Choice Hotels International Reports First Quarter 2013 Diluted EPS Of $0.26 Per Share New Domestic Hotel Franchise Contracts Rise 30%

ROCKVILLE, Md., April 29, 2013 /PRNewswire/ -- Choice Hotels International, Inc., (NYSE: CHH) today reported the following highlights for the first quarter 2013:

  • Franchising revenues increased 4% to $59.5 million for the three months ended March 31, 2013 from $57.3 million for the same period of 2012.  Total revenues increased 6% to $136.9 million for the three months ended March 31, 2013 compared to the same period of 2012.
  • Domestic royalty fees for the three months ended March 31, 2013 increased $2.0 million to $44.3 million from $42.3 million for the three months ended March 31, 2012, an increase of 5%.
  • Domestic system-wide revenue per available room ("RevPAR") increased 4.6% for the three months ended March 31, 2013 compared to the same quarter of the prior year as occupancy and average daily rates increased 100 basis points and 2.3 percent, respectively.  
  • Domestic unit and room growth increased 1.7 percent and 0.8 percent from March 31, 2012, respectively. 
  • The effective royalty rate increased 5 basis points to 4.39% for the three months ended March 31, 2013 compared to 4.34% for the same period of the prior year.
  • Initial and relicensing fees for the three months ended March 31, 2013 increased $1.2 million or 49% to $3.8 million from the same period of the prior year.
  • The company executed 83 new domestic hotel franchise contracts for the three months ended March 31, 2013 compared to 64 new domestic hotel franchise contracts in the same period of the prior year, a 30% increase.
  • The company entered into a multi-faceted strategic marketing alliance with Bluegreen Corporation which will add 21 Bluegreen Vacation Club® Resorts in top vacation destinations to the company's Ascend Hotel Collection.
  • Domestic relicensing and contract renewal transactions increased from 49 contracts during the three months ended March 31, 2012 to 69 in the current period, a 41% increase.
  • The number of worldwide hotels under construction, awaiting conversion or approved for development as of March 31, 2013 was 476 hotels representing 37,977 rooms.
  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $32.6 million for the three months ended March 31, 2013, compared to $33.1 million in the same period of the prior year. The first quarter 2013 EBITDA results reflect certain one-time costs related to the company's recent corporate headquarters relocation as well as additional investments in alternative growth strategies.
  • The effective income tax rate for the three months ended March 31, 2013 was 25.8% compared to 33.9% for the same period of 2012.
  • Diluted earnings per share ("EPS") for first quarter 2013 were $0.26 compared to $0.34 for the first quarter of 2012.  EPS for the first quarter of 2013 reflect $7.7 million of additional interest expense compared to the prior year reflecting the financing transactions entered into during the second and third quarters of 2012 in conjunction with the payment of the $600 million special cash dividend on August 23, 2012.
  • The company launched SkyTouch Technology, a new division that develops and markets cloud-based technology products to help industry-wide hoteliers improve their efficiency and profitability.

"Our development results continued to build on the momentum that started last year, increasing by 30% over the same period of the prior year," said Stephen P. Joyce, president and chief executive officer. "We are also encouraged by our RevPAR results which still reflect a strong mix of both occupancy and average daily rate increases. We remain optimistic that our core hotel franchising business will continue to improve and we are excited about our new alliance with Bluegreen Corporation and the launch of our new SkyTouch Technology initiative."

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

The company did not pay dividends during the three months ended March 31, 2013 as the company's regular first quarter dividend was paid in December 2012. The company's current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors.

Share Repurchases

The company did not repurchase any shares of common stock under the share repurchase program during the three months ended March 31, 2013 but has authorization to purchase up to an additional 1.4 million shares under this program.  We expect we will continue to make 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 March 31, 2013. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 78.3 million shares through March 31, 2013 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 a program which permits 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. At March 31, 2013 and December 31, 2012, the company had approximately $69 million and $68 million outstanding related to this program, respectively. Over the next several years, we expect to continue to opportunistically deploy capital pursuant to this program 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 investments will be dependent on market and other conditions.  Notwithstanding this program, 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 March 31, 2013, the company had gross debt of $871.3 million and cash and cash equivalents totaling $140.2 million resulting in net debt of $731.1 million.  At December 31, 2012, the company had gross debt of $855.3 million and cash equivalents totaling $134.2 million resulting in net debt of $721.1 million.

At March 31, 2013 and December 31, 2012, the company had outstanding mezzanine financing, real estate investments and sliver equity investments totaling $69 million and $68 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 second quarter 2013 diluted EPS is expected to be $0.45. The company expects full-year 2013 diluted EPS to range between $1.87 and $1.91.  EBITDA for full-year 2013 are expected to range between $206 million and $210 million. These estimates include the following assumptions:

  • The company expects net domestic unit growth to increase by approximately 1.5% in 2013;
  • RevPAR is expected to increase approximately 4% for the second quarter of 2013 and increase between 4.5% and 5.5% for full-year 2013;
  • The effective royalty rate is expected to increase 3 basis points for full-year 2013;
  • All figures assume the existing share count;
  • An effective tax rate of 30.8% and 30.6% for the second quarter and full-year 2013, respectively;
  • Our EBITDA outlook for full year 2013 reflects additional expenses related to the company's recently announced SkyTouch Technology initiative. The company expects to deploy additional resources towards this growth opportunity and as a result expects to incur operating expenses in 2013 not contemplated in the company's previous outlook ranging between $6 million and $8 million for investment in the infrastructure of this division including business development, sales and marketing and other costs as well as continued software development expenditures related to the division's technology related products and services.

Conference Call

Choice will conduct a conference call on Monday, April 29, 2013 at 10:00 a.m. EDT to discuss the company's first quarter 2013 results. The dial-in number to listen to the call is 1-800-884-5695, and the access code is 85035046. International callers should dial 1-617-786-2960 and enter the access code 85035046.  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 12:00 p.m. EDT on Monday April 29, 2013 through Monday, May 6, 2013 by calling 1-888-286-8010 and entering access code 97633732. The international dial-in number for the replay is 1-617-801-6888, access code 97633732. 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 over 6,200 hotels, representing more than 500,000 rooms, in the United States and more than 30 other countries and territories.  As of March 31, 2013, 395 hotels, representing more than 30,000 rooms, were under construction, awaiting conversion or approved for development in the United States.  Additionally, 81 hotels, representing approximately 7,000 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.

SkyTouch Technology is an initiative of Choice Hotels International, Inc. that develops and markets cloud-based technology products to help industry-wide hoteliers improve their efficiency and profitability.

Additional corporate information can 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, 2012, filed with the Securities and Exchange Commission on February 28, 2013 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

EBITDA, franchising revenues and franchising margins are non-GAAP financial measurements.  This information should not be considered as an alternative to any measure of performance as promulgated under generally accepted accounting principles in the United States ("GAAP"), 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 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.

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, Ascend Hotel Collection and SkyTouch Technologyare proprietary trademarks and service marks of Choice Hotels International.

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

 

 

Choice Hotels International, Inc.







Exhibit 1

Consolidated Statements of Income








(Unaudited)


















































Three Months Ended March 31,










Variance






2013


2012


$


%

(In thousands, except per share amounts)





















REVENUES:























Royalty fees




$              49,736


$              47,853


$       1,883


4%

Initial franchise and relicensing fees


3,777


2,528


1,249


49%

Procurement services



3,950


3,315


635


19%

Marketing and reservation 



76,440


70,929


5,511


8%

Hotel operations




956


978


(22)


(2%)

Other





2,013


3,566


(1,553)


(44%)

      Total revenues



136,872


129,169


7,703


6%













OPERATING EXPENSES:






















Selling, general and administrative


26,916


24,349


2,567


11%

Depreciation and amortization



2,175


2,017


158


8%

Marketing and reservation



76,440


70,929


5,511


8%

Hotel operations




875


809


66


8%

Total operating expenses



106,406


98,104


8,302


8%













Operating income




30,466


31,065


(599)


(2%)













OTHER INCOME AND EXPENSES, NET:









Interest expense




10,770


3,117


7,653


246%

Interest income




(644)


(337)


(307)


91%

Other (gains) and losses



(710)


(2,003)


1,293


(65%)

Equity in net loss of affiliates



141


55


86


156%

Total other income and expenses, net

9,557


832


8,725


1049%













Income before income taxes



20,909


30,233


(9,324)


(31%)

Income taxes




5,386


10,236


(4,850)


(47%)

Net income




$              15,523


$              19,997


$      (4,474)


(22%)

























Basic earnings per share



$                  0.27


$                  0.34


$       (0.07)


(21%)













Diluted earnings per share



$                  0.26


$                  0.34


$       (0.08)


(24%)













 

Choice Hotels International, Inc.




Exhibit 2

Consolidated Balance Sheets





















(In thousands, except per share amounts)

 March 31, 


 December 31, 






2013


2012






(Unaudited)











ASSETS















Cash and cash equivalents



$           140,225


$         134,177

Accounts receivable, net



54,202


52,270

Investments, employee benefit plans, at fair value

378


3,486

Other current assets



44,968


43,537


Total current assets



239,773


233,470









Fixed assets and intangibles, net


149,652


130,937

Receivable -- marketing and reservation fees

51,297


42,179

Investments, employee benefit plans, at fair value

13,933


12,755

Other assets




91,318


91,431











Total assets


$           545,973


$         510,772

























LIABILITIES AND SHAREHOLDERS' DEFICIT












Accounts payable and accrued expenses

$              94,563


$            94,266

Deferred revenue



76,316


71,154

Deferred compensation & retirement plan obligations

2,361


2,522

Current portion of long-term debt


8,201


8,195

Other current liabilities



1,550


-


Total current liabilities


182,991


176,137









Long-term debt



863,114


847,150

Deferred compensation & retirement plan obligations  

19,940


20,399

Other liabilities




19,257


15,990










Total liabilities



1,085,302


1,059,676









Common stock, $0.01 par value


585


582

Additional paid-in-capital



108,995


110,246

Accumulated other comprehensive loss

(4,233)


(4,216)

Treasury stock, at cost



(921,421)


(927,776)

Retained earnings



276,745


272,260


Total shareholders' deficit


(539,329)


(548,904)











Total liabilities and shareholders' deficit       

$           545,973


$         510,772









 

Choice Hotels International, Inc.



Exhibit 3

Consolidated Statements of Cash Flows




(Unaudited)














(In thousands)

Three Months Ended March 31,






2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES:








Net income

$                    15,523


$              19,997





Adjustments to reconcile net income to net cash provided 




 by operating activities:




  Depreciation and amortization  

2,175


2,017

  Provision for bad debts, net

844


679

  Non-cash stock compensation and other charges

2,549


2,543

  Non-cash interest and other (income) loss

76


(1,593)

  Deferred income taxes

446


(30)

  Dividends received from equity method investments

146


-

  Equity in net loss of affiliates

141


55





Changes in assets and liabilities:




  Receivables

(3,531)


(870)

  Receivable - marketing and reservation fees, net

(4,101)


(6,187)

  Accounts payable

10,471


6,712

  Accrued expenses

(31,145)


(25,342)

  Income taxes payable/receivable

4,367


8,180

  Deferred revenue

5,160


1,997

  Other assets

(3,869)


(2,611)

  Other liabilities

2,622


(1,135)





 NET CASH PROVIDED BY OPERATING ACTIVITIES

1,874


4,412





CASH FLOWS FROM INVESTING ACTIVITIES:








Investment in property and equipment

(13,645)


(3,129)

Equity method investments

(1,000)


(2,600)

Issuance of notes receivable

(1,729)


(3,719)

Collections of notes receivable

19


151

Purchases of investments, employee benefit plans

(1,242)


(743)

Proceeds from sales of investments, employee benefit plans

3,882


8,652

Other items, net

(101)


(108)





 NET CASH USED IN INVESTING ACTIVITIES

(13,816)


(1,496)





CASH FLOWS FROM FINANCING ACTIVITIES:








Net borrowings pursuant to revolving credit facilities

18,000


5,900

Principal payments on long-term debt

(2,046)


(166)

Dividends paid

(503)


(10,713)

Purchase of treasury stock

(3,634)


(14,854)

Excess tax benefits from stock-based compensation

952


422

Proceeds from exercise of stock options

5,367


389





 NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES

18,136


(19,022)





Net change in cash and cash equivalents

6,194


(16,106)

Effect of foreign exchange rate changes on cash and cash equivalents    

(146)


361

Cash and cash equivalents at beginning of period

134,177


107,057





CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                  140,225


$              91,312





 

CHOICE HOTELS INTERNATIONAL, INC.

Exhibit 4

SUPPLEMENTAL OPERATING INFORMATION 


DOMESTIC HOTEL SYSTEM


(UNAUDITED)




























































































For the Three Months Ended March 31, 2013*


For the Three Months Ended March 31, 2012*


Change



























Average Daily






Average Daily






Average Daily










Rate


Occupancy


RevPAR


Rate


Occupancy


RevPAR


Rate


Occupancy


RevPAR

























Comfort Inn


$             76.30


47.5%


$          36.24


$             74.29


46.8%


$34.76


2.7%


70

bps


4.3%



Comfort Suites


81.82


52.6%


43.04


79.88


51.0%


40.72


2.4%


160

bps


5.7%



Sleep


69.07


47.6%


32.85


66.39


45.0%


29.90


4.0%


260

bps


9.9%



Quality


64.20


42.2%


27.08


63.39


40.8%


25.87


1.3%


140

bps


4.7%



Clarion


68.84


41.1%


28.32


67.90


38.7%


26.26


1.4%


240

bps


7.8%



Econo Lodge


51.67


38.6%


19.95


50.31


38.7%


19.45


2.7%


(10)

bps


2.6%



Rodeway


47.96


42.2%


20.25


47.08


41.7%


19.61


1.9%


50

bps


3.3%



MainStay


68.55


57.0%


39.05


64.60


61.8%


39.94


6.1%


(480)

bps


(2.2%)



Suburban


40.90


63.4%


25.94


39.15


62.5%


24.47


4.5%


90

bps


6.0%



Ascend Collection


113.87


56.1%


63.84


104.02


52.0%


54.11


9.5%


410

bps


18.0%

























Total 


$             68.87


45.5%


$          31.34


$             67.32


44.5%


$29.95


2.3%


100

bps


4.6%





























































































For the Quarter Ended


















3/31/2013


3/31/2012








































System-wide effective royalty rate


4.39%


4.34%










































































































* Operating statistics represent hotel operations from December through February






































 

CHOICE HOTELS INTERNATIONAL, INC.

Exhibit 5

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA


(UNAUDITED)


























































March 31, 2013


March 31, 2012


Variance






















Hotels


Rooms


Hotels


Rooms


Hotels


Rooms


%


%




















Comfort Inn


1,332


104,159


1,392


108,777


(60)


(4,618)


(4.3%)


(4.2%)


Comfort Suites


597


46,079


613


47,506


(16)


(1,427)


(2.6%)


(3.0%)


Sleep


382


27,685


394


28,564


(12)


(879)


(3.0%)


(3.1%)


Quality


1,172


99,090


1,054


91,942


118


7,148


11.2%


7.8%


Clarion


190


27,268


188


27,550


2


(282)


1.1%


(1.0%)


Econo Lodge


811


49,244


797


49,254


14


(10)


1.8%


(0.0%)


Rodeway


421


24,269


396


22,183


25


2,086


6.3%


9.4%


MainStay


41


3,165


39


3,024


2


141


5.1%


4.7%


Suburban


63


7,241


61


7,191


2


50


3.3%


0.7%


Ascend Collection


63


5,481


53


4,671


10


810


18.9%


17.3%


Cambria Suites


19


2,221


19


2,215


-


6


0.0%


0.3%




















Domestic Franchises


5,091


395,902


5,006


392,877


85


3,025


1.7%


0.8%




















International Franchises


1,173


104,474


1,168


103,491


5


983


0.4%


0.9%




















Total Franchises


6,264


500,376


6,174


496,368


90


4,008


1.5%


0.8%




















 



















Exhibit 6


CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL INFORMATION BY BRAND

DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS

(UNAUDITED)



















































































For the Three Months Ended March 31, 2013


For the Three Months Ended March 31, 2012


% Change
























New






New






New








Construction


Conversion


Total


Construction


Conversion


Total


Construction


Conversion


Total






















Comfort Inn


3


5


8


1


8


9


200%


(38%)


(11%)


Comfort Suites


2


2


4


1


2


3


100%


0%


33%


Sleep


1


-


1


3


-


3


(67%)


NM


(67%)


Quality


-


19


19


-


27


27


NM


(30%)


(30%)


Clarion


-


3


3


-


2


2


NM


50%


50%


Econo Lodge


-


8


8


-


4


4


NM


100%


100%


Rodeway


-


9


9


-


12


12


NM


(25%)


(25%)


MainStay


1


-


1


-


-


-


NM


NM


NM


Suburban


-


1


1


-


-


-


NM


NM


NM


Ascend Collection


2


26


28


1


2


3


100%


1200%


833%


Cambria Suites


1


-


1


1


-


1


0%


NM


0%






















Total Domestic System


10


73


83


7


57


64


43%


28%


30%






















 























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, 2013


March 31, 2012















Units


Units


Conversion


New Construction


Total



Conversion


New

Construction


Total


Conversion


New

Construction


Total


Units


%


Units


%


Units


%


























Comfort Inn


30


49


79


28


44


72


2


7%


5


11%


7


10%

Comfort Suites


2


67


69


3


83


86


(1)


(33%)


(16)


(19%)


(17)


(20%)

Sleep Inn


1


44


45


1


44


45


-


0%


-


0%


-


0%

Quality


35


2


37


40


4


44


(5)


(13%)


(2)


(50%)


(7)


(16%)

Clarion


9


-


9


12


1


13


(3)


(25%)


(1)


(100%)


(4)


(31%)

Econo Lodge


23


-


23


18


2


20


5


28%


(2)


(100%)


3


15%

Rodeway


30


-


30


25


1


26


5


20%


(1)


(100%)


4


15%

MainStay


-


25


25


2


22


24


(2)


(100%)


3


14%


1


4%

Suburban


3


12


15


2


16


18


1


50%


(4)


(25%)


(3)


(17%)

Ascend Collection


30


9


39


7


4


11


23


329%


5


125%


28


255%

Cambria Suites


-


24


24


-


29


29


-


NM


(5)


(17%)


(5)


(17%)


























Total Domestic Pipeline


163


232


395


138


250


388


25


18%


(18)


(7%)


7


2%


























 


CHOICE HOTELS INTERNATIONAL, INC.

Exhibit 8


SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION




(UNAUDITED)















CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS





















(dollar amounts in thousands)


Three Months Ended March 31, 




















2013


2012








Franchising Revenues:
























Total Revenues


$              136,872


$               129,169








Adjustments:












     Marketing and reservation revenues


(76,440)


(70,929)








     Hotel operations


(956)


(978)








Franchising Revenues


$                59,476


$                 57,262




















Franchising Margins:
























Operating Margin:
























Total Revenues


$              136,872


$               129,169








Operating Income


$                30,466


$                 31,065








     Operating Margin


22.3%


24.0%




















Franchising Margin:
























Franchising Revenues


$                59,476


$                 57,262




















Operating Income


$                30,466


$                 31,065








Hotel operations


(81)


(169)










$                30,385


$                 30,896




















     Franchising Margins


51.1%


54.0%



































































EBITDA Reconciliation























(in thousands)














Q1 2013 Actuals


Q1 2012 Actuals


Full-Year 2013 Outlook Range
















Operating Income (per GAAP)


$                30,466


$                 31,065


$                196


$               200




Depreciation and amortization


2,175


2,017


10


10




Earnings before interest, taxes, depreciation & amortization

(non-GAAP)


$                32,641


$                 33,082


$                206


$               210















 

SOURCE Choice Hotels International, Inc.



RELATED LINKS
http://www.choicehotels.com

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