EX-99.1 2 exhibit991earningspressrel.htm EX-99.1 Document


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CHOICE HOTELS INTERNATIONAL REPORTS 2022 THIRD QUARTER RESULTS
Third quarter domestic RevPAR exceeded 2019 levels by 15.2%; new domestic franchise agreements awarded in the quarter, increased 38% versus the same period of 2021

ROCKVILLE, Md., November 7, 2022 – Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest lodging franchisors, reported its results today for the three months ended September 30, 2022.

“Our third quarter results and the acquisition of the Radisson Hotels Americas business are a significant leap forward in the evolution of both Choice Hotels’ competitive position and future growth potential. For 11 consecutive quarters, our RevPAR growth has outperformed the hotel industry, confirming that our strategy of focusing our investments and growth on RevPAR accretive hotel segments and locations is working. Our future growth is now enhanced by the addition of the Radisson Hotels Americas' brands to our best-in-class business delivery engine. Radisson Hotels Americas is expected to provide the company with significant incremental recurring adjusted EBITDA upon its full integration in early 2024,” said Patrick Pacious, president and chief executive officer, Choice Hotels. “We exceeded our 2019 earnings last year, have built on that strength through the third quarter this year and are confident that the changes we are observing in leisure and business travel behavior that favor our brands will enable us to maximize growth opportunities well into the future.”

Highlights of third quarter 2022 results include:1,2

•Domestic revenue per available room (RevPAR) growth accelerated quarter-over-quarter, increasing by 15.2% for third quarter 2022, compared to the same period of 2019, outperforming the total industry by 410 basis points.

•Domestic RevPAR growth has surpassed 2019 levels for 16 consecutive months through September 30, 2022, a trend that has continued in the fourth quarter 2022 with October RevPAR increasing approximately 20%, compared to October of 2019.

•The company closed the acquisition of Radisson Hospitality, Inc. (“Radisson Hotels Americas”) on August 11, 2022, for a purchase price of $674 million. As of September 30, 2022, the number of global rooms in the company’s targeted upper-midscale and upscale segments open and in the development pipeline increased by over 73,000 as a result of the acquisition. At quarter-end, the company had over 730,000 global rooms open or in the development pipeline, including the incremental Radisson Hotels Americas rooms.
1 2019 RevPAR comparison data is shown for comparable prior year periods for context throughout this press release in light of the pandemic’s impact on industry performance in 2021.
2 For comparative purposes, RevPAR, effective royalty rate and executed contracts exclude the impact of the Radisson Hotels Americas acquisition, while financial data, pipeline and unit growth include the impact of the Radisson Hotels Americas acquisition unless otherwise noted.



•During third quarter 2022, the company resumed share repurchases under its share repurchase program and returned over $230 million in shares, representing nearly 4% of shares outstanding as of September 30, 2022.3 This increased year-to-date returns to shareholders to over $286 million in the form of cash dividends and share repurchases as of September 30, 2022. The company's board of directors approved an increase in the company's share repurchase authorization by 5 million shares in third quarter 2022.

•The number of domestic franchise agreements awarded in third quarter 2022 increased by 38% compared to the same period of the prior year.

•The company's total domestic pipeline as of September 30, 2022, increased 16% to 1,017 hotels, representing over 98,000 rooms, from September 30, 2021.4

•The company's domestic effective royalty rate was 5.04% for the three months ended September 30, 2022 and 5.05% for the nine months ended September 30, 2022, an increase of 5 basis points, compared to the respective 2021 periods.

•The company sold the Cambria Hotel Nashville, Tennessee, property in July 2022 for approximately $110 million and secured a 30-year franchise agreement with the buyer to continue to operate the hotel as a Cambria Hotel. The sale of this hotel increased the recycling of prior investments in Cambria Hotels development projects for the nine months ended September 30, 2022 to over $140 million.5

RevPAR Performance Trends

•RevPAR increased 15.2% for third quarter 2022, compared to the same period of 2019, driven primarily by an increase in average daily rate (ADR) of 15.1%, compared to third quarter 2019.

•The company’s extended-stay portfolio has consistently exceeded 2019 RevPAR levels since April 2021 and achieved domestic RevPAR growth of 21.8% in third quarter 2022, compared to the same period of 2019. The WoodSpring Suites brand achieved RevPAR growth of 27.5% in third quarter 2022, compared to the same period of 2019, driven by occupancy levels of 81% and a 22% increase in ADR.

•The company’s overall midscale portfolio has consistently surpassed 2019 RevPAR levels since June 2021 and achieved domestic RevPAR growth of 11.3% in third quarter 2022 compared to the same period of 2019. In third quarter 2022, the Comfort brand continued to achieve RevPAR share gains versus local competitors, and the brand’s domestic RevPAR growth continued to outperform the upper-midscale chain scale, compared to the same period of 2019.
3 The percentage of shares repurchased is calculated based on 54 million shares outstanding as of September 30, 2022.
4 Pipeline is defined as hotels awaiting conversion, under construction or approved for development and master development agreements committing owners to future franchise development. The pipeline number also includes 48 Radisson Hotels Americas units representing over 5,700 rooms.
5Subsequent to quarter-end, the company sold the Cambria Hotel New Haven, Connecticut, in October 2022 for $30 million and secured a 30-year franchise agreement with the buyer to continue operating the hotel as a Cambria Hotel.



•The company’s upscale portfolio achieved domestic RevPAR growth of 18.3% for third quarter 2022, compared to the same period of 2019, and outperformed the upscale chain scale by over 13 percentage points.

Financial Performance

•Total revenues increased 28% to $414.3 million for third quarter 2022, compared to the same period of 2021, and included $40.2 million revenue contribution from Radisson Hotels Americas. Total revenues, excluding reimbursable revenue from franchised and managed properties and an extraordinary one-time termination fee, increased 21% to $201 million for third quarter 2022, compared to the same period of 2021, and included $24.8 million revenue contribution from Radisson Hotels Americas.

•Net income was $103.1 million for third quarter 2022, representing diluted earnings per share (EPS) of $1.85.

•Third quarter adjusted net income, excluding certain items described in Exhibit 7, increased to $87.5 million from third quarter 2021, representing adjusted diluted EPS of $1.56.

•Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for third quarter 2022 increased to $139.4 million from the same period of 2021 and included $6.8 million of adjusted EBITDA contribution from Radisson Hotels Americas.

•The company received a $67.4 million cash payment related to the previously disclosed one-time exit of 110 WoodSpring Suites hotels in third quarter 2022, resulting in an increase in total revenue of $22.6 million, which has been excluded from both total revenues, excluding reimbursable revenue from franchised and managed properties and an extraordinary one-time termination fee and adjusted EBITDA results.

•Third quarter 2022 domestic royalties totaled $131.7 million, a 7% increase from the same period of 2021.

•Procurement services revenues increased 11% to $14.4 million for third quarter 2022, compared to the same period of 2021.

Development

•Year-to-date through September 30, 2022, the number of domestic franchise agreements awarded increased 17% compared to the same period of 2021. Excluding the multi-unit transaction for 22 properties as part of the company's strategic alliance with Penn National Gaming in 2021, domestic franchise agreements increased 27% in the first nine months of 2022, compared to the same period of 2021. Applications received for new domestic franchise agreements increased by 23% year-to-date through September 30, 2022, compared to the same period of 2021.

•The number of domestic franchise agreements awarded for conversion hotels increased by 42% in third quarter 2022, compared to the same period of 2021.



•The company’s extended-stay domestic pipeline reached 468 hotels as of September 30, 2022, a 45% increase since September 30, 2021. In September 2022, the Everhome Suites brand, an all-new construction midscale extended stay brand, celebrated the opening of its first hotel in Corona, California, and the brand’s domestic pipeline reached 56 hotels as of September 30, 2022.

•The number of domestic franchise agreements awarded for the company’s midscale segment increased 39% in third quarter 2022, compared to the same period of 2021.

•The number of domestic franchise agreements awarded for the company’s upscale segment nearly tripled for third quarter 2022, compared to the same period of 2021. The Cambria Hotels brand increased its number of domestic hotels open by 5.2% from September 30, 2021, and more than tripled the number of domestic franchise agreements awarded for both third quarter 2022 and the first nine months of 2022, compared to the same period of 2021.

•The number of domestic hotels and rooms, as of September 30, 2022, increased 5.4% and 5.5%, respectively, from September 30, 2021.6

Shareholder Returns

During the nine months ended September 30, 2022, the company paid cash dividends totaling approximately $40 million. Based on the current quarterly dividend rate of $0.2375 per common shares outstanding, the company expects to pay dividends of $53 million during 2022, compared to total dividends of $25 million paid in 2021.

During the nine months ended September 30, 2022, the company repurchased approximately 2 million shares of common stock for $247 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 September 30, 2022, the company had 6.3 million shares of common stock remaining under the current share repurchase authorization.

Outlook

The outlook information provided below includes forward-looking non-GAAP financial measures, which management uses in measuring performance. The company is not able to reconcile full-year 2022 projected adjusted EBITDA and full-year 2024 projected adjusted EBITDA contribution from the Radisson Hotels Americas business unit, in each case without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the final valuation and related allocation of the purchase price and other potential adjustments. The unavailable information could have a significant impact on the company’s full-year 2022 and full-year 2024 reported financial results. The adjusted numbers in the company's outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, the gain (loss) on sales of assets, extraordinary one-time franchisee termination fees, due diligence and transition costs and other items:
•Adjusted EBITDA for full-year 2022 is expected to range between $465 million and $470 million, representing a 15% to 17% increase compared to full-year 2021 and a 25% to 26% increase compared to full-year 2019. The company’s outlook for adjusted EBITDA includes a
6 Including both the Radisson Hotels Americas incremental units and the impact of the previously announced one-time exits.


$14 to $15 million adjusted EBITDA contribution from the Radisson Hotels Americas business unit since the acquisition close through the end of December 2022.
•Annual adjusted EBITDA for the Radisson Hotels Americas business unit is expected to reach $80 million upon its full integration in early 2024.
•Excluding the impact of Radisson Hotels Americas, domestic RevPAR for full-year 2022 is expected to increase between 13% and 15%, compared to full-year 2019, which represents 11% to 12% growth, compared to full-year 2021.
•Excluding the impact of Radisson Hotels Americas, the domestic effective royalty rate for full-year 2022 is expected to continue to grow in the mid-single digits, compared to full-year 2021.
•The domestic number of units, including Radisson Hotels Americas and the impact of the previously announced one-time exit of the WoodSpring Suites hotels, is expected to grow approximately 7% for full-year 2022, compared to full-year 2021.

Conference Call

Choice Hotels International will conduct a conference call on, November 7, 2022, at 8:30 a.m. Eastern Time to discuss the company’s third quarter 2022 earnings results. The dial-in number to listen to the call domestically is (888) 349-0087 and the number for international participants is (412) 317-5259. A live webcast and accompanying materials will also be available on the company’s investor relations website, http://investor.choicehotels.com/ and can be accessed via the Financial Performance and Presentations tab.

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 nearly 630,000 rooms, in 46 countries and territories as of September 30, 2022, the Choice® family of hotel brands provides business and leisure travelers with a range of high-quality lodging options from limited service to full-service hotels in the upscale, midscale, extended-stay and economy segments. The award-winning Choice Privileges® loyalty program offers members benefits ranging from everyday rewards to exceptional experiences. For more information, visit www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the company's revenue, expenses, 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, the company's ability to benefit from any rebound in travel demand, the company's liquidity, the impact of COVID-19 and economic conditions on our future operations, 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, the consummation of the acquisition of Radisson Hotels Americas, including the related incurrence of additional indebtedness; the company’s ability to successfully integrate Radisson Hotels Americas’ employees and operations; the ability to realize the anticipated benefits and synergies of the acquisition of Radisson Hotels Americas as rapidly or to the extent anticipated; the continuation or resurgence of the COVID-19 pandemic, including with respect to new strains or variants; the rate, pace and effectiveness of vaccination in the broader population; changes in consumer demand and confidence, including the impact of the COVID-19 pandemic on unemployment rates, consumer discretionary spending and the demand for travel, transient and group business; the impact of COVID-19 on the global hospitality industry, particularly but not exclusively in the U.S. travel market; the timing and amount of future dividends and share repurchases; changes to general, domestic and foreign economic conditions, including access to liquidity and capital; future domestic or global outbreaks of epidemics, pandemics or contagious diseases, or fear of such outbreaks; changes in law and regulation applicable to the travel, lodging or franchising industries; including with respect to the status of the 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; the commercial acceptance of our Software-as-a-Service (“SaaS”) technology solutions division's products and services; 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; cyber security and data breach risks; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations, especially in areas currently most affected by COVID-19; the outcome of litigation; and 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. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and, where applicable, our Quarter Reports on Form 10-Q. 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

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted EBITDA margins, adjusted selling, general and administrative (SG&A) expenses, revenues excluding reimbursable revenue from franchised and managed properties and extraordinary termination fees from franchisee, adjusted net income and adjusted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibit 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, SG&A, EPS and total revenues. 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 non-GAAP measures 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, expenses associated with legal claims, 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 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.

Adjusted SG&A, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization and Margin: Adjusted SG&A, Adjusted EBITDA and Adjusted EBITDA Margin reflects net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, franchise-agreement acquisition cost amortization, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates, 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 adjusted EBITDA and adjusted EBITDA margins 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 SG&A are excluded from 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 and property-management 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. 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 and property-management 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 allow for period-over-period comparisons of our ongoing operations.

Revenues, Excluding Reimbursable Revenue from Franchised and Managed Properties and Extraordinary Termination Fees from Franchisee: The company reports revenues, excluding reimbursable revenue from franchised and managed properties and extraordinary termination fees from franchisee. These non-GAAP measures we present are commonly used measures of performance in our industry and facilitate comparisons between the company and its competitors. Reimbursable revenues from franchised and managed properties are excluded, as the company’s franchise and management agreements require revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation and property-management systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchisees 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. During the third quarter of 2022, the company earned one-time franchise agreement termination fees related to the purchase by a third-party from an existing franchisee and the subsequent rebranding of a 110 hotel portfolio of WoodSpring Suites hotels. These termination fees received are considered infrequent in nature and not representative of on-going operations and therefore have been excluded from the measurements utilized to assess the company’s operating performance.

Contacts

Scott Oaksmith, Senior Vice President, Real Estate and Finance
Allie Summers, Director, Executive Reporting and Investor Relations

IR@choicehotels.com

© 2022 Choice Hotels International, Inc. All rights reserved.




Choice Hotels International, Inc. and SubsidiariesExhibit 1
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)Three Months Ended September 30,Nine Months Ended September 30,
VarianceVariance
20222021$%20222021$%
REVENUES
Royalty, licensing and management fees$144,020 $127,317 $16,703 13 %$356,208 $299,606 $56,602 19 %
Initial franchise fees7,011 6,149 862 14 %21,635 18,904 2,731 14 %
Procurement services14,401 13,010 1,391 11 %47,887 36,293 11,594 32 %
Owned hotels19,992 11,377 8,615 76 %49,220 24,724 24,496 99 %
Other31,432 8,645 22,787 264 %51,588 20,753 30,835 149 %
Other revenues from franchised and managed properties197,410 156,871 40,539 26 %513,429 384,380 129,049 34 %
Total revenues414,266 323,369 90,897 28 %1,039,967 784,660 255,307 33 %
OPERATING EXPENSES
Selling, general and administrative70,202 35,110 35,092 100 %144,414 99,847 44,567 45 %
Depreciation and amortization8,726 5,883 2,843 48 %20,436 18,477 1,959 11 %
Owned hotels13,158 7,054 6,104 87 %32,004 16,534 15,470 94 %
Other expenses from franchised and managed properties190,541 116,216 74,325 64 %458,037 327,674 130,363 40 %
       Total operating expenses
282,627 164,263 118,364 72 %654,891 462,532 192,359 42 %
Gain on sale of business and assets, net13,379 — 13,379 NM16,688 — 16,688 NM
Operating income145,018 159,106 (14,088)(9)%401,764 322,128 79,636 25 %
OTHER INCOME AND EXPENSES, NET
Interest expense9,362 11,638 (2,276)(20)%32,084 35,106 (3,022)(9)%
Interest income(2,348)(1,202)(1,146)95 %(5,256)(3,717)(1,539)41 %
Other loss (gain)2,303 407 1,896 466 %9,578 (2,906)12,484 (430)%
Equity in net loss (gain) of affiliates(1,075)(3,326)2,251 (68)%(1,279)1,492 (2,771)(186)%
Total other income and expenses, net8,242 7,517 725 10 %35,127 29,975 5,152 17 %
Income before income taxes136,776 151,589 (14,813)(10)%366,637 292,153 74,484 25 %
Income tax expense33,696 34,934 (1,238)(4)%89,998 67,279 22,719 34 %
Net income$103,080 $116,655 $(13,575)(12)%$276,639 $224,874 $51,765 23 %
Basic earnings per share$1.87 $2.10 $(0.23)(11)%$4.98 $4.05 $0.93 23 %
Diluted earnings per share$1.85 $2.08 $(0.23)(11)%$4.93 $4.01 $0.92 23 %



Choice Hotels International, Inc. and SubsidiariesExhibit 2
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)September 30,December 31,
20222021
ASSETS
Cash and cash equivalents$52,541 $511,605 
Accounts receivable, net297,628 153,147 
Other current assets108,980 96,909 
Total current assets459,149 761,661 
Property and equipment, net417,431 377,367 
Intangible assets, net723,617 312,389 
Goodwill227,703 159,196 
Notes receivable, net of allowances54,492 66,451 
Investments in affiliates29,694 27,967 
Operating lease right-of-use assets70,533 34,183 
Investments, employee benefit plans, at fair value29,010 33,946 
Other assets177,354 158,664 
Total assets$2,188,983 $1,931,824 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable$129,856 $81,169 
Accrued expenses and other current liabilities125,227 104,472 
Deferred revenue85,863 81,538 
Current portion of long-term debt2,976 216,351 
Liability for guest loyalty program82,461 86,765 
 Total current liabilities426,383 570,295 
Long-term debt1,155,142 844,123 
Deferred revenue134,171 105,785 
Liability for guest loyalty program49,113 41,785 
Operating lease liabilities70,564 35,492 
Deferred compensation & retirement plan obligations43,053 38,690 
Other liabilities26,046 29,772 
Total liabilities1,904,472 1,665,942 
Total shareholders' equity284,511 265,882 
Total liabilities and shareholders' equity$2,188,983 $1,931,824 



Choice Hotels International, Inc. and SubsidiariesExhibit 3
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)Nine Months Ended September 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$276,639 $224,874 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization20,436 18,477 
Depreciation and amortization – marketing, reservation, and system23,237 18,364 
Gain on sale and disposal of business and assets, net(16,688)— 
Amortization - franchise agreement acquisition cost 11,558 9,734 
Stock compensation and other charges28,621 24,277 
Interest and investment loss (income)9,135 (11,039)
Deferred income taxes(22,402)(34,285)
Equity in net loss of affiliates, less distributions received2,451 8,421 
Franchise agreement acquisition costs, net of reimbursements(32,947)(28,466)
Change in working capital and other(34,838)14,887 
 NET CASH PROVIDED BY OPERATING ACTIVITIES 265,202 245,244 
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment(66,084)(46,098)
Investment in intangible assets(3,247)(3,113)
Asset acquisitions, net of cash paid(856)— 
Proceeds from termination of intangibles5,698 — 
Contributions to investments in affiliates(4,264)(2,150)
Proceeds from sale of equity method investments— 15,554 
Purchases of investments, employee benefit plans(3,719)(1,279)
Proceeds from sales of investments, employee benefit plans1,896 2,487 
Issuance of notes receivable(5,617)(17,918)
Collections of notes receivable701 63 
Proceeds from sale of business and assets140,554 — 
Business acquisition, net of cash acquired(550,431)— 
Other items, net1,708 (115)
 NET CASH USED IN INVESTING ACTIVITIES (483,661)(52,569)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities315,000 — 
Payments to extinguish acquired debt(55,975)— 
Proceeds from acquired derivative1,943 — 
Principal payments on 2012 senior notes(216,571)— 
Purchases of treasury stock(246,530)(10,039)
Dividends paid(39,697)(12,528)
Debt issuance costs(24)(365)
Proceeds from exercise of stock options2,361 10,817 
 NET CASH USED IN FINANCING ACTIVITIES(239,493)(12,115)
Net change in cash and cash equivalents(457,952)180,560 
Effect of foreign exchange rate changes on cash and cash equivalents(1,112)(223)
Cash and cash equivalents at beginning of period511,605 234,779 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$52,541 $415,116 


Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Nine Months Ended September 30, 2022For the Nine Months Ended September 30, 2021Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Comfort(1)
$109.50 63.0 %$68.99 $97.74 60.8 %$59.40 12.0 %220bps16.1 %
Sleep96.10 60.9 %58.56 86.39 59.6 %51.45 11.2 %130bps13.8 %
Quality91.68 54.9 %50.36 83.94 54.5 %45.77 9.2 %40bps10.0 %
Clarion(2)
95.66 46.3 %44.28 87.91 43.8 %38.52 8.8 %250bps15.0 %
Econo Lodge72.63 50.5 %36.70 68.35 51.1 %34.94 6.3 %(60)bps5.0 %
Rodeway73.20 52.0 %38.03 68.20 52.0 %35.48 7.3 %— bps7.2 %
WoodSpring Suites57.98 79.9 %46.30 50.83 81.9 %41.63 14.1 %(200)bps11.2 %
MainStay88.01 63.3 %55.75 79.84 62.8 %50.15 10.2 %50bps11.2 %
Suburban62.14 69.2 %43.02 54.49 71.5 %38.95 14.0 %(230)bps10.4 %
Cambria Hotels159.68 64.7 %103.24 129.62 55.1 %71.44 23.2 %960bps44.5 %
Ascend Hotel Collection155.81 57.7 %89.93 138.31 54.4 %75.28 12.7 %330bps19.5 %
Total*$93.81 59.3 %$55.65 $83.70 58.2 %$48.71 12.1 %110bps14.2 %
*The operating statistics presented exclude the legacy Radisson brands acquired. Additionally, the operating statistics exclude Choice's Everhome brand since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.
For the Three Months Ended September 30, 2022For the Three Months Ended September 30, 2021Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Comfort(1)
$115.72 67.6 %$78.26 $110.72 67.8 %$75.03 4.5 %(20)bps4.3 %
Sleep100.82 63.9 %64.47 95.70 66.4 %63.55 5.4 %(250)bps1.4 %
Quality97.66 59.6 %58.24 94.48 62.2 %58.76 3.4 %(260)bps(0.9)%
Clarion(2)
101.35 51.8 %52.52 101.17 51.9 %52.47 0.2 %(10)bps0.1 %
Econo Lodge78.12 54.1 %42.26 76.51 57.1 %43.66 2.1 %(300)bps(3.2)%
Rodeway77.99 55.5 %43.32 76.21 56.9 %43.37 2.3 %(140)bps(0.1)%
WoodSpring Suites59.26 81.1 %48.04 54.11 85.5 %46.26 9.5 %(440)bps3.8 %
MainStay92.26 67.2 %61.99 87.15 69.1 %60.18 5.9 %(190)bps3.0 %
Suburban61.61 68.4 %42.12 59.26 73.5 %43.54 4.0 %(510)bps(3.3)%
Cambria Hotels164.66 70.1 %115.42 148.85 62.2 %94.15 10.6 %790bps22.6 %
Ascend Hotel Collection174.63 64.5 %112.56 158.37 63.3 %98.50 10.3 %120bps14.3 %
Total*$100.07 63.4 %$63.45 $94.59 64.9 %$61.37 5.8 %(150)bps3.4 %
*The operating statistics presented exclude the legacy Radisson brands acquired. Additionally, the operating statistics exclude Choice's Everhome brand since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.
Effective Royalty Rate
For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
System-wide5.04 %4.99 %5.05 %5.00 %
(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites
(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe


Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Nine Months Ended September 30, 2022For the Nine Months Ended September 30, 2019Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Comfort(1)
$109.50 63.0 %$68.99 $97.39 63.9 %$62.25 12.4 %(90)bps10.8 %
Sleep96.10 60.9 %58.56 86.50 63.0 %54.48 11.1 %(210)bps7.5 %
Quality91.68 54.9 %50.36 81.51 55.9 %45.55 12.5 %(100)bps10.6 %
Clarion(2)
95.66 46.3 %44.28 86.31 51.3 %44.32 10.8 %(500)bps(0.1)%
Econo Lodge72.63 50.5 %36.70 64.75 49.1 %31.77 12.2 %140bps15.5 %
Rodeway73.20 52.0 %38.03 65.29 50.4 %32.89 12.1 %160bps15.6 %
WoodSpring Suites57.98 79.9 %46.30 47.34 76.9 %36.40 22.5 %300bps27.2 %
MainStay88.01 63.3 %55.75 86.38 65.8 %56.86 1.9 %(250)bps(2.0)%
Suburban62.14 69.2 %43.02 58.36 68.9 %40.18 6.5 %30bps7.1 %
Cambria Hotels159.68 64.7 %103.24 145.08 69.5 %100.88 10.1 %(480)bps2.3 %
Ascend Hotel Collection155.81 57.7 %89.93 126.66 62.7 %79.41 23.0 %(500)bps13.2 %
Total*$93.81 59.3 %$55.65 $83.07 59.3 %$49.26 12.9 %— bps13.0 %
*The operating statistics presented exclude the legacy Radisson brands acquired. Additionally, the operating statistics exclude Choice's Everhome brand since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.
For the Three Months Ended September 30, 2022For the Three Months Ended September 30, 2019Change
Average DailyAverage DailyAverage Daily
RateOccupancyRevPARRateOccupancyRevPARRateOccupancyRevPAR
Comfort(1)
$115.72 67.6 %$78.26 $101.48 68.4 %$69.38 14.0 %(80)bps12.8 %
Sleep100.82 63.9 %64.47 88.32 66.4 %58.62 14.2 %(250)bps10.0 %
Quality97.66 59.6 %58.24 85.60 60.6 %51.87 14.1 %(100)bps12.3 %
Clarion(2)
101.35 51.8 %52.52 91.80 55.7 %51.16 10.4 %(390)bps2.7 %
Econo Lodge78.12 54.1 %42.26 68.67 53.3 %36.60 13.8 %80bps15.5 %
Rodeway77.99 55.5 %43.32 68.98 54.3 %37.45 13.1 %120bps15.7 %
WoodSpring Suites59.26 81.1 %48.04 48.69 77.4 %37.67 21.7 %370bps27.5 %
MainStay92.26 67.2 %61.99 88.05 70.5 %62.07 4.8 %(330)bps(0.1)%
Suburban61.61 68.4 %42.12 57.55 67.9 %39.11 7.1 %50bps7.7 %
Cambria Hotels164.66 70.1 %115.42 145.78 72.0 %104.95 13.0 %(190)bps10.0 %
Ascend Hotel Collection174.63 64.5 %112.56 135.09 67.6 %91.29 29.3 %(310)bps23.3 %
Total*$100.07 63.4 %$63.45 $86.95 63.4 %$55.10 15.1 %— bps15.2 %
*The operating statistics presented exclude the legacy Radisson brands acquired. Additionally, the operating statistics exclude Choice's Everhome brand since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.
Effective Royalty Rate
For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2019September 30, 2022September 30, 2019
System-wide5.04 %4.84 %5.05 %4.84 %
(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites
(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe


Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
September 30, 2022September 30, 2021Variance
HotelsRoomsHotelsRoomsHotelsRooms%%
Comfort(1)
1,668 131,140 1,665 131,066 3 74 0.2 %0.1 %
Sleep423 29,770 414 29,167 9 603 2.2 %2.1 %
Quality1,625 120,708 1,666 125,061 (41)(4,353)(2.5)%(3.5)%
Clarion(2)
185 20,642 183 21,917 2 (1,275)1.1 %(5.8)%
Econo Lodge704 42,323 734 44,112 (30)(1,789)(4.1)%(4.1)%
Rodeway491 27,569 531 30,657 (40)(3,088)(7.5)%(10.1)%
WoodSpring Suites206 24,890 300 36,112 (94)(11,222)(31.3)%(31.1)%
Everhome1 99 — — 1 99 NMNM
MainStay113 7,843 97 6,780 16 1,063 16.5 %15.7 %
Suburban73 6,565 70 6,366 3 199 4.3 %3.1 %
Cambria Hotels61 8,433 58 8,060 3 373 5.2 %4.6 %
Ascend Hotel Collection192 20,069 224 28,175 (32)(8,106)(14.3)%(28.8)%
Radisson*520 53,185 — — 520 53,185 NMNM
Domestic Franchises(3)
6,262 493,236 5,942 467,473 320 25,763 5.4 %5.5 %
International Choice1,107 121,164 1,160 134,303 (53)(13,139)(4.6)%(9.8)%
International Radisson*89 12,783 — — 89 12,783 NMNM
International Franchises(3)
1,196 133,947 1,160 134,303 36 (356)3.1 %(0.3)%
Total Franchises7,458 627,183 7,102 601,776 356 25,407 5.0 %4.2 %
(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites
(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe
(3) Prior to 2022, seven properties located in Caribbean territories were classified as domestic. In 2022, the seven properties were reclassified to international.
*Radisson Hotels Americas brands are referred to as Radisson within this table.




Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
REVENUES EXCLUDING REIMBURSABLE REVENUE FROM FRANCHISED AND MANAGED PROPERTIES AND EXTRAORDINARY TERMINATION FEES FROM FRANCHISEE
(dollar amounts in thousands)Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Total Revenues$414,266$323,369$1,039,967$784,660
Adjustments:
  Reimbursable revenue from franchised and managed properties(190,627)(156,871)(506,646)(384,380)
  Extraordinary termination fees from franchisee (22,647)—(22,647)—
Revenues excluding reimbursable revenue from franchised and managed properties and extraordinary termination fees from franchisee$200,992$166,498$510,674$400,280
ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(dollar amounts in thousands)Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Total Selling, General and Administrative Expenses$70,202$35,110 $144,414 99,847 
Mark to market adjustments on non-qualified retirement plan investments1,419617,979 (3,402)
Operational restructuring charges(5,416)—(5,416)(724)
Share-based compensation(4,662)(3,016)(12,869)(8,399)
Due diligence and transition costs(19,496)—(23,557)— 
Exceptional allowances attributable to COVID-19—(989)—(3,087)
Expense associated with legal claims—(3,000)—(3,000)
Adjusted Selling, General and Administrative Expenses$42,047$28,166$110,551$81,235
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA MARGINS
(dollar amounts in thousands)Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income $103,080 $116,655 $276,639 $224,874 
Income tax expense33,696 34,934 89,998 67,279 
Interest expense9,362 11,638 32,084 35,106 
Interest income(2,348)(1,202)(5,256)(3,717)
Other loss (gain)2,303 407 9,578 (2,906)
Equity in operating net loss (gain) of affiliates, net of impairments(1,075)957 (1,279)3,547 
Loss on impairment of affiliate— — — 4,805 
Gain on sale of affiliate— (4,283)— (6,860)
Gain on sale of assets(13,379)— (16,688)— 
Depreciation and amortization 9,668 5,883 21,378 18,477 
Mark to market adjustments on non-qualified retirement plan investments(1,419)(61)(7,979)3,402 
Operational restructuring charges5,416 — 5,416 724 
Share-based compensation4,662 3,016 12,869 8,399 
Due diligence and transition costs19,496 — 23,557 — 
Extraordinary termination fees from franchisee(22,647)— (22,647)— 
Expenses associated with legal claims— 3,000 — 3,000 
Net reimbursable revenues from franchised and managed properties(9,702)(40,655)(58,225)(56,706)
Exceptional allowances attributable to COVID-19— 989 — 3,087 
Franchise agreement acquisition costs amortization2,262 1,961 6,620 5,534 
Adjusted EBITDA$139,375$133,239$366,065$308,045
Revenues excluding reimbursable revenue from franchised and managed properties and extraordinary termination fees from franchisee$200,992$166,498$510,674$400,280
Adjusted EBITDA margins69.3 %80.0 %71.7 %77.0 %


ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
(dollar amounts in thousands, except per share amounts)Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income $103,080$116,655$276,639$224,874
Adjustments:
Loss on impairment of affiliates———3,647
(Gain) on the sale of assets(10,087)—(12,583)—
(Gain) Loss on sale of affiliates—(3,276)—(5,207)
Operational restructuring charges4,084—4,084550
Due diligence & transition costs14,700—17,762—
Extraordinary termination fees from franchisee(17,076)—(17,076)—
Exceptional allowances attributable to COVID-19—757—2,343
Expenses associated with legal claims—2,295—2,277
Net reimbursable revenues from franchise and managed properties(7,238)(31,286)(43,436)(43,635)
Adjusted Net Income$87,463$85,145$225,390$184,849
Diluted Earnings Per Share$1.85$2.08$4.93$4.01
Adjustments:
Loss on impairment of affiliates———0.07
(Gain) on the sale of assets(0.18)—(0.22)—
(Gain) Loss on sale of affiliates—(0.06)—(0.09)
Operational restructuring charges0.07—0.070.01
Due diligence & transition costs0.26—0.32—
Extraordinary termination fees from franchisee(0.31)—(0.30)—
Exceptional allowances attributable to COVID-19—0.01—0.04
Expenses associated with legal claims—0.04—0.04
Net reimbursable revenues from franchise and managed properties(0.13)(0.56)(0.78)(0.78)
Adjusted Diluted Earnings Per Share (EPS)$1.56$1.51$4.02$3.30