SILVER SPRING, Md., April 28, 2011-- Choice Hotels International,
Inc., (NYSE: CHH) today reported the following highlights for first
quarter 2011:
- Adjusted diluted earnings per share ("EPS") for first
quarter 2011 were $0.28 compared to $0.27 for the same period of the prior year.
Diluted EPS were $0.26 for first
quarter 2011 compared to $0.26 for first
quarter 2010. Adjusted diluted EPS for first quarter 2011 and
2010 exclude certain special items, as described below, totaling $0.02 and $0.01,
respectively.
- Excluding special items, adjusted earnings before interest,
taxes, depreciation and amortization ("EBITDA") were $27.8 million for the three months ended March 31, 2011, compared to $26.4 million for the same period of 2010.
Operating income increased 8% from $23.8 million
for the three months ended March 31, 2010
to $25.7 million for the same period of
the current year.
- Franchising revenues increased 8% from $47.7 million for the three months ended March 31, 2010 to $51.5
million for the same period of 2011. Total revenues for
the three months ended March 31, 2011
increased 7% to $115.3 million compared
to the same period of 2010.
- The effective income tax rate for the three months ended March 31, 2011 was 28.2% compared to 35.9% for
the same period of the prior year. Excluding certain discrete
items totaling $1.3 million
(approximately $0.02 diluted earnings
per share) recorded during the three months ended March 31, 2011, the company's effective income
tax rate was 34.4%.
- Domestic unit and room growth increased 1.3 percent and 0.8
percent, respectively, from March 31, 2010.
- Domestic system-wide revenue per available room ("RevPAR")
increased 5.5% for the first quarter of 2011 compared to the same
period of 2010.
- The effective royalty rate increased 3 basis points to
4.35% for the three months ended March 31, 2011
compared to 4.32% for the same period of the prior year.
- The company executed 56 new domestic hotel franchise
contracts for the three months ended March 31,
2011 compared to 55 contracts executed in the same period of the
prior year.
- The number of domestic hotels under construction, awaiting
conversion or approved for development declined 23% from March 31, 2010 to 508 hotels representing
41,475 rooms; the worldwide pipeline declined 20% from March 31, 2010 to 606 hotels representing
49,908 rooms.
"While the franchise development environment remained
challenging during the first quarter, we are pleased with our continued
growth in domestic RevPAR, domestic net units and rooms and key
financial metrics," said Stephen P. Joyce,
president and chief executive officer. "As the domestic RevPAR
and hotel transaction environments continue to improve, Choice remains
a top option for hotel developers thanks to our formidable position as
the premier lodging franchisor in the mid-scale and economy segments
with a mix of well-segmented, well-known brands suitable for new
construction and conversion development opportunities."
Special Items
During the three months ended March
31, 2011 and 2010, the company recorded employee termination
benefits in selling, general and administrative expenses of
approximately $0.1 million and $0.4 million, respectively. In addition,
during the three months ended March 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 amounts represented
diluted EPS of $0.02 and $0.01 for the three months ended March 31, 2011 and 2010, respectively.
Outlook for 2011
The company's second quarter 2011 diluted EPS is expected to
be at least $0.43. The company expects
full-year 2011 adjusted diluted EPS to be between $1.73 and $1.75. Adjusted EBITDA for
full-year 2011 are expected to be between $177
million and $179 million. These estimates include the following
assumptions:
- The company expects net domestic unit growth to be
relatively flat in 2011;
- RevPAR is expected to increase approximately 5% for the
second quarter of 2011 and increase approximately 4% for full-year
2011;
- The effective royalty rate is expected to increase 1 basis
points for full-year 2011;
- All figures assume the existing share count and an
effective tax rate of 34.5% and 33.5% for the second quarter and
full-year 2011, respectively;
- Adjusted EBITDA for the full year 2011 excludes $0.1 million of operating expenses related to
employee termination benefits. Adjusted diluted EPS excludes the
aforementioned employee termination benefits as well as a $1.8 million loss on land held for sale which
together represent approximately $0.02
diluted EPS for full year 2011.
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 three months ended March 31,
2011 the company paid $11.0 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 three months ended March
31, 2011, the company did not purchase shares of its common
stock under the share repurchase program but still has authorization to
purchase up to an additional 3.6 million shares under this program.
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 March
31, 2011. Considering the effect of a two-for-one stock split in
October 2005, the company had
repurchased 76.2 million shares through March
31, 2011 under the share repurchase program at an average price
of $13.35 per share.
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 top
markets. 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 Friday, April 29, 2011 at 10:00 a.m. EDT to discuss the company's first
quarter 2011 results. The dial-in number to listen to the call is
1-866-356-4123, and the access code is 79940540. International callers
should dial 1-617-597-5393 and enter the access code 79940540.
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 1:00 p.m. EDT on April 29, 2011 through May
29, 2011 by calling 1-888-286-8010 and entering access code
21425981. The international dial-in number for the replay is
1-617-801-6888, access code 21425981. 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 6,100
hotels, representing more than 490,000 rooms, in the United States and more than 30 other
countries and territories. As of March
31, 2011, more than 500 hotels were under construction, awaiting
conversion or approved for development in the
United States, representing more than 40,000 rooms, and
approximately 100 hotels, representing approximately 8,400 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 serve guests worldwide. In addition, via its
Ascend Collection membership program, travelers in the United States, Canada and the Caribbean
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 at www.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, 2010, filed with the Securities
and Exchange Commission on March 1, 2011.
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 months ended March 31,
2011 and 2010 as well as a reduction in the carrying amount of
land held for sale during the three months ended March
31, 2011. 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.
© 2011 Choice Hotels International, Inc. All rights
reserved.
Exhibit
1
|
|
Choice
Hotels International, Inc.
|
|
Consolidated
Statements of Income
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31,
|
|
|
|
|
|
|
Variance
|
|
|
2011
|
|
2010
|
|
$
|
|
%
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty
fees
|
$
44,240
|
|
$
41,021
|
|
$ 3,219
|
|
8%
|
|
Initial
franchise and relicensing fees
|
2,614
|
|
1,912
|
|
702
|
|
37%
|
|
Procurement
services
|
3,165
|
|
3,245
|
|
(80)
|
|
(2%)
|
|
Marketing
and reservation
|
62,967
|
|
58,840
|
|
4,127
|
|
7%
|
|
Hotel
operations
|
864
|
|
867
|
|
(3)
|
|
(0%)
|
|
Other
|
1,431
|
|
1,536
|
|
(105)
|
|
(7%)
|
|
Total revenues
|
115,281
|
|
107,421
|
|
7,860
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
23,847
|
|
21,816
|
|
2,031
|
|
9%
|
|
Depreciation
and amortization
|
1,955
|
|
2,172
|
|
(217)
|
|
(10%)
|
|
Marketing
and reservation
|
62,967
|
|
58,840
|
|
4,127
|
|
7%
|
|
Hotel
operations
|
833
|
|
756
|
|
77
|
|
10%
|
|
Total
operating expenses
|
89,602
|
|
83,584
|
|
6,018
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
25,679
|
|
23,837
|
|
1,842
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME AND EXPENSES:
|
|
|
|
|
|
|
|
|
Interest
expense
|
3,224
|
|
621
|
|
2,603
|
|
419%
|
|
Interest
income
|
(210)
|
|
(60)
|
|
(150)
|
|
250%
|
|
Other
(gains) and losses
|
1,043
|
|
(1,017)
|
|
2,060
|
|
(203%)
|
|
Equity
in net income of affiliates
|
(301)
|
|
(353)
|
|
52
|
|
(15%)
|
|
Total
other income and expenses, net
|
3,756
|
|
(809)
|
|
4,565
|
|
(564%)
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
21,923
|
|
24,646
|
|
(2,723)
|
|
(11%)
|
|
Income
taxes
|
6,193
|
|
8,853
|
|
(2,660)
|
|
(30%)
|
|
Net
income
|
$
15,730
|
|
$
15,793
|
|
$
(63)
|
|
(0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
0.26
|
|
$
0.27
|
|
$
(0.01)
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
$
0.26
|
|
$
0.26
|
|
$
-
|
|
0%
|
|
|
|
|
|
|
|
|
|
Exhibit
2
|
|
Choice
Hotels International, Inc.
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
March
31,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
$
76,405
|
|
$
91,259
|
|
Accounts
receivable, net
|
48,279
|
|
47,638
|
|
Deferred
income taxes
|
429
|
|
429
|
|
Other
current assets
|
22,755
|
|
24,256
|
|
|
Total
current assets
|
147,868
|
|
163,582
|
|
|
|
|
|
|
|
|
Fixed
assets and intangibles, net
|
140,300
|
|
142,528
|
|
Receivable
-- marketing and reservation fees
|
54,719
|
|
42,507
|
|
Investments,
employee benefit plans, at fair value
|
24,728
|
|
23,365
|
|
Other
assets
|
44,758
|
|
39,740
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
412,373
|
|
$
411,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
$
67,693
|
|
$
88,986
|
|
Deferred
revenue
|
72,039
|
|
67,322
|
|
Deferred
compensation & retirement plan obligations
|
2,573
|
|
2,552
|
|
Current
portion of long-term debt
|
508
|
|
420
|
|
Revolving
credit facility
|
-
|
|
200
|
|
Other
current liabilities
|
6,928
|
|
5,778
|
|
|
Total
current liabilities
|
149,741
|
|
165,258
|
|
|
|
|
|
|
|
|
Long-term
debt
|
260,007
|
|
251,554
|
|
Deferred
compensation & retirement plan obligations
|
34,660
|
|
35,707
|
|
Other
liabilities
|
16,995
|
|
17,274
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
461,403
|
|
469,793
|
|
|
|
|
|
|
|
|
Common
stock, $0.01 par value
|
598
|
|
596
|
|
Additional
paid-in-capital
|
92,019
|
|
92,774
|
|
Accumulated
other comprehensive loss
|
(6,482)
|
|
(7,192)
|
|
Treasury
stock, at cost
|
(867,960)
|
|
(872,306)
|
|
Retained
earnings
|
732,795
|
|
728,057
|
|
|
|
|
|
|
|
|
|
Total
shareholders' deficit
|
(49,030)
|
|
(58,071)
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' deficit
|
$
412,373
|
|
$
411,722
|
|
|
|
|
|
|
|
Exhibit
3
|
|
Choice
Hotels International, Inc.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Three
Months Ended March 31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
15,730
|
|
$
15,793
|
|
|
|
|
|
|
Adjustments
to reconcile net income to net cash provided (used)
|
|
|
|
|
by
operating activities:
|
|
|
|
|
Depreciation
and amortization
|
1,955
|
|
2,172
|
|
Provision
for bad debts
|
778
|
|
856
|
|
Non-cash
stock compensation and other charges
|
4,513
|
|
2,670
|
|
Non-cash
interest and other (income) loss
|
(350)
|
|
(987)
|
|
Equity
in net income of affiliates
|
(301)
|
|
(353)
|
|
|
|
|
|
|
Changes
in assets and liabilities, net of acquisitions:
|
|
|
|
|
Receivables
|
(1,250)
|
|
(435)
|
|
Receivable
- marketing and reservation fees, net
|
(8,979)
|
|
(10,909)
|
|
Accounts
payable
|
(1,775)
|
|
3,294
|
|
Accrued
expenses
|
(18,931)
|
|
(10,611)
|
|
Income
taxes payable/receivable
|
1,182
|
|
4,667
|
|
Deferred
income taxes
|
(12)
|
|
(65)
|
|
Deferred
revenue
|
4,709
|
|
9,138
|
|
Other
assets
|
(1,147)
|
|
(6,898)
|
|
Other
liabilities
|
(1,339)
|
|
(1,352)
|
|
|
|
|
|
|
NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
(5,217)
|
|
6,980
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Investment
in property and equipment
|
(1,835)
|
|
(4,558)
|
|
Equity
method investments
|
(1,600)
|
|
-
|
|
Acquisitions,
net of cash acquired
|
-
|
|
(466)
|
|
Purchases
of investments, employee benefit plans
|
(897)
|
|
(1,104)
|
|
Proceeds
from sales of investments, employee benefit plans
|
310
|
|
522
|
|
Issuance
of notes receivable
|
(1,477)
|
|
(534)
|
|
Collections
of notes receivable
|
7
|
|
10
|
|
Other
items, net
|
(95)
|
|
(124)
|
|
|
|
|
|
|
NET
CASH USED IN INVESTING ACTIVITIES
|
(5,587)
|
|
(6,254)
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net
borrowings pursuant to revolving credit facilities
|
7,900
|
|
16,200
|
|
Repayments
of long-term debt
|
(5)
|
|
-
|
|
Purchase
of treasury stock
|
(2,207)
|
|
(8,936)
|
|
Dividends
paid
|
(10,950)
|
|
(10,945)
|
|
Excess
tax benefits from stock-based compensation
|
834
|
|
49
|
|
Debt
issuance costs
|
(2,207)
|
|
-
|
|
Proceeds
from exercise of stock options
|
2,238
|
|
648
|
|
|
|
|
|
|
NET
CASH USED IN FINANCING ACTIVITIES
|
(4,397)
|
|
(2,984)
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
(15,201)
|
|
(2,258)
|
|
Effect
of foreign exchange rate changes on cash and cash equivalents
|
347
|
|
(19)
|
|
Cash
and cash equivalents at beginning of period
|
91,259
|
|
67,870
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
76,405
|
|
$
65,593
|
|
|
|
|
|
Exhibit
4
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
|
SUPPLEMENTAL
OPERATING INFORMATION
|
|
DOMESTIC
HOTEL SYSTEM
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended March 31, 2011*
|
|
For
the Three Months Ended March 31, 2010*
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
$
72.21
|
|
44.3%
|
|
$ 32.00
|
|
$
71.02
|
|
42.8%
|
|
$ 30.36
|
|
1.7%
|
|
150
|
bps
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Suites
|
79.08
|
|
47.0%
|
|
37.18
|
|
79.21
|
|
43.7%
|
|
34.64
|
|
(0.2%)
|
|
330
|
bps
|
|
7.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sleep
|
64.94
|
|
42.2%
|
|
27.43
|
|
64.76
|
|
41.2%
|
|
26.67
|
|
0.3%
|
|
100
|
bps
|
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
61.58
|
|
38.6%
|
|
23.80
|
|
61.59
|
|
37.0%
|
|
22.77
|
|
(0.0%)
|
|
160
|
bps
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarion
|
67.72
|
|
36.6%
|
|
24.75
|
|
69.45
|
|
33.6%
|
|
23.32
|
|
(2.5%)
|
|
300
|
bps
|
|
6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo
Lodge
|
49.61
|
|
37.3%
|
|
18.49
|
|
49.58
|
|
35.6%
|
|
17.65
|
|
0.1%
|
|
170
|
bps
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodeway
|
45.77
|
|
38.6%
|
|
17.65
|
|
45.44
|
|
36.3%
|
|
16.51
|
|
0.7%
|
|
230
|
bps
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
60.97
|
|
53.9%
|
|
32.85
|
|
63.11
|
|
52.1%
|
|
32.86
|
|
(3.4%)
|
|
180
|
bps
|
|
(0.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban
|
38.29
|
|
60.7%
|
|
23.24
|
|
37.22
|
|
58.8%
|
|
21.89
|
|
2.9%
|
|
190
|
bps
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
98.46
|
|
49.9%
|
|
49.09
|
|
97.33
|
|
42.3%
|
|
41.21
|
|
1.2%
|
|
760
|
bps
|
|
19.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
65.69
|
|
42.0%
|
|
$ 27.58
|
|
$
65.22
|
|
40.1%
|
|
$ 26.13
|
|
0.7%
|
|
190
|
bps
|
|
5.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Quarter Ended*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2011
|
|
3/31/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
effective royalty rate
|
4.35%
|
|
4.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Operating statistics represent hotel operations fro m
December through February
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
5
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
|
SUPPLEMENTAL
HOTEL AND ROOM SUPPLY DATA
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31, 2011
|
|
March
31, 2010
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
1,422
|
|
110,932
|
|
1,445
|
|
113,266
|
|
(23)
|
|
(2,334)
|
|
(1.6%)
|
|
(2.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Suites
|
621
|
|
48,096
|
|
620
|
|
48,180
|
|
1
|
|
(84)
|
|
0.2%
|
|
(0.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sleep
|
397
|
|
28,895
|
|
389
|
|
28,377
|
|
8
|
|
518
|
|
2.1%
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
1,015
|
|
88,967
|
|
976
|
|
88,394
|
|
39
|
|
573
|
|
4.0%
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarion
|
192
|
|
28,259
|
|
168
|
|
24,336
|
|
24
|
|
3,923
|
|
14.3%
|
|
16.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo
Lodge
|
779
|
|
48,245
|
|
786
|
|
48,519
|
|
(7)
|
|
(274)
|
|
(0.9%)
|
|
(0.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodeway
|
381
|
|
20,940
|
|
373
|
|
21,118
|
|
8
|
|
(178)
|
|
2.1%
|
|
(0.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
38
|
|
2,943
|
|
36
|
|
2,797
|
|
2
|
|
146
|
|
5.6%
|
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban
|
63
|
|
7,543
|
|
62
|
|
7,474
|
|
1
|
|
69
|
|
1.6%
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
42
|
|
3,259
|
|
30
|
|
2,459
|
|
12
|
|
800
|
|
40.0%
|
|
32.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cambria
Suites
|
20
|
|
2,328
|
|
20
|
|
2,326
|
|
-
|
|
2
|
|
0.0%
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Franchises
|
4,970
|
|
390,407
|
|
4,905
|
|
387,246
|
|
65
|
|
3,161
|
|
1.3%
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Franchises
|
1,158
|
|
102,326
|
|
1,127
|
|
100,018
|
|
31
|
|
2,308
|
|
2.8%
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Franchises
|
6,128
|
|
492,733
|
|
6,032
|
|
487,264
|
|
96
|
|
5,469
|
|
1.6%
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
6
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
|
SUPPLEMENTAL
INFORMATION BY BRAND
|
|
DEVELOPMENT
RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended March 31, 2011
|
|
For
the Three Months Ended March 31, 2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
New
|
|
|
|
|
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
Construction
|
|
Conversion
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
2
|
|
7
|
|
9
|
|
1
|
|
8
|
|
9
|
|
100%
|
|
(13%)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Suites
|
-
|
|
2
|
|
2
|
|
2
|
|
-
|
|
2
|
|
(100%)
|
|
NM
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sleep
|
2
|
|
-
|
|
2
|
|
2
|
|
-
|
|
2
|
|
0%
|
|
NM
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
-
|
|
24
|
|
24
|
|
1
|
|
11
|
|
12
|
|
(100%)
|
|
118%
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarion
|
-
|
|
5
|
|
5
|
|
-
|
|
3
|
|
3
|
|
NM
|
|
67%
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo
Lodge
|
-
|
|
6
|
|
6
|
|
-
|
|
10
|
|
10
|
|
NM
|
|
(40%)
|
|
(40%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodeway
|
-
|
|
5
|
|
5
|
|
1
|
|
11
|
|
12
|
|
(100%)
|
|
(55%)
|
|
(58%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
1
|
|
-
|
|
1
|
|
2
|
|
-
|
|
2
|
|
(50%)
|
|
NM
|
|
(50%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
1
|
|
(100%)
|
|
NM
|
|
(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
-
|
|
1
|
|
1
|
|
-
|
|
2
|
|
2
|
|
NM
|
|
(50%)
|
|
(50%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cambria
Suites
|
1
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Domestic System
|
6
|
|
50
|
|
56
|
|
10
|
|
45
|
|
55
|
|
(40%)
|
|
11%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
March
31, 2011
|
|
March
31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
Units
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Conversion
|
|
New
Construction
|
|
Total
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
Units
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Inn
|
31
|
|
58
|
|
89
|
|
43
|
|
81
|
|
124
|
|
(12)
|
|
(28%)
|
|
(23)
|
|
(28%)
|
|
(35)
|
|
(28%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comfort
Suites
|
3
|
|
117
|
|
120
|
|
-
|
|
154
|
|
154
|
|
3
|
|
NM
|
|
(37)
|
|
(24%)
|
|
(34)
|
|
(22%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sleep
Inn
|
-
|
|
70
|
|
70
|
|
1
|
|
115
|
|
116
|
|
(1)
|
|
(100%)
|
|
(45)
|
|
(39%)
|
|
(46)
|
|
(40%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
47
|
|
6
|
|
53
|
|
39
|
|
13
|
|
52
|
|
8
|
|
21%
|
|
(7)
|
|
(54%)
|
|
1
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarion
|
20
|
|
2
|
|
22
|
|
16
|
|
6
|
|
22
|
|
4
|
|
25%
|
|
(4)
|
|
(67%)
|
|
-
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Econo
Lodge
|
35
|
|
2
|
|
37
|
|
39
|
|
4
|
|
43
|
|
(4)
|
|
(10%)
|
|
(2)
|
|
(50%)
|
|
(6)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodeway
|
14
|
|
2
|
|
16
|
|
33
|
|
3
|
|
36
|
|
(19)
|
|
(58%)
|
|
(1)
|
|
(33%)
|
|
(20)
|
|
(56%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MainStay
|
2
|
|
39
|
|
41
|
|
-
|
|
39
|
|
39
|
|
2
|
|
NM
|
|
-
|
|
0%
|
|
2
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban
|
-
|
|
20
|
|
20
|
|
-
|
|
26
|
|
26
|
|
-
|
|
NM
|
|
(6)
|
|
(23%)
|
|
(6)
|
|
(23%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ascend
Collection
|
4
|
|
4
|
|
8
|
|
4
|
|
4
|
|
8
|
|
-
|
|
0%
|
|
-
|
|
0%
|
|
-
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cambria
Suites
|
-
|
|
32
|
|
32
|
|
-
|
|
37
|
|
37
|
|
-
|
|
NM
|
|
(5)
|
|
(14%)
|
|
(5)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156
|
|
352
|
|
508
|
|
175
|
|
482
|
|
657
|
|
(19)
|
|
(11%)
|
|
(130)
|
|
(27%)
|
|
(149)
|
|
(23%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
8
|
|
CHOICE
HOTELS INTERNATIONAL, INC.
|
|
SUPPLEMENTAL
NON-GAAP FINANCIAL INFORMATION
|
|
(UNAUDITED)
|
|
|
|
CALCULATION
OF FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS
|
|
|
|
|
|
|
|
(dollar
amounts in thousands)
|
Three
Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
Franchising
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
115,281
|
|
$
107,421
|
|
|
Adjustments:
|
|
|
|
|
|
Marketing and reservation revenues
|
(62,967)
|
|
(58,840)
|
|
|
Hotel operations
|
(864)
|
|
(867)
|
|
|
Franchising
Revenues
|
$
51,450
|
|
$
47,714
|
|
|
|
|
|
|
|
|
Franchising
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
115,281
|
|
$
107,421
|
|
|
Operating
Income
|
$
25,679
|
|
$
23,837
|
|
|
Operating Margin
|
22.3%
|
|
22.2%
|
|
|
|
|
|
|
|
|
Adjusted
Franchising Margin:
|
|
|
|
|
|
|
|
|
|
|
|
Franchising
Revenues
|
$
51,450
|
|
$
47,714
|
|
|
|
|
|
|
|
|
Operating
Income
|
$
25,679
|
|
$
23,837
|
|
|
Employee
termination benefits
|
70
|
|
352
|
|
|
Hotel
operations
|
(31)
|
|
(111)
|
|
|
|
$
25,718
|
|
$
24,078
|
|
|
|
|
|
|
|
|
Adjusted Franchising Margins
|
50.0%
|
|
50.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE COSTS
|
|
|
|
|
|
|
|
(dollar
amounts in thousands)
|
Three
Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
Selling,
general and administrative costs
|
$
23,847
|
|
$
21,816
|
|
|
Employee
termination benefits
|
(70)
|
|
(352)
|
|
|
Adjusted
Selling, General and Administrative Costs
|
$
23,777
|
|
$
21,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION
OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
|
|
|
|
|
|
|
|
(In
thousands, except per share amounts)
|
Three
Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Net
Income
|
$
15,730
|
|
$
15,793
|
|
Adjustments:
|
|
|
|
|
|
Loss
on land held for sale
|
1,111
|
|
-
|
|
|
Employee
termination benefits
|
44
|
|
220
|
|
Adjusted
Net Income
|
$
16,885
|
|
$
16,013
|
|
|
|
|
|
|
|
Weighted
average shares outstanding-diluted
|
59,825
|
|
59,600
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share
|
$
0.26
|
|
$
0.26
|
|
Adjustments:
|
|
|
|
|
|
Loss
on land held for sale
|
0.02
|
|
-
|
|
|
Employee
termination benefits
|
-
|
|
0.01
|
|
Adjusted
Diluted Earnings Per Share (EPS)
|
$
0.28
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
Q1
2011 Actuals
|
|
Q1
2010 Actuals
|
|
Full-Year
2011 Outlook
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (per GAAP)
|
$
25.7
|
|
$
23.8
|
|
$168.1-$170.1
|
|
|
Employee
termination benefits
|
0.1
|
|
0.4
|
|
0.1
|
|
|
Depreciation
and amortization
|
2.0
|
|
2.2
|
|
8.8
|
|
|
Adjusted
Earnings before interest, taxes, depreciation & amortization
(non-GAAP)
|
$
27.8
|
|
$
26.4
|
|
$177-$179
|
|
|
|
|
|
|
|
|
|