Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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 $0.01 per share | |
Trading Symbol | CHH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,769,629 | |
Entity Central Index Key | 0001046311 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
REVENUES | ||
Total revenues | $ 257,727 | $ 182,947 |
OPERATING EXPENSES | ||
Selling, general and administrative | 30,324 | 30,267 |
Depreciation and amortization | 6,231 | 6,362 |
Marketing and reservation system | 113,650 | 98,173 |
Owned hotels | 8,154 | 4,147 |
Total operating expenses | 158,359 | 138,949 |
Gain on sale of asset | 29 | 0 |
Operating income | 99,397 | 43,998 |
OTHER INCOME AND EXPENSES, NET | ||
Interest expense | 11,470 | 11,777 |
Interest income | (1,280) | (1,281) |
Other (gains) losses | 1,716 | (1,205) |
Equity in net (gain) loss of affiliates | (244) | 5,997 |
Total other income and expenses, net | 11,662 | 15,288 |
Income before income taxes | 87,735 | 28,710 |
Income tax expense | 20,344 | 6,373 |
Net income | $ 67,391 | $ 22,337 |
Basic earnings per share (in usd per share) | $ 1.21 | $ 0.40 |
Diluted earnings per share (in usd per share) | 1.20 | 0.40 |
Cash dividends declared per share (in usd per share) | $ 0.2375 | $ 0 |
Royalty fees | ||
REVENUES | ||
Total revenues | $ 90,739 | $ 66,047 |
Initial franchise and relicensing fees | ||
REVENUES | ||
Total revenues | 8,402 | 5,427 |
Procurement services | ||
REVENUES | ||
Total revenues | 11,683 | 11,191 |
Marketing and reservation system | ||
REVENUES | ||
Total revenues | 126,637 | 91,521 |
Owned hotels | ||
REVENUES | ||
Total revenues | 12,037 | 4,354 |
Other | ||
REVENUES | ||
Total revenues | $ 8,229 | $ 4,407 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 67,391 | $ 22,337 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | (134) | 52 |
Other comprehensive income (loss), net of tax | (134) | 52 |
Comprehensive income | $ 67,257 | $ 22,389 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 527,209 | $ 511,605 |
Accounts receivable (net of allowance for credit losses of $27,713 and $34,149, respectively) | 175,051 | 153,147 |
Income taxes receivable | 4,211 | 12,511 |
Notes receivable (net of allowance for credit losses of $4,316 and $4,318, respectively) | 54,746 | 54,453 |
Prepaid expenses and other current assets | 26,801 | 29,945 |
Total current assets | 788,018 | 761,661 |
Property and equipment, at cost (net of accumulated depreciation and amortization of $242,375 and $232,492, respectively) | 394,950 | 377,367 |
Operating lease right-of-use assets | 31,869 | 34,183 |
Goodwill | 159,196 | 159,196 |
Intangible assets (net of accumulated amortization of $201,764 and $195,909, respectively) | 311,079 | 312,389 |
Notes receivable (net of allowance for credit losses of $12,500 and $12,461, respectively) | 67,649 | 66,451 |
Investments, employee benefit plans, at fair value | 34,173 | 33,946 |
Investments in affiliates | 28,126 | 27,967 |
Deferred income taxes | 71,795 | 68,643 |
Other assets | 85,173 | 90,021 |
Total assets | 1,972,028 | 1,931,824 |
Current liabilities | ||
Accounts payable | 89,826 | 81,169 |
Accrued expenses and other current liabilities | 81,265 | 104,472 |
Deferred revenue | 89,724 | 81,538 |
Current portion of long-term debt | 216,486 | 216,351 |
Liability for guest loyalty program | 86,212 | 86,765 |
Total current liabilities | 563,513 | 570,295 |
Long-term debt | 844,426 | 844,123 |
Long-term deferred revenue | 108,165 | 105,785 |
Deferred compensation and retirement plan obligations | 38,893 | 38,690 |
Income taxes payable | 20,642 | 20,642 |
Operating lease liabilities | 32,549 | 35,492 |
Liability for guest loyalty program | 42,350 | 41,785 |
Other liabilities | 6,845 | 9,130 |
Total liabilities | 1,657,383 | 1,665,942 |
Commitments and Contingencies | ||
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at March 31, 2022 and December 31, 2021; 55,770,322 and 55,609,226 shares outstanding at March 31, 2022 and December 31, 2021, respectively | 951 | 951 |
Additional paid-in-capital | 265,385 | 259,317 |
Accumulated other comprehensive loss | (4,708) | (4,574) |
Treasury stock, at cost; 39,295,316 and 39,456,412 shares at March 31, 2022 and December 31, 2021, respectively | (1,276,348) | (1,265,032) |
Retained earnings | 1,329,365 | 1,275,220 |
Total shareholders’ equity | 314,645 | 265,882 |
Total liabilities and shareholders’ equity | $ 1,972,028 | $ 1,931,824 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 27,713 | $ 34,149 |
Allowance for credit losses, current | 4,316 | 4,318 |
Accumulated depreciation and amortization, property, plant and equipment | 242,375 | 232,492 |
Intangible assets, accumulated amortization | 201,764 | 195,909 |
Allowance for credit losses, noncurrent | $ 12,500 | $ 12,461 |
Common stock, par value (in usd 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) | 55,770,322 | 55,609,226 |
Treasury stock, shares (in shares) | 39,295,316 | 39,456,412 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 67,391 | $ 22,337 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,231 | 6,362 |
Depreciation and amortization – marketing and reservation system | 7,154 | 5,815 |
Gain on sale of asset | (29) | 0 |
Franchise agreement acquisition cost amortization | 3,784 | 3,044 |
Stock compensation and other charges | 7,555 | 5,026 |
Interest and investment loss (income) | 1,909 | (2,059) |
Deferred income taxes | (3,119) | (1,378) |
Equity in net loss of affiliates, less distributions received | 230 | 5,997 |
Franchise agreement acquisition costs, net of reimbursements | (12,435) | (6,770) |
Change in working capital and other | (14,747) | (38,254) |
Net cash provided by operating activities | 63,924 | 120 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in property and equipment | (26,809) | (9,364) |
Investment in intangible assets | (1,208) | (885) |
Proceeds from sale of asset | 8,494 | 0 |
Contributions to investments in affiliates | (268) | (968) |
Purchases of investments, employee benefit plans | (2,818) | (551) |
Proceeds from sales of investments, employee benefit plans | 1,853 | 1,992 |
Issuance of notes receivable | (1,245) | 0 |
Collections of notes receivable | 63 | 63 |
Other items, net | (529) | 0 |
Net cash used in investing activities | (22,467) | (9,713) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Purchase of treasury stock | (14,802) | (5,046) |
Dividends paid | (13,204) | 0 |
Proceeds from exercise of stock options | 2,211 | 2,845 |
Net cash used in financing activities | (25,795) | (2,201) |
Net change in cash and cash equivalents | 15,662 | (11,794) |
Effect of foreign exchange rate changes on cash and cash equivalents | (58) | (24) |
Cash and cash equivalents at beginning of period | 511,605 | 234,779 |
Cash and cash equivalents at end of period | 527,209 | 222,961 |
Cash payments during the period for | ||
Income taxes, net of refunds | 513 | 323 |
Interest, net of capitalized interest | 14,462 | 14,349 |
Non-cash investing and financing activities | ||
Dividends declared but not paid | 13,250 | 0 |
Investment in property, equipment and intangibles acquired in accounts payable and accrued liabilities | $ 4,129 | $ 2,785 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | |
Beginning balance (in shares) at Dec. 31, 2020 | 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 | 22,337 | 22,337 | |||||
Other comprehensive income (loss), net of tax | 52 | 52 | |||||
Share-based payment activity (in shares) | [1] | 48,781 | |||||
Share-based payment activity | [1] | 7,644 | 3,617 | 4,030 | (3) | ||
Dividends declared | [1] | 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, 2021 | 55,609,226 | 55,609,226 | |||||
Beginning balance at Dec. 31, 2021 | $ 265,882 | $ 951 | 259,317 | (4,574) | (1,265,032) | 1,275,220 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 67,391 | 67,391 | |||||
Other comprehensive income (loss), net of tax | (134) | (134) | |||||
Share-based payment activity (in shares) | [1] | 262,008 | |||||
Share-based payment activity | [1] | 9,558 | 6,068 | 3,486 | 4 | ||
Dividends declared | [1] | (13,250) | (13,250) | ||||
Treasury purchases (in shares) | (100,912) | ||||||
Treasury purchases | $ (14,802) | (14,802) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 55,770,322 | 55,770,322 | |||||
Ending balance at Mar. 31, 2022 | $ 314,645 | $ 951 | $ 265,385 | $ (4,708) | $ (1,276,348) | $ 1,329,365 | |
[1] | In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. In May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors, and declared a quarterly cash dividend of $0.225 per share of common stock. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock. On February 24, 2022 the Company's board of directors declared a quarterly cash dividend of $0.2375 per share of common stock. During all periods presented, 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. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Deficit) (Parenthetical) - $ / shares | Feb. 24, 2022 | Dec. 06, 2021 | May 31, 2021 | Mar. 31, 2022 |
Dividends declared (in dollars per share) | $ 0.2375 | |||
Common Stock | ||||
Dividends declared (in dollars per share) | $ 0.2375 | $ 0.225 | $ 0.2375 | |
Common stock dividends, percentage increase (as a percent) | 6.00% |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2022. Interim results are not necessarily indicative of the entire year results. 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, 2021. Recently Issued Accounting Standards In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses ("ASU 2022-02"). ASU 2022-02 eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("Topic 326"), requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty, and includes new guidance on current-period gross write-offs presentation. The guidance is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that ASU 2022-02 will have on the consolidated financial statements and disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
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 are typically recognized over a five Significant changes in the contract liabilities balances during the period December 31, 2021 to March 31, 2022 are as follows: (in thousands) Balance as of December 31, 2021 $ 175,425 Increases to the contract liability balance due to cash received 26,756 Revenue recognized in the period (22,602) Balance as of March 31, 2022 $ 179,579 Remaining Performance Obligations The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $179.6 million as of March 31, 2022. 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 March 31, 2022 March 31, 2021 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 90,739 $ — $ 90,739 $ 66,047 $ — $ 66,047 Initial franchise and relicensing fees 8,402 — 8,402 5,427 — 5,427 Procurement services 11,131 552 11,683 10,739 452 11,191 Marketing and reservation system 112,259 14,378 126,637 79,052 12,469 91,521 Owned hotels 9,940 1,997 11,937 3,517 722 4,239 Other 8,229 — 8,229 4,407 — 4,407 Total Topic 606 revenues $ 240,700 $ 16,927 257,627 $ 169,189 $ 13,643 182,832 Non-Topic 606 revenues 100 115 Total revenues $ 257,727 $ 182,947 Marketing and reservation system and Procurement services point in time revenues represent loyalty points redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions. As presented in Note 11, the Corporate & Other segment amounts represent $14.3 million and $6.0 million for the three months ended March 31, 2022 and 2021, 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 March 31, 2022 and 2021, respectively. |
Receivables and Allowance for C
Receivables and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2022 | |
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] | |
Receivables and Allowance for Credit Losses | 90 days Total Current Total As of March 31, 2022 Senior $ — $ 15,200 $ — $ 15,200 $ 94,428 $ 109,628 Subordinated — — 2,209 2,209 25,768 27,977 Unsecured — — — — 1,606 1,606 $ — $ 15,200 $ 2,209 $ 17,409 $ 121,802 $ 139,211 As of December 31, 2021 Senior $ — $ — $ — $ — $ 108,370 $ 108,370 Subordinated — — 2,209 2,209 25,592 27,801 Unsecured — — — — 1,512 1,512 $ — $ — $ 2,209 $ 2,209 $ 135,474 $ 137,683 The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of March 31, 2022. Refer to Note 12. Variable Interest through Notes Issued The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $121.6 million and $120.2 million as of March 31, 2022 and December 31, 2021, 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 three months ended March 31, 2021, the Company recorded provisions for credit losses on accounts receivable of $2.6 million in SG&A expenses and $3.9 million in marketing and reservation system expenses. During three months ended March 31, 2022, the Company recorded reversals of provisions for credit losses on accounts receivable of $0.5 million in SG&A expenses and provisions of $0.3 million in marketing and reservation system expenses. During the three months ended March 31, 2021 and 2022, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $0.3 million and $6.3 million, respectively." 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) March 31, 2022 December 31, 2021 Senior $ 109,628 $ 108,370 Subordinated 27,977 27,801 Unsecured 1,606 1,512 Total notes receivable 139,211 137,683 Total allowance for notes receivable credit losses 16,816 16,779 Total notes receivable, net of allowance $ 122,395 $ 120,904 Current portion, net of allowance $ 54,746 $ 54,453 Long-term portion, net of allowance $ 67,649 $ 66,451 Amortized cost basis by year of origination and credit quality indicator are as follows: (in thousands) 2022 2021 2020 Prior Total Senior $ — $ 3,453 $ — $ 106,175 $ 109,628 Subordinated — — — 27,977 27,977 Unsecured — — — 1,606 1,606 Total notes receivable $ — $ 3,453 $ — $ 135,758 $ 139,211 The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses: (in thousands) March 31, 2022 December 31, 2021 Beginning balance $ 16,779 $ 19,484 Provision for credit losses 39 709 Write-offs (2) (3,414) Ending balance $ 16,816 $ 16,779 As of both March 31, 2022 and December 31, 2021, two loans with senior and/or subordinated tranches met the definition of collateral-dependent and are collateralized by membership interests in the borrowing entities and either the associated land parcels or an operating hotel. 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. Allowances for credit losses attributable to collateral-dependent loans are $6.3 million as of both March 31, 2022 and December 31, 2021, respectively. The write-offs for the year ended December 31, 2021 are associated with a loan previously classified as collateral-dependent that was settled in exchange for an operating hotel on October 1, 2021. In April 2022, 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 April 14, 2022. The Company will account for the acquisition of the hotel as an asset acquisition in the second quarter of 2022. 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 $44.1 million at both March 31, 2022 and December 31, 2021, respectively. The Company has identified loans totaling approximately $7.5 million as of both March 31, 2022 and December 31, 2021, respectively, with stated interest rates that are less than market rate, representing a total unamortized discount of $0.3 million as of both March 31, 2022 and December 31, 2021, 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 March 31, 2022 Senior $ — $ 15,200 $ — $ 15,200 $ 94,428 $ 109,628 Subordinated — — 2,209 2,209 25,768 27,977 Unsecured — — — — 1,606 1,606 $ — $ 15,200 $ 2,209 $ 17,409 $ 121,802 $ 139,211 As of December 31, 2021 Senior $ — $ — $ — $ — $ 108,370 $ 108,370 Subordinated — — 2,209 2,209 25,592 27,801 Unsecured — — — — 1,512 1,512 $ — $ — $ 2,209 $ 2,209 $ 135,474 $ 137,683 The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of March 31, 2022. Refer to Note 12. Variable Interest through Notes Issued The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $121.6 million and $120.2 million as of March 31, 2022 and December 31, 2021, 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 three months ended March 31, 2021, the Company recorded provisions for credit losses on accounts receivable of $2.6 million in SG&A expenses and $3.9 million in marketing and reservation system expenses. During three months ended March 31, 2022, the Company recorded reversals of provisions for credit losses on accounts receivable of $0.5 million in SG&A expenses and provisions of $0.3 million in marketing and reservation system expenses. During the three months ended March 31, 2021 and 2022, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $0.3 million and $6.3 million, respectively. |
Investments in Affiliates
Investments in Affiliates | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investments in Affiliates | Investments in Affiliates The Company maintains equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The Company has investments in affiliates that represent VIEs totaling $24.7 million and $25.2 million on the consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however it does exercise significant influence through its equity ownership and as a result the investment in these affiliates is accounted for under the equity method. For the three months ended March 31, 2022 and 2021, the Company recognized losses totaling $0.8 million and $6.4 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. The Company recognized no impairment charges related to equity method investments during the three months ended March 31, 2022. 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, which was a key judgment in the fair value determination. This nonrecurring fair value measurement was classified as level three of the fair value measurement hierarchy, as the Company utilized unobservable inputs which are significant to the overall fair value. 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. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following: March 31, 2022 December 31, 2021 (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 $5.4 million and $5.5 million at March 31, 2022 and December 31, 2021, respectively $ 444,622 $ 444,470 $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 $4.6 million and $4.8 million at March 31, 2022 and December 31, 2021, respectively 395,388 395,237 $400 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.1 million and $0.2 million at March 31, 2022 and December 31, 2021, respectively (2) 216,486 216,351 $600 million senior unsecured revolving credit facility (1) — — Economic development loans with an effective interest rate of 3.00% at March 31, 2022 and December 31, 2021, respectively 4,416 4,416 Total debt $ 1,060,912 $ 1,060,474 Less current portion (2) 216,486 216,351 Long-term debt $ 844,426 $ 844,123 (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 March 31, 2022 and December 31, 2021. As there are no outstanding borrowings at March 31, 2022 or December 31, 2021, deferred issuance costs for the senior unsecured revolving credit facility of $2.1 million and $2.3 million, respectively, are presented in non-current Other assets in the consolidated balance sheets. (2) The Company's 2012 Senior Notes mature on July 1, 2022 with a principal maturity, net of unamortized deferred issuance costs, of $216.5 million. 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 three months ended March 31, 2022 and 2021 are as follows: (in thousands) Balance as of December 31, 2021 $ (4,574) Other comprehensive income (loss) before reclassification (134) Net current period other comprehensive income (loss) (134) Balance as of March 31, 2022 $ (4,708) (in thousands) Balance as of December 31, 2020 $ (4,646) Other comprehensive income (loss) before reclassification 52 Net current period other comprehensive income (loss) 52 Balance as of March 31, 2021 $ (4,594) The other comprehensive income (loss) before reclassification for both the three months ended March 31, 2022 and 2021 relate to foreign currency items. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
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 three months ended March 31, 2022. As of March 31, 2022 and December 31, 2021, 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 March 31, 2022 Mutual funds (1) $ 32,478 $ 32,478 $ — $ — Money market funds (1) 2,840 — 2,840 — Total $ 35,318 $ 32,478 $ 2,840 $ — As of December 31, 2021 Mutual funds (1) $ 33,555 $ 33,555 $ — $ — Money market funds (1) 2,520 — 2,520 — Total $ 36,075 $ 33,555 $ 2,520 $ — (1) Included in Investments, employee benefit plans, at fair value and Prepaid expenses 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 March 31, 2022 and December 31, 2021, the carrying amounts and fair values are as follows: March 31, 2022 December 31, 2021 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2020 Senior Notes $ 444,622 $ 437,724 $ 444,470 $ 477,675 2019 Senior Notes 395,388 398,056 395,237 425,984 2012 Senior Notes 216,486 218,143 216,351 221,702 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 | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates were 23.2% and 22.2% for the three months ended March 31, 2022 and 2021, respectively. The effective income tax rate for the three months ended March 31, 2022 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 excess tax benefits from share-based compensation. The effective income tax rate for the three months ended March 31, 2021 was higher than the U.S. federal income tax rate of 21.0% due to the impact of state income taxes and foreign operations, partially offset by excess tax benefits from share-based compensation. |
Share-Based Compensation and Ca
Share-Based Compensation and Capital Stock | 3 Months Ended |
Mar. 31, 2022 | |
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 months ended March 31, 2022 and 2021: Three Months Ended March 31, (in thousands) 2022 2021 Stock options $ 1,052 $ 616 Restricted stock awards 3,043 2,519 Performance vested restricted stock units 3,354 1,666 Total share-based compensation expense $ 7,449 $ 4,801 Income tax expense $ 1,805 $ 1,157 A summary of share-based award activity as of and changes during the three months ended March 31, 2022 are presented below: Stock Options Restricted Stock Performance Vested Options Weighted Weighted Shares Weighted Shares Weighted Outstanding at January 1, 2022 910,944 $ 83.14 236,599 $ 92.60 412,642 $ 114.70 Granted 155,774 146.68 241,833 146.68 111,585 181.91 Performance-Based Leveraging (1) — — — — 12,280 81.55 Exercised/Vested (41,054) 53.86 (76,229) 87.90 — — Expired — — — — (78,370) 81.15 Forfeited — — (1,407) 94.19 (194) 114.36 Outstanding at March 31, 2022 1,025,664 $ 93.96 6.2 years 400,796 $ 126.12 457,943 $ 135.65 Options exercisable at March 31, 2022 549,980 $ 76.12 4.0 years (1) PVRSUs outstanding have been increased by 12,280 units in the three months ended March 31, 2022 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: 2022 Grants Risk-free interest rate 1.92 % Expected volatility 29.39 % Expected life of stock option 5.9 years Dividend yield 0.65 % Requisite service period 4 years Contractual life 10 years Weighted average fair value of options granted (per option) $ 43.25 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 three months ended March 31, 2022 range from 9 to 60 months. Performance Vested Restricted Stock Units The Company grants three types of PVRSU awards: i) PVRSUs with performance conditions based on internal performance conditions, including earnings per share ("EPS") relative to Company established targets, 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 three months ended March 31, 2022, 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. Share Repurchases and Redemptions In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, the Company suspended activity under the Company's share repurchase program. In May 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 months ended March 31, 2022 there were 68,486 purchases of common stock under the share repurchase program at a total cost of $9.9 million. During the three months ended March 31, 2021 there were no purchases of common stock under the share repurchase program. During the three months ended March 31, 2022 and 2021, the Company redeemed 32,426 and 46,499 shares of common stock at a total cost of $4.9 million and $5.1 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 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 March 31, (in thousands, except per share amounts) 2022 2021 Numerator: Net income $ 67,391 $ 22,337 Income allocated to participating securities (324) (110) Net income available to common shareholders $ 67,067 $ 22,227 Denominator: Weighted average shares of common stock outstanding – basic 55,412 55,263 Basic earnings per share $ 1.21 $ 0.40 Numerator: Net income $ 67,391 $ 22,337 Income allocated to participating securities (324) (110) Net income available to common shareholders $ 67,067 $ 22,227 Denominator: Weighted average shares of common stock outstanding – basic 55,412 55,263 Dilutive effect of stock options and PVRSUs 642 398 Weighted average shares of common stock outstanding – diluted 56,054 55,661 Diluted earnings per share $ 1.20 $ 0.40 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: Three Months Ended March 31, (in thousands) 2022 2021 Stock options 156 — PVRSUs 76 83 |
Reportable Segment Information
Reportable Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Reportable Segment Information The Hotel Franchising reportable segment 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. 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 investment in affiliates 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 decisions and therefore assets by segment are not disclosed below. The following table presents the financial information for the Company's segments: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 244,371 $ 14,260 $ (904) $ 257,727 $ 177,218 $ 6,040 $ (311) $ 182,947 Operating income (loss) $ 107,320 $ (7,923) $ — $ 99,397 $ 58,153 $ (14,155) $ — $ 43,998 Income (loss) before income taxes $ 107,564 $ (19,829) $ — $ 87,735 $ 51,911 $ (23,201) $ — $ 28,710 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021, 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 March 31, 2022: • 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 March 31, 2022, the Company had commitments to extend an additional $277.0 million for these purposes provided the conditions of the payment are met by its franchisees. • To the extent existing unconsolidated affiliates proceed to the hotel construction phase, the Company is committed to make capital contributions totaling $7.8 million to support their efforts to construct Cambria hotels. • The Company committed to provide financing in the form of loans or credit facilities to franchisees for Choice brand development efforts. At March 31, 2022, the Company has remaining commitments of approximately $6.2 million, upon certain conditions being met. • 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, |
Transactions with Unconsolidate
Transactions with Unconsolidated Affiliates | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Transactions with Unconsolidated Affiliates | Transactions with Unconsolidated Affiliates The Company has a management fee arrangement for marketing services with a partner in an unconsolidated affiliate. For the three months ended March 31, 2022 and 2021, fees earned and payroll costs reimbursed under this arrangement totaled $0.4 million and $0.2 million, respectively. The Company has entered into franchise agreements with certain of the unconsolidated affiliates discussed in Note 4. Pursuant to these franchise agreements, the Company recorded royalty and marketing reservation system fees of approximately $4.2 million and $2.9 million for the three months ended March 31, 2022 and 2021, respectively. The Company recorded $3.0 million and $2.7 million as a receivable due from these affiliates as of March 31, 2022 and December 31, 2021, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company committed to a plan to market two owned hotel assets for sale and executed purchase and sale agreements in April and May 2022. As a result, each owned hotel is deemed to meet held for sale classification as of May 2022. Management expects to sell the assets in 2022 and recognize a gain on sale upon consummation of each transaction. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2022. Interim results are not necessarily indicative of the entire year results. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses ("ASU 2022-02"). ASU 2022-02 eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("Topic 326"), requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty, and includes new guidance on current-period gross write-offs presentation. The guidance is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that ASU 2022-02 will have on the consolidated financial statements and disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract with Customer, Liability | Significant changes in the contract liabilities balances during the period December 31, 2021 to March 31, 2022 are as follows: (in thousands) Balance as of December 31, 2021 $ 175,425 Increases to the contract liability balance due to cash received 26,756 Revenue recognized in the period (22,602) Balance as of March 31, 2022 $ 179,579 |
Schedule of Disaggregation of Revenue | Disaggregation of Revenue Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 (in thousands) Over time Point in time Total Over time Point in time Total Royalty fees $ 90,739 $ — $ 90,739 $ 66,047 $ — $ 66,047 Initial franchise and relicensing fees 8,402 — 8,402 5,427 — 5,427 Procurement services 11,131 552 11,683 10,739 452 11,191 Marketing and reservation system 112,259 14,378 126,637 79,052 12,469 91,521 Owned hotels 9,940 1,997 11,937 3,517 722 4,239 Other 8,229 — 8,229 4,407 — 4,407 Total Topic 606 revenues $ 240,700 $ 16,927 257,627 $ 169,189 $ 13,643 182,832 Non-Topic 606 revenues 100 115 Total revenues $ 257,727 $ 182,947 |
Receivables and Allowance for_2
Receivables and Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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) March 31, 2022 December 31, 2021 Senior $ 109,628 $ 108,370 Subordinated 27,977 27,801 Unsecured 1,606 1,512 Total notes receivable 139,211 137,683 Total allowance for notes receivable credit losses 16,816 16,779 Total notes receivable, net of allowance $ 122,395 $ 120,904 Current portion, net of allowance $ 54,746 $ 54,453 Long-term portion, net of allowance $ 67,649 $ 66,451 |
Schedule of Financing Receivable Credit Quality Indicators | Amortized cost basis by year of origination and credit quality indicator are as follows: (in thousands) 2022 2021 2020 Prior Total Senior $ — $ 3,453 $ — $ 106,175 $ 109,628 Subordinated — — — 27,977 27,977 Unsecured — — — 1,606 1,606 Total notes receivable $ — $ 3,453 $ — $ 135,758 $ 139,211 |
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: (in thousands) March 31, 2022 December 31, 2021 Beginning balance $ 16,779 $ 19,484 Provision for credit losses 39 709 Write-offs (2) (3,414) Ending balance $ 16,816 $ 16,779 |
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 March 31, 2022 Senior $ — $ 15,200 $ — $ 15,200 $ 94,428 $ 109,628 Subordinated — — 2,209 2,209 25,768 27,977 Unsecured — — — — 1,606 1,606 $ — $ 15,200 $ 2,209 $ 17,409 $ 121,802 $ 139,211 As of December 31, 2021 Senior $ — $ — $ — $ — $ 108,370 $ 108,370 Subordinated — — 2,209 2,209 25,592 27,801 Unsecured — — — — 1,512 1,512 $ — $ — $ 2,209 $ 2,209 $ 135,474 $ 137,683 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | Debt consists of the following: March 31, 2022 December 31, 2021 (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 $5.4 million and $5.5 million at March 31, 2022 and December 31, 2021, respectively $ 444,622 $ 444,470 $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 $4.6 million and $4.8 million at March 31, 2022 and December 31, 2021, respectively 395,388 395,237 $400 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.1 million and $0.2 million at March 31, 2022 and December 31, 2021, respectively (2) 216,486 216,351 $600 million senior unsecured revolving credit facility (1) — — Economic development loans with an effective interest rate of 3.00% at March 31, 2022 and December 31, 2021, respectively 4,416 4,416 Total debt $ 1,060,912 $ 1,060,474 Less current portion (2) 216,486 216,351 Long-term debt $ 844,426 $ 844,123 (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 March 31, 2022 and December 31, 2021. As there are no outstanding borrowings at March 31, 2022 or December 31, 2021, deferred issuance costs for the senior unsecured revolving credit facility of $2.1 million and $2.3 million, respectively, are presented in non-current Other assets in the consolidated balance sheets. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 three months ended March 31, 2022 and 2021 are as follows: (in thousands) Balance as of December 31, 2021 $ (4,574) Other comprehensive income (loss) before reclassification (134) Net current period other comprehensive income (loss) (134) Balance as of March 31, 2022 $ (4,708) (in thousands) Balance as of December 31, 2020 $ (4,646) Other comprehensive income (loss) before reclassification 52 Net current period other comprehensive income (loss) 52 Balance as of March 31, 2021 $ (4,594) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets | As of March 31, 2022 and December 31, 2021, 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 March 31, 2022 Mutual funds (1) $ 32,478 $ 32,478 $ — $ — Money market funds (1) 2,840 — 2,840 — Total $ 35,318 $ 32,478 $ 2,840 $ — As of December 31, 2021 Mutual funds (1) $ 33,555 $ 33,555 $ — $ — Money market funds (1) 2,520 — 2,520 — Total $ 36,075 $ 33,555 $ 2,520 $ — (1) Included in Investments, employee benefit plans, at fair value and Prepaid expenses and other current assets on the consolidated balance sheets. |
Schedule of Carrying Amounts and Fair Values | At March 31, 2022 and December 31, 2021, the carrying amounts and fair values are as follows: March 31, 2022 December 31, 2021 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2020 Senior Notes $ 444,622 $ 437,724 $ 444,470 $ 477,675 2019 Senior Notes 395,388 398,056 395,237 425,984 2012 Senior Notes 216,486 218,143 216,351 221,702 |
Share-Based Compensation and _2
Share-Based Compensation and Capital Stock (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 months ended March 31, 2022 and 2021: Three Months Ended March 31, (in thousands) 2022 2021 Stock options $ 1,052 $ 616 Restricted stock awards 3,043 2,519 Performance vested restricted stock units 3,354 1,666 Total share-based compensation expense $ 7,449 $ 4,801 Income tax expense $ 1,805 $ 1,157 |
Summary of Change In Stock-Based Award Activity | A summary of share-based award activity as of and changes during the three months ended March 31, 2022 are presented below: Stock Options Restricted Stock Performance Vested Options Weighted Weighted Shares Weighted Shares Weighted Outstanding at January 1, 2022 910,944 $ 83.14 236,599 $ 92.60 412,642 $ 114.70 Granted 155,774 146.68 241,833 146.68 111,585 181.91 Performance-Based Leveraging (1) — — — — 12,280 81.55 Exercised/Vested (41,054) 53.86 (76,229) 87.90 — — Expired — — — — (78,370) 81.15 Forfeited — — (1,407) 94.19 (194) 114.36 Outstanding at March 31, 2022 1,025,664 $ 93.96 6.2 years 400,796 $ 126.12 457,943 $ 135.65 Options exercisable at March 31, 2022 549,980 $ 76.12 4.0 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: 2022 Grants Risk-free interest rate 1.92 % Expected volatility 29.39 % Expected life of stock option 5.9 years Dividend yield 0.65 % Requisite service period 4 years Contractual life 10 years Weighted average fair value of options granted (per option) $ 43.25 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, (in thousands, except per share amounts) 2022 2021 Numerator: Net income $ 67,391 $ 22,337 Income allocated to participating securities (324) (110) Net income available to common shareholders $ 67,067 $ 22,227 Denominator: Weighted average shares of common stock outstanding – basic 55,412 55,263 Basic earnings per share $ 1.21 $ 0.40 Numerator: Net income $ 67,391 $ 22,337 Income allocated to participating securities (324) (110) Net income available to common shareholders $ 67,067 $ 22,227 Denominator: Weighted average shares of common stock outstanding – basic 55,412 55,263 Dilutive effect of stock options and PVRSUs 642 398 Weighted average shares of common stock outstanding – diluted 56,054 55,661 Diluted earnings per share $ 1.20 $ 0.40 |
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: Three Months Ended March 31, (in thousands) 2022 2021 Stock options 156 — PVRSUs 76 83 |
Reportable Segment Information
Reportable Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 Three Months Ended March 31, 2021 (in thousands) Hotel Corporate & Intersegment Eliminations Consolidated Hotel Corporate & Intersegment Eliminations Consolidated Revenues $ 244,371 $ 14,260 $ (904) $ 257,727 $ 177,218 $ 6,040 $ (311) $ 182,947 Operating income (loss) $ 107,320 $ (7,923) $ — $ 99,397 $ 58,153 $ (14,155) $ — $ 43,998 Income (loss) before income taxes $ 107,564 $ (19,829) $ — $ 87,735 $ 51,911 $ (23,201) $ — $ 28,710 |
Revenue - Textual (Details)
Revenue - Textual (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation | $ 179,600 | |
Revenues | $ 257,727 | $ 182,947 |
Royalty fees | ||
Disaggregation of Revenue [Line Items] | ||
Redemption of loyalty points period | 3 years | |
Revenues | $ 90,739 | 66,047 |
Corporate & Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,260 | 6,040 |
Corporate & Other | Over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,300 | 6,000 |
Intersegment Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (904) | (311) |
Intersegment Eliminations | Royalty fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ (900) | $ (300) |
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 | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Changes in Contract Liability [Roll Forward] | |
Balance as of December 31, 2021 | $ 175,425 |
Increases to the contract liability balance due to cash received | 26,756 |
Revenue recognized in the period | (22,602) |
Balance as of March 31, 2022 | $ 179,579 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 257,627 | $ 182,832 |
Total revenues | 257,727 | 182,947 |
Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 240,700 | 169,189 |
Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 16,927 | 13,643 |
Royalty fees | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 90,739 | 66,047 |
Total revenues | 90,739 | 66,047 |
Royalty fees | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 90,739 | 66,047 |
Royalty fees | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 0 | 0 |
Initial franchise and relicensing fees | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 8,402 | 5,427 |
Total revenues | 8,402 | 5,427 |
Initial franchise and relicensing fees | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 8,402 | 5,427 |
Initial franchise and relicensing fees | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 0 | 0 |
Procurement services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 11,683 | 11,191 |
Total revenues | 11,683 | 11,191 |
Procurement services | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 11,131 | 10,739 |
Procurement services | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 552 | 452 |
Marketing and reservation system | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 126,637 | 91,521 |
Total revenues | 126,637 | 91,521 |
Marketing and reservation system | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 112,259 | 79,052 |
Marketing and reservation system | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 14,378 | 12,469 |
Owned hotels | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 11,937 | 4,239 |
Total revenues | 12,037 | 4,354 |
Owned hotels | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 9,940 | 3,517 |
Owned hotels | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 1,997 | 722 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 8,229 | 4,407 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 8,229 | 4,407 |
Other | Over time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 8,229 | 4,407 |
Other | Point in time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 0 | 0 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Non-Topic 606 revenues | $ 100 | $ 115 |
Receivables and Allowance for_3
Receivables and Allowance for Credit Losses - Schedule Of Notes Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | $ 139,211 | $ 137,683 | |
Total allowance for notes receivable credit losses | 16,816 | 16,779 | $ 19,484 |
Total notes receivable, net of allowance | 122,395 | 120,904 | |
Current portion, net of allowance | 54,746 | 54,453 | |
Long-term portion, net of allowance | 67,649 | 66,451 | |
Senior | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | 109,628 | 108,370 | |
Subordinated | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | 27,977 | 27,801 | |
Unsecured | |||
Notes Receivable and Allowance for Losses [Line Items] | |||
Notes receivable | $ 1,606 | $ 1,512 |
Receivables and Allowance for_4
Receivables and Allowance for Credit Losses - Credit Quality Indicator (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Notes Receivable and Allowance for Losses [Line Items] | ||
2022 | $ 0 | |
2021 | 3,453 | |
2020 | 0 | |
Prior | 135,758 | |
Total | 139,211 | $ 137,683 |
Senior | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2022 | 0 | |
2021 | 3,453 | |
2020 | 0 | |
Prior | 106,175 | |
Total | 109,628 | 108,370 |
Subordinated | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
Prior | 27,977 | |
Total | 27,977 | 27,801 |
Unsecured | ||
Notes Receivable and Allowance for Losses [Line Items] | ||
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
Prior | 1,606 | |
Total | $ 1,606 | $ 1,512 |
Receivables and Allowance for_5
Receivables and Allowance for Credit Losses - Allowance for Credit Loss Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 16,779 | $ 19,484 |
Provision for credit losses | 39 | 709 |
Write-offs | (2) | (3,414) |
Ending balance | $ 16,816 | $ 16,779 |
Receivables and Allowance for_6
Receivables and Allowance for Credit Losses - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($)loan | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Notes Receivable and Allowance for Losses [Line Items] | ||||
Total allowance for notes receivable credit losses | $ 16,816 | $ 16,779 | $ 19,484 | |
Loans and financing receivable | 67,649 | 66,451 | ||
Allowance for credit loss | 6,300 | $ 300 | ||
Variable Interest Entity, Not Primary Beneficiary | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Loans and financing receivable | 121,600 | $ 120,200 | ||
SG&A expenses | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Provision for (reversal of) credit losses | (500) | 2,600 | ||
Marketing and reservation system expenses | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Provision for (reversal of) credit losses | $ 300 | $ 3,900 | ||
Collateral-Dependent Loans | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Number of loans | loan | 2 | 2 | ||
Total allowance for notes receivable credit losses | $ 6,300 | $ 6,300 | ||
Impaired Loans | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Nonaccrual status | 44,100 | 44,100 | ||
Interest Rate Below Market Reduction | Variable Interest Entity, Not Primary Beneficiary | ||||
Notes Receivable and Allowance for Losses [Line Items] | ||||
Loans and financing receivable | 7,500 | 7,500 | ||
Receivable with imputed interest, discount | $ 300 | $ 300 |
Receivables and Allowance for_7
Receivables and Allowance for Credit Losses - Past Due Balances Of Mezzanine And Other Notes Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | $ 139,211 | $ 137,683 |
Senior | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 109,628 | 108,370 |
Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 27,977 | 27,801 |
Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 1,606 | 1,512 |
1- 30 days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
1- 30 days Past Due | Senior | ||
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 | 15,200 | 0 |
31-89 days Past Due | Senior | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 15,200 | 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 | 2,209 | 2,209 |
> 90 days Past Due | Senior | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 0 | 0 |
> 90 days Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 2,209 | 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 | 17,409 | 2,209 |
Total Past Due | Senior | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 15,200 | 0 |
Total Past Due | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 2,209 | 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 | 121,802 | 135,474 |
Current | Senior | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 94,428 | 108,370 |
Current | Subordinated | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | 25,768 | 25,592 |
Current | Unsecured | ||
Financing Receivable, Past Due [Line Items] | ||
Notes receivable | $ 1,606 | $ 1,512 |
Investments in Affiliates (Deta
Investments in Affiliates (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Investments in joint ventures included in unconsolidated entities | $ 1,972,028,000 | $ 1,931,824,000 | |
Equity method investment impairment | 0 | ||
Hotel Franchising | |||
Variable Interest Entity [Line Items] | |||
Equity method investment impairment | $ 4,800,000 | ||
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Investments in joint ventures included in unconsolidated entities | 24,700,000 | $ 25,200,000 | |
Loss attributable to variable interest entities | $ 800,000 | $ 6,400,000 |
Debt - Schedule Of Components O
Debt - Schedule Of Components Of Debt (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt [Line Items] | ||
Long-term debt | $ 1,060,912,000 | $ 1,060,474,000 |
Less current portion (2) | 216,486,000 | 216,351,000 |
Long-term debt | $ 844,426,000 | $ 844,123,000 |
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 | ||
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 | $ 5,400,000 | $ 5,500,000 |
Long-term debt | 444,622,000 | 444,470,000 |
$400 Million Senior Unsecured Notes Due 2029 | Senior | ||
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 | $ 4,600,000 | $ 4,800,000 |
Long-term debt | 395,388,000 | 395,237,000 |
$400 Million Senior Unsecured Notes 2022 | Senior | ||
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 | $ 100,000 | $ 200,000 |
Long-term debt | 216,486,000 | 216,351,000 |
$600 Million Unsecured Revolving Credit Facility | Senior | ||
Debt [Line Items] | ||
Deferred issuance costs | 2,100,000 | 2,300,000 |
Total capacity | 600,000,000 | 600,000,000 |
Long-term debt | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 265,882 | $ (5,752) |
Other comprehensive income (loss) before reclassification | (134) | 52 |
Other comprehensive income (loss), net of tax | (134) | 52 |
Ending balance | 314,645 | 19,235 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (4,574) | (4,646) |
Other comprehensive income (loss), net of tax | (134) | 52 |
Ending balance | $ (4,708) | $ (4,594) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Of Fair Value Of Assets (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements [Line Items] | ||
Total | $ 35,318 | $ 36,075 |
Mutual funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 32,478 | 33,555 |
Money market funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 2,840 | 2,520 |
Level 1 | ||
Fair Value Measurements [Line Items] | ||
Total | 32,478 | 33,555 |
Level 1 | Mutual funds | Investments, employee benefit plans, at fair value | ||
Fair Value Measurements [Line Items] | ||
Mutual funds and money market funds, fair value | 32,478 | 33,555 |
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 | 2,840 | 2,520 |
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 | 2,840 | 2,520 |
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 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements [Line Items] | ||
Long-term debt | $ 1,060,912 | $ 1,060,474 |
Senior | 2020 Senior Notes | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 444,622 | 444,470 |
Senior | 2020 Senior Notes | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 444,622 | 444,470 |
Senior | 2020 Senior Notes | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 437,724 | 477,675 |
Senior | 2019 Senior Notes | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 395,388 | 395,237 |
Senior | 2019 Senior Notes | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 395,388 | 395,237 |
Senior | 2019 Senior Notes | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 398,056 | 425,984 |
Senior | 2012 Senior Notes | Level 2 | Carrying Amount | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | 216,486 | 216,351 |
Senior | 2012 Senior Notes | Level 2 | Fair Value | ||
Fair Value Measurements [Line Items] | ||
Long-term debt | $ 218,143 | $ 221,702 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (percent) | 23.20% | 22.20% |
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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-Based Compensation and Capital Stock [Line Items] | ||
Total share-based compensation expense | $ 7,449 | $ 4,801 |
Income tax expense | 1,805 | 1,157 |
Stock options | ||
Share-Based Compensation and Capital Stock [Line Items] | ||
Total share-based compensation expense | 1,052 | 616 |
Restricted stock awards | ||
Share-Based Compensation and Capital Stock [Line Items] | ||
Total share-based compensation expense | 3,043 | 2,519 |
Performance vested restricted stock units | ||
Share-Based Compensation and Capital Stock [Line Items] | ||
Total share-based compensation expense | $ 3,354 | $ 1,666 |
Share-Based Compensation and _4
Share-Based Compensation and Capital Stock - Summary of Change in Stock-Based Award Activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Stock Options | |
Options | |
Outstanding, beginning balance (in shares) | shares | 910,944 |
Granted (in shares) | shares | 155,774 |
Performance-based leveraging (in shares) | shares | 0 |
Exercised/vested (in shares) | shares | (41,054) |
Expired (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 1,025,664 |
Options exercisable, ending balance (in shares) | shares | 549,980 |
Weighted Average Exercise Price | |
Beginning balance - weighted average exercise price (in usd per share) | $ / shares | $ 83.14 |
Granted - weighted average exercise price (in usd per share) | $ / shares | 146.68 |
Performance-based leveraging - weighted average exercise price (in usd per share) | $ / shares | 0 |
Exercised/vested - weighted average exercise price (in usd per share) | $ / shares | 53.86 |
Expired - weighted average exercise price (in usd per share) | $ / shares | 0 |
Forfeited - weighted average exercise price (in usd per share) | $ / shares | 0 |
Ending balance - weighted average exercise price (in usd per share) | $ / shares | 93.96 |
Options exercisable, ending balance - weighted average exercise price (in usd per share) | $ / shares | $ 76.12 |
Weighted Average Remaining Contractual Term | |
Weighted average remaining contractual term - outstanding, ending balance | 6 years 2 months 12 days |
Weighted average remaining contractual term - options exercisable, ending balance | 4 years |
Restricted Stock | |
Restricted Stock, Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in shares) | shares | 236,599 |
Granted (in shares) | shares | 241,833 |
Performance-based leveraging (in shares) | shares | 0 |
Exercised/vested (in shares) | shares | (76,229) |
Expired (in shares) | shares | 0 |
Forfeited (in shares) | shares | (1,407) |
Outstanding, ending balance (in shares) | shares | 400,796 |
Restricted Stock and Performance vested Restricted Stock Units | |
Outstanding, beginning balance - weighted average grant date fair value (in usd per share) | $ / shares | $ 92.60 |
Granted - weighted average grant date fair value (in usd per share) | $ / shares | 146.68 |
Performance-based leveraging - weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Exercised/vested - weighted average grant date fair value (in usd per share) | $ / shares | 87.90 |
Expired - weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Forfeited - weighted average grant date fair value (in usd per share) | $ / shares | 94.19 |
Outstanding, ending balance - weighted average grant date fair value (in usd per share) | $ / shares | $ 126.12 |
Performance Vested Restricted Stock Units | |
Restricted Stock, Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in shares) | shares | 412,642 |
Granted (in shares) | shares | 111,585 |
Performance-based leveraging (in shares) | shares | 12,280 |
Exercised/vested (in shares) | shares | 0 |
Expired (in shares) | shares | (78,370) |
Forfeited (in shares) | shares | (194) |
Outstanding, ending balance (in shares) | shares | 457,943 |
Restricted Stock and Performance vested Restricted Stock Units | |
Outstanding, beginning balance - weighted average grant date fair value (in usd per share) | $ / shares | $ 114.70 |
Granted - weighted average grant date fair value (in usd per share) | $ / shares | 181.91 |
Performance-based leveraging - weighted average grant date fair value (in usd per share) | $ / shares | 81.55 |
Exercised/vested - weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Expired - weighted average grant date fair value (in usd per share) | $ / shares | 81.15 |
Forfeited - weighted average grant date fair value (in usd per share) | $ / shares | 114.36 |
Outstanding, ending balance - weighted average grant date fair value (in usd per share) | $ / shares | $ 135.65 |
Share-Based Compensation and _5
Share-Based Compensation and Capital Stock - Weighted Average Assumptions Of Black-Scholes Option-Pricing Model (Details) - Stock options | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Share-Based Compensation and Capital Stock [Line Items] | |
Risk-free interest rate | 1.92% |
Expected volatility | 29.39% |
Expected life of stock option | 5 years 10 months 24 days |
Dividend yield | 0.65% |
Requisite service period | 4 years |
Contractual life | 10 years |
Weighted average fair value of options granted (in usd per share) | $ 43.25 |
Share-Based Compensation and _6
Share-Based Compensation and Capital Stock - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)awardTypeshares | Mar. 31, 2021USD ($)shares | |
Share-Based Compensation and Capital Stock [Line Items] | ||
Stock repurchased during period (in shares) | shares | 68,486 | 0 |
Cost of shares repurchased | $ | $ 9.9 | |
Stock redeemed during period (in shares) | shares | 32,426 | 46,499 |
Stock redeemed during period | $ | $ 4.9 | $ 5.1 |
Restricted stock awards | ||
Share-Based Compensation and Capital Stock [Line Items] | ||
Types of awards granted | awardType | 2 | |
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 | 60 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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 67,391 | $ 22,337 |
Income allocated to participating securities | (324) | (110) |
Net income available to common shareholders | $ 67,067 | $ 22,227 |
Denominator: | ||
Weighted average shares of common stock outstanding – basic (in shares) | 55,412 | 55,263 |
Basic earnings per share (in usd per share) | $ 1.21 | $ 0.40 |
Numerator: | ||
Net income | $ 67,391 | $ 22,337 |
Income allocated to participating securities | (324) | (110) |
Net income available to common shareholders | $ 67,067 | $ 22,227 |
Denominator: | ||
Weighted average shares of common stock outstanding – basic (in shares) | 55,412 | 55,263 |
Diluted effect of stock options and PVRSUs (in shares) | 642 | 398 |
Weighted average shares of common stock outstanding – diluted (in shares) | 56,054 | 55,661 |
Diluted earnings per share (in usd per share) | $ 1.20 | $ 0.40 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Stock options (in shares) | 156 | 0 |
Performance vested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
PVRSUs (in shares) | 76 | 83 |
Reportable Segment Informatio_2
Reportable Segment Information - Narrative (Details) | Mar. 31, 2022brand |
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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reportable Segment Information [Line Items] | ||
Revenues | $ 257,727 | $ 182,947 |
Operating income (loss) | 99,397 | 43,998 |
Income (loss) before income taxes | 87,735 | 28,710 |
Corporate & Other | ||
Reportable Segment Information [Line Items] | ||
Revenues | 14,260 | 6,040 |
Operating income (loss) | (7,923) | (14,155) |
Income (loss) before income taxes | (19,829) | (23,201) |
Intersegment Eliminations | ||
Reportable Segment Information [Line Items] | ||
Revenues | (904) | (311) |
Operating income (loss) | 0 | 0 |
Income (loss) before income taxes | 0 | 0 |
Hotel Franchising | Operating Segments | ||
Reportable Segment Information [Line Items] | ||
Revenues | 244,371 | 177,218 |
Operating income (loss) | 107,320 | 58,153 |
Income (loss) before income taxes | $ 107,564 | $ 51,911 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments and Contingencies [Line Items] | |
Limited payment guaranties | $ 5.7 |
Other commitment | 6.2 |
Forgivable Notes Receivable | |
Commitments and Contingencies [Line Items] | |
Other commitment | 277 |
Capital contributions to joint ventures | |
Commitments and Contingencies [Line Items] | |
Other commitment | $ 7.8 |
Transactions with Unconsolida_2
Transactions with Unconsolidated Affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Member of Unconsolidated Joint Venture | |||
Related Party Transaction [Line Items] | |||
Royalty and marketing and reservation system fees | $ 4.2 | $ 2.9 | |
Receivables | 3 | $ 2.7 | |
Joint Venture Partner | |||
Related Party Transaction [Line Items] | |||
Fees earned and payroll costs reimbursed from marketing services arrangement | $ 0.4 | $ 0.2 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
May 10, 2022property | |
Subsequent Event | Owned hotels | |
Subsequent Event [Line Items] | |
Number of assets held for sale | 2 |