Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-13393 | |
Entity Registrant Name | CHOICE HOTELS INTERNATIONAL INC /DE | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-1209792 | |
Entity Address, Address Line One | 1 Choice Hotels Circle, | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Rockville, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20850 | |
City Area Code | 301 | |
Local Phone Number | 592-5000 | |
Title of 12(b) Security | Common Stock, Par Value $0.01 per share | |
Trading Symbol | CHH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,629,330 | |
Entity Central Index Key | 0001046311 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES | ||||
Revenues | $ 323,258 | $ 210,403 | $ 784,328 | $ 579,574 |
Total revenues | 323,369 | 210,771 | 784,660 | 580,679 |
OPERATING EXPENSES | ||||
Selling, general and administrative | 35,110 | 31,779 | 99,847 | 104,098 |
Depreciation and amortization | 5,883 | 6,382 | 18,477 | 19,309 |
Marketing and reservation system | 116,216 | 113,808 | 327,674 | 333,564 |
Owned hotels | 7,054 | 3,812 | 16,534 | 12,822 |
Total operating expenses | 164,263 | 155,781 | 462,532 | 469,793 |
Loss on impairment of assets | 0 | (4,290) | 0 | (5,516) |
Operating income | 159,106 | 50,700 | 322,128 | 105,370 |
OTHER INCOME AND EXPENSES, NET | ||||
Interest expense | 11,638 | 12,691 | 35,106 | 37,153 |
Interest income | (1,202) | (1,744) | (3,717) | (6,277) |
Loss on extinguishment of debt | 0 | 15,958 | 0 | 16,565 |
Other (gains) losses | 407 | (2,030) | (2,906) | (858) |
Equity in net (gain) loss of affiliates | (3,326) | 1,731 | 1,492 | 7,172 |
Total other income and expenses, net | 7,517 | 26,606 | 29,975 | 53,755 |
Income before income taxes | 151,589 | 24,094 | 292,153 | 51,615 |
Income tax expense (benefit) | 34,934 | 9,594 | 67,279 | (15,907) |
Net income | $ 116,655 | $ 14,500 | $ 224,874 | $ 67,522 |
Basic earnings (losses) per share (in dollars per share) | $ 2.10 | $ 0.26 | $ 4.05 | $ 1.22 |
Diluted earning (losses) per share (in dollars per share) | 2.08 | 0.26 | 4.01 | 1.21 |
Cash dividends declared per share (in dollars per share) | $ 0.225 | $ 0 | $ 0.450 | $ 0.225 |
Royalty fees | ||||
REVENUES | ||||
Revenues | $ 127,317 | $ 79,666 | $ 299,606 | $ 200,157 |
Initial franchise and relicensing fees | ||||
REVENUES | ||||
Revenues | 6,149 | 6,071 | 18,904 | 20,031 |
Procurement services | ||||
REVENUES | ||||
Revenues | 13,010 | 10,115 | 36,293 | 34,609 |
Marketing and reservation system | ||||
REVENUES | ||||
Revenues | 156,871 | 107,141 | 384,380 | 297,203 |
Owned hotels | ||||
REVENUES | ||||
Revenues | 11,266 | 4,093 | 24,392 | 15,407 |
Owned hotels | 11,377 | 4,201 | 24,724 | 15,731 |
Other | ||||
REVENUES | ||||
Revenues | 8,645 | 3,317 | 20,753 | 12,167 |
Owned hotels | $ 8,645 | $ 3,577 | $ 20,753 | $ 12,948 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 116,655 | $ 14,500 | $ 224,874 | $ 67,522 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | (57) | 240 | 66 | (237) |
Other comprehensive income (loss), net of tax | (57) | 240 | 66 | (237) |
Comprehensive income | $ 116,598 | $ 14,740 | $ 224,940 | $ 67,285 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 415,116 | $ 234,779 |
Accounts receivable (net of allowance for credit losses of $48,275 and $59,424, respectively) | 197,999 | 149,921 |
Income taxes receivable | 0 | 4,186 |
Notes receivable (net of allowance for credit losses of $7,428 and $4,179, respectively) | 71,334 | 24,048 |
Prepaid expenses and other current assets | 26,520 | 19,980 |
Total current assets | 710,969 | 432,914 |
Property and equipment, at cost (net of accumulated depreciation and amortization of $248,693 and $223,421, respectively) | 351,768 | 334,901 |
Operating lease right-of-use assets | 10,655 | 17,688 |
Goodwill | 159,196 | 159,196 |
Intangible assets (net of accumulated amortization of $175,548 and $163,128, respectively) | 306,008 | 303,725 |
Notes receivable (net of allowance for credit losses of $12,611 and $15,305, respectively) | 67,755 | 95,785 |
Investments, employee benefit plans, at fair value | 31,285 | 29,104 |
Investments in unconsolidated entities | 42,961 | 57,879 |
Deferred income taxes | 101,922 | 67,745 |
Other assets | 83,415 | 88,396 |
Total assets | 1,865,934 | 1,587,333 |
Current liabilities | ||
Accounts payable | 88,056 | 83,329 |
Accrued expenses and other current liabilities | 129,173 | 78,920 |
Deferred revenue | 80,607 | 50,290 |
Current portion of long-term debt | 216,217 | 0 |
Liability for guest loyalty program | 76,541 | 43,308 |
Total current liabilities | 590,594 | 255,847 |
Long-term debt | 843,820 | 1,058,738 |
Long-term deferred revenue | 106,410 | 122,406 |
Deferred compensation and retirement plan obligations | 35,958 | 33,756 |
Income taxes payable | 20,642 | 23,394 |
Operating lease liabilities | 5,666 | 12,739 |
Liability for guest loyalty program | 40,236 | 77,071 |
Other liabilities | 10,462 | 9,134 |
Total liabilities | 1,653,788 | 1,593,085 |
Commitments and Contingencies | ||
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at September 30, 2021 and December 31, 2020; 55,630,704 and 55,535,554 shares outstanding at September 30, 2021 and December 31, 2020, respectively | 951 | 951 |
Additional paid-in-capital | 253,361 | 233,921 |
Accumulated other comprehensive loss | (4,580) | (4,646) |
Treasury stock, at cost; 39,434,934 and 39,530,084 shares at September 30, 2021 and December 31, 2020, respectively | (1,261,926) | (1,260,478) |
Retained earnings | 1,224,340 | 1,024,500 |
Total shareholders’ equity (deficit) | 212,146 | (5,752) |
Total liabilities and shareholders’ equity (deficit) | $ 1,865,934 | $ 1,587,333 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss, current | $ (48,275) | $ (59,424) |
Allowance for credit losses, current | (7,428) | (4,179) |
Accumulated depreciation and amortization, property, plant and equipment | 248,693 | 223,421 |
Intangible assets, accumulated amortization | 175,548 | 163,128 |
Allowance for credit losses, noncurrent | $ (12,611) | $ (15,305) |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 |
Common stock, shares issued (in shares) | 95,065,638 | 95,065,638 |
Common stock, shares outstanding (in shares) | 55,630,704 | 55,535,554 |
Treasury stock, shares (in shares) | 39,434,934 | 39,530,084 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 224,874 | $ 67,522 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 18,477 | 19,309 |
Depreciation and amortization – marketing and reservation system | 18,364 | 14,994 |
Franchise agreement acquisition cost amortization | 9,734 | 8,343 |
Loss on impairment of assets | 0 | 5,516 |
Loss on extinguishment of debt | 0 | 16,565 |
Non-cash stock compensation and other charges | 24,277 | 4,748 |
Non-cash interest and other investment income | (11,039) | (465) |
Deferred income taxes | (34,285) | (31,411) |
Equity in net losses from unconsolidated joint ventures, less distributions received | 8,421 | 7,320 |
Franchise agreement acquisition costs, net of reimbursements | (28,466) | (16,960) |
Change in working capital and other | 14,887 | (25,801) |
Net cash provided by operating activities | 245,244 | 69,680 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in property and equipment | (46,098) | (32,176) |
Investment in intangible assets | (3,113) | (1,212) |
Proceeds from sale of tax credits for rehabilitation of historic building | 0 | 9,197 |
Contributions to equity method investments | (2,150) | (4,620) |
Distributions and sale proceeds from equity method investments | 15,554 | 3,362 |
Purchases of investments, employee benefit plans | (1,279) | (2,254) |
Proceeds from sales of investments, employee benefit plans | 2,487 | 2,372 |
Purchase/issuance of notes receivable | (17,918) | (9,845) |
Collection of notes receivable | 63 | 5,113 |
Other items, net | (115) | (473) |
Net cash used in investing activities | (52,569) | (30,536) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of Term Loan | 0 | 249,500 |
Proceeds from issuance of 2020 Senior Notes | 0 | 447,723 |
Net borrowings pursuant to revolving credit facilities | 0 | (18,200) |
Principal payments on long-term debt | 0 | (466,915) |
Payments to extinguish long-term debt | 0 | (14,347) |
Debt issuance costs | (365) | (4,620) |
Purchase of treasury stock | (10,039) | (55,158) |
Dividends paid | (12,528) | (25,274) |
Proceeds from exercise of stock options | 10,817 | 6,615 |
Net cash (used in) provided by financing activities | (12,115) | 119,324 |
Net change in cash and cash equivalents | 180,560 | 158,468 |
Effect of foreign exchange rate changes on cash and cash equivalents | (223) | (267) |
Cash and cash equivalents at beginning of period | 234,779 | 33,766 |
Cash and cash equivalents at end of period | 415,116 | 191,967 |
Cash payments during the period for: | ||
Income taxes, net of refunds | 58,229 | 41 |
Interest, net of capitalized interest | 36,519 | 37,338 |
Non-cash investing and financing activities: | ||
Dividends declared but not paid | 12,517 | 0 |
Investment in property, equipment and intangibles acquired in accounts payable and accrued liabilities | $ 6,920 | $ 757 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | [1] | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings | [1] | |
Beginning balance (in shares) at Dec. 31, 2019 | 55,702,628 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ (23,511) | $ 951 | $ 231,160 | $ (4,550) | $ (1,219,905) | $ 968,833 | $ (6,831) | $ (6,831) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 55,463 | 55,463 | |||||||||
Other comprehensive income (loss) | (664) | (664) | |||||||||
Share-based payment activity (in shares) | [2] | 294,826 | |||||||||
Share-based payment activity | [2] | (1,787) | (9,607) | 8,089 | (269) | ||||||
Dividends declared | [2] | (12,452) | (12,452) | ||||||||
Treasury purchases (in shares) | (657,031) | ||||||||||
Treasury purchases | (54,072) | (54,072) | |||||||||
Ending balance (in shares) at Mar. 31, 2020 | 55,340,423 | ||||||||||
Ending balance at Mar. 31, 2020 | $ (43,854) | $ 951 | 221,553 | (5,214) | (1,265,888) | 1,004,744 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.225 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 55,702,628 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ (23,511) | $ 951 | 231,160 | (4,550) | (1,219,905) | 968,833 | $ (6,831) | $ (6,831) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 67,522 | ||||||||||
Other comprehensive income (loss) | (237) | ||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 55,458,248 | ||||||||||
Ending balance at Sep. 30, 2020 | $ (21,404) | $ 951 | 228,521 | (4,787) | (1,262,724) | 1,016,635 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.225 | ||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 55,340,423 | ||||||||||
Beginning balance at Mar. 31, 2020 | $ (43,854) | $ 951 | 221,553 | (5,214) | (1,265,888) | 1,004,744 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | (2,441) | (2,441) | |||||||||
Other comprehensive income (loss) | 187 | 187 | |||||||||
Share-based payment activity (in shares) | [2] | 29,997 | |||||||||
Share-based payment activity | [2] | 3,820 | 2,166 | 1,825 | (171) | ||||||
Dividends declared | [2] | 0 | |||||||||
Treasury purchases (in shares) | (6,525) | ||||||||||
Treasury purchases | (464) | (464) | |||||||||
Ending balance (in shares) at Jun. 30, 2020 | 55,363,895 | ||||||||||
Ending balance at Jun. 30, 2020 | (42,752) | $ 951 | 223,719 | (5,027) | (1,264,527) | 1,002,132 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 14,500 | 14,500 | |||||||||
Other comprehensive income (loss) | 240 | 240 | |||||||||
Share-based payment activity (in shares) | [2] | 101,857 | |||||||||
Share-based payment activity | [2] | 7,229 | 4,802 | 2,424 | 3 | ||||||
Dividends declared | [2] | 0 | |||||||||
Treasury purchases (in shares) | (7,504) | ||||||||||
Treasury purchases | (621) | (621) | |||||||||
Ending balance (in shares) at Sep. 30, 2020 | 55,458,248 | ||||||||||
Ending balance at Sep. 30, 2020 | $ (21,404) | $ 951 | 228,521 | (4,787) | (1,262,724) | 1,016,635 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0 | ||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 55,535,554 | 55,535,554 | |||||||||
Ending balance at Dec. 31, 2020 | $ (5,752) | $ 951 | 233,921 | (4,646) | (1,260,478) | 1,024,500 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.215 | ||||||||||
Net income | $ 22,337 | 22,337 | |||||||||
Other comprehensive income (loss) | 52 | 52 | |||||||||
Share-based payment activity (in shares) | [2] | 48,781 | |||||||||
Share-based payment activity | [2] | 7,644 | 3,617 | 4,030 | (3) | ||||||
Dividends declared | [2] | 0 | |||||||||
Treasury purchases (in shares) | (46,499) | ||||||||||
Treasury purchases | (5,046) | (5,046) | |||||||||
Ending balance (in shares) at Mar. 31, 2021 | 55,537,836 | ||||||||||
Ending balance at Mar. 31, 2021 | $ 19,235 | $ 951 | 237,538 | (4,594) | (1,261,494) | 1,046,834 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 55,535,554 | 55,535,554 | |||||||||
Beginning balance at Dec. 31, 2020 | $ (5,752) | $ 951 | 233,921 | (4,646) | (1,260,478) | 1,024,500 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 224,874 | ||||||||||
Other comprehensive income (loss) | $ 66 | ||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 55,630,704 | 55,630,704 | |||||||||
Ending balance at Sep. 30, 2021 | $ 212,146 | $ 951 | 253,361 | (4,580) | (1,261,926) | 1,224,340 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.450 | ||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 55,537,836 | ||||||||||
Beginning balance at Mar. 31, 2021 | $ 19,235 | $ 951 | 237,538 | (4,594) | (1,261,494) | 1,046,834 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 85,882 | 85,882 | |||||||||
Other comprehensive income (loss) | 71 | 71 | |||||||||
Share-based payment activity (in shares) | [2] | 111,895 | |||||||||
Share-based payment activity | [2] | 12,583 | 9,066 | 3,516 | 1 | ||||||
Dividends declared | [2] | (12,521) | (12,521) | ||||||||
Treasury purchases (in shares) | (2,738) | ||||||||||
Treasury purchases | (317) | (317) | |||||||||
Ending balance (in shares) at Jun. 30, 2021 | 55,646,993 | ||||||||||
Ending balance at Jun. 30, 2021 | $ 104,933 | $ 951 | 246,604 | (4,523) | (1,258,295) | 1,120,196 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.225 | ||||||||||
Net income | $ 116,655 | 116,655 | |||||||||
Other comprehensive income (loss) | (57) | (57) | |||||||||
Share-based payment activity (in shares) | [2] | 23,757 | |||||||||
Share-based payment activity | [2] | 7,808 | 6,757 | 1,045 | 6 | ||||||
Dividends declared | [2] | (12,517) | (12,517) | ||||||||
Treasury purchases (in shares) | (40,046) | ||||||||||
Treasury purchases | $ (4,676) | (4,676) | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 55,630,704 | 55,630,704 | |||||||||
Ending balance at Sep. 30, 2021 | $ 212,146 | $ 951 | $ 253,361 | $ (4,580) | $ (1,261,926) | $ 1,224,340 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.225 | ||||||||||
[1] | Reflects the cumulative effect of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) and subsequent amendments issued thereafter (collectively "Topic 326"), which was adopted on January 1, 2020. Refer to Note 3. | ||||||||||
[2] | During the fourth quarter of 2019, the Company's board of directors announced a 5% increase to the quarterly dividend rate to $0.225 per share from $0.215 per share, beginning with the dividend payable in the first quarter of 2020. On February 28, 2020, the Company’s board of directors declared a quarterly cash dividend of $0.225 per share of common stock. The dividend was payable on April 16, 2020 to shareholders of record on April 2, 2020. In April 2020, subsequent to the payment of the dividend and in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. During 2020 and 2021, accumulated dividends were paid to certain shareholders upon vesting of certain performance vested restricted stock units ("PVRSU") which are captured in Share-based payment activity. On May 7, 2021 and September 9, 2021, the Company's board of directors declared a quarterly cash dividend of $0.225 per share of common stock. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per share (in dollars per share) | $ 0.225 | |
Accounting standards update | Accounting Standards Update 2016-13 [Member] | |
Increase to quarterly dividend rate | 5.00% |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and its subsidiaries (together the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2021. Interim results are not necessarily indicative of the entire year results. Certain prior year amounts in our consolidated financial statements have been reclassified in order to maintain comparability with current year presentation. Foreign currency transaction gains and losses that were previously presented in selling, general and administrative ("SG&A") expenses are now presented within other gain (loss) in the consolidated statements of income. The reclassification had no effect on the Company’s previously reported results of operations. Summary of Significant Accounting Policies The Company’s significant accounting policies are detailed in the “Summary of Significant Accounting Policies” section of Note 1 in the Annual Report on Form 10-K for the year ended December 31, 2020. The significant accounting policies that changed in 2021 are set forth below. Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance in Accounting Standards Codification ("ASC") 740, Income Taxes. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Contract Liabilities Contract liabilities relate to (i) advance consideration received, such as initial franchise and relicensing fees paid when a franchise agreement is executed and system implementation fees paid at time of installation, for services considered to be part of the brand intellectual property performance obligation and (ii) amounts received when Choice Privileges points are issued, but for which revenue is not yet recognized since the related points have not been redeemed. Deferred revenues from initial and relicensing fees and system implementation fees will typically be recognized over a five Significant changes in the contract liabilities balances during the period December 31, 2020 to September 30, 2021 are as follows: (in thousands) Balance as of December 31, 2020 $ 156,227 Increases to the contract liability balance due to cash received 76,936 Revenue recognized in the period (58,264) Balance as of September 30, 2021 $ 174,899 Remaining Performance Obligations The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $174.9 million as of September 30, 2021. This amount represents fixed transaction price that will be recognized as revenue in future periods, which is captured in the consolidated balance sheet as current and non-current deferred revenue. Based on practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which we recognize revenue at the amount to which we have the right to invoice for services performed, or (iii) contracts with an expected original duration of one year or less. Disaggregation of Revenue Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 127,317 $ — $ 127,317 $ 79,666 $ — $ 79,666 Initial franchise and relicensing fees 6,149 — 6,149 6,071 — 6,071 Procurement services 12,285 725 13,010 9,620 495 10,115 Marketing and reservation system 145,216 11,655 156,871 93,327 13,814 107,141 Owned hotels 9,614 1,652 11,266 3,498 595 4,093 Other 8,645 — 8,645 3,317 — 3,317 Total Topic 606 revenues $ 309,226 $ 14,032 323,258 $ 195,499 $ 14,904 210,403 Non-Topic 606 revenues 111 368 Total revenues $ 323,369 $ 210,771 Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 299,606 $ — $ 299,606 $ 200,157 $ — $ 200,157 Initial franchise and relicensing fees 18,904 — 18,904 20,031 — 20,031 Procurement services 34,526 1,767 36,293 33,069 1,540 34,609 Marketing and reservation system 346,211 38,169 384,380 247,092 50,111 297,203 Owned hotels 20,683 3,709 24,392 13,159 2,248 15,407 Other 20,753 — 20,753 12,167 — 12,167 Total Topic 606 revenues $ 740,683 $ 43,645 784,328 $ 525,675 $ 53,899 579,574 Non-Topic 606 revenues 332 1,105 Total revenues $ 784,660 $ 580,679 Non-Topic 606 revenues primarily represent revenue from leasing and are presented in Owned hotels and Other revenues in the consolidated statements of income. As presented in Note 11, the Corporate & Other segment amounts represent $13.5 million and $6.4 million for the three months ended September 30, 2021 and 2020, respectively, and $30.5 million and $21.8 million for the nine months ended September 30, 2021 and 2020, respectively, and are included in the Over time column of Other revenues and the Owned hotels and Non-Topic 606 revenues rows. The remaining revenues relate to the Hotel Franchising segment. Royalty fees and Marketing and reservation system revenues are presented net of intersegment revenues of $0.9 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.9 million and $1.2 million for the nine months ended September 30, 2021 and 2020, respectively. |
Receivables and Allowance for C
Receivables and Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2021 | |
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] | |
Receivables and Allowance for Credit Losses | 90 days Total Current Total As of September 30, 2021 Senior $ — $ — $ 17,917 $ 17,917 $ 105,609 $ 123,526 Subordinated — — 8,838 8,838 25,354 34,192 Unsecured — — — — 1,410 1,410 $ — $ — $ 26,755 $ 26,755 $ 132,373 $ 159,128 As of December 31, 2020 Senior $ — $ — $ 15,200 $ 15,200 $ 89,516 $ 104,716 Subordinated — — 2,209 2,209 31,025 33,234 Unsecured — — — — 1,367 1,367 $ — $ — $ 17,409 $ 17,409 $ 121,908 $ 139,317 The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of September 30, 2021. Refer to Note 12. The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $138.5 million and $119.3 million as of September 30, 2021 and December 31, 2020, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). These loans have stated fixed and/or variable interest amounts. Accounts Receivable Accounts receivable consist primarily of franchise and related fees due from hotel franchisees and are recorded at the invoiced amount. During the nine months ended September 30, 2020, the Company recorded provisions for credit losses on accounts receivable of $10.4 million in SG&A expenses and $18.0 million in marketing and reservation system expenses, in consideration of the economic and credit conditions resulting from the COVID-19 pandemic and estimates of other expected credit losses. During nine months ended September 30, 2021, the Company recorded reversals of provisions for credit losses on accounts receivable of $2.2 million in SG&A expenses and $4.2 million in marketing and reservation system expenses, after considering improved collection patterns and economic and credit conditions." id="sjs-B4">Receivables and Allowance for Credit Losses Notes Receivable The Company has provided financing in the form of notes receivable loans to franchisees to support the development of properties in strategic markets. The Company's credit quality indicator is the level of security in the note receivable. The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows: (in thousands) September 30, 2021 December 31, 2020 Senior $ 123,526 $ 104,716 Subordinated 34,192 33,234 Unsecured 1,410 1,367 Total notes receivable 159,128 139,317 Total allowance for notes receivable credit losses (20,039) (19,484) Total notes receivable, net of allowance $ 139,089 $ 119,833 Current portion, net of allowance $ 71,334 $ 24,048 Long-term portion, net of allowance $ 67,755 $ 95,785 During the second quarter of 2021, the Company acquired a senior note collateralized by an operating hotel for $17.9 million. The acquired senior note has an origination date in June 2018. Amortized cost basis by year of origination and credit quality indicator are as follows: (in thousands) 2021 2020 2019 Prior Total Senior $ — $ — $ 28,867 $ 94,659 $ 123,526 Subordinated — — 2,747 31,445 34,192 Unsecured — — — 1,410 1,410 Total notes receivable $ — $ — $ 31,614 $ 127,514 $ 159,128 The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses, including the impacts of adopting Topic 326: (in thousands) September 30, 2021 December 31, 2020 Beginning balance $ 19,484 $ 4,556 Allowances established from adoption of Topic 326 — 8,348 Provision for credit losses 555 7,634 Write-offs — (1,054) Ending balance $ 20,039 $ 19,484 The provisions recorded in the nine months ended September 30, 2021 primarily result from changes in the classification of certain loans as collateral-dependent and associated revisions to their allowances. Allowances for credit losses attributable to collateral-dependent loans are $9.1 million and $7.8 million as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, three loans with senior and/or subordinated tranches met the definition of collateral-dependent and are collateralized by either land parcels, an operating hotel, or membership interests in the borrowing entities. The Company used a discounted cash flow ("DCF") technique to project cash flows or a market approach via quoted market prices to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as level three of the fair value measurement hierarchy, as there are unobservable inputs which are significant to the overall fair value. Based on these analyses, the fair value of collateral secures the carrying value of each loan to a significant extent. During the first quarter of 2021, a loan with senior and subordinated tranches, that met the definition of collateral-dependent as of December 31, 2020, was restructured and as a result no longer meets the classification of collateral-dependent as of September 30, 2021. In September 2021, the Company reached a settlement with a borrower holding a loan classified as collateral-dependent, collateralized by an operating hotel. The key terms of the settlement resulted in a deed in lieu of foreclosure on the operating hotel in exchange for releasing obligations pursuant to the senior and mezzanine loans and the associated franchise agreement. The property was exchanged in full settlement of the senior and mezzanine loans and will be recorded at fair value as of the acquisition date of October 1, 2021. The Company will account for the acquisition of the hotel as an asset acquisition in the fourth quarter of 2021. As a result of the COVID-19 pandemic, the Company extended interest deferral terms on certain notes receivable. The Company considers loans past due and in default when payments are not made when due in accordance with then current loan provisions or terms extended to borrowers, including loans with concessions or interest deferral. The Company suspends the accrual of interest when payments on loans are more than 30 days past due or upon a loan being classified as collateral-dependent. The Company applies payments received for loans on non-accrual status first to interest and then to principal. The Company does not resume interest accrual until all delinquent payments are received based on then current loan provisions. The amortized cost basis of notes receivable on non-accrual status was $68.7 million and $28.9 million at September 30, 2021 and December 31, 2020, respectively. The Company has identified loans totaling approximately $13.1 million as of both September 30, 2021 and December 31, 2020, with stated interest rates that are less than market rate, representing a total unamortized discount of $0.4 million and $0.8 million as of September 30, 2021 and December 31, 2020, respectively. These discounts are reflected as a reduction of the outstanding loan amounts and are amortized over the life of the related loan. The past due balances by credit quality indicator of notes receivable are as follows: (in thousands) 1- 30 days 31-89 days > 90 days Total Current Total As of September 30, 2021 Senior $ — $ — $ 17,917 $ 17,917 $ 105,609 $ 123,526 Subordinated — — 8,838 8,838 25,354 34,192 Unsecured — — — — 1,410 1,410 $ — $ — $ 26,755 $ 26,755 $ 132,373 $ 159,128 As of December 31, 2020 Senior $ — $ — $ 15,200 $ 15,200 $ 89,516 $ 104,716 Subordinated — — 2,209 2,209 31,025 33,234 Unsecured — — — — 1,367 1,367 $ — $ — $ 17,409 $ 17,409 $ 121,908 $ 139,317 The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of September 30, 2021. Refer to Note 12. The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $138.5 million and $119.3 million as of September 30, 2021 and December 31, 2020, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). These loans have stated fixed and/or variable interest amounts. Accounts Receivable Accounts receivable consist primarily of franchise and related fees due from hotel franchisees and are recorded at the invoiced amount. During the nine months ended September 30, 2020, the Company recorded provisions for credit losses on accounts receivable of $10.4 million in SG&A expenses and $18.0 million in marketing and reservation system expenses, in consideration of the economic and credit conditions resulting from the COVID-19 pandemic and estimates of other expected credit losses. During nine months ended September 30, 2021, the Company recorded reversals of provisions for credit losses on accounts receivable of $2.2 million in SG&A expenses and $4.2 million in marketing and reservation system expenses, after considering improved collection patterns and economic and credit conditions. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities The Company maintains a portfolio of investments owned through noncontrolling interests in equity method investments with one or more partners. The Company has equity method investments in joint ventures that represent VIEs totaling $40.5 million and $56.9 million on the consolidated balance sheets at September 30, 2021 and December 31, 2020, respectively. These investments relate to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. Based on an analysis of who has the power to direct the activities that most significantly impact these entities performance and who has an obligation to absorb losses of these entities or a right to receive benefits from these entities that could potentially be significant to the entity, the Company determined that it is not the primary beneficiary of any of these VIEs. The Company based its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, operating management and financial agreements. Although the Company is not the primary beneficiary of these VIEs, it does exercise significant influence through its equity ownership and as a result the Company's investment in these entities is accounted for under the equity method. For the three months ended September 30, 2021 and 2020, the Company recognized (gains) losses totaling $(2.5) million and $2.3 million, respectively, from these investments that represent VIEs. For the nine months ended September 30, 2021 and 2020, the Company recognized losses totaling $3.0 million and $6.9 million, respectively, from these investments that represent VIEs. The Company's maximum exposure to losses related to its investments in VIEs is limited to its equity investments as well as certain limited payment guaranties described in Note 12 of these financial statements. During the first quarter of 2021, the Company recognized an other-than-temporary impairment of $4.8 million related to an equity method investment. The Company assessed the estimated fair value of the investment from comparable market transactions of the investment. Based on this analysis, the Company determined that the fair market value declined below the carrying value and the decline is other-than-temporary. As a result, the Company recorded an other-than-temporary impairment from the carrying value to the estimated fair value for the investment. The other-than-temporary impairment is classified as equity in net loss of affiliates in the consolidated statements of income and captured in the Hotel Franchising reportable segment in Note 11. During the second quarter of 2021, the Company sold its ownership interest in three separate equity method investments. The Company recognized a cumulative gain of $2.6 million on the sales of these investments, which is recorded in equity in net (gain) loss of affiliates. During the third quarter of 2021, a joint venture for which the Company maintains an ownership interest sold its underlying assets. The Company received a distribution and recognized a gain of $4.3 million, which is recorded in equity in net (gain) loss of affiliates. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following: September 30, 2021 December 31, 2020 (in thousands) $450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $5.7 million and $6.1 million at September 30, 2021 and December 31, 2020, respectively $ 444,318 $ 443,860 $400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $4.9 million and $5.4 million at September 30, 2021 and December 31, 2020, respectively 395,086 394,635 $400 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.4 million and $0.7 million at September 30, 2021 and December 31, 2020, respectively 216,217 215,827 $600 million senior unsecured revolving credit facility (1) — — Economic development loans with an effective interest rate of 3.00% at September 30, 2021 and December 31, 2020, respectively 4,416 4,416 Total debt $ 1,060,037 $ 1,058,738 Less current portion 216,217 — Long-term debt $ 843,820 $ 1,058,738 (1) During the third quarter of 2020, the Company utilized excess cash on hand to pay down its senior unsecured revolving credit facility balance in full and the facility remains undrawn as of September 30, 2021 and December 31, 2020. As there are no outstanding borrowings at September 30, 2021 or December 31, 2020, deferred issuance costs for the senior unsecured revolving credit facility of $2.4 million and $2.4 million, respectively, are presented in non-current Other assets in the consolidated balance sheets. In August 2021, the Company executed a one-year extension on the senior unsecured revolving credit facility for $540 million of the $600 million total capacity in exchange for fees of $0.4 million. The extended maturity date is August 20, 2026. Refer to Note 12 and the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2021 and 2020 are as follows: (in thousands) Balance as of December 31, 2020 $ (4,646) Other comprehensive income (loss) before reclassification 66 Net current period other comprehensive income (loss) 66 Balance as of September 30, 2021 $ (4,580) (in thousands) Balance as of December 31, 2019 $ (4,550) Other comprehensive income (loss) before reclassification (237) Net current period other comprehensive income (loss) (237) Balance as of September 30, 2020 $ (4,787) The other comprehensive income (loss) before reclassification for both the nine months ended September 30, 2021 and 2020 relate to foreign currency items. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs on a recurring basis. Level 1 : Quoted prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of marketable securities (primarily mutual funds) held in the Deferred Compensation Plan. Level 2 : Observable inputs, other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable. The Company’s Level 2 assets consist of money market funds held in the Company's Deferred Compensation Plan. Level 3 : Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument. The Company does not currently have any assets recorded at fair value whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the nine months ended September 30, 2021. As of September 30, 2021 and December 31, 2020, the Company had the following assets recorded in the consolidated balance sheets measured at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using (in thousands) Total Level 1 Level 2 Level 3 As of September 30, 2021 Mutual funds (1) $ 31,069 $ 31,069 $ — $ — Money market funds (1) 2,519 — 2,519 — Total $ 33,588 $ 31,069 $ 2,519 $ — As of December 31, 2020 Mutual funds (1) $ 28,520 $ 28,520 $ — $ — Money market funds (1) 2,836 — 2,836 — Total $ 31,356 $ 28,520 $ 2,836 $ — (1) Included in Investments, employee benefit plans, at fair value and Other current assets on the consolidated balance sheets. Other financial instruments disclosure The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rates of the Company's senior unsecured revolving credit facility adjust frequently based on current market rates; accordingly, we believe its carrying amount, when amounts are drawn, approximates fair value. The fair values of the Company's senior unsecured notes are classified as Level 2, as the significant inputs are observable in an active market. Refer to Note 5 for further information on debt. At September 30, 2021 and December 31, 2020, the carrying amounts and fair values are as follows: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2020 Senior Notes $ 444,318 $ 484,574 $ 443,860 $ 498,290 2019 Senior Notes 395,086 428,544 394,635 438,104 2012 Senior Notes 216,217 224,688 215,827 232,381 Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be possible or a prudent management decision. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates were 23.1% and 39.4% for the three months ended September 30, 2021 and 2020, respectively. The effective income tax rates were 23.0% and (30.8)% for the nine months ended September 30, 2021 and 2020, respectively. The effective income tax rate for the three months ended September 30, 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by $0.4 million of excess tax benefits from share-based compensation and $0.7 million of additional federal research and development ("R&D") tax credits. The effective income tax rate for the nine months ended September 30, 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by $2.4 million of excess tax benefits from share-based compensation and $0.7 million of additional federal R&D tax credits. On January 1, 2018, the Company adopted ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other than Inventory ("ASU 2016-16"), which provides guidance on recognition of current income tax consequences for inter-company asset transfers (other than inventory) at the time of transfer. On January 1, 2020, the Company completed a reorganization of its foreign legal entity structure that resulted in a $30.6 million tax benefit. In accordance with ASU 2016-16, the Company recorded the $30.6 million benefit and a corresponding deferred tax asset in the first quarter of 2020. Due to a decrease in the forecasted income of international entities resulting from adverse impacts of the COVID-19 pandemic, the Company recorded a valuation allowance of $5.1 million in the third quarter of 2020 reflecting a change in the anticipated realizability of this deferred tax asset. The effective income tax rate for the three months ended September 30, 2020 was higher than the U.S. federal income tax rate of 21.0% primarily due to the establishment of a valuation allowance of $5.1 million and state income taxes, partially offset by the impact of foreign operations, a $1.5 million adjustment to our deferred taxes, and $0.7 million of excess tax benefits from share-based compensation. The effective income tax rate for the nine months ended September 30, 2020 was lower than the U.S. federal income tax rate of 21.0% due to the impacts of ASU-2016 and the corresponding valuation allowance, $3.4 million of excess tax benefits from share-based compensation, an adjustment to our deferred taxes, and the impact of foreign operations, partially offset by state income taxes and a change in estimated uncertain tax positions. |
Share-Based Compensation and Ca
Share-Based Compensation and Capital Stock | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation and Capital Stock | Share-Based Compensation and Capital Stock The components of the Company’s pretax share-based compensation activity and associated income tax expense are as follows for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Stock options $ 933 $ 497 $ 2,482 $ 1,478 Restricted stock awards 2,285 2,206 7,126 6,249 Performance vested restricted stock units 2,950 675 7,760 (4,836) Total share-based compensation expense $ 6,168 $ 3,378 $ 17,368 $ 2,891 Income tax expense $ 1,498 $ 805 $ 4,219 $ 689 A summary of share-based award activity as of and changes during the nine months ended September 30, 2021 are presented below: Stock Options Restricted Stock Performance Vested Options Weighted Weighted Shares Weighted Shares Weighted Outstanding at January 1, 2021 819,610 $ 70.48 304,439 $ 84.48 321,752 $ 109.25 Granted 280,811 104.87 55,439 107.49 98,544 108.75 Performance-Based Leveraging (1) — — — — 75,476 107.51 Exercised/Vested (181,458) 59.61 (106,167) 80.80 (3,986) 81.55 Expired — — — — (72,955) 81.55 Forfeited (1,629) 104.87 (15,401) 89.79 (3,324) 95.98 Outstanding at September 30, 2021 917,334 $ 83.10 5.8 years 238,310 $ 91.12 415,507 $ 114.05 Options exercisable at September 30, 2021 425,571 $ 67.02 3.1 years (1) PVRSUs outstanding have been increased by 75,476 units in the nine months ended September 30, 2021 due to the Company exceeding the targeted performance conditions contained in PVRSUs. Stock Options The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions: 2021 Grants Risk-free interest rate 0.94 % Expected volatility 29.23 % Expected life of stock option 5.9 years Dividend yield (1) 0.82 % Requisite service period 4 years Contractual life 10 years Weighted average fair value of options granted (per option) $ 28.00 (1) In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. On May 7, 2021 and September 9, 2021, the Company's board of directors declared a quarterly cash dividend of $0.225 per share of common stock. Restricted Stock Awards The Company grants two types of restricted stock awards: i) shares of restricted stock and ii) restricted stock units ("RSU"). Shares of restricted stock provide the participant a non-forfeitable right to dividends, if declared, and the right to vote as a shareholder while the shares are unvested. RSUs provide the participant declared dividends that are contingent upon vesting of the award. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. The fair value of restricted stock awards is measured by the market price of the Company's common stock on the date of grant. The service period of restricted stock awards granted during the nine months ended September 30, 2021 range from 9 to 48 months. Performance Vested Restricted Stock Units The Company grants three types of PVRSU awards: i) PVRSUs with performance conditions based on internal performance conditions, ii) PVRSUs with market conditions based on the Company's total shareholder return ("TSR") relative to a predetermined peer group, and iii) PVRSUs with both performance and market conditions. The vesting of PVRSU awards is contingent upon the Company achieving internal performance and/ or TSR targets over a specified period and the employees' continued employment for a service period. These performance and market conditions affect the number of shares that will ultimately vest. During the nine months ended September 30, 2021, the Company granted PVRSUs with market conditions, PVRSUs with performance conditions and PVRSUs with performance and market conditions with requisite service periods between 9 months and 60 months with award vesting ranges between 0% and 300% of the initial units granted. The fair value of PVRSUs with only internal performance conditions is measured by the market price of the Company's common stock on the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions. Management monitors current results and forecasts of the relevant internal performance and, as necessary, adjusts the performance-based leveraging of unvested PVRSUs. The fair value of PVRSUs with market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period, regardless of whether the market conditions are achieved and the awards ultimately vest. The fair value of PVRSUs with both performance and market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions, with subsequent adjustments made for performance-based leveraging of unvested PVRSUs, as necessary. During the nine months ended September 30, 2020, the Company reduced the leveraging factor for 230,647 unvested PVRSUs to 0%. Share Repurchases and Redemptions In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, the Company temporarily suspended activity under the Company's share repurchase program. On May 7, 2021, the Company's board of directors approved resumption of the share repurchase program. Refer to the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information. During the three and nine months ended September 30, 2021, there were 34,746 and 36,328 purchases of common stock under the share repurchase program at a total cost of $4.0 million and $4.2 million, respectively. During the three and nine months ended September 30, 2021, the Company redeemed 5,300 and 52,955 shares of common stock at a total cost of $0.7 million and $5.8 million, respectively, from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. These redemptions were outside the share repurchase program. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company’s shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic earnings per share (“EPS”) using the two-class method. As the shares of restricted stock are both potential shares of common stock and participating securities, the Company calculates diluted earnings per share by the more dilutive of the treasury stock method or the two-class method. The calculation of EPS for net income available to common shareholders excludes the distribution of dividends and undistributed earnings attributable to participating securities from the numerator. The diluted earnings weighted average shares of common stock outstanding includes stock options, PVRSUs and RSUs. The computation of basic and diluted earnings per share of common stock is as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share amounts) 2021 2020 2021 2020 Numerator: Net income $ 116,655 $ 14,500 $ 224,874 $ 67,522 (Income) loss allocated to participating securities (420) (78) (910) (378) Net income (loss) available to common shareholders $ 116,235 $ 14,422 $ 223,964 $ 67,144 Denominator: Weighted average shares of common stock outstanding – basic 55,427 55,106 55,360 55,167 Basic earnings per share $ 2.10 $ 0.26 $ 4.05 $ 1.22 Numerator: Net income $ 116,655 $ 14,500 $ 224,874 $ 67,522 (Income) loss allocated to participating securities (420) (78) (910) (377) Net income (loss) available to common shareholders $ 116,235 $ 14,422 $ 223,964 $ 67,145 Denominator: Weighted average shares of common stock outstanding – basic 55,427 55,106 55,360 55,167 Dilutive effect of stock options and PVRSUs 478 304 429 273 Weighted average shares of common stock outstanding – diluted 55,905 55,410 55,789 55,440 Diluted earnings per share $ 2.08 $ 0.26 $ 4.01 $ 1.21 The following securities have been excluded from the calculation of diluted weighted average shares of common stock outstanding as the inclusion of these securities would have an anti-dilutive effect or the performance or market conditions have not been met: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2021 2020 2021 2020 Stock options — 155 — 155 PVRSUs 155 234 155 234 |
Reportable Segment Information
Reportable Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Reportable Segment Information Hotel Franchising: Hotel Franchising includes the Company's hotel franchising operations consisting of its fourteen brands. The fourteen brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the hotel franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other hotel franchising related revenue. The Company is obligated under its hotel franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company's hotel franchising business. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in hotel franchising revenues and are offset by the related expenses paid for marketing and reservation system activities to calculate hotel franchising operating income. Equity in earnings or losses from hotel franchising related joint ventures is allocated to the Company's hotel franchising segment. The Company evaluates its hotel franchising segment based primarily on the results of the segment without allocating corporate expenses, indirect general and administrative expenses, interest expense, interest income, other gains and losses or income taxes, which are included in the Corporate & Other column. Corporate & Other revenues include owned hotel revenues, rental income related to an office building owned by the Company, and revenues related to the Company's SaaS technology solutions division which provide cloud-based property management software to non-franchised hoteliers. Intersegment revenue adjustment is from the elimination of Hotel Franchising revenue which include royalty and marketing and reservation system fees charged to our owned hotels against franchise fee expense recognized by our owned hotels in Corporate & Other operating income (loss). Our President and Chief Executive Officer, who is our chief operating decision maker, does not use assets by operating segment when assessing performance or making operating segment resource allocations and therefore assets by segment are not disclosed below. The following table presents the financial information for the Company's segments: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 310,703 $ 13,532 $ (866) $ 323,369 $ 204,717 $ 6,368 $ (314) $ 210,771 Operating income (loss) $ 169,516 $ (10,410) $ — $ 159,106 $ 70,940 $ (20,240) $ — $ 50,700 Income (loss) before income taxes $ 172,338 $ (20,749) $ — $ 151,589 $ 69,208 $ (45,114) $ — $ 24,094 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 756,013 $ 30,504 $ (1,857) $ 784,660 $ 560,082 $ 21,785 $ (1,188) $ 580,679 Operating income (loss) $ 360,269 $ (38,141) $ — $ 322,128 $ 154,770 $ (49,400) $ — $ 105,370 Income (loss) before income taxes $ 358,274 $ (66,121) $ — $ 292,153 $ 147,598 $ (95,983) $ — $ 51,615 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows. Contingencies The Company entered into various limited payment guaranties with regards to the Company’s VIEs supporting their efforts to develop and own hotels franchised under the Company’s brands. Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full or (d) the Company, through its affiliates, ceases to be a member of the VIE. The maximum exposure of principal incidental to these limited payment guaranties is $5.7 million, plus unpaid expenses and accrued unpaid interest. As of September 30, 2021 and December 31, 2020, the Company believed the likelihood of having to perform under the aforementioned limited payment guaranties was remote. In the event of performance, the Company has recourse for one of the transactions in the form of a membership interest pledge as collateral for the guaranty. Commitments The Company has the following commitments outstanding at September 30, 2021: • The Company provides financing in the form of franchise agreement acquisition payments to franchisees for property improvements, hotel development efforts and other purposes. These payments are typically made at commencement of construction or hotel opening, in accordance with agreed upon provisions in individual franchise agreements. At September 30, 2021, the Company had commitments to extend an additional $269.2 million for these purposes provided the conditions of the payment are met by its franchisees. • To the extent existing unconsolidated joint ventures proceed to the hotel construction phase, the Company is committed to make capital contributions totaling $7.5 million to support their efforts to construct Cambria hotels. • The Company committed to provide financing in the form of mezzanine loans or credit facilities to franchisees for Choice brand development efforts. At September 30, 2021, the Company has committed to provide an aggregate of approximately $7.7 million, upon certain conditions being met, and none of these amounts have been disbursed. • The Company’s franchise agreements require the payment of franchise fees, which include marketing and reservation system fees. In accordance with terms of our franchise agreements, the Company is obligated to use the marketing and reservation system revenues it collects from the current franchisees comprising its various hotel brands to provide marketing and reservation services appropriate to support the operation of the overall system. To the extent revenues collected exceed expenditures incurred, the Company has a commitment to the franchisee system to make expenditures in future years. Conversely, to the extent expenditures incurred exceed revenues collected, the Company has the contractual enforceable right to assess and collect such amounts. In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates potential liability. |
Transactions with Unconsolidate
Transactions with Unconsolidated Joint Ventures | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Transactions with Unconsolidated Joint Ventures | Transactions with Unconsolidated Joint Ventures The Company has a management fee arrangement for marketing services with a joint venture partner. For the three months ended September 30, 2021 and 2020, fees earned and payroll costs reimbursed under this arrangement totaled $0.6 million and $0.5 million, respectively. For both the nine months ended September 30, 2021 and 2020, fees earned and payroll costs reimbursed under this arrangement totaled $1.1 million and $0.9 million, respectively. The Company has entered into franchise agreements with certain of the unconsolidated joint ventures discussed in Note 4. Pursuant to these franchise agreements, for the three months ended September 30, 2021 and 2020, the Company recorded royalty, marketing reservation system, and other fees of approximately $8.0 million and $3.6 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded royalty, marketing reservation system, and other fees of approximately $15.0 million and $10.4 million, respectively. The Company recorded $3.0 million and $2.4 million as a receivable due from these joint ventures as of September 30, 2021 and December 31, 2020, respectively. |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | Assets Held for Sale Assets held for sale of $6.4 million are recorded within Prepaid expenses and other current assets on the consolidated balance sheets and relate to a commercial office building previously awarded to the Company pursuant to a court settlement. No revision to the carrying value was recorded upon reaching held for sale classification. As a result of the Company's long range planning process, management pursued a sale of the commercial office building. The building was sold in November 2021 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 4, 2021, an office lease with an approximate 10-year term with an unrelated third party commenced. The Company expects to account for this lease as an operating lease and establish a lease liability and right-of-use asset of approximately $34.6 million and $25.3 million, respectively, during the fourth quarter of 2021. On October 12, 2021, the Company executed a purchase and sale agreement for a parcel of land recorded at $8.7 million within Property and equipment, at cost, net on the consolidated balance sheets. As a result, this parcel of land is deemed to meet held for sale classification in October 2021. Management expects to sell the parcel of land in 2022. On October 21, 2021, the Company entered into an office lease agreement with an unrelated third-party with an approximately 11 year term. This office lease is expected to commence in 2023. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and its subsidiaries (together the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2021. Interim results are not necessarily indicative of the entire year results. Certain prior year amounts in our consolidated financial statements have been reclassified in order to maintain comparability with current year presentation. Foreign currency transaction gains and losses that were previously presented in selling, general and administrative ("SG&A") expenses are now presented within other gain (loss) in the consolidated statements of income. The reclassification had no effect on the Company’s previously reported results of operations. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance in Accounting Standards Codification ("ASC") 740, Income Taxes. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption does not have material impacts on our consolidated financial statements and disclosures. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule Of Contract with Customer, Liability | Significant changes in the contract liabilities balances during the period December 31, 2020 to September 30, 2021 are as follows: (in thousands) Balance as of December 31, 2020 $ 156,227 Increases to the contract liability balance due to cash received 76,936 Revenue recognized in the period (58,264) Balance as of September 30, 2021 $ 174,899 |
Schedule Of Disaggregation of Revenue | Disaggregation of Revenue Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 127,317 $ — $ 127,317 $ 79,666 $ — $ 79,666 Initial franchise and relicensing fees 6,149 — 6,149 6,071 — 6,071 Procurement services 12,285 725 13,010 9,620 495 10,115 Marketing and reservation system 145,216 11,655 156,871 93,327 13,814 107,141 Owned hotels 9,614 1,652 11,266 3,498 595 4,093 Other 8,645 — 8,645 3,317 — 3,317 Total Topic 606 revenues $ 309,226 $ 14,032 323,258 $ 195,499 $ 14,904 210,403 Non-Topic 606 revenues 111 368 Total revenues $ 323,369 $ 210,771 Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 299,606 $ — $ 299,606 $ 200,157 $ — $ 200,157 Initial franchise and relicensing fees 18,904 — 18,904 20,031 — 20,031 Procurement services 34,526 1,767 36,293 33,069 1,540 34,609 Marketing and reservation system 346,211 38,169 384,380 247,092 50,111 297,203 Owned hotels 20,683 3,709 24,392 13,159 2,248 15,407 Other 20,753 — 20,753 12,167 — 12,167 Total Topic 606 revenues $ 740,683 $ 43,645 784,328 $ 525,675 $ 53,899 579,574 Non-Topic 606 revenues 332 1,105 Total revenues $ 784,660 $ 580,679 |
Receivables and Allowance for_2
Receivables and Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule Of Notes Receivable | The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows: (in thousands) September 30, 2021 December 31, 2020 Senior $ 123,526 $ 104,716 Subordinated 34,192 33,234 Unsecured 1,410 1,367 Total notes receivable 159,128 139,317 Total allowance for notes receivable credit losses (20,039) (19,484) Total notes receivable, net of allowance $ 139,089 $ 119,833 Current portion, net of allowance $ 71,334 $ 24,048 Long-term portion, net of allowance $ 67,755 $ 95,785 |
Schedule Of Financing Receivable Credit Quality Indicators | Amortized cost basis by year of origination and credit quality indicator are as follows: (in thousands) 2021 2020 2019 Prior Total Senior $ — $ — $ 28,867 $ 94,659 $ 123,526 Subordinated — — 2,747 31,445 34,192 Unsecured — — — 1,410 1,410 Total notes receivable $ — $ — $ 31,614 $ 127,514 $ 159,128 |
Schedule Of Financing Receivable, Allowance for Credit Loss | The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses, including the impacts of adopting Topic 326: (in thousands) September 30, 2021 December 31, 2020 Beginning balance $ 19,484 $ 4,556 Allowances established from adoption of Topic 326 — 8,348 Provision for credit losses 555 7,634 Write-offs — (1,054) Ending balance $ 20,039 $ 19,484 |
Schedule Of Past Due Balances Of Notes Receivable | The past due balances by credit quality indicator of notes receivable are as follows: (in thousands) 1- 30 days 31-89 days > 90 days Total Current Total As of September 30, 2021 Senior $ — $ — $ 17,917 $ 17,917 $ 105,609 $ 123,526 Subordinated — — 8,838 8,838 25,354 34,192 Unsecured — — — — 1,410 1,410 $ — $ — $ 26,755 $ 26,755 $ 132,373 $ 159,128 As of December 31, 2020 Senior $ — $ — $ 15,200 $ 15,200 $ 89,516 $ 104,716 Subordinated — — 2,209 2,209 31,025 33,234 Unsecured — — — — 1,367 1,367 $ — $ — $ 17,409 $ 17,409 $ 121,908 $ 139,317 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule Of Components Of Debt | Debt consists of the following: September 30, 2021 December 31, 2020 (in thousands) $450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $5.7 million and $6.1 million at September 30, 2021 and December 31, 2020, respectively $ 444,318 $ 443,860 $400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $4.9 million and $5.4 million at September 30, 2021 and December 31, 2020, respectively 395,086 394,635 $400 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.4 million and $0.7 million at September 30, 2021 and December 31, 2020, respectively 216,217 215,827 $600 million senior unsecured revolving credit facility (1) — — Economic development loans with an effective interest rate of 3.00% at September 30, 2021 and December 31, 2020, respectively 4,416 4,416 Total debt $ 1,060,037 $ 1,058,738 Less current portion 216,217 — Long-term debt $ 843,820 $ 1,058,738 (1) During the third quarter of 2020, the Company utilized excess cash on hand to pay down its senior unsecured revolving credit facility balance in full and the facility remains undrawn as of September 30, 2021 and December 31, 2020. As there are no outstanding borrowings at September 30, 2021 or December 31, 2020, deferred issuance costs for the senior unsecured revolving credit facility of $2.4 million and $2.4 million, respectively, are presented in non-current Other assets in the consolidated balance sheets. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2021 and 2020 are as follows: (in thousands) Balance as of December 31, 2020 $ (4,646) Other comprehensive income (loss) before reclassification 66 Net current period other comprehensive income (loss) 66 Balance as of September 30, 2021 $ (4,580) (in thousands) Balance as of December 31, 2019 $ (4,550) Other comprehensive income (loss) before reclassification (237) Net current period other comprehensive income (loss) (237) Balance as of September 30, 2020 $ (4,787) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Fair Value Of Assets | As of September 30, 2021 and December 31, 2020, the Company had the following assets recorded in the consolidated balance sheets measured at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using (in thousands) Total Level 1 Level 2 Level 3 As of September 30, 2021 Mutual funds (1) $ 31,069 $ 31,069 $ — $ — Money market funds (1) 2,519 — 2,519 — Total $ 33,588 $ 31,069 $ 2,519 $ — As of December 31, 2020 Mutual funds (1) $ 28,520 $ 28,520 $ — $ — Money market funds (1) 2,836 — 2,836 — Total $ 31,356 $ 28,520 $ 2,836 $ — (1) Included in Investments, employee benefit plans, at fair value and Other current assets on the consolidated balance sheets. |
Schedule of Carrying Amounts and Fair Values | At September 30, 2021 and December 31, 2020, the carrying amounts and fair values are as follows: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2020 Senior Notes $ 444,318 $ 484,574 $ 443,860 $ 498,290 2019 Senior Notes 395,086 428,544 394,635 438,104 2012 Senior Notes 216,217 224,688 215,827 232,381 |
Share-Based Compensation and _2
Share-Based Compensation and Capital Stock (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Pre-Tax Stock-Based Compensation Expenses | The components of the Company’s pretax share-based compensation activity and associated income tax expense are as follows for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Stock options $ 933 $ 497 $ 2,482 $ 1,478 Restricted stock awards 2,285 2,206 7,126 6,249 Performance vested restricted stock units 2,950 675 7,760 (4,836) Total share-based compensation expense $ 6,168 $ 3,378 $ 17,368 $ 2,891 Income tax expense $ 1,498 $ 805 $ 4,219 $ 689 |
Summary of Change In Stock-Based Award Activity | A summary of share-based award activity as of and changes during the nine months ended September 30, 2021 are presented below: Stock Options Restricted Stock Performance Vested Options Weighted Weighted Shares Weighted Shares Weighted Outstanding at January 1, 2021 819,610 $ 70.48 304,439 $ 84.48 321,752 $ 109.25 Granted 280,811 104.87 55,439 107.49 98,544 108.75 Performance-Based Leveraging (1) — — — — 75,476 107.51 Exercised/Vested (181,458) 59.61 (106,167) 80.80 (3,986) 81.55 Expired — — — — (72,955) 81.55 Forfeited (1,629) 104.87 (15,401) 89.79 (3,324) 95.98 Outstanding at September 30, 2021 917,334 $ 83.10 5.8 years 238,310 $ 91.12 415,507 $ 114.05 Options exercisable at September 30, 2021 425,571 $ 67.02 3.1 years |
Schedule of Weighted Average Assumptions Of Black-Scholes Option-Pricing Model | The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions: 2021 Grants Risk-free interest rate 0.94 % Expected volatility 29.23 % Expected life of stock option 5.9 years Dividend yield (1) 0.82 % Requisite service period 4 years Contractual life 10 years Weighted average fair value of options granted (per option) $ 28.00 (1) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation Of Basic And Diluted Earnings Per Common Share | The computation of basic and diluted earnings per share of common stock is as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share amounts) 2021 2020 2021 2020 Numerator: Net income $ 116,655 $ 14,500 $ 224,874 $ 67,522 (Income) loss allocated to participating securities (420) (78) (910) (378) Net income (loss) available to common shareholders $ 116,235 $ 14,422 $ 223,964 $ 67,144 Denominator: Weighted average shares of common stock outstanding – basic 55,427 55,106 55,360 55,167 Basic earnings per share $ 2.10 $ 0.26 $ 4.05 $ 1.22 Numerator: Net income $ 116,655 $ 14,500 $ 224,874 $ 67,522 (Income) loss allocated to participating securities (420) (78) (910) (377) Net income (loss) available to common shareholders $ 116,235 $ 14,422 $ 223,964 $ 67,145 Denominator: Weighted average shares of common stock outstanding – basic 55,427 55,106 55,360 55,167 Dilutive effect of stock options and PVRSUs 478 304 429 273 Weighted average shares of common stock outstanding – diluted 55,905 55,410 55,789 55,440 Diluted earnings per share $ 2.08 $ 0.26 $ 4.01 $ 1.21 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities have been excluded from the calculation of diluted weighted average shares of common stock outstanding as the inclusion of these securities would have an anti-dilutive effect or the performance or market conditions have not been met: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2021 2020 2021 2020 Stock options — 155 — 155 PVRSUs 155 234 155 234 |
Reportable Segment Information
Reportable Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule Of Financial Information For Company's Franchising Segment | The following table presents the financial information for the Company's segments: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 310,703 $ 13,532 $ (866) $ 323,369 $ 204,717 $ 6,368 $ (314) $ 210,771 Operating income (loss) $ 169,516 $ (10,410) $ — $ 159,106 $ 70,940 $ (20,240) $ — $ 50,700 Income (loss) before income taxes $ 172,338 $ (20,749) $ — $ 151,589 $ 69,208 $ (45,114) $ — $ 24,094 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 756,013 $ 30,504 $ (1,857) $ 784,660 $ 560,082 $ 21,785 $ (1,188) $ 580,679 Operating income (loss) $ 360,269 $ (38,141) $ — $ 322,128 $ 154,770 $ (49,400) $ — $ 105,370 Income (loss) before income taxes $ 358,274 $ (66,121) $ — $ 292,153 $ 147,598 $ (95,983) $ — $ 51,615 |
Revenue - Textual (Details)
Revenue - Textual (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation | $ 174,900 | $ 174,900 | ||
Revenues | 323,258 | $ 210,403 | 784,328 | $ 579,574 |
Revenues | (323,369) | (210,771) | $ (784,660) | (580,679) |
Royalty fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Redemption of loyalty points period | 3 years | |||
Revenues | 127,317 | 79,666 | $ 299,606 | 200,157 |
Corporate & Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,500 | 6,400 | 30,500 | 21,800 |
Revenues | (13,532) | (6,368) | (30,504) | (21,785) |
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 866 | 314 | 1,857 | 1,188 |
Intersegment Eliminations | Royalty fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 900 | $ 300 | $ 1,900 | $ 1,200 |
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Deferred revenue, recognition period | 5 years | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Deferred revenue, recognition period | 10 years |
Revenue - Contract Liability (D
Revenue - Contract Liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Changes in Contract Liability [Roll Forward] | |
Balance as of December 31, 2020 | $ 156,227 |
Increases to the contract liability balance due to cash received | 76,936 |
Revenue recognized in the period | (58,264) |
Balance as of September 30, 2021 | $ 174,899 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | $ 323,258 | $ 210,403 | $ 784,328 | $ 579,574 |
Non-Topic 606 revenues | 111 | 368 | 332 | 1,105 |
Total revenues | 323,369 | 210,771 | 784,660 | 580,679 |
Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 309,226 | 195,499 | 740,683 | 525,675 |
Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 14,032 | 14,904 | 43,645 | 53,899 |
Royalty fees | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 127,317 | 79,666 | 299,606 | 200,157 |
Royalty fees | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 127,317 | 79,666 | 299,606 | 200,157 |
Royalty fees | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Initial franchise and relicensing fees | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 6,149 | 6,071 | 18,904 | 20,031 |
Initial franchise and relicensing fees | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 6,149 | 6,071 | 18,904 | 20,031 |
Initial franchise and relicensing fees | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Procurement services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 13,010 | 10,115 | 36,293 | 34,609 |
Procurement services | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 12,285 | 9,620 | 34,526 | 33,069 |
Procurement services | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 725 | 495 | 1,767 | 1,540 |
Marketing and reservation system | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 156,871 | 107,141 | 384,380 | 297,203 |
Marketing and reservation system | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 145,216 | 93,327 | 346,211 | 247,092 |
Marketing and reservation system | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 11,655 | 13,814 | 38,169 | 50,111 |
Owned hotels | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 11,266 | 4,093 | 24,392 | 15,407 |
Owned hotels | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 9,614 | 3,498 | 20,683 | 13,159 |
Owned hotels | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 1,652 | 595 | 3,709 | 2,248 |
Other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 8,645 | 3,317 | 20,753 | 12,167 |
Other | Over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 8,645 | 3,317 | 20,753 | 12,167 |
Other | Point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Receivables and Allowance for_3
Receivables and Allowance for Credit Losses - Schedule Of Notes Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | $ 159,128 | $ 139,317 | |
Total allowance for notes receivable credit losses | (20,039) | (19,484) | $ (4,556) |
Total notes receivable, net of allowance | 139,089 | 119,833 | |
Current portion, net of allowance | 71,334 | 24,048 | |
Long-term portion, net of allowance | 67,755 | 95,785 | |
Senior Notes | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | 123,526 | 104,716 | |
Subordinated | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | 34,192 | 33,234 | |
Unsecured | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | $ 1,410 | $ 1,367 |
Receivables and Allowance for_4
Receivables and Allowance for Credit Losses - Credit Quality Indicator (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Notes Receivable and Allowance for Losses [Line Items] | ||
2021 | $ 0 | |
2020 | 0 | |
2019 | 31,614 | |
Prior | 127,514 | |
Total | 159,128 | $ 139,317 |
Senior Notes | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2021 | 0 | |
2020 | 0 | |
2019 | 28,867 | |
Prior | 94,659 | |
Total | 123,526 | 104,716 |
Subordinated | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2021 | 0 | |
2020 | 0 | |
2019 | 2,747 | |
Prior | 31,445 | |
Total | 34,192 | 33,234 |
Unsecured | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 1,410 | |
Total | $ 1,410 | $ 1,367 |
Receivables and Allowance for_5
Receivables and Allowance for Credit Losses - Allowance for Credit Loss Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 19,484 | $ 4,556 |
Provision for credit losses | 555 | 7,634 |
Write-offs | 0 | (1,054) |
Ending balance | 20,039 | 19,484 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 0 | 8,348 |
Ending balance | $ 0 |
Receivables and Allowance for_6
Receivables and Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Notes Receivable and Allowance for Losses [Line Items] | |||||
Loan reserves | $ 20,039 | $ 19,484 | $ 4,556 | ||
Loans and financing receivable | 67,755 | 95,785 | |||
Variable Interest Entity, Not Primary Beneficiary | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Loans and financing receivable | 138,500 | 119,300 | |||
SG&A expenses | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Provision (reversal) of credit losses | 2,200 | $ 10,400 | |||
Marketing and reservation system expenses | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Provision (reversal) of credit losses | 4,200 | $ 18,000 | |||
Senior Notes | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Acquired a senior note with collateral | $ 17,900 | ||||
Collateral-Dependent Loans | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Loan reserves | 9,100 | 7,800 | |||
Impaired Loans | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Average notes receivable, nonaccrual status | 68,700 | 28,900 | |||
Interest Rate Below Market Reduction | Variable Interest Entity, Not Primary Beneficiary | |||||
Notes Receivable and Allowance for Losses [Line Items] | |||||
Loans and financing receivable | 13,100 | 13,100 | |||
Receivable with imputed interest, discount | $ 400 | $ 800 |
Receivables and Allowance for_7
Receivables and Allowance for Credit Losses - Past Due Balances Of Mezzanine And Other Notes Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | $ 159,128 | $ 139,317 |
Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 123,526 | 104,716 |
Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 34,192 | 33,234 |
Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 1,410 | 1,367 |
1- 30 days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
1- 30 days Past Due | Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
1- 30 days Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
1- 30 days Past Due | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
31-89 days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
31-89 days Past Due | Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
31-89 days Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
31-89 days Past Due | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
> 90 days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 26,755 | 17,409 |
> 90 days Past Due | Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 17,917 | 15,200 |
> 90 days Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 8,838 | 2,209 |
> 90 days Past Due | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 26,755 | 17,409 |
Total Past Due | Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 17,917 | 15,200 |
Total Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 8,838 | 2,209 |
Total Past Due | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 132,373 | 121,908 |
Current | Senior Notes | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 105,609 | 89,516 |
Current | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 25,354 | 31,025 |
Current | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | $ 1,410 | $ 1,367 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)investment | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Variable Interest Entity [Line Items] | |||||||
Investments in joint ventures included in unconsolidated entities | $ 1,865,934 | $ 1,865,934 | $ 1,587,333 | ||||
Number of securities sold | investment | 3 | ||||||
Equity method investment, realized gain on disposal | 4,300 | $ 2,600 | |||||
Hotel Franchising | |||||||
Variable Interest Entity [Line Items] | |||||||
Equity method investment impairment | $ 4,800 | ||||||
Variable Interest Entity, Not Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Investments in joint ventures included in unconsolidated entities | 40,500 | 40,500 | $ 56,900 | ||||
Gain (loss) attributable to variable interest entities | $ 2,500 | $ (2,300) | $ (3,000) | $ (6,900) |
Debt - Schedule Of Components O
Debt - Schedule Of Components Of Debt (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt [Line Items] | ||
Long-term debt | $ 1,060,037,000 | $ 1,058,738,000 |
Less current portion | 216,217,000 | 0 |
Long-term debt | $ 843,820,000 | $ 1,058,738,000 |
Economic Development Loans | ||
Debt [Line Items] | ||
Debt instrument effective interest rate | 3.00% | 3.00% |
Long-term debt | $ 4,416,000 | $ 4,416,000 |
$450 Million Senior Unsecured Notes Due 2031 | Senior Notes | ||
Debt [Line Items] | ||
Debt instrument face amount | $ 450,000,000 | $ 450,000,000 |
Debt instrument effective interest rate | 3.86% | 3.86% |
Deferred issuance costs | $ 5,700,000 | $ 6,100,000 |
$400 Million Senior Unsecured Notes Due 2029 | Senior Notes | ||
Debt [Line Items] | ||
Debt instrument face amount | $ 400,000,000 | $ 400,000,000 |
Debt instrument effective interest rate | 3.88% | 3.88% |
Deferred issuance costs | $ 4,900,000 | $ 5,400,000 |
$400 Million Senior Notes Due 2022 | Senior Notes | ||
Debt [Line Items] | ||
Debt instrument face amount | $ 400,000,000 | $ 400,000,000 |
Debt instrument effective interest rate | 6.00% | 6.00% |
Deferred issuance costs | $ 400,000 | $ 700,000 |
$600 Million Unsecured Revolving Credit Facility | Senior Notes | ||
Debt [Line Items] | ||
Deferred issuance costs | 2,400,000 | 2,400,000 |
Total capacity | 600,000,000 | 600,000,000 |
Long-term debt | $ 0 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Line of Credit - Revolving Credit Facility | 1 Months Ended |
Aug. 31, 2021USD ($) | |
Debt [Line Items] | |
Extension term | 1 year |
Proceeds from lines of credit | $ 540,000,000 |
Total capacity | 600,000,000 |
Debt issuance cost | $ 400,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Beginning balance | $ 104,933 | $ 19,235 | $ (5,752) | $ (42,752) | $ (43,854) | $ (23,511) | $ (5,752) | $ (23,511) |
Other comprehensive income (loss) before reclassification | 66 | (237) | ||||||
Other comprehensive income (loss), net of tax | (57) | 71 | 52 | 240 | 187 | (664) | 66 | (237) |
Ending balance | 212,146 | 104,933 | 19,235 | (21,404) | (42,752) | (43,854) | 212,146 | (21,404) |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||
Beginning balance | (4,523) | (4,594) | (4,646) | (5,027) | (5,214) | (4,550) | (4,646) | (4,550) |
Other comprehensive income (loss), net of tax | (57) | 71 | 52 | 240 | 187 | (664) | ||
Ending balance | $ (4,580) | $ (4,523) | $ (4,594) | $ (4,787) | $ (5,027) | $ (5,214) | $ (4,580) | $ (4,787) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Of Fair Value Of Assets (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurements [Line Items] | ||
Total | $ 33,588 | $ 31,356 |
Mutual Funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 31,069 | 28,520 |
Money market funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 2,519 | 2,836 |
Level 1 | ||
Fair Value Measurements [Line Items] | ||
Total | 31,069 | 28,520 |
Level 1 | Mutual Funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 31,069 | 28,520 |
Level 1 | Money market funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 0 | 0 |
Level 2 | ||
Fair Value Measurements [Line Items] | ||
Total | 2,519 | 2,836 |
Level 2 | Mutual Funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 0 | 0 |
Level 2 | Money market funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 2,519 | 2,836 |
Level 3 | ||
Fair Value Measurements [Line Items] | ||
Total | 0 | 0 |
Level 3 | Mutual Funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 0 | 0 |
Level 3 | Money market funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | $ 0 | $ 0 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurements [Line Items] | ||
Long-term debt | $ 1,060,037 | $ 1,058,738 |
Senior | $450 Million Senior Unsecured Notes Due 2031 | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 444,318 | 443,860 |
Senior | $450 Million Senior Unsecured Notes Due 2031 | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 484,574 | 498,290 |
Senior | $400 Million Senior Unsecured Notes Due 2029 | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 395,086 | 394,635 |
Senior | $400 Million Senior Unsecured Notes Due 2029 | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 428,544 | 438,104 |
Senior | $400 Million Senior Notes Due 2022 | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 216,217 | 215,827 |
Senior | $400 Million Senior Notes Due 2022 | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | $ 224,688 | $ 232,381 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Loss Carryforwards [Line Items] | |||||
Effective income tax rate (percent) | 23.10% | 39.40% | 23.00% | (30.80%) | |
R&D tax credit | $ 700 | $ 700 | |||
Share-based compensation, excess tax benefit, amount | 400 | $ (700) | 2,400 | $ 3,400 | |
Adjustment to deferred taxes | 1,500 | ||||
Income tax benefit | $ (34,934) | (9,594) | $ (67,279) | $ 15,907 | |
Valuation allowance | $ 5,100 | ||||
Accounting Standards Update 2016-16 | Cumulative Effect, Period of Adoption, Adjustment | Foreign | |||||
Operating Loss Carryforwards [Line Items] | |||||
Income tax benefit | $ 30,600 |
Share-Based Compensation and _3
Share-Based Compensation and Capital Stock - Pre-Tax Stock-Based Compensation Expenses And Associated Income Tax Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-Based Compensation and Capital Stock [Line Items] | ||||
Total share-based compensation expense | $ 6,168 | $ 3,378 | $ 17,368 | $ 2,891 |
Income tax expense | 1,498 | 805 | 4,219 | 689 |
Stock options | ||||
Share-Based Compensation and Capital Stock [Line Items] | ||||
Total share-based compensation expense | 933 | 497 | 2,482 | 1,478 |
Restricted stock awards | ||||
Share-Based Compensation and Capital Stock [Line Items] | ||||
Total share-based compensation expense | 2,285 | 2,206 | 7,126 | 6,249 |
Performance vested restricted stock units | ||||
Share-Based Compensation and Capital Stock [Line Items] | ||||
Total share-based compensation expense | $ 2,950 | $ 675 | $ 7,760 | $ (4,836) |
Share-Based Compensation and _4
Share-Based Compensation and Capital Stock - Summary of Change in Stock-Based Award Activity (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Stock Options | |
Options | |
Outstanding, beginning balance (in shares) | shares | 819,610 |
Granted (in shares) | shares | 280,811 |
Exercised/vested (in shares) | shares | (181,458) |
Expired (in shares) | shares | 0 |
Forfeited (in shares) | shares | (1,629) |
Outstanding, ending balance (in shares) | shares | 917,334 |
Options exercisable, ending balance (in shares) | shares | 425,571 |
Weighted Average Exercise Price | |
Beginning balance - weighted average exercise price (in dollars per share) | $ / shares | $ 70.48 |
Granted - weighted average exercise price (in dollars per share) | $ / shares | 104.87 |
Exercised/vested - weighted average exercise price (in dollars per share) | $ / shares | 59.61 |
Expired - weighted average exercise price (in dollars per share) | $ / shares | 0 |
Forfeited - weighted average exercise price (in dollars per share) | $ / shares | 104.87 |
Ending balance - weighted average exercise price (in dollars per share) | $ / shares | 83.10 |
Options exercisable, ending balance - weighted average exercise price (in dollars per share) | $ / shares | $ 67.02 |
Weighted Average Remaining Contractual Term | |
Weighted average remaining contractual term - outstanding, ending balance | 5 years 9 months 18 days |
Weighted average remaining contractual term - options exercisable, ending balance | 3 years 1 month 6 days |
Restricted Stock | |
Restricted Stock, Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in shares) | shares | 304,439 |
Granted (in shares) | shares | 55,439 |
Exercised/vested (in shares) | shares | (106,167) |
Forfeited (in shares) | shares | (15,401) |
Outstanding, ending balance (in shares) | shares | 238,310 |
Restricted Stock and Performance vested Restricted Stock Units | |
Outstanding, beginning balance - weighted average grant date fair value (in dollars per share) | $ / shares | $ 84.48 |
Granted - weighted average grant date fair value (in dollars per share) | $ / shares | 107.49 |
Exercised/vested - weighted average grant date fair value (in dollars per share) | $ / shares | 80.80 |
Forfeited - weighted average grant date fair value (in dollars per share) | $ / shares | 89.79 |
Outstanding, ending balance - weighted average grant date fair value (in dollars per share) | $ / shares | $ 91.12 |
Performance Vested Restricted Stock Units | |
Restricted Stock, Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in shares) | shares | 321,752 |
Granted (in shares) | shares | 98,544 |
Performance-based leveraging (in shares) | shares | 75,476 |
Exercised/vested (in shares) | shares | (3,986) |
Expired (in shares) | shares | (72,955) |
Forfeited (in shares) | shares | (3,324) |
Outstanding, ending balance (in shares) | shares | 415,507 |
Restricted Stock and Performance vested Restricted Stock Units | |
Outstanding, beginning balance - weighted average grant date fair value (in dollars per share) | $ / shares | $ 109.25 |
Granted - weighted average grant date fair value (in dollars per share) | $ / shares | 108.75 |
Performance-based leveraging - weighted average grant date fair value (in dollars per share) | $ / shares | 107.51 |
Exercised/vested - weighted average grant date fair value (in dollars per share) | $ / shares | 81.55 |
Expired - weighted average grant date fair value (in dollars per share) | $ / shares | 81.55 |
Forfeited - weighted average grant date fair value (in dollars per share) | $ / shares | 95.98 |
Outstanding, ending balance - weighted average grant date fair value (in dollars per share) | $ / shares | $ 114.05 |
Share-Based Compensation and _5
Share-Based Compensation and Capital Stock - Weighted Average Assumptions Of Black-Scholes Option-Pricing Model (Details) - $ / shares | Sep. 09, 2021 | May 07, 2021 | Feb. 28, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-Based Compensation and Capital Stock [Line Items] | |||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.215 | $ 0 | $ 0.225 | $ 0.225 | $ 0.450 | $ 0.225 |
Stock options | |||||||||||
Share-Based Compensation and Capital Stock [Line Items] | |||||||||||
Risk-free interest rate | 0.94% | ||||||||||
Expected volatility | 29.23% | ||||||||||
Expected life of stock option | 5 years 10 months 24 days | ||||||||||
Dividend yield | 0.82% | ||||||||||
Requisite service period | 4 years | ||||||||||
Contractual life | 10 years | ||||||||||
Weighted average fair value of options granted (in dollars per share) | $ 28 |
Share-Based Compensation and _6
Share-Based Compensation and Capital Stock - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)awardTypeshares | Sep. 30, 2020shares | |
Share-Based Compensation and Capital Stock [Line Items] | |||
Stock repurchased during period (in shares) | 34,746 | 36,328 | |
Cost of shares repurchased | $ | $ 4 | $ 4.2 | |
Stock redeemed during period (in shares) | 5,300 | 52,955 | |
Stock redeemed during period | $ | $ 0.7 | $ 5.8 | |
Restricted stock awards | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Types of awards granted | awardType | 2 | ||
Unvested shares expected to vest (in shares) | 230,647 | ||
Leveraging factor | 0.00% | ||
Restricted stock awards | Minimum | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Performance period, duration | 9 months | ||
Restricted stock awards | Maximum | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Performance period, duration | 48 months | ||
Performance vested restricted stock units | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Types of awards granted | awardType | 3 | ||
Performance vested restricted stock units | Minimum | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Performance period, duration | 9 months | ||
Performance period, percent | 0.00% | ||
Performance vested restricted stock units | Maximum | |||
Share-Based Compensation and Capital Stock [Line Items] | |||
Performance period, duration | 60 months | ||
Performance period, percent | 300.00% |
Earnings Per Share - Computatio
Earnings Per Share - Computation Of Basic And Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||||||
Net income | $ 116,655 | $ 85,882 | $ 22,337 | $ 14,500 | $ (2,441) | $ 55,463 | $ 224,874 | $ 67,522 |
(Income) loss allocated to participating securities | (420) | (78) | (910) | (378) | ||||
Net income (loss) available to common shareholders | $ 116,235 | $ 14,422 | $ 223,964 | $ 67,144 | ||||
Denominator: | ||||||||
Weighted average shares of common stock outstanding – basic (in shares) | 55,427 | 55,106 | 55,360 | 55,167 | ||||
Basic earnings (losses) per share (in dollars per share) | $ 2.10 | $ 0.26 | $ 4.05 | $ 1.22 | ||||
Numerator: | ||||||||
Net income | $ 116,655 | $ 85,882 | $ 22,337 | $ 14,500 | $ (2,441) | $ 55,463 | $ 224,874 | $ 67,522 |
(Income) loss allocated to participating securities | (420) | (78) | (910) | (377) | ||||
Net income (loss) available to common shareholders | $ 116,235 | $ 14,422 | $ 223,964 | $ 67,145 | ||||
Denominator: | ||||||||
Weighted average shares of common stock outstanding – basic (in shares) | 55,427 | 55,106 | 55,360 | 55,167 | ||||
Diluted effect of stock options and PVRSUs (in shares) | 478 | 304 | 429 | 273 | ||||
Weighted average shares of common stock outstanding – diluted (in shares) | 55,905 | 55,410 | 55,789 | 55,440 | ||||
Diluted earning (losses) per share (in dollars per share) | $ 2.08 | $ 0.26 | $ 4.01 | $ 1.21 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options (in shares) | 0 | 155 | 0 | 155 |
Performance vested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
PVRSUs (in shares) | 155 | 234 | 155 | 234 |
Reportable Segment Informatio_2
Reportable Segment Information - Narrative (Details) | Sep. 30, 2021brand |
Segment Reporting [Abstract] | |
Number of brands | 14 |
Reportable Segment Informatio_3
Reportable Segment Information - Schedule Of Financial Information For Company's Franchising Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reportable Segment Information [Line Items] | ||||
Revenues | $ 323,369 | $ 210,771 | $ 784,660 | $ 580,679 |
Operating income (loss) | 159,106 | 50,700 | 322,128 | 105,370 |
Income (loss) before income taxes | 151,589 | 24,094 | 292,153 | 51,615 |
Corporate & Other | ||||
Reportable Segment Information [Line Items] | ||||
Revenues | 13,532 | 6,368 | 30,504 | 21,785 |
Operating income (loss) | (10,410) | (20,240) | (38,141) | (49,400) |
Income (loss) before income taxes | (20,749) | (45,114) | (66,121) | (95,983) |
Intersegment Eliminations | ||||
Reportable Segment Information [Line Items] | ||||
Revenues | (866) | (314) | (1,857) | (1,188) |
Operating income (loss) | 0 | 0 | 0 | 0 |
Income (loss) before income taxes | 0 | 0 | 0 | 0 |
Hotel Franchising | Operating Segments | ||||
Reportable Segment Information [Line Items] | ||||
Revenues | 310,703 | 204,717 | 756,013 | 560,082 |
Operating income (loss) | 169,516 | 70,940 | 360,269 | 154,770 |
Income (loss) before income taxes | $ 172,338 | $ 69,208 | $ 358,274 | $ 147,598 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2021USD ($) |
Commitments and Contingencies [Line Items] | |
Limited payment guaranties | $ 5.7 |
Other commitment | 7.7 |
Forgivable Notes Receivable | |
Commitments and Contingencies [Line Items] | |
Other commitment | 269.2 |
Capital contributions to joint ventures | |
Commitments and Contingencies [Line Items] | |
Other commitment | $ 7.5 |
Transactions with Unconsolida_2
Transactions with Unconsolidated Joint Ventures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Member of Unconsolidated Joint Venture | |||||
Related Party Transaction [Line Items] | |||||
Royalty and marketing and reservation system fees | $ 8 | $ 3.6 | $ 15 | $ 10.4 | |
Receivables | 3 | 3 | $ 2.4 | ||
Joint Venture Partner | |||||
Related Party Transaction [Line Items] | |||||
Fees earned and payroll costs reimbursed from marketing services arrangement | $ 0.6 | $ 0.5 | $ 1.1 | $ 0.9 |
Assets Held for Sale - Narrativ
Assets Held for Sale - Narrative (Details) $ in Millions | Sep. 30, 2021USD ($) |
Prepaid Expenses and Other Current Assets | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Assets held for sale | $ 6.4 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Oct. 21, 2021 | Oct. 12, 2021 | Oct. 04, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||||
Operating lease right-of-use assets | $ 10,655 | $ 17,688 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Lease liability | $ 34,600 | ||||
Operating lease right-of-use assets | $ 25,300 | ||||
Subsequent Event | Building | |||||
Subsequent Event [Line Items] | |||||
Operating lease, term | 11 years | 10 years | |||
Subsequent Event | Land | |||||
Subsequent Event [Line Items] | |||||
Assets held for sale | $ 8,700 |