SILVER SPRING, Md., Feb. 11, 2013 -- Choice Hotels International, Inc.,
(NYSE:CHH) today reported the following highlights for the fourth
quarter and full year 2012:
"2012 was a record breaking year for the company in terms of
operating performance. We established new company records for the size
of the domestic franchise system, total franchising revenues,
franchising margins, operating cash flows, operating income and
earnings per share," said Stephen P.
Joyce, president and chief executive officer. "We are
very pleased with our development results which increased 42 percent
over the prior year, highlighted by the conversion of 46 properties,
formerly operated as Jameson Inns,
to our system and the execution of several Cambria Suites agreements in
key markets important for Cambria's long-term success. We remain
optimistic that the development and RevPAR environments will continue
to improve and result in further growth of our business in 2013."
Full Year Highlights
- Adjusted diluted earnings per share ("EPS") for full year
2012 were $2.11 compared
to $1.92 for full year
2011, a 10% increase. Adjusted diluted EPS for full year 2012 and 2011
exclude certain special items, as described below, totaling $0.04 and $0.07, respectively.
- Excluding special items, adjusted earnings before interest,
taxes, depreciation and amortization ("EBITDA") increased 10% to $203.7 million for the year
ended December 31, 2012,
compared to the prior year. Operating income increased 12% from $171.9 million for the year
ended December 31, 2011
to $193.1 million for
full year 2012.
- Franchising revenues increased 6% to $302.2
million for the year ended December
31, 2012 from $285.4
million for the same period of 2011. Total revenues
increased 8% to $691.5 million
for the year ended December 31, 2012
compared to the same period of 2011.
- Adjusted franchising margins increased 280 basis points
from 61.5% for the year ended December
31, 2011 to 64.3% for the same period of the current
year.
- Domestic royalty fees for the year ended December 31, 2012 increased $15.4 million to $235.7
million from $220.3 million
for the year ended December 31, 2011,
an increase of 7%.
- Domestic unit and room growth increased 1.6 percent and 0.8
percent from December 31, 2011,
respectively.
- Domestic system-wide revenue per available room ("RevPAR")
increased 6.2% for the year ended December
31, 2012 compared to the year ended December 31, 2011 as occupancy
and average daily rates increased 200 basis points and 2.5 percent,
respectively.
- The effective royalty rate increased 1 basis point to 4.33%
for the year ended December 31, 2012
compared to 4.32% for the same period of the prior year.
- The company executed 473 new domestic hotel franchise
contracts for the year ended December
31, 2012 compared to 332 new domestic hotel franchise
contracts in the same period of the prior year, a 42% increase.
- The number of worldwide hotels under construction, awaiting
conversion or approved for development as of December
31, 2012 was 482 hotels representing 38,969 rooms.
- The effective income tax rate for the year ended December 31, 2012 was 28.7%
compared to 30.1% for the same period of 2011.
- During the year ended December
31, 2012, the company paid cash dividends totaling
approximately $654.1 million,
including a special cash dividend of $10.41
per share or approximately $600.7 million
and purchased approximately 0.5 million shares of its common stock for
a total cost of $19.9 million
under the share repurchase program.
Fourth Quarter Highlights
- Adjusted diluted EPS for fourth quarter 2012 were $0.45 compared to $0.46 for the same period of
the prior year. Diluted EPS were $0.42
for the fourth quarter of 2012 compared to $0.42
for the same period of 2011. Adjusted diluted EPS for fourth quarter
2012 and 2011 exclude certain special items, as described below,
totaling $0.03 and $0.04, respectively.
- Excluding special items, adjusted EBITDA increased 11% to $49.3 million for the three
months ended December 31, 2012
compared to the same period of the prior year. Operating income for the
three months ended December 31, 2012
increased 17% from the same period of the prior year to $45.2 million.
- Franchising revenues increased 4% from $73.9 million for the three
months ended December 31, 2011
to $77.0 million for the
same period of 2012. Total revenues for the three months ended December 31, 2012 increased 7%
compared to the same period of the prior year.
- Domestic system-wide revenue per available room ("RevPAR")
increased 4.2% for the three months ended December
31, 2012 compared to the same period of 2011 as
occupancy and average daily rates increased 120 basis points and 2.0
percent, respectively.
- The effective royalty rate increased 5 basis points to
4.36% for the three months ended December
31, 2012 compared to 4.31% for the same period of the
prior year.
- The company executed 214 new domestic hotel franchise
contracts for the three months ended December
31, 2012 compared to 128 new domestic hotel franchise
contracts in the same period of the prior year, a 67% increase.
- Reached an agreement with affiliates of Colony
Capital, LLC, including Colony Financial, Inc., 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, representing the company's
largest single conversion transaction, excluding brand acquisitions.
- Expanded Cambria Suites into additional major markets with
new franchise agreements executed for hotels in New
York City, Phoenix, Arizona
and Plano, Texas.
- Interest expense for the three months ended December 31, 2012 increased $7.1 million over the same
period of the prior reflecting the financing transactions entered into
during the second and third quarter of 2012 in conjunction with the
payment of the $600 million
special cash dividend paid on August 23,
2012.
Special Items
On December 27, 2012,
the company settled its supplemental executive retirement plan and paid
the actuarial equivalent of the lump sum value of the full accrued
benefit to each participant. As a result of the settlement, the company
recognized a settlement loss in SG&A expense totaling $1.8 million for the three
months and year ended December 31, 2012.
In addition, during the year ended December
31, 2012, the company recorded employee termination
benefits charges in SG&A of approximately $0.5
million and recognized a loss on the extinguishment of
debt totaling $0.5 million.
These special items represent diluted EPS of $0.03
and $0.04 for the three
months and year ended December 31, 2012,
respectively.
During the three months and year ended December
31, 2011, the company recorded employee termination
benefit charges included in SG&A expenses of approximately $3.6 million and $4.4 million, respectively. In
addition, during the year ended December
31, 2011, the company reduced the carrying amount of a
parcel of land held for sale resulting in a loss of $1.8 million included in other
gains and losses. These special items represent diluted EPS of $0.04 and $0.07 for the three months and
year ended December 31, 2011,
respectively.
Use of Free Cash Flow
The company has historically used its free cash flow (cash
flow from operations less capital expenditures) to return value to
shareholders, primarily through share repurchases and dividends.
Dividends
For the year ended December 31,
2012, the company paid $654.1
million of cash dividends to shareholders which included
a special cash dividend in the amount of $10.41
per share or approximately $600.7 million
paid on August 23, 2012.
The company's current quarterly dividend rate per common share is $0.185, subject to declaration
by our board of directors.
Share Repurchases
During the year ended December
31, 2012, the company repurchased 0.5 million shares for
a total cost of $19.9 million
and has authorization to purchase up to an additional 1.4 million
shares under this program. The company did not repurchase any shares of
common stock under the share repurchase program during the three months
ended December 31, 2012.
We expect to continue making repurchases under our share repurchase
program in the open market and through privately negotiated
transactions, subject to market and other conditions. 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, 2012.
Considering the effect of a two-for-one stock split in October 2005, the company had
repurchased 78.3 million shares through December
31, 2012 under the share repurchase program at an
average price of $13.89
per share.
Other
Our board of directors previously authorized us to enter into
programs which permit us to offer financing, investment and guaranty
support to qualified franchisees as well as to acquire and resell real
estate to incent franchise development for certain brands in strategic
markets. During the year ended December
31, 2012, the company advanced, net of repayments,
approximately $41 million
related to mezzanine financing and sliver equity investments to
construct Cambria Suites in such markets as New York City
and White Plains, New York, Phoenix, Arizona and Plano,
Texas. At December 31,
2012 the company had approximately $68 million outstanding related
to this program. Over the next several years, we expect to continue to
opportunistically deploy capital pursuant to these programs to promote
growth of our emerging brands. We expect these advances to range
between $20 million and $40 million
per year, however, the amount and timing of the investment in these
programs will be dependent on market and other conditions.
Notwithstanding these programs, the company expects to continue to
return value to its shareholders through a combination of share
repurchases and dividends, subject to market and other conditions.
Balance Sheet
At December 31, 2012,
the company had gross debt of $855.3
million and cash and cash equivalents totaling $134.2 million resulting in net
debt of $721.1 million.
At December 31, 2011, the
company had gross debt of $252.7 million
and cash equivalents totaling $107.1
million resulting in net debt of $145.6
million.
On June 27, 2012,
the company issued unsecured senior notes in an aggregate principal
amount of $400 million,
in an underwritten, registered public offering. These notes will mature
in July 2022 and bear a
coupon rate of interest of 5.75%. Considering bond issuance costs, the
company's effective interest costs related to these senior notes is
approximately 5.94%.
On July 25, 2012,
the company entered into a senior secured credit facility consisting of
a $200 million revolving
credit tranche and a $150 million
term loan tranche, with a four year term. The company may elect to have
borrowings under the senior secured credit facility bear interest at
(i) a base rate plus a margin ranging from 100 to 325 basis points
based on the company's total leverage ratio or (ii) LIBOR plus a margin
ranging from 200 to 425 basis points based on the company's total
leverage ratio. As a result of entering into the senior secured credit
facility, the company's existing $300
million senior unsecured revolving credit facility was
terminated. Under the $300 million
senior unsecured revolving credit facility the company could elect to
have borrowings bear interest at (i) a base rate plus a margin ranging
from 5 to 80 basis points based on the company's credit rating or (ii)
LIBOR plus a margin ranging from 105 to 180 basis points based on the
company's credit rating.
The proceeds from the issuance of the $400
million senior notes and the company's new senior
secured credit facility were utilized to pay the special cash dividend
paid on August 23, 2012.
At December 31, 2012
and 2011, the company had outstanding mezzanine financing, real estate
investments and sliver equity investments totaling $68 million and $27 million, respectively
pursuant to its program to offer financing and investment support to
incent franchise development for the Cambria Suites 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 first quarter 2013 diluted EPS is expected to be
$0.26. The company
expects full-year 2013 diluted EPS to range between $1.96 and $1.98. EBITDA for
full-year 2013 are expected to range between $215
million and $217 million. These estimates include the
following assumptions:
- The company expects net domestic unit growth to increase by
approximately 1.5% in 2013;
- RevPAR is expected to increase approximately 5% for first
quarter of 2013 and increase between 4.5% and 5.5% for full-year 2013;
- The effective royalty rate is expected to increase 3 basis
points for full-year 2013;
- All figures assume the existing share count;
- An effective tax rate of 28.5% and 30.6% for the first
quarter and full-year 2013, respectively.
Conference Call
Choice will conduct a conference call on Tuesday, February 12, 2013 at 9:00 a.m. EST to discuss the
company's fourth quarter 2012 results. The dial-in number to listen to
the call is 1-800-591-6930, and the access code is 96459022.
International callers should dial 1-617-614-4908 and enter the access
code 96459022. 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
Information page will feature a conference call microphone icon to
access the call.
The call will be recorded and available for replay beginning
at 11:00 a.m. EST on Tuesday, February 12, 2013
through Tuesday, February 19, 2013
by calling 1-888-286-8010 and entering access code 56450518. The
international dial-in number for the replay is 1-617-801-6888, access
code 56450518. In addition, the call will be archived and available on www.choicehotels.com via the
Investor Info link.
About Choice
Hotels
Choice Hotels
International, Inc. franchises approximately 6,200 hotels,
representing more than 499,000 rooms, in the United States
and more than 30 other countries and territories. As of December 31, 2012, 394 hotels,
representing more than 31,000 rooms, were under construction, awaiting
conversion or approved for development in the United States.
Additionally, 88 hotels, representing approximately 7,800 rooms, were
under construction, awaiting conversion or approved for development in
more than 20 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.
Additional corporate information may 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 Risk
Factors section of the company's Form 10-K for the year ended December 31, 2011, filed with
the Securities and Exchange Commission on February 29, 2012 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 Exhibit 8
Adjusted diluted EPS, adjusted EBITDA, franchising revenues,
adjusted franchising margins and adjusted SG&A expenses are
non-GAAP financial measurements. This information should not be
considered as an alternative to any measure of performance as
promulgated under accounting principles generally accepted in the
United States ("GAAP"), such as diluted EPS,
operating 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 measures to the comparable GAAP measurement. 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, tax expense, depreciation and amortization. Our
management considers EBITDA to be an indicator of operating performance
because it can be used to measure our ability to service debt, fund
capital expenditures, and expand our business. EBITDA is a commonly
used measure of performance in our industry. In addition, it is used by
analysts, lenders, investors and others, as well as by us, to
facilitate comparisons between the company and its competitors because
it excludes certain items that can vary widely across different
industries or among companies within the same industry.
Franchising Revenues and Margins: The company reports
franchising revenues and margins which exclude marketing and
reservation revenues and hotel operations. Marketing and reservation
activities are excluded from revenues and operating margins since the
company is required by its franchise agreements to use these fees
collected for marketing and reservation activities. Cumulative
reservation and marketing system fees not expended are recorded as a
liability on the company's financial statements and are carried over to
the next fiscal year and expended in accordance with the franchise
agreements. Cumulative marketing and reservation expenditures in excess
of system fees collected for marketing and reservation activities are
recorded as a receivable on the company's financial statements. In
addition, the company has the contractual authority to require that the
franchisees in the system at any given point repay the company for any
deficits related to marketing and reservation activities. Hotel
operations are excluded since they do not reflect the most accurate
measure of the company's core franchising business. These non-GAAP
measures are a commonly used measure of performance in our industry and
facilitate comparisons between the company and its competitors.
Adjusted Diluted EPS, Adjusted EBITDA, Adjusted SG&A
and Adjusted Franchising Margins: The company's management also
uses adjusted diluted EPS, adjusted EBITDA, adjusted SG&A and
adjusted franchising margins which exclude the loss on settlement of a
pension plan, employee termination benefits, a loss on extinguishment
of debt as well as a reduction in the carrying amount of land held for
sale. The company utilizes these non-GAAP measures to enable investors
to perform meaningful comparisons of past, present and future operating
results and as a means to emphasize the results of on-going operations.
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 and Ascend
Collectionare proprietary trademarks and service marks of Choice Hotels International.
© 2013 Choice Hotels International, Inc. All rights
reserved.
Choice
Hotels International, Inc.
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Exhibit
1
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Consolidated
Statements of Income
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(Unaudited)
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Three
Months Ended December 31,
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Year
Ended December 31,
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Variance
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Variance
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2012
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2011
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$
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%
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2012
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2011
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$
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%
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(In
thousands, except per share amounts)
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REVENUES:
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Royalty
fees
|
$
66,020
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$
62,922
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$ 3,098
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5%
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|
$
260,782
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|
$
245,426
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$
15,356
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6%
|
Initial
franchise and relicensing fees
|
5,250
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|
4,969
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|
281
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6%
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|
14,203
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|
14,052
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|
151
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1%
|
Procurement
services
|
3,972
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|
4,074
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|
(102)
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(3%)
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|
17,962
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|
18,111
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(149)
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(1%)
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Marketing
and reservation
|
100,160
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|
90,844
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|
9,316
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10%
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|
384,784
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|
349,036
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|
35,748
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10%
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Hotel
operations
|
1,133
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|
1,183
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(50)
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(4%)
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|
4,573
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4,356
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|
217
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5%
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Other
|
1,771
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|
1,898
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(127)
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(7%)
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9,205
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7,812
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|
1,393
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18%
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Total
revenues
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178,306
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165,890
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|
12,416
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7%
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691,509
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638,793
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|
52,716
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8%
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OPERATING
EXPENSES:
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Selling,
general and administrative
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29,779
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33,463
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(3,684)
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(11%)
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101,852
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|
106,404
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(4,552)
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(4%)
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Depreciation
and amortization
|
2,237
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|
2,048
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|
189
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9%
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|
8,226
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|
8,024
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|
202
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3%
|
Marketing
and reservation
|
100,160
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|
90,844
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|
9,316
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10%
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|
384,784
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349,036
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|
35,748
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10%
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Hotel
operations
|
896
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|
873
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23
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3%
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3,505
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|
3,466
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39
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1%
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Total
operating expenses
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133,072
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127,228
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5,844
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5%
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498,367
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466,930
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|
31,437
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7%
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Operating
income
|
45,234
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|
38,662
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|
6,572
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17%
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|
193,142
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|
171,863
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|
21,279
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12%
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OTHER
INCOME AND EXPENSES, NET:
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Interest
expense
|
10,366
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|
3,220
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7,146
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222%
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27,189
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|
12,939
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|
14,250
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110%
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Interest
income
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(384)
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|
(369)
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(15)
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4%
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(1,540)
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(1,306)
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(234)
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18%
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Loss
on extinguishment of debt
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-
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-
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-
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NM
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526
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-
|
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526
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NM
|
Other
(gains) and losses
|
148
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(1,236)
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|
1,384
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(112%)
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(1,989)
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|
2,442
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(4,431)
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(181%)
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Equity
in net income of affiliates
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(224)
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(7)
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(217)
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3100%
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(212)
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|
(269)
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|
57
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(21%)
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Total
other income and expenses, net
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9,906
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|
1,608
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|
8,298
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516%
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|
23,974
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|
13,806
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|
10,168
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74%
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Income
before income taxes
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35,328
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|
37,054
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(1,726)
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(5%)
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|
169,168
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|
158,057
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|
11,111
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|
7%
|
Income
taxes
|
10,877
|
|
12,268
|
|
(1,391)
|
|
(11%)
|
|
48,481
|
|
47,661
|
|
820
|
|
2%
|
Net
income
|
$
24,451
|
|
$
24,786
|
|
$ (335)
|
|
(1%)
|
|
$
120,687
|
|
$
110,396
|
|
$
10,291
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
0.42
|
|
$ 0.42
|
|
$ -
|
|
0%
|
|
$
2.08
|
|
$ 1.86
|
|
$ 0.22
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
$
0.42
|
|
$ 0.42
|
|
$ -
|
|
0%
|
|
$
2.07
|
|
$ 1.85
|
|
$ 0.22
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Choice
Hotels International, Inc.
|
|
|
Exhibit
2
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
December 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
$
134,177
|
|
$
107,057
|
Accounts
receivable, net
|
52,270
|
|
53,012
|
Investments,
employee benefit plans, at fair value
|
3,486
|
|
12,094
|
Other
current assets
|
43,537
|
|
22,633
|
|
Total
current assets
|
233,470
|
|
194,796
|
|
|
|
|
|
|
Fixed
assets and intangibles, net
|
130,937
|
|
135,252
|
Receivable
-- marketing and reservation fees
|
42,179
|
|
54,014
|
Investments,
employee benefit plans, at fair value
|
12,755
|
|
11,678
|
Other
assets
|
|
91,431
|
|
51,949
|
|
|
|
|
|
|
|
|
Total
assets
|
$
510,772
|
|
$
447,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
$
94,266
|
|
$
92,240
|
Deferred
revenue
|
71,154
|
|
68,825
|
Deferred
compensation & retirement plan obligations
|
2,522
|
|
18,935
|
Current
portion of long-term debt
|
8,195
|
|
673
|
Other
current liabilities
|
-
|
|
3,892
|
|
Total
current liabilities
|
176,137
|
|
184,565
|
|
|
|
|
|
|
Long-term
debt
|
847,150
|
|
252,032
|
Deferred
compensation & retirement plan obligations
|
20,399
|
|
20,593
|
Other
liabilities
|
|
15,990
|
|
16,060
|
|
|
|
|
|
|
|
Total
liabilities
|
1,059,676
|
|
473,250
|
|
|
|
|
|
|
Common
stock, $0.01 par value
|
582
|
|
583
|
Additional
paid-in-capital
|
110,246
|
|
102,665
|
Accumulated
other comprehensive loss
|
(4,216)
|
|
(6,801)
|
Treasury
stock, at cost
|
(927,776)
|
|
(916,955)
|
Retained
earnings
|
272,260
|
|
794,947
|
|
Total
shareholders' deficit
|
(548,904)
|
|
(25,561)
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' deficit
|
$
510,772
|
|
$
447,689
|
|
|
|
|
|
|
Choice
Hotels International, Inc.
|
|
|
Exhibit
3
|
Consolidated
Statements of Cash Flows
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Year
Ended December 31,
|
|
|
|
|
|
2012
|
|
2011
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
income
|
$
120,687
|
|
$
110,396
|
|
|
|
|
Adjustments
to reconcile net income to net cash provided
|
|
|
|
by
operating activities:
|
|
|
|
Depreciation and amortization
|
8,226
|
|
8,024
|
Provision for bad debts, net
|
2,896
|
|
2,160
|
Non-cash stock compensation and other charges
|
12,375
|
|
14,511
|
Non-cash interest and other loss
|
292
|
|
2,208
|
Loss
on extinguishment of debt
|
526
|
|
-
|
Dividends received from equity method investments
|
1,310
|
|
1,139
|
Equity in net income of affiliates
|
(212)
|
|
(269)
|
|
|
|
|
Changes
in assets and liabilities:
|
|
|
|
Receivables
|
(5,239)
|
|
(7,785)
|
Receivable - marketing and reservation fees, net
|
30,313
|
|
623
|
Accounts payable
|
11
|
|
(1,851)
|
Accrued expenses
|
12,376
|
|
6,346
|
Income taxes payable/receivable
|
(3,193)
|
|
(4,562)
|
Deferred income taxes
|
(540)
|
|
5,514
|
Deferred revenue
|
2,188
|
|
1,523
|
Other
assets
|
(3,476)
|
|
(3,162)
|
Other
liabilities
|
(17,520)
|
|
29
|
|
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
161,020
|
|
134,844
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Investment
in property and equipment
|
(15,443)
|
|
(10,924)
|
Equity
method investments
|
(20,285)
|
|
(5,000)
|
Issuance
of notes receivable
|
(34,925)
|
|
(12,766)
|
Collections
of notes receivable
|
3,561
|
|
4,754
|
Purchases
of investments, employee benefit plans
|
(1,697)
|
|
(1,602)
|
Proceeds
from sales of investments, employee benefit plans
|
11,223
|
|
644
|
Proceeds
from sale of assets
|
-
|
|
1,654
|
Other
items, net
|
(433)
|
|
(564)
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
(57,999)
|
|
(23,804)
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds
from the issuance of long-term debt
|
543,500
|
|
75
|
Net
borrowings (repayments) pursuant to revolving credit facilities
|
57,000
|
|
(200)
|
Principal
payments on long-term debt
|
(4,422)
|
|
(297)
|
Debt
issuance costs
|
(4,759)
|
|
(2,356)
|
Dividends
paid
|
(654,092)
|
|
(43,747)
|
Purchase
of treasury stock
|
(22,586)
|
|
(53,617)
|
Excess
tax benefits from stock-based compensation
|
1,559
|
|
1,227
|
Proceeds
from exercise of stock options
|
7,090
|
|
3,845
|
|
|
|
|
NET CASH USED IN FINANCING ACTIVITIES
|
(76,710)
|
|
(95,070)
|
|
|
|
|
Net
change in cash and cash equivalents
|
26,311
|
|
15,970
|
Effect
of foreign exchange rate changes on cash and cash equivalents
|
809
|
|
(172)
|
Cash
and cash equivalents at beginning of period
|
107,057
|
|
91,259
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
134,177
|
|
$
107,057
|
|
|
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
Exhibit
4
|
SUPPLEMENTAL
OPERATING INFORMATION
|
|
DOMESTIC
HOTEL SYSTEM
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Year Ended December 31, 2012*
|
|
For
the Year Ended December 31, 2011*
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
$
81.55
|
|
59.4%
|
|
$
48.42
|
|
$ 79.41
|
|
57.5%
|
|
$ 45.62
|
|
2.7%
|
|
190
|
bps
|
|
6.1%
|
|
|
Comfort
Suites
|
85.47
|
|
61.7%
|
|
52.74
|
|
83.72
|
|
58.6%
|
|
49.09
|
|
2.1%
|
|
310
|
bps
|
|
7.4%
|
|
|
Sleep
|
72.40
|
|
56.3%
|
|
40.77
|
|
69.96
|
|
53.6%
|
|
37.49
|
|
3.5%
|
|
270
|
bps
|
|
8.7%
|
|
|
Quality
|
69.46
|
|
51.6%
|
|
35.85
|
|
67.75
|
|
50.0%
|
|
33.86
|
|
2.5%
|
|
160
|
bps
|
|
5.9%
|
|
|
Clarion
|
74.94
|
|
49.4%
|
|
37.03
|
|
73.89
|
|
46.9%
|
|
34.64
|
|
1.4%
|
|
250
|
bps
|
|
6.9%
|
|
|
Econo
Lodge
|
55.78
|
|
48.5%
|
|
27.05
|
|
54.71
|
|
47.5%
|
|
25.96
|
|
2.0%
|
|
100
|
bps
|
|
4.2%
|
|
|
Rodeway
|
53.36
|
|
50.8%
|
|
27.13
|
|
51.87
|
|
48.7%
|
|
25.27
|
|
2.9%
|
|
210
|
bps
|
|
7.4%
|
|
|
MainStay
|
69.34
|
|
70.4%
|
|
48.81
|
|
66.16
|
|
67.7%
|
|
44.80
|
|
4.8%
|
|
270
|
bps
|
|
9.0%
|
|
|
Suburban
|
41.61
|
|
69.7%
|
|
29.01
|
|
40.26
|
|
67.5%
|
|
27.15
|
|
3.4%
|
|
220
|
bps
|
|
6.9%
|
|
|
Ascend
Collection
|
113.33
|
|
64.4%
|
|
72.94
|
|
113.59
|
|
60.3%
|
|
68.44
|
|
(0.2%)
|
|
410
|
bps
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
73.60
|
|
55.5%
|
|
$
40.84
|
|
$ 71.83
|
|
53.5%
|
|
$ 38.44
|
|
2.5%
|
|
200
|
bps
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Operating statistics represent hotel operations from December through
November
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended December 31, 2012*
|
|
For
the Three Months Ended December 31, 2011*
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
$
81.67
|
|
60.0%
|
|
$
48.98
|
|
$ 79.92
|
|
58.8%
|
|
$ 46.98
|
|
2.2%
|
|
120
|
bps
|
|
4.3%
|
|
|
Comfort
Suites
|
85.01
|
|
61.4%
|
|
52.21
|
|
83.13
|
|
59.2%
|
|
49.23
|
|
2.3%
|
|
220
|
bps
|
|
6.1%
|
|
|
Sleep
|
72.70
|
|
56.5%
|
|
41.05
|
|
70.06
|
|
54.0%
|
|
37.80
|
|
3.8%
|
|
250
|
bps
|
|
8.6%
|
|
|
Quality
|
68.34
|
|
51.2%
|
|
35.02
|
|
67.17
|
|
50.2%
|
|
33.74
|
|
1.7%
|
|
100
|
bps
|
|
3.8%
|
|
|
Clarion
|
74.81
|
|
49.6%
|
|
37.12
|
|
74.27
|
|
47.6%
|
|
35.32
|
|
0.7%
|
|
200
|
bps
|
|
5.1%
|
|
|
Econo
Lodge
|
55.84
|
|
48.0%
|
|
26.80
|
|
54.62
|
|
48.3%
|
|
26.37
|
|
2.2%
|
|
(30)
|
bps
|
|
1.6%
|
|
|
Rodeway
|
52.64
|
|
49.5%
|
|
26.07
|
|
51.12
|
|
49.1%
|
|
25.11
|
|
3.0%
|
|
40
|
bps
|
|
3.8%
|
|
|
MainStay
|
69.54
|
|
70.3%
|
|
48.85
|
|
66.12
|
|
69.7%
|
|
46.06
|
|
5.2%
|
|
60
|
bps
|
|
6.1%
|
|
|
Suburban
|
42.78
|
|
69.2%
|
|
29.61
|
|
40.31
|
|
66.6%
|
|
26.84
|
|
6.1%
|
|
260
|
bps
|
|
10.3%
|
|
|
Ascend
Collection
|
116.26
|
|
67.0%
|
|
77.86
|
|
122.22
|
|
61.0%
|
|
74.56
|
|
(4.9%)
|
|
600
|
bps
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
73.44
|
|
55.4%
|
|
$
40.68
|
|
$ 71.98
|
|
54.2%
|
|
$ 39.03
|
|
2.0%
|
|
120
|
bps
|
|
4.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Operating statistics represent hotel operations from September through
November
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Quarter Ended
|
|
|
|
For
the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2012
|
|
12/31/2011
|
|
|
|
12/31/2012
|
|
12/31/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
effective royalty rate
|
4.36%
|
|
4.31%
|
|
|
|
4.33%
|
|
4.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
Exhibit
5
|
SUPPLEMENTAL
HOTEL AND ROOM SUPPLY DATA
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2012
|
|
December
31, 2011
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
1,349
|
|
105,471
|
|
1,399
|
|
109,330
|
|
(50)
|
|
(3,859)
|
|
(3.6%)
|
|
(3.5%)
|
|
Comfort
Suites
|
597
|
|
46,045
|
|
616
|
|
47,738
|
|
(19)
|
|
(1,693)
|
|
(3.1%)
|
|
(3.5%)
|
|
Sleep
|
387
|
|
28,087
|
|
394
|
|
28,568
|
|
(7)
|
|
(481)
|
|
(1.8%)
|
|
(1.7%)
|
|
Quality
|
1,152
|
|
98,078
|
|
1,047
|
|
91,502
|
|
105
|
|
6,576
|
|
10.0%
|
|
7.2%
|
|
Clarion
|
191
|
|
27,441
|
|
189
|
|
27,527
|
|
2
|
|
(86)
|
|
1.1%
|
|
(0.3%)
|
|
Econo
Lodge
|
817
|
|
49,951
|
|
797
|
|
49,483
|
|
20
|
|
468
|
|
2.5%
|
|
0.9%
|
|
Rodeway
|
410
|
|
23,370
|
|
388
|
|
21,627
|
|
22
|
|
1,743
|
|
5.7%
|
|
8.1%
|
|
MainStay
|
41
|
|
3,165
|
|
40
|
|
3,093
|
|
1
|
|
72
|
|
2.5%
|
|
2.3%
|
|
Suburban
|
63
|
|
7,291
|
|
60
|
|
7,126
|
|
3
|
|
165
|
|
5.0%
|
|
2.3%
|
|
Ascend
Collection
|
57
|
|
4,982
|
|
52
|
|
4,617
|
|
5
|
|
365
|
|
9.6%
|
|
7.9%
|
|
Cambria
Suites
|
19
|
|
2,221
|
|
19
|
|
2,215
|
|
-
|
|
6
|
|
0.0%
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Franchises
|
5,083
|
|
396,102
|
|
5,001
|
|
392,826
|
|
82
|
|
3,276
|
|
1.6%
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Franchises
|
1,160
|
|
103,151
|
|
1,177
|
|
104,379
|
|
(17)
|
|
(1,228)
|
|
(1.4%)
|
|
(1.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Franchises
|
6,243
|
|
499,253
|
|
6,178
|
|
497,205
|
|
65
|
|
2,048
|
|
1.1%
|
|
0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
6
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
SUPPLEMENTAL
INFORMATION BY BRAND
|
DEVELOPMENT
RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Year Ended December 31, 2012
|
|
For
the Year Ended December 31, 2011
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
23
|
|
36
|
|
59
|
|
12
|
|
46
|
|
58
|
|
92%
|
|
(22%)
|
|
2%
|
|
Comfort
Suites
|
12
|
|
5
|
|
17
|
|
12
|
|
4
|
|
16
|
|
0%
|
|
25%
|
|
6%
|
|
Sleep
|
25
|
|
2
|
|
27
|
|
9
|
|
2
|
|
11
|
|
178%
|
|
0%
|
|
145%
|
|
Quality
|
-
|
|
170
|
|
170
|
|
-
|
|
80
|
|
80
|
|
NM
|
|
113%
|
|
113%
|
|
Clarion
|
-
|
|
22
|
|
22
|
|
-
|
|
19
|
|
19
|
|
NM
|
|
16%
|
|
16%
|
|
Econo
Lodge
|
-
|
|
59
|
|
59
|
|
1
|
|
56
|
|
57
|
|
(100%)
|
|
5%
|
|
4%
|
|
Rodeway
|
-
|
|
71
|
|
71
|
|
-
|
|
49
|
|
49
|
|
NM
|
|
45%
|
|
45%
|
|
MainStay
|
12
|
|
1
|
|
13
|
|
6
|
|
3
|
|
9
|
|
100%
|
|
(67%)
|
|
44%
|
|
Suburban
|
3
|
|
4
|
|
7
|
|
5
|
|
4
|
|
9
|
|
(40%)
|
|
0%
|
|
(22%)
|
|
Ascend
Collection
|
4
|
|
17
|
|
21
|
|
2
|
|
14
|
|
16
|
|
100%
|
|
21%
|
|
31%
|
|
Cambria
Suites
|
7
|
|
-
|
|
7
|
|
8
|
|
-
|
|
8
|
|
(13%)
|
|
NM
|
|
(13%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic System
|
86
|
|
387
|
|
473
|
|
55
|
|
277
|
|
332
|
|
56%
|
|
40%
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended December 31, 2012
|
|
For
the Three Months Ended December 31, 2011
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
13
|
|
19
|
|
32
|
|
6
|
|
18
|
|
24
|
|
117%
|
|
6%
|
|
33%
|
|
Comfort
Suites
|
1
|
|
1
|
|
2
|
|
5
|
|
-
|
|
5
|
|
(80%)
|
|
NM
|
|
(60%)
|
|
Sleep
|
8
|
|
1
|
|
9
|
|
3
|
|
1
|
|
4
|
|
167%
|
|
0%
|
|
125%
|
|
Quality
|
-
|
|
82
|
|
82
|
|
-
|
|
31
|
|
31
|
|
NM
|
|
165%
|
|
165%
|
|
Clarion
|
-
|
|
8
|
|
8
|
|
-
|
|
7
|
|
7
|
|
NM
|
|
14%
|
|
14%
|
|
Econo
Lodge
|
-
|
|
26
|
|
26
|
|
1
|
|
20
|
|
21
|
|
(100%)
|
|
30%
|
|
24%
|
|
Rodeway
|
-
|
|
25
|
|
25
|
|
-
|
|
17
|
|
17
|
|
NM
|
|
47%
|
|
47%
|
|
MainStay
|
10
|
|
-
|
|
10
|
|
5
|
|
-
|
|
5
|
|
100%
|
|
NM
|
|
100%
|
|
Suburban
|
2
|
|
3
|
|
5
|
|
3
|
|
2
|
|
5
|
|
(33%)
|
|
50%
|
|
0%
|
|
Ascend
Collection
|
3
|
|
9
|
|
12
|
|
-
|
|
5
|
|
5
|
|
NM
|
|
80%
|
|
140%
|
|
Cambria
Suites
|
3
|
|
-
|
|
3
|
|
4
|
|
-
|
|
4
|
|
(25%)
|
|
NM
|
|
(25%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic System
|
40
|
|
174
|
|
214
|
|
27
|
|
101
|
|
128
|
|
48%
|
|
72%
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2012
|
|
December
31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
Units
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
33
|
|
49
|
|
82
|
|
29
|
|
46
|
|
75
|
|
4
|
|
14%
|
|
3
|
|
7%
|
|
7
|
|
9%
|
Comfort
Suites
|
1
|
|
72
|
|
73
|
|
1
|
|
90
|
|
91
|
|
-
|
|
0%
|
|
(18)
|
|
(20%)
|
|
(18)
|
|
(20%)
|
Sleep
Inn
|
1
|
|
43
|
|
44
|
|
1
|
|
49
|
|
50
|
|
-
|
|
0%
|
|
(6)
|
|
(12%)
|
|
(6)
|
|
(12%)
|
Quality
|
36
|
|
3
|
|
39
|
|
29
|
|
5
|
|
34
|
|
7
|
|
24%
|
|
(2)
|
|
(40%)
|
|
5
|
|
15%
|
Clarion
|
12
|
|
1
|
|
13
|
|
14
|
|
1
|
|
15
|
|
(2)
|
|
(14%)
|
|
-
|
|
0%
|
|
(2)
|
|
(13%)
|
Econo
Lodge
|
24
|
|
-
|
|
24
|
|
25
|
|
2
|
|
27
|
|
(1)
|
|
(4%)
|
|
(2)
|
|
(100%)
|
|
(3)
|
|
(11%)
|
Rodeway
|
35
|
|
-
|
|
35
|
|
22
|
|
1
|
|
23
|
|
13
|
|
59%
|
|
(1)
|
|
(100%)
|
|
12
|
|
52%
|
MainStay
|
-
|
|
25
|
|
25
|
|
2
|
|
28
|
|
30
|
|
(2)
|
|
(100%)
|
|
(3)
|
|
(11%)
|
|
(5)
|
|
(17%)
|
Suburban
|
1
|
|
15
|
|
16
|
|
2
|
|
20
|
|
22
|
|
(1)
|
|
(50%)
|
|
(5)
|
|
(25%)
|
|
(6)
|
|
(27%)
|
Ascend
Collection
|
11
|
|
7
|
|
18
|
|
6
|
|
4
|
|
10
|
|
5
|
|
83%
|
|
3
|
|
75%
|
|
8
|
|
80%
|
Cambria
Suites
|
-
|
|
25
|
|
25
|
|
-
|
|
31
|
|
31
|
|
-
|
|
NM
|
|
(6)
|
|
(19%)
|
|
(6)
|
|
(19%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic Pipeline
|
154
|
|
240
|
|
394
|
|
131
|
|
277
|
|
408
|
|
23
|
|
18%
|
|
(37)
|
|
(13%)
|
|
(14)
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
Exhibit
8
|
|
|
|
SUPPLEMENTAL
NON-GAAP FINANCIAL INFORMATION
|
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar
amounts in thousands)
|
Three
Months Ended December 31,
|
|
Year
Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
Franchising
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
178,306
|
|
$
165,890
|
|
$
691,509
|
|
$
638,793
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and reservation revenues
|
(100,160)
|
|
(90,844)
|
|
(384,784)
|
|
(349,036)
|
|
|
|
|
|
Hotel
operations
|
(1,133)
|
|
(1,183)
|
|
(4,573)
|
|
(4,356)
|
|
|
|
|
|
Franchising
Revenues
|
$
77,013
|
|
$
73,863
|
|
$
302,152
|
|
$
285,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchising
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
178,306
|
|
$
165,890
|
|
$
691,509
|
|
$
638,793
|
|
|
|
|
|
Operating
Income
|
$
45,234
|
|
$
38,662
|
|
$
193,142
|
|
$
171,863
|
|
|
|
|
|
Operating Margin
|
25.4%
|
|
23.3%
|
|
27.9%
|
|
26.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Franchising Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchising
Revenues
|
$
77,013
|
|
$
73,863
|
|
$
302,152
|
|
$
285,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
$
45,234
|
|
$
38,662
|
|
$
193,142
|
|
$
171,863
|
|
|
|
|
|
Employee
termination benefits
|
-
|
|
3,619
|
|
491
|
|
4,444
|
|
|
|
|
|
Loss
on settlement of pension plan
|
1,818
|
|
-
|
|
1,818
|
|
-
|
|
|
|
|
|
Hotel
operations
|
(237)
|
|
(310)
|
|
(1,068)
|
|
(890)
|
|
|
|
|
|
|
$
46,815
|
|
$
41,971
|
|
$
194,383
|
|
$
175,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Franchising Margins
|
60.8%
|
|
56.8%
|
|
64.3%
|
|
61.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar
amounts in thousands)
|
Three
Months Ended December 31,
|
|
Year
Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense
|
$
29,779
|
|
$
33,463
|
|
$
101,852
|
|
$
106,404
|
|
|
|
|
|
Employee
termination benefits
|
-
|
|
(3,619)
|
|
(491)
|
|
(4,444)
|
|
|
|
|
|
Loss
on settlement of pension plan
|
(1,818)
|
|
-
|
|
(1,818)
|
|
-
|
|
|
|
|
Adjusted
Selling, General and Administrative Expense
|
$
27,961
|
|
$
29,844
|
|
$
99,543
|
|
$
101,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
Three
Months Ended December 31,
|
|
Year
Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
24,451
|
|
$
24,786
|
|
$
120,687
|
|
$
110,396
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
termination benefits
|
-
|
|
2,291
|
|
312
|
|
2,813
|
|
|
|
|
|
Less
on settlement of pension plan
|
1,774
|
|
-
|
|
1,774
|
|
-
|
|
|
|
|
|
Loss
on extinguishment of debt
|
-
|
|
-
|
|
334
|
|
-
|
|
|
|
|
|
Loss
on land held for sale
|
-
|
|
-
|
|
-
|
|
1,119
|
|
|
|
|
Adjusted
Net Income
|
$
26,225
|
|
$
27,077
|
|
$
123,107
|
|
$
114,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding-diluted
|
58,377
|
|
58,608
|
|
58,265
|
|
59,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share
|
$ 0.42
|
|
$ 0.42
|
|
$ 2.07
|
|
$ 1.85
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
termination benefits
|
-
|
|
0.04
|
|
-
|
|
0.05
|
|
|
|
|
|
Loss
on settlement of pension plan
|
0.03
|
|
-
|
|
0.03
|
|
-
|
|
|
|
|
|
Loss
on extinguishment of debt
|
-
|
|
-
|
|
0.01
|
|
-
|
|
|
|
|
|
Loss
on land held for sale
|
-
|
|
-
|
|
-
|
|
0.02
|
|
|
|
|
Adjusted
Diluted Earnings Per Share (EPS)
|
$ 0.45
|
|
$ 0.46
|
|
$ 2.11
|
|
$ 1.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
2012 Actuals
|
|
Q4
2011 Actuals
|
|
Year
Ended December
31,
2012 Actuals
|
|
Year
Ended December
31,
2011 Actuals
|
|
Full-Year
2013 Outlook
Range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (per GAAP)
|
$
45,234
|
|
$
38,662
|
|
$
193,142
|
|
$
171,863
|
|
$
205,100
|
-
|
$
207,100
|
|
Employee
termination benefits
|
-
|
|
3,619
|
|
491
|
|
4,444
|
|
-
|
|
-
|
|
Loss
on settlement of pension plan
|
1,818
|
|
-
|
|
1,818
|
|
-
|
|
-
|
|
-
|
|
Depreciation
and amortization
|
2,237
|
|
2,048
|
|
8,226
|
|
8,024
|
|
9,900
|
-
|
9,900
|
|
Adjusted
Earnings before interest, taxes, depreciation & amortization
(non-GAAP)
|
$
49,289
|
|
$
44,329
|
|
$
203,677
|
|
$
184,331
|
|
$
215,000
|
|
$
217,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|