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Choice Hotels International Reports Full Year 2012 Adjusted Diluted EPS of $2.11 Per Share



  Choice Hotels International Reports Full Year 2012 Adjusted Diluted EPS of
                               $2.11 Per Share

Full Year New Domestic Hotel Franchise Contracts Rise 42%

PR Newswire

SILVER SPRING, Md., Feb. 11, 2013

SILVER SPRING, Md., Feb. 11, 2013 /PRNewswire/ -- Choice Hotels International,
Inc., (NYSE:CHH) today reported the following highlights for the fourth
quarter and full year 2012:

"2012 was a record breaking year for the company in terms of operating
performance. We established new company records for the size of the domestic
franchise system, total franchising revenues, franchising margins, operating
cash flows, operating income and earnings per share," said Stephen P. Joyce,
president and chief executive officer. "We are very pleased with our
development results which increased 42 percent over the prior year,
highlighted by the conversion of 46 properties, formerly operated as Jameson
Inns, to our system and the execution of several Cambria Suites agreements in
key markets important for Cambria's long-term success. We remain optimistic
that the development and RevPAR environments will continue to improve and
result in further growth of our business in 2013." 

Full Year Highlights

  o Adjusted diluted earnings per share ("EPS") for full year 2012 were $2.11
    compared to $1.92 for full year 2011, a 10% increase.  Adjusted diluted
    EPS for full year 2012 and 2011 exclude certain special items, as
    described below, totaling $0.04 and $0.07, respectively.
  o Excluding special items, adjusted earnings before interest, taxes,
    depreciation and amortization ("EBITDA") increased 10% to $203.7 million
    for the year ended December 31, 2012, compared to the prior year.
    Operating income increased 12% from $171.9 million for the year ended
    December 31, 2011 to $193.1 million for full year 2012.
  o Franchising revenues increased 6% to $302.2 million for the year ended
    December 31, 2012 from $285.4 million for the same period of 2011.  Total
    revenues increased 8% to $691.5 million for the year ended December 31,
    2012 compared to the same period of 2011.
  o Adjusted franchising margins increased 280 basis points from 61.5% for the
    year ended December 31, 2011 to 64.3% for the same period of the current
    year.
  o Domestic royalty fees for the year ended December 31, 2012 increased $15.4
    million to $235.7 million from $220.3 million for the year ended December
    31, 2011, an increase of 7%.
  o Domestic unit and room growth increased 1.6 percent and 0.8 percent from
    December 31, 2011, respectively. 
  o Domestic system-wide revenue per available room ("RevPAR") increased 6.2%
    for the year ended December 31, 2012 compared to the year ended December
    31, 2011 as occupancy and average daily rates increased 200 basis points
    and 2.5 percent, respectively.   
  o The effective royalty rate increased 1 basis point to 4.33% for the year
    ended December 31, 2012 compared to 4.32% for the same period of the prior
    year.
  o The company executed 473 new domestic hotel franchise contracts for the
    year ended December 31, 2012 compared to 332 new domestic hotel franchise
    contracts in the same period of the prior year, a 42% increase.
  o The number of worldwide hotels under construction, awaiting conversion or
    approved for development as of December 31, 2012 was 482 hotels
    representing 38,969 rooms.
  o The effective income tax rate for the year ended December 31, 2012 was
    28.7% compared to 30.1% for the same period of 2011.
  o During the year ended December 31, 2012, the company paid cash dividends
    totaling approximately $654.1 million, including a special cash dividend
    of $10.41 per share or approximately $600.7 million and purchased
    approximately 0.5 million shares of its common stock for a total cost of
    $19.9 million under the share repurchase program.

Fourth Quarter Highlights

  o Adjusted diluted EPS for fourth quarter 2012 were $0.45 compared to $0.46
    for the same period of the prior year. Diluted EPS were $0.42 for the
    fourth quarter of 2012 compared to $0.42 for the same period of 2011.
    Adjusted diluted EPS for fourth quarter 2012 and 2011 exclude certain
    special items, as described below, totaling $0.03 and $0.04, respectively.
  o Excluding special items, adjusted EBITDA increased 11% to $49.3 million
    for the three months ended December 31, 2012 compared to the same period
    of the prior year.  Operating income for the three months ended December
    31, 2012 increased 17% from the same period of the prior year to $45.2
    million.
  o Franchising revenues increased 4% from $73.9 million for the three months
    ended December 31, 2011 to $77.0 million for the same period of 2012. 
    Total revenues for the three months ended December 31, 2012 increased 7%
    compared to the same period of the prior year.
  o Domestic system-wide revenue per available room ("RevPAR") increased 4.2%
    for the three months ended December 31, 2012 compared to the same period
    of 2011 as occupancy and average daily rates increased 120 basis points
    and 2.0 percent, respectively.   
  o The effective royalty rate increased 5 basis points to 4.36% for the three
    months ended December 31, 2012 compared to 4.31% for the same period of
    the prior year.
  o The company executed 214 new domestic hotel franchise contracts for the
    three months ended December 31, 2012 compared to 128 new domestic hotel
    franchise contracts in the same period of the prior year, a 67% increase.
  o Reached an agreement with affiliates of Colony Capital, LLC, including
    Colony Financial, Inc., and hospitality management company Aimbridge
    Hospitality, to convert 46 properties, formerly operated as Jameson Inns,
    to the company's Quality Inn, Comfort Inn and Econo Lodge brands,
    representing the company's largest single conversion transaction,
    excluding brand acquisitions.
  o Expanded Cambria Suites into additional major markets with new franchise
    agreements executed for hotels in New York City, Phoenix, Arizona and
    Plano, Texas.
  o Interest expense for the three months ended December 31, 2012 increased
    $7.1 million over the same period of the prior reflecting the financing
    transactions entered into during the second and third quarter of 2012 in
    conjunction with the payment of the $600 million special cash dividend
    paid on August 23, 2012.

Special Items

On December 27, 2012, the company settled its supplemental executive
retirement plan and paid the actuarial equivalent of the lump sum value of the
full accrued benefit to each participant. As a result of the settlement, the
company recognized a settlement loss in SG&A expense totaling $1.8 million for
the three months and year ended December 31, 2012. In addition, during the
year ended December 31, 2012, the company recorded employee termination
benefits charges in SG&A of approximately $0.5 million and recognized a loss
on the extinguishment of debt totaling $0.5 million. These special items
represent diluted EPS of $0.03 and $0.04 for the three months and year ended
December 31, 2012, respectively.

During the three months and year ended December 31, 2011, the company recorded
employee termination benefit charges included in SG&A expenses of
approximately $3.6 million and $4.4 million, respectively. In addition, during
the year ended December 31, 2011, the company reduced the carrying amount of a
parcel of land held for sale resulting in a loss of $1.8 million included in
other gains and losses. These special items represent diluted EPS of $0.04 and
$0.07 for the three months and year ended December 31, 2011, respectively.

Use of Free Cash Flow

The company has historically used its free cash flow (cash flow from
operations less capital expenditures) to return value to shareholders,
primarily through share repurchases and dividends.

Dividends

For the year ended December 31, 2012, the company paid $654.1 million of cash
dividends to shareholders which included a special cash dividend in the amount
of $10.41 per share or approximately $600.7 million paid on August 23, 2012.
The company's current quarterly dividend rate per common share is $0.185,
subject to declaration by our board of directors.

Share Repurchases

During the year ended December 31, 2012, the company repurchased 0.5 million
shares for a total cost of $19.9 million and has authorization to purchase up
to an additional 1.4 million shares under this program.  The company did not
repurchase any shares of common stock under the share repurchase program
during the three months ended December 31, 2012. We expect to continue making
repurchases under our share repurchase program in the open market and through
privately negotiated transactions, subject to market and other conditions. No
minimum number of share repurchases has been fixed. Since Choice announced its
stock repurchase program on June 25, 1998, the company has repurchased 45.3
million shares of its common stock for a total cost of $1.1 billion through
December 31, 2012. Considering the effect of a two-for-one stock split in
October 2005, the company had repurchased 78.3 million shares through December
31, 2012 under the share repurchase program at an average price of $13.89 per
share.

Other

Our board of directors previously authorized us to enter into programs which
permit us to offer financing, investment and guaranty support to qualified
franchisees as well as to acquire and resell real estate to incent franchise
development for certain brands in strategic markets.  During the year ended
December 31, 2012, the company advanced, net of repayments, approximately $41
million related to mezzanine financing and sliver equity investments to
construct Cambria Suites in such markets as New York City and White Plains,
New York, Phoenix, Arizona and Plano, Texas. At December 31, 2012 the company
had approximately $68 million outstanding related to this program. Over the
next several years, we expect to continue to opportunistically deploy capital
pursuant to these programs to promote growth of our emerging brands.  We
expect these advances to range between $20 million and $40 million per year,
however, the amount and timing of the investment in these programs will be
dependent on market and other conditions.  Notwithstanding these programs, the
company expects to continue to return value to its shareholders through a
combination of share repurchases and dividends, subject to market and other
conditions.

Balance Sheet

At December 31, 2012, the company had gross debt of $855.3 million and cash
and cash equivalents totaling $134.2 million resulting in net debt of $721.1
million.  At December 31, 2011, the company had gross debt of $252.7 million
and cash equivalents totaling $107.1 million resulting in net debt of $145.6
million.

On June 27, 2012, the company issued unsecured senior notes in an aggregate
principal amount of $400 million, in an underwritten, registered public
offering. These notes will mature in July 2022 and bear a coupon rate of
interest of 5.75%. Considering bond issuance costs, the company's effective
interest costs related to these senior notes is approximately 5.94%.

On July 25, 2012, the company entered into a senior secured credit facility
consisting of a $200 million revolving credit tranche and a $150 million term
loan tranche, with a four year term. The company may elect to have borrowings
under the senior secured credit facility bear interest at (i) a base rate plus
a margin ranging from 100 to 325 basis points based on the company's total
leverage ratio or (ii) LIBOR plus a margin ranging from 200 to 425 basis
points based on the company's total leverage ratio.  As a result of entering
into the senior secured credit facility, the company's existing $300 million
senior unsecured revolving credit facility was terminated. Under the $300
million senior unsecured revolving credit facility the company could elect to
have borrowings bear interest at (i) a base rate plus a margin ranging from 5
to 80 basis points based on the company's credit rating or (ii) LIBOR plus a
margin ranging from 105 to 180 basis points based on the company's credit
rating.

The proceeds from the issuance of the $400 million senior notes and the
company's new senior secured credit facility were utilized to pay the special
cash dividend paid on August 23, 2012.

At December 31, 2012 and 2011, the company had outstanding mezzanine
financing, real estate investments and sliver equity investments totaling $68
million and $27 million, respectively pursuant to its program to offer
financing and investment support to incent franchise development for the
Cambria Suites brand in strategic markets.  These investments are reported in
other current assets and other assets on the company's consolidated balance
sheet.

Outlook

The company's first quarter 2013 diluted EPS is expected to be $0.26. The
company expects full-year 2013 diluted EPS to range between $1.96 and $1.98. 
EBITDA for full-year 2013 are expected to range between $215 million and $217
million. These estimates include the following assumptions:

  o The company expects net domestic unit growth to increase by approximately
    1.5% in 2013;
  o RevPAR is expected to increase approximately 5% for first quarter of 2013
    and increase between 4.5% and 5.5% for full-year 2013;
  o The effective royalty rate is expected to increase 3 basis points for
    full-year 2013;
  o All figures assume the existing share count;
  o An effective tax rate of 28.5% and 30.6% for the first quarter and
    full-year 2013, respectively.

Conference Call

Choice will conduct a conference call on Tuesday, February 12, 2013 at 9:00
a.m. EST to discuss the company's fourth quarter 2012 results. The dial-in
number to listen to the call is 1-800-591-6930, and the access code is
96459022. International callers should dial 1-617-614-4908 and enter the
access code 96459022.  The conference call also will be Webcast simultaneously
via the company's Web site, www.choicehotels.com.  Interested investors and
other parties wishing to access the call via the Webcast should go to the Web
site and click on the Investor Info link.  The Investor Information page will
feature a conference call microphone icon to access the call.

The call will be recorded and available for replay beginning at 11:00 a.m. EST
on Tuesday, February 12, 2013 through Tuesday, February 19, 2013 by calling
1-888-286-8010 and entering access code 56450518. The international dial-in
number for the replay is 1-617-801-6888, access code 56450518. In addition,
the call will be archived and available on www.choicehotels.com via the
Investor Info link.

About Choice Hotels

Choice Hotels International, Inc. franchises approximately 6,200 hotels,
representing more than 499,000 rooms, in the United States and more than 30
other countries and territories.  As of December 31, 2012, 394 hotels,
representing more than 31,000 rooms, were under construction, awaiting
conversion or approved for development in the United States.  Additionally, 88
hotels, representing approximately 7,800 rooms, were under construction,
awaiting conversion or approved for development in more than 20 other
countries and territories.  The company's Comfort Inn, Comfort Suites,
Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban
Extended Stay Hotel, Econo Lodge and Rodeway Inn brands, as well as its Ascend
Hotel Collection membership program, serve guests worldwide.

Additional corporate information may be found on the Choice Hotels
International, Inc. web site, which may be accessed at www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995.  Generally, our use of words such as "expect," "estimate," "believe,"
"anticipate," "will," "forecast," "plan"," project," "assume" or similar words
of futurity identify such forward-looking statements.  These forward-looking
statements are based on management's current beliefs, assumptions and
expectations regarding future events, which in turn are based on information
currently available to management.  Such statements may relate to
projections of the company's revenue, earnings and other financial and
operational measures, company debt levels, ability to repay outstanding
indebtedness, payment of dividends, and future operations, among other
matters.   We caution you not to place undue reliance on any such
forward-looking statements.  Forward-looking statements do not guarantee
future performance and involve known and unknown risks, uncertainties and
other factors.

Several factors could cause actual results, performance or achievements of the
company to differ materially from those expressed in or contemplated by the
forward-looking statements.  Such risks include, but are not limited to,
changes to general, domestic and foreign economic conditions;  operating risks
common in the lodging and franchising industries; changes to the desirability
of our brands as viewed by hotel operators and customers; changes to the terms
or termination of our contracts with franchisees; our ability to keep pace
with improvements in technology utilized for reservations systems and other
operating systems; fluctuations in the supply and demand for hotels rooms;
and our ability to manage effectively our indebtedness.  These and other risk
factors are discussed in detail in the Risk Factors section of the company's
Form 10-K for the year ended December 31, 2011, filed with the Securities and
Exchange Commission on February 29, 2012 and our quarterly reports filed on
Form 10-Q.  We undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.

Statement Concerning Non-GAAP Financial Measurements Presented in Exhibit 8

Adjusted diluted EPS, adjusted EBITDA, franchising revenues, adjusted
franchising margins and adjusted SG&A expenses are non-GAAP financial
measurements.  This information should not be considered as an alternative to
any measure of performance as promulgated under accounting principles
generally accepted in the United States ("GAAP"), such as diluted EPS,
operating income, total revenues and operating margins.  The company's
calculation of these measurements may be different from the calculations used
by other companies and therefore comparability may be limited.  The company
has included an exhibit accompanying this release that reconciles these
measures to the comparable GAAP measurement. We discuss management's reasons
for reporting these non-GAAP measures below.

Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA
reflects earnings excluding the impact of interest expense, tax expense,
depreciation and amortization. Our management considers EBITDA to be an
indicator of operating performance because it can be used to measure our
ability to service debt, fund capital expenditures, and expand our business.
EBITDA is a commonly used measure of performance in our industry. In addition,
it is used by analysts, lenders, investors and others, as well as by us, to
facilitate comparisons between the company and its competitors because it
excludes certain items that can vary widely across different industries or
among companies within the same industry.

Franchising Revenues and Margins:  The company reports franchising revenues
and margins which exclude marketing and reservation revenues and hotel
operations.  Marketing and reservation activities are excluded from revenues
and operating margins since the company is required by its franchise
agreements to use these fees collected for marketing and reservation
activities. Cumulative reservation and marketing system fees not expended are
recorded as a liability on the company's financial statements and are carried
over to the next fiscal year and expended in accordance with the franchise
agreements. Cumulative marketing and reservation expenditures in excess of
system fees collected for marketing and reservation activities are recorded as
a receivable on the company's financial statements. In addition, the company
has the contractual authority to require that the franchisees in the system at
any given point repay the company for any deficits related to marketing and
reservation activities.  Hotel operations are excluded since they do not
reflect the most accurate measure of the company's core franchising business.
These non-GAAP measures are a commonly used measure of performance in our
industry and facilitate comparisons between the company and its competitors.

Adjusted Diluted EPS, Adjusted EBITDA, Adjusted SG&A and Adjusted Franchising
Margins: The company's management also uses adjusted diluted EPS, adjusted
EBITDA, adjusted SG&A and adjusted franchising margins which exclude the loss
on settlement of a pension plan, employee termination benefits, a loss on
extinguishment of debt as well as a reduction in the carrying amount of land
held for sale.  The company utilizes these non-GAAP measures to enable
investors to perform meaningful comparisons of past, present and future
operating results and as a means to emphasize the results of on-going
operations.

Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites,
Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban
Extended Stay Hotel, Econo Lodge, Rodeway Inn and Ascend Collectionare
proprietary trademarks and service marks of Choice Hotels International.

© 2013 Choice Hotels International, Inc.  All rights reserved.

Choice Hotels                                                                  Exhibit
International,                                                                 1
Inc.
Consolidated
Statements of
Income
(Unaudited)
               Three Months Ended December 31,    Year Ended December 31,
                                 Variance                             Variance
               2012     2011     $        %       2012      2011      $        %
(In thousands,
except per
share amounts)
REVENUES:
               $        $        $                $         $         $    
Royalty fees                     3,098    5%                          15,356   6%
                66,020   62,922                    260,782   245,426
Initial
franchise and  5,250    4,969    281      6%      14,203    14,052    151      1%
relicensing
fees
Procurement    3,972    4,074    (102)    (3%)    17,962    18,111    (149)    (1%)
services
Marketing and  100,160  90,844   9,316    10%     384,784   349,036   35,748   10%
reservation 
Hotel          1,133    1,183    (50)     (4%)    4,573     4,356     217      5%
operations
Other          1,771    1,898    (127)    (7%)    9,205     7,812     1,393    18%
      Total    178,306  165,890  12,416   7%      691,509   638,793   52,716   8%
revenues
OPERATING
EXPENSES:
Selling,
general and    29,779   33,463   (3,684)  (11%)   101,852   106,404   (4,552)  (4%)
administrative
Depreciation
and            2,237    2,048    189      9%      8,226     8,024     202      3%
amortization
Marketing and  100,160  90,844   9,316    10%     384,784   349,036   35,748   10%
reservation
Hotel          896      873      23       3%      3,505     3,466     39       1%
operations
Total
operating      133,072  127,228  5,844    5%      498,367   466,930   31,437   7%
expenses
Operating      45,234   38,662   6,572    17%     193,142   171,863   21,279   12%
income
OTHER INCOME
AND EXPENSES,
NET:
Interest       10,366   3,220    7,146    222%    27,189    12,939    14,250   110%
expense
Interest       (384)    (369)    (15)     4%      (1,540)   (1,306)   (234)    18%
income
Loss on
extinguishment -        -        -        NM      526       -         526      NM
of debt
Other (gains)  148      (1,236)  1,384    (112%)  (1,989)   2,442     (4,431)  (181%)
and losses
Equity in net
income of      (224)    (7)      (217)    3100%   (212)     (269)     57       (21%)
affiliates
Total other
income and     9,906    1,608    8,298    516%    23,974    13,806    10,168   74%
expenses, net
Income before  35,328   37,054   (1,726)  (5%)    169,168   158,057   11,111   7%
income taxes
Income taxes   10,877   12,268   (1,391)  (11%)   48,481    47,661    820      2%
               $        $        $                $         $         $    
Net income                        (335)   (1%)                        10,291   9%
                24,451   24,786                    120,687   110,396
Basic earnings $        $        $                $         $         $      
per share                           -     0%                           0.22    12%
                  0.42     0.42                      2.08      1.86
Diluted        $        $        $                $         $         $      
earnings per                        -     0%                           0.22    12%
share             0.42     0.42                      2.07      1.85

Choice Hotels International, Inc.                               Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts)         December 31,    December 31, 
                                                2012            2011
                                                (Unaudited)
ASSETS
Cash and cash equivalents                       $               $        
                                                134,177         107,057
Accounts receivable, net                        52,270          53,012
Investments, employee benefit plans, at fair    3,486           12,094
value
Other current assets                            43,537          22,633
           Total current assets                 233,470         194,796
Fixed assets and intangibles, net               130,937         135,252
Receivable -- marketing and reservation fees    42,179          54,014
Investments, employee benefit plans, at fair    12,755          11,678
value
Other assets                                    91,431          51,949
                   Total assets                 $               $        
                                                510,772         447,689
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses           $               $          
                                                 94,266          92,240
Deferred revenue                                71,154          68,825
Deferred compensation & retirement plan         2,522           18,935
obligations
Current portion of long-term debt               8,195           673
Other current liabilities                       -               3,892
           Total current liabilities            176,137         184,565
Long-term debt                                  847,150         252,032
Deferred compensation & retirement plan         20,399          20,593
obligations  
Other liabilities                               15,990          16,060
           Total liabilities                    1,059,676       473,250
Common stock, $0.01 par value                   582             583
Additional paid-in-capital                      110,246         102,665
Accumulated other comprehensive loss            (4,216)         (6,801)
Treasury stock, at cost                         (927,776)       (916,955)
Retained earnings                               272,260         794,947
           Total shareholders' deficit          (548,904)       (25,561)
                   Total liabilities and        $               $        
                   shareholders' deficit        510,772         447,689

 

Choice Hotels International, Inc.                                  Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)                                  Year Ended December 31,
                                                2012               2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                      $                  $          
                                                 120,687            110,396
Adjustments to reconcile net income to net cash
provided 
 by operating activities:
  Depreciation and amortization                 8,226              8,024
  Provision for bad debts, net                  2,896              2,160
  Non-cash stock compensation and other charges 12,375             14,511
  Non-cash interest and other loss              292                2,208
  Loss on extinguishment of debt                526                -
  Dividends received from equity method         1,310              1,139
investments
  Equity in net income of affiliates            (212)              (269)
Changes in assets and liabilities:
  Receivables                                   (5,239)            (7,785)
  Receivable - marketing and reservation fees,  30,313             623
net
  Accounts payable                              11                 (1,851)
  Accrued expenses                              12,376             6,346
  Income taxes payable/receivable               (3,193)            (4,562)
  Deferred income taxes                         (540)              5,514
  Deferred revenue                              2,188              1,523
  Other assets                                  (3,476)            (3,162)
  Other liabilities                             (17,520)           29
 NET CASH PROVIDED BY OPERATING ACTIVITIES      161,020            134,844
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment            (15,443)           (10,924)
Equity method investments                       (20,285)           (5,000)
Issuance of notes receivable                    (34,925)           (12,766)
Collections of notes receivable                 3,561              4,754
Purchases of investments, employee benefit      (1,697)            (1,602)
plans
Proceeds from sales of investments, employee    11,223             644
benefit plans
Proceeds from sale of assets                    -                  1,654
Other items, net                                (433)              (564)
 NET CASH USED IN INVESTING ACTIVITIES          (57,999)           (23,804)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt    543,500            75
Net borrowings (repayments) pursuant to         57,000             (200)
revolving credit facilities
Principal payments on long-term debt            (4,422)            (297)
Debt issuance costs                             (4,759)            (2,356)
Dividends paid                                  (654,092)          (43,747)
Purchase of treasury stock                      (22,586)           (53,617)
Excess tax benefits from stock-based            1,559              1,227
compensation
Proceeds from exercise of stock options         7,090              3,845
 NET CASH USED IN FINANCING ACTIVITIES          (76,710)           (95,070)
Net change in cash and cash equivalents         26,311             15,970
Effect of foreign exchange rate changes on cash 809                (172)
and cash equivalents
Cash and cash equivalents at beginning of       107,057            91,259
period
CASH AND CASH EQUIVALENTS AT END OF PERIOD      $                  $          
                                                 134,177            107,057

CHOICE HOTELS INTERNATIONAL, INC.                                                                       Exhibit
                                                                                                        4
SUPPLEMENTAL OPERATING INFORMATION 
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
            For the Year Ended December     For the Year Ended December     Change
            31, 2012*                       31, 2011*
            Average                         Average                         Average
            Daily                           Daily                           Daily
            Rate        Occupancy   RevPAR  Rate        Occupancy   RevPAR  Rate     Occupancy  RevPAR
            $                       $       $                       $    
Comfort Inn     81.55   59.4%                   79.41   57.5%               2.7%     190   bps  6.1%
                                     48.42                          45.62
Comfort     85.47       61.7%       52.74   83.72       58.6%       49.09   2.1%     310   bps  7.4%
Suites
Sleep       72.40       56.3%       40.77   69.96       53.6%       37.49   3.5%     270   bps  8.7%
Quality     69.46       51.6%       35.85   67.75       50.0%       33.86   2.5%     160   bps  5.9%
Clarion     74.94       49.4%       37.03   73.89       46.9%       34.64   1.4%     250   bps  6.9%
Econo Lodge 55.78       48.5%       27.05   54.71       47.5%       25.96   2.0%     100   bps  4.2%
Rodeway     53.36       50.8%       27.13   51.87       48.7%       25.27   2.9%     210   bps  7.4%
MainStay    69.34       70.4%       48.81   66.16       67.7%       44.80   4.8%     270   bps  9.0%
Suburban    41.61       69.7%       29.01   40.26       67.5%       27.15   3.4%     220   bps  6.9%
Ascend      113.33      64.4%       72.94   113.59      60.3%       68.44   (0.2%)   410   bps  6.6%
Collection
            $                       $       $                       $    
Total           73.60   55.5%                   71.83   53.5%               2.5%     200   bps  6.2%
                                     40.84                          38.44
* Operating statistics represent hotel
operations from December through November
            For the Three Months Ended      For the Three Months Ended      Change
            December 31, 2012*              December 31, 2011*
            Average                         Average                         Average
            Daily                           Daily                           Daily
            Rate        Occupancy   RevPAR  Rate        Occupancy   RevPAR  Rate     Occupancy  RevPAR
            $                       $       $                       $    
Comfort Inn     81.67   60.0%                   79.92   58.8%               2.2%     120   bps  4.3%
                                     48.98                          46.98
Comfort     85.01       61.4%       52.21   83.13       59.2%       49.23   2.3%     220   bps  6.1%
Suites
Sleep       72.70       56.5%       41.05   70.06       54.0%       37.80   3.8%     250   bps  8.6%
Quality     68.34       51.2%       35.02   67.17       50.2%       33.74   1.7%     100   bps  3.8%
Clarion     74.81       49.6%       37.12   74.27       47.6%       35.32   0.7%     200   bps  5.1%
Econo Lodge 55.84       48.0%       26.80   54.62       48.3%       26.37   2.2%     (30)  bps  1.6%
Rodeway     52.64       49.5%       26.07   51.12       49.1%       25.11   3.0%     40    bps  3.8%
MainStay    69.54       70.3%       48.85   66.12       69.7%       46.06   5.2%     60    bps  6.1%
Suburban    42.78       69.2%       29.61   40.31       66.6%       26.84   6.1%     260   bps  10.3%
Ascend      116.26      67.0%       77.86   122.22      61.0%       74.56   (4.9%)   600   bps  4.4%
Collection
            $                       $       $                       $    
Total           73.44   55.4%                   71.98   54.2%               2.0%     120   bps  4.2%
                                     40.68                          39.03
* Operating statistics represent hotel
operations from September through November
            For the Quarter Ended           For the Year Ended
            12/31/2012  12/31/2011          12/31/2012  12/31/2011
System-wide
effective   4.36%       4.31%               4.33%       4.32%
royalty
rate

 

CHOICE HOTELS INTERNATIONAL, INC.                                               Exhibit
                                                                                5
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
              December 31,     December 31,     Variance
              2012             2011
              Hotels  Rooms    Hotels  Rooms    Hotels  Rooms    %       %
Comfort Inn   1,349   105,471  1,399   109,330  (50)    (3,859)  (3.6%)  (3.5%)
Comfort       597     46,045   616     47,738   (19)    (1,693)  (3.1%)  (3.5%)
Suites
Sleep         387     28,087   394     28,568   (7)     (481)    (1.8%)  (1.7%)
Quality       1,152   98,078   1,047   91,502   105     6,576    10.0%   7.2%
Clarion       191     27,441   189     27,527   2       (86)     1.1%    (0.3%)
Econo Lodge   817     49,951   797     49,483   20      468      2.5%    0.9%
Rodeway       410     23,370   388     21,627   22      1,743    5.7%    8.1%
MainStay      41      3,165    40      3,093    1       72       2.5%    2.3%
Suburban      63      7,291    60      7,126    3       165      5.0%    2.3%
Ascend        57      4,982    52      4,617    5       365      9.6%    7.9%
Collection
Cambria       19      2,221    19      2,215    -       6        0.0%    0.3%
Suites
Domestic      5,083   396,102  5,001   392,826  82      3,276    1.6%    0.8%
Franchises
International 1,160   103,151  1,177   104,379  (17)    (1,228)  (1.4%)  (1.2%)
Franchises
Total         6,243   499,253  6,178   497,205  65      2,048    1.1%    0.4%
Franchises

                                                                                                       Exhibit
                                                                                                       6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
           For the Year Ended December 31,  For the Year Ended December 31,  % Change
           2012                             2011
           New                              New                              New
           Construction  Conversion  Total  Construction  Conversion  Total  Construction  Conversion  Total
Comfort    23            36          59     12            46          58     92%           (22%)       2%
Inn
Comfort    12            5           17     12            4           16     0%            25%         6%
Suites
Sleep      25            2           27     9             2           11     178%          0%          145%
Quality    -             170         170    -             80          80     NM            113%        113%
Clarion    -             22          22     -             19          19     NM            16%         16%
Econo      -             59          59     1             56          57     (100%)        5%          4%
Lodge
Rodeway    -             71          71     -             49          49     NM            45%         45%
MainStay   12            1           13     6             3           9      100%          (67%)       44%
Suburban   3             4           7      5             4           9      (40%)         0%          (22%)
Ascend     4             17          21     2             14          16     100%          21%         31%
Collection
Cambria    7             -           7      8             -           8      (13%)         NM          (13%)
Suites
Total
Domestic   86            387         473    55            277         332    56%           40%         42%
System
           For the Three Months Ended       For the Three Months Ended       % Change
           December 31, 2012                December 31, 2011
           New                              New                              New
           Construction  Conversion  Total  Construction  Conversion  Total  Construction  Conversion  Total
Comfort    13            19          32     6             18          24     117%          6%          33%
Inn
Comfort    1             1           2      5             -           5      (80%)         NM          (60%)
Suites
Sleep      8             1           9      3             1           4      167%          0%          125%
Quality    -             82          82     -             31          31     NM            165%        165%
Clarion    -             8           8      -             7           7      NM            14%         14%
Econo      -             26          26     1             20          21     (100%)        30%         24%
Lodge
Rodeway    -             25          25     -             17          17     NM            47%         47%
MainStay   10            -           10     5             -           5      100%          NM          100%
Suburban   2             3           5      3             2           5      (33%)         50%         0%
Ascend     3             9           12     -             5           5      NM            80%         140%
Collection
Cambria    3             -           3      4             -           4      (25%)         NM          (25%)
Suites
Total
Domestic   40            174         214    27            101         128    48%           72%         67%
System

                                                                                                           Exhibit
                                                                                                           7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT
(UNAUDITED)
A hotel in the domestic pipeline does not always result in an open
and operating hotel due to various factors.
                                                                             Variance
           December 31, 2012                December 31, 2011
           Units                            Units                            Conversion     New            Total
                                                                                            Construction
           Conversion  New           Total  Conversion  New           Total  Units  %       Units  %       Units    %
                       Construction                     Construction
Comfort    33          49            82     29          46            75     4      14%     3      7%      7        9%
Inn
Comfort    1           72            73     1           90            91     -      0%      (18)   (20%)   (18)     (20%)
Suites
Sleep Inn  1           43            44     1           49            50     -      0%      (6)    (12%)   (6)      (12%)
Quality    36          3             39     29          5             34     7      24%     (2)    (40%)   5        15%
Clarion    12          1             13     14          1             15     (2)    (14%)   -      0%      (2)      (13%)
Econo      24          -             24     25          2             27     (1)    (4%)    (2)    (100%)  (3)      (11%)
Lodge
Rodeway    35          -             35     22          1             23     13     59%     (1)    (100%)  12       52%
MainStay   -           25            25     2           28            30     (2)    (100%)  (3)    (11%)   (5)      (17%)
Suburban   1           15            16     2           20            22     (1)    (50%)   (5)    (25%)   (6)      (27%)
Ascend     11          7             18     6           4             10     5      83%     3      75%     8        80%
Collection
Cambria    -           25            25     -           31            31     -      NM      (6)    (19%)   (6)      (19%)
Suites
Total
Domestic   154         240           394    131         277           408    23     18%     (37)   (13%)   (14)     (3%)
Pipeline

  CHOICE HOTELS INTERNATIONAL, INC.                           Exhibit 8
  SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
  (UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND
ADJUSTED FRANCHISING MARGINS
(dollar amounts in  Three Months Ended   Year Ended December
thousands)          December 31,         31, 
                    2012       2011      2012       2011
  Franchising
  Revenues:
                    $          $         $          $        
  Total Revenues                                             
                     178,306   165,890              638,793
                                          691,509
  Adjustments:
       Marketing
  and reservation   (100,160)  (90,844)  (384,784)  (349,036)
  revenues
       Hotel        (1,133)    (1,183)   (4,573)    (4,356)
  operations
                    $          $         $          $        
  Franchising                                                
  Revenues           77,013      73,863             285,401
                                          302,152
  Franchising
  Margins:
  Operating Margin:
                    $          $         $          $        
  Total Revenues                                             
                     178,306   165,890              638,793
                                          691,509
                    $          $         $          $        
  Operating Income                                           
                     45,234      38,662             171,863
                                          193,142
       Operating    25.4%      23.3%     27.9%      26.9%
  Margin
  Adjusted
  Franchising
  Margin:
                    $          $         $          $        
  Franchising                                                
  Revenues           77,013      73,863             285,401
                                          302,152
                    $          $         $          $        
  Operating Income                                           
                     45,234      38,662             171,863
                                          193,142
  Employee
  termination       -          3,619     491        4,444
  benefits
  Loss on
  settlement of     1,818      -         1,818      -
  pension plan
  Hotel operations  (237)      (310)     (1,068)    (890)
                    $          $         $          $        
                                                             
                     46,815      41,971             175,417
                                          194,383
       Adjusted
  Franchising       60.8%      56.8%     64.3%      61.5%
  Margins
CALCULATION OF ADJUSTED SELLING, GENERAL
AND ADMINISTRATIVE COSTS
(dollar amounts in  Three Months Ended   Year Ended December
thousands)          December 31,         31, 
                    2012       2011      2012       2011
Selling, general    $          $         $          $        
and administrative                                           
expense              29,779      33,463             106,404
                                          101,852
  Employee
  termination       -          (3,619)   (491)      (4,444)
  benefits
  Loss on
  settlement of     (1,818)    -         (1,818)    -
  pension plan
Adjusted Selling,   $          $         $          $        
General and                                                  
Administrative       27,961      29,844             101,960
Expense                                  99,543
CALCULATION OF ADJUSTED NET INCOME AND
ADJUSTED DILUTED EARNINGS PER SHARE
(EPS)
(In thousands,      Three Months Ended   Year Ended December
except per share    December 31,         31, 
amounts)
                    2012       2011      2012       2011
                    $          $         $          $        
Net Income                                                   
                     24,451      24,786             110,396
                                          120,687
Adjustments:
  Employee
  termination       -          2,291     312        2,813
  benefits
  Less on
  settlement of     1,774      -         1,774      -
  pension plan
  Loss on
  extinguishment of -          -         334        -
  debt
  Loss on land held -          -         -          1,119
  for sale
                    $          $         $          $        
Adjusted Net Income                                          
                     26,225      27,077             114,328
                                          123,107
Weighted average
shares              58,377     58,608    58,265     59,525
outstanding-diluted
                    $          $         $          $        
Diluted Earnings                                             
Per Share           0.42                                 1.85
                               0.42      2.07
Adjustments:
  Employee
  termination       -          0.04      -          0.05
  benefits
  Loss on
  settlement of     0.03       -         0.03       -
  pension plan
  Loss on
  extinguishment of -          -         0.01       -
  debt
  Loss on land held -          -         -          0.02
  for sale
Adjusted Diluted    $          $         $          $        
Earnings Per Share                                           
(EPS)               0.45                                 1.92
                               0.46      2.11
Adjusted EBITDA
Reconciliation
(in thousands)
                                         Year       Year
                                         Ended      Ended      Full-Year 2013
                    Q4 2012    Q4 2011   December   December   Outlook
                    Actuals    Actuals
                                         31, 2012   31, 2011   Range
                                         Actuals    Actuals
                    $          $         $          $        
  Operating Income                                             $        - $  
  (per GAAP)         45,234      38,662             171,863     205,100   207,100
                                          193,142
  Employee
  termination       -          3,619     491        4,444      -          -
  benefits
  Loss on
  settlement of     1,818      -         1,818      -          -          -
  pension plan
  Depreciation and  2,237      2,048     8,226      8,024      9,900    - 9,900
  amortization
  Adjusted Earnings
  before interest,  $          $         $          $        
  taxes,                                                       $          $  
  depreciation &     49,289      44,329             184,331     215,000   217,000
  amortization                            203,677
  (non-GAAP)

 

SOURCE Choice Hotels International, Inc.

Website: http://www.choicehotels.com
Contact: David White, Senior Vice President, Chief Financial Officer &
Treasurer, +1-301-592-5117, or Robin Pence, Vice President, Public Relations,
+1-301-592-5186
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