Choice Hotels International Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Choice Hotels International Inc. has filed its 2023 10-K report detailing its financial performance and business operations.</b>

AI Summary

CHOICE HOTELS INTERNATIONAL INC /DE (CHH) filed a Annual Report (10-K) with the SEC on February 20, 2024. Choice Hotels International Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal business is in the Hotels & Motels industry (SIC code 7011). Choice Hotels International Inc. is incorporated in Delaware. The filing includes financial data for the fiscal years 2021, 2022, and 2023.

Why It Matters

For investors and stakeholders tracking CHOICE HOTELS INTERNATIONAL INC /DE, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Choice Hotels' financial health and strategic positioning for the past fiscal year, crucial for investors and stakeholders to assess performance and future outlook. The detailed financial statements and risk factors within the report offer insights into the company's revenue streams, operational efficiency, and potential challenges in the competitive hospitality market.

Risk Assessment

Risk Level: medium — CHOICE HOTELS INTERNATIONAL INC /DE shows moderate risk based on this filing. The company operates in the Hotels & Motels industry, which is subject to economic fluctuations and competitive pressures, as indicated by its SIC code 7011 and the nature of a 10-K filing.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Choice Hotels' performance and strategic direction for the upcoming year.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period of Report)
• 2024-02-20 — Filing Date (Filed as of Date)
• 2023 — Fiscal Year (Filing Year)
• 2021, 2022, 2023 — Reported Fiscal Years (Financial data periods)

Key Players & Entities

• CHOICE HOTELS INTERNATIONAL INC /DE (company) — Filer name
• 0001046311 (company) — Central Index Key
• 7011 (company) — Standard Industrial Classification
• DE (company) — State of Incorporation
• NORTH BETHESDA (company) — Business Address City
• MD (company) — Business Address State
• 20852 (company) — Business Address ZIP
• 3015925000 (company) — Business Phone

FAQ

Risk Factors

• Industry Competition [medium — market]: The company operates in a highly competitive hotel industry, facing competition from other hotel franchisors and operators.
• Economic Conditions [medium — financial]: The company's financial performance is sensitive to general economic conditions, including recessions and changes in consumer spending.
• Franchisee Performance [medium — operational]: The success of the company depends on the financial success and operational performance of its franchisees.

Key Financial Figures

• $0.01 — ich Registered Common Stock, Par Value $0.01 per share CHH New York Stock Exchange
• $117.52 — 30, 2023 based upon a closing price of $117.52 per share. As of February 14, 2024, th
• $49.50 — nc. ("Wyndham") at an exchange ratio of $49.50 in cash and 0.324 shares of Choice comm

Filing Documents

• chh-20231231.htm (10-K) — 2917KB
• chh12312023ex2101.htm (EX-21.01) — 45KB
• chh12312023ex23.htm (EX-23) — 3KB
• chh12312023ex311.htm (EX-31.1) — 10KB
• chh12312023ex312.htm (EX-31.2) — 10KB
• chh12312023ex32.htm (EX-32) — 4KB
• chh12312023ex97.htm (EX-97) — 22KB
• chh-20231231_g1.jpg (GRAPHIC) — 229KB
• chh-20231231_g2.jpg (GRAPHIC) — 371KB
• 0001046311-24-000010.txt (&nbsp;) — 17554KB
• chh-20231231.xsd (EX-101.SCH) — 119KB
• chh-20231231_cal.xml (EX-101.CAL) — 177KB
• chh-20231231_def.xml (EX-101.DEF) — 579KB
• chh-20231231_lab.xml (EX-101.LAB) — 1309KB
• chh-20231231_pre.xml (EX-101.PRE) — 914KB
• chh-20231231_htm.xml (XML) — 2751KB

Risk Factors

Item 1A. Risk Factors 23

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 42

Cybersecurity

Item 1C. Cybersecurity 42

Properties

Item 2. Properties 43

Legal Proceedings

Item 3. Legal Proceedings 44

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 44 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45

Selected Financial Data

Item 6. Selected Financial Data 47

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 47

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 61

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 62

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 107

Controls and Procedures

Item 9A. Controls and Procedures 107

Other Information

Item 9B. Other Information 110

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 110 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 110

Executive Compensation

Item 11. Executive Compensation 110

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 111

Certain Relationships and Related Transactions and Director Independence

Item 13. Certain Relationships and Related Transactions and Director Independence 111

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 111 Part IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 111

Form 10-K Summary

Item 16. Form 10-K Summary 116 SIGNATURE 117 Table of Contents PART I Throughout this report, we refer to Choice Hotels International, Inc., together with its subsidiaries as "Choice," the "Company," "we," "us," or "our."

Forward-Looking Statements

Forward-Looking Statements Certain matters discussed in this report 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 include, but are not limited to, the ultimate outcome of any possible transaction between us and Wyndham Hotels & Resorts, Inc. ("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 herein); uncertainties as to whether Wyndham will cooperate with us regarding the proposed transaction; our 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; our ability to finance the proposed transaction with Wyndham; our indebtedness, including the substantial indebtedness we expect 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 we 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 ours, including our loyalty program; the possibility that we may be unable to achieve the benefits of the pr

Business

Item 1. Business Overview We are primarily a hotel franchisor operating in 50 states, the District of Columbia, and 46 countries and territories. At December 31, 2023, we had 7,527 hotels with 632,986 rooms open and operating, and 1,032 hotels with 105,062 rooms under construction, awaiting conversion or approved for development, or committed to future franchise development on outstanding master development agreements (collectively, "pipeline") in its global system. Our brand names include Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Ascend Hotel Collection, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Studios, WoodSpring Suites, Everhome Suites, and Cambria Hotels (collectively, the "legacy Choice brands"). Additionally, through the Radisson Hotels Americas acquisition completed on August 11, 2022, our brands expanded to include Radisson Blu, Radisson RED, Radisson, Park Plaza, Country Inn & Suites by Radisson, Radisson Inn & Suites SM , Park Inn by Radisson, Radisson Individuals, and Radisson Collection (collectively, the "legacy Radisson brands"), which are located across the United States, Canada, the Caribbean and Latin America (the "Americas"). The hotel franchising business represents the Company's primary operations. The Company's domestic operations are conducted through direct franchising relationships, the ownership of seven Cambria and three legacy Radisson Hotels Americas open and operating hotels, and the management of 14 hotels (inclusive of four owned hotels), while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee. As a result of our master franchise relationships and international ma

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