SILVER SPRING, Md., October
27, 2010 -- Choice Hotels International, Inc., (NYSE: CHH)
today reported the following highlights for third quarter 2010:
- Adjusted
diluted earnings per share (“EPS”) for third quarter 2010 were $0.68 compared to $0.56 for the same period of the
prior year. Diluted EPS were $0.68 for third quarter 2010
compared to $0.55 for third quarter 2009.
Adjusted diluted EPS for third quarter 2009 exclude certain
special items, as described below, totaling $0.01.
- Excluding
special items, adjusted earnings before interest, taxes, depreciation
and amortization (“EBITDA”) were $57.3
million for the
three months ended September
30, 2010, compared to $51.7
million for the
same period of 2009. Operating income for the three months ended September 30, 2010 and 2009 was $54.9 million and $48.1 million,
respectively.
- Franchising
revenues increased 7% from $74.6
million for the
three months ended September
30, 2009 to $79.9 millionfor
the same period of 2010. Total revenues for the three months ended September 30, 2010 increased 11% compared to
the same period of 2009.
- Domestic
unit and room growth increased 1.2% and 0.7%, respectively, from September 30, 2009.
- Domestic
system-wide revenue per available room (“RevPAR”) increased 7.4% for
the third quarter of 2010 compared to the same period of 2009 primarily
as a result of occupancy rates increasing 420 basis points.
- The
effective royalty rate increased 7 basis points to 4.30% for the three
months ended September
30, 2010 compared
to 4.23% for the same period of the prior year.
- The
company executed 79 new domestic hotel franchise contracts for both the
three months ended September
30, 2010and 2009.
- The
number of domestic hotels under construction, awaiting conversion or
approved for development declined 27% fromSeptember 30, 2009 to 545 hotels representing
44,627 rooms; the worldwide pipeline declined 26% from September 30, 2009 to 638 hotels representing
52,723 rooms.
- On August 25, 2010,
the company completed and issued unsecured senior notes in an aggregate
principal amount of$250 million,
in an underwritten, registered public offering. The notes will mature in August 2020 and bear a coupon rate of
interest of 5.7%. Considering bond issuance and related interest rate
hedging costs, the company’s effective interest cost is approximately
6.2%. The proceeds from these senior notes were utilized to repay other
outstanding indebtedness under the company’s unsecured revolving credit
facility.
- The
effective income tax rate for the three months ended September 30, 2010 was 26.4% compared to 35.0%
for the same period of the prior year. Excluding discrete items,
totaling $3.8
million (approximately $0.06 diluted earnings per
share), recorded during the three months ended September 30, 2010,
the company’s effective income tax rate was approximately 34.7%.
“During
the third quarter, we were pleased to see strong gains in RevPAR
domestically across every brand in the Choice family, enabling us to
post positive year-to-date domestic RevPAR performance,” said Stephen P. Joyce,
president and chief executive officer. “While the hotel
transaction environment and lack of access to financing continues to
impact our franchise sales results, our recently launched incentive
program for the Quality, Clarion, and Econo Lodge brands has been
well-received by developers. With our roster of strong,
well-known brands and proven ability to deliver reservations to our
franchisees’ hotels, we are well-positioned for growth as the hotel
development environment improves.”
Special
Items
During
the three and nine months ended September
30, 2010, the company recorded employee termination benefits
charges of approximately $0.3
million and $0.5 million,
respectively. These special items did not have an impact on diluted EPS
for the three and nine months ended September
30, 2010.
During
the three and nine months ended September
30, 2009, the company recorded employee termination benefits of
approximately $1.5
million and $2.3 million,
respectively. During the nine months ended September 30, 2009,
the company also recorded a $1.5
million charge
related to the sublease of a portion of its office space. These special
items represent diluted EPS of $0.01 and $0.03 for the three and nine
months ended September
30, 2009.
Outlook
for 2010
The
company’s fourth quarter 2010 adjusted diluted EPS is expected to be $0.38. The
company expects full-year 2010 adjusted diluted EPS to be between $1.77 and $1.79.
Adjusted EBITDA for full-year 2010 are expected to be between $168.5 million and
$170.5 million. These estimates include the following
assumptions:
- The
company expects net domestic unit growth of approximately 1% in 2010;
- RevPAR
is expected to increase approximately 7% to 8% for fourth quarter of
2010 and increase approximately 2% for full-year 2010;
- The
effective royalty rate is expected to increase 6 basis points for
full-year 2010;
- All
figures assume the existing share count and an effective tax rate of
34.7% for the fourth quarter and 32.3% for full-year 2010.
- Adjusted
EBITDA and adjusted diluted EPS for the fourth quarter and full year
2010 exclude $1.0
million and $1.5 million,
respectively of operating expenses related to employee termination
benefits which represent approximately $0.01 diluted EPS for both
periods.
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.
For
the nine months ended September
30, 2010 the
company paid $32.9
million of cash
dividends to shareholders. The current quarterly dividend rate per
common share is $0.185,
subject to declaration by our board of directors.
During
the nine months ended September
30, 2010, the company purchased approximately 0.3 million shares
of its common stock at an average price of $32.36 for a total cost of $8.7 million under the share repurchase
program and has authorization to purchase up to an additional 3.6
million shares under this program. During the three months ended September 30, 2010 the Company purchased
approximately 0.1 million shares of its common stock for a total cost of $1.9 million at an average price of$34.85.
We expect to continue making repurchases 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 43.2 million shares of its common stock for
a total cost of $1
billion through September 30, 2010.
Considering the effect of a two-for-one stock split in October 2005,
the company had repurchased 76.2 million shares through September 30, 2010 under the share repurchase
program at an average price of$13.35 per share.
Our
Board 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 top markets. Recent
market conditions have resulted in an increase in opportunities to
incent development under these programs. As a result, during the nine
months ended September
30, 2010, the Company has advanced approximately $18.9 millionpursuant
to these programs (of which $5
million has been
repaid to the Company).
Over
the next several years, we expect to continue to opportunistically
deploy capital pursuant to these programs to promote growth of our
emerging brands. The amount and timing of the investment in these
programs will be dependent on market and other conditions. Our current
expectation is that our annual investment in these programs will range
between $20
million to $40 million. 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.
Conference
Call
Choice
will conduct a conference call on Thursday,
October 28, 2010 at 10:15 a.m. EDT to discuss the company’s
third quarter 2010 results. The dial-in number to listen to the call is
1-866-314-5232, and the access code is 99130444. International callers
should dial 1-617-213-8052 and enter the access code 99130444.
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 1:15 p.m. EDT on October 28, 2010 through November 28, 2010by
calling 1-888-286-8010 and entering access code 42827909. The
international dial-in number for the replay is 617-801-6888, access
code 42827909. 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 more than 6,000 hotels,
representing more than 490,000 rooms, in the United States and more than 35 other
countries and territories. As of September 30, 2010,
more than 540 hotels are under construction, awaiting conversion or
approved for development in the
United States, representing more than 44,000 rooms, and
approximately 90 hotels, representing approximately 8,000 rooms, are
under construction, awaiting conversion or approved for development in
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 serve guests worldwide. In addition, via its Ascend
Collection membership program, travelers in the United States, Canada and theCaribbean have upscale lodging
options at historic, boutique and unique hotels.
Additional
corporate information may be found on the Choice Hotels International,
Inc. web site, which may be accessed atwww.choicehotels.com.
Forward-Looking
Statements
Certain
matters discussed in this press release constitute forward-looking
statements within the meaning of the federal securities law.
Generally, our use of words such as "expect," "estimate," "believe,"
"anticipate," "will," "forecast," "plan”," project," "assume" or
similar words of futurity identify statements that are forward-looking
and that we intend to be included within the Safe Harbor protections
provided by Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Such 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, payment
of stock 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, 2009, filed with the Securities and Exchange Commission on March 1,
2010. 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
Adjusted
diluted EPS, adjusted EBITDA, adjusted SG&A, franchising revenues
and adjusted franchising margins 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 earnings per share, 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 contractually required by
its franchise agreements to use these fees collected for marketing and
reservation activities. Cumulative reservation and marketing fees not
expended are recorded as a payable 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 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
employee termination benefits for the three and nine months September 30, 2010 and 2009 as well as a loss
on the sublease of a portion of the Company’s office space during the
nine months ended September
30, 2009. 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 Collection are
proprietary trademarks and service marks of Choice Hotels International.
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 September 30,
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Nine Months
Ended September 30,
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Variance
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Variance
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2010
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2009
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$
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%
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2010
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2009
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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
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$
72,565
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$
66,401
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$ 6,164
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9%
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$ 171,029
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$ 164,771
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$ 6,258
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4%
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Initial
franchise and relicensing fees
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1,970
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2,957
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(987)
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(33%)
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6,537
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9,599
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(3,062)
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(32%)
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Procurement
services
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3,756
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3,922
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(166)
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(4%)
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13,612
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14,084
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(472)
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(3%)
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Marketing
and reservation
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102,867
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90,465
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12,402
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14%
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242,096
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227,803
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14,293
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6%
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Hotel
operations
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1,068
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934
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134
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14%
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3,044
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3,231
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(187)
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(6%)
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Other
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1,575
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|
1,297
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|
278
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21%
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4,752
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3,989
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|
763
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19%
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Total revenues
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183,801
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165,976
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17,825
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11%
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441,070
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423,477
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17,593
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4%
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OPERATING
EXPENSES:
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Selling,
general and administrative
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23,156
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24,517
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(1,361)
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(6%)
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67,796
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73,054
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(5,258)
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(7%)
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Depreciation
and amortization
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2,078
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2,105
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(27)
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(1%)
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6,470
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6,252
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|
218
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3%
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Marketing
and reservation
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102,867
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90,465
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12,402
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14%
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242,096
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227,803
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14,293
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6%
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Hotel
operations
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823
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764
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59
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8%
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2,387
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2,378
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9
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0%
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Total
operating expenses
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128,924
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117,851
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11,073
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9%
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318,749
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309,487
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9,262
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3%
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Operating
income
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54,877
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48,125
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6,752
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14%
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122,321
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113,990
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8,331
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7%
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OTHER INCOME
AND EXPENSES:
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Interest
expense
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1,864
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926
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938
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101%
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3,160
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3,731
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(571)
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(15%)
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Interest and
other investment income
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(1,671)
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(2,961)
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1,290
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(44%)
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(1,645)
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(5,302)
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3,657
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(69%)
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Equity in
net income of affiliates
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(342)
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(336)
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(6)
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2%
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(890)
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(779)
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(111)
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14%
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Total other
income and expenses, net
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(149)
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(2,371)
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2,222
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(94%)
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625
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(2,350)
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2,975
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(127%)
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Income
before income taxes
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55,026
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50,496
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4,530
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9%
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121,696
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116,340
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5,356
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5%
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Income taxes
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14,532
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17,688
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(3,156)
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(18%)
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38,398
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41,721
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(3,323)
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(8%)
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Net income
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$
40,494
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$
32,808
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$ 7,686
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23%
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$
83,298
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$
74,619
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$ 8,679
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12%
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Basic
earnings per share
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$
0.68
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$
0.55
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$ 0.13
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24%
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$
1.40
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$
1.24
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$ 0.16
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13%
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Diluted
earnings per share
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$
0.68
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$
0.55
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$ 0.13
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24%
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$
1.40
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$
1.24
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$ 0.16
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13%
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Choice
Hotels International, Inc.
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Exhibit 2
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Consolidated
Balance Sheets
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(In
thousands, except per share amounts)
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September 30,
|
|
December 31,
|
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|
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2010
|
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2009
|
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|
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(Unaudited)
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ASSETS
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Cash and
cash equivalents
|
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$
79,548
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$
67,870
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Accounts
receivable, net
|
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53,682
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|
41,898
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Deferred
income taxes
|
|
7,980
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7,980
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Other
current assets
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23,980
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10,114
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Total
current assets
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165,190
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127,862
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Fixed assets
and intangibles, net
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140,657
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133,999
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Receivable
-- marketing and reservation fees
|
|
46,127
|
|
33,872
|
|
Investments,
employee benefit plans, at fair value
|
|
22,370
|
|
20,931
|
|
Other assets
|
|
28,963
|
|
23,373
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
403,307
|
|
$
340,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
76,240
|
|
$
70,933
|
|
Deferred
revenue
|
|
71,296
|
|
51,765
|
|
Revolving
credit facility
|
|
6,600
|
|
-
|
|
Deferred
compensation & retirement plan obligations
|
|
2,510
|
|
2,798
|
|
Current
portion of long-term debt
|
|
294
|
|
-
|
|
Income taxes
payable
|
|
19,775
|
|
6,310
|
|
|
Total
current liabilities
|
|
176,715
|
|
131,806
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
251,613
|
|
277,700
|
|
Deferred
compensation & retirement plan obligations
|
|
34,579
|
|
34,956
|
|
Other
liabilities
|
|
|
15,894
|
|
9,787
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
478,801
|
|
454,249
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.01 par value
|
|
596
|
|
595
|
|
Additional
paid-in-capital
|
|
89,611
|
|
90,731
|
|
Accumulated
other comprehensive income (loss)
|
|
(7,545)
|
|
333
|
|
Treasury
stock, at cost
|
|
(872,999)
|
|
(870,302)
|
|
Retained
earnings
|
|
714,843
|
|
664,431
|
|
|
Total
shareholders' deficit
|
|
(75,494)
|
|
(114,212)
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' deficit
|
|
$
403,307
|
|
$
340,037
|
|
|
|
|
|
|
|
|
Choice
Hotels International, Inc.
|
|
|
Exhibit 3
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
83,298
|
|
$ 74,619
|
|
|
|
|
|
|
Adjustments
to reconcile net income to net cash provided
|
|
|
|
|
by operating
activities:
|
|
|
|
|
Depreciation
and amortization
|
6,470
|
|
6,252
|
|
Provision
for bad debts
|
2,421
|
|
1,643
|
|
Non-cash
stock compensation and other charges
|
6,969
|
|
8,796
|
|
Non-cash
interest and other income
|
(987)
|
|
(4,953)
|
|
Dividends
received from equity method investments
|
618
|
|
819
|
|
Equity
in net income of affiliates
|
(890)
|
|
(779)
|
|
|
|
|
|
|
Changes in
assets and liabilities, net of acquisitions:
|
|
|
|
|
Receivables
|
(14,511)
|
|
(9,409)
|
|
Receivable
- marketing and reservation fees, net
|
(2,594)
|
|
(13,742)
|
|
Accounts
payable
|
6,274
|
|
(2,061)
|
|
Accrued
expenses
|
(1,210)
|
|
(5,754)
|
|
Income
taxes payable/receivable
|
11,940
|
|
22,314
|
|
Deferred
income taxes
|
(2,704)
|
|
-
|
|
Deferred
revenue
|
19,443
|
|
5,349
|
|
Other
assets
|
(11,755)
|
|
2,087
|
|
Other
liabilities
|
5,457
|
|
(5,215)
|
|
|
|
|
|
|
NET CASH
PROVIDED BY OPERATING ACTIVITIES
|
108,239
|
|
79,966
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Investment
in property and equipment
|
(17,673)
|
|
(7,539)
|
|
Acquisitions,
net of cash acquired
|
(466)
|
|
-
|
|
Issuance of
notes receivable
|
(8,901)
|
|
(1,731)
|
|
Collections
of notes receivable
|
5,055
|
|
190
|
|
Purchases of
investments, employee benefit plans
|
(1,396)
|
|
(3,239)
|
|
Proceeds
from sales of investments, employee benefit plans
|
1,018
|
|
13,839
|
|
Other items,
net
|
(296)
|
|
(447)
|
|
|
|
|
|
|
NET CASH
PROVIDED (USED) IN INVESTING ACTIVITIES
|
(22,659)
|
|
1,073
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Proceeds
from the issuance of long-term debt
|
247,733
|
|
-
|
|
Net
borrowings (repayments) pursuant to revolving credit facility
|
(271,100)
|
|
7,900
|
|
Principal
payments on long-term debt
|
(20)
|
|
-
|
|
Settlement
of forward starting interest rate swap agreement
|
(8,663)
|
|
-
|
|
Debt
issuance costs
|
(804)
|
|
-
|
|
Purchase of
treasury stock
|
(11,171)
|
|
(57,042)
|
|
Excess tax
benefits from stock-based compensation
|
331
|
|
4,374
|
|
Dividends
paid
|
(32,884)
|
|
(33,335)
|
|
Proceeds
from exercise of stock options
|
1,321
|
|
6,744
|
|
|
|
|
|
|
NET CASH
USED IN FINANCING ACTIVITIES
|
(75,257)
|
|
(71,359)
|
|
|
|
|
|
|
Net change
in cash and cash equivalents
|
10,323
|
|
9,680
|
|
Effect of
foreign exchange rate changes on cash and cash equivalents
|
1,355
|
|
1,285
|
|
Cash and
cash equivalents at beginning of period
|
67,870
|
|
52,680
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS AT END OF PERIOD
|
$
79,548
|
|
$ 63,645
|
|
|
|
|
|
CHOICE HOTELS INTERNATIONAL, INC.
|
Exhibit 4
|
|
SUPPLEMENTAL
OPERATING INFORMATION
|
|
|
DOMESTIC
HOTEL SYSTEM
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30, 2010*
|
|
For the Nine
Months Ended September 30, 2009*
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
$
77.16
|
|
55.4%
|
|
$ 42.72
|
|
$
77.48
|
|
54.7%
|
|
$ 42.36
|
|
(0.4%)
|
|
70
|
bps
|
|
0.8%
|
|
Comfort
Suites
|
|
82.92
|
|
55.1%
|
|
45.72
|
|
85.72
|
|
54.2%
|
|
46.50
|
|
(3.3%)
|
|
90
|
bps
|
|
(1.7%)
|
|
Sleep
|
|
68.94
|
|
51.8%
|
|
35.69
|
|
70.16
|
|
52.5%
|
|
36.80
|
|
(1.7%)
|
|
(70)
|
bps
|
|
(3.0%)
|
|
Midscale
without Food & Beverage
|
|
77.47
|
|
54.8%
|
|
42.42
|
|
78.41
|
|
54.2%
|
|
42.53
|
|
(1.2%)
|
|
60
|
bps
|
|
(0.3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
67.30
|
|
48.0%
|
|
32.31
|
|
68.73
|
|
46.9%
|
|
32.20
|
|
(2.1%)
|
|
110
|
bps
|
|
0.3%
|
|
Clarion
|
|
75.54
|
|
43.3%
|
|
32.73
|
|
77.95
|
|
43.0%
|
|
33.55
|
|
(3.1%)
|
|
30
|
bps
|
|
(2.4%)
|
|
Midscale
with Food & Beverage
|
|
68.98
|
|
47.0%
|
|
32.40
|
|
70.54
|
|
46.1%
|
|
32.48
|
|
(2.2%)
|
|
90
|
bps
|
|
(0.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
54.26
|
|
45.7%
|
|
24.81
|
|
54.96
|
|
43.9%
|
|
24.15
|
|
(1.3%)
|
|
180
|
bps
|
|
2.7%
|
|
Rodeway
|
|
51.42
|
|
46.0%
|
|
23.64
|
|
53.24
|
|
43.9%
|
|
23.35
|
|
(3.4%)
|
|
210
|
bps
|
|
1.2%
|
|
Economy
|
|
53.39
|
|
45.8%
|
|
24.45
|
|
54.46
|
|
43.9%
|
|
23.92
|
|
(2.0%)
|
|
190
|
bps
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
66.03
|
|
63.8%
|
|
42.09
|
|
71.68
|
|
58.1%
|
|
41.65
|
|
(7.9%)
|
|
570
|
bps
|
|
1.1%
|
|
Suburban
|
|
39.24
|
|
64.2%
|
|
25.20
|
|
42.37
|
|
56.0%
|
|
23.72
|
|
(7.4%)
|
|
820
|
bps
|
|
6.2%
|
|
Extended
Stay
|
|
46.76
|
|
64.1%
|
|
29.97
|
|
50.76
|
|
56.6%
|
|
28.71
|
|
(7.9%)
|
|
750
|
bps
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
70.36
|
|
51.2%
|
|
$ 36.02
|
|
$
71.59
|
|
50.1%
|
|
$ 35.85
|
|
(1.7%)
|
|
110
|
bps
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Operating
statistics represent hotel operations from December through August
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended September 30, 2010*
|
|
For the
Three Months Ended September 30, 2009*
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
Average Daily
|
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
$
82.46
|
|
66.7%
|
|
$ 54.99
|
|
$
81.35
|
|
62.7%
|
|
$ 51.04
|
|
1.4%
|
|
400
|
bps
|
|
7.7%
|
|
Comfort
Suites
|
|
85.78
|
|
64.2%
|
|
55.03
|
|
86.67
|
|
60.0%
|
|
52.02
|
|
(1.0%)
|
|
420
|
bps
|
|
5.8%
|
|
Sleep
|
|
72.03
|
|
60.4%
|
|
43.52
|
|
72.14
|
|
57.9%
|
|
41.74
|
|
(0.2%)
|
|
250
|
bps
|
|
4.3%
|
|
Midscale
without Food & Beverage
|
|
81.84
|
|
65.1%
|
|
53.28
|
|
81.32
|
|
61.4%
|
|
49.89
|
|
0.6%
|
|
370
|
bps
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
71.76
|
|
58.3%
|
|
41.84
|
|
72.71
|
|
53.7%
|
|
39.02
|
|
(1.3%)
|
|
460
|
bps
|
|
7.2%
|
|
Clarion
|
|
80.18
|
|
51.5%
|
|
41.27
|
|
81.07
|
|
47.8%
|
|
38.75
|
|
(1.1%)
|
|
370
|
bps
|
|
6.5%
|
|
Midscale
with Food & Beverage
|
|
73.44
|
|
56.8%
|
|
41.72
|
|
74.33
|
|
52.4%
|
|
38.97
|
|
(1.2%)
|
|
440
|
bps
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
58.62
|
|
55.4%
|
|
32.47
|
|
58.54
|
|
51.2%
|
|
29.94
|
|
0.1%
|
|
420
|
bps
|
|
8.5%
|
|
Rodeway
|
|
57.40
|
|
56.0%
|
|
32.15
|
|
57.37
|
|
51.1%
|
|
29.30
|
|
0.1%
|
|
490
|
bps
|
|
9.7%
|
|
Economy
|
|
58.24
|
|
55.6%
|
|
32.37
|
|
58.19
|
|
51.1%
|
|
29.75
|
|
0.1%
|
|
450
|
bps
|
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
68.96
|
|
72.5%
|
|
49.98
|
|
73.01
|
|
63.6%
|
|
46.44
|
|
(5.5%)
|
|
890
|
bps
|
|
7.6%
|
|
Suburban
|
|
40.61
|
|
67.8%
|
|
27.52
|
|
41.68
|
|
60.1%
|
|
25.06
|
|
(2.6%)
|
|
770
|
bps
|
|
9.8%
|
|
Extended
Stay
|
|
49.01
|
|
69.1%
|
|
33.87
|
|
50.88
|
|
61.1%
|
|
31.10
|
|
(3.7%)
|
|
800
|
bps
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
74.79
|
|
61.1%
|
|
$ 45.71
|
|
$
74.77
|
|
56.9%
|
|
$ 42.56
|
|
0.0%
|
|
420
|
bps
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Operating
statistics represent hotel operations from June through August
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Quarter Ended
|
|
|
|
For the Nine
Months Ended
|
|
|
|
9/30/2010
|
|
9/30/2009
|
|
|
|
9/30/2010
|
|
9/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
effective royalty rate
|
|
4.30%
|
|
4.23%
|
|
|
|
4.32%
|
|
4.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
Exhibit 5
|
|
SUPPLEMENTAL
HOTEL AND ROOM SUPPLY DATA
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, 2010
|
|
September
30, 2009
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
1,450
|
|
113,952
|
|
1,457
|
|
114,377
|
|
(7)
|
|
(425)
|
|
(0.5%)
|
|
(0.4%)
|
|
Comfort
Suites
|
|
624
|
|
48,411
|
|
601
|
|
46,853
|
|
23
|
|
1,558
|
|
3.8%
|
|
3.3%
|
|
Sleep
|
|
394
|
|
28,714
|
|
389
|
|
28,459
|
|
5
|
|
255
|
|
1.3%
|
|
0.9%
|
|
Midscale
without Food & Beverage
|
|
2,468
|
|
191,077
|
|
2,447
|
|
189,689
|
|
21
|
|
1,388
|
|
0.9%
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
990
|
|
88,831
|
|
963
|
|
88,129
|
|
27
|
|
702
|
|
2.8%
|
|
0.8%
|
|
Clarion
|
|
176
|
|
25,208
|
|
167
|
|
24,063
|
|
9
|
|
1,145
|
|
5.4%
|
|
4.8%
|
|
Midscale
with Food & Beverage
|
|
1,166
|
|
114,039
|
|
1,130
|
|
112,192
|
|
36
|
|
1,847
|
|
3.2%
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
774
|
|
48,022
|
|
795
|
|
49,504
|
|
(21)
|
|
(1,482)
|
|
(2.6%)
|
|
(3.0%)
|
|
Rodeway
|
|
387
|
|
21,522
|
|
374
|
|
21,834
|
|
13
|
|
(312)
|
|
3.5%
|
|
(1.4%)
|
|
Economy
|
|
1,161
|
|
69,544
|
|
1,169
|
|
71,338
|
|
(8)
|
|
(1,794)
|
|
(0.7%)
|
|
(2.5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
37
|
|
2,868
|
|
37
|
|
2,866
|
|
-
|
|
2
|
|
0.0%
|
|
0.1%
|
|
Suburban
|
|
63
|
|
7,608
|
|
63
|
|
7,531
|
|
-
|
|
77
|
|
0.0%
|
|
1.0%
|
|
Extended
Stay
|
|
100
|
|
10,476
|
|
100
|
|
10,397
|
|
-
|
|
79
|
|
0.0%
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
|
34
|
|
2,821
|
|
26
|
|
1,941
|
|
8
|
|
880
|
|
30.8%
|
|
45.3%
|
|
Cambria
Suites
|
|
22
|
|
2,558
|
|
18
|
|
2,073
|
|
4
|
|
485
|
|
22.2%
|
|
23.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Franchises
|
|
4,951
|
|
390,515
|
|
4,890
|
|
387,630
|
|
61
|
|
2,885
|
|
1.2%
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Franchises
|
|
1,140
|
|
101,637
|
|
1,116
|
|
99,582
|
|
24
|
|
2,055
|
|
2.2%
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Franchises
|
|
6,091
|
|
492,152
|
|
6,006
|
|
487,212
|
|
85
|
|
4,940
|
|
1.4%
|
|
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, 2010
|
|
For the Nine
Months Ended September 30, 2009
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
4
|
|
22
|
|
26
|
|
4
|
|
22
|
|
26
|
|
0%
|
|
0%
|
|
0%
|
|
Comfort
Suites
|
|
13
|
|
1
|
|
14
|
|
9
|
|
1
|
|
10
|
|
44%
|
|
0%
|
|
40%
|
|
Sleep
|
|
3
|
|
-
|
|
3
|
|
11
|
|
2
|
|
13
|
|
(73%)
|
|
(100%)
|
|
(77%)
|
|
Midscale
without Food & Beverage
|
|
20
|
|
23
|
|
43
|
|
24
|
|
25
|
|
49
|
|
(17%)
|
|
(8%)
|
|
(12%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
1
|
|
54
|
|
55
|
|
3
|
|
87
|
|
90
|
|
(67%)
|
|
(38%)
|
|
(39%)
|
|
Clarion
|
|
-
|
|
17
|
|
17
|
|
1
|
|
23
|
|
24
|
|
(100%)
|
|
(26%)
|
|
(29%)
|
|
Midscale
with Food & Beverage
|
|
1
|
|
71
|
|
72
|
|
4
|
|
110
|
|
114
|
|
(75%)
|
|
(35%)
|
|
(37%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
-
|
|
38
|
|
38
|
|
-
|
|
45
|
|
45
|
|
NM
|
|
(16%)
|
|
(16%)
|
|
Rodeway
|
|
1
|
|
26
|
|
27
|
|
1
|
|
36
|
|
37
|
|
0%
|
|
(28%)
|
|
(27%)
|
|
Economy
|
|
1
|
|
64
|
|
65
|
|
1
|
|
81
|
|
82
|
|
0%
|
|
(21%)
|
|
(21%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
4
|
|
-
|
|
4
|
|
1
|
|
1
|
|
2
|
|
300%
|
|
(100%)
|
|
100%
|
|
Suburban
|
|
1
|
|
-
|
|
1
|
|
2
|
|
-
|
|
2
|
|
(50%)
|
|
NM
|
|
(50%)
|
|
Extended
Stay
|
|
5
|
|
-
|
|
5
|
|
3
|
|
1
|
|
4
|
|
67%
|
|
(100%)
|
|
25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
|
1
|
|
5
|
|
6
|
|
1
|
|
5
|
|
6
|
|
0%
|
|
0%
|
|
0%
|
|
Cambria
Suites
|
|
5
|
|
-
|
|
5
|
|
2
|
|
-
|
|
2
|
|
150%
|
|
NM
|
|
150%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic System
|
|
33
|
|
163
|
|
196
|
|
35
|
|
222
|
|
257
|
|
(6%)
|
|
(27%)
|
|
(24%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended September 30, 2010
|
|
For the
Three Months Ended September 30, 2009
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
1
|
|
9
|
|
10
|
|
3
|
|
7
|
|
10
|
|
(67%)
|
|
29%
|
|
0%
|
|
Comfort
Suites
|
|
5
|
|
-
|
|
5
|
|
3
|
|
-
|
|
3
|
|
67%
|
|
NM
|
|
67%
|
|
Sleep
|
|
1
|
|
-
|
|
1
|
|
4
|
|
-
|
|
4
|
|
(75%)
|
|
NM
|
|
(75%)
|
|
Midscale
without Food & Beverage
|
|
7
|
|
9
|
|
16
|
|
10
|
|
7
|
|
17
|
|
(30%)
|
|
29%
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
-
|
|
23
|
|
23
|
|
1
|
|
23
|
|
24
|
|
(100%)
|
|
0%
|
|
(4%)
|
|
Clarion
|
|
-
|
|
11
|
|
11
|
|
1
|
|
9
|
|
10
|
|
(100%)
|
|
22%
|
|
10%
|
|
Midscale
with Food & Beverage
|
|
-
|
|
34
|
|
34
|
|
2
|
|
32
|
|
34
|
|
(100%)
|
|
6%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
-
|
|
16
|
|
16
|
|
-
|
|
16
|
|
16
|
|
NM
|
|
0%
|
|
0%
|
|
Rodeway
|
|
-
|
|
7
|
|
7
|
|
-
|
|
8
|
|
8
|
|
NM
|
|
(13%)
|
|
(13%)
|
|
Economy
|
|
-
|
|
23
|
|
23
|
|
-
|
|
24
|
|
24
|
|
NM
|
|
(4%)
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
1
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
NM
|
|
Suburban
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
NM
|
|
Extended
Stay
|
|
1
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
|
1
|
|
2
|
|
3
|
|
1
|
|
3
|
|
4
|
|
0%
|
|
(33%)
|
|
(25%)
|
|
Cambria
Suites
|
|
2
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic System
|
|
11
|
|
68
|
|
79
|
|
13
|
|
66
|
|
79
|
|
(15%)
|
|
3%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 7
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
|
DOMESTIC
HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR
APPROVED FOR DEVELOPMENT
|
|
(UNAUDITED)
|
|
|
|
A hotel in
the domestic pipeline does not always result in an open and operating
hotel due to various factors.
|
|
|
|
|
|
|
|
|
Variance
|
|
|
|
September
30, 2010
|
|
September
30, 2009
|
|
|
|
|
|
|
|
|
|
Units
|
|
Units
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort Inn
|
|
35
|
|
64
|
|
99
|
|
37
|
|
97
|
|
134
|
|
(2)
|
|
(5%)
|
|
(33)
|
|
(34%)
|
|
(35)
|
|
(26%)
|
|
Comfort
Suites
|
|
1
|
|
126
|
|
127
|
|
-
|
|
194
|
|
194
|
|
1
|
|
NM
|
|
(68)
|
|
(35%)
|
|
(67)
|
|
(35%)
|
|
Sleep Inn
|
|
1
|
|
81
|
|
82
|
|
1
|
|
129
|
|
130
|
|
-
|
|
0%
|
|
(48)
|
|
(37%)
|
|
(48)
|
|
(37%)
|
|
Midscale without Food & Beverage
|
|
37
|
|
271
|
|
308
|
|
38
|
|
420
|
|
458
|
|
(1)
|
|
(3%)
|
|
(149)
|
|
(35%)
|
|
(150)
|
|
(33%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
38
|
|
9
|
|
47
|
|
49
|
|
16
|
|
65
|
|
(11)
|
|
(22%)
|
|
(7)
|
|
(44%)
|
|
(18)
|
|
(28%)
|
|
Clarion
|
|
20
|
|
4
|
|
24
|
|
23
|
|
6
|
|
29
|
|
(3)
|
|
(13%)
|
|
(2)
|
|
(33%)
|
|
(5)
|
|
(17%)
|
|
Midscale with Food & Beverage
|
|
58
|
|
13
|
|
71
|
|
72
|
|
22
|
|
94
|
|
(14)
|
|
(19%)
|
|
(9)
|
|
(41%)
|
|
(23)
|
|
(24%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo Lodge
|
|
37
|
|
2
|
|
39
|
|
40
|
|
4
|
|
44
|
|
(3)
|
|
(8%)
|
|
(2)
|
|
(50%)
|
|
(5)
|
|
(11%)
|
|
Rodeway
|
|
16
|
|
2
|
|
18
|
|
35
|
|
2
|
|
37
|
|
(19)
|
|
(54%)
|
|
-
|
|
0%
|
|
(19)
|
|
(51%)
|
|
Economy
|
|
53
|
|
4
|
|
57
|
|
75
|
|
6
|
|
81
|
|
(22)
|
|
(29%)
|
|
(2)
|
|
(33%)
|
|
(24)
|
|
(30%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
|
-
|
|
40
|
|
40
|
|
-
|
|
34
|
|
34
|
|
-
|
|
NM
|
|
6
|
|
18%
|
|
6
|
|
18%
|
|
Suburban
|
|
-
|
|
26
|
|
26
|
|
-
|
|
31
|
|
31
|
|
-
|
|
NM
|
|
(5)
|
|
(16%)
|
|
(5)
|
|
(16%)
|
|
Extended Stay
|
|
-
|
|
66
|
|
66
|
|
-
|
|
65
|
|
65
|
|
-
|
|
NM
|
|
1
|
|
2%
|
|
1
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
|
3
|
|
5
|
|
8
|
|
1
|
|
2
|
|
3
|
|
2
|
|
200%
|
|
3
|
|
150%
|
|
5
|
|
167%
|
|
Cambria
Suites
|
|
-
|
|
35
|
|
35
|
|
-
|
|
43
|
|
43
|
|
-
|
|
NM
|
|
(8)
|
|
(19%)
|
|
(8)
|
|
(19%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
394
|
|
545
|
|
186
|
|
558
|
|
744
|
|
(35)
|
|
(19%)
|
|
(164)
|
|
(29%)
|
|
(199)
|
|
(27%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
Franchising
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$
183,801
|
|
$
165,976
|
|
$
441,070
|
|
$
423,477
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and reservation revenues
|
|
(102,867)
|
|
(90,465)
|
|
(242,096)
|
|
(227,803)
|
|
|
|
Hotel operations
|
|
(1,068)
|
|
(934)
|
|
(3,044)
|
|
(3,231)
|
|
|
|
Franchising
Revenues
|
|
$
79,866
|
|
$
74,577
|
|
$
195,930
|
|
$
192,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchising
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$
183,801
|
|
$
165,976
|
|
$
441,070
|
|
$
423,477
|
|
|
|
Operating
Income
|
|
$
54,877
|
|
$
48,125
|
|
$
122,321
|
|
$
113,990
|
|
|
|
Operating Margin
|
|
29.9%
|
|
29.0%
|
|
27.7%
|
|
26.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Franchising Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchising
Revenues
|
|
$
79,866
|
|
$
74,577
|
|
$
195,930
|
|
$
192,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
54,877
|
|
$
48,125
|
|
$
122,321
|
|
$
113,990
|
|
|
|
Employee
termination benefits
|
|
263
|
|
1,496
|
|
497
|
|
2,270
|
|
|
|
Loss on
sublease of office space
|
|
-
|
|
-
|
|
-
|
|
1,503
|
|
|
|
Hotel
operations
|
|
(245)
|
|
(170)
|
|
(657)
|
|
(853)
|
|
|
|
|
|
$
54,895
|
|
$
49,451
|
|
$
122,161
|
|
$
116,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Franchising Margins
|
|
68.7%
|
|
66.3%
|
|
62.3%
|
|
60.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar
amounts in thousands)
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative costs
|
|
$
23,156
|
|
$
24,517
|
|
$
67,796
|
|
$
73,054
|
|
|
|
|
Employee
termination benefits
|
|
(263)
|
|
(1,496)
|
|
(497)
|
|
(2,270)
|
|
|
|
|
Loss on
sublease of office space
|
|
-
|
|
-
|
|
-
|
|
(1,503)
|
|
|
|
|
Adjusted
Selling, General and Administrative Costs
|
|
$
22,893
|
|
$
23,021
|
|
$
67,299
|
|
$
69,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
40,494
|
|
$
32,808
|
|
$
83,298
|
|
$
74,619
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
termination benefits
|
|
165
|
|
936
|
|
311
|
|
1,421
|
|
|
|
|
Loss on
sublease of office space
|
|
-
|
|
-
|
|
-
|
|
941
|
|
|
|
Adjusted Net
Income
|
|
$
40,659
|
|
$
33,744
|
|
$
83,609
|
|
$
76,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding-diluted
|
|
59,658
|
|
59,818
|
|
59,646
|
|
60,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share
|
|
$
0.68
|
|
$
0.55
|
|
$
1.40
|
|
$
1.24
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
termination benefits
|
|
-
|
|
0.01
|
|
-
|
|
0.02
|
|
|
|
|
Loss on
sublease of office space
|
|
-
|
|
-
|
|
-
|
|
0.01
|
|
|
|
Adjusted
Diluted Earnings Per Share (EPS)
|
|
$
0.68
|
|
$
0.56
|
|
$
1.40
|
|
$
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2010
Actuals
|
|
Q3 2009
Actuals
|
|
Nine Months
Ended September 30, 2010 Actuals
|
|
Nine Months
Ended September 30, 2009 Actuals
|
|
Full-Year
2010 Outlook
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (per GAAP)
|
|
$
54.9
|
|
$
48.1
|
|
$
122.3
|
|
$
114.0
|
|
$158.5-$160.5
|
|
|
Employee
termination benefits
|
|
0.3
|
|
1.5
|
|
0.5
|
|
2.3
|
|
1.5
|
|
|
Loss
on sublease of office space
|
|
-
|
|
-
|
|
-
|
|
1.5
|
|
-
|
|
|
Depreciation
and amortization
|
|
2.1
|
|
2.1
|
|
6.5
|
|
6.3
|
|
8.5
|
|
|
Adjusted
Earnings before interest, taxes, depreciation & amortization
(non-GAAP)
|
|
$
57.3
|
|
$
51.7
|
|
$
129.3
|
|
$
124.1
|
|
$168.5-$170.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|