Choice Hotels International Reports A 16-Percent Increase In Second Quarter Diluted Earnings Per Share

ROCKVILLE, Md., Aug. 2, 2017 (hospitalitybusinessnews.com) — Choice Hotels International, Inc. , one of the world’s largest hotel companies, today reported its results for the three months ended June 30, 2017. Net income for the 2017 second quarter was $45.0 million, or $0.79 per diluted share, compared to $38.8 million, or $0.68 per diluted share for the 2016 second quarter, representing a 16-percent increase.  Second quarter adjusted earnings before income taxes, depreciation and amortization (EBITDA) was $81.1 million compared to $70.4 million in the prior-year second quarter, a 15-percent increase.

“Choice Hotels’ overall strategy to successfully focus on franchisee profitability has led to our robust development pipeline and continues to deliver strong financial results,” said Stephen P. Joyce, chief executive officer, Choice Hotels. “For second quarter of 2017, 176 new domestic franchise agreements were executed, a 20-percent increase when compared to second quarter of 2016. In fact, we have experienced one of the strongest January through June development periods in our company’s history, as new franchise agreements increased 30-percent and new construction agreements increased 65-percent, versus the first six months of 2016.”

“Our midscale and upscale brands continue to be core areas of strength and expansion,” said Patrick Pacious, Choice Hotel’s president, chief operating officer and incoming chief executive officer. “The brands in our midscale segment, including Comfort, Quality and Sleep Inn, are experiencing continued growth in both RevPAR and our development pipeline. In addition, our upscale brands – Cambria Hotels and The Ascend Hotel Collection – are aggressively expanding. These results reinforce that we have very effective distribution channels and a high-performing franchisee business model.”

Highlights of the company’s second quarter 2017 results are as follows:

Overall Results

  • Diluted earnings per share (EPS) for the second quarter was $0.79, a 16-percent increase from the second quarter of the prior year; Diluted EPS increased 11-percent compared to our adjusted diluted EPS for the second quarter of 2016, which excluded executive termination benefits incurred in 2016.
  • Total revenues and hotel franchising revenues for the second quarter increased 14 percent and 10 percent, respectively, from the second quarter of the prior year.
  • Adjusted EBITDA totaled $81.1 million for the second quarter, a 15-percent increase from the second quarter of the prior year.
  • Adjusted EBITDA from hotel franchising activities for the second quarter increased 11 percent from the prior year second quarter to $84.0 million.
  • Adjusted hotel franchising margins for the second quarter increased 100 basis points from the prior year second quarter to 70.5 percent.

Royalties

  • Domestic royalty fees for second quarter totaled $87.0 million, a 7.2-percent increase from the second quarter of the prior year.
  • Domestic system-wide revenue per available room (RevPAR) increased 2.0 percent for the second quarter compared to the prior year second quarter.  Occupancy and average daily rates increased 30 basis points and 1.5 percent, respectively, in the second quarter compared to the same period of 2016.
  • The Comfort brands extended their consecutive months of RevPAR index gains, compared to their focused competition, to 33 months.
  • Effective royalty rate increased 19 basis points for the second quarter of 2017, compared to the second quarter of the prior year.
  • Domestic franchised hotels, as of June 30, 2017, increased 2.6 percent from June 30, 2016.
  • Cambria Hotels surpassed 30 open hotels with three new Cambria Hotels opening during the second quarter, including our first Los Angeles property and our second hotel in Chicago.
  • Domestic and international rooms, as of June 30, 2017, increased 2.2 percent and 1.8 percent, respectively, from June 30, 2016.

Development

  • New, executed franchised hotel development contracts totaled 176 in the second quarter, a 20-percent increase from the comparable period of the prior year.
  • New construction and conversion franchise agreements increased 33 percent and 14 percent, respectively, in the second quarter of 2017, compared to the second quarter of the prior year.
  • The company executed 11 Cambria Hotels new construction franchise agreements in the second quarter of 2017, a 22-percent increase compared to the second quarter of the prior year. The domestic new construction pipeline for the Cambria Hotels brand now totals nearly 70 hotels.
  • Domestic relicensing and contract renewal transactions totaled 127 for the three months ended June 30, 2017, a 19-percent increase from the same period of 2016.
  • The company’s total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of June 30, 2017, increased 22 percent to 721 hotels from June 30, 2016.
  • The new construction and conversion domestic pipelines totaled 523 and 198 hotels, respectively at June 30, 2017, representing increases of 30 percent and 5 percent from June 30, 2016.

Use of Cash Flows

Dividends
During the six months ended June 30, 2017, the company paid cash dividends totaling approximately $24 million. Based on the current quarterly dividend rate of $0.215 per common share, the company expects to pay dividends of approximately $49 million during 2017.

Share Repurchases
The company did not repurchase shares of common stock under its share repurchase program during the six months ended June 30, 2017. The company currently has authorization to purchase up to 4.0 million additional shares under this program.

Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale Cambria Hotels brand, the company advanced approximately $64 million in support of the brand’s development during the six months ended June 30, 2017. The company also recycled approximately $2 million of prior investments in Cambria development projects, resulting in net advances of $62 million for the current year. Advances under this program are primarily in the form of joint venture investments, forgivable key money loans, senior mortgage loans, development loans, mezzanine lending, and through the operation of a land-banking program.  On June 30, 2017, the company had approximately $261 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five-year period.

Special Item

During the three and six months ended June 30, 2016, the company recorded an executive termination benefit charge of approximately $2.2 million. This special item impacted diluted EPS by $0.03 and $0.02 per share for the three and six months ended June 30, 2016, respectively. The company evaluates the non-GAAP measures presented herein that exclude executive termination benefits because those non-GAAP measures allow for period-over-period comparison of ongoing core operations before the impact of these charges. These non-GAAP measures, which are reconciled to the comparable GAAP measures in Exhibit 6, include adjusted net income, adjusted diluted EPS, adjusted hotel franchising selling, general and administrative expenses, adjusted EBITDA, adjusted hotel franchising EBITDA and adjusted hotel franchising margins.

Outlook

The company’s consolidated 2017 outlook reflects the following assumptions:

Consolidated Outlook

  • Net income for full-year 2017 is expected to range between $160 million and $163 million.
  • Adjusted EBITDA for full-year 2017 is expected to range between $293 million and $297 million.
  • The company’s third-quarter 2017 adjusted diluted EPS is expected to range between $0.90 and $0.92.
  • The company expects full-year 2017 adjusted diluted EPS to range between $2.81 and $2.86.
  • The effective tax rate is expected to be approximately 33 percent for both the third quarter and full-year 2017.
  • All estimates for 2017 exclude any potential costs associated with the company’s recently announced executive succession plan.
  • Adjusted diluted EPS estimates are based on the current number of shares outstanding, and thus do not factor in any changes that may occur due to new equity grants or any further repurchases of common stock, under the company’s share repurchase program.
  • The adjusted diluted EPS and consolidated adjusted EBITDA estimates assume that we incur net reductions in adjusted EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.

Hotel Franchising

  • Adjusted EBITDA from hotel franchising activities for full-year 2017 is expected to range between $299 million and $303 million.
  • Net domestic unit growth for 2017 is expected to range between approximately 2 percent and 3 percent.
  • RevPAR is expected to increase between 1 percent and 2 percent for the third quarter and range between 2 percent and 3 percent for full-year 2017.
  • The effective royalty rate is expected to increase between 17 and 19 basis points for full-year 2017 as compared to full-year 2016.

Non-Hotel Franchising Activities

  • Net reductions in full-year 2017 adjusted EBITDA, relating to our non-hotel franchising operations, which primarily relate to SkyTouch and vacation rental activities, are expected to range between approximately $5 million and $7 million.

Choice Hotels International, Inc. and Subsidiaries

Exhibit 1

Consolidated Statements of Income

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Variance

Variance

2017

2016

$

%

2017

2016

$

%

(In thousands, except per share amounts)

REVENUES:

Royalty fees

$              92,486

$              86,195

$     6,291

7%

$            161,475

$            151,054

$     10,421

7%

Initial franchise and relicensing fees

6,981

5,706

1,275

22%

11,987

10,862

1,125

10%

Procurement services

11,068

10,308

760

7%

17,544

16,104

1,440

9%

Marketing and reservation system

158,035

133,814

24,221

18%

267,510

260,175

7,335

3%

Other

8,229

5,728

2,501

44%

16,181

10,674

5,507

52%

      Total revenues

276,799

241,751

35,048

14%

474,697

448,869

25,828

6%

OPERATING EXPENSES:

Selling, general and administrative

38,208

40,039

(1,831)

(5%)

71,054

75,158

(4,104)

(5%)

Depreciation and amortization

3,050

2,956

94

3%

6,120

5,721

399

7%

Marketing and reservation system

158,035

133,814

24,221

18%

267,510

260,175

7,335

3%

Total operating expenses

199,293

176,809

22,484

13%

344,684

341,054

3,630

1%

Operating income

77,506

64,942

12,564

19%

130,013

107,815

22,198

21%

OTHER INCOME AND EXPENSES, NET:

Interest expense

11,280

11,224

56

0%

22,485

22,316

169

1%

Interest income

(1,438)

(827)

(611)

74%

(2,702)

(1,666)

(1,036)

62%

Other (gains) losses

(576)

(321)

(255)

79%

(1,473)

(259)

(1,214)

469%

Equity in net (income) loss of affiliates

859

(744)

1,603

(215%)

2,939

1,436

1,503

105%

Total other income and expenses, net

10,125

9,332

793

8%

21,249

21,827

(578)

(3%)

Income before income taxes

67,381

55,610

11,771

21%

108,764

85,988

22,776

26%

Income taxes

22,386

16,788

5,598

33%

35,025

26,003

9,022

35%

Net income

$              44,995

$              38,822

$     6,173

16%

$              73,739

$              59,985

$     13,754

23%

Basic earnings per share

$                  0.80

$                  0.69

$      0.11

16%

$                  1.31

$                  1.06

$        0.25

24%

Diluted earnings per share

$                  0.79

$                  0.68

$      0.11

16%

$                  1.30

$                  1.06

$        0.24

23%

 

Choice Hotels International, Inc. and Subsidiaries

Exhibit 2

Consolidated Balance Sheets

(In thousands, except per share amounts)

 June 30, 

 December 31, 

2017

2016

(Unaudited)

ASSETS

Cash and cash equivalents

$           197,957

$         202,463

Accounts receivable, net

146,653

107,336

Other current assets

35,617

35,074

Total current assets

380,227

344,873

Fixed assets and intangibles, net

178,271

178,704

Notes receivable, net of allowances

132,004

110,608

Investments in unconsolidated entities

131,722

94,839

Investments, employee benefit plans, at fair value

19,451

16,975

Other assets

106,298

106,469

Total assets

$           947,973

$         852,468

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Accounts payable 

$              67,736

$            48,071

Accrued expenses and other current liabilities

71,973

81,184

Deferred revenue

135,350

133,218

Current portion of long-term debt

1,302

1,195

Total current liabilities

276,361

263,668

Long-term debt

862,965

839,409

Deferred compensation & retirement plan obligations  

23,927

21,595

Other liabilities

37,337

39,145

Total liabilities

1,200,590

1,163,817

Total shareholders’ deficit

(252,617)

(311,349)

Total liabilities and shareholders’ deficit

$           947,973

$         852,468

 

Choice Hotels International, Inc. and Subsidiaries

Exhibit 3

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$                    73,739

$              59,985

Adjustments to reconcile net income to net cash provided

 by operating activities:

  Depreciation and amortization  

6,120

5,721

  Loss on disposal of assets

4

7

  Provision for bad debts, net

916

962

  Non-cash stock compensation and other charges

6,809

7,966

  Non-cash interest and other (income) loss

(274)

958

  Deferred income taxes

(1,446)

4,030

  Equity in net losses from unconsolidated joint ventures less distributions received

3,543

2,193

Changes in assets and liabilities:

  Receivables

(40,673)

(39,058)

  Advances to/from marketing and reservation activities, net

17,407

(42,671)

  Forgivable notes receivable, net

(14,108)

(13,174)

  Accounts payable

18,955

10,567

  Accrued expenses and other current liabilities

(11,286)

(8,842)

  Income taxes payable/receivable

5,629

10,463

  Deferred revenue

2,061

42,164

  Other assets

(1,764)

(10,834)

  Other liabilities

(1,524)

(2,576)

 NET CASH PROVIDED BY OPERATING ACTIVITIES 

64,108

27,861

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in property and equipment

(10,687)

(10,912)

Investment in intangible assets

(2,228)

(322)

Proceeds from sales of assets

1,700

Acquisitions of real estate

(25,389)

Contributions to equity method investments

(42,127)

(19,688)

Distributions from equity method investments

1,696

3,619

Purchases of investments, employee benefit plans

(1,736)

(1,140)

Proceeds from sales of investments, employee benefit plans

2,094

1,136

Issuance of mezzanine and other notes receivable

(14,977)

(13,048)

Collections of mezzanine and other notes receivable

552

10,158

Other items, net

110

11

 NET CASH USED IN INVESTING ACTIVITIES 

(67,303)

(53,875)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings pursuant to revolving credit facilities

23,200

87,950

Principal payments on long-term debt

(309)

(623)

Purchases of treasury stock

(7,414)

(28,278)

Dividends paid

(24,333)

(23,193)

Proceeds from exercise of stock options

6,590

4,234

 NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES

(2,266)

40,090

Net change in cash and cash equivalents

(5,461)

14,076

Effect of foreign exchange rate changes on cash and cash equivalents

955

371

Cash and cash equivalents at beginning of period

202,463

193,441

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                  197,957

$            207,888

 

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

Exhibit 4

SUPPLEMENTAL OPERATING INFORMATION 

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Six Months Ended June 30, 2017

For the Six Months Ended June 30, 2016

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort Inn

$             92.00

64.7%

$          59.48

$             90.11

64.0%

$         57.67

2.1%

70

bps

3.1%

Comfort Suites

96.16

69.3%

66.65

95.51

68.9%

65.80

0.7%

40

bps

1.3%

Sleep

82.29

65.0%

53.51

81.13

64.2%

52.08

1.4%

80

bps

2.7%

Quality

77.45

58.5%

45.32

75.79

57.9%

43.88

2.2%

60

bps

3.3%

Clarion

82.30

58.9%

48.45

80.52

56.3%

45.35

2.2%

260

bps

6.8%

Econo Lodge

60.64

53.2%

32.26

59.24

52.4%

31.03

2.4%

80

bps

4.0%

Rodeway

62.61

55.1%

34.51

60.72

54.6%

33.15

3.1%

50

bps

4.1%

MainStay

74.51

67.1%

49.99

75.80

63.4%

48.02

(1.7%)

370

bps

4.1%

Suburban

51.74

76.2%

39.44

49.67

74.9%

37.21

4.2%

130

bps

6.0%

Cambria hotel & suites

133.34

72.9%

97.16

 NA 

 NA 

 NA 

 NA 

 NA 

 NA 

Ascend Hotel Collection

123.71

54.1%

66.96

125.21

56.9%

71.28

(1.2%)

(280)

bps

(6.1%)

Total  (1)

$             82.16

61.1%

$          50.22

$             80.77

60.5%

$         48.84

1.7%

60

bps

2.8%

For the Three Months Ended June 30, 2017

For the Three Months Ended June 30, 2016

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort Inn

$             95.96

70.6%

$          67.76

$             93.87

70.1%

$         65.84

2.2%

50

bps

2.9%

Comfort Suites

98.54

73.4%

72.32

98.19

73.6%

72.24

0.4%

(20)

bps

0.1%

Sleep

84.84

69.9%

59.27

83.93

69.5%

58.35

1.1%

40

bps

1.6%

Quality

80.36

63.6%

51.12

78.61

63.3%

49.79

2.2%

30

bps

2.7%

Clarion

85.70

63.9%

54.76

84.14

62.3%

52.46

1.9%

160

bps

4.4%

Econo Lodge

63.31

57.6%

36.48

61.84

57.3%

35.46

2.4%

30

bps

2.9%

Rodeway

64.94

58.7%

38.12

63.13

57.9%

36.56

2.9%

80

bps

4.3%

MainStay

76.88

72.4%

55.62

78.07

68.4%

53.40

(1.5%)

400

bps

4.2%

Suburban

52.42

78.2%

41.00

51.07

76.9%

39.27

2.6%

130

bps

4.4%

Cambria hotel & suites

142.23

77.2%

109.78

 NA 

 NA 

 NA 

 NA 

 NA 

 NA 

Ascend Hotel Collection

129.17

56.8%

73.32

133.28

60.0%

79.94

(3.1%)

(320)

bps

(8.3%)

Total  (1)

$             85.19

65.9%

$          56.17

$             83.89

65.6%

$         55.07

1.5%

30

bps

2.0%

For the Quarter Ended

For the Six Months Ended

6/30/2017

6/30/2016

6/30/2017

6/30/2016

System-wide effective royalty rate

4.58%

4.39%

(1)

4.56%

4.39%

(1)

(1)Totals for the three and six months ended June 30, 2016 have been revised from previous disclosures to include the operating statistics for the Cambria hotel & suites brand

 

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

Exhibit 5

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

June 30, 2017

June 30, 2016

Variance

Hotels

Rooms

Hotels

Rooms

Hotels

Rooms

%

%

Comfort Inn

1,093

84,956

1,138

88,085

(45)

(3,129)

(4.0%)

(3.6%)

Comfort Suites

565

43,721

564

43,522

1

199

0.2%

0.5%

Sleep

385

27,574

380

27,188

5

386

1.3%

1.4%

Quality

1,493

116,961

1,395

110,952

98

6,009

7.0%

5.4%

Clarion

163

22,159

168

23,033

(5)

(874)

(3.0%)

(3.8%)

Econo Lodge

843

51,757

847

52,385

(4)

(628)

(0.5%)

(1.2%)

Rodeway

586

34,085

528

29,771

58

4,314

11.0%

14.5%

MainStay

56

4,074

54

4,020

2

54

3.7%

1.3%

Suburban

59

6,578

58

6,471

1

107

1.7%

1.7%

Cambria hotel & suites

31

4,160

25

3,113

6

1,047

24.0%

33.6%

Ascend Hotel Collection

135

10,877

116

9,650

19

1,227

16.4%

12.7%

Domestic Franchises

5,409

406,902

5,273

398,190

136

8,712

2.6%

2.2%

International Franchises

1,144

113,322

1,156

111,366

(12)

1,956

(1.0%)

1.8%

Total Franchises

6,553

520,224

6,429

509,556

124

10,668

1.9%

2.1%

 

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

Exhibit 6

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

HOTEL FRANCHISING REVENUES AND ADJUSTED HOTEL FRANCHISING MARGINS

(dollar amounts in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

2017

2016

Hotel Franchising Revenues:

Total Revenues

$              276,799

$               241,751

$              474,697

$               448,869

Adjustments:

     Marketing and reservation system revenues

(158,035)

(133,814)

(267,510)

(260,175)

     Non-hotel franchising activities

(2,557)

(2,068)

(5,112)

(4,097)

Hotel Franchising Revenues

$              116,207

$               105,869

$              202,075

$               184,597

Adjusted Hotel Franchising Margins:

Operating Margin:

Total Revenues

$              276,799

$               241,751

$              474,697

$               448,869

Operating Income

$                77,506

$                 64,942

$              130,013

$               107,815

     Operating Margin

28.0%

26.9%

27.4%

24.0%

Adjusted Hotel Franchising Margin:

Hotel Franchising Revenues

$              116,207

$               105,869

$              202,075

$               184,597

Operating Income

$                77,506

$                 64,942

$              130,013

$               107,815

Mark to market adjustments on non-qualified retirement plan investments

$                    590

$                      315

$                  1,441

$                      255

Executive termination benefits

$                         –

$                   2,206

$                         –

$                   2,206

Non-hotel franchising activities operating loss

3,801

6,084

5,906

11,740

Adjusted Hotel Franchising Operating Income

$                81,897

$                 73,547

$              137,360

$               122,016

     Adjusted Hotel Franchising Margins

70.5%

69.5%

68.0%

66.1%

ADJUSTED HOTEL FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES

(dollar amounts in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

2017

2016

Total Selling, General and Administrative Expenses

$                38,208

$                 40,039

$                71,054

$                 75,158

Mark to market adjustments on non-qualified retirement plan investments

$                   (590)

$                     (315)

$                 (1,441)

$                     (255)

Executive termination benefits

$                         –

$                  (2,206)

$                          –

$                  (2,206)

Non-hotel franchising activities

(5,415)

(7,045)

(9,095)

(13,715)

Adjusted Hotel Franchising Selling, General and Administration Expenses

$                32,203

$                 30,473

$                60,518

$                 58,982

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)

(dollar amounts in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

2017

2016

Net income

$                44,995

$                 38,822

$                73,739

$                 59,985

Income taxes

22,386

16,788

35,025

26,003

Interest expense

11,280

11,224

22,485

22,316

Interest income

(1,438)

(827)

(2,702)

(1,666)

Other (gains) losses

(576)

(321)

(1,473)

(259)

Equity in net (income) loss of affiliates

859

(744)

2,939

1,436

Depreciation and amortization

3,050

2,956

6,120

5,721

Executive termination benefits

2,206

2,206

Mark to market adjustments on non-qualified retirement plan investments

590

315

1,441

255

Adjusted EBITDA

$                81,146

$                 70,419

$              137,574

$               115,997

Hotel franchising 

$                84,004

$                 75,397

$              141,557

$               125,616

Non-hotel franchising activities

(2,858)

(4,978)

(3,983)

(9,619)

$                81,146

$                 70,419

$              137,574

$               115,997

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)

(dollar amounts in thousands, except per share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

2017

2016

Net Income

$                44,995

$                 38,822

$                73,739

$                 59,985

Adjustments:

Executive termination benefits

1,394

1,394

Adjusted Net Income

$                44,995

$                 40,216

$                73,739

$                 61,379

Diluted Earnings Per Share

$                   0.79

$                     0.68

$                   1.30

$                     1.06

Adjustments:

Executive termination benefits

0.03

0.02

Adjusted Diluted Earnings Per Share (EPS)

$                   0.79

$                     0.71

$                   1.30

$                     1.08

ADJUSTED EBITDA FULL YEAR FORECAST

(dollar amounts in thousands)

Range

Estimated Adjusted EBITDA

Fiscal Year 2017

Net income

$              160,000

$               163,000

Income taxes

77,500

78,500

Interest expense

45,900

45,900

Interest income

(5,100)

(5,100)

Gain on sale of assets

Other gains

(1,500)

(1,500)

Equity in net loss of affiliates

1,600

1,600

Depreciation and amortization

13,100

13,100

Mark to market adjustments on non-qualified retirement plan investments

1,500

1,500

Adjusted EBITDA

$              293,000

$               297,000

Hotel franchising 

$              299,000

$               303,000

Non-hotel franchising activities

(6,000)

(6,000)

$              293,000

$               297,000

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