Choice Hotels Reports Diluted EPS of $2.15 for Full Year 2004; Adjusted Diluted EPS of $2.16, up 16%.SILVER SPRING, Md. -- Domestic Unit Growth Rises 5.4%; New Domestic Hotel Franchise Contracts Exceed 550 For Full Year, Up 17% Choice Hotels International, Inc. (NYSE NYSE See: New York Stock Exchange :CHH CHH Cartilage Hair Hypoplasia CHH Crustacean Hyperglycemic Hormone CHH Carter Holt Harvey Limited (Australia & New Zealand) CHH Chuan Hup Holdings Limited (Singapore) CHH Certified Hardware Hosineer ) today reported the following highlights for the fourth quarter and full year 2004: --Diluted earnings per share for full year 2004 were $2.15 compared to $1.96 for 2003; Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for fourth quarter 2004 were $0.60 compared to $0.57 for fourth quarter 2003; --Adjusted diluted earnings per share for full year 2004 were $2.16, up 16% from $1.87 for the same period in 2003, on a non-GAAP basis, excluding specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. items; --Royalty revenues up 13% and 11% for fourth quarter and full year 2004, respectively, total revenues up 12% and 11% for fourth quarter and full year, respectively; --Domestic unit growth of 5.4%; --Domestic system-wide revenue per available room increased 7.9% for fourth quarter 2004 and 5.1% for full year 2004 compared to prior year results; --Year-to-date new domestic hotel franchise contracts up 17% to a record 552; --Domestic hotels under development increased in 2004 by more than 14% to 460 hotels representing 35,652 rooms at year end 2004; worldwide hotels under development grew 16% to 569 hotels at year end 2004, representing 45,167 rooms; --Company returned more than $175 million of cash to shareholders in 2004 through a combination of treasury share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and dividends; --Company announces 2005 full year guidance of $2.38 to $2.42 diluted earnings per share. "Choice Hotels enjoyed yet another record-setting year in 2004 as we added more than 15,000 rooms to our domestic system and achieved a significant milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. with more than 400,000 rooms open worldwide," said Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by A. Ledsinger, Jr., president and chief executive officer. "We had a second consecutive record development year, with more than 550 contracts for new franchises executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. , which positions us well for unit growth in 2005 and beyond." He added, "We are also encouraged by strengthening industry fundamentals that contributed to an increase in domestic RevPAR RevPAR A performance metric in the hotel industry which stands for "revenue per available room." RevPAR is typically calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate. of nearly 8% in the fourth quarter. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the strong momentum reflected in our 2004 results will carry forward into next year. We are especially excited with this month's announcement of the launch of our new upscale brand, Cambria Cambria (kăm`brēə) [Latinized form of Welsh Cymry=Welshmen], ancient name of Wales. Suites, which has received an enthusiastic reception from developers." Full Year 2004 & Fourth Quarter Performance Choice reported full year 2004 net income of $74.3 million, or $2.15 diluted earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ), a 10% increase in diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS over the same period for 2003. For full year 2003, the company reported net income of $71.9 million, or $1.96 diluted EPS. Adjusted net income for full year 2004 was $74.8 million, compared to adjusted net income of $68.5 million for the same period in 2003. Adjusted diluted EPS was $2.16 for full year 2004, a 16% increase compared to the same period in 2003. Adjusted net income and adjusted diluted EPS presented for full year 2004 exclude a $0.4 million (net of related tax effect), or $0.01 per share, loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt. Adjusted net income and adjusted diluted EPS presented for full year 2003 exclude a $3.4 million gain (net of related tax effect), or $0.09 per share, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of a note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. from Sunburst Hospitality Corporation ("Sunburst") which was repaid to the Company in December December: see month. 2003. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for full year 2004 increased 10% from $114.0 million to $125.0 million. Franchising margins for 2004 increased to 60.9% from 60.4% for full year 2003. The company also reported total revenues of $428.8 million for 2004, compared to $386.1 million in 2003, an increase of 11%. Franchising revenues, which include royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. revenues, initial and relicensing fees, partner services and other revenue, for 2004 were $203.8 million, an increase of 9% from the $187.1 million reported a year ago. Royalty revenues for 2004 were $167.2 million, compared to $151.3 million for 2003, an increase of 11%. System-wide domestic revenue per available room (RevPAR) was $35.95 for full year 2004, compared to $34.21 for 2003, a 5.1% increase. For fourth quarter 2004, Choice reported net income of $20.3 million or $0.60 diluted EPS compared to net income of $20.7 million and $0.57 diluted EPS reported for fourth quarter 2003. Net income of $20.3 million for fourth quarter 2004 increased 17% compared to adjusted net income of $17.3 million for the same period in 2003. Diluted EPS for fourth quarter 2004 increased 25% compared to adjusted diluted EPS of $0.48 for fourth quarter 2003. Adjusted net income and adjusted diluted EPS presented for fourth quarter 2003 exclude a $3.4 million gain (net of related tax effect), or $0.09 per share, gain on the Sunburst note receivable prepayment. Operating income for fourth quarter 2004 increased 11% to $31.5 million, compared to $28.3 million for the same period a year ago. Total revenues were $106.9 million for the three months ended December 31, 2004, an increase of 12% compared to $95.2 million for the same period in 2003. Franchising revenues for the last three months of 2004 increased 11% to $53.7 million, compared to $48.5 million for the same period a year ago. Royalty revenues for fourth quarter 2004 were $42.9 million, compared to $38.1 million for the same period a year ago, an increase of 13%. System-wide domestic RevPAR was $35.96 for the last three months of 2004, compared to $33.34 for the same period in 2003, a 7.9% gain. 2004 Unit Growth The number of domestic Choice hotels on-line grew by 5.4% to 3,834 (309,586 rooms on-line) as of December 31, 2004 from 3,636 (294,268 rooms on-line) as of the same date a year ago. Net domestic franchise additions in 2004 were 198 compared to 154 net domestic franchise additions in 2003, a 29% increase. In fourth quarter 2004, net domestic franchise additions were 38, an increase of 9% compared to 35 for the same period a year ago. Choice executed 552 new domestic hotel franchise contracts representing 47,277 rooms in 2004, compared to 470 new contracts representing 41,039 rooms for the same period a year ago, increases of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 17% and 15% respectively. For the quarter ended December 31, 2004, Choice executed 198 new domestic hotel franchise contracts, representing 17,078 rooms, compared to 176 contracts, representing 15,075 rooms, for the same period in 2003, increases of 12% and 13% respectively. These increases in executed new franchise contracts and an increase in the number of existing franchise relicensings have contributed to better than 19% increases in initial franchise and relicensing fees for both the three month period and year ended December 31, 2004, compared to the same periods in 2003. For full year 2004, 182 contracts for new construction hotel franchises, representing 12,799 rooms were executed, compared to 128 contracts, representing 8,649 rooms for the same period a year ago, representing increases of approximately 42% and 48%, respectively. For the three months ended December 31, 2004, 82 contracts for new construction hotels representing 5,931 rooms were executed, representing increases of 64% and 82%, respectively, compared to 50 contracts, representing 3,250 rooms, for new construction hotels for the same period a year ago. As of December 31, 2004, Choice had 460 hotels under development in its domestic hotel system, representing 35,652 rooms, compared to 401 hotels and 31,409 rooms at the same date in 2003, increases of 15% and 14%, respectively. As of December 31, 2004, the number of Choice hotels on-line worldwide grew 3.5% to 4,977 from 4,810 as of the same date a year ago. This growth represents an increase of 3.9% in the number of rooms open to 403,806 from 388,618. As of December 31, 2004, Choice had 569 hotels under development worldwide, representing 45,167 rooms, compared to 491 hotels and 39,877 rooms at the same date in 2003. Use of Free Cash Flow The company has consistently used the free cash flow (cash flows from operations less capital expenditures) generated from its operations to return value to its shareholders. This is primarily achieved through share repurchases and dividends. During 2004, the company purchased 3.2 million shares of its common stock at an average price of $46.45 per share for a total cost of $148.3 million. For the three months ended December 31, 2004, the company purchased 0.9 million shares of its common stock at a total cost of $47.1 million. The company has remaining authorization The right or permission to use a system resource; the process of granting access. See access control. to purchase up to 1.8 million shares. Since Choice announced its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program on June June: see month. 25, 1998, the company has purchased 32.5 million shares of its common stock at an average price of $20.38 per share and a total cost of $663 million, through December 31, 2004. Total shares outstanding as of December 31, 2004, are 32.3 million. During 2004, the company paid $27.7 million of cash dividends to shareholders. The current annual dividend rate on the company's common stock is $0.90 per share. The company expects to continue to return value to its shareholders through a combination of share repurchases and dividends. First Quarter & Full-Year 2005 The company's first quarter 2005 diluted EPS is expected to be $0.32 to $0.34. These first quarter estimates assume the existing share count and RevPAR growth of approximately 5% to 6%. Full year 2005 diluted EPS is expected to be $2.38 to $2.42. These estimates assume the existing share count and RevPAR growth of approximately 5% to 7%. These estimates exclude the effect of adopting Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R) related to unvested stock options granted prior to 2003. Non-GAAP Financial Measures Franchising revenues, franchising margins, adjusted net income, adjusted diluted EPS and free cash flow are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are used by management in reviewing and analyzing the company's performance. This information should not be considered as an alternative to any measure of performance as promulgated prom·ul·gate tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates 1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce. 2. under accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), such as total revenues, operating income margins, net income, diluted EPS and cash flows from operations. The company's calculation of these measurements may be different from the calculation used by other companies and therefore comparability may be limited. The company has included exhibits accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. this release which reconcile these measures to the comparable GAAP measurement. Conference Call Choice will conduct a conference call on Wednesday Wednesday: see week. , February February: see month. 16, 2005 at 9 a.m. Eastern time to discuss the fourth quarter and full-year 2004 results. The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number to listen to the call is 1-877-209-0397. The conference call also will be Webcast simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics via the company's Web site, www.choicehotels.com. The audio of the call will be archived and available on the company's Web site and also available for replay until March 16, 2005 by calling 1-800-475-6701. The access code for the replay is: 762835. Choice Hotels International franchises more than 4,900 hotels, representing approximately 400,000 rooms, in the United States and 41 other countries and territories. As of December 31, 2004, 460 hotels are under development in the United States, representing 35,652 rooms, and an additional 109 hotels, representing 9,515 rooms, are under development in 21 countries and territories. Its Comfort Inn, Comfort Suites, Quality, Clarion A family of application development systems for Windows from SoftVelocity, Inc., Pompano Beach, FL (www.softvelocity.com). Clarion provides a comprehensive set of tools for development, including a screen builder, 4GL and application generator. , Sleep Inn, Econo Lodge Econo Lodge is an economy motel chain based in the United States. Econo Lodge is the second largest brand in the Choice Hotels system. It is one of the best known names of its category and provides affordable rooms to budget travelers. , Rodeway Inn Rodeway Inn is an upper-priced economy chain of motels in the United States and Canada. Rodeway Inn is a brand of the Choice Hotels group. There are over 150 locations in North America. and MainStay Suites Mainstay Suites is a brand of mid-priced extended stay hotels franchised by Choice Hotels International. Mainstay Suites hotels provide comfortable and affordable accommodations to extended stay travelers as well as provide many amenities to its guests. brands serve guests worldwide. Certain matters discussed in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities law. Such statements are based on management's beliefs, assumptions and expectations, which in turn are based on information currently available to management. Actual performance and results could differ from those expressed in or contemplated by the forward-looking statements due to a number of risks, uncertainties and other factors, many of which are beyond Choice's ability to predict or control. For further information on factors that could impact Choice and the statements contained therein, we refer you to the filings made by Choice with the Securities and Exchange Commission, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended December 31, 2003. Additional corporate information may be found on the Choice Hotels' Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the site, which may be accessed at www.choicehotels.com. Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites are registered trademarks, service marks and trade names of Choice Hotels International, Inc.
Choice Hotels International, Inc. Exhibit 1
Consolidated Statements of Income
(Unaudited)
(In thousands, except per Three Months Ended Twelve Months Ended
share amounts) December December December December
31, 2004 31, 2003 31, 2004 31, 2003
------------------ ------------------
REVENUES:
Royalty fees $42,914 $38,130 $167,151 $151,326
Initial franchise and
relicensing fees 6,566 5,514 20,112 16,799
Partner services 3,242 3,597 12,524 13,227
Marketing and reservation 52,204 45,871 221,313 195,420
Hotel operations 967 826 3,729 3,565
Other 993 1,220 3,977 5,767
------------------ ------------------
Total revenues 106,886 95,158 428,806 386,104
OPERATING EXPENSES:
Selling, general and
administrative 20,042 17,823 69,654 62,860
Depreciation and amortization 2,422 2,753 9,947 11,225
Marketing and reservation 52,204 45,871 221,313 195,420
Hotel operations 742 399 2,892 2,616
------------------ ------------------
Total operating expenses 75,410 66,846 303,806 272,121
Operating income 31,476 28,312 125,000 113,983
OTHER INCOME AND EXPENSES:
Interest expense 3,328 2,612 11,605 11,597
Interest and other investment
income (783) (1,546) (1,093) (6,185)
Gain on prepayment of note
receivable from Sunburst - (3,433) - (3,383)
Equity in net income of
affiliates (271) (247) (722) (582)
Loss on extinguishment of debt - - 696 -
Other (4) 122 (10) 129
------------------ ------------------
Total other income and
expenses 2,270 (2,492) 10,476 1,576
------------------ ------------------
Income before income taxes 29,206 30,804 114,524 112,407
Income taxes 8,874 10,084 40,179 40,544
------------------ ------------------
Net income $20,332 $20,720 $74,345 $71,863
================== ==================
Weighted average shares
outstanding-basic 32,350 35,303 33,203 35,699
================== ==================
Weighted average shares
outstanding-diluted 33,716 36,513 34,500 36,674
================== ==================
Basic earnings per share $0.63 $0.59 $2.24 $2.01
================== ==================
Diluted earnings per share $0.60 $0.57 $2.15 $1.96
================== ==================
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands) December 31, December 31,
2004 2003
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $27,554 $20,031
Accounts receivable, net 34,611 33,631
Deferred income taxes 2,252 1,957
Other current assets 4,212 3,613
------------ ------------
Total current assets 68,629 59,232
Fixed assets and intangibles, net 140,214 150,256
Receivable -- marketing and reservation fees 21,683 32,368
Other assets 31,862 25,416
------------ ------------
Total assets 262,388 267,272
------------ ------------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current portion of long-term debt 10,146 23,829
Other current liabilities 90,945 78,382
------------ ------------
Total current liabilities 101,091 102,211
Long-term debt 318,557 222,823
Deferred income taxes 6,974 21,562
Other liabilities 38,819 38,863
------------ ------------
Total liabilities 465,441 385,459
------------ ------------
Total shareholders' deficit (203,053) (118,187)
------------ ------------
Total liabilities and
shareholders' deficit $262,388 $267,272
------------ ------------
Choice Hotels International, Inc. Exhibit 3
Consolidated Statements of Cash Flow
(Unaudited)
(In thousands) Twelve Months Ended
December 31, December 31,
2004 2003
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $74,345 $71,863
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,947 11,225
Gain on Sunburst Hospitality note
prepayment - (3,383)
Provision for bad debts (157) (189)
Non-cash stock compensation 4,019 2,226
Non-cash interest and other investment
income (463) (886)
Loss on extinguishment of debt 696 -
Equity in net income of affiliates (722) (582)
Changes in assets and liabilities, net of
acquisitions:
Receivables (735) (887)
Receivable -- marketing and reservation
fees, net 19,743 24,726
Accounts payable 978 6,439
Accrued expenses and other 12,802 7,616
Income taxes payable 2,854 (2,675)
Deferred income taxes (14,883) (7,970)
Other current assets (599) 383
Other liabilities (26) 7,579
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 107,799 115,485
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (6,859) (8,480)
Proceeds from disposition of property - 498
Prepayment of Sunburst Hospitality note - 44,701
Issuance of notes receivable (2,264) (4,433)
Acquisition of flag - (1,211)
Purchases of investments, net (4,157) (2,673)
Other items, net (436) (618)
------------ ------------
NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES (13,716) 27,784
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 192,000 -
Principal payments of long-term debt (267,739) (17,404)
Net borrowings (repayments) pursuant to
revolving credit facility 157,725 (43,800)
Debt issue costs (1,010) -
Purchase of treasury stock (148,273) (80,358)
Dividends paid (27,690) -
Proceeds from exercise of stock options 8,427 6,097
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (86,560) (135,465)
------------ ------------
Net change in cash and cash equivalents 7,523 7,804
Cash and cash equivalents at beginning of
period 20,031 12,227
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $27,554 $20,031
============ ============
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 4
SUPPLEMENTAL OPERATING INFORMATION BY BRAND
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
COMFORT INN
Hotels 1,432 1,413 1,432 1,413
Rooms 112,325 111,218 112,325 111,218
Avg. Daily Rate $65.70 $62.80 $65.53 $64.05
Occupancy % 61.3% 58.6% 60.1% 58.2%
RevPAR $40.29 $36.82 $39.37 $37.28
COMFORT SUITES
Hotels 389 370 389 370
Rooms 30,682 29,198 30,682 29,198
Avg. Daily Rate $72.90 $70.68 $73.68 $72.58
Occupancy % 64.1% 60.8% 64.1% 61.2%
RevPAR $46.70 $42.99 $47.26 $44.44
QUALITY
Hotels 576 508 576 508
Rooms 58,785 52,766 58,785 52,766
Avg. Daily Rate $61.85 $60.90 $63.62 $64.19
Occupancy % 53.8% 51.8% 54.1% 51.6%
RevPAR $33.30 $31.52 $34.41 $33.14
CLARION
Hotels 158 138 158 138
Rooms 23,652 20,737 23,652 20,737
Avg. Daily Rate $72.47 $70.63 $72.37 $72.27
Occupancy % 50.7% 48.8% 51.1% 49.2%
RevPAR $36.71 $34.48 $36.97 $35.55
SLEEP
Hotels 311 309 311 309
Rooms 23,766 23,678 23,766 23,678
Avg. Daily Rate $59.67 $57.24 $59.50 $58.01
Occupancy % 60.3% 58.2% 59.5% 57.5%
RevPAR $35.99 $33.32 $35.42 $33.33
MAINSTAY
Hotels 27 26 27 26
Rooms 2,150 2,063 2,150 2,063
Avg. Daily Rate $61.93 $58.87 $61.09 $61.50
Occupancy % 65.2% 63.4% 62.2% 62.9%
RevPAR $40.36 $37.33 $37.97 $38.70
ECONO LODGE
Hotels 781 734 781 734
Rooms 48,301 45,420 48,301 45,420
Avg. Daily Rate $48.75 $46.97 $48.92 $47.88
Occupancy % 47.9% 46.5% 48.2% 47.5%
RevPAR $23.36 $21.86 $23.57 $22.76
RODEWAY
Hotels 160 138 160 138
Rooms 9,925 9,188 9,925 9,188
Avg. Daily Rate $50.09 $47.37 $52.33 $49.84
Occupancy % 49.3% 43.5% 48.7% 44.8%
RevPAR $24.67 $20.59 $25.49 $22.32
TOTAL CHOICE - DOMESTIC
Hotels 3,834 3,636 3,834 3,636
Rooms 309,586 294,268 309,586 294,268
Avg. Daily Rate $63.17 $60.98 $63.56 $62.53
Occupancy % 56.9% 54.7% 56.6% 54.7%
RevPAR $35.96 $33.34 $35.95 $34.21
Effective Royalty
Rate 4.05% 4.06% 4.04% 4.01%
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 5
SUPPLEMENTAL INFORMATION
CALCULATION OF FRANCHISING REVENUES AND
FRANCHISING MARGINS
(UNAUDITED)
(dollar amounts in thousands) Three Months Ended Twelve Months Ended
December December December December
31, 2004 31, 2003 31, 2004 31, 2003
------------------ ------------------
Franchising Revenues:
Total Revenues $106,886 $95,158 $428,806 $386,104
Adjustments:
Marketing and Reservation
Revenues (52,204) (45,871) (221,313)(195,420)
Hotel Operations (967) (826) (3,729) (3,565)
------------------ ------------------
Franchising Revenues $53,715 $48,461 $203,764 $187,119
------------------ ------------------
Franchising Margins:
Operating Margin:
Total Revenues $106,886 $95,158 $428,806 $386,104
Operating Income $31,476 $28,312 $125,000 $113,983
------------------ ------------------
Operating Margin 29.4% 29.8% 29.2% 29.5%
------------------ ------------------
Franchising Margin:
Franchising Revenues $53,715 $48,461 $203,764 $187,119
Operating Income $31,476 $28,312 $125,000 $113,983
Less: Hotel Operations 225 427 837 949
------------------ ------------------
$31,251 $27,885 $124,163 $113,034
------------------ ------------------
------------------ ------------------
Franchising Margins 58.2% 57.5% 60.9% 60.4%
------------------ ------------------
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 6
SUPPLEMENTAL INFORMATION
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED
DILUTED EARNINGS PER
SHARE (EPS)
(UNAUDITED)
(In thousands, except per
share amounts) Three Months Ended Twelve Months Ended
December December December December
31, 2004 31, 2003 31, 2004 31, 2003
------------------ ------------------
Adjusted Net Income
Net Income $20,332 $20,720 $74,345 $71,863
Adjustments:
Debt Extinguishment Costs - - 433 -
Gain on Sunburst Note
Prepayment - (3,433) - (3,383)
------------------ ------------------
Adjusted Net Income $20,332 $17,287 $74,778 $68,480
------------------ ------------------
Weighted average shares
outstanding-diluted 33,716 36,513 34,500 36,674
Diluted Earnings Per Share $0.60 $0.57 $2.15 $1.96
Adjustments:
Debt Extinguishment Costs - - 0.01 -
Gain on Sunburst Note
Prepayment - (0.09) - (0.09)
------------------ ------------------
Adjusted Diluted Earnings Per
Share (EPS) $0.60 $0.48 $2.16 $1.87
------------------ ------------------
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