Delaware | 001-13393 | 52-1209792 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
1 Choice Hotels Circle, Suite 400, Rockville, Maryland | 20850 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Date: February 18, 2016 | /s/ David L. White | |||||
David L. White Senior Vice President, Chief Financial Officer & Treasurer |
• | Diluted earnings per share (“EPS”) from continuing operations for the three months ended December 31, 2015 totaled $0.51, an increase of 19 percent from the same period of 2014. |
• | Revenues for the three months ended December 31, 2015 totaled $211.0 million, an increase of 14 percent from the same period of 2014. |
• | Earnings before interest, taxes, depreciation and amortization (“EBITDA”) from franchising activities for the three months ended December 31, 2015 totaled $55.7 million, an increase of 6 percent from the same period of 2014. |
• | Franchising margins for the three months ended December 31, 2015 were 62.3 percent, an increase of 20 basis points from the same period of 2014. |
• | Domestic royalty fees for the three months ended December 31, 2015 totaled $63.1 million, an increase of 6.7 percent from the same period of 2014. |
• | Domestic system-wide revenue per available room (“RevPAR”) increased 4.3 percent in the fourth quarter of 2015, as occupancy and average daily rates increased 60 basis points and 3.2 percent, respectively from the same period of 2014. |
• | Domestic units as of December 31, 2015 increased 1.1 percent from December 31, 2014. |
• | Effective royalty rate for the three months ended December 31, 2015 was 4.37 percent, an increase of 9 basis points from the same period of 2014. |
• | Domestic relicensing and contract renewal transactions totaled 104 for the three months ended December 31, 2015, an increase of 12 percent from the same period of 2014. |
• | The company’s domestic pipeline of hotels awaiting conversion, under construction or approved for development as of December 31, 2015 increased 19 percent from December 31, 2014. |
• | EBITDA from franchising activities in 2015 totaled $255.8 million, an increase of $15.8 million or 7 percent from 2014. |
• | Revenues for 2015 totaled $859.9 million, an increase of 13 percent from 2014. |
• | Franchising revenues for 2015 totaled $366.7 million, an increase of $21.9 million or 6 percent from 2014. |
• | Franchising selling, general and administration (“SG&A”) expenses in 2015 totaled $110.9 million, an increase of 5.8 percent from 2014. |
• | Franchising margins for 2015 were 67.3 percent, an increase of 10 basis points from 2014. |
• | Diluted EPS from continuing operations in 2015 totaled $2.22, an increase of 7 percent from 2014. |
• | Domestic royalty fees in 2015 totaled $281.3 million, an increase of 7 percent from 2014. |
• | Domestic system-wide RevPAR increased 6.5 percent in 2015 as occupancy and average daily rates increased 160 basis points and 3.7 percent, respectively, from 2014. |
• | The effective royalty rate in 2015 was 4.30 percent, a 2 basis point increase from 2014. |
• | Initial and relicensing fees for 2015 totaled $24.7 million, an increase of 27 percent from 2014. |
• | New franchise contracts executed in 2015 for domestic hotels, totaled 630, an 11 percent increase from 2014. |
• | Domestic relicensing and contract renewal transactions in 2015 totaled 408 contracts, an increase of 21 percent from 2014. |
• | During 2015, non-franchising activities, which primarily relate to SkyTouch, and an acquired vacation rental technology business drove $4 million of revenues and a net $19 million operating expense. |
• | EBITDA from franchising activities for full-year 2016 are expected to range between $270 million and $275 million; |
• | Net domestic unit growth for 2016 is expected to be between 2% and 3%; |
• | RevPAR is expected to increase approximately 2% for first quarter and range between 3.75% and 4.75% for full-year 2016; and |
• | The effective royalty rate is expected to increase between 6 and 8 basis points for full-year 2016 as compared to full-year 2015. |
• | Net reductions in EBITDA relating to our non-hotel franchising operations, which primarily relate to SkyTouch and vacation rental activities, for full-year 2016 are expected to range between approximately $16 million and $19 million. |
• | The effective tax rate for continuing operations is expected to be approximately 33.5% for the first quarter and full-year 2016; and |
• | All figures assume no further repurchases of common stock under the company’s share repurchase program. |
Choice Hotels International, Inc. | Exhibit 1 | |||||||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||
Variance | Variance | |||||||||||||||||||||||||||||
2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||
Royalty fees | $ | 67,965 | $ | 65,237 | $ | 2,728 | 4 | % | $ | 301,508 | $ | 287,538 | $ | 13,970 | 5 | % | ||||||||||||||
Initial franchise and relicensing fees | 6,977 | 6,720 | 257 | 4 | % | 24,680 | 19,481 | 5,199 | 27 | % | ||||||||||||||||||||
Procurement services | 7,404 | 5,526 | 1,878 | 34 | % | 27,071 | 23,819 | 3,252 | 14 | % | ||||||||||||||||||||
Marketing and reservation | 122,465 | 103,594 | 18,871 | 18 | % | 488,763 | 412,619 | 76,144 | 18 | % | ||||||||||||||||||||
Other | 6,140 | 4,325 | 1,815 | 42 | % | 17,856 | 14,513 | 3,343 | 23 | % | ||||||||||||||||||||
Total revenues | 210,951 | 185,402 | 25,549 | 14 | % | 859,878 | 757,970 | 101,908 | 13 | % | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||||||||
Selling, general and administrative | 38,542 | 33,089 | 5,453 | 16 | % | 134,254 | 121,418 | 12,836 | 11 | % | ||||||||||||||||||||
Depreciation and amortization | 2,749 | 2,462 | 287 | 12 | % | 11,542 | 9,365 | 2,177 | 23 | % | ||||||||||||||||||||
Marketing and reservation | 122,465 | 103,594 | 18,871 | 18 | % | 488,763 | 412,619 | 76,144 | 18 | % | ||||||||||||||||||||
Total operating expenses | 163,756 | 139,145 | 24,611 | 18 | % | 634,559 | 543,402 | 91,157 | 17 | % | ||||||||||||||||||||
Operating income | 47,195 | 46,257 | 938 | 2 | % | 225,319 | 214,568 | 10,751 | 5 | % | ||||||||||||||||||||
OTHER INCOME AND EXPENSES, NET: | ||||||||||||||||||||||||||||||
Interest expense | 10,776 | 10,110 | 666 | 7 | % | 42,833 | 41,486 | 1,347 | 3 | % | ||||||||||||||||||||
Interest income | (598 | ) | (556 | ) | (42 | ) | 8 | % | (1,580 | ) | (1,761 | ) | 181 | (10 | )% | |||||||||||||||
Other (gains) and losses | (581 | ) | 585 | (1,166 | ) | (199 | )% | (820 | ) | 427 | (1,247 | ) | (292 | )% | ||||||||||||||||
Equity in net (income) loss of affiliates | (206 | ) | 80 | (286 | ) | (358 | )% | 901 | 658 | 243 | 37 | % | ||||||||||||||||||
Total other income and expenses, net | 9,391 | 10,219 | (828 | ) | (8 | )% | 41,334 | 40,810 | 524 | 1 | % | |||||||||||||||||||
Income from continuing operations before income taxes | 37,804 | 36,038 | 1,766 | 5 | % | 183,985 | 173,758 | 10,227 | 6 | % | ||||||||||||||||||||
Income taxes | 8,601 | 10,729 | (2,128 | ) | (20 | )% | 55,956 | 52,285 | 3,671 | 7 | % | |||||||||||||||||||
Income from continuing operations, net of income taxes | 29,203 | 25,309 | 3,894 | 15 | % | 128,029 | 121,473 | 6,556 | 5 | % | ||||||||||||||||||||
Income from discontinued operations, net of income taxes | — | (24 | ) | 24 | (100 | )% | — | 1,687 | (1,687 | ) | (100 | )% | ||||||||||||||||||
Net income | $ | 29,203 | $ | 25,285 | $ | 3,918 | 15 | % | $ | 128,029 | $ | 123,160 | $ | 4,869 | 4 | % | ||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||
Continuing operations | $ | 0.52 | $ | 0.44 | $ | 0.08 | 18 | % | $ | 2.24 | $ | 2.08 | $ | 0.16 | 8 | % | ||||||||||||||
Discontinued operations | — | — | — | NM | — | 0.03 | (0.03 | ) | (100 | )% | ||||||||||||||||||||
$ | 0.52 | $ | 0.44 | $ | 0.08 | 18 | % | $ | 2.24 | $ | 2.11 | $ | 0.13 | 6 | % | |||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||
Continuing operations | $ | 0.51 | $ | 0.43 | $ | 0.08 | 19 | % | $ | 2.22 | $ | 2.07 | $ | 0.15 | 7 | % | ||||||||||||||
Discontinued operations | — | — | — | NM | — | 0.03 | (0.03 | ) | (100 | )% | ||||||||||||||||||||
$ | 0.51 | $ | 0.43 | $ | 0.08 | 19 | % | $ | 2.22 | $ | 2.10 | $ | 0.12 | 6 | % | |||||||||||||||
Choice Hotels International, Inc. | Exhibit 2 | ||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(In thousands, except per share amounts) | December 31, | December 31, | |||||||||
2015 | 2014(1) | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 193,441 | $ | 214,879 | |||||||
Accounts receivable, net | 89,352 | 91,681 | |||||||||
Other current assets | 28,160 | 18,869 | |||||||||
Total current assets | 310,953 | 325,429 | |||||||||
Fixed assets and intangibles, net | 179,433 | 152,034 | |||||||||
Notes receivable, net of allowances | 82,572 | 40,441 | |||||||||
Investments, employee benefit plans, at fair value | 17,674 | 17,539 | |||||||||
Other assets | 126,378 | 102,474 | |||||||||
Total assets | $ | 717,010 | $ | 637,917 | |||||||
LIABILITIES AND SHAREHOLDERS' DEFICIT | |||||||||||
Accounts payable | $ | 64,431 | $ | 57,124 | |||||||
Accrued expenses and other current liabilities | 70,807 | 64,243 | |||||||||
Deferred revenue | 71,587 | 66,382 | |||||||||
Current portion of long-term debt | 1,191 | 12,349 | |||||||||
Total current liabilities | 208,016 | 200,098 | |||||||||
Long-term debt | 812,945 | 772,729 | |||||||||
Deferred compensation & retirement plan obligations | 22,859 | 23,987 | |||||||||
Other liabilities | 69,089 | 69,904 | |||||||||
Total liabilities | 1,112,909 | 1,066,718 | |||||||||
Total shareholders' deficit | (395,899 | ) | (428,801 | ) | |||||||
Total liabilities and shareholders' deficit | $ | 717,010 | $ | 637,917 | |||||||
(1) The consolidated balance sheet has been recast to reflect the Company's adoption of ASU 2015-03 "Simplifying the Presentation | |||||||||||
of Debt Issuance Costs" and ASU 2015-17 "Balance Sheet Classification of Deferred Taxes". As a result, debt issuance costs | |||||||||||
have been recast from other assets to long-term debt and current deferred taxes were recast as long-term assets. |
Choice Hotels International, Inc. | Exhibit 3 | ||||||
Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
(In thousands) | Year Ended December 31, | ||||||
2015 | 2014 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 128,029 | $ | 123,160 | |||
Adjustments to reconcile net income to net cash provided | |||||||
by operating activities: | |||||||
Depreciation and amortization | 11,542 | 9,365 | |||||
Gain on sale of assets | (1,521 | ) | (2,809 | ) | |||
Provision for bad debts, net | 1,704 | 2,775 | |||||
Non-cash stock compensation and other charges | 11,805 | 9,706 | |||||
Non-cash interest and other (income) loss | 3,229 | 3,174 | |||||
Deferred income taxes | 615 | (22,899 | ) | ||||
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received | 3,279 | 2,200 | |||||
Changes in assets and liabilities, net of acquisition: | |||||||
Receivables | 401 | (14,250 | ) | ||||
Advances to/from marketing and reservation activities, net | 11,074 | 70,179 | |||||
Forgivable notes receivable, net | (23,066 | ) | (12,914 | ) | |||
Accounts payable | 6,493 | 9,636 | |||||
Accrued expenses and other current liabilities | 5,166 | 6,678 | |||||
Income taxes payable/receivable | (4,399 | ) | (3,582 | ) | |||
Deferred revenue | 5,251 | 5,297 | |||||
Other assets | (5,792 | ) | (1,250 | ) | |||
Other liabilities | 6,062 | (575 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 159,872 | 183,891 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Investment in property and equipment | (27,765 | ) | (20,946 | ) | |||
Proceeds from sales of assets | 6,347 | 15,612 | |||||
Acquisition, net of cash acquired | (13,269 | ) | — | ||||
Issuance of mezzanine and other notes receivable | (36,884 | ) | (3,340 | ) | |||
Collections of mezzanine and other notes receivable | 4,849 | 11,289 | |||||
Contributions to equity method investments | (23,737 | ) | (17,789 | ) | |||
Distributions from equity method investments | 518 | — | |||||
Purchases of investments, employee benefit plans | (3,220 | ) | (2,794 | ) | |||
Proceeds from sales of investments, employee benefit plans | 3,170 | 964 | |||||
Other items, net | (9,819 | ) | (642 | ) | |||
NET CASH USED BY INVESTING ACTIVITIES | (99,810 | ) | (17,646 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net borrowings pursuant to revolving credit facilities | 158,867 | — | |||||
Principal payments on long-term debt | (130,501 | ) | (10,108 | ) | |||
Proceeds from the issuance of long-term debt | 176 | 250 | |||||
Debt issuance costs | (2,169 | ) | — | ||||
Purchase of treasury stock | (72,873 | ) | (77,972 | ) | |||
Dividends paid | (45,214 | ) | (43,529 | ) | |||
Excess tax benefits from stock-based compensation | 5,207 | 3,721 | |||||
Proceeds from exercise of stock options | 7,056 | 10,098 | |||||
NET CASH USED BY FINANCING ACTIVITIES | (79,451 | ) | (117,540 | ) | |||
Net change in cash and cash equivalents | (19,389 | ) | 48,705 | ||||
Effect of foreign exchange rate changes on cash and cash equivalents | (2,049 | ) | (1,621 | ) | |||
Cash and cash equivalents at beginning of period | 214,879 | 167,795 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 193,441 | $ | 214,879 | |||
CHOICE HOTELS INTERNATIONAL, INC. | Exhibit 4 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL OPERATING INFORMATION | ||||||||||||||||||||||||||||||||
DOMESTIC HOTEL SYSTEM | ||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2015 | For the Year Ended December 31, 2014 | Change | ||||||||||||||||||||||||||||||
Average Daily | Average Daily | Average Daily | ||||||||||||||||||||||||||||||
Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | ||||||||||||||||||||||||
Comfort Inn | $ | 89.68 | 65.0 | % | $ | 58.25 | $ | 86.08 | 63.3 | % | $ | 54.50 | 4.2 | % | 170 | bps | 6.9 | % | ||||||||||||||
Comfort Suites | 93.89 | 68.3 | % | 64.16 | 90.24 | 66.5 | % | 60.01 | 4.0 | % | 180 | bps | 6.9 | % | ||||||||||||||||||
Sleep | 80.41 | 63.9 | % | 51.41 | 77.13 | 62.5 | % | 48.24 | 4.3 | % | 140 | bps | 6.6 | % | ||||||||||||||||||
Quality | 75.06 | 58.2 | % | 43.69 | 71.98 | 56.1 | % | 40.39 | 4.3 | % | 210 | bps | 8.2 | % | ||||||||||||||||||
Clarion | 79.85 | 57.2 | % | 45.63 | 77.65 | 54.5 | % | 42.34 | 2.8 | % | 270 | bps | 7.8 | % | ||||||||||||||||||
Econo Lodge | 59.61 | 53.5 | % | 31.90 | 57.85 | 51.6 | % | 29.86 | 3.0 | % | 190 | bps | 6.8 | % | ||||||||||||||||||
Rodeway | 59.75 | 56.3 | % | 33.64 | 56.68 | 55.1 | % | 31.25 | 5.4 | % | 120 | bps | 7.6 | % | ||||||||||||||||||
MainStay | 77.02 | 67.1 | % | 51.71 | 74.82 | 71.4 | % | 53.40 | 2.9 | % | (430 | ) | bps | (3.2 | )% | |||||||||||||||||
Suburban | 47.61 | 75.5 | % | 35.95 | 45.25 | 71.8 | % | 32.51 | 5.2 | % | 370 | bps | 10.6 | % | ||||||||||||||||||
Ascend Hotel Collection | 127.27 | 58.5 | % | 74.47 | 121.49 | 60.3 | % | 73.20 | 4.8 | % | (180 | ) | bps | 1.7 | % | |||||||||||||||||
Total | $ | 79.86 | 61.1 | % | $ | 48.78 | $ | 77.03 | 59.5 | % | $ | 45.80 | 3.7 | % | 160 | bps | 6.5 | % | ||||||||||||||
For the Three Months Ended December 31, 2015 | For the Three Months Ended December 31, 2014 | Change | ||||||||||||||||||||||||||||||
Average Daily | Average Daily | Average Daily | ||||||||||||||||||||||||||||||
Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | ||||||||||||||||||||||||
Comfort Inn | $ | 86.31 | 59.4 | % | $ | 51.25 | $ | 83.22 | 58.4 | % | $ | 48.59 | 3.7 | % | 100 | bps | 5.5 | % | ||||||||||||||
Comfort Suites | 90.85 | 63.7 | % | 57.90 | 87.51 | 62.4 | % | 54.65 | 3.8 | % | 130 | bps | 5.9 | % | ||||||||||||||||||
Sleep | 77.35 | 58.7 | % | 45.41 | 75.09 | 59.0 | % | 44.30 | 3.0 | % | (30 | ) | bps | 2.5 | % | |||||||||||||||||
Quality | 71.82 | 52.5 | % | 37.68 | 68.96 | 51.3 | % | 35.37 | 4.1 | % | 120 | bps | 6.5 | % | ||||||||||||||||||
Clarion | 76.13 | 51.8 | % | 39.43 | 76.21 | 50.3 | % | 38.29 | (0.1 | )% | 150 | bps | 3.0 | % | ||||||||||||||||||
Econo Lodge | 56.79 | 48.8 | % | 27.72 | 55.18 | 47.7 | % | 26.33 | 2.9 | % | 110 | bps | 5.3 | % | ||||||||||||||||||
Rodeway | 57.00 | 49.9 | % | 28.47 | 54.01 | 50.9 | % | 27.47 | 5.5 | % | (100 | ) | bps | 3.6 | % | |||||||||||||||||
MainStay | 73.73 | 60.1 | % | 44.30 | 72.56 | 67.0 | % | 48.59 | 1.6 | % | (690 | ) | bps | (8.8 | )% | |||||||||||||||||
Suburban | 47.15 | 71.1 | % | 33.51 | 45.11 | 67.5 | % | 30.45 | 4.5 | % | 360 | bps | 10.0 | % | ||||||||||||||||||
Ascend Hotel Collection | 126.92 | 54.4 | % | 69.09 | 124.75 | 62.2 | % | 77.56 | 1.7 | % | (780 | ) | bps | (10.9 | )% | |||||||||||||||||
Total | $ | 76.81 | 55.7 | % | $ | 42.76 | $ | 74.42 | 55.1 | % | $ | 41.00 | 3.2 | % | 60 | bps | 4.3 | % | ||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||
12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | |||||||||||||||||||||||||||||
System-wide effective royalty rate | 4.37% | 4.28% | 4.3% | 4.28% | ||||||||||||||||||||||||||||
CHOICE HOTELS INTERNATIONAL, INC. | Exhibit 5 | |||||||||||||||||||||||
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | Variance | ||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | % | % | |||||||||||||||||
Comfort Inn | 1,156 | 89,545 | 1,240 | 95,862 | (84 | ) | (6,317 | ) | (6.8 | )% | (6.6 | )% | ||||||||||||
Comfort Suites | 569 | 43,949 | 577 | 44,632 | (8 | ) | (683 | ) | (1.4 | )% | (1.5 | )% | ||||||||||||
Sleep | 377 | 27,047 | 371 | 26,811 | 6 | 236 | 1.6 | % | 0.9 | % | ||||||||||||||
Quality | 1,379 | 110,116 | 1,284 | 104,454 | 95 | 5,662 | 7.4 | % | 5.4 | % | ||||||||||||||
Clarion | 175 | 24,449 | 178 | 25,049 | (3 | ) | (600 | ) | (1.7 | )% | (2.4 | )% | ||||||||||||
Econo Lodge | 856 | 52,978 | 856 | 52,878 | — | 100 | — | % | 0.2 | % | ||||||||||||||
Rodeway | 513 | 28,880 | 474 | 26,172 | 39 | 2,708 | 8.2 | % | 10.3 | % | ||||||||||||||
MainStay | 52 | 3,846 | 45 | 3,568 | 7 | 278 | 15.6 | % | 7.8 | % | ||||||||||||||
Suburban | 62 | 6,994 | 65 | 7,198 | (3 | ) | (204 | ) | (4.6 | )% | (2.8 | )% | ||||||||||||
Ascend Hotel Collection | 112 | 9,455 | 109 | 9,395 | 3 | 60 | 2.8 | % | 0.6 | % | ||||||||||||||
Cambria hotel & suites | 25 | 3,113 | 22 | 2,642 | 3 | 471 | 13.6 | % | 17.8 | % | ||||||||||||||
Domestic Franchises | 5,276 | 400,372 | 5,221 | 398,661 | 55 | 1,711 | 1.1 | % | 0.4 | % | ||||||||||||||
International Franchises | 1,147 | 107,111 | 1,158 | 106,617 | (11 | ) | 494 | (0.9 | )% | 0.5 | % | |||||||||||||
Total Franchises | 6,423 | 507,483 | 6,379 | 505,278 | 44 | 2,205 | 0.7 | % | 0.4 | % |
Exhibit 6 | ||||||||||||||||||||||||
CHOICE HOTELS INTERNATIONAL, INC. | ||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION BY BRAND | ||||||||||||||||||||||||
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
For the Year Ended December 31, 2015 | For the Year Ended December 31, 2014 | % Change | ||||||||||||||||||||||
New Construction | Conversion | Total | New Construction | Conversion | Total | New Construction | Conversion | Total | ||||||||||||||||
Comfort Inn | 37 | 39 | 76 | 31 | 24 | 55 | 19% | 63% | 38% | |||||||||||||||
Comfort Suites | 45 | 6 | 51 | 39 | 1 | 40 | 15% | 500% | 28% | |||||||||||||||
Sleep | 34 | — | 34 | 36 | 2 | 38 | (6)% | (100)% | (11)% | |||||||||||||||
Quality | 3 | 193 | 196 | 3 | 166 | 169 | —% | 16% | 16% | |||||||||||||||
Clarion | — | 12 | 12 | 1 | 28 | 29 | (100)% | (57)% | (59)% | |||||||||||||||
Econo Lodge | — | 60 | 60 | 3 | 79 | 82 | (100)% | (24)% | (27)% | |||||||||||||||
Rodeway | — | 104 | 104 | 3 | 76 | 79 | (100)% | 37% | 32% | |||||||||||||||
MainStay | 27 | — | 27 | 20 | 3 | 23 | 35% | (100)% | 17% | |||||||||||||||
Suburban | 1 | 6 | 7 | 4 | 5 | 9 | (75)% | 20% | (22)% | |||||||||||||||
Ascend Hotel Collection | 5 | 32 | 37 | 11 | 23 | 34 | (55)% | 39% | 9% | |||||||||||||||
Cambria hotel & suites | 21 | 5 | 26 | 8 | — | 8 | 163% | NM | 225% | |||||||||||||||
Total Domestic System | 173 | 457 | 630 | 159 | 407 | 566 | 9% | 12% | 11% | |||||||||||||||
For the Three Months Ended December 31, 2015 | For the Three Months Ended December 31, 2014 | |||||||||||||||||||||||
% Change | ||||||||||||||||||||||||
New Construction | Conversion | Total | New Construction | Conversion | Total | New Construction | Conversion | Total | ||||||||||||||||
Comfort Inn | 20 | 11 | 31 | 15 | 13 | 28 | 33% | (15)% | 11% | |||||||||||||||
Comfort Suites | 27 | 3 | 30 | 28 | 1 | 29 | (4)% | 200% | 3% | |||||||||||||||
Sleep | 15 | — | 15 | 15 | 1 | 16 | —% | (100)% | (6)% | |||||||||||||||
Quality | — | 79 | 79 | — | 84 | 84 | NM | (6)% | (6)% | |||||||||||||||
Clarion | — | 5 | 5 | — | 13 | 13 | NM | (62)% | (62)% | |||||||||||||||
Econo Lodge | — | 21 | 21 | 2 | 33 | 35 | (100)% | (36)% | (40)% | |||||||||||||||
Rodeway | — | 47 | 47 | — | 28 | 28 | NM | 68% | 68% | |||||||||||||||
MainStay | 11 | — | 11 | 10 | 2 | 12 | 10% | (100)% | (8)% | |||||||||||||||
Suburban | — | 2 | 2 | 2 | 2 | 4 | (100)% | —% | (50)% | |||||||||||||||
Ascend Hotel Collection | 2 | 10 | 12 | 5 | 12 | 17 | (60)% | (17)% | (29)% | |||||||||||||||
Cambria hotel & suites | 7 | 3 | 10 | 3 | — | 3 | 133% | NM | 233% | |||||||||||||||
Total Domestic System | 82 | 181 | 263 | 80 | 189 | 269 | 3% | (4)% | (2)% | |||||||||||||||
Exhibit 7 | |||||||||||||||||||||||||||||||||
CHOICE HOTELS INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||
DOMESTIC 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, 2015 Units | December 31, 2014 Units | Conversion | New Construction | Total | |||||||||||||||||||||||||||||
Conversion | New Construction | Total | Conversion | New Construction | Total | Units | % | Units | % | Units | % | ||||||||||||||||||||||
Comfort Inn | 38 | 83 | 121 | 36 | 64 | 100 | 2 | 6% | 19 | 30% | 21 | 21% | |||||||||||||||||||||
Comfort Suites | 3 | 95 | 98 | — | 75 | 75 | 3 | NM | 20 | 27% | 23 | 31% | |||||||||||||||||||||
Sleep Inn | — | 81 | 81 | 2 | 72 | 74 | (2 | ) | (100)% | 9 | 13% | 7 | 9% | ||||||||||||||||||||
Quality | 53 | 5 | 58 | 52 | 5 | 57 | 1 | 2% | — | —% | 1 | 2% | |||||||||||||||||||||
Clarion | 7 | 2 | 9 | 12 | 2 | 14 | (5 | ) | (42)% | — | —% | (5 | ) | (36)% | |||||||||||||||||||
Econo Lodge | 23 | 4 | 27 | 32 | 5 | 37 | (9 | ) | (28)% | (1 | ) | (20)% | (10 | ) | (27)% | ||||||||||||||||||
Rodeway | 47 | 2 | 49 | 31 | 4 | 35 | 16 | 52% | (2 | ) | (50)% | 14 | 40% | ||||||||||||||||||||
MainStay | — | 60 | 60 | 1 | 46 | 47 | (1 | ) | (100)% | 14 | 30% | 13 | 28% | ||||||||||||||||||||
Suburban | 5 | 8 | 13 | 4 | 12 | 16 | 1 | 25% | (4 | ) | (33)% | (3 | ) | (19)% | |||||||||||||||||||
Ascend Hotel Collection | 28 | 19 | 47 | 14 | 20 | 34 | 14 | 100% | (1 | ) | (5)% | 13 | 38% | ||||||||||||||||||||
Cambria hotel & suites | 5 | 38 | 43 | — | 21 | 21 | 5 | NM | 17 | 81% | 22 | 105% | |||||||||||||||||||||
209 | 397 | 606 | 184 | 326 | 510 | 25 | 14% | 71 | 22% | 96 | 19% | ||||||||||||||||||||||
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 December 31, | Year Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Franchising Revenues: | |||||||||||||||||
Total Revenues | $ | 210,951 | $ | 185,402 | $ | 859,878 | $ | 757,970 | |||||||||
Adjustments: | |||||||||||||||||
Marketing and reservation revenues | (122,465 | ) | (103,594 | ) | (488,763 | ) | (412,619 | ) | |||||||||
Non-franchising activities | (1,943 | ) | (387 | ) | (4,416 | ) | (600 | ) | |||||||||
Franchising Revenues | $ | 86,543 | $ | 81,421 | $ | 366,699 | $ | 344,751 | |||||||||
Franchising Margins: | |||||||||||||||||
Operating Margin: | |||||||||||||||||
Total Revenues | $ | 210,951 | $ | 185,402 | $ | 859,878 | $ | 757,970 | |||||||||
Operating Income | $ | 47,195 | $ | 46,257 | $ | 225,319 | $ | 214,568 | |||||||||
Operating Margin | 22.4 | % | 24.9 | % | 26.2 | % | 28.3 | % | |||||||||
Franchising Margin: | |||||||||||||||||
Franchising Revenues | $ | 86,543 | $ | 81,421 | $ | 366,699 | $ | 344,751 | |||||||||
Operating Income | $ | 47,195 | $ | 46,257 | $ | 225,319 | $ | 214,568 | |||||||||
Non-franchising activities operating loss | $ | 6,722 | $ | 4,271 | $ | 21,529 | $ | 17,065 | |||||||||
$ | 53,917 | $ | 50,528 | $ | 246,848 | $ | 231,633 | ||||||||||
Franchising Margins | 62.3 | % | 62.1 | % | 67.3 | % | 67.2 | % | |||||||||
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES | |||||||||||||||||
(dollar amounts in thousands) | Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Total Selling, General and Administrative Expenses | $ | 38,542 | $ | 33,089 | $ | 134,254 | $ | 121,418 | |||||||||
Non-Franchising Activities | (7,746 | ) | (4,336 | ) | (23,376 | ) | (16,658 | ) | |||||||||
Franchising Selling, General and Administration Expenses | $ | 30,796 | $ | 28,753 | $ | 110,878 | $ | 104,760 | |||||||||
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") | |||||||||||||||||
(dollar amounts in thousands) | |||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Income from continuing operations, net of income taxes | $ | 29,203 | $ | 25,309 | $ | 128,029 | $ | 121,473 | |||||||||
Income taxes | 8,601 | 10,729 | 55,956 | 52,285 | |||||||||||||
Interest expense | 10,776 | 10,110 | 42,833 | 41,486 | |||||||||||||
Interest income | (598 | ) | (556 | ) | (1,580 | ) | (1,761 | ) | |||||||||
Other (gains) and losses | (581 | ) | 585 | (820 | ) | 427 | |||||||||||
Equity in net (income) loss of affiliates | (206 | ) | 80 | 901 | 658 | ||||||||||||
Depreciation and amortization | 2,749 | 2,462 | 11,542 | 9,365 | |||||||||||||
EBITDA | $ | 49,944 | $ | 48,719 | $ | 236,861 | $ | 223,933 | |||||||||
Franchising | $ | 55,747 | $ | 52,668 | $ | 255,821 | $ | 239,991 | |||||||||
Non-Franchising activities | (5,803 | ) | (3,949 | ) | (18,960 | ) | (16,058 | ) | |||||||||
$ | 49,944 | $ | 48,719 | $ | 236,861 | $ | 223,933 | ||||||||||
CHOICE HOTELS INTERNATIONAL, INC. | Exhibit 9 | ||||||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
(In thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
REVENUES: | |||||||||||||||
Hotel operations | — | — | — | $ | 801 | ||||||||||
Total revenues | — | — | — | 801 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Hotel operations | — | 43 | — | 927 | |||||||||||
Total operating expenses | — | 43 | — | 927 | |||||||||||
Operating income (loss) | — | (43 | ) | — | (126 | ) | |||||||||
Gain (loss) on disposal of discontinued operations | — | 4 | — | 2,807 | |||||||||||
Income (loss) from discontinued operations before income taxes | — | (39 | ) | — | 2,681 | ||||||||||
Income tax (benefit) | — | (15 | ) | — | 994 | ||||||||||
Income (loss) from discontinued operations | — | $ | (24 | ) | — | $ | 1,687 | ||||||||