Achieves Record Revenues in 2023
Exceeds Full-Year 2023 Outlook for Unit
Growth
Grows Global Rooms Pipeline
Sequentially 6% including a 16% Increase for Conversion
Hotels
NORTH
BETHESDA, Md., Feb. 20,
2024 /PRNewswire/ -- Choice Hotels International,
Inc. (NYSE: CHH), one of the world's leading lodging
franchisors, today reported its fourth quarter and full-year
2023 results.
Highlights include:
- Record total revenues grew 10% to $1.5
billion for full-year 2023 compared to the same period of
2022.
- Net income was $258.5 million for
full-year 2023, representing diluted earnings per share (EPS) of
$5.07. As a result of one-time items,
including Radisson Hotels Americas integration costs, due diligence
and transaction pursuit costs in 2023, gains from the sale of the
Cambria Hotel Nashville owned asset and the extraordinary
franchisee termination fees in 2022, and the timing of net
reimbursable expenses, net income and diluted EPS were 22% and 15%
lower, respectively, for full-year 2023 compared to the same period
of 2022.
- Adjusted earnings before interest, taxes, depreciation, and
amortization (EBITDA) for full-year 2023 reached a company record
of $540.5 million, a 13% increase
compared to 2022, and exceeded the top end of the company's
full-year 2023 guidance.
- Full-year 2023 adjusted diluted EPS exceeded the top end of the
guidance by $0.08 per share and
increased 16% to $6.11 compared to
the same period of 2022.
- The growth of the company's domestic upscale, extended stay,
and midscale brands accelerated from September 30, 2023, and exceeded the unit growth
guidance for the full-year 2023, with the Choice legacy portfolio
increasing by 1.8% for hotels and 2.4% for rooms since December 31, 2022.
- Global pipeline as of December 31,
2023, increased 6% to over 105,000 rooms from September 30, 2023. The global pipeline for
conversion rooms increased by 16% from September 30, 2023, and 34% from December 31, 2022.
- The company provided full-year 2024 net income guidance of
$260 million and $274 million. Adjusted EBITDA for full-year 2024
is expected to range between $580
million to $600 million.
"2023 was a year of accelerating growth, in which we exceeded
the top end of the company's full-year adjusted EBITDA and adjusted
EPS guidance led by our successful strategy of adding hotels that
generate higher royalties per unit. We significantly expanded our
rewards program, increased our geographic reach, unlocked new value
through our platform capabilities, and created step function growth
through the rapid completion of the Radisson Americas'
integration," said Patrick Pacious, President and Chief
Executive Officer. "Our superior hotel conversion capability
increased the velocity of new hotel openings and is a clear
advantage in today's hotel development environment. The positive
momentum created by our successful strategy gives us confidence in
our 2024 outlook and beyond."
Mr. Pacious continued, "Our demonstrated track record of
improving the delivery of direct business to franchisees positions
us to further accelerate value creation for all stakeholders
through a compelling combination with Wyndham Hotels & Resorts.
By bringing Choice's best-in-class technology and franchisee
success model to the Wyndham network, we are confident we can
create meaningful value for franchisees and shareholders of both
companies. We are committed to pursuing this combination and remain
encouraged by our progress on the regulatory front. Choice recently
nominated a slate of independent, highly qualified directors to
stand for election at Wyndham's 2024 Annual Meeting of
Stockholders. If elected, these nominees will exercise their
independent judgment to serve Wyndham shareholders' best interests,
which we continue to believe is to move with urgency to maximize
the value that can be created through a combination with
Choice."
Financial Performance
- The company achieved $85 million
of annual recurring synergies through the successful completion of
the integration of Radisson Hotels Americas, exceeding the prior
target by 6%.
- Fourth quarter 2023 total revenues were $358.4 million, a 1% decline compared to the same
period of 2022.
- Net income was $29 million for
fourth quarter 2023, representing diluted EPS of $0.58. As a result of one-time items, including
Radisson Hotels Americas integration costs, due diligence and
transaction pursuit costs in 2023, and the timing of net
reimbursable expenses, net income and diluted EPS were 48% and 44%
lower, respectively, for fourth quarter 2023 compared to the same
period of 2022.
- Adjusted EBITDA for fourth quarter 2023 increased 11% to
$125 million from the same period of
2022. Fourth quarter 2023 adjusted diluted EPS increased 14% to
$1.44 compared to the same period of
2022.
- Platform and procurement services increased 18% to $75.1 million for full-year 2023 and 6% to
$16.9 million for fourth quarter
2023, compared to the same periods of 2022.
- Royalty, licensing and management fees totaled $513.4 million for full-year 2023 and
$116.9 million for fourth quarter
2023, a 9% and 1% increase from the same periods of 2022.
- The company's domestic effective royalty rate for the full-year
ended December 31, 2023, increased 6
basis points to 4.99% compared to the same period of 2022.
- Domestic revenue per available room (RevPAR) increased 10 basis
points and decreased 390 basis points for the twelve-month and
three-month periods ended December 31,
2023, respectively, compared to the same periods of 2022.
Domestic RevPAR increased 12.7% and 13.1% for the twelve-month and
three-month periods ended December 31,
2023, respectively, compared to the same periods of
2019.
Development
- The company's hotel mix of the domestic upscale, extended stay,
and midscale portfolio increased by 8 percentage points since
December 31, 2017, and represented
82% of the company's total domestic portfolio as of December 31, 2023.
- The company's domestic upscale, extended stay, and midscale
portfolio increased by 1.4% for hotels and 1.6% for rooms
since December 31, 2022. Domestic upscale and extended
stay rooms portfolio grew by 6.3% and 14.9%, respectively, since
December 31, 2022, driven by an
increase in the number of Cambria Hotels, Ascend Hotel Collection,
WoodSpring Suites, MainStay Suites, and Suburban Studios units. The
company's total domestic system size increased to over 6,300 hotels
and nearly 497,000 rooms as of December 31,
2023.
- The company opened an average of eight hotels per week in the
fourth quarter 2023, contributing to a total of 263 hotel openings
for full-year 2023, a 13% increase compared to the same period of
2022.
- Of the total domestic franchise agreements awarded in full-year
2023, 83% were for the company's upscale, extended stay, and
midscale brands, and 72% were for conversion hotels. Of the
domestic franchise agreements awarded for conversion hotels in
2023, 135 opened in the same year.
- Domestic rooms pipeline as of December
31, 2023, increased by 3% since September 30, 2023, highlighted by a 6% increase
for conversion hotels.
- The international portfolio, as of December 31, 2023, expanded by 2.6% in the number
of units and by 2.0% in the number of rooms from December 31, 2022. Specifically, the company
extended its master franchise agreement with Strawberry (formerly
Nordic Choice Hotels), secured a distribution partnership with a
leading Spanish hotel chain, Sercotel, signed an agreement with
Zenitude Hotel-Residences that is expected to double the company's
unit footprint in France, and
acquired the franchise rights for City Edge Apartment Hotels in
Australia. As of December 31, 2023, the international units
pipeline increased by 33% from September 30,
2023, and the company more than doubled the number of
international hotels in the pipeline since December 31, 2022.
Shareholder Returns
During full-year 2023, the company paid cash dividends of
$56.5 million and repurchased 2.9
million shares of common stock for $365.9
million under its stock repurchase program as well as
through repurchases from employees in connection with tax
withholding and option exercises relating to awards under the
company's equity incentive plans.
As of December 31, 2023, the
company had 1.8 million shares of common stock remaining under the
current share repurchase authorization.
Balance Sheet and Liquidity
The company generated operating cash flows totaling $297 million for the year ended December 31, 2023, and closed on a 364-day new
term loan of $500 million in the
fourth quarter of 2023. As of December 31,
2023, the company's total available liquidity, consisting of
cash and available borrowing capacity through the revolving credit
facility, was approximately $650
million.
During the fourth quarter, the company purchased over 1.4
million shares of Wyndham common stock, valued in excess of
$110 million.
Outlook
The outlook information below includes forward-looking non-GAAP
financial measures, which management uses in measuring 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 2024
|
Net Income
|
$260 – $274
million
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Adjusted Net
Income
|
$316 – $331
million
|
Adjusted
EBITDA
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$580 – $600
million
|
Diluted EPS
|
$5.19 –
$5.49
|
Adjusted Diluted
EPS
|
$6.30 –
$6.60
|
Effective Income Tax
Rate
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24.5 %
|
|
|
|
Full-Year 2024
|
vs. Full-Year 2023
|
Domestic RevPAR
Growth
|
Flat to 2%
|
Domestic Effective
Royalty Rate Growth
|
Mid-single
digits
|
Domestic Net Unit
Growth
|
Approximately
2%
|
(upscale, extended
stay, and midscale brands)
|
|
Committed to Combination with Wyndham
The company remains committed to completing its pro-competitive,
pro-franchisee combination with Wyndham. On January 22, 2024, the company nominated a slate
of independent, highly qualified directors to stand for election at
Wyndham's 2024 Annual Meeting of Stockholders. These nominees are
proven leaders with wide-ranging expertise across relevant
industries, including deep proficiency in the hospitality and
franchising sectors. If elected, the nominees will exercise their
independent judgment to serve Wyndham shareholders' best
interests.
The company continues to make progress on the regulatory process
with the U.S. Federal Trade Commission and remains confident that
it can complete the combination within a one-year customary
timeframe. The company has taken steps to address Wyndham's stated
regulatory concerns, including offering significant regulatory
protections for Wyndham shareholders. Despite these accommodations,
the Wyndham board of directors refuses to engage.
A combined Choice-Wyndham would provide Wyndham shareholders
with a substantial valuation premium and the opportunity to
participate in the significant upside potential. Together, Choice
and Wyndham would help franchisees reduce costs, improve
profitability, and level the playing field with the dominant market
players. The combination would provide guests with expanded lodging
options and an enhanced rewards program. Learn more about the
benefits of a Choice-Wyndham combination at
www.createvaluewithchoice.com.
Webcast and Conference Call
Choice Hotels International will conduct a live webcast to
discuss the company's fourth quarter and full-year 2023 earnings
results on February 20, 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 (888) 259-6580 domestically or (416)
764-8624 internationally using conference ID 12743708.
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 over 7,500 hotels,
representing more than 630,000 rooms, in 46 countries and
territories as of December 31, 2023.
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 include, but are not limited to, the
ultimate outcome of any possible transaction between Choice and
Wyndham (including the possibility that the parties will not agree
to pursue a business combination transaction or that the terms of
any definitive agreement will be materially different from those
described); uncertainties as to whether Wyndham will cooperate with
Choice regarding the proposed transaction; Choice's ability to
consummate the proposed transaction with Wyndham; the conditions to
the completion of the proposed transaction, including the receipt
of any required shareholder approvals and any required regulatory
approvals; Choice's ability to finance the proposed transaction
with Wyndham; Choice's indebtedness, including the substantial
indebtedness Choice expects to incur in connection with the
proposed transaction with Wyndham and the need to generate
sufficient cash flows to service and repay such debt; the
possibility that Choice may be unable to achieve expected synergies
and operating efficiencies within the expected timeframes or at all
and to successfully integrate Wyndham's operations with those of
Choice, including the Choice rewards program; the possibility that
Choice may be unable to achieve the benefits of the proposed
transaction for its franchisees, associates, investors and guests
within the expected timeframes or at all, including that such
integration may be more difficult, time-consuming or costly than
expected; that operating costs and business disruption (without
limitation, difficulties in maintaining relationships with
associates, guests or franchisees) may be greater than expected
following the proposed transaction or the public announcement of
the proposed transaction; and that the retention of certain key
employees may be difficult. 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; the ability to realize the anticipated
long-term benefits and synergies of the acquisition of Radisson
Hotels Americas to the extent anticipated; 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 (including
COVID-19) 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; our ability to effectively
manage our indebtedness and secure our indebtedness, including
additional indebtedness incurred as a result of the acquisition of
Radisson Hotels Americas; and developments with respect to the
proposed acquisition of Wyndham. 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, exceptional allowances recorded as a result
of COVID-19's impact on the collectability of receivables,
acquisition related due diligence, transition and transaction
costs, one-time franchise agreement termination fees received
related to the purchase and rebranding of a 110 hotel portfolio of
WoodSpring Suites hotels, and gains/losses on sale/disposal,
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 impairment of assets primarily
related to hotel ownership and development activities 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.
Additional Information
This communication relates to a proposal that Choice has made
for a business combination transaction with Wyndham, the exchange
offer which Choice, through WH Acquisition Corp., its wholly owned
subsidiary, has made to Wyndham stockholders and the nomination of
nominees for Wyndham's 2024 Annual Meeting of Stockholders (the
"Wyndham 2024 Annual Meeting"). The exchange offer is being made
pursuant to a tender offer statement on Schedule TO (including the
offer to exchange, the letter of election and transmittal and other
related offer documents) and a registration statement on
Form S-4, each initially filed by Choice on December 12, 2023 and subsequently amended. These
materials, as may be further amended from time to time, contain
important information, including the terms and conditions of the
exchange offer. On February 14, 2024,
Choice filed a preliminary proxy statement (the "Choice Meeting
Proxy") with the United States Securities and Exchange Commission
(the "SEC") relating to a special meeting of Choice stockholders
seeking approval of the issuance of Choice shares in combination
with Wyndham. In furtherance of its proposal for a business
combination transaction with Wyndham, and subject to future
developments, Choice (and, if applicable, Wyndham) may file
additional registration statements, proxy statements, tender or
exchange offers or other documents with the SEC, including the
Wyndham Annual Meeting Proxy Statement (as defined below). This
communication is not a substitute for any proxy statement,
registration statement, tender or exchange offer document,
prospectus or other document Choice and/or Wyndham have filed or
may file with the SEC in connection with the proposed
transaction.
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended. Choice intends to file a proxy
statement (the "Wyndham Annual Meeting Proxy Statement") and
accompanying BLUE proxy card with the SEC with respect to the
Wyndham 2024 Annual Meeting. Investors and security holders of
Choice and Wyndham are urged to read the proxy statement(s),
registration statement, tender offer statement, prospectus
(including the CHOICE MEETING PROXY, THE FORM S-4, offer to
exchange, the letter of election and transmittal and other related
offer documents) and/or other documents filed with the SEC
INCLUDING ANY AMENDMENTS TO PREVIOUSLY FILED DOCUMENTS carefully in
their entirety if and when they become available as they will
contain important INFORMATION. Any definitive proxy statement(s) or
prospectus(es) (if and when available), including the Wyndham
Annual Meeting Proxy Statement and the Choice Meeting Proxy, will
be mailed to shareholders of Choice and/or Wyndham, as applicable.
Investors and security holders may also obtain free copies of these
documents (if and when available), including the Wyndham Annual
Meeting Proxy Statement and the Choice Meeting Proxy, and other
documents filed with the SEC by Choice through the web site
maintained by the SEC at www.sec.gov, and by visiting Choice's
investor relations site at www.investor.choicehotels.com.
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, Choice, its executive officers and
directors, WH Acquisition Corporation, which is the wholly owned
subsidiary of Choice formed to facilitate the exchange offer
("Purchaser") and, with respect to the Wyndham Annual Meeting
Proxy, the candidates nominated by Choice for election at the
Wyndham 2024 Annual Meeting (the "Choice Nominees"), may be deemed
to be participants in the solicitation of proxies. You can find
information about Choice and its executive officers and directors
in the Annual Report on Form 10-K for the year ended
December 31, 2022 filed by Choice
with the SEC on March 1, 2023 and the
definitive Proxy Statement on Schedule 14A filed by Choice with the
SEC on April 18, 2023. You can find
information about Purchaser and further information about Choice
and its executive officers and directors in the registration
statement on Form S-4 filed by Choice on December 12, 2023 (including any amendments
thereto) and the Choice Meeting Proxy. Information about the Choice
Nominees is available
at www.createvaluewithchoice.com and will be included in
the Wyndham Annual Meeting Proxy Statement. Additional information
regarding the interests of such potential participants will be
included in additional registration statements, proxy statements,
tender or exchange offer documents or other documents filed with
the SEC. These documents (if and when available) may be obtained
free of charge from the SEC's website at www.sec.gov and by
visiting Choice's investor relations site at
www.investor.choicehotels.com.
© 2024 Choice Hotels International, Inc. All rights
reserved.
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Exhibit
1
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Choice Hotels
International, Inc.
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Condensed
Consolidated Statements of Income
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(Unaudited)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
per share amounts)
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
2023
|
|
2022
|
|
$
|
|
%
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty, licensing and
management fees
|
|
$
116,909
|
|
$
115,551
|
|
$
1,358
|
|
1 %
|
|
$
513,412
|
|
$
471,759
|
|
$ 41,653
|
|
9 %
|
Initial franchise
fees
|
|
6,547
|
|
6,439
|
|
108
|
|
2 %
|
|
27,787
|
|
28,074
|
|
(287)
|
|
(1) %
|
Platform and
procurement services
|
|
16,928
|
|
15,913
|
|
1,015
|
|
6 %
|
|
75,114
|
|
63,800
|
|
11,314
|
|
18 %
|
Owned hotels
|
|
23,566
|
|
21,606
|
|
1,960
|
|
9 %
|
|
97,641
|
|
70,826
|
|
26,815
|
|
38 %
|
Other
|
|
12,840
|
|
13,152
|
|
(312)
|
|
(2) %
|
|
46,051
|
|
64,740
|
|
(18,689)
|
|
(29) %
|
Other revenues from
franchised and managed properties
|
|
181,606
|
|
189,321
|
|
(7,715)
|
|
(4) %
|
|
784,160
|
|
702,750
|
|
81,410
|
|
12 %
|
Total
revenues
|
|
358,396
|
|
361,982
|
|
(3,586)
|
|
(1) %
|
|
1,544,165
|
|
1,401,949
|
|
142,216
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
64,694
|
|
52,257
|
|
12,437
|
|
24 %
|
|
216,081
|
|
167,697
|
|
48,384
|
|
29 %
|
Business combination,
diligence and transition costs
|
|
25,165
|
|
10,604
|
|
14,561
|
|
137 %
|
|
55,778
|
|
39,578
|
|
16,200
|
|
41 %
|
Depreciation and
amortization
|
|
10,191
|
|
9,989
|
|
202
|
|
2 %
|
|
39,659
|
|
30,425
|
|
9,234
|
|
30 %
|
Owned hotels
|
|
17,550
|
|
16,833
|
|
717
|
|
4 %
|
|
71,474
|
|
48,837
|
|
22,637
|
|
46 %
|
Other expenses from
franchised and managed properties
|
|
199,314
|
|
195,023
|
|
4,291
|
|
2 %
|
|
782,409
|
|
653,060
|
|
129,349
|
|
20 %
|
Total operating
expenses
|
|
316,914
|
|
284,706
|
|
32,208
|
|
11 %
|
|
1,165,401
|
|
939,597
|
|
225,804
|
|
24 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
business & assets, and impairments, net
|
|
(3,736)
|
|
(439)
|
|
(3,297)
|
|
751 %
|
|
(3,736)
|
|
16,249
|
|
(19,985)
|
|
(123) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
37,746
|
|
76,837
|
|
(39,091)
|
|
(51) %
|
|
375,028
|
|
478,601
|
|
(103,573)
|
|
(22) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND
EXPENSES, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
17,258
|
|
11,713
|
|
5,545
|
|
47 %
|
|
63,780
|
|
43,797
|
|
19,983
|
|
46 %
|
Interest
income
|
|
(1,928)
|
|
(2,032)
|
|
104
|
|
(5) %
|
|
(7,764)
|
|
(7,288)
|
|
(476)
|
|
7 %
|
Gain on extinguishment
of debt
|
|
(4,416)
|
|
—
|
|
(4,416)
|
|
NM
|
|
(4,416)
|
|
—
|
|
(4,416)
|
|
NM
|
Other (gain)
loss
|
|
(7,897)
|
|
(2,560)
|
|
(5,337)
|
|
208 %
|
|
(10,649)
|
|
7,018
|
|
(17,667)
|
|
(252) %
|
Equity in net (gain)
loss of affiliates
|
|
(956)
|
|
(453)
|
|
(503)
|
|
111 %
|
|
(2,879)
|
|
(1,732)
|
|
(1,147)
|
|
66 %
|
Total other income
and expenses, net
|
|
2,061
|
|
6,668
|
|
(4,607)
|
|
(69) %
|
|
38,072
|
|
41,795
|
|
(3,723)
|
|
(9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
35,685
|
|
70,169
|
|
(34,484)
|
|
(49) %
|
|
336,956
|
|
436,806
|
|
(99,850)
|
|
(23) %
|
Income tax
expense
|
|
6,732
|
|
14,656
|
|
(7,924)
|
|
(54) %
|
|
78,449
|
|
104,654
|
|
(26,205)
|
|
(25) %
|
Net
income
|
|
$
28,953
|
|
$ 55,513
|
|
$
(26,560)
|
|
(48) %
|
|
$
258,507
|
|
$
332,152
|
|
$
(73,645)
|
|
(22) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.58
|
|
$
1.05
|
|
$
(0.47)
|
|
(45) %
|
|
$
5.11
|
|
$
6.05
|
|
$
(0.94)
|
|
(16) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
0.58
|
|
$
1.04
|
|
$
(0.46)
|
|
(44) %
|
|
$
5.07
|
|
$
5.99
|
|
$
(0.92)
|
|
(15) %
|
|
|
|
|
Exhibit
2
|
Choice Hotels
International, Inc.
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
26,754
|
|
$
41,566
|
Accounts receivable,
net
|
|
195,896
|
|
216,614
|
Other current
assets
|
|
73,880
|
|
89,742
|
|
Total current
assets
|
|
296,530
|
|
347,922
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
493,478
|
|
427,306
|
Operating lease
right-of-use assets
|
|
85,101
|
|
68,985
|
Goodwill
|
|
220,187
|
|
218,653
|
Intangible assets,
net
|
|
811,075
|
|
742,190
|
Notes receivable, net
of allowances
|
|
78,900
|
|
55,577
|
Investments in equity
securities, at fair value
|
|
116,374
|
|
—
|
Investments in
affiliates
|
|
70,579
|
|
30,647
|
Investments, employee
benefit plans, at fair value
|
|
39,751
|
|
31,645
|
Other assets
|
|
182,824
|
|
179,250
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
2,394,799
|
|
$
2,102,175
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Accounts
payable
|
|
$
131,284
|
|
$
118,863
|
Accrued expenses and
other current liabilities
|
|
109,248
|
|
131,410
|
Deferred
revenue
|
|
108,316
|
|
92,695
|
Liability for guest
loyalty program
|
|
94,574
|
|
89,954
|
Current portion of
long-term debt
|
|
499,268
|
|
2,976
|
|
Total current
liabilities
|
|
942,690
|
|
435,898
|
|
|
|
|
|
Long-term
debt
|
|
1,068,751
|
|
1,200,547
|
Deferred
revenue
|
|
133,501
|
|
134,149
|
Deferred compensation
& retirement plan obligations
|
|
45,657
|
|
36,673
|
Liability for guest
loyalty program
|
|
43,266
|
|
47,381
|
Operating lease
liabilities
|
|
109,483
|
|
70,994
|
Other
liabilities
|
|
15,853
|
|
21,873
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,359,201
|
|
1,947,515
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
35,598
|
|
154,660
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
2,394,799
|
|
$
2,102,175
|
|
|
|
|
|
|
|
|
Exhibit
3
|
Choice Hotels
International, Inc.
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
(In
thousands)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
258,507
|
|
$
332,152
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
39,659
|
|
30,425
|
Depreciation and
amortization - other expenses from franchised and managed
properties
|
36,076
|
|
33,488
|
Franchise agreement
acquisition cost amortization
|
20,024
|
|
15,666
|
Gain on extinguishment
of debt
|
(4,416)
|
|
—
|
Impairment of
long-lived assets
|
3,736
|
|
—
|
(Gain) loss on sale of
business and assets, net
|
—
|
|
(16,251)
|
Non-cash share-based
compensation and other charges
|
46,809
|
|
42,974
|
Non-cash interest,
investment, and affiliate (income) loss, net
|
(8,747)
|
|
7,365
|
Deferred income
taxes
|
(1,336)
|
|
(19,642)
|
Equity in net (gain)
loss of affiliates, less distributions received
|
(1,570)
|
|
489
|
Franchise agreement
acquisition costs, net of reimbursements
|
(98,316)
|
|
(54,527)
|
Change in working
capital and other
|
6,128
|
|
(5,078)
|
Net cash provided
by operating activities
|
296,554
|
|
367,061
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Investments in property
and equipment
|
(116,277)
|
|
(89,954)
|
Investments in
intangible assets
|
(2,014)
|
|
(3,631)
|
Proceeds from the sale
of assets and business
|
—
|
|
166,568
|
Asset acquisitions, net
of cash paid
|
—
|
|
(856)
|
Business acquisition,
net of cash acquired
|
—
|
|
(550,431)
|
Proceeds from the
termination of intangible assets
|
—
|
|
44,711
|
Contributions to
investments in affiliates
|
(38,930)
|
|
(3,148)
|
Proceeds from the sale
of affiliates
|
868
|
|
—
|
Purchases of
investments for employee benefit plans
|
(4,194)
|
|
(4,185)
|
Proceeds from sales of
investments for employee benefit plans
|
1,609
|
|
1,908
|
Purchases of equity
securities
|
(112,420)
|
|
—
|
Issuances of notes
receivable
|
(4,323)
|
|
(5,647)
|
Collections of notes
receivable
|
10,852
|
|
975
|
Other items,
net
|
(797)
|
|
1,260
|
Net cash used in
investing activities
|
(265,626)
|
|
(442,430)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Net (repayments)
borrowings pursuant to revolving credit facilities
|
(131,500)
|
|
360,000
|
Proceeds from issuance
of Term Loan
|
500,000
|
|
—
|
Principal payments on
long-term debt
|
—
|
|
(216,571)
|
Payments to extinguish
acquired debt
|
—
|
|
(55,975)
|
Proceeds from acquired
derivative
|
—
|
|
1,943
|
Debt issuance
costs
|
(1,553)
|
|
(44)
|
Purchases of treasury
stock
|
(362,772)
|
|
(434,767)
|
Dividends
paid
|
(56,457)
|
|
(52,545)
|
Proceeds from the
exercise of stock options
|
6,345
|
|
3,809
|
Net cash used in
financing activities
|
(45,937)
|
|
(394,150)
|
|
|
|
|
Net change in cash and
cash equivalents
|
(15,009)
|
|
(469,519)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
197
|
|
(520)
|
Cash and cash
equivalents at beginning of period
|
41,566
|
|
511,605
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
26,754
|
|
$
41,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
4
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL
OPERATING INFORMATION
|
DOMESTIC HOTEL
SYSTEM
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended December 31, 2023
|
|
For the Three Months
Ended December 31, 2022
|
|
Change
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
Upscale & Above
(1)
|
|
$
146.35
|
|
52.2 %
|
|
$
76.40
|
|
$
144.07
|
|
53.2 %
|
|
$
76.71
|
|
1.6 %
|
|
(100)
|
bps
|
|
(0.4) %
|
Midscale & Upper
Midscale (2)
|
|
95.23
|
|
52.3 %
|
|
49.81
|
|
97.01
|
|
53.6 %
|
|
52.01
|
|
(1.8) %
|
|
(130)
|
bps
|
|
(4.2) %
|
Extended Stay
(3)
|
|
61.21
|
|
68.8 %
|
|
42.14
|
|
62.13
|
|
70.7 %
|
|
43.95
|
|
(1.5) %
|
|
(190)
|
bps
|
|
(4.1) %
|
Economy
(4)
|
|
68.57
|
|
44.8 %
|
|
30.71
|
|
69.44
|
|
47.1 %
|
|
32.72
|
|
(1.3) %
|
|
(230)
|
bps
|
|
(6.1) %
|
Total
(5)
|
|
$
91.51
|
|
52.8 %
|
|
$
48.36
|
|
$
93.05
|
|
54.1 %
|
|
$
50.33
|
|
(1.7) %
|
|
(130)
|
bps
|
|
(3.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31, 2023
|
|
For the Year Ended
December 31, 2022
|
|
Change
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
Upscale & Above
(1)
|
|
$
151.14
|
|
56.7 %
|
|
$
85.73
|
|
$
146.24
|
|
55.8 %
|
|
$
81.65
|
|
3.4 %
|
|
90
|
bps
|
|
5.0 %
|
Midscale & Upper
Midscale (2)
|
|
101.14
|
|
56.8 %
|
|
57.46
|
|
100.42
|
|
57.4 %
|
|
57.64
|
|
0.7 %
|
|
(60)
|
bps
|
|
(0.3) %
|
Extended Stay
(3)
|
|
63.50
|
|
72.2 %
|
|
45.88
|
|
61.91
|
|
75.6 %
|
|
46.81
|
|
2.6 %
|
|
(340)
|
bps
|
|
(2.0) %
|
Economy
(4)
|
|
71.71
|
|
47.9 %
|
|
34.37
|
|
71.75
|
|
50.1 %
|
|
35.94
|
|
(0.1) %
|
|
(220)
|
bps
|
|
(4.4) %
|
Total
(5)
|
|
$
96.93
|
|
57.0 %
|
|
$
55.21
|
|
$
95.13
|
|
58.0 %
|
|
$
55.16
|
|
1.9 %
|
|
(100)
|
bps
|
|
0.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Royalty
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
For the Year
Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
System-wide
(5)
|
|
5.03 %
|
|
4.94 %
|
|
|
|
4.99 %
|
|
4.93 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Ascend
Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu,
Radisson Individuals, and Radisson RED brands.
|
(2) Includes Clarion,
Comfort Inn, Country Inn & Suites, Park Inn, Quality Inn, and
Sleep Inn brands.
|
(3) Includes Everhome
Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites
brands.
|
(4) Includes Econo
Lodge and Rodeway brands.
|
(5) Radisson Hotels
Americas was acquired on August 11, 2022. To enhance comparability,
ADR, Occupancy, RevPAR, and effective royalty rate reflect
operating performance for the three months and year ended December
31, 2022 as if the legacy Radisson brands were acquired on January
1, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
5
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL HOTEL
AND ROOM SUPPLY DATA
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Variance
|
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
%
|
|
Rooms
|
|
%
|
Ascend Hotel
Collection
|
|
199
|
|
22,818
|
|
196
|
|
20,091
|
|
3
|
|
1.5 %
|
|
2,727
|
|
13.6 %
|
Cambria
Hotels
|
|
74
|
|
10,239
|
|
65
|
|
8,865
|
|
9
|
|
13.8 %
|
|
1,374
|
|
15.5 %
|
Radisson
(1)
|
|
64
|
|
15,206
|
|
70
|
|
16,453
|
|
(6)
|
|
(8.6) %
|
|
(1,247)
|
|
(7.6) %
|
Comfort
(2)
|
|
1,705
|
|
133,675
|
|
1,685
|
|
132,523
|
|
20
|
|
1.2 %
|
|
1,152
|
|
0.9 %
|
Country
(3)
|
|
426
|
|
33,976
|
|
434
|
|
34,657
|
|
(8)
|
|
(1.8) %
|
|
(681)
|
|
(2.0) %
|
Clarion
(4)
|
|
178
|
|
19,185
|
|
178
|
|
19,630
|
|
—
|
|
0.0 %
|
|
(445)
|
|
(2.3) %
|
Quality
|
|
1,617
|
|
118,960
|
|
1,633
|
|
121,275
|
|
(16)
|
|
(1.0) %
|
|
(2,315)
|
|
(1.9) %
|
Sleep
|
|
427
|
|
30,104
|
|
423
|
|
29,775
|
|
4
|
|
0.9 %
|
|
329
|
|
1.1 %
|
Park
Inn
|
|
4
|
|
363
|
|
4
|
|
363
|
|
—
|
|
0.0 %
|
|
—
|
|
0.0 %
|
Everhome
|
|
1
|
|
98
|
|
1
|
|
99
|
|
—
|
|
0.0 %
|
|
(1)
|
|
(1.0) %
|
MainStay
|
|
126
|
|
8,831
|
|
115
|
|
7,891
|
|
11
|
|
9.6 %
|
|
940
|
|
11.9 %
|
WoodSpring
|
|
235
|
|
28,350
|
|
212
|
|
25,592
|
|
23
|
|
10.8 %
|
|
2,758
|
|
10.8 %
|
Suburban
|
|
104
|
|
9,046
|
|
75
|
|
6,719
|
|
29
|
|
38.7 %
|
|
2,327
|
|
34.6 %
|
Econo
Lodge
|
|
675
|
|
39,805
|
|
702
|
|
42,112
|
|
(27)
|
|
(3.8) %
|
|
(2,307)
|
|
(5.5) %
|
Rodeway
|
|
470
|
|
26,309
|
|
503
|
|
28,364
|
|
(33)
|
|
(6.6) %
|
|
(2,055)
|
|
(7.2) %
|
Domestic
Franchises
|
|
6,305
|
|
496,965
|
|
6,296
|
|
494,409
|
|
9
|
|
0.1 %
|
|
2,556
|
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Franchises
|
|
1,222
|
|
136,021
|
|
1,191
|
|
133,395
|
|
31
|
|
2.6 %
|
|
2,626
|
|
2.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Franchises
|
|
7,527
|
|
632,986
|
|
7,487
|
|
627,804
|
|
40
|
|
0.5 %
|
|
5,182
|
|
0.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Radisson
Blu, Radisson RED, Radisson Individuals and Radisson
brands.
|
(2) Includes Comfort
family of brand extensions, including Comfort Inn and Comfort
Suites.
|
(3) Includes Country
Inn & Suites and Park Plaza brands.
|
(4) 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
December 31,
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
28,953
|
|
$
55,513
|
|
$
258,507
|
|
$
332,152
|
|
Income tax
expense
|
|
6,732
|
|
14,656
|
|
78,449
|
|
104,654
|
|
Interest
expense
|
|
17,258
|
|
11,713
|
|
63,780
|
|
43,797
|
|
Interest
income
|
|
(1,928)
|
|
(2,032)
|
|
(7,764)
|
|
(7,288)
|
|
Other (gain)
loss
|
|
(7,897)
|
|
(2,560)
|
|
(10,649)
|
|
7,018
|
|
Equity in net (gain)
loss of affiliates
|
|
(956)
|
|
(453)
|
|
(2,879)
|
|
(1,732)
|
|
Depreciation and
amortization
|
|
10,191
|
|
9,989
|
|
39,659
|
|
30,425
|
|
Impairments and gain on
sale of business & assets, net
|
|
3,736
|
|
439
|
|
3,736
|
|
(16,249)
|
|
Gain on extinguishment
of debt
|
|
(4,416)
|
|
—
|
|
(4,416)
|
|
—
|
EBITDA
|
|
$
51,673
|
|
$
87,265
|
|
$
418,423
|
|
$
492,777
|
|
Share-based
compensation
|
|
4,572
|
|
6,268
|
|
21,075
|
|
19,137
|
|
Mark to market
adjustments on non-qualified retirement plan investments
|
|
3,374
|
|
2,050
|
|
6,329
|
|
(5,930)
|
|
Franchise agreement
acquisition cost amortization and charges
|
|
6,307
|
|
2,375
|
|
14,675
|
|
8,995
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
30,229
|
|
5,181
|
|
17,079
|
|
(52,102)
|
|
Business combination,
diligence and transition costs
|
|
25,165
|
|
10,604
|
|
55,778
|
|
39,578
|
|
Operational
restructuring charges
|
|
3,703
|
|
—
|
|
5,547
|
|
—
|
|
Limited payment
guaranty charge
|
|
—
|
|
—
|
|
1,551
|
|
—
|
|
Extraordinary
termination fees from franchisee
|
|
—
|
|
—
|
|
—
|
|
(22,647)
|
|
Exceptional allowances
attributable to COVID-19
|
|
—
|
|
(1,241)
|
|
—
|
|
(1,241)
|
Adjusted
EBITDA
|
|
$
125,023
|
|
$
112,502
|
|
$
540,457
|
|
$
478,567
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME
AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
|
|
|
|
|
(dollar amounts in
thousands, except per share amounts)
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
28,953
|
|
$
55,513
|
|
$
258,507
|
|
$
332,152
|
|
Impairments and gain on
sale of business & assets, net
|
|
2,839
|
|
474
|
|
2,839
|
|
(12,208)
|
|
Gain on extinguishment
of debt
|
|
(3,356)
|
|
—
|
|
(3,356)
|
|
—
|
|
Unrealized gain on
investments in equity securities
|
|
(3,005)
|
|
—
|
|
(3,005)
|
|
—
|
|
Franchise agreement
acquisition cost charges
|
|
2,346
|
|
—
|
|
2,346
|
|
—
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
21,954
|
|
4,088
|
|
6,429
|
|
(39,233)
|
|
Business combination,
diligence and transition costs
|
|
19,288
|
|
8,059
|
|
42,391
|
|
30,079
|
|
Operational
restructuring charges
|
|
2,814
|
|
—
|
|
4,216
|
|
—
|
|
Limited payment
guaranty charge
|
|
—
|
|
—
|
|
1,174
|
|
—
|
|
Extraordinary
termination fees from franchisee
|
|
—
|
|
—
|
|
—
|
|
(17,212)
|
|
Exceptional allowances
attributable to COVID-19
|
|
—
|
|
(943)
|
|
—
|
|
(943)
|
Adjusted Net
Income
|
|
$
71,833
|
|
$
67,191
|
|
$
311,541
|
|
$
292,635
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
|
$
0.58
|
|
$
1.04
|
|
$
5.07
|
|
$
5.99
|
|
Impairments and gain on
sale of business & assets, net
|
|
0.06
|
|
0.01
|
|
0.06
|
|
(0.22)
|
|
Gain on extinguishment
of debt
|
|
(0.07)
|
|
—
|
|
(0.07)
|
|
—
|
|
Unrealized gain on
investments in equity securities
|
|
(0.06)
|
|
—
|
|
(0.06)
|
|
—
|
|
Franchise agreement
acquisition cost charges
|
|
0.05
|
|
—
|
|
0.05
|
|
—
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
0.43
|
|
0.08
|
|
0.13
|
|
(0.71)
|
|
Business combination,
diligence and transition costs
|
|
0.39
|
|
0.15
|
|
0.83
|
|
0.54
|
|
Operational
restructuring charges
|
|
0.06
|
|
—
|
|
0.08
|
|
—
|
|
Limited payment
guaranty charge
|
|
—
|
|
—
|
|
0.02
|
|
—
|
|
Extraordinary
termination fees from franchisee
|
|
—
|
|
—
|
|
—
|
|
(0.31)
|
|
Exceptional allowances
attributable to COVID-19
|
|
—
|
|
(0.02)
|
|
—
|
|
(0.02)
|
Adjusted Diluted
Earnings Per Share (EPS)
|
|
$
1.44
|
|
$
1.26
|
|
$
6.11
|
|
$
5.27
|
|
|
|
Exhibit
7
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL
INFORMATION - 2024 OUTLOOK
|
(UNAUDITED)
|
|
|
|
|
Guidance represents
the midpoint of the company's range of estimated outcomes for the
full year ended December 31, 2024
|
|
|
|
|
EBITDA AND ADJUSTED
EBITDA
|
|
|
(dollar amounts in
thousands)
|
|
|
Midpoint
|
|
|
|
2024
Guidance
|
Net income
|
|
|
$
267,100
|
|
Income tax
expense
|
|
86,700
|
|
Interest
expense
|
|
79,000
|
|
Interest
income
|
|
(7,200)
|
|
Other gain,
net
|
|
(500)
|
|
Equity in net gain of
affiliates
|
|
(400)
|
|
Depreciation and
amortization
|
|
50,700
|
EBITDA
|
|
|
$
475,400
|
|
Share-based
compensation
|
|
23,100
|
|
Franchise agreement
acquisition costs amortization
|
|
16,700
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
30,000
|
|
Business combination,
diligence and transition costs
|
|
41,500
|
|
Global ERP system
implementation and related costs
|
|
3,300
|
Adjusted
EBITDA
|
|
$
590,000
|
|
|
|
|
ADJUSTED NET INCOME
AND DILUTED EARNINGS PER SHARE (EPS)
|
|
|
(dollar amounts in
thousands, except per share amounts)
|
|
Midpoint
|
|
|
|
2024
Guidance
|
Net income
|
|
|
$
267,100
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
22,600
|
|
Business combination,
diligence and transition costs
|
|
31,300
|
|
Global ERP system
implementation and related costs
|
|
2,500
|
Adjusted Net
Income
|
|
|
$
323,500
|
|
|
|
|
Diluted Earnings Per
Share
|
|
|
$
5.34
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
0.44
|
|
Business combination,
diligence and transition costs
|
|
0.62
|
|
Global ERP system
implementation and related costs
|
|
0.05
|
Adjusted Diluted
Earnings Per Share (EPS)
|
|
$
6.45
|
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SOURCE Choice Hotels International, Inc.