Choice Hotels International, Inc.
Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
----------------------------
Variance
2009 2008 $
%
---- ---- -
-
(In thousands, except per
share amounts)
REVENUES:
Royalty fees
$43,441 $47,780 $(4,339)
(9%)
Initial franchise and
relicensing fees
2,649 6,044 (3,395)
(56%)
Procurement services
3,390 3,342 48
1%
Marketing and reservation
62,042 68,426 (6,384)
(9%)
Hotel operations
1,118 1,042 76
7%
Other
1,518 2,221 (703)
(32%)
----- ----- ----
---
Total revenues
114,158 128,855 (14,697)
(11%)
OPERATING EXPENSES:
Selling, general and
administrative
21,461 23,555 (2,094)
(9%)
Depreciation and amortization
2,115 2,057 58
3%
Marketing and reservation
62,042 68,426 (6,384)
(9%)
Hotel operations
785 765
20 3%
--- ---
-- -
Total operating expenses 86,403
94,803 (8,400) (9%)
Operating income
27,755 34,052 (6,297)
(18%)
OTHER INCOME AND EXPENSES:
Interest expense
1,540 3,837 (2,297)
(60%)
Interest and other investment
loss
832 1,068 (236)
(22%)
Equity in net income of
affiliates
(218) (301) 83
(28%)
---- ---- --
---
Total other
income and
expenses,
net
2,154 4,604 (2,450)
(53%)
----- ----- ------
---
Income before income taxes
25,601 29,448 (3,847)
(13%)
Income taxes
9,293 10,871 (1,578)
(15%)
----- ------ ------
---
Net income
$16,308 $18,577 $(2,269)
(12%)
======= ======= =======
===
Weighted average shares
outstanding-basic*
60,532 62,240
====== ======
Weighted average shares
outstanding-diluted*
60,851 63,032
====== ======
Basic earnings per share*
$0.27 $0.30 $(0.03)
(10%)
===== ===== ======
===
Diluted earnings per share*
$0.27 $0.29 $(0.02)
(7%)
===== ===== ======
==
* The Company's weighted average shares
outstanding for the three months
ended March 31, 2008 have been retrospectively
adjusted due to the application of
EITF Issue 03-6-1 "Determining
Whether Instruments Granted in Share
Based Payment Transactions are
Participating Securities" which became
effective for the Company in
2009. The application of this guidance
has resulted in the revision of
diluted earnings per share for the
three months ended March 31, 2008
from $0.30 to $0.29 per share.
Choice Hotels International, Inc.
Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts)
March 31, December 31,
2009
2008
----
----
(Unaudited)
ASSETS
Cash and cash equivalents
$57,395 $52,680
Accounts receivable, net
38,087 43,141
Deferred income taxes
8,223 8,223
Other current assets
12,996 16,172
------ ------
Total current assets
116,701 120,216
Fixed assets and intangibles, net
136,984 138,867
Receivable -- marketing and reservation
fees 24,077
13,527
Investments, employee benefit plans,
at
fair value
25,303 25,360
Other assets
30,649 30,249
------ ------
Total assets
$333,714 $328,219
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses
$61,980 $79,897
Deferred revenue
55,966 47,004
Deferred compensation & retirement
plan
obligations
2,808 6,960
Other current liabilities
6,728 1,206
----- -----
Total current liabilities
127,482 135,067
Long-term debt
309,800 284,400
Deferred compensation & retirement
plan
obligations
33,097 33,462
Other liabilities
9,537 12,960
----- ------
Total liabilities
479,916 465,889
------- -------
Common stock, $0.01 par value
605
607
Additional paid-in-capital
84,062 90,141
Accumulated other comprehensive loss
(3,695) (3,472)
Treasury stock, at cost
(842,554) (835,186)
Retained earnings
615,380 610,240
------- -------
Total shareholders' deficit
(146,202) (137,670)
-------- --------
Total liabilities
and shareholders'
deficit
$333,714 $328,219
-------- --------
Choice Hotels International, Inc.
Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
Three Months
(In thousands)
Ended March 31,
---------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$16,308 $18,577
Adjustments to reconcile net income
to net
cash provided by operating activities:
Depreciation and amortization
2,115 2,057
Provision for bad debts
350 44
Non-cash stock compensation
and other charges 2,406
3,293
Non-cash interest and
other loss
949 1,577
Dividends received from
equity method
investments
166 192
Equity in net income of
affiliates
(218) (301)
Changes in assets and liabilities:
Receivables
4,455 (2,208)
Receivable - marketing
and reservation fees, net (10,370) (9,533)
Accounts payable
(9,095) (13,610)
Accrued expenses
(8,708) (5,442)
Income taxes payable/receivable
8,321 5,660
Deferred income taxes
- 2,389
Deferred revenue
8,964 5,890
Other assets
456 (903)
Other liabilities
(5,643) 684
------ ---
NET CASH PROVIDED BY OPERATING ACTIVITIES
10,456 8,366
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment
(2,068) (2,606)
Purchases of investments, employee
benefit plans (2,003) (4,405)
Proceeds from sales of investments,
employee
benefit plans
1,149 4,430
Issuance of notes receivable
(948) (775)
Collections of notes receivable
2 176
Other items, net
(74) (267)
--- ----
NET CASH USED IN INVESTING ACTIVITIES
(3,942) (3,447)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving
credit facility
25,400 6,800
Excess tax benefits from stock-based
compensation 694
2,085
Purchase of treasury stock
(19,308) (1,446)
Dividends paid
(11,157) (10,484)
Proceeds from exercise of stock options
2,711 2,795
----- -----
NET CASH USED IN FINANCING ACTIVITIES
(1,660) (250)
------ ----
Net change in cash and cash equivalents
4,854 4,669
Effect of foreign exchange rate changes
on cash and
cash equivalents
(139) 272
Cash and cash equivalents at beginning
of period 52,680 46,377
------ ------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $57,395
$51,318
======= =======
CHOICE
HOTELS INTERNATIONAL, INC. Exhibit
4
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months
Ended March 31, 2009*
---------------------
Average Daily
Rate Occupancy
RevPAR
---- ---------
------
Comfort Inn
$73.96 45.9%
$33.96
Comfort Suites
84.48 47.1%
39.77
Sleep
67.49 44.9%
30.32
----- ----
-----
Midscale without Food
& Beverage 75.56
46.0% 34.79
----- ----
-----
Quality
64.73 39.1%
25.29
Clarion
74.03 37.0%
27.35
----- ----
-----
Midscale with Food &
Beverage 66.57
38.6% 25.72
----- ----
-----
Econo Lodge
51.65 37.1%
19.14
Rodeway
49.60 37.0%
18.34
----- ----
-----
Economy
51.07 37.0%
18.92
----- ----
-----
MainStay
71.08 50.5%
35.90
Suburban
42.60 52.0%
22.15
----- ----
-----
Extended Stay
50.25 51.6%
25.92
----- ----
-----
Total
$68.39 42.4%
$29.02
====== ====
======
For the Three Months
Ended March 31, 2008*
---------------------
Average Daily
Rate Occupancy
RevPAR
---- ---------
------
Comfort Inn
$73.70 50.5%
$37.23
Comfort Suites
86.06 54.0%
46.49
Sleep
67.66 50.2%
33.98
----- ----
-----
Midscale without Food
& Beverage 75.65
51.2% 38.76
----- ----
-----
Quality
66.36 43.3%
28.76
Clarion
79.75 41.4%
33.04
----- ----
-----
Midscale with Food &
Beverage 69.30
42.9% 29.74
----- ----
-----
Econo Lodge
50.93 38.5%
19.60
Rodeway
49.52 40.9%
20.25
----- ----
-----
Economy
50.58 39.1%
19.75
----- ----
-----
MainStay
69.02 58.2%
40.14
Suburban
41.05 59.3%
24.35
----- ----
-----
Extended Stay
48.12 59.0%
28.39
----- ----
-----
Total
$69.19 46.8%
$32.37
====== ====
======
Change
------
Average Daily
Rate Occupancy
RevPAR
---- ---------
------
Comfort Inn
0.4% (460) bps
(8.8%)
Comfort Suites
(1.8%) (690) bps (14.5%)
Sleep
(0.3%) (530) bps (10.8%)
---- ---- ---
-----
Midscale without Food
& Beverage (0.1%)
(520) bps (10.2%)
---- ---- ---
-----
Quality
(2.5%) (420) bps (12.1%)
Clarion
(7.2%) (440) bps (17.2%)
---- ---- ---
-----
Midscale with Food &
Beverage
(3.9%) (430) bps (13.5%)
---- ---- ---
-----
Econo Lodge
1.4% (140) bps
(2.3%)
Rodeway
0.2% (390) bps
(9.4%)
--- ---- ---
----
Economy
1.0% (210) bps
(4.2%)
--- ---- ---
----
MainStay
3.0% (770) bps (10.6%)
Suburban
3.8% (730) bps
(9.0%)
--- ---- ---
----
Extended Stay
4.4% (740) bps
(8.7%)
--- ---- ---
----
Total
(1.2%) (440) bps (10.3%)
==== ==== ===
=====
For the Quarter Ended*
----------------------
3/31/2009 3/31/2008
System-wide effective royalty rate
4.26% 4.18%
* Operating statistics represent hotel
operations from December through
February
CHOICE HOTELS INTERNATIONAL, INC.
Exhibit 5
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
March 31, 2009 March 31, 2008
-------------- --------------
Hotels Rooms Hotels Rooms
------ ----- ------ -----
Comfort Inn
1,452 114,008 1,436 112,150
Comfort Suites
560 43,694 490 38,128
Sleep
366 26,956 347 25,781
--- ------ --- ------
Midscale without Food
& Beverage 2,378 184,658 2,273
176,059
----- ------- ----- -------
Quality
926 85,943 847 80,484
Clarion
155 22,562 169 23,340
--- ------ --- ------
Midscale with Food &
Beverage 1,081 108,505 1,016
103,824
----- ------- ----- -------
Econo Lodge
821 51,288 831 51,104
Rodeway
352 20,442 297 17,628
--- ------ --- ------
Economy
1,173 71,730 1,128 68,732
----- ------ ----- ------
MainStay
37 2,867 32
2,421
Suburban
64 7,675 55
6,739
-- ----- --
-----
Extended Stay
101 10,542 87
9,160
--- ------ --
-----
Ascend Collection
21 1,363 -
-
Cambria Suites
13 1,448 5
567
-- ----- --
---
Domestic Franchises
4,767 378,246 4,509 358,342
International Franchises
1,099 97,989 1,111 98,354
----- ------ ----- ------
Total Franchises
5,866 476,235 5,620 456,696
===== ======= ===== =======
Variance
--------
Hotels Rooms %
%
------ ----- -
-
Comfort Inn
16 1,858 1.1%
1.7%
Comfort Suites
70 5,566 14.3%
14.6%
Sleep
19 1,175 5.5%
4.6%
-- ----- ---
---
Midscale without Food
& Beverage 105 8,599
4.6% 4.9%
--- ----- ---
---
Quality
79 5,459 9.3%
6.8%
Clarion
(14) (778) (8.3%) (3.3%)
--- ---- ----
----
Midscale with Food &
Beverage 65
4,681 6.4% 4.5%
-- ----- ---
---
Econo Lodge
(10) 184 (1.2%)
0.4%
Rodeway
55 2,814 18.5%
16.0%
-- ----- ----
----
Economy
45 2,998 4.0%
4.4%
-- ----- ---
---
MainStay
5 446 15.6%
18.4%
Suburban
9 936 16.4%
13.9%
-- --- ----
----
Extended Stay
14 1,382 16.1%
15.1%
-- ----- ----
----
Ascend Collection
21 1,363 NM
NM
Cambria Suites
8 881 160.0%
155.4%
-- --- -----
-----
Domestic Franchises
258 19,904 5.7%
5.6%
International Franchises
(12) (365) (1.1%) (0.4%)
--- ---- ----
----
Total Franchises
246 19,539 4.4%
4.3%
=== ====== ===
===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Three Months For the Three Months
Ended March 31, 2009 Ended March 31, 2008
-------------------- --------------------
New
New
Cons- Conv-
Cons- Conv-
truction ersion Total truction ersion Total
-------- ------ ----- -------- ------ -----
Comfort Inn
- 7 7
11 9 20
Comfort Suites
1 1 2
15 3 18
Sleep
2 - 2
11 2 13
-- -- --
-- -- --
Midscale without Food
&
Beverage
3 8 11
37 14 51
-- -- --
-- -- --
Quality
1 23 24
- 28 28
Clarion
- 6 6
1 10 11
-- -- --
-- -- --
Midscale with Food &
Beverage
1 29 30
1 38 39
-- -- --
-- -- --
Econo Lodge
- 9 9
1 19 20
Rodeway
1 7 8
1 18 19
-- -- --
-- -- --
Economy
1 16 17
2 37 39
-- -- --
-- -- --
MainStay
- 1 1
1 - 1
Suburban
- - -
2 - 2
-- -- --
-- -- --
Extended Stay
- 1 1
3 - 3
-- -- --
-- -- --
Ascend Collection
- - -
- - -
Cambria Suites
1 - 1
1 - 1
-- -- --
-- -- --
Total Domestic System
6 54 60
44 89 133
= == ==
== == ===
% Change
--------
New
Construction Conversion Total
------------ ---------- -----
Comfort Inn
(100%) (22%)
(65%)
Comfort Suites
(93%) (67%)
(89%)
Sleep
(82%) (100%)
(85%)
--- ----
---
Midscale without Food
& Beverage (92%)
(43%) (78%)
--- ---
---
Quality
NM (18%)
(14%)
Clarion
(100%) (40%)
(45%)
---- ---
---
Midscale with Food &
Beverage
0% (24%)
(23%)
-- ---
---
Econo Lodge
(100%) (53%)
(55%)
Rodeway
0% (61%)
(58%)
-- ---
---
Economy
(50%) (57%)
(56%)
--- ---
---
MainStay
(100%) NM
0%
Suburban
(100%) NM
(100%)
---- --
----
Extended Stay
(100%) NM
(67%)
---- --
---
Ascend Collection
NM NM
NM
Cambria Suites
0% NM
0%
-- --
--
Total Domestic System
(86%) (39%)
(55%)
=== ===
===
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.
March 31, 2009 March 31,
2008
Units
Units
-----
-----
Conv- New Cons- Conv- New Cons-
ersion truction Total ersion truction Total
------ --------- ----- ------ --------- -----
Comfort Inn
48 118 166
53 131 184
Comfort Suites
2 253 255
3 275 278
Sleep Inn
1 151 152
2 140 142
-- --- ---
-- --- ---
Midscale without
Food &
Beverage
51 522 573
58 546 604
-- --- ---
-- --- ---
Quality
64 13 77
67 15 82
Clarion
27 7
34 34
7 41
-- -- --
-- -- --
Midscale with Food
&
Beverage
91 20 111
101 22 123
-- -- ---
--- -- ---
Econo Lodge
35 4
39 46
3 49
Rodeway
48 3
51 59
2 61
-- -- --
-- -- --
Economy
83 7
90 105
5 110
-- -- --
--- -- ---
MainStay
- 36 36
2 45 47
Suburban
- 30 30
3 38 41
-- -- --
-- -- --
Extended
Stay
- 66 66
5 83 88
-- -- --
-- -- --
Ascend Collection
- 1
1 -
- -
Cambria Suites
- 55 55
- 61 61
-- -- --
-- -- --
225 671 896
269 717 986
=== === ===
=== === ===
Variance
--------
Conversion New Construction Total
---------- ---------------- -----
Units % Units
% Units %
----- - -----
- ----- -
Comfort Inn
(5) (9%) (13) (10%)
(18) (10%)
Comfort Suites
(1) (33%) (22) (8%)
(23) (8%)
Sleep Inn
(1) (50%) 11
8% 10 7%
-- --- --
-- -- --
Midscale without
Food &
Beverage
(7) (12%) (24) (4%)
(31) (5%)
-- --- ---
-- --- --
Quality
(3) (4%) (2) (13%)
(5) (6%)
Clarion
(7) (21%) -
0% (7) (17%)
-- --- --
-- -- ---
Midscale with Food
&
Beverage
(10) (10%) (2) (9%)
(12) (10%)
--- --- --
-- --- ---
Econo Lodge
(11) (24%) 1
33% (10) (20%)
Rodeway
(11) (19%) 1
50% (10) (16%)
--- --- --
-- --- ---
Economy
(22) (21%) 2
40% (20) (18%)
--- --- --
-- --- ---
MainStay
(2) (100%) (9) (20%)
(11) (23%)
Suburban
(3) (100%) (8) (21%)
(11) (27%)
-- ---- --
--- --- ---
Extended
Stay
(5) (100%) (17) (20%)
(22) (25%)
-- ---- ---
--- --- ---
Ascend Collection
- NM
1 NM
1 NM
Cambria Suites
- NM (6)
(10%) (6) (10%)
-- -- --
--- -- ---
(44) (16%) (46) (6%)
(90) (9%)
=== === ===
== === ==
CHOICE HOTELS INTERNATIONAL, INC.
Exhibit 8
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES
AND FRANCHISING MARGINS
Three Months Ended
(dollar amounts in thousands)
March 31,
------------------
2009 2008
---- ----
Franchising Revenues:
Total Revenues
$114,158 $128,855
Adjustments:
Marketing and reservation
revenues
(62,042) (68,426)
Hotel Operations
(1,118) (1,042)
------ ------
Franchising Revenues
$50,998 $59,387
------- -------
Franchising Margins:
Operating Margin:
Total Revenues
$114,158 $128,855
Operating Income
$27,755 $34,052
------- -------
Operating Margin
24.3% 26.4%
---- ----
Franchising Margin:
Franchising Revenues
$50,998 $59,387
Operating Income
$27,755 $34,052
Less: Hotel Operations
333 277
--- ---
$27,422 $33,775
------- -------
---- ----
Franchising Margins
53.8% 56.9%
---- ----
EBITDA Reconciliation
(in millions)
Q1 2009 Q1 2008
Full-Year
Actuals Actuals 2009 Outlook
------- ------- ------------
Operating Income
$27.8 $34.1
$167.0
Depreciation and amortization
2.1 2.0
8.5
--- ---
---
Earnings before interest,
taxes, depreciation
&
amortization
$29.9 $36.1
$175.5
===== =====
======
|