10-Q 1 chh-20220630.htm 10-Q chh-20220630
CHOICE HOTELS INTERNATIONAL INC /DE000104631112/312022Q2FALSEP5Y00010463112022-01-012022-06-3000010463112022-07-29xbrli:shares0001046311chh:RoyaltyFeesMember2022-04-012022-06-30iso4217:USD0001046311chh:RoyaltyFeesMember2021-04-012021-06-300001046311chh:RoyaltyFeesMember2022-01-012022-06-300001046311chh:RoyaltyFeesMember2021-01-012021-06-300001046311chh:InitialFranchiseandRelicensingFeesMember2022-04-012022-06-300001046311chh:InitialFranchiseandRelicensingFeesMember2021-04-012021-06-300001046311chh:InitialFranchiseandRelicensingFeesMember2022-01-012022-06-300001046311chh:InitialFranchiseandRelicensingFeesMember2021-01-012021-06-300001046311chh:ProcurementServicesMember2022-04-012022-06-300001046311chh:ProcurementServicesMember2021-04-012021-06-300001046311chh:ProcurementServicesMember2022-01-012022-06-300001046311chh:ProcurementServicesMember2021-01-012021-06-300001046311chh:MarketingandReservationSystemMember2022-04-012022-06-300001046311chh:MarketingandReservationSystemMember2021-04-012021-06-300001046311chh:MarketingandReservationSystemMember2022-01-012022-06-300001046311chh:MarketingandReservationSystemMember2021-01-012021-06-300001046311chh:OwnedHotelsMember2022-04-012022-06-300001046311chh:OwnedHotelsMember2021-04-012021-06-300001046311chh:OwnedHotelsMember2022-01-012022-06-300001046311chh:OwnedHotelsMember2021-01-012021-06-300001046311chh:OtherRevenueTopic606AndNotTopic606Member2022-04-012022-06-300001046311chh:OtherRevenueTopic606AndNotTopic606Member2021-04-012021-06-300001046311chh:OtherRevenueTopic606AndNotTopic606Member2022-01-012022-06-300001046311chh:OtherRevenueTopic606AndNotTopic606Member2021-01-012021-06-3000010463112022-04-012022-06-3000010463112021-04-012021-06-3000010463112021-01-012021-06-30iso4217:USDxbrli:shares00010463112022-06-3000010463112021-12-3100010463112020-12-3100010463112021-06-300001046311us-gaap:CommonStockMember2020-12-310001046311us-gaap:AdditionalPaidInCapitalMember2020-12-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001046311us-gaap:TreasuryStockMember2020-12-310001046311us-gaap:RetainedEarningsMember2020-12-310001046311us-gaap:RetainedEarningsMember2021-01-012021-03-3100010463112021-01-012021-03-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001046311us-gaap:CommonStockMember2021-01-012021-03-310001046311us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001046311us-gaap:TreasuryStockMember2021-01-012021-03-310001046311us-gaap:CommonStockMember2021-03-310001046311us-gaap:AdditionalPaidInCapitalMember2021-03-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001046311us-gaap:TreasuryStockMember2021-03-310001046311us-gaap:RetainedEarningsMember2021-03-3100010463112021-03-310001046311us-gaap:RetainedEarningsMember2021-04-012021-06-300001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001046311us-gaap:CommonStockMember2021-04-012021-06-300001046311us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001046311us-gaap:TreasuryStockMember2021-04-012021-06-300001046311us-gaap:CommonStockMember2021-06-300001046311us-gaap:AdditionalPaidInCapitalMember2021-06-300001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001046311us-gaap:TreasuryStockMember2021-06-300001046311us-gaap:RetainedEarningsMember2021-06-300001046311us-gaap:CommonStockMember2021-12-310001046311us-gaap:AdditionalPaidInCapitalMember2021-12-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001046311us-gaap:TreasuryStockMember2021-12-310001046311us-gaap:RetainedEarningsMember2021-12-310001046311us-gaap:RetainedEarningsMember2022-01-012022-03-3100010463112022-01-012022-03-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001046311us-gaap:CommonStockMember2022-01-012022-03-310001046311us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001046311us-gaap:TreasuryStockMember2022-01-012022-03-310001046311us-gaap:CommonStockMember2022-03-310001046311us-gaap:AdditionalPaidInCapitalMember2022-03-310001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001046311us-gaap:TreasuryStockMember2022-03-310001046311us-gaap:RetainedEarningsMember2022-03-3100010463112022-03-310001046311us-gaap:RetainedEarningsMember2022-04-012022-06-300001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001046311us-gaap:CommonStockMember2022-04-012022-06-300001046311us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001046311us-gaap:TreasuryStockMember2022-04-012022-06-300001046311us-gaap:CommonStockMember2022-06-300001046311us-gaap:AdditionalPaidInCapitalMember2022-06-300001046311us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001046311us-gaap:TreasuryStockMember2022-06-300001046311us-gaap:RetainedEarningsMember2022-06-300001046311us-gaap:CommonStockMember2021-05-012021-05-310001046311us-gaap:CommonStockMember2021-12-062021-12-06xbrli:pure0001046311srt:MinimumMember2022-01-012022-06-300001046311srt:MaximumMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:RoyaltyFeesMember2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:RoyaltyFeesMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:RoyaltyFeesMember2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:RoyaltyFeesMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:InitialFranchiseandRelicensingFeesMember2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:InitialFranchiseandRelicensingFeesMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:InitialFranchiseandRelicensingFeesMember2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:InitialFranchiseandRelicensingFeesMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:ProcurementServicesMember2022-04-012022-06-300001046311chh:ProcurementServicesMemberus-gaap:TransferredAtPointInTimeMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:ProcurementServicesMember2021-04-012021-06-300001046311chh:ProcurementServicesMemberus-gaap:TransferredAtPointInTimeMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:MarketingandReservationSystemMember2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:MarketingandReservationSystemMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:MarketingandReservationSystemMember2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:MarketingandReservationSystemMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:OwnedHotelsMember2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OwnedHotelsMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:OwnedHotelsMember2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OwnedHotelsMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:OtherRevenueTopic606Member2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OtherRevenueTopic606Member2022-04-012022-06-300001046311chh:OtherRevenueTopic606Member2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:OtherRevenueTopic606Member2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OtherRevenueTopic606Member2021-04-012021-06-300001046311chh:OtherRevenueTopic606Member2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMember2022-04-012022-06-300001046311us-gaap:TransferredAtPointInTimeMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMember2021-04-012021-06-300001046311us-gaap:TransferredAtPointInTimeMember2021-04-012021-06-300001046311chh:OtherRevenueNotTopic606Member2022-04-012022-06-300001046311chh:OtherRevenueNotTopic606Member2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:RoyaltyFeesMember2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:RoyaltyFeesMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:RoyaltyFeesMember2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:RoyaltyFeesMember2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:InitialFranchiseandRelicensingFeesMember2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:InitialFranchiseandRelicensingFeesMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:InitialFranchiseandRelicensingFeesMember2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:InitialFranchiseandRelicensingFeesMember2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:ProcurementServicesMember2022-01-012022-06-300001046311chh:ProcurementServicesMemberus-gaap:TransferredAtPointInTimeMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:ProcurementServicesMember2021-01-012021-06-300001046311chh:ProcurementServicesMemberus-gaap:TransferredAtPointInTimeMember2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:MarketingandReservationSystemMember2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:MarketingandReservationSystemMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:MarketingandReservationSystemMember2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:MarketingandReservationSystemMember2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:OwnedHotelsMember2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OwnedHotelsMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:OwnedHotelsMember2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OwnedHotelsMember2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberchh:OtherRevenueTopic606Member2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OtherRevenueTopic606Member2022-01-012022-06-300001046311chh:OtherRevenueTopic606Member2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberchh:OtherRevenueTopic606Member2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMemberchh:OtherRevenueTopic606Member2021-01-012021-06-300001046311chh:OtherRevenueTopic606Member2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMember2022-01-012022-06-300001046311us-gaap:TransferredAtPointInTimeMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMember2021-01-012021-06-300001046311us-gaap:TransferredAtPointInTimeMember2021-01-012021-06-300001046311chh:OtherRevenueNotTopic606Member2022-01-012022-06-300001046311chh:OtherRevenueNotTopic606Member2021-01-012021-06-300001046311us-gaap:TransferredOverTimeMemberus-gaap:CorporateNonSegmentMember2022-04-012022-06-300001046311us-gaap:TransferredOverTimeMemberus-gaap:CorporateNonSegmentMember2021-04-012021-06-300001046311us-gaap:TransferredOverTimeMemberus-gaap:CorporateNonSegmentMember2022-01-012022-06-300001046311us-gaap:TransferredOverTimeMemberus-gaap:CorporateNonSegmentMember2021-01-012021-06-300001046311us-gaap:IntersegmentEliminationMemberchh:RoyaltyFeesMember2022-04-012022-06-300001046311us-gaap:IntersegmentEliminationMemberchh:RoyaltyFeesMember2021-04-012021-06-300001046311us-gaap:IntersegmentEliminationMemberchh:RoyaltyFeesMember2022-01-012022-06-300001046311us-gaap:IntersegmentEliminationMemberchh:RoyaltyFeesMember2021-01-012021-06-300001046311us-gaap:SeniorNotesMember2022-06-300001046311us-gaap:SeniorNotesMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMember2021-12-310001046311chh:UnsecuredNotesMember2022-06-300001046311chh:UnsecuredNotesMember2021-12-3100010463112021-01-012021-12-310001046311chh:CollateralDependentLoansMember2022-06-30chh:loan0001046311chh:CollateralDependentLoansMember2021-12-310001046311chh:ImpairedLoansMember2022-01-012022-06-300001046311chh:ImpairedLoansMember2021-01-012021-12-310001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:InterestRateBelowMarketReductionMember2022-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:InterestRateBelowMarketReductionMember2021-12-310001046311us-gaap:FinancingReceivables1To29DaysPastDueMemberus-gaap:SeniorNotesMember2022-06-300001046311chh:FinancialAsset30To89DaysPastDueMemberus-gaap:SeniorNotesMember2022-06-300001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:SeniorNotesMember2022-06-300001046311us-gaap:FinancialAssetPastDueMemberus-gaap:SeniorNotesMember2022-06-300001046311us-gaap:FinancialAssetNotPastDueMemberus-gaap:SeniorNotesMember2022-06-300001046311us-gaap:SeniorNotesMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancingReceivables1To29DaysPastDueMember2022-06-300001046311chh:FinancialAsset30To89DaysPastDueMemberus-gaap:SeniorSubordinatedNotesMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancialAssetPastDueMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001046311us-gaap:SeniorSubordinatedNotesMember2022-06-300001046311us-gaap:FinancingReceivables1To29DaysPastDueMemberchh:UnsecuredNotesMember2022-06-300001046311chh:FinancialAsset30To89DaysPastDueMemberchh:UnsecuredNotesMember2022-06-300001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberchh:UnsecuredNotesMember2022-06-300001046311chh:UnsecuredNotesMemberus-gaap:FinancialAssetPastDueMember2022-06-300001046311us-gaap:FinancialAssetNotPastDueMemberchh:UnsecuredNotesMember2022-06-300001046311chh:UnsecuredNotesMember2022-06-300001046311us-gaap:FinancingReceivables1To29DaysPastDueMember2022-06-300001046311chh:FinancialAsset30To89DaysPastDueMember2022-06-300001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-06-300001046311us-gaap:FinancialAssetPastDueMember2022-06-300001046311us-gaap:FinancialAssetNotPastDueMember2022-06-300001046311us-gaap:FinancingReceivables1To29DaysPastDueMemberus-gaap:SeniorNotesMember2021-12-310001046311chh:FinancialAsset30To89DaysPastDueMemberus-gaap:SeniorNotesMember2021-12-310001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:SeniorNotesMember2021-12-310001046311us-gaap:FinancialAssetPastDueMemberus-gaap:SeniorNotesMember2021-12-310001046311us-gaap:FinancialAssetNotPastDueMemberus-gaap:SeniorNotesMember2021-12-310001046311us-gaap:SeniorNotesMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancingReceivables1To29DaysPastDueMember2021-12-310001046311chh:FinancialAsset30To89DaysPastDueMemberus-gaap:SeniorSubordinatedNotesMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancialAssetPastDueMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001046311us-gaap:SeniorSubordinatedNotesMember2021-12-310001046311us-gaap:FinancingReceivables1To29DaysPastDueMemberchh:UnsecuredNotesMember2021-12-310001046311chh:FinancialAsset30To89DaysPastDueMemberchh:UnsecuredNotesMember2021-12-310001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberchh:UnsecuredNotesMember2021-12-310001046311chh:UnsecuredNotesMemberus-gaap:FinancialAssetPastDueMember2021-12-310001046311us-gaap:FinancialAssetNotPastDueMemberchh:UnsecuredNotesMember2021-12-310001046311chh:UnsecuredNotesMember2021-12-310001046311us-gaap:FinancingReceivables1To29DaysPastDueMember2021-12-310001046311chh:FinancialAsset30To89DaysPastDueMember2021-12-310001046311us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-12-310001046311us-gaap:FinancialAssetPastDueMember2021-12-310001046311us-gaap:FinancialAssetNotPastDueMember2021-12-310001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-12-310001046311us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300001046311chh:MarketingAndReservationSystemExpensesMember2022-01-012022-06-300001046311us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-300001046311chh:MarketingAndReservationSystemExpensesMember2021-01-012021-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-04-012022-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-04-012021-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-01-012022-06-300001046311us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-01-012021-06-300001046311chh:FranchisingMember2021-01-012021-03-31chh:investment0001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:SeniorNotesMember2021-12-310001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:SeniorNotesMember2022-06-300001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:SeniorNotesMember2021-12-310001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:SeniorNotesMember2022-06-300001046311us-gaap:SeniorNotesMemberchh:A400MillionSeniorNotes2022Member2022-06-300001046311us-gaap:SeniorNotesMemberchh:A400MillionSeniorNotes2022Member2021-12-310001046311us-gaap:SeniorNotesMemberchh:A600MillionUnsecuredRevolvingCreditFacilityMember2021-12-310001046311us-gaap:SeniorNotesMemberchh:A600MillionUnsecuredRevolvingCreditFacilityMember2022-06-300001046311chh:EconomicDevelopmentLoansMember2022-06-300001046311chh:EconomicDevelopmentLoansMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberchh:MutualFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberchh:MutualFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberchh:MutualFundsMemberus-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberchh:MutualFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMember2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-06-300001046311us-gaap:FairValueMeasurementsRecurringMemberchh:MutualFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberchh:MutualFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberchh:MutualFundsMemberus-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberchh:MutualFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:InvestmentsMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMember2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311chh:A450MillionSeniorUnsecuredNotesDue2031Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311chh:A400MillionSeniorUnsecuredNotesDue2029Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:SeniorNotesMemberchh:A400MillionSeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberchh:A400MillionSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2022-06-300001046311us-gaap:SeniorNotesMemberchh:A400MillionSeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberchh:A400MillionSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001046311us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001046311us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001046311us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001046311us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001046311us-gaap:RestrictedStockMember2022-04-012022-06-300001046311us-gaap:RestrictedStockMember2021-04-012021-06-300001046311us-gaap:RestrictedStockMember2022-01-012022-06-300001046311us-gaap:RestrictedStockMember2021-01-012021-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2022-04-012022-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001046311us-gaap:EmployeeStockOptionMember2021-12-310001046311us-gaap:RestrictedStockMember2021-12-310001046311us-gaap:RestrictedStockUnitsRSUMember2021-12-310001046311us-gaap:EmployeeStockOptionMember2022-06-300001046311us-gaap:RestrictedStockMember2022-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2022-06-30chh:award_type0001046311us-gaap:RestrictedStockMembersrt:MinimumMember2022-01-012022-06-300001046311us-gaap:RestrictedStockMembersrt:MaximumMember2022-01-012022-06-300001046311us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2022-01-012022-06-300001046311srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001046311us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001046311us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001046311us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001046311us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2022-04-012022-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001046311us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-30chh:brand0001046311chh:FranchisingMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001046311us-gaap:CorporateNonSegmentMember2022-04-012022-06-300001046311us-gaap:IntersegmentEliminationMember2022-04-012022-06-300001046311chh:FranchisingMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001046311us-gaap:CorporateNonSegmentMember2021-04-012021-06-300001046311us-gaap:IntersegmentEliminationMember2021-04-012021-06-300001046311chh:FranchisingMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001046311us-gaap:CorporateNonSegmentMember2022-01-012022-06-300001046311us-gaap:IntersegmentEliminationMember2022-01-012022-06-300001046311chh:FranchisingMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001046311us-gaap:CorporateNonSegmentMember2021-01-012021-06-300001046311us-gaap:IntersegmentEliminationMember2021-01-012021-06-300001046311chh:ForgivableNotesReceivableMember2022-06-300001046311chh:CapitalContributiontoJointVentureMember2022-06-300001046311us-gaap:CoVenturerMember2022-04-012022-06-300001046311us-gaap:CoVenturerMember2021-04-012021-06-300001046311us-gaap:CoVenturerMember2022-01-012022-06-300001046311us-gaap:CoVenturerMember2021-01-012021-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2022-04-012022-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2021-04-012021-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2022-01-012022-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2021-01-012021-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2022-06-300001046311chh:MemberofUnconsolidatedJointVentureMember2021-12-310001046311us-gaap:BuildingMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-05-310001046311us-gaap:SubsequentEventMemberus-gaap:CorporateNonSegmentMemberus-gaap:BuildingMember2022-07-012022-07-310001046311us-gaap:CommercialRealEstateMemberchh:SeniorAndMezzanineLoanMember2022-03-310001046311chh:A2022AssetAcquisitionMember2022-03-312022-03-310001046311chh:A2022AssetAcquisitionMemberus-gaap:LandMember2022-04-142022-04-140001046311chh:A2022AssetAcquisitionMemberus-gaap:BuildingAndBuildingImprovementsMember2022-04-142022-04-140001046311chh:A2022AssetAcquisitionMemberus-gaap:FurnitureAndFixturesMember2022-04-142022-04-140001046311chh:A2022AssetAcquisitionMember2022-04-142022-04-140001046311chh:RadissonAmericasMember2022-06-120001046311chh:RadissonAmericasMember2022-06-122022-06-120001046311us-gaap:SubsequentEventMemberchh:WoodSpringMember2022-07-19chh:awardType
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 _____________________________________________ 
FORM 10-Q
 _____________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 001-13393
 _____________________________________________ 
CHOICE HOTELS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
_____________________________________________ 
Delaware52-1209792
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
1 Choice Hotels Circle20850
Suite 400
Rockville,Maryland
(Address of Principal Executive Offices)(Zip Code)

(Registrant’s telephone number, including area code): (301) 592-5000
(Former name, former address and former fiscal year, if changed since last report): N/A
 ________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 per shareCHHNew York Stock Exchange
_____________________________________________  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  No  
The number of shares of common stock outstanding on July 29, 2022 was 55,779,959.


CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
 
 PAGE NO.

2

PART I. FINANCIAL INFORMATION
 
ITEM 1.FINANCIAL STATEMENTS

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
        
Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
REVENUES
Royalty fees$121,449 $106,242 $212,188 $172,289 
Initial franchise and relicensing fees6,222 7,328 14,624 12,755 
Procurement services21,803 12,092 33,486 23,283 
Marketing and reservation system189,382 135,988 316,019 227,509 
Owned hotels17,191 8,993 29,228 13,347 
Other11,927 7,701 20,156 12,108 
Total revenues367,974 278,344 625,701 461,291 
OPERATING EXPENSES
Selling, general and administrative43,888 34,470 74,212 64,737 
Depreciation and amortization5,479 6,232 11,710 12,594 
Marketing and reservation system153,846 113,285 267,496 211,458 
Owned hotels10,692 5,333 18,846 9,480 
       Total operating expenses
213,905 159,320 372,264 298,269 
Gain on sale of business and assets, net3,280  3,309  
Operating income157,349 119,024 256,746 163,022 
OTHER INCOME AND EXPENSES, NET
Interest expense11,252 11,691 22,722 23,468 
Interest income(1,628)(1,234)(2,908)(2,515)
Other loss (gain)5,559 (2,108)7,275 (3,313)
Equity in net loss (gain) of affiliates40 (1,179)(204)4,818 
Total other income and expenses, net15,223 7,170 26,885 22,458 
Income before income taxes142,126 111,854 229,861 140,564 
Income tax expense35,958 25,972 56,302 32,345 
Net income$106,168 $85,882 $173,559 $108,219 
Basic earnings per share$1.90 $1.54 $3.11 $1.95 
Diluted earnings per share$1.89 $1.53 $3.08 $1.93 
Cash dividends declared per share$0.2375 $0.225 $0.4750 $0.225 
The accompanying notes are an integral part of these consolidated financial statements.
3

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
(UNAUDITED)
 
        
Three Months EndedSix Months Ended
 June 30,June 30,
2022202120222021
Net income$106,168 $85,882 $173,559 $108,219 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(103)71 (237)123 
Other comprehensive income (loss), net of tax(103)71 (237)123 
Comprehensive income$106,065 $85,953 $173,322 $108,342 
The accompanying notes are an integral part of these consolidated financial statements.
4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
June 30, 2022December 31, 2021
ASSETS
Current assets
Cash and cash equivalents$607,185 $511,605 
Accounts receivable (net of allowance for credit losses of $21,822 and $34,149, respectively)
203,890 153,147 
Income taxes receivable3,123 12,511 
Notes receivable (net of allowance for credit losses of $4,483 and $4,318, respectively)
53,760 54,453 
Prepaid expenses and other current assets115,651 29,945 
Total current assets983,609 761,661 
Property and equipment, at cost (net of accumulated depreciation and amortization of $236,191 and $232,492, respectively)
319,161 377,367 
Operating lease right-of-use assets29,669 34,183 
Goodwill159,196 159,196 
Intangible assets (net of accumulated amortization of $213,000 and $195,909, respectively)
319,922 312,389 
Notes receivable (net of allowance for credit losses of $7,048 and $12,461, respectively)
48,649 66,451 
Investments, employee benefit plans, at fair value29,821 33,946 
Investments in affiliates27,789 27,967 
Deferred income taxes74,049 68,643 
Other assets84,976 90,021 
Total assets$2,076,841 $1,931,824 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable$106,427 $81,169 
Accrued expenses and other current liabilities100,631 104,472 
Deferred revenue79,767 81,538 
Current portion of long-term debt216,571 216,351 
Liability for guest loyalty program78,955 86,765 
Total current liabilities582,351 570,295 
Long-term debt844,729 844,123 
Long-term deferred revenue107,690 105,785 
Deferred compensation and retirement plan obligations34,468 38,690 
Income taxes payable15,482 20,642 
Operating lease liabilities30,355 35,492 
Liability for guest loyalty program37,684 41,785 
Other liabilities7,357 9,130 
Total liabilities1,660,116 1,665,942 
Commitments and Contingencies
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at June 30, 2022 and December 31, 2021; 55,780,322 and 55,609,226 shares outstanding at June 30, 2022 and December 31, 2021, respectively
951 951 
Additional paid-in-capital274,384 259,317 
Accumulated other comprehensive loss(4,811)(4,574)
Treasury stock, at cost; 39,285,316 and 39,456,412 shares at June 30, 2022 and December 31, 2021, respectively
(1,276,090)(1,265,032)
Retained earnings1,422,291 1,275,220 
Total shareholders’ equity 416,725 265,882 
Total liabilities and shareholders’ equity$2,076,841 $1,931,824 
The accompanying notes are an integral part of these consolidated financial statements.
5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

Six Months Ended
 June 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$173,559 $108,219 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization11,710 12,594 
Depreciation and amortization – marketing and reservation system14,608 12,076 
Gain on sale and disposal of business and assets, net(3,309) 
Franchise agreement acquisition cost amortization7,623 6,294 
Stock compensation and other charges17,770 16,295 
Interest and investment loss (income)7,459 (6,824)
Deferred income taxes(5,493)(3,465)
Equity in net loss of affiliates, less distributions received745 7,398 
Franchise agreement acquisition costs, net of reimbursements(27,016)(18,078)
Change in working capital and other(38,307)(32,102)
Net cash provided by operating activities159,349 102,407 
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment(49,866)(23,393)
Investment in intangible assets(1,824)(2,976)
Asset acquisitions, net of cash paid(856) 
Proceeds from sale of business and assets32,893  
Contributions to investments in affiliates(669)(1,136)
Proceeds from sale of equity method investments 11,830 
Purchases of investments, employee benefit plans(3,294)(931)
Proceeds from sales of investments, employee benefit plans1,854 1,994 
Issuance of notes receivable(1,987)(17,918)
Collections of notes receivable63 63 
Other items, net(305)(486)
Net cash used in investing activities(23,991)(32,953)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt issuance costs(24) 
Purchase of treasury stock(15,140)(5,362)
Dividends paid(26,453) 
Proceeds from exercise of stock options2,359 9,115 
Net cash (used in) provided by financing activities(39,258)3,753 
Net change in cash and cash equivalents96,100 73,207 
Effect of foreign exchange rate changes on cash and cash equivalents(520)(11)
Cash and cash equivalents at beginning of period511,605 234,779 
Cash and cash equivalents at end of period$607,185 $307,975 
Supplemental disclosure of cash flow information:
Cash payments during the period for
Income taxes, net of refunds$40,144 $17,108 
Interest, net of capitalized interest$21,614 $21,885 
Non-cash investing and financing activities
Dividends declared but not paid$13,249 $12,521 
Investment in property, equipment and intangibles acquired in accounts payable and accrued liabilities$5,715 $4,085 
Asset acquisition from extinguishment of note receivable$20,446 $— 

The accompanying notes are an integral part of these consolidated financial statements.
6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

Common
Stock -
Shares
Outstanding
Common
Stock -
Par
Value
Additional
Paid-in-
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Retained
Earnings
Total
Balance as of December 31, 202055,535,554 $951 $233,921 $(4,646)$(1,260,478)$1,024,500 $(5,752)
Net income— — — — — 22,337 22,337 
Other comprehensive income (loss), net of tax— — — 52 — — 52 
Share-based payment activity(1)
48,781 — 3,617 — 4,030 (3)7,644 
Dividends declared(1)
— — — — — —  
Treasury purchases(46,499)— — — (5,046)— (5,046)
Balance as of March 31, 202155,537,836 $951 $237,538 $(4,594)$(1,261,494)$1,046,834 $19,235 
Net income— — — — — 85,882 85,882 
Other comprehensive income (loss)— — — 71 — — 71 
Share based payment activity(1)
111,895 — 9,066 — 3,516 1 12,583 
Dividends declared ($0.225 per share)(1)
— — — — — (12,521)(12,521)
Treasury purchases(2,738)— — — (317)— (317)
Balance as of June 30, 202155,646,993 $951 $246,604 $(4,523)$(1,258,295)$1,120,196 $104,933 

Common
Stock -
Shares
Outstanding
Common
Stock -
Par
Value
Additional
Paid-in-
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Retained
Earnings
Total
Balance as of December 31, 202155,609,226 $951 $259,317 $(4,574)$(1,265,032)$1,275,220 $265,882 
Net income     67,391 67,391 
Other comprehensive income (loss), net of tax   (134)  (134)
Share-based payment activity(1)
262,008  6,068  3,486 4 9,558 
Dividends declared ($0.2375 per share)(1)
     (13,250)(13,250)
Treasury purchases(100,912)   (14,802) (14,802)
Balance as of March 31, 202255,770,322 $951 $265,385 $(4,708)$(1,276,348)$1,329,365 $314,645 
Net income     106,168 106,168 
Other comprehensive income (loss), net of tax   (103)  (103)
Share based payment activity(1)
12,422  8,999  596  9,595 
Dividends declared ($0.2375 per share)(1)
     (13,242)(13,242)
Treasury purchases(2,422)   (338) (338)
Balance as of June 30, 202255,780,322 $951 $274,384 $(4,811)$(1,276,090)$1,422,291 $416,725 
(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. During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of performance vested restricted stock units ("PVRSU") which are captured in Share-based payment activity.

The accompanying notes are an integral part of these consolidated financial statements.


7

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    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 Adopted Accounting Standards
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Topic 606, as opposed to at fair value. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted.
The Company has elected to early adopt ASU 2021-08 in the second quarter of 2022. The adoption has no present impact on the Company's consolidated financial statements, but will impact the accounting for contract assets and contract liabilities acquired in future business combinations.
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. ASU 2022-02 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.
2.    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- to ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby remaining deferred amounts are recognized to revenue in the period of termination. Loyalty points are typically redeemed within three years of issuance.
Significant changes in the contract liabilities balances during the period December 31, 2021 to June 30, 2022 are as follows:
(in thousands)
Balance as of December 31, 2021$175,425 
Increases to the contract liability balance due to cash received56,392 
Revenue recognized in the period(57,127)
Balance as of June 30, 2022$174,690 
Remaining Performance Obligations
The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $174.7 million as of June 30, 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 EndedThree Months Ended
June 30, 2022June 30, 2021
(in thousands)Over timePoint in timeTotalOver timePoint in timeTotal
Royalty fees$121,449 $ $121,449 $106,242 $ $106,242 
Initial franchise and relicensing fees6,222  6,222 7,328  7,328 
Procurement services20,744 1,059 21,803 11,502 590 12,092 
Marketing and reservation system148,126 41,256 189,382 121,944 14,044 135,988 
Owned hotels14,694 2,388 17,082 7,550 1,336 8,886 
Other11,927  11,927 7,701  7,701 
Total Topic 606 revenues$323,162 $44,703 367,865 $262,267 $15,970 278,237 
Non-Topic 606 revenues109 107 
Total revenues$367,974 $278,344 
Six Months EndedSix Months Ended
June 30, 2022June 30, 2021
(in thousands)Over timePoint in timeTotalOver timePoint in timeTotal
Royalty fees$212,188 $ $212,188 $172,289 $ $172,289 
Initial franchise and relicensing fees14,624  14,624 12,755  12,755 
Procurement services31,876 1,610 33,486 22,241 1,042 23,283 
Marketing and reservation system260,382 55,637 316,019 200,995 26,514 227,509 
Owned hotels24,635 4,385 29,020 11,068 2,058 13,126 
Other20,156  20,156 12,108  12,108 
Total Topic 606 revenues$563,861 $61,632 625,493 $431,456 $29,614 461,070 
Non-Topic 606 revenues208 221 
Total revenues$625,701 $461,291 
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 $19.4 million and $10.9 million for the three months ended June 30, 2022 and 2021, respectively, and $33.7 million and $17.0 million for the six months ended June 30, 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 $1.3 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $2.2 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively.
3.    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.
8

The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows:
(in thousands)June 30, 2022December 31, 2021
Senior$91,981 $108,370 
Subordinated20,506 27,801 
Unsecured1,453 1,512 
Total notes receivable113,940 137,683 
Total allowance for notes receivable credit losses11,531 16,779 
Total notes receivable, net of allowance$102,409 $120,904 
Current portion, net of allowance$53,760 $54,453 
Long-term portion, net of allowance$48,649 $66,451 
Amortized cost basis by year of origination and credit quality indicator are as follows:
(in thousands)202220212020PriorTotal
Senior$ $4,211 $ $87,770 $91,981 
Subordinated   20,506 20,506 
Unsecured   1,453 1,453 
Total notes receivable$ $4,211 $ $109,729 $113,940 
The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:
(in thousands)June 30, 2022December 31, 2021
Beginning balance$16,779 $19,484 
Provision for credit losses230 709 
Write-offs(5,478)(3,414)
Ending balance$11,531 $16,779 
As of June 30, 2022 and December 31, 2021, one loan and two loans, respectively, 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 $0.9 million and $6.3 million as of June 30, 2022 and December 31, 2021, respectively.
The write-offs for the year ended June 30, 2022 and December 31, 2021 are associated with loans previously classified as collateral-dependent that were settled in exchange for an operating hotel on April 14, 2022 and October 1, 2021, respectively. Refer to Note 15 regarding the second quarter 2022 asset acquisition accounting.
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 $18.2 million and $44.1 million at June 30, 2022 and December 31, 2021, respectively.
The Company has identified loans totaling approximately $7.5 million as of both June 30, 2022 and December 31, 2021, respectively, with stated interest rates that are less than market rate, representing a total unamortized discount of $0.2 million and $0.3 million as of June 30, 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.
9

The past due balances by credit quality indicator of notes receivable are as follows:
(in thousands)1- 30 days
Past Due
31-89 days
Past Due
> 90 days
Past Due
Total
Past Due
CurrentTotal
 Notes Receivable
As of June 30, 2022
Senior$ $ $15,200 $15,200 $76,781 $91,981 
Subordinated  2,209 2,209 18,297 20,506 
Unsecured    1,453 1,453 
$ $ $