# EDGAR Filing Document

**Accession Number:** 0001046311
**File Stem:** 0001193125-25-146761
**Filing Date:** 2025-6
**Character Count:** 13458
**Document Hash:** 49c7525faec95ba8461fc035243cf1fd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-146761.hdr.sgml**: 20250805

**ACCESSION NUMBER**: 0001193125-25-146761

**CONFORMED SUBMISSION TYPE**: CORRESP

**PUBLIC DOCUMENT COUNT**: 1

**FILED AS OF DATE**: 20250625

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CHOICE HOTELS INTERNATIONAL INC /DE
- **CENTRAL INDEX KEY:** 0001046311
- **STANDARD INDUSTRIAL CLASSIFICATION:** HOTELS & MOTELS [7011]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 521209792
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** CORRESP

**BUSINESS ADDRESS:**
- **STREET 1:** 915 MEETING STREET
- **STREET 2:** SUITE 600
- **CITY:** NORTH BETHESDA
- **STATE:** MD
- **ZIP:** 20852
- **BUSINESS PHONE:** 3015925000

**MAIL ADDRESS:**
- **STREET 1:** 915 MEETING STREET
- **STREET 2:** SUITE 600
- **CITY:** NORTH BETHESDA
- **STATE:** MD
- **ZIP:** 20852

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHOICE HOTELS FRANCHISING INC
- **DATE OF NAME CHANGE:** 19971118

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHOICE HOTELS INTERNATIONAL INC/
- **DATE OF NAME CHANGE:** 19971022

Ms. Babette Cooper

Mr. Wilson Lee

Division of Corporation Finance

Office of Real Estate & Construction

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

**Re: Choice Hotels International, Inc.** 

**Form 8-K filed on May 8, 2025** 

**File No. 001-13393** 

Dear Ms. Cooper and Mr. Lee:

Choice Hotels International, Inc. (the "Company," "Choice," "we," or "our") is submitting this letter in response to the comment letter dated June 12, 2025 from the staff (the "Staff") of the Securities and Exchange Commission (the "Commission"), regarding the Company's Current Report on Form 8-K filed on May 8, 2025 (the "Form 8-K"). For ease of reference, we have retyped the text of the Staff's comments in italics below.

<u>Form 8-K filed on May 8, 2025</u> 

<u>Exhibit 99.1</u> 

<u>Supplemental Non-GAAP Financial Information</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *We note your adjustment of "Net reimbursable (surplus) deficit from franchised and managed properties" in order to arrive at Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted Earnings Per Share (EPS), and their related 2025 Outlook measures. Please tell us what consideration you gave to presenting this adjustment on a gross disaggregated basis where the adjustment is split into two separate line items (i.e. one for revenue and another for expense). Your response should highlight all factors considered that would support and/or not support such a presentation.* 

The Company respectfully acknowledges the Staff's comment and in future filings will present this adjustment on a gross disaggregated basis where the adjustment is split into two separate line items (i.e. one for "Revenue for reimbursable costs from franchised and managed properties" and another for "Reimbursable expenses from franchised and managed properties"). We have provided below a revised presentation of the Adjusted EBITDA, the Adjusted Net Income, and the Adjusted Diluted Earnings Per Share (EPS) reconciliations for the three months ended March 31, 2025 and 2024 reflecting this change, and a presentation of the 2025 Outlook for the full year ended December 31, 2025 reflecting this change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *Further to our above comment, we note the amounts disclosed for "Net reimbursable deficit from franchised and managed properties" to arrive at Adjusted EBITDA differs from the amount adjusted to arrive at Adjusted Net Income. Please reconcile the amounts and explain the factors that contributed to differences between the adjustments in arriving at the two Non-GAAP financial measures that share the same labeling description.* 

The Company respectfully notes that the amounts disclosed for "Net reimbursable deficit from franchised and managed properties" to arrive at Adjusted EBITDA is presented before income tax effects, whereas the "Net reimbursable deficit from franchised and managed properties" to arrive at Adjusted Net Income includes income tax effects. The Company respectfully acknowledges the Staff's comment and in future filings will quantify the total income tax effects on the non-GAAP adjustments in a single line item in the Adjusted Net Income reconciliation, the Adjusted Diluted Earnings Per Share (EPS) reconciliation, and the related Outlook measures. We have provided below a revised presentation of the Adjusted Net Income and the Adjusted Diluted Earnings Per Share (EPS) reconciliations for the three months ended March 31, 2025 and 2024 reflecting this change, and a presentation of the 2025 Outlook for the full year ended December 31, 2025 reflecting this change.

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**Exhibit 6** 

**CHOICE HOTELS INTERNATIONAL, INC.** 

**SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION** 

**(UNAUDITED)** 

**EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA** 

(dollar amounts in thousands)

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
|  | **2025** | **2024** |
|  Net income | $**44534** | $31009 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense | **15228** | 9199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **21242** | 20181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | **(1559)** | (1731) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other loss | **436** | 1336 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity in net loss of affiliates | **51** | 155 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | **13748** | 12815 |
|  EBITDA | $**93680** | $72964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | **5890** | 4933 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mark to market adjustments on non-qualified retirement plan investments | **(723)** | 3720 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Franchise agreement acquisition costs amortization and charges | **5386** | 3527 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(123424)** | (128987) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **143811** | 151549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **990** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Business combination, diligence and transition costs | **99** | 15844 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **3930** | 791 |
|  Adjusted EBITDA | $**129639** | $124341 |

---

**ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)** 

(dollar amounts in thousands, except per share amounts)

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
|  | **2025** | **2024** |
|  Net income | $**44534** | $31009 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on investments in equity securities, net of dividend income | **—** | 4227 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(123424)** | (128987) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **143811** | 151549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Business combination, diligence and transition costs | **99** | 15844 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **3930** | 791 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **990** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense on adjustments | **(6297)** | (10772) |
|  Adjusted Net Income | $**63643** | $**63661** |
|  Diluted Earnings Per Share | $**0.94** | $0.62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on investments in equity securities, net of dividend income | **—** | 0.08 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(2.61)** | (2.59) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **3.04** | 3.04 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Business combination. diligence and transition costs | **—** | 0.32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **0.08** | 0.02 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **0.02** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense on adjustments | **(0.13)** | (0.21) |
|  Adjusted Diluted Earnings Per Store (EPS) | $**1.34** | $1.28 |

---

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**Exhibit 7** 

**CHOICE HOTELS INTERNATIONAL, INC.** 

**SUPPLEMENTAL INFORMATION - 2025 OUTLOOK** 

**(UNAUDITED)** 

**Guidance represents the company's range of estimated outcomes for the full year ended December 31, 2025** 

**EBITDA & ADJUSTED EBITDA** 

(in thousands)

---

| | | |
|:---|:---|:---|
|  | **Full Year**<br>**Lower Range** | **Full Year<br>Upper Range** |
|  Net income | $**275000** | $**290000** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense | **93100** | **98100** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **89800** | **89800** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | **(6900)** | **(6900)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other loss | **800** | **800** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity in net gain of affiliates | **(6300)** | **(6300)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | **57700** | **57700** |
|  EBITDA | $**503200** | $**523200** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation) | **24400** | **24400** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mark to market adjustments on non-qualified retirement plan investments | **(700)** | **(700)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Franchise agreement acquisition costs amortization and charges | **23000** | **23000** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(597200)** | **(597200)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **652200** | **652200** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **6100** | **6100** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **4000** | **4000** |
|  Adjusted EBITDA | $**615000** | $**635000** |

---

**ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (EPS)** 

(in thousands, except per share amounts)

---

| | | |
|:---|:---|:---|
|  | **Full Year<br>Lower Range** | **Full Year<br>Upper Range** |
|  Net income | $**275000** | $**290000** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(597200)** | **(597200)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **652200** | **652200** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **6100** | **6100** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **4000** | **4000** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense on adjustments | **(16100)** | **(16100)** |
|  Adjusted Net Income | $**324000** | $**339000** |
|  Diluted Earnings Per Share | $**5.86** | $**6.18** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue for reimbursable costs from franchised and managed properties | **(12.73)** | **(12.73)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reimbursable expenses from franchised and managed properties | **13.90** | **13.90** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global ERP system implementation and related costs | **0.13** | **0.13** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-recurring operational restructuring charges and executive severance | **0.09** | **0.09** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense on adjustments | **(0.35)** | **(0.35)** |
|  Adjusted Diluted Earnings Per Share (EPS) | $**6.90** | $**7.22** |

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Please do not hesitate to call me at (301) 592-6659 with any questions or further comments you may have or if you wish to discuss the above responses.

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| | |
|:---|:---|
| Regards, | Regards, |
| CHOICE HOTELS INTERNATIONAL, INC. | CHOICE HOTELS INTERNATIONAL, INC. |
| By: | /s/ Scott E. Oaksmith |
| Name: | Scott E. Oaksmith |
| Title: | Chief Financial Officer |

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