Choice Hotels International Reports Strong Third Quarter 2024 Results
Drives EPS Growth of 23% Year-over-Year
Raises Full-year 2024 Net Income, EPS, and RevPAR Guidance
Highlights include:
- Total revenues reached
$428.0 million for third quarter 2024, a quarterly record and a 1% increase compared to the same period of 2023. - Net income increased 15% to
$105.7 million for third quarter 2024, representing diluted earnings per share (EPS) of$2.22 , a quarterly record and a 23% increase compared to the same period of 2023. - Third quarter 2024 adjusted net income, excluding certain items described in Exhibit 7, increased 15% to
$106.2 million compared to the same period of 2023, and adjusted diluted EPS increased 23% to a record of$2.23 compared to the same period of 2023. - Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for third quarter 2024 grew to a quarterly record of
$177.6 million , a 14% increase compared to the same period of 2023. - Global pipeline as of
September 30, 2024 , increased 11% to a third quarter record of over 110,000 rooms fromSeptember 30, 2023 , highlighted by a 54% increase for conversion rooms. Domestic rooms pipeline as ofSeptember 30, 2024 , increased by 10% sinceSeptember 30, 2023 , including a 68% increase for conversion rooms. - Global hotel openings for third quarter 2024 increased by 75% compared to the same period of 2023.
- The company's unit and room growth as of
September 30, 2024 , accelerated across its domestic and international portfolio fromJune 30, 2024 . The company's upscale, extended stay, and midscale rooms portfolio, as ofSeptember 30, 2024 , increased by 1.8% globally sinceSeptember 30, 2023 . - The international portfolio as of
September 30, 2024 , expanded by 3.8% in the number of rooms, highlighted by international hotel openings that tripled in third quarter 2024 compared to the same period of 2023. - The company repurchased 2.9 million shares of common stock for
$352.9 million year-to-date throughSeptember 30, 2024 , representing over 6% of the company's market capitalization at the beginning of the year. - The company is increasing midpoint of its guidance for net income, adjusted EBITDA, diluted EPS, and adjusted diluted EPS for full-year 2024.
"
Financial Performance
- Total revenues excluding reimbursable revenue from franchised and managed properties, calculated as total revenues net of reimbursable revenue of
$171.8 million , increased 17% to$256.1 million for the third quarter 2024 compared to the same period of 2023. - Platform and procurement services fees increased 4% to
$16.2 million for third quarter 2024 compared to the same period of 2023. - Third quarter 2024 domestic effective royalty rate increased 6 basis points to 5.05% compared to the same period of 2023.
- Domestic revenue per available room (RevPAR) decreased 250 basis points for the three-month period ended
September 30, 2024 , compared to the same period of 2023. Domestic occupancy levels for the three-month period endedSeptember 30, 2024 , improved by 80 basis points from the three months ended June 30, 2024.
Development
- The company's total domestic system size increased to nearly 6,300 hotels representing over 495,000 rooms as of
September 30, 2024 . The company's domestic upscale, extended stay, and midscale portfolio increased 1.3% for hotels and increased 1.1% for rooms since September 30, 2023. The domestic extended stay hotels portfolio grew by 11.2% since September 30, 2023, driven by increases in each of the company's brands. - The company's international rooms pipeline as of
September 30, 2024 increased by 21% compared to the same period of 2023. - The company opened 190 domestic hotel openings year-to-date through
September 30, 2024 , a 19% increase compared to the same period of 2023. Of the domestic franchise agreements executed for conversion hotels over the trailing twelve months endingSeptember 30, 2024 , 141 opened in the same year, a 17% increase over the comparable period of the prior year.
Balance Sheet and Liquidity
As of
Shareholder Returns
During the nine months ended
During the nine months ended
As of
Outlook
The outlook information below includes forward-looking non-GAAP financial measures, which management uses in forecasting performance. The adjusted numbers in the company's outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, due diligence and transition costs, additional repurchases of company stock, and other items:
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Full-Year 2024 |
Prior Outlook |
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Net Income |
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Adjusted Net Income |
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Adjusted EBITDA |
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Diluted EPS |
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Adjusted Diluted EPS |
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Effective Income Tax Rate |
24.0 % |
24.5 % |
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Full-Year 2024 |
Prior Outlook |
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vs. Full-Year 2023 |
||
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Domestic RevPAR Growth |
-2% to -1% |
-3.5% to -1.5% |
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Domestic Effective Royalty Rate Growth |
Mid-single digits |
Mid-single digits |
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Domestic Net Unit Growth |
Approximately 2% |
Approximately 2% |
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(upscale, extended stay, and midscale brands) |
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Webcast and Conference Call
A conference call will also be available. Participants may listen to the call by dialing (800) 549-8228 domestically or (646) 564-2877 internationally using conference ID 91747.
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
Forward-Looking Statements
Information set forth herein includes "forward-looking statements." Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume," or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of Choice's revenue, expenses, EBITDA, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock and other financial and operational measures, including occupancy and open hotels, RevPAR, and Choice's liquidity, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties, and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future domestic or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the
Non-GAAP Financial Measurements and Other Definitions
The company evaluates its operations utilizing the performance metrics of EBITDA, adjusted EBITDA, adjusted net income, and adjusted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as net income and EPS. The company's calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. We discuss management's reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.
In addition to the specific adjustments noted below with respect to each measure, the adjusted EBITDA, adjusted net income and adjusted EPS presented herein also exclude restructuring of the company's operations including employee severance benefit, income taxes and legal costs, acquisition related to business combination, due diligence and, transition costs, expenses associated with legal claims, loss on the sale of equity securities, net of dividend income purchased in contemplation of the proposed acquisition of
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.
© 2024
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Exhibit 1 |
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Condensed Consolidated Statements of Income |
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|
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||||||
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(Unaudited) |
|
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|
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|
|
|
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|
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|
|
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(In thousands, except per share amounts) |
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Three months ended |
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Nine months ended |
||||||||||||
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Variance |
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Variance |
||||
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|
|
2024 |
|
2023 |
|
$ |
|
% |
|
2024 |
|
2023 |
|
$ |
|
% |
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty, licensing and management fees |
|
$ 147,151 |
|
$ 148,512 |
|
$ (1,361) |
|
(1) % |
|
$ 394,431 |
|
$ 396,503 |
|
$ (2,072) |
|
(1) % |
|
Initial franchise fees |
|
5,866 |
|
6,194 |
|
(328) |
|
(5) % |
|
19,133 |
|
21,240 |
|
(2,107) |
|
(10) % |
|
Platform and procurement services fees |
|
16,178 |
|
15,542 |
|
636 |
|
4 % |
|
58,060 |
|
58,186 |
|
(126) |
|
— % |
|
Owned hotels |
|
31,936 |
|
26,239 |
|
5,697 |
|
22 % |
|
85,345 |
|
74,075 |
|
11,270 |
|
15 % |
|
Other |
|
13,857 |
|
11,436 |
|
2,421 |
|
21 % |
|
45,251 |
|
33,211 |
|
12,040 |
|
36 % |
|
Other revenues from franchised and managed properties |
|
212,976 |
|
217,634 |
|
(4,658) |
|
(2) % |
|
592,849 |
|
602,554 |
|
(9,705) |
|
(2) % |
|
Total revenues |
|
427,964 |
|
425,557 |
|
2,407 |
|
1 % |
|
1,195,069 |
|
1,185,769 |
|
9,300 |
|
1 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
49,077 |
|
44,042 |
|
5,035 |
|
11 % |
|
162,697 |
|
151,387 |
|
11,310 |
|
7 % |
|
Business combination, diligence and transition costs |
|
984 |
|
10,871 |
|
(9,887) |
|
(91) % |
|
17,723 |
|
30,613 |
|
(12,890) |
|
(42) % |
|
Depreciation and amortization |
|
10,861 |
|
9,633 |
|
1,228 |
|
13 % |
|
32,623 |
|
29,468 |
|
3,155 |
|
11 % |
|
Owned hotels |
|
22,343 |
|
18,628 |
|
3,715 |
|
20 % |
|
62,370 |
|
53,924 |
|
8,446 |
|
16 % |
|
Other expenses from franchised and managed properties |
|
192,916 |
|
207,341 |
|
(14,425) |
|
(7) % |
|
575,102 |
|
583,095 |
|
(7,993) |
|
(1) % |
|
Total operating expenses |
|
276,181 |
|
290,515 |
|
(14,334) |
|
(5) % |
|
850,515 |
|
848,487 |
|
2,028 |
|
— % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
151,783 |
|
135,042 |
|
16,741 |
|
12 % |
|
344,554 |
|
337,282 |
|
7,272 |
|
2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
OTHER EXPENSES AND INCOME, NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
22,038 |
|
16,168 |
|
5,870 |
|
36 % |
|
66,064 |
|
46,522 |
|
19,542 |
|
42 % |
|
Interest income |
|
(2,411) |
|
(1,897) |
|
(514) |
|
27 % |
|
(6,557) |
|
(5,836) |
|
(721) |
|
12 % |
|
Loss on extinguishment of debt |
|
331 |
|
— |
|
331 |
|
NM |
|
331 |
|
— |
|
331 |
|
NM |
|
Other (gain) loss |
|
(4,013) |
|
1,343 |
|
(5,356) |
|
(399) % |
|
(133) |
|
(2,752) |
|
2,619 |
|
(95) % |
|
Equity in net gain of affiliates |
|
(1,310) |
|
(1,801) |
|
491 |
|
(27) % |
|
(9,088) |
|
(1,923) |
|
(7,165) |
|
373 % |
|
Total other expenses and income, net |
|
14,635 |
|
13,813 |
|
822 |
|
6 % |
|
50,617 |
|
36,011 |
|
14,606 |
|
41 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
137,148 |
|
121,229 |
|
15,919 |
|
13 % |
|
293,937 |
|
301,271 |
|
(7,334) |
|
(2) % |
|
Income tax expense |
|
31,432 |
|
29,205 |
|
2,227 |
|
8 % |
|
70,076 |
|
71,717 |
|
(1,641) |
|
(2) % |
|
Net income |
|
$ 105,716 |
|
$ 92,024 |
|
$ 13,692 |
|
15 % |
|
$ 223,861 |
|
$ 229,554 |
|
$ (5,693) |
|
(2) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ 2.24 |
|
$ 1.83 |
|
$ 0.41 |
|
22 % |
|
$ 4.64 |
|
$ 4.51 |
|
$ 0.13 |
|
3 % |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ 2.22 |
|
$ 1.81 |
|
$ 0.41 |
|
23 % |
|
$ 4.61 |
|
$ 4.47 |
|
$ 0.14 |
|
3 % |
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Exhibit 2 |
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Condensed Consolidated Balance Sheets |
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|
(Unaudited) |
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||
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|
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(In thousands) |
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|
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||
|
|
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|
2024 |
|
2023 |
|
|
|
|
|
|
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|
|
ASSETS |
|
|
|
|
||
|
Cash and cash equivalents |
|
$ 58,565 |
|
$ 26,754 |
||
|
Accounts receivable, net |
|
210,925 |
|
195,896 |
||
|
Other current assets |
|
69,112 |
|
73,880 |
||
|
|
Total current assets |
|
338,602 |
|
296,530 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
580,021 |
|
493,478 |
||
|
Operating lease right-of-use assets |
|
81,987 |
|
85,101 |
||
|
|
|
220,187 |
|
220,187 |
||
|
Intangible assets, net |
|
863,811 |
|
811,075 |
||
|
Notes receivable, net of allowances |
|
99,722 |
|
78,900 |
||
|
Investments in equity securities, at fair value |
|
— |
|
116,374 |
||
|
Investments for employee benefit plans, at fair value |
|
47,788 |
|
39,751 |
||
|
Investments in affiliates |
|
109,732 |
|
70,579 |
||
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Other assets |
|
202,196 |
|
182,824 |
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|
|
|
|
|
|
|
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Total assets |
|
$ 2,544,046 |
|
$ 2,394,799 |
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|
|
|
|
|
|
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|
|
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY |
|
|
|
|
||
|
Accounts payable |
|
$ 152,781 |
|
$ 131,284 |
||
|
Accrued expenses and other current liabilities |
|
122,172 |
|
109,248 |
||
|
Deferred revenue |
|
103,194 |
|
108,316 |
||
|
Current portion of long-term debt |
|
— |
|
499,268 |
||
|
Liability for guest loyalty program |
|
100,639 |
|
94,574 |
||
|
|
Total current liabilities |
|
478,786 |
|
942,690 |
|
|
|
|
|
|
|
||
|
Long-term debt |
|
1,810,731 |
|
1,068,751 |
||
|
Long-term deferred revenue |
|
132,332 |
|
133,501 |
||
|
Deferred compensation & retirement plan obligations |
|
53,361 |
|
45,657 |
||
|
Operating lease liabilities |
|
109,930 |
|
109,483 |
||
|
Liability for guest loyalty program |
|
46,797 |
|
43,266 |
||
|
Other liabilities |
|
8,261 |
|
15,853 |
||
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
2,640,198 |
|
2,359,201 |
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' (deficit) equity |
|
(96,152) |
|
35,598 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' (deficit) equity |
|
$ 2,544,046 |
|
$ 2,394,799 |
|
|
|
|
|
Exhibit 3 |
|
Condensed Consolidated Statements of Cash Flows |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
(In thousands) |
Nine months ended |
||
|
|
2024 |
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
Net income |
$ 223,861 |
|
$ 229,554 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
32,623 |
|
29,468 |
|
Depreciation and amortization – other expenses from franchised and managed properties |
20,236 |
|
27,544 |
|
Franchise agreement acquisition cost amortization |
20,584 |
|
14,616 |
|
Non-cash share-based compensation and other charges |
32,445 |
|
34,670 |
|
Non-cash interest, investments, and affiliate income, net |
(7,529) |
|
(1,709) |
|
Deferred income taxes |
(21,086) |
|
(4,315) |
|
Equity in net loss (gain) of affiliates, less distributions received |
56 |
|
(621) |
|
Franchise agreement acquisition costs, net of reimbursements |
(84,085) |
|
(72,867) |
|
Change in working capital and other |
19,435 |
|
(9,150) |
|
Net cash provided by operating activities |
236,540 |
|
247,190 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
Investments in other property and equipment |
(33,620) |
|
(35,933) |
|
Investments in owned hotel properties |
(81,239) |
|
(45,470) |
|
Contributions to investments in affiliates |
(47,695) |
|
(24,573) |
|
Issuances of notes receivable |
(24,405) |
|
(4,319) |
|
Distributions from sales of affiliates |
15,850 |
|
868 |
|
Collections of notes receivable |
2,277 |
|
9,923 |
|
Proceeds from sales of equity securities |
108,149 |
|
— |
|
Other items, net |
(2,680) |
|
(3,761) |
|
Net cash used in investing activities |
(63,363) |
|
(103,265) |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
Net borrowings pursuant to revolving credit facilities |
154,500 |
|
191,500 |
|
Proceeds from the issuance of long-term debt |
593,574 |
|
— |
|
Repayment of long-term debt |
(500,000) |
|
— |
|
Debt issuance costs |
(8,069) |
|
(755) |
|
Purchases of treasury stock |
(348,964) |
|
(304,400) |
|
Dividends paid |
(42,488) |
|
(42,073) |
|
Proceeds from the exercise of stock options |
9,279 |
|
6,719 |
|
Net cash used in financing activities |
(142,168) |
|
(149,009) |
|
Net change in cash and cash equivalents |
31,009 |
|
(5,084) |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
802 |
|
(50) |
|
Cash and cash equivalents, beginning of period |
26,754 |
|
41,566 |
|
Cash and cash equivalents, end of period |
$ 58,565 |
|
$ 36,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 4 |
||
|
|
|||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the three months ended |
|
Change |
|||||||||||||
|
|
|
Average Daily |
|
|
|
|
|
Average Daily |
|
|
|
|
|
Average Daily |
|
|
|
|
|
|
|
|
Rate |
|
Occupancy |
|
RevPAR |
|
Rate |
|
Occupancy |
|
RevPAR |
|
Rate |
|
Occupancy |
|
RevPAR |
|
|
Upscale & Above (1) |
|
$ 159.88 |
|
64.2 % |
|
$ 102.69 |
|
$ 160.49 |
|
63.0 % |
|
$ 101.17 |
|
(0.4) % |
|
120 |
bps |
|
1.5 % |
|
Midscale & Upper Midscale (2) |
|
106.57 |
|
61.0 % |
|
65.04 |
|
107.75 |
|
62.2 % |
|
67.04 |
|
(1.1) % |
|
(120) |
bps |
|
(3.0) % |
|
Extended Stay (3) |
|
65.45 |
|
73.3 % |
|
47.99 |
|
64.65 |
|
74.5 % |
|
48.17 |
|
1.2 % |
|
(120) |
bps |
|
(0.4) % |
|
Economy (4) |
|
75.69 |
|
50.5 % |
|
38.20 |
|
76.97 |
|
51.6 % |
|
39.73 |
|
(1.7) % |
|
(110) |
bps |
|
(3.8) % |
|
Total |
|
$ 102.10 |
|
61.1 % |
|
$ 62.41 |
|
$ 103.31 |
|
61.9 % |
|
$ 63.99 |
|
(1.2) % |
|
(80) |
bps |
|
(2.5) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended |
|
For the nine months ended |
|
Change |
|||||||||||||
|
|
|
Average Daily |
|
|
|
|
|
Average Daily |
|
|
|
|
|
Average Daily |
|
|
|
|
|
|
|
|
Rate |
|
Occupancy |
|
RevPAR |
|
Rate |
|
Occupancy |
|
RevPAR |
|
Rate |
|
Occupancy |
|
RevPAR |
|
|
Upscale & Above (1) |
|
$ 153.87 |
|
59.1 % |
|
$ 91.01 |
|
$ 152.59 |
|
58.2 % |
|
$ 88.82 |
|
0.8 % |
|
90 |
bps |
|
2.5 % |
|
Midscale & Upper Midscale (2) |
|
101.86 |
|
57.0 % |
|
58.04 |
|
102.90 |
|
58.3 % |
|
60.00 |
|
(1.0) % |
|
(130) |
bps |
|
(3.3) % |
|
Extended Stay (3) |
|
63.84 |
|
72.1 % |
|
46.04 |
|
64.28 |
|
73.5 % |
|
47.24 |
|
(0.7) % |
|
(140) |
bps |
|
(2.5) % |
|
Economy (4) |
|
71.83 |
|
47.6 % |
|
34.20 |
|
72.65 |
|
49.0 % |
|
35.57 |
|
(1.1) % |
|
(140) |
bps |
|
(3.8) % |
|
Total |
|
$ 97.45 |
|
57.4 % |
|
$ 55.93 |
|
$ 98.59 |
|
58.3 % |
|
$ 57.50 |
|
(1.2) % |
|
(90) |
bps |
|
(2.7) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Royalty Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
For the three months ended |
|
|
|
For the nine months ended |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide |
|
5.05 % |
|
4.99 % |
|
|
|
5.05 % |
|
4.99 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|||||||||||||||||||
|
(2) Includes Clarion, |
|||||||||||||||||||
|
(3) Includes Everhome Suites, Mainstay Suites, |
|||||||||||||||||||
|
(4)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 5 |
||
|
|
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance |
||||||||||
|
|
|
Hotels |
|
Rooms |
|
Hotels |
|
Rooms |
|
Hotels |
|
% |
|
Rooms |
|
% |
|
|
|
201 |
|
22,957 |
|
208 |
|
23,187 |
|
(7) |
|
(3.4) % |
|
(230) |
|
(1.0) % |
|
|
|
75 |
|
10,226 |
|
69 |
|
9,398 |
|
6 |
|
8.7 % |
|
828 |
|
8.8 % |
|
Radisson(1) |
|
61 |
|
14,296 |
|
66 |
|
15,499 |
|
(5) |
|
(7.6) % |
|
(1,203) |
|
(7.8) % |
|
Comfort(2) |
|
1,669 |
|
131,205 |
|
1,667 |
|
131,027 |
|
2 |
|
0.1 % |
|
178 |
|
0.1 % |
|
Quality |
|
1,623 |
|
118,361 |
|
1,614 |
|
119,067 |
|
9 |
|
0.6 % |
|
(706) |
|
(0.6) % |
|
Country |
|
418 |
|
33,327 |
|
427 |
|
33,996 |
|
(9) |
|
(2.1) % |
|
(669) |
|
(2.0) % |
|
Sleep |
|
421 |
|
29,610 |
|
430 |
|
30,331 |
|
(9) |
|
(2.1) % |
|
(721) |
|
(2.4) % |
|
Clarion(3) |
|
188 |
|
19,763 |
|
182 |
|
19,763 |
|
6 |
|
3.3 % |
|
— |
|
— % |
|
|
|
25 |
|
2,818 |
|
4 |
|
363 |
|
21 |
|
525.0 % |
|
2,455 |
|
676.3 % |
|
WoodSpring |
|
249 |
|
29,989 |
|
231 |
|
27,862 |
|
18 |
|
7.8 % |
|
2,127 |
|
7.6 % |
|
MainStay |
|
132 |
|
9,459 |
|
124 |
|
8,503 |
|
8 |
|
6.5 % |
|
956 |
|
11.2 % |
|
Suburban |
|
110 |
|
9,178 |
|
91 |
|
7,954 |
|
19 |
|
20.9 % |
|
1,224 |
|
15.4 % |
|
Everhome |
|
6 |
|
685 |
|
1 |
|
98 |
|
5 |
|
500.0 % |
|
587 |
|
599.0 % |
|
|
|
650 |
|
37,955 |
|
671 |
|
39,429 |
|
(21) |
|
(3.1) % |
|
(1,474) |
|
(3.7) % |
|
Rodeway |
|
450 |
|
25,365 |
|
471 |
|
26,557 |
|
(21) |
|
(4.5) % |
|
(1,192) |
|
(4.5) % |
|
Domestic Franchises |
|
6,278 |
|
495,194 |
|
6,256 |
|
493,034 |
|
22 |
|
0.4 % |
|
2,160 |
|
0.4 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Franchises |
|
1,237 |
|
139,758 |
|
1,207 |
|
134,660 |
|
30 |
|
2.5 % |
|
5,098 |
|
3.8 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Franchises |
|
7,515 |
|
634,952 |
|
7,463 |
|
627,694 |
|
52 |
|
0.7 % |
|
7,258 |
|
1.2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Radisson, Radisson Blu, Radisson Individuals, and Radisson Red brands. |
|
|
|
|
|
|
|
|
||||||||
|
(2) Includes Comfort family of brand extensions including |
|
|
|
|
|
|
|
|
||||||||
|
(3) Includes Clarion family of brand extensions including Clarion and |
||||||||||||||||
|
|
|
|
|
|
|
|
Exhibit 6 |
||
|
|
|||||||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||||||
|
(UNAUDITED) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA |
|||||||||
|
(dollar amounts in thousands) |
|
Three months ended |
|
Nine months ended |
|||||
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ 105,716 |
|
$ 92,024 |
|
$ 223,861 |
|
$ 229,554 |
|
|
|
Income tax expense |
|
31,432 |
|
29,205 |
|
70,076 |
|
71,717 |
|
|
Interest expense |
|
22,038 |
|
16,168 |
|
66,064 |
|
46,522 |
|
|
Interest income |
|
(2,411) |
|
(1,897) |
|
(6,557) |
|
(5,836) |
|
|
Loss on extinguishment of debt |
|
331 |
|
— |
|
331 |
|
— |
|
|
Other (gain) loss |
|
(4,013) |
|
1,343 |
|
(133) |
|
(2,752) |
|
|
Equity in net gain of affiliates |
|
(1,310) |
|
(1,801) |
|
(9,088) |
|
(1,923) |
|
|
Depreciation and amortization |
|
10,861 |
|
9,633 |
|
32,623 |
|
29,468 |
|
EBITDA |
|
$ 162,644 |
|
$ 144,675 |
|
$ 377,177 |
|
$ 366,750 |
|
|
|
Share-based compensation |
|
5,425 |
|
5,890 |
|
15,484 |
|
16,503 |
|
|
Mark to market adjustments on non-qualified retirement plan investments |
|
2,533 |
|
(913) |
|
7,185 |
|
2,955 |
|
|
Franchise agreement acquisition costs amortization and charges |
|
4,011 |
|
2,972 |
|
11,592 |
|
8,368 |
|
|
Net reimbursable deficit (surplus) from franchised and managed properties |
|
1,148 |
|
(7,889) |
|
30,703 |
|
(13,150) |
|
|
Global ERP system implementation and related costs |
|
586 |
|
— |
|
586 |
|
— |
|
|
Business combination, diligence and transition costs |
|
984 |
|
10,871 |
|
17,723 |
|
30,613 |
|
|
Operational restructuring charges |
|
255 |
|
275 |
|
788 |
|
1,844 |
|
|
Limited payment guarantee charge |
|
— |
|
— |
|
— |
|
1,551 |
|
|
Expenses associated with legal claims |
|
— |
|
— |
|
2,430 |
|
— |
|
Adjusted EBITDA |
|
$ 177,586 |
|
$ 155,881 |
|
$ 463,668 |
|
$ 415,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) |
|
|
|||||||
|
(dollar amounts in thousands, except per share amounts) |
|
Three months ended |
|
Nine months ended |
|||||
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ 105,716 |
|
$ 92,024 |
|
$ 223,861 |
|
$ 229,554 |
|
|
|
Loss on extinguishment of debt |
|
250 |
|
— |
|
250 |
|
— |
|
|
(Gain) Loss on investments in equity securities, net of dividend income |
|
(635) |
|
— |
|
5,076 |
|
— |
|
|
Net reimbursable (surplus) deficit from franchised and managed properties |
|
(538) |
|
(7,975) |
|
18,660 |
|
(15,525) |
|
|
Business combination, diligence and transition costs |
|
794 |
|
8,169 |
|
13,398 |
|
23,113 |
|
|
Operational restructuring charges |
|
194 |
|
204 |
|
596 |
|
1,392 |
|
|
Limited payment guarantee charge |
|
— |
|
— |
|
— |
|
1,174 |
|
|
Expenses associated with legal claims |
|
— |
|
— |
|
1,830 |
|
— |
|
|
Gain on sale of an affiliate |
|
— |
|
— |
|
(5,446) |
|
— |
|
|
Global ERP system implementation and related costs |
|
443 |
|
— |
|
443 |
|
— |
|
Adjusted Net Income |
|
$ 106,224 |
|
$ 92,422 |
|
$ 258,668 |
|
$ 239,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ 2.22 |
|
$ 1.81 |
|
$ 4.61 |
|
$ 4.47 |
|
|
|
Loss on extinguishment of debt |
|
0.01 |
|
— |
|
0.01 |
|
— |
|
|
(Gain) Loss on investments in equity securities, net of dividend income |
|
(0.01) |
|
— |
|
0.10 |
|
— |
|
|
Net reimbursable (surplus) deficit from franchised and managed properties |
|
(0.02) |
|
(0.15) |
|
0.37 |
|
(0.30) |
|
|
Business combination, diligence and transition costs |
|
0.02 |
|
0.16 |
|
0.28 |
|
0.45 |
|
|
Operational restructuring charges |
|
— |
|
— |
|
0.01 |
|
0.03 |
|
|
Limited payment guarantee charge |
|
— |
|
— |
|
— |
|
0.02 |
|
|
Expenses associated with legal claims |
|
— |
|
— |
|
0.04 |
|
— |
|
|
Gain on sale of an affiliate |
|
— |
|
— |
|
(0.11) |
|
— |
|
|
Global ERP system implementation and related costs |
|
0.01 |
|
— |
|
0.01 |
|
— |
|
Adjusted Diluted Earnings Per Share (EPS) |
|
$ 2.23 |
|
$ 1.82 |
|
$ 5.32 |
|
$ 4.67 |
|
|
|
|
|
Exhibit 7 |
||
|
|
|||||
|
SUPPLEMENTAL INFORMATION - 2024 OUTLOOK |
|||||
|
(UNAUDITED) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance represents the company's range of estimated outcomes for the full year ended |
|||||
|
|
|
|
|
|
|
|
EBITDA AND ADJUSTED EBITDA |
|
|
|
|
|
|
(in thousands) |
|
Full Year |
|
Full Year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ 276,000 |
|
$ 284,000 |
|
|
|
Income tax expense |
|
86,700 |
|
88,500 |
|
|
Interest expense |
|
88,000 |
|
88,000 |
|
|
Interest income |
|
(8,400) |
|
(8,400) |
|
|
Loss on extinguishment of debt |
|
300 |
|
300 |
|
|
Other gain |
|
(500) |
|
(500) |
|
|
Equity in net gain of affiliates |
|
(10,000) |
|
(9,800) |
|
|
Depreciation and amortization |
|
51,900 |
|
51,900 |
|
EBITDA |
|
$ 484,000 |
|
$ 494,000 |
|
|
|
Share-based compensation |
|
20,800 |
|
20,800 |
|
|
Mark to market adjustments on non-qualified retirement plan investments |
|
7,100 |
|
7,100 |
|
|
Franchise agreement acquisition costs amortization |
|
15,200 |
|
15,400 |
|
|
Net reimbursable deficit from franchised and managed properties |
|
39,600 |
|
39,600 |
|
|
Global ERP system implementation and related costs |
|
1,700 |
|
1,700 |
|
|
Business combination, diligence and transition costs |
|
18,300 |
|
18,100 |
|
|
Operational restructuring charges |
|
800 |
|
800 |
|
|
Expenses associated with legal claims |
|
2,500 |
|
2,500 |
|
Adjusted EBITDA |
|
$ 590,000 |
|
$ 600,000 |
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (EPS) |
|
|
|
|
|
|
(in thousands, except per share amounts) |
|
Full Year |
|
Full Year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ 276,000 |
|
$ 284,000 |
|
|
|
Loss on extinguishment of debt |
|
200 |
|
200 |
|
|
Loss on investments in equity securities, net of dividend income |
|
5,100 |
|
5,100 |
|
|
Net reimbursable deficit from franchised and managed properties |
|
29,800 |
|
29,800 |
|
|
Business combination, diligence and transition costs |
|
13,600 |
|
13,600 |
|
|
Operational restructuring charges |
|
600 |
|
600 |
|
|
Expenses associated with legal claims |
|
1,800 |
|
1,800 |
|
|
Gain on sale of an affiliate |
|
(5,300) |
|
(5,300) |
|
|
Global ERP system implementation and related costs |
|
1,200 |
|
1,200 |
|
Adjusted Net Income |
|
$ 323,000 |
|
$ 331,000 |
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ 5.74 |
|
$ 5.91 |
|
|
|
Loss on extinguishment of debt |
|
0.01 |
|
0.01 |
|
|
Loss on investments in equity securities, net of dividend income |
|
0.11 |
|
0.11 |
|
|
Net reimbursable deficit from franchised and managed properties |
|
0.61 |
|
0.61 |
|
|
Business combination, diligence and transition costs |
|
0.28 |
|
0.28 |
|
|
Operational restructuring charges |
|
0.01 |
|
0.01 |
|
|
Expenses associated with legal claims |
|
0.04 |
|
0.04 |
|
|
Gain on sale of an affiliate |
|
(0.11) |
|
(0.11) |
|
|
Global ERP system implementation and related costs |
|
0.01 |
|
0.01 |
|
Adjusted Diluted Earnings Per Share (EPS) |
|
$ 6.70 |
|
$ 6.87 |
|
Contacts
IR@choicehotels.com
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