CHOICE HOTELS INTERNATIONAL INC / DE0001046311FALSE00010463112024-08-082024-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
  _____________________________________________________ 
FORM 8-K
 _____________________________________________________ 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 8, 2024
  _____________________________________________________ 
 CHOICE HOTELS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 _____________________________________________________ 
Delaware001-1339352-1209792
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification Number)
915 Meeting Street20852
Suite 600
North Bethesda,Maryland
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code (301) 592-5000
  _____________________________________________________  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTicker Symbol(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 per shareCHHNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.Results of Operations and Financial Condition.
On August 8, 2024, Choice Hotels International, Inc. issued a press release announcing earnings for the quarter ended June 30, 2024. A copy of the release is furnished herewith as Exhibit 99.1.

Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
Exhibit 104—Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:August 8, 2024/s/ Scott E. Oaksmith
Scott E. Oaksmith
Chief Financial Officer




choicea.jpg
CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2024 RESULTS

Raises Midpoint of Full-year 2024 EPS Guidance
Global Rooms Pipeline up 22% and Openings up 20% Year-over-Year

NORTH BETHESDA, Md., August 8, 2024 – Choice Hotels International, Inc. (NYSE: CHH), one of the world’s leading lodging franchisors, today reported its second quarter 2024 results.
Highlights include:
•Total revenues reached $435.2 million for second quarter 2024, a quarterly record and a 2% increase compared to the same period of 2023.
•Net income increased 3% to $87.1 million for the second quarter of 2024, representing diluted earnings per share (EPS) of $1.80, a 9% increase compared to the same period of 2023.
•Second quarter 2024 adjusted net income, excluding certain items described in Exhibit 7, decreased 0.4% to $88.8 million compared to the same period of 2023, and adjusted diluted EPS increased 5% to a record of $1.84 compared to the same period of 2023.
•Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for second quarter 2024 grew to a quarterly record of $161.7 million, a 6% increase compared to the same period of 2023.
•Global pipeline as of June 30, 2024, increased 22% to a second quarter record of over 114,000 rooms from June 30, 2023, highlighted by a doubling of the global pipeline for conversion rooms. Domestic rooms pipeline as of June 30, 2024 increased by 11% since June 30, 2023, including a 65% increase for conversion rooms.
•Global hotel openings for second quarter 2024 increased by 20% compared to the same period of 2023.
•Domestic franchise agreements for the company’s upscale, extended stay, and midscale brands executed year-to-date through June 30, 2024, increased by 8% compared to the same period of 2023.
•The international portfolio as of June 30, 2024, expanded by 1.6% in the number of rooms, highlighted by international hotel openings that doubled in the second quarter compared to the same period of 2023.
•The company repurchased 2.4 million shares of common stock for $296.2 million year-to-date through June 30, 2024, representing over 5% of the company’s market capitalization at the beginning of the year.
“Choice Hotels generated another quarter of record financial performance amid a normalizing domestic RevPAR environment, demonstrating the strength of our versatile business model and proven growth strategy,” said Patrick Pacious, President and Chief Executive Officer. “We increased


our global pipeline to new levels propelled by robust demand for our brands, accelerated the velocity of our global hotel openings, expanded our international reach, and significantly grew the size of our rewards program. With our meaningfully enhanced hotel portfolio profile, we are confident in the company’s ability to continue to deliver sustained earnings growth, invest in profitable long-term growth initiatives, and return significant capital to shareholders.”
Financial Performance
•Total revenues excluding reimbursable revenue from franchised and managed properties, calculated as total revenues net of reimbursable revenue of $176.3 million, increased 14% to $258.9 million for the second quarter 2024 compared to the same period of 2023.
•Royalty, licensing, and management fees increased 1% to $141.8 million for second quarter 2024 compared to $140.5 million for the same period of 2023.
•Second quarter 2024 domestic effective royalty rate increased 5 basis points to 5.04% compared to the same period of 2023.
•Domestic revenue per available room (RevPAR) increased 540 basis points sequentially for the three-month period ended June 30, 2024, and decreased 50 basis points compared to the same period of 2023.
•Domestic occupancy increased 10 basis points compared to the same period of 2023, representing 96% of 2019 domestic occupancy levels. Domestic RevPAR for the three months ended June 30, 2024 remains 11.0% higher than the same period of 2019.
Development
•The company’s domestic upscale, extended stay, and midscale portfolio increased 1.0% for hotels and increased 0.7% for rooms since June 30, 2023. The domestic extended stay hotels portfolio grew by 14.0% since June 30, 2023, driven by increases in each of the segment’s brands. The company’s total domestic system size increased to over 6,200 hotels representing over 494,000 rooms as of June 30, 2024.
•The international pipeline for conversion rooms increased by 8% from March 31, 2024, and the company nearly tripled the number of international rooms in the pipeline since June 30, 2023.
•The company opened an average of over four domestic hotels per week for a total of 118 domestic hotel openings year-to-date through June 30, 2024, a 10% increase compared to the same period of 2023. Of the domestic franchise agreements executed for conversion hotels over the trailing twelve months ending June 30, 2024, 134 opened in the same year, a 14% increase over the comparable period of the prior year.
•Of the total domestic franchise agreements awarded year-to-date through June 30, 2024, 82% were for conversion hotels and 89% were for the company’s upscale, extended stay, and midscale brands.
•The company’s WoodSpring Suites brand grew by 10% to 246 hotels since June 30, 2023, and was ranked number one for the second year in a row in guest satisfaction among economy extended stay hotel brands in the J.D. Power 2024 North America Hotel Guest Satisfaction Index Study.1
1 WoodSpring Suites received the highest score among economy extended stay hotels in the J.D. Power 2024 North America Hotel Guest Satisfaction Index Study of customers' satisfaction with their hotel stay. Visit jdpower.com/awards for more details.


Balance Sheet and Liquidity
On June 28, 2024, the company amended its revolving credit facility, increasing total commitments from $850 million to $1 billion and extending maturity from 2026 to 2029. On July 2, 2024, the company issued $600 million aggregate principal amount of new 5.85% unsecured senior notes due 2034. The net proceeds from the offering were used to repay the company’s $500 million unsecured term loan maturing at the end of 2024 and a portion to repay borrowings under the company’s revolving credit facility, reducing the company’s effective borrowing costs.
As of June 30, 2024, the company had a total available liquidity of approximately $530 million, including available borrowing capacity and cash and equivalents. In July 2024, the company fully divested the remaining shares owned in Wyndham Hotels and Resorts Inc. for approximately $91 million.
Shareholder Returns
During the six months ended June 30, 2024, the company paid cash dividends totaling $28.9 million.
During the six months ended June 30, 2024, the company repurchased 2.4 million shares of common stock for $296.2 million under its stock repurchase program and through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company’s equity incentive plans.
As of June 30, 2024, the company had 4.4 million shares of common stock remaining under the current share repurchase authorization.
Outlook
The company is adjusting its RevPAR outlook to reflect a more moderated domestic RevPAR performance acceleration than previously expected. The outlook information below includes forward-looking non-GAAP financial measures, which management uses in forecasting performance. The adjusted numbers in the company’s outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, due diligence and transition costs, additional repurchases of company stock, and other items:
Full-Year 2024Prior Outlook
Net Income$260 – $272 million$260 – $274 million
Adjusted Net Income$309.5 – $321.5 million$306 – $320 million
Adjusted EBITDA$580 – $600 million$580 – $600 million
Diluted EPS$5.40 – $5.65$5.35 – $5.65
Adjusted Diluted EPS$6.40 – $6.65$6.30 – $6.60
Effective Income Tax Rate24.5%24.5%
Full-Year 2024Prior Outlook
vs. Full-Year 2023
Domestic RevPAR Growth-3.5% to -1.5%Flat to 2%
Domestic Effective Royalty Rate GrowthMid-single digitsMid-single digits
Domestic Net Unit Growth (1)
Approximately 2%Approximately 2%
(1) upscale, extended stay, and midscale brands



Webcast and Conference Call
Choice Hotels International will conduct a live webcast to discuss the company’s second quarter 2024 earnings results on August 8, 2024, at 10:00 a.m. on the company’s investor relations website, www.investor.choicehotels.com, accessible via the Events and Presentations tab.
A conference call will also be available. Participants may listen to the call by dialing (800) 549-8228 domestically or (646) 564-9445 internationally using conference ID 34768.
A replay and transcript of the event will be available on the company’s investor relations website within 24 hours at www.investor.choicehotels.com/events-and-presentations.
About Choice Hotels®
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with nearly 7,500 hotels, representing more than 630,000 rooms, in 45 countries and territories as of June 30, 2024. A diverse portfolio of 22 brands that range from full-service upper upscale properties to midscale, extended stay, and economy enables Choice® to meet travelers’ needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® rewards program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.
Forward-Looking Statements
Information set forth herein includes “forward-looking statements.” Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “expect,” “estimate,” “believe,” “anticipate,” “should,” “will,” “forecast,” “plan,” “project,” “assume,” or similar words of futurity. All statements other than historical facts are 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 Choice’s revenue, expenses, EBITDA, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock and other financial and operational measures, including occupancy and open hotels, RevPAR, and Choice’s liquidity, 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, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future domestic or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of the company’s relationship with employees of our franchisees; foreign currency fluctuations; impairments or declines in the value of the company’s assets; operating risks common in the travel, lodging or 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 and our relationships with our franchisees; our ability to keep pace with improvements in technology


utilized for marketing and reservations systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; cyber security and data breach risks; climate change and sustainability related concerns; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness. These and other risk factors are discussed in detail in the company’s filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measurements and Other Definitions
The company evaluates its operations utilizing the performance metrics of EBITDA, adjusted EBITDA, adjusted net income, and adjusted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as net income and EPS. The company’s calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. We discuss management’s reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.
In addition to the specific adjustments noted below with respect to each measure, the adjusted EBITDA, adjusted net income and adjusted EPS presented herein also exclude restructuring of the company’s operations including employee severance benefit, income taxes and legal costs, acquisition related to business combination, due diligence and, transition costs, expenses associated with legal claims, fluctuations in the market value of equity securities purchased in contemplation of the proposed acquisition of Wyndham Hotels, global ERP system implementation and related costs, performance under limited debt payment guaranties and gain on sale of a hotel owned through an unconsolidated joint venture to allow for period-over-period comparison of ongoing core operations before the impact of these discrete and infrequent charges.
Earnings Before Interest, Taxes, Depreciation, and Amortization and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization: EBITDA reflects net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, impairments and gains on sale of business and assets, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates and gain on extinguishment of debt. Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including, mark-to-market adjustments on non-qualified retirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by reimbursable revenue from franchised and managed properties. We consider EBITDA and adjusted EBITDA to be an indicator of operating performance because it measures our ability to service debt, fund capital expenditures, and expand our business. We also use these measures, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items that can vary widely across industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings, and share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expense and share based


compensation expense (benefit) on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. These measures also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimated lives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in selling, general and administrative (SG&A) expenses are excluded from adjusted EBITDA, as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company’s net income. Surpluses and deficits generated from reimbursable revenues from franchised and managed properties are excluded, as the company’s franchise and management agreements require these revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from these activities and the company is required to spend any surpluses generated in future periods. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance.
Adjusted Net Income and Adjusted Earnings Per Share: Adjusted net income and EPS exclude the impact of surpluses or deficits generated from reimbursable revenue from franchised and managed properties and gains on extinguishment of debt. Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as the company’s franchise agreements require these revenues to be used exclusively for expenses associated with providing franchised and managed services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from activities and the company is required to spend any surpluses generated in future periods. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance. We consider adjusted net income and adjusted EPS to be indicators of operating performance because excluding these items allows for period-over-period comparisons of our ongoing operations.
Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancy based on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years’ operating statistics for the most current information provided.
Average Daily Rate (ADR): ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the company is able to generate.


The company calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company may revise its prior years’ operating statistics for the most current information provided.
RevPAR: RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotel performance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers of operations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by its franchisees. To accurately reflect RevPAR, the company may revise its prior years’ operating statistics for the most current information provided. RevPAR is also a useful indicator in measuring performance over comparable periods.
Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.
Contacts
Allie Summers, Senior Director, Investor Relations
IR@choicehotels.com

© 2024 Choice Hotels International, Inc. All rights reserved.


Choice Hotels International, Inc.Exhibit 1
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)Three months ended June 30,Six months ended June 30,
VarianceVariance
20242023$%20242023$%
REVENUES
Royalty, licensing and management fees$141,813 $140,499 $1,314 1 %$247,280 $247,991 $(711)— %
Initial franchise fees6,562 7,164 (602)(8)%13,267 15,046 (1,779)(12)%
Platform and procurement services fees28,126 28,801 (675)(2)%41,882 42,644 (762)(2)%
Owned hotels28,418 25,504 2,914 11 %53,409 47,836 5,573 12 %
Other15,037 11,148 3,889 35 %31,394 21,775 9,619 44 %
Other revenues from franchised and managed properties215,200 214,304 896 0 %379,873 384,920 (5,047)(1)%
Total revenues435,156 427,420 7,736 2 %767,105 760,212 6,893 1 %
OPERATING EXPENSES
Selling, general and administrative64,995 58,424 6,571 11 %113,620 107,345 6,275 6 %
Business combination, diligence and transition costs895 9,380 (8,485)(90)%16,739 19,742 (3,003)(15)%
Depreciation and amortization10,827 9,812 1,015 10 %21,762 19,835 1,927 10 %
Owned hotels20,704 18,150 2,554 14 %40,027 35,296 4,731 13 %
Other expenses from franchised and managed properties205,113 207,265 (2,152)(1)%382,186 375,754 6,432 2 %
       Total operating expenses
302,534 303,031 (497)0 %574,334 557,972 16,362 3 %
Operating income132,622 124,389 8,233 7 %192,771 202,240 (9,469)(5)%
OTHER EXPENSES AND INCOME, NET
Interest expense23,845 16,270 7,575 47 %44,026 30,354 13,672 45 %
Interest income(2,415)(2,056)(359)17 %(4,146)(3,939)(207)5 %
Other loss (gain)2,544 (2,187)4,731 (216)%3,880 (4,095)7,975 (195)%
Equity in net gain of affiliates(7,933)(185)(7,748)4,188 %(7,778)(122)(7,656)6,275 %
Total other expenses and income, net16,041 11,842 4,199 35 %35,982 22,198 13,784 62 %
Income before income taxes116,581 112,547 4,034 4 %156,789 180,042 (23,253)(13)%
Income tax expense29,445 27,837 1,608 6 %38,644 42,512 (3,868)(9)%
Net income$87,136 $84,710 $2,426 3 %$118,145 $137,530 $(19,385)(14)%
Basic earnings per share$1.82 $1.66 $0.16 10 %$2.42 $2.68 $(0.26)(10)%
Diluted earnings per share$1.80 $1.65 $0.15 9 %$2.41 $2.66 $(0.25)(9)%



Choice Hotels International, Inc.Exhibit 2
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)June 30,December 31,
20242023
ASSETS
Cash and cash equivalents$60,409 $26,754 
Accounts receivable, net235,384 195,896 
Investments in equity securities, at fair value90,446 — 
Other current assets61,918 73,880 
Total current assets448,157 296,530 
Property and equipment, net541,194 493,478 
Operating lease right-of-use assets83,359 85,101 
Goodwill220,187 220,187 
Intangible assets, net833,016 811,075 
Notes receivable, net of allowances77,871 78,900 
Investments in equity securities, at fair value— 116,374 
Investments for employee benefit plans, at fair value45,270 39,751 
Investments in affiliates80,555 70,579 
Other assets189,298 182,824 
Total assets$2,518,907 $2,394,799 
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Accounts payable$151,086 $131,284 
Accrued expenses and other current liabilities96,583 109,248 
Deferred revenue105,928 108,316 
Current portion of long-term debt— 499,268 
Liability for guest loyalty program98,493 94,574 
 Total current liabilities452,090 942,690 
Long-term debt1,868,425 1,068,751 
Long-term deferred revenue132,170 133,501 
Deferred compensation & retirement plan obligations50,676 45,657 
Operating lease liabilities110,266 109,483 
Liability for guest loyalty program44,394 43,266 
Other liabilities7,665 15,853 
Total liabilities2,665,686 2,359,201 
Total shareholders' (deficit) equity(146,779)35,598 
Total liabilities and shareholders' (deficit) equity$2,518,907 $2,394,799 



Choice Hotels International, Inc.Exhibit 3
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)Six months ended June 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$118,145 $137,530 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization21,762 19,835 
Depreciation and amortization – other expenses from franchised and managed properties13,797 18,581 
Franchise agreement acquisition cost amortization13,993 9,380 
Non-cash share-based compensation and other charges19,253 23,689 
Non-cash interest, investments, and affiliate income, net(1,791)(3,098)
Deferred income taxes(2,689)2,157 
Equity in net loss of affiliates, less distributions received1,160 637 
Franchise agreement acquisition costs, net of reimbursements(52,025)(46,150)
Change in working capital and other(18,010)(36,822)
Net cash provided by operating activities113,595 125,739 
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in property and equipment(73,539)(45,684)
Investments in intangible assets(1,702)(1,385)
Contributions to investments in affiliates(19,486)(15,328)
Distributions from sales of affiliates15,850 868 
Purchases of investments for employee benefit plans(2,110)(3,206)
Proceeds from sales of investments for employee benefit plans2,142 1,099 
Proceeds from sales of equity securities16,815 — 
Issuances of notes receivable(1,479)(4,284)
Collections of notes receivable1,743 9,296 
Other items, net(266)(526)
Net cash used in investing activities(62,032)(59,150)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings pursuant to revolving credit facilities301,500 185,000 
Debt issuance costs(2,760)(755)
Purchases of treasury stock(292,711)(234,455)
Dividends paid(28,854)(27,534)
Proceeds from the exercise of stock options4,261 5,616 
Net cash used in financing activities(18,564)(72,128)
Net change in cash and cash equivalents32,999 (5,539)
Effect of foreign exchange rate changes on cash and cash equivalents656 140 
Cash and cash equivalents, beginning of period26,754 41,566 
Cash and cash equivalents, end of period$60,409 $36,167 


Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months Ended June 30, 2024For the Three Months Ended June 30, 2023Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Upscale & Above (1)
$156.38 62.0 %$96.99 $155.09 59.9 %$92.90 0.8 %210bps4.4 %
Midscale & Upper Midscale (2)
104.16 60.2 %62.75 104.49 60.4 %63.15 (0.3)%(20)bps(0.6)%
Extended Stay (3)
64.38 74.0 %47.64 65.26 74.6 %48.65 (1.4)%(60)bps(2.1)%
Economy (4)
72.42 49.6 %35.93 72.71 50.5 %36.72 (0.4)%(90)bps(2.1)%
Total$99.46 60.3 %$60.00 $100.09 60.2 %$60.29 (0.6)%10bps(0.5)%
For the Six Months Ended June 30, 2024For the Six Months Ended June 30, 2023Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Upscale & Above (1)
$150.36 56.5 %$85.02 $148.04 55.8 %$82.53 1.6 %80bps3.0 %
Midscale & Upper Midscale (2)
99.20 54.9 %54.47 100.19 56.3 %56.45 (1.0)%(140)bps(3.5)%
Extended Stay (3)
62.98 71.5 %45.03 64.08 72.9 %46.74 (1.7)%(140)bps(3.7)%
Economy (4)
69.75 46.2 %32.26 70.35 47.6 %33.52 (0.9)%(140)bps(3.8)%
Total$94.84 55.5 %$52.65 $95.96 56.5 %$54.22 (1.2)%(100)bps(2.9)%
Effective Royalty Rate
For the Three Months EndedFor the Six Months Ended
June 30, 2024June 30, 2023June 30, 2024June 30, 2023
System-wide5.04 %4.99 %5.04 %4.99 %
(1) Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.
(2) Includes Clarion, Comfort Inn, Country Inn, Park Inn, Quality Inn, Radisson Inn, and Sleep Inn brands.
(3) Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.
(4) Includes Econo Lodge and Rodeway brands.


Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
June 30, 2024June 30, 2023Variance
HotelsRoomsHotelsRoomsHotels%Rooms%
Ascend Hotel Collection203 23,109 212 23,646 (9)(4.2)%(537)(2.3)%
Cambria Hotels74 10,209 69 9,399 57.2 %8108.6 %
Radisson(1)
60 14,177 68 15,887 (8)(11.8)%(1,710)(10.8)%
Comfort(2)
1,670 131,167 1,663 130,694 70.4 %4730.4 %
Quality1,625 118,739 1,619 119,642 60.4 %(903)(0.8)%
Country422 33,633 430 34,326 (8)(1.9)%(693)(2.0)%
Sleep422 29,696 431 30,415 (9)(2.1)%(719)(2.4)%
Clarion(3)
186 19,598 181 19,760 52.8 %(162)(0.8)%
Park Inn8 775 4 363 4100.0 %412113.5 %
WoodSpring246 29,639 224 27,005 229.8 %2,6349.8 %
MainStay130 9,202 121 8,234 97.4 %96811.8 %
Suburban110 9,332 84 7,474 2631.0 %1,85824.9 %
Everhome4 449 1 98 3300.0 %351358.2 %
Econo Lodge658 38,602 676 39,906 (18)(2.7)%(1,304)(3.3)%
Rodeway458 25,756 484 27,286 (26)(5.4)%(1,530)(5.6)%
Domestic Franchises6,276 494,083 6,267 494,135 90.1 %(52)— %
International Franchises1,210 136,980 1,205 134,766 50.4 %2,2141.6 %
Total Franchises7,486 631,063 7,472 628,901 140.2 %2,1620.3 %
(1) Includes Radisson, Radisson Blu, Radisson Individuals, and Radisson Red brands.
(2) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.
(3) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.




Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA
(dollar amounts in thousands)Three months ended June 30,Six months ended June 30,
2024202320242023
Net income $87,136 $84,710 $118,145 $137,530 
Income tax expense29,445 27,837 38,644 42,512 
Interest expense23,845 16,270 44,026 30,354 
Interest income(2,415)(2,056)(4,146)(3,939)
Other loss (gain)2,544 (2,187)3,880 (4,095)
Equity in net gain of affiliates(7,933)(185)(7,778)(122)
Depreciation and amortization10,827 9,812 21,762 19,835 
EBITDA$143,449 $134,201 $214,533 $222,075 
Share-based compensation5,126 6,007 10,059 10,613 
Mark to market adjustments on non-qualified retirement plan investments933 2,051 4,652 3,868 
Franchise agreement acquisition costs amortization and charges4,054 2,736 7,581 5,397 
Net reimbursable deficit (surplus) from franchised and managed properties5,112 (4,388)29,555 (5,262)
Business combination, diligence and transition costs895 9,380 16,739 19,742 
Operational restructuring (net benefit) charges(258)1,569 533 1,569 
Limited payment guarantee charge— 1,551 — 1,551 
Expenses associated with legal claims2,430 — 2,430 — 
Adjusted EBITDA$161,741 $153,107 $286,082 $259,553 
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,
2024202320242023
Net income $87,136 $84,710 $118,145 $137,530 
Loss on investments in equity securities, net of dividend income2,524 — 5,711 — 
Net reimbursable deficit (surplus) from franchised and managed properties2,276 (5,050)19,198 (7,550)
Business combination, diligence and transition costs657 7,090 12,604 14,944 
Operational restructuring (net benefit) charges(194)1,188 402 1,188 
Limited payment guarantee charge— 1,174 — 1,174 
Expenses associated with legal claims1,830 — 1,830 — 
Gain on sale of an affiliate(5,446)— (5,446)— 
Adjusted Net Income$88,783 $89,112 $152,444 $147,286 
Diluted Earnings Per Share$1.80$1.65$2.41$2.66
Loss on investments in equity securities, net of dividend income0.05—0.12—
Net reimbursable deficit (surplus) from franchised and managed properties0.05(0.09)0.38(0.13)
Business combination, diligence and transition costs0.010.140.260.29
Operational restructuring (net benefit) charges—0.030.010.03
Limited payment guarantee charge—0.02—0.02
Expenses associated with legal claims0.04—0.04—
Gain on sale of an affiliate(0.11)—(0.11)—
Adjusted Diluted Earnings Per Share (EPS)$1.84$1.75$3.11$2.87


Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION - 2024 OUTLOOK
(UNAUDITED)
Guidance represents the company's range of estimated outcomes for the full year ended December 31, 2024
EBITDA AND ADJUSTED EBITDA
(in thousands)Full YearFull Year
Lower RangeUpper Range
Net income $260,000 $272,000 
Income tax expense84,700 88,600 
Interest expense90,600 89,600 
Interest income(7,800)(7,800)
Other loss3,200 3,200 
Equity in net gain of affiliates(9,100)(8,300)
Depreciation and amortization51,600 51,600 
EBITDA$473,200 $488,900 
Share-based compensation19,900 21,100 
Mark to market adjustments on non-qualified retirement plan investments4,600 4,600 
Franchise agreement acquisition costs amortization15,500 17,500 
Net reimbursable deficit from franchised and managed properties44,500 45,600 
Global ERP system implementation and related costs1,800 1,800 
Business combination, diligence and transition costs17,500 17,500 
Operational restructuring charges500 500 
Expenses associated with legal claims2,500 2,500 
Adjusted EBITDA$580,000 $600,000 
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (EPS)
(in thousands, except per share amounts)Full YearFull Year
Lower RangeUpper Range
Net income$260,000 $272,000 
Loss on investments in equity securities, net of dividend income5,700 5,700 
Net reimbursable deficit from franchised and managed properties32,700 33,100 
Business combination, diligence and transition costs13,000 12,800 
Operational restructuring charges400 400 
Expenses associated with legal claims1,800 1,800 
Gain on sale of an affiliate(5,400)(5,400)
Global ERP system implementation and related costs1,300 1,100 
Adjusted Net Income$309,500 $321,500 
Diluted Earnings Per Share$5.40 $5.65 
Loss on investments in equity securities, net of dividend income0.120.12
Net reimbursable deficit from franchised and managed properties0.670.68
Business combination, diligence and transition costs0.250.25
Operational restructuring charges0.010.01
Expenses associated with legal claims0.040.04
Gain on sale of an affiliate(0.11)(0.11)
Global ERP system implementation and related costs0.020.01
Adjusted Diluted Earnings Per Share (EPS)$6.40 $6.65 

v3.24.2.u1
Document and Entity Information Document
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity File Number 001-13393
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 52-1209792
Entity Address, Address Line One 915 Meeting Street
Entity Address, City or Town North Bethesda,
Entity Address, State or Province MD
Entity Address, Postal Zip Code 20852
City Area Code 301
Local Phone Number 592-5000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Registrant Name CHOICE HOTELS INTERNATIONAL INC / DE
Entity Central Index Key 0001046311
Amendment Flag false
Choice Hotels (NYSE:CHH)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Choice Hotels Charts.
Choice Hotels (NYSE:CHH)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Choice Hotels Charts.