What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-02-24 · 290 added, 216 removed, 555 unchanged (48% of the section changed)

Recent Developments

Agreement to acquire Radisson Hotels Americas

The Company entered into a Share Sale and Purchase Agreement, dated June 12, 2022, by and among the Company, Radisson Holdings, Inc., Radisson Hospitality, Inc., Aplite Holdings AB and Radisson Hospitality Belgium BV/SR to acquire (1) all of the issued and outstanding shares of Radisson Hospitality, Inc.

and (2) certain trademarks held by Radisson Hospitality Belgium BV/SRL (collectively referred to as "Radisson Hotels Americas") for a base purchase price of approximately $675.2 million, adjusted for Disclosed Leakage (as defined in the Share Sale and Purchase Agreement) and certain other prepaid expenses.

The transaction closed on August 11, 2022 for a purchase price of $673.9 million, net of leakage and certain prepaid expenses.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic continues to cause disruptions to the global economy and the hospitality industry, including in the United States, where more than 80% of our franchised hotels are located.

The COVID-19 pandemic and its consequences have reduced travel and demand for hotel rooms, which has adversely impacted, both financially and operationally and at varying degrees throughout the pandemic, the hospitality industry generally and the Company.

The development of effective vaccines, the on-going distribution of such vaccines and other containment efforts have been significant positive developments that we believe have contributed to improved operating metrics since the second quarter of 2021.

However, the extent to which the COVID-19 pandemic will impact the hospitality industry generally and our operations remains uncertain and will depend largely on future developments.

The impacts of COVID-19 on the Company's business were first experienced toward the end of the first quarter of 2020, resulting in significant decreases in revenue per available room ("RevPAR").

The Company continued to experience significant negative impacts through the first quarter of 2021, although an increase in leisure travel reservations was observed in March 2021 that steadily improved through the remainder of 2021.

The fourth quarter 2021 domestic RevPAR experienced an increase of approximately 52.2% and 13.9% relative to fourth quarter 2020 and fourth quarter 2019, respectively.

As of both December 31, 2021 and December 31, 2020, less than 1% of the Company's domestic hotel system had temporarily suspended operations due to governmental restrictions or a franchisee’s election.

The COVID-19 pandemic has caused and continues to cause disruptions to the global economy and the hospitality industry, including in the United States, where more than 80% of our franchised hotels are located.

Reduced travel as a result of COVID-19 adversely impacted the hospitality industry generally and the Company, however, the development and distribution of effective vaccines and other containment efforts have been significant positive developments that have contributed to improved operating metrics since the second quarter of 2021.

The extent to which the COVID-19 pandemic will continue to impact the hospitality industry generally and our operations remains uncertain and will depend in part on future developments, including the severity and duration of resurgences or variants of the virus, the effectiveness of actions by government authorities and the public to continue to contain the pandemic, and the potential for long-term adverse changes in consumer sentiment with respect to travel as a result of the pandemic.

Since the impacts of COVID-19 on the Company's business were first experienced in March 2020, trends have improved steadily.

The full year 2022 domestic RevPAR experienced an increase of approximately 12.4% and 14.6% relative to full year 2021 and full year 2019, respectively.

As of both December 31, 2022 and December 31, 2021, less than 1% of the Company's domestic hotel system had temporarily suspended operations.

While the ultimate impact and duration of COVID-19 is uncertain and will depend on future developments, which are difficult to predict, the Company believes that it will continue to benefit in the long-term from its primarily franchise-only business model, which has historically provided a relatively stable earnings stream and low capital expenditure requirements.

Further, as of December 31, 2021, the Company had approximately $1.1 billion in cash and additional borrowing capacity through its senior unsecured revolving credit facility.

Based on our business model and information known at this time, the Company believes that cash flows from operations and available financing capacity are adequate to meet the expected future operating, investing and financing needs of the business.

While a recovery in the hospitality industry has commenced, industry projections anticipate that recovery to 2019 operating performance will occur over multiple years.

As the industry recovery continues, the Company believes it will continue to benefit from the faster rebound of leisure demand as a result of its higher share of leisure travel mix relative to competitors.

The Company's properties are also well distributed in drive-to markets, which the Company believes will lead in the demand recovery and foreseeable future for the industry.

We believe these points are illustrated by the Company's RevPAR results for full year and fourth quarter 2021, which both reflect growth relative to the comparable 2019 periods.

The effects of the COVID-19 pandemic on our annual 2021 results and anticipated trends are discussed further in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K.

We are primarily a hotel franchisor with franchise agreements and owned hotels representing 7,030 hotels open comprising 579,746 rooms and 924 hotels under construction, awaiting conversion or approved for development comprising 79,915 rooms as of December 31, 2021, located in 50 states, the District of Columbia and nearly 40 countries and territories outside the United States.

Our brand names include Comfort Inn ® , Comfort Suites ® , Quality ® , Clarion ® , Clarion Pointe™, Ascend Hotel Collection ® , Sleep Inn ® , Econo Lodge ® , Rodeway Inn ® , MainStay Suites ® , Suburban Extended Stay Hotel ® , WoodSpring Suites ® , Everhome Suites ® , and Cambria ® Hotels (collectively, the "Choice brands").

The Company's primary segment is the hotel franchising business, which represents approximately 96% of the Company's total revenues.

The Company's domestic operations are conducted through direct franchising relationships and the ownership of six Cambria hotels, while its international franchise operations are conducted through a combination of direct franchising and master franchising or master development (collectively, "master franchising") relationships.

Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee.

Further, as of December 31, 2022, the Company had approximately $281.6 million in cash and additional borrowing capacity through its senior unsecured revolving credit facility.

Based on our business model and information known at this time, the Company believes that cash flows from operations and available financing capacity provide sufficient liquidity to meet the expected future operating, investing and financing needs of the business, inclusive of those for the recently acquired Radisson Hotels Americas operations.

While the Company believes that the long-term fundamentals of the business remain strong, it will continue to adjust business contingency plans as it deems necessary as the COVID-19 pandemic evolves.

For additional information, refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 1A.

Risk Factors.

We are primarily a hotel franchisor with franchise agreements and owned hotels representing 7,487 hotels open comprising 627,804 rooms and 988 hotels under construction, awaiting conversion or approved for development comprising 94,558 rooms as of December 31, 2022, located in 50 states, the District of Columbia and approximately 50 countries and territories outside the United States.

Our brand names include Comfort Inn®, Comfort Suites®, Quality®, Clarion®, Clarion Pointe™, Ascend Hotel Collection®, Sleep Inn®, Econo Lodge®, Rodeway Inn®, MainStay Suites®, Suburban Studios™, WoodSpring Suites®, Everhome Suites®, and Cambria® Hotels (collectively, the "legacy Choice brands").

Additionally, through the Radisson Hotels Americas acquisition, our brands expanded to include Radisson Blu®, Radisson RED®, Radisson®, Park Plaza®, Country Inn & Suites® by Radisson, Radisson Inn & Suites SM , Park Inn by Radisson®, Radisson Individuals®, and Radisson Collection®, which are located across the United States, Canada, the Caribbean and Latin America ("the Americas"), collectively referred to for these markets as the "legacy Radisson brands".

The hotel franchising business represents the Company's primary operations,which represents approximately 92% of the Company's total revenues.

The Company's domestic operations are conducted through direct franchising relationships, the ownership of nine hotels, and the management of 13 hotels (inclusive of 3 owned hotels), while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships.

Master franchising

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relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee.

With a primary focus on hotel franchising, we benefit from the economies of scale inherent in the franchising business.

The fee and cost structure of our franchising business provides opportunities to improve operating results by increasing the number of franchised hotel rooms and effective royalty rates of our franchise contracts resulting in increased initial and relicensing fee revenue, ongoing royalty fees, and procurement services revenues.

The fee and cost structure of our franchising business provides opportunities to improve operating results by increasing the number of franchised hotel rooms and effective royalty rates of our franchise contracts resulting in increased initial fee revenue, ongoing royalty fees, and procurement services revenues.

In addition, our operating results can also be improved through our company-wide efforts related to improving property-level performance and expanding the number of partnerships with travel-related companies.

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The number of rooms in our hotel system and the occupancy and room rates at those properties significantly affect the Company’s results because our fees are based upon room revenues or the number of rooms at owned and franchised hotels.

To varying degrees, all of these factors have been and may continue to be disrupted by the COVID-19 pandemic.

The key industry standard for measuring hotel-operating performance is RevPAR, which is calculated by multiplying the percentage of occupied rooms by the average daily room rate realized.

Our variable overhead costs associated with franchise system growth of our established brands have historically been less than incremental royalty fees generated from new franchises.

The key industry standard for measuring hotel-operating performance is RevPAR, which is calculated by multiplying the percentage of occupied rooms by the average daily room rate ("ADR") realized.

Our variable overhead costs associated with franchise system growth of our brands have historically been less than incremental royalty fees generated from new franchises.

Accordingly, over the long term, any continued growth of our franchise business should enable us to realize benefits from the operating leverage in place and improve operating results.

The effects of the COVID-19 pandemic on our annual 2021 results and anticipated trends are discussed above under the heading "Impact of the COVID-19 Pandemic" and Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We are required by our franchise agreements to use the marketing and reservation system fees we collect for system-wide marketing and reservation system activities.

We are required by our legacy Choice franchise agreements to use marketing and reservation system fees we collect for system-wide marketing and reservation system activities.

These expenditures, which include advertising costs and costs to maintain our central reservations and property management systems, enhance awareness and consumer preference for our brands and deliver guests to our franchisees.

Greater awareness and preference promotes long-term growth in business delivery to our franchisees

and increases the desirability of our brands to hotel owners and developers, which ultimately increases franchise fees earned by the Company.

Due to increased RevPAR growth during the second, third, and fourth quarters of 2021 and our disciplined management of discretionary marketing and reservation system expenditures, marketing and reservation revenues exceeded expenses for full year 2021.

Greater awareness and preference promote long-term growth in business delivery to our franchisees and increases the desirability of our brands to hotel owners and developers, which ultimately increases franchise fees earned by the Company.

The legacy Radisson Hotels Americas franchise agreements have similar provisions regarding marketing fees to be used for marketing activities.

Additionally, the legacy Radisson Hotels Americas management agreements include cost reimbursements, primarily related to payroll costs at managed hotels where the Company is the employer.

Our Company articulates its mission as a commitment to our franchisees’ profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise.

We have developed an operating system dedicated to our franchisees’ success that focuses on delivering guests to hotels and reducing hotel operating costs.

As discussed above, the Company has taken and is continuing to take measures to combat the impact of the COVID-19 pandemic on our business.

We believe these measures support the Company's preparedness and complement the strategic priorities we execute against to create value for our shareholders over the long-term.

We believe that executing our strategic priorities creates value for our shareholders over the long term.

These key long-term goals are as follows:

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Our success is dependent on improving the performance of our hotels, increasing our system size by selling additional hotel franchises with a focus on revenue-intense chain scales and markets, improving our effective royalty rate, expanding our qualified vendor programs and travel-related partnerships and maintaining a disciplined cost structure.

As noted above, we have introduced several temporary measures designed to assist franchisees during the COVID-19 pandemic.

We attempt to improve our revenues and overall profitability by providing a variety of products and services designed to increase business delivery and/or reduce operating and development costs.

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This ensures that we have brands suitable for creating growth in a variety of market conditions.

Improving the performance of the hotels in our system, strategically growing the system through additional franchise sales, and improving franchise agreement pricing while maintaining a disciplined cost structure are the keys to profitable growth.

As disclosed above, prior to the second quarter of 2021, the Company's hotels experienced declines in occupancy and RevPAR resulting from the impacts of the COVID-19 pandemic.

The declines impacted the profitability of the Company and the negative impact to the Company could return if a resurgence of the COVID-19 pandemic significantly impacts travel.

The addition of the legacy Radisson brands in the Americas increased Choice's footprint in the upper midscale and upscale chain scales and introduced presence in the upper upscale chain scale.

We expect that the Radisson Americas acquisition will enable us to further build on our momentum in the upscale chain scale, accelerating the growth of our Cambria Hotels and Ascend Hotel Collection brands and allowing us to expand the Radisson portfolio.

Maximizing Financial Returns and Creating Value for Shareholders.

Our capital allocation decisions, including capital structure and uses of capital, are intended to maximize our return on invested capital and create value for our shareholders.

We believe our historically strong and predictable cash flows create a strong financial position that provides us a competitive advantage.

We maintain a capital structure intended to generate high financial returns and use our excess cash flow to provide returns to our shareholders primarily through share repurchases, dividends and investing in growth opportunities.

In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends and activity under the Company's share repurchase program.

Given our strong liquidity and credit profile, the Company's board of directors declared on May 7, 2021, a quarterly cash dividend of $0.225 per share of common stock and approved resumption of the share repurchase program.

On September 9, 2021, the Company's board of directors declared a quarterly cash dividend of $0.225 per share of common stock.

Additionally, 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, which was paid in January 2022.

In addition to our hotel franchising business, we have also developed or acquired six Cambria hotels.

Since our business has not historically required significant reinvestment of capital, we typically utilize cash in ways that management believes provide the greatest returns to our shareholders, which include acquisitions, share repurchases and dividends.

Refer to the heading Liquidity and Capital Resources under Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations for additional analysis.

In April 2020, in light of uncertainty resulting from the

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COVID-19 pandemic, we suspended future, undeclared dividends and activity under the Company's share repurchase program.

Given our strong liquidity and credit profile, in May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our Board of Directors, and activity under the share repurchase program.

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, which was paid in January 2022.

On February 24, 2022, May 24, 2022, September 22, 2022, and December 7, 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.2375 per share of common stock.

In addition to our hotel franchising business, we have also developed or acquired six Cambria hotels and three legacy Radisson Hotels Americas hotels.

We intend to continue to strategically develop hotels to increase the presence of our brands in the United States, drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded.

When developing hotels, we seek key markets with strong growth potential that will deliver strong operating performance and improve the recognition of our brands.

Our hotel development and ownership efforts currently focus on the Cambria Hotels and Everhome Suites brands.

We believe our owned hotels provide us the opportunity to support and accelerate growth of our brands.

For legacy Choice brands, our hotel development and ownership efforts currently focus on the Cambria Hotels and Everhome Suites brands.

We believe our owned hotels provide us the opportunity to support and accelerate the growth of our brands.

We do not anticipate owning hotels on a permanent basis and expect to target dispositions to a franchisee in the future.

As a result of the Radisson Hotels Americas acquisition, we also manage 13 legacy Radisson Hotels Americas hotels (including the owned Radisson Hotels Americas hotels).

A key component of our strategy for owned hotels is to maximize revenues and manage costs.

We strive to optimize revenues by focusing on revenue management, increasing guest loyalty, expanding brand awareness with targeted customer segments, and providing superior guest service.

We currently do not manage our owned hotels but utilize the services of third-party management companies who provide their own employees.

We strive to optimize revenues by focusing on revenue management, increasing guest loyalty, expanding brand awareness with targeted customer groupings, and providing superior guest service.

We currently do not manage our owned hotels, other than the acquired Radisson Hotels Americas hotels, but utilize the services of third-party management companies that provide their own employees.

We manage costs by setting performance goals for our hotel management companies and optimizing distribution channels.

our core hotel franchising business, which leverage our core competencies and are additive to our franchising business model.

The Company also allocates capital to financing, investment and guaranty support to incentivize franchise development for certain brands in strategic markets and to explore growth opportunities in business areas that are adjacent or complementary to our core hotel franchising business, which leverage our core competencies and are additive to our franchising business model.

The timing and amount of these investments are subject to market and other conditions.

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As a result, profits escalate rapidly in a lodging up-cycle but erode quickly in a downturn as costs rarely decline as fast as revenue.

Profits from an ownership model increase at a greater rate from RevPAR growth attributable to average daily rate ("ADR") growth, than from occupancy gains since there are more incremental costs associated with higher guest volumes compared to higher pricing.

Profits from an ownership model increase at a greater rate from RevPAR growth attributable to ADR growth than from occupancy gains since there are more incremental costs associated with higher guest volumes compared to higher pricing.

• Franchisors license their brands to a hotel owner, giving the hotel owner the right to use the brand name, logo, operating practices, and reservations systems in exchange for a fee and an agreement to operate the hotel in accordance with the franchisor’s brand standards.

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As a result, franchisors benefit from both RevPAR growth and supply increases, which aids in reducing the impact of lodging industry economic cycles.

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• Management companies operate hotels for owners that do not have the expertise and/or the desire to self-manage.

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Similar to other industries, lodging experiences both positive and negative operating cycles.

The COVID-19 pandemic and its consequences have reduced demand for hotel rooms, which has adversely impacted, both financially and operationally and at varying degrees throughout the pandemic, the hospitality industry generally and the Company.

The duration of impact from the pandemic remains unknown, however the Company anticipates some negative impacts to persist in 2022.

Independent of the present impacts from the COVID-19 pandemic, there are general trajectories and characteristics of positive and negative operating cycles.

Independent of any persisting impacts from the COVID-19 pandemic, there are general trajectories and characteristics of positive and negative operating cycles.

Positive cycles are characterized as periods of sustained occupancy growth, increasing room rates and hotel development.

These cycles usually continue until either the economy sustains a prolonged downturn, excess supply conditions exist or some external factor occurs such as war, terrorism, pandemic or natural resource shortages.

These cycles usually continue until either the economy sustains a prolonged downturn, conditions create excess supply, or some external factor occurs such as war, terrorism, pandemic and/or natural resource shortages.

Negative cycles are characterized by hoteliers reducing room rates to stimulate occupancy and a reduction of hotel development.

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The increase in occupancy and room rates serves as a catalyst for increased hotel development.

As a franchisor with 7,030 opened hotels, including ownership of 6 hotels, we believe we are generally well positioned in any stage of the lodging cycle as our fee-for-service business model has historically delivered predictable, profitable, long-term growth in a variety of lodging and economic environments.

As a franchisor with 7,487 opened hotels, including ownership of nine hotels and management of 13 hotels (inclusive of 3 owned hotels), we believe we are generally well positioned in any stage of the lodging cycle as our fee-for-service business model has historically delivered predictable and profitable, long-term growth in a variety of lodging and economic environments.

We have historically benefited from both the RevPAR gains typically experienced in the early stages of recovery as our revenues are based on our franchisees’ gross room revenues, and the supply growth normally occurring in the later stages as we increase our portfolio size.

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Luxury Four Seasons, Ritz Carlton, W Hotel, JW Marriott

Upper Upscale Marriott, Hilton, Hyatt, Sheraton

Upscale Cambria Hotels, Courtyard, Hyatt Place, Hilton Garden Inn

Upper Midscale Comfort Inn, Holiday Inn Express, Hampton Inn, Fairfield Inn

Upper Upscale Radisson Blu, Marriott, Hilton, Hyatt, Sheraton

Upscale Cambria Hotels, Radisson, Courtyard, Hyatt Place, Hilton Garden Inn

Upper Midscale Comfort Inn, Country Inn & Suites, Holiday Inn Express, Hampton Inn, Fairfield Inn

Midscale Quality Inn, Sleep Inn, Best Western, Baymont

Economy Econo Lodge, Super 8, Days Inn, Motel 6

The lodging industry consists of independent operators of hotels and those that have joined national hotel franchise chains.

The lodging industry consists of independent operators and those that have joined national hotel franchise chains.

Independent operators of hotels not owned or managed by major lodging companies have increasingly joined national hotel franchise chains as a means of remaining competitive with hotels owned by or affiliated with national lodging companies.

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We believe that national franchise chains with a large number of hotels enjoy greater brand awareness among potential guests and greater bargaining power with suppliers than those with fewer hotels, and that greater brand awareness and bargaining power can increase the desirability of a hotel to its potential guests and reduce operating costs of a hotel.

Furthermore, we believe that hotel operators choose lodging franchisors based primarily on the perceived value and quality of each franchisor’s brand and its services, and the extent to which affiliation with that franchisor may increase the hotel operator profitability.

Furthermore, we believe that hotel operators choose lodging franchisors based

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primarily on the perceived value and quality of each franchisor’s brand and its services, and the extent to which affiliation with that franchisor may increase the hotel operator profitability.

We believe these factors enhance the resiliency of hotels affiliated with brands, and as a result, the value proposition of the franchise lodging chains, during a negative operating cycle.

Choice’s Franchising Business

As discussed herein, the Company has taken numerous measures to combat the significant impact of the COVID-19 pandemic on our business.

These measures have been and remain an immediate priority in order to mitigate the financial impacts to our franchisees and the Company.

We believe these immediate measures support the Company's preparedness and complement the strategic priorities, addressed below, we execute against to create value for our shareholders over the long-term.

The impacts of the pandemic have not materially changed the fundamentals of the Choice franchising business nor our vision for deploying our family of fourteen brands, which represent both new construction and conversion brands and compete at various hotel consumer and developer price points.

We operate primarily as a hotel franchisor and deploy our family of 22 brands and brand extensions, which represent both new construction and conversion brands and compete at various hotel consumer and developer price points.

Economics of Franchising Business .

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Our family of well-known and diversified brand offerings positions us well within the lodging industry.

Our new build brands such as Cambria Hotels, Comfort, Sleep Inn, WoodSpring, and Everhome Suites offer hotel developers an array of choices at various price points for transient and extended stay business during periods of supply growth in the various hotel chain scale categories.

Our brands such as Quality, Clarion Pointe, Ascend Hotel Collection and Econo Lodge offer conversion opportunities during both industry contraction and growth cycles to independent operators and non-Choice affiliated hotels who desire to affiliate with our brands and take advantage of the services we have to offer.

Our new build brands such as Cambria Hotels, Comfort, Sleep Inn, WoodSpring, Everhome Suites, and Country Inn & Suites offer hotel developers an array of choices at various price points for transient and extended stay business during periods of supply growth in the various hotel chain scale categories.

Our brands such as Quality, Clarion Pointe, Ascend Hotel Collection, Econo Lodge, and Radisson offer conversion opportunities during both industry contraction and growth cycles to independent operators and non-Choice affiliated hotels who desire to affiliate with our brands and take advantage of the services we have to offer.

Our mission is a commitment to franchisee profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise.

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During times of lower industry supply growth and tighter capital markets, we can target conversions of existing non-Choice affiliated hotels seeking the awareness and proven performance provided by our brands.

During periods of strong industry supply growth, we expect a greater portion of our room growth to come from our new construction brands.

During periods of strong industry supply growth, we generally expect a greater portion of our room growth to come from our new construction brands.

We believe that a large number of markets can still support our hotel brands and that the growth potential for our brands remains strong.

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We strive to maintain the strength of our brands by enhancing product consistency and quality.

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Reaching More Consumers .

We believe hotel owners value and benefit from the large volume of guests we deliver through a mix of activities including brand marketing, reservation systems, account sales (corporate, government, social, military, educational and fraternal organizations), and the Company’s loyalty program, Choice Privileges ® .

Our strategy is to maximize the effectiveness of these activities in delivering both leisure and business travelers to Choice-branded hotels.

The Company intends to continue to increase awareness of its brands through its national marketing campaigns and its Choice Privileges loyalty program promotions.

The Company intends to continue to increase awareness of its brands through its national marketing campaigns and its loyalty program promotions.

These campaigns are intended to generate a compelling message to consumers to create even greater awareness for our brands with the ultimate goal of driving business through our central reservation system.

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Our central reservations system is a critical technology used to deliver guests to our franchisees through multiple channels, including our call centers, proprietary web and mobile sites, global distribution systems (e.g., SABRE, Amadeus), online travel agents ("OTAs") (e.g., Expedia, Booking.com) and internet referral or booking services (e.g., Kayak, Trip Advisor).

We believe our well-known brands, combined with our relationships with many internet distribution web sites, benefits our franchisees by facilitating increased rate and reservations delivery, and reducing costs and operational complexity.

We believe our well-known brands, combined with our relationships with many internet distribution websites, benefits our franchisees by facilitating increased rate and reservations delivery, and reducing costs and operational complexity.

Leveraging Size, Scale and Distribution .

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Domestic Franchise System

Our standard domestic franchise agreements grant franchisees the non-exclusive right to use certain of our trademarks and receive other benefits of our franchise system to facilitate the operation of their franchised hotel at a specified location.

The majority of our standard domestic franchise agreements are 10 to 30 years in duration with certain rights for each of the franchisor and franchisee to terminate the agreement, such as upon designated anniversaries of hotel opening, before the stated duration.

Our franchisees operate domestically under one of fourteen Choice brands.

The majority of our standard domestic franchise agreements are 20 to 30 years in duration with certain rights for each of the

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franchisor and franchisee to terminate the agreement, such as upon designated anniversaries of hotel opening, before the stated duration.

Our franchisees operate domestically under one of 22 brands and brand extensions.

The following table presents key statistics related to our domestic franchise system over the five years ended December 31, 2022.

During the first quarter of 2020, the Company revised its calculation of Occupancy.

Historically, Occupancy has excluded rooms unavailable to our guests for operational reasons, as reported by our franchisees.

With the onset of the COVID-19 pandemic resulting in reduced travel and lesser demand, our franchisees began closing greater portions of inventory as compared to previous periods.

To provide a more representative depiction of system occupancy and with reference to industry standards for RevPAR reporting for partially closed hotels during the COVID-19 pandemic, we have revised our Occupancy calculation to be reflective of full room availability for open hotels.

Additionally, the Company made minor revisions to the calculation of ADR with respect to complimentary rooms.

The revised ADR, Occupancy, and RevPAR are reflected in the table below for all periods noted.

As of and For the Year Ended December 31,

2017 2018 2019 (3)

Number of properties, end of period (5)

5,853 5,945 5,943 5,913 6,296

Number of rooms, end of period (5)

448,749 461,674 456,528 458,030 494,409

Royalty fees (in thousands) (1)

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58.0 % 57.6 % 45.6 % 57.2 % 58.0 %

Average daily room rate (ADR) (2)

Average daily rate (ADR) (2)

$ 82.17 $ 81.86 $ 71.67 $ 84.06 $ 93.17

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$ 47.68 $ 47.18 $ 32.69 $ 48.10 $ 54.06

(1) Royalty fees exclude the impact of franchise agreement acquisition cost amortization.

(2) The periods prior to 2018 exclude operating statistics from WoodSpring Suites properties, while 2018 includes full year operating statistics.

(3) The 2021, 2020 and 2019 periods include operating statistics of the Company's owned hotels, including intersegment royalties of $1.6 million, $0.8 million and $0.9 million, respectively.

(1) Royalty fees reflect legacy Choice brands, excluding the impact of franchise agreement acquisition cost amortization.

Total global royalty fees for legacy Radisson brands were $19.5 million for the period from the August 11, 2022 acquisition date through December 31, 2022.

(2) Statistics for average occupancy percentage, ADR and RevPAR exclude acquired legacy Radisson brands.

Additionally, the operating statistics exclude the Everhome Suites brand since the operating statistics are not representative of a stabilized brand, which the Company defines as having at least 25 units open and operating for over a twelve month period.

(3) These periods include operating statistics of the Company's legacy Choice owned hotels, including intersegment royalties of $2.2 million for 2022, $1.6 million for 2021, $0.8 million for 2020, and $0.9 million for 2019.

(4) The Company calculates RevPAR based on information as reported by franchisees.

To accurately reflect RevPAR, the company revised its prior years' operating statistics for the most current information provided.

(5) In 2022, the Company reclassified seven properties located in the Caribbean from Domestic Franchises to International Franchises.

2021 and prior properties and rooms data have been reclassified for comparability.

Currently, no individual franchisee accounts for more than 1% of the Company's total domestic royalty fees.

Owned and Managed Hotels

While the hotel franchising business represents the Company's primary operations, the Company also owns six Cambria hotels and three legacy Radisson Hotels Americas hotels and manages 13 hotels (inclusive of 3 owned hotels).

We derive revenue from the owned hotels primarily from guest stays.

We derive revenue from the managed hotels from base and incentive management fees, in addition to cost reimbursements, primarily for payroll costs at managed hotels where the Company is the employer.

We intend to continue to strategically develop and manage hotels to increase the presence of our brands in the United States, drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded.

We believe these avenues provide us the opportunity to support and accelerate the growth of our brands.

Industry Positioning

Our brands offer consumers and developers a wide range of options for transient and extended stay customers, including economy, midscale, upper midscale, and upscale hotels.

Our brands are as follows:

Our brands offer consumers and developers a wide range of options for transient and extended stay customers, including economy, midscale, upper midscale, upscale, and upper upscale hotels.

Our legacy Choice and legacy Radisson brands are as follows:

Cambria Hotels:

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Principal competitors include:

Tapestry, BW Premier Collection, Tribute, TRYP and Autograph Collection.

The Comfort family, consisting of three extensions - Comfort Inn, Comfort Inn & Suites, Comfort Suites - is an upper midscale brand that offers guests a warm and welcoming experience that is designed to help travelers feel refreshed and ready to take on the day.

Comfort hotels are ready to welcome business and leisure travelers everywhere they need to be.

The Comfort brand family recently completed a multiyear transformation initiative that resulted in updated guest rooms, refreshed public spaces, and a new, modern logo—signaling to guests on the outside of the hotel that something's new on the inside.

As the largest 100% smoke-free hotel brand in North America, Comfort hotels offer complimentary amenities that include a hot breakfast, free Wi-Fi, business center, and fitness center or swimming pool at most locations.

Tapestry, BW Premier, Voco, Trademark, and Tribute.

The Comfort brand family - consisting of Comfort Inn, Comfort Suites, and Comfort Inn & Suites - is an upper midscale brand that offers guests a warm and welcoming experience that is designed to help travelers feel refreshed and ready to take on the day.

Comfort hotels are ready to welcome business and leisure travelers everywhere.

The launch of our new

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prototype – Rise & Shine™ – marks a new chapter in Comfort’s journey and this milestone comes off the heels of a multiyear transformation initiative that resulted in updated guest rooms, refreshed public spaces, and a new, modern logo.

Each spacious guest room offers premium bedding and bath amenities along with a refrigerator and microwave.

Comfort Suites properties are tailored to meet the demands of today's business traveler, with each oversized suite featuring separate areas for working and relaxing, along with a sleeper sofa.

Comfort Suites properties are tailored to meet the demands of today's traveler, with each oversized suite featuring separate areas for working and relaxing, along with a sleeper sofa.

Principal competitor brands include Hampton, Holiday Inn Express and Fairfield Inn & Suites.

Sleep Inn is a midscale new construction brand offering developers a lower cost to build with competitive midscale average daily rates.

Sleep Inn delivers a reliable, simply stylish guest experience, providing both business and leisure travelers with modern nature-inspired designs, free high-speed internet access, free hot breakfast, amenities to support a better night’s rest, and an exercise room and/or pool.

Sleep Inn’s competitors include AmericInn, Baymont and Country Inn & Suites

Sleep Inn is a midscale new construction brand offering developers cost-efficient property to build, operate, and maintain with competitive midscale average daily rates.

Sleep Inn delivers a reliable, simply stylish guest experience that’s designed to help guests "Dream Better Here." Guests find fresh, nature-inspired design elements that are modern but timeless, that create a relaxed and serene environment, providing both business and leisure travelers with free Wi-Fi, free hot breakfast, amenities to support a better night’s rest, and an exercise room and/or pool.

Sleep Inn’s competitors include AmericInn, Baymont and Wingate.

Clarion helps owners of existing assets with food and beverage capabilities achieve strong returns with reasonable investment.

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Amenities include free high-speed internet access, a pool or fitness center, and a business center.

Principal competitor brands include Four Points by Sheraton and Radisson.

Principal competitor brands include Four Points by Sheraton.

Clarion Pointe:

Clarion Pointe is a select service franchise that is ideal for owners who want to strategically reposition their limited-service property into a brand with strong awareness and a concept that satisfies the expectations of emerging travelers.

Launched in 2019, Clarion Pointe is a select service franchise that is ideal for owners who want to strategically reposition their limited-service property into a brand with strong awareness and a concept that satisfies the expectations of emerging travelers.

Hotels offer guests a convenient and affordable experience with elevated essentials in just the right places, including contemporary design touches, curated food and beverage options, and on-demand connectivity.

Since launching in 2019, 35 Clarion Pointe hotels are open and operating, with a pipeline in excess of 35 hotels.

As of December 31, 2022, there are over 50 Clarion Pointe hotels open and operating.

Quality helps both guests and owners "get your money's worth" in the midscale category.

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All suites include a fully equipped kitchen with separate spaces to work, relax and eat.

Larger one-bedroom signature suites come equipped with in-unit washers and dryers.

Guests have access to free high-speed internet, a modern fitness room and outdoor amenity, business center, 24/7 laundry facilities and weekly housekeeping service.

Larger one-bedroom suites come equipped with in-unit washers and dryers.

Guests have access to free high-speed internet, a modern fitness room and outdoor amenity space, 24/7 laundry facilities and weekly housekeeping service.

Each hotel also has a “Homebase Market” with food, drink and personal items available for purchase.

Small kitchen appliances are available to check out at the front desk.

Principal competitors include Candlewood Suites, Home2 Suites and TownePlace Suites.

The Everhome Suites brand was launched in January 2020 and the first hotel opening is projected in 2022.

Suburban Extended Stay Hotel:

Suburban Extended Stay Hotels operate in the economy extended stay category, offering developers access to this category through flexible conversion options.

Suburban’s “just what you need” philosophy provides value-conscious, long staying guests with a simple, unpretentious experience with just the right hotel amenities.

All suites provide in-room kitchens.

Small kitchen appliances are available to check out at the front desk through the “Homebase Essentials” program.

Principal competitors include Candlewood Suites, Home2 Suites, TownePlace Suites and Extended Stay America Premier Suites.

The Everhome Suites brand was launched in January 2020 and the first hotel opened in Southern California in September 2022.

Suburban Studios:

Suburban Studios operate in the economy extended stay category, offering developers access to this category through flexible conversion options.

Suburban Studios’ “longer stays made easy” philosophy provides value-conscious, long staying guests with clean, comfortable rooms, friendly service and the amenities they need.

All guestrooms provide in-room kitchens.

Guests have access to free high-speed internet, 24/7 laundry facilities and bi-weekly housekeeping.

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WoodSpring Suites are all new construction, value-engineered hotels that operate in the economy extended stay category.

WoodSpring developers adhere to strict prototype/design specifications and an operating model that embody WoodSpring’s promise of “It’s Simple.

Done Better.” Every suite includes a well-designed kitchen, seating area and free premium movie channel.

Guests have access to free high-speed internet, 24/7 laundry facilities and biweekly housekeeping.

Principal competitors include Extended Stay America, HomeTowne Studios, MyPlace and Studio 6.

Econo Lodge is Choice Hotel’s premiere economy brand, providing an “easy stop on the road” for value-oriented travelers.

WoodSpring developers adhere to strict prototype and design specifications and an operating model that embodies WoodSpring’s promise of “It’s Simple.

Done Better.” Every suite includes a well-designed kitchen, seating area and

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free premium movie channel.

Guests have access to free high-speed internet, 24/7 laundry facilities and bi-weekly housekeeping.

Principal competitors include Extended Stay America, Echo by Wyndham, HomeTowne Studios, MyPlace and Studio 6.

Econo Lodge is Choice Hotel’s economy brand, providing an “easy stop on the road” for value-oriented travelers.

Free high-speed internet, bedside recharge outlets, refrigerators and free morning coffee are just some of the amenities that position Econo Lodge as a great value in the economy category.

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Great Savings.” Principal competitor brands include Americas Best Value Inn and Motel 6.

The following table presents key statistics related to the domestic system for the Choice brands over the five years ended December 31, 2021.

As of and For the Year Ended December 31,

2017 2018 2019 2020 2021

Country Inn & Suites by Radisson :

Country Inn & Suites by Radisson seeks to inspire guests with a sense of belonging, community, and shared experiences.

Each location offers inviting design, products, and services that create a warm, welcoming atmosphere for both business and leisure travelers.

Hotel teams also help guests feel like they matter through welcoming and attentive service.

The brand’s three signature amenities are free Wi-Fi, fitness centers, and a free, hot breakfast served daily.

Radisson offers an upscale travel experience.

With clean, modern designs, thoughtfully considered details, and a variety of services, these properties focus on providing excellent work/life balance for guests during their travels.

To ensure a harmonious stay, hotel teams seek to build meaningful personal relationships with guests.

Radisson hotels are found in suburban and city settings, near airports and leisure destinations.

Radisson RED:

An upscale, select service hotel brand, Radisson RED is characterized by a love of bold design, social connectedness, and playful twists on the conventional.

These urban hotels inject new life into hospitality through informal services where anything goes.

Hotel spaces kick-start the fun with vibrant designs, encourage social sharing, and easily switch from work to play and back.

Connected, trend-savvy travelers will love this unique opportunity to tailor their stay to their style.

Radisson Blu:

The Radisson Blu brand provides an upper upscale hotel experience distinguished by positive, personalized service and iconic buildings with stylish spaces.

Designed with contemporary flair and local flavor, each property offers a range of services such as premium dining and on-site spas.

Hotel teams shine in their thoughtful attention to the smallest details so that guests enjoy truly unforgettable experiences.

Radisson Blu hotels are located in major cities, key airport gateways, as well as growing and key markets.

Radisson Individuals:

Radisson Individuals is an upscale affiliation brand that offers hotels the benefits of our expertise, infrastructure, and brand recognition while celebrating each property’s distinct personality.

A Radisson Individuals hotel gives guests the charm of a one-of-a-kind travel experience while providing the high-quality services and genuine hospitality we’re known for.

These hotels are located in renowned cities, close to airports and key business and leisure destinations.

Characterized by a positive, stress-free environment, an upper economy to midscale brand, Park Inn by Radisson, provides good food and upbeat surroundings.

Mood-lifting contemporary design and clever use of color are combined with friendly, personalized service and feel-good extras like complimentary breakfast to ensure our guests experience a happy stay.

These hotels are located in primary and secondary cities, around economic and transit hubs, and conveniently near airports and railway stations.

An upper upscale brand combines engaging service, contemporary elegance, and local flavor.

At each hotel, team members warmly welcome guests and make it a point to foster genuine and meaningful interactions.

Refined spaces incorporate the essence of each location and provide a vibrant social setting for guests and the local community alike.

Located in capital cities and key business and leisure destinations, these charmingly distinctive hotels help travelers connect with the authentic character and culture of their location.

The Company's brands also include the Radisson Collection and Radisson Inn & Suites, however there are no open properties under these brands in the Company's markets as of December 31, 2022.

The following table presents key statistics related to the domestic system for the legacy Choice brands over the five years ended December 31, 2022.

As of December 31, 2022, legacy Radisson brands accounted for 508 and 51,473 domestic hotels and rooms, respectively, and 90 and 12,927 international hotels and rooms, respectively.

COMFORT DOMESTIC SYSTEM (2)

Number of properties, end of period (3)

1,623 1,612 1,645 1,665 1,685

Number of rooms, end of period (3)

Royalty fees (in thousands) (1)

126,823 126,541 129,372 130,963 132,523

Average occupancy percentage 62.7 % 62.2 % 46.1 % 60.1 % 61.8 %

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ADR $ 96.17 $ 95.84 $ 83.72 $ 98.22 $ 108.31

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Number of rooms, end of period 126,533 129,232 128,807 123,549 121,275

Royalty fees (in thousands) (1)

$ 80,924 $ 90,128 $ 94,228 $ 66,052 $ 97,855

Average occupancy percentage 54.4 % 54.1 % 41.8 % 53.5 % 53.5 %

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Number of rooms, end of period 22,179 22,498 22,072 21,837 19,630

Royalty fees (in thousands) (1)

$ 12,589 $ 12,798 $ 13,383 $ 7,991 $ 13,156

Average occupancy percentage 50.3 % 49.3 % 32.9 % 43.1 % 45.5 %

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Number of rooms, end of period 27,962 28,361 28,790 29,194 29,775

Royalty fees (in thousands) (1)

$ 23,093 $ 24,003 $ 24,747 $ 16,771 $ 25,956

Average occupancy percentage 61.9 % 61.1 % 46.2 % 58.7 % 59.5 %

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Number of rooms, end of period 4,268 4,636 6,374 6,994 7,891

Royalty fees (in thousands) (1)

$ 3,252 $ 3,669 $ 4,110 $ 3,427 $ 5,896

Average occupancy percentage 65.4 % 63.9 % 54.8 % 62.1 % 62.3 %

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Number of rooms, end of period 50,692 48,538 47,023 44,107 42,112

Royalty fees (in thousands) (1)

$ 23,867 $ 24,455 $ 24,510 $ 18,343 $ 25,208

Average occupancy percentage 47.6 % 47.7 % 40.9 % 50.1 % 49.6 %

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Number of rooms, end of period 35,124 34,727 31,828 30,275 28,364

Royalty fees (in thousands) (1)

$ 8,799 $ 9,772 $ 10,380 $ 8,980 $ 10,471

Average occupancy percentage 49.2 % 49.0 % 43.6 % 50.9 % 50.9 %

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RevPAR $ 32.15 $ 31.48 $ 25.94 $ 34.64 $ 36.96

SUBURBAN EXTENDED STAY HOTEL DOMESTIC SYSTEM

SUBURBAN DOMESTIC SYSTEM

Number of properties, end of period 54 60 66 71 75

Number of rooms, end of period 5,699 6,082 6,470 6,395 6,719

Royalty fees (in thousands) (1)

$ 3,716 $ 3,725 $ 3,783 $ 3,483 $ 4,308

Average occupancy percentage 69.4 % 66.0 % 63.6 % 70.0 % 67.5 %

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Number of rooms, end of period 5,685 7,277 7,697 7,869 8,865

Royalty fees (in thousands) (1)

$ 6,731 $ 8,872 $ 10,527 $ 5,574 $ 10,550

Average occupancy percentage 67.6 % 67.5 % 38.2 % 56.2 % 64.2 %

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Number of properties, end of period (3)

170 205 173 200 196

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Number of rooms, end of period (3)

Royalty fees (in thousands) (1)

13,873 21,303 13,075 20,473 20,091

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WOODSPRING SUITES DOMESTIC SYSTEM (5)

Number of properties, end of period N/A 249 270 291 302

Number of rooms, end of period N/A 29,911 32,479 35,020 36,374

Royalty fees (in thousands) (1)

N/A $ 18,982 $ 21,901 $ 22,091 $ 29,577

Number of properties, end of period 249 270 291 302 212

Number of rooms, end of period 29,911 32,479 35,020 36,374 25,592

Average occupancy percentage (5)

N/A 77.1 % 75.3 % 71.5 % 81.1 %

N/A $ 45.89 $ 47.10 $ 46.16 $ 51.61

N/A $ 35.37 $ 35.46 $ 33.01 $ 41.85

(1) Royalty fees exclude the impact of franchise agreement acquisition cost amortization.

77.1 % 75.3 % 71.7 % 79.6 % 79.2 %

$ 45.89 $ 47.10 $ 46.18 $ 51.66 $ 58.02

$ 35.37 $ 35.44 $ 33.09 $ 41.10 $ 45.94

EVERHOME SUITES DOMESTIC SYSTEM (6)

Number of properties, end of period N/A N/A N/A N/A 1

Number of rooms, end of period N/A N/A N/A N/A 99

Average occupancy percentage N/A N/A N/A N/A N/A

ADR N/A N/A N/A N/A N/A

RevPAR N/A N/A N/A N/A N/A

(1) The Company calculates RevPAR based on information as reported by franchisees.

To accurately reflect RevPAR, the Company revises its prior years' operating statistics for the most current information provided.

(2) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.

(3) In 2022, the Company reclassified properties located in the Caribbean from Domestic Franchises to International Franchises.

2021 and prior properties and rooms data have been reclassified for comparability.

(4) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.

(4) Statistics for 2017 exclude WoodSpring Suites properties.

Statistics for 2018 include royalties after acquisition on February 1, 2018 and full year statistics for average occupancy percentage, ADR and RevPAR.

(5) WoodSpring Suites statistics for 2018 include royalties after acquisition on February 1, 2018 and full year statistics for average occupancy percentage, ADR and RevPAR.

(6) Statistics for average occupancy percentage, ADR and RevPAR for the Everhome Suites brand, launched in January 2020, are not provided, as the operating statistics are not representative of stabilized brand, which the company defines as having at least 25 units open and operating for over a twelve month period.

International Franchise Operations

The Company conducts its international franchise operations through a combination of direct franchising and master franchising or master development (collectively, "master franchising") relationships.

The Company conducts its international franchise operations through a combination of direct franchising and master franchising relationships.

Master franchising relationships are governed by agreements that generally provide the master franchisee with the right to use and sub-license the use of our brands in a specific geographic region, usually for a fee.

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Master franchising relationships typically provide lower revenues to the Company as the master franchisees are responsible for managing certain necessary services (such as training, quality assurance, reservations and marketing) to support the franchised hotels in the assigned development territory and, therefore, retain a larger percentage of the hotel franchise fees to cover their expenses.

The international master franchisee collects the fees paid by the local franchisee and remits an agreed upon share to us.

Our master franchise and similar multi-unit licensing agreements have expiration dates, which we actively manage and potentially renew as we deem beneficial.

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We believe that international franchise operations will provide a long-term growth opportunity for the Company and as a result we continue to make investments which are expected to enhance the value proposition for prospective international franchisees.

As of December 31, 2021 and December 31, 2020, approximately 2% and 5%, respectively, of the Company's international branded hotels temporarily suspended operations due to governmental restriction or a franchisee’s election.

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The hotels and room online figures below include those with temporarily suspended operations.

The 2020 and 2021 operating results were significantly impacted by the COVID-19 pandemic, and we anticipate impacts of the pandemic on international operating results to persist in 2022.

The following chart summarizes our franchise system and operating results outside of the United States (1) :

As of and For the Year Ended December 31,

The 2020 and 2021 operating results were significantly impacted by the COVID-19 pandemic.

However, the development and distribution of effective vaccines and other containment efforts have resulted in significant positive developments that have contributed to improved operating metrics since the second quarter of 2021, with lingering impacts in some markets.

The following chart summarizes our legacy Choice franchise system and operating results outside of the United States (1) :

2018 2019 2020 2021 2022

Number of properties, end of period (2)

1,168 1,208 1,204 1,117 1,101

Number of rooms, end of period (2)

120,359 129,223 141,449 121,716 120,468

Royalty fees (in thousands) (3)

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(1) Reporting of operating statistics (i.e., average occupancy percentage, average daily room rate) of international franchisees is not required by all master franchise contracts, thus RevPAR metrics are not presented for our international franchisees.

(2) In 2022, the Company reclassified seven properties located in the Caribbean from Domestic Franchises to International Franchises.

2021 and prior properties and rooms data have been reclassified for comparability.

(3) Royalty fees exclude the impact of franchise agreement acquisition cost amortization and impairment.

The Company's international operations are primarily conducted in the following countries and territories, as organized by region:

Asia-Pacific.

Australia, China, India, Japan, New Zealand

Europe & Middle East.

Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Kingdom of Saudi Arabia, Lithuania, Norway, Portugal, Spain, Sweden, Turkey, United Kingdom

Latin America & Canada.

Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico

The open hotels and rooms by region and franchising relationship as of December 31, 2021 are presented below:

The open hotels and rooms by region and franchising relationship as of December 31, 2022 for legacy Choice are presented below:

Direct Franchising Master Franchising Total

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Europe & Middle East 91 7,994 264 45,834 355 53,828

Latin America & Canada 48 5,893 413 38,129 461 44,022

Latin America, Caribbean & Canada 52 6,249 411 37,954 463 44,203

International Total 345 24,111 756 96,357 1,101 120,468

As a result of the Radisson transaction, we expanded our international operations in several countries and territories in Latin America and the Caribbean.

As of December 31, 2022, Radisson Hotels Americas brands accounted for 90 and 12,927 international hotels and rooms, respectively.

The Company's international operations, inclusive of legacy Radisson, are primarily conducted in the following countries and territories, as organized by region:

Asia-Pacific.

Australia, China, India, Japan, New Zealand, Thailand

Europe & Middle East .

Austria, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Kingdom of Saudi Arabia, Lithuania, Norway, Portugal, Slovakia, Spain, Sweden, Turkey, United Kingdom

Latin America, Caribbean & Canada.

Aruba, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Honduras, Mexico, Panama, Peru, Trinidad and Tobago, Uruguay

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The worldwide open and pipeline hotels and rooms for the year ended December 31, 2022 are presented below:

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Hotels Rooms Hotels Rooms

Comfort 2,140 177,132 228 18,877

2,141 176,994 205 17,201

Quality 1,930 154,440 49 4,369

Ascend Hotel Collection 326 35,422 41 7,510

Clarion 316 43,138 19 1,691

304 41,186 20 2,239

Sleep Inn 448 32,525 102 5,669

MainStay Suites 116 7,991 90 4,030

Everhome — — 23 2,571

Everhome Suites 1 99 46 5,206

Econo Lodge 759 44,697 21 1,359

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WoodSpring Suites 212 25,592 223 26,874

Totals 7,030 579,746 924 79,915

Radisson Hotels Americas 598 64,400 66 8,104

Total excluding MDA commitments 7,487 627,804 988 94,558

MDA commitments — — 102 12,332

Total including MDA commitments 7,487 627,804 1,090 106,890

(1) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.

(3) Pipeline is defined as hotels with executed franchise agreements awaiting conversion, under construction or approved for development, and master development agreements ("MDA") committing owners to future franchise development.

Franchise Sales

Brand growth is important to our business model.

The number of franchise agreements awarded in 2021 were impacted by the COVID-19 pandemic, and we anticipate negative impacts to franchise sales activity to persist during the duration of the pandemic.

We have identified key market areas for hotel development based on supply/demand relationships and our strategic objectives.

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We deploy capital pursuant to this program opportunistically to promote growth of our brands.

The amount and timing of the investment in this program will be dependent on market and other conditions and we generally expect to recycle these investments within a five year period.

The amount and timing

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of the investment in this program will be dependent on market and other conditions and we generally expect to recycle these investments within a five year period.

For additional information, see the "Investing Activities" caption under the "Liquidity and Capital Resources" section in Item 7.

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The upfront fees received on signing of the MDA are non-refundable and are allocable to the affiliation fees due upon the execution of each franchise agreement between the parties in the regions covered by the MDA.

The MDA specifies development schedules the developer

must maintain;

The MDA specifies development schedules the developer must maintain;

if not met, the Company can terminate the geographic exclusivity, however the upfront fees remain allocable to future franchise agreement affiliation fees as long as the MDA remains in effect.

When the responsibility for development is transferred to a master franchisee in an international market, that party has the responsibility to develop and grow our brands in the covered region.

The international master franchisee generally must manage the delivery of certain necessary services (such as quality assurance, reservations and marketing) to support the franchised hotels in the covered region.

The international master franchisee collects the fees paid by the local franchisee and remits an agreed upon share to us.

International master franchise agreements generally have a term of at least 10 years.

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Franchise agreements are generally individually negotiated and vary among the different Choice brands and franchises, but we believe they are competitive with the industry standard within their market group.

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Cambria Hotels $500/$60,000 $750/$65,000 6.00 % 3.00 %

Comfort $500/$50,000 $750/$65,000 6.00 % 3.50 %

$500/$50,000 $750/$65,000 6.00 % 3.50 %

Quality Inn $500/$45,000 $550/$45,000 5.25 % 3.50 %

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Rodeway Inn $200/$20,000 $375/$15,000 5.00 % 3.50 %

Suburban Extended Stay Hotel (2)

Suburban Studios (3)

$225/$30,000 $475/$30,000 6.00 % 2.50 %

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N/A/$50,000 $550/$50,000 6.00 % 2.50 %

Country Inn & Suites $500/$50,000 NA/$50,000 5.75 % 3.75 %

Park Inn $450/$45,000 NA/$45,000 5.50 % 3.25 %

Radisson $500/$75,000 NA/$75,000 5.00 % 4.00 %

Radisson Blu $500/$100,000 NA/$100,000 5.00 % 4.00 %

Radisson Individuals $500/$75,000 NA/$75,000 5.00 % 4.00 %

Park Plaza $450/$50,000 NA/$50,000 4.00 % 3.50 %

Radisson Collection $500/$100,000 NA/$100,000 5.00 % 4.00 %

Radisson Inn & Suites $450/$50,000 NA/$50,000 5.00 % 3.75 %

Radisson Red $450/$75,000 NA/$75,000 5.00 % 4.00 %

(1) Fees are based on a percentage of gross room revenue.

(2) For dual brand hotels that combine either the Mainstay Suites or Suburban Extended Stay Hotel brand with another Choice brand, we may increase the Royalty Fee and/or System Fee up to the standard amount for such other Choice brand.

(3) The initial or transfer fee is $50,000 for properties with 122 rooms or less.

(2) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.

(3) In 2022, we rebranded Suburban Extended Stay to Suburban Studios.

For dual brand hotels that combine either the Mainstay Suites or Suburban Studios brand with another Choice brand, we may increase the Royalty Fee and/or System Fee to the standard amount for such other Choice brand.

(4) The WoodSpring Suites initial or transfer fee is $50,000 for properties with 122 rooms or less.

Each additional room is $300/per room for initial fees.

(4) The initial fee is $50,000 for properties with 113 rooms or less.

(5) The Everhome Suites initial fee is $50,000 for properties with 114 rooms or less.

Each additional room is $300/per room for initial fees and $550/per room for transfers or renewals.

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Our focus is not only to help increase the number of reservations delivered to our franchisees, but also to help increase the percentage of guest reservations processed through our proprietary channels.

We believe that our proprietary channels, which include our loyalty program, propriety internet sites (including mobile and tablet applications), global sales programs and interfaces with global distribution systems, help deliver guests to our franchisees' hotels at the lowest cost to the franchisee.

We believe that by helping our franchisees become more profitable we will enhance our ability to retain our existing franchisees, attract new franchisees, and improve the pricing of our franchise agreements.

We believe that our proprietary channels, which include our loyalty program, propriety internet sites (including mobile and tablet applications), global sales programs and interfaces with global distribution systems, help in delivering guests to our franchisees' hotels at the lowest cost to the franchisee.

We believe helping our franchisees become more profitable we will enhance our ability to retain our existing franchisees, attract new franchisees, and improve the pricing of our franchise agreements.

The key aspects of our franchise operations are:

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Brand Name Marketing and Advertising .

Our franchised hotels are typically located in areas conveniently accessible to business and leisure travelers, and therefore, a significant portion of hotel room nights are sold to guests who either walk-in or contact the hotel directly.

The majority of our franchised hotels are typically located in areas conveniently accessible to business and leisure travelers, and therefore, a significant portion of hotel room nights are sold to guests who either walk-in or contact the hotel directly.

As a result, we believe that brand name recognition and the strength of the brand reputation are important factors in influencing business and leisure traveler hotel accommodation choices.

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Other marketing efforts include domestic and international trade show programs, targeted marketing campaigns (including print, digital, and social media), direct-mail programs, marketing e-mail programs, and centralized commissions for travel agents.

We operate a loyalty program, Choice Privileges, for all the Choice brands (except WoodSpring Suites) to attract and retain travelers by rewarding stays with points towards free hotel nights at Choice brand properties and through our partners that provide travel related accommodations.

The loyalty program also offers guests the ability to redeem points for gift certificates at participating retailers, and earn airline miles from qualifying stays redeemable for flights with various airline partners.

We operate loyalty programs, (Choice Privileges, for all legacy Choice brands except WoodSpring Suites, and Radisson Rewards Americas for all legacy Radisson Americas brands) to attract and retain travelers by rewarding stays with points towards free hotel nights at properties and through our partners that provide travel related accommodations.

The loyalty program also offers guests the ability to redeem points for gift cards at participating retailers, and earn airline miles from qualifying stays redeemable for flights with various airline partners.

These programs allow us to conduct lower cost, more targeted marketing campaigns to our consumers;

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and are an important selling point for our franchise sales personnel.

The Choice Privileges program had approximately 51 million members worldwide as of December 31, 2021.

Growing the membership of the Choice Privileges program as well as increasing the number of room nights consumed by existing members will continue to be a focus of the Company.

As of December 31, 2022, the Choice Privileges program had approximately 55 million worldwide members and the Radisson Rewards Americas program had approximately 11 million worldwide members.

Growing the membership of the Choice Privileges and Radisson Rewards Americas programs as well as increasing the number of room nights consumed by existing members will continue to be a focus of the Company.

Marketing and advertising programs are directed by our marketing department, which utilizes the services of independent advertising agencies.

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Our CRS provides a data link to our franchised properties as well as to travel reservation systems such as Amadeus, Galileo, SABRE and Worldspan that facilitate the reservation process for travel agents and corporate travelers.

We also offer rooms for rent on our own proprietary internet site (www.choicehotels.com) and mobile applications as well as those of OTA's and other third-party internet referral or booking services.

We also offer rooms for rent on our website (http://www.choicehotels.com) and mobile applications as well as those of OTA's and other third-party internet referral or booking services.

Our toll-free telephone reservation system primarily utilizes third-party call center service providers.

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Typically, this helps reduce the hotel’s front desk staffing needs, improves customer service and results in a higher average daily rate than reservations booked directly through the property.

We continue to implement our integrated reservation and distribution strategy to help improve reservations delivery, reduce franchisee costs and improve franchisee satisfaction by enhancing our website, www.choicehotels.com.

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We design our marketing campaigns to drive reservation traffic directly to our proprietary channels to minimize the impact that third party reservation sites may have on the pricing of our franchisees' inventory.

In addition, we have introduced programs such as our Lowest Price Guarantee program which has greatly reduced the ability of the travel intermediaries to undercut the published rates at our franchisees' hotels.

Further, we selectively distribute our franchisees' inventory to key third-party travel

intermediaries that we have established agreements with to help drive additional business to our franchisees' hotels.

Further, we selectively distribute our franchisees' inventory to key third-party travel intermediaries that we have established agreements with to help drive additional business to our franchisees' hotels.

These agreements typically offer our brands preferred placement on these third-party sites at reduced transaction fees.

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We also continue to upgrade our technology to ensure that our CRS can effectively handle the current and future volume on digital channels and support the industry's shift toward accelerated digital communications and guest experience personalization.

In support of these initiatives, in the first quarter of 2018, the Company transitioned to choiceEDGE, a cloud-based software developed by the Company to manage all distribution for the Company by optimizing rate, inventory, availability, shopping, booking and reservations for its website, mobile apps and third-party distribution partners.

In support of these initiatives, the Company developed choiceEDGE, a cloud-based software to manage all distribution for the Company by optimizing rate, inventory, availability, shopping, booking and reservations for its website, mobile apps and third-party distribution partners.

Property Management Systems .

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These tools are critical to business delivery and yield improvement as they facilitate a franchisee's ability to effectively manage hotel operations, determine appropriate rates, help drive occupancy and participate in our marketing programs.

As a cloud-based solution, the choiceADVANTAGE system helps reduce each hotel’s investment in on-site computer equipment, typically resulting in a lower total cost of ownership for property management systems than traditional on-site solutions.

As a cloud-based solution, the choiceADVANTAGE system helps to reduce each hotel’s investment in on-site computer equipment, typically resulting in a lower total cost of ownership for property management systems than traditional on-site solutions.

Quality Assurance Programs .

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Franchise contracts are typically long-term in nature, but most allow either the hotel owner or the Company to opt-out of the agreement at mutually agreed upon anniversary dates.

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We believe that hotel operators choose lodging franchisors based primarily on the value and quality of each franchisor’s brand(s) and services and the extent to which affiliation with that franchisor may increase the franchisee’s reservations and profits.

We also believe that hotel operators select a franchisor in part based on the franchisor’s reputation among other franchisees and the success of its existing franchisees.

Since our franchising revenues are generated primarily from a percentage of franchisees’ gross room revenues, our prospects for growth are largely dependent upon the ability of our franchisees to compete in the lodging market, our ability to retain existing franchises, our ability to convert competitor franchises and independent hotels to our brands and the ability of existing and potential franchisees to obtain financing to construct new hotels.

Since our franchising revenues are generated primarily as a percentage of franchisees’ gross room revenues, our prospects for growth are largely dependent upon the ability of our franchisees to compete in the lodging market, our ability to retain existing franchises, our ability to convert competitor franchises and independent hotels to our brands and the ability of existing and potential franchisees to obtain financing to construct new hotels.

The ability of a hotel to compete may be affected by a number of factors, including the location and quality of the property, the abilities of the franchisee, the number and quality of competing lodging facilities nearby, its affiliation with a recognized name brand and general regional and local economic conditions.

While the COVID-19 pandemic has impacted the operating results of the Company, we generally believe the effect of local economic conditions on our results is substantially reduced by our range of products and room rates and the geographic diversity of our franchised properties, which are open and operating in 50 states, the District of Columbia and nearly 40 countries and territories outside the United States.

We generally believe the effect of local economic conditions on our results is substantially reduced by our range of products and room rates and the geographic diversity of our franchised properties, which are open and operating in 50 states, the District of Columbia and nearly 50 countries and territories outside the United States.

We believe that our focus on core business strategies, combined with our financial strength and size, geographic diversity, scale and distribution will enable us to remain competitive.

Service Marks and Other Intellectual Property

The service marks Choice Hotels, Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Cambria, Suburban Extended Stay Hotel, Ascend Hotel Collection, WoodSpring Suites, Everhome Suites, Choice Privileges, and related marks and logos are material to our business.

The service marks Choice Hotels, Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Cambria, Suburban Extended Stay Hotel, Ascend Hotel Collection, WoodSpring Suites, Everhome Suites, Country Inn & Suites, Radisson Collection, Radisson, Radisson Blu, Radisson Red, Park Plaza, Park Inn, Choice Privileges, Radisson Rewards Americas, and related marks and logos are material to our business.

We, directly and through our franchisees, actively use these marks.

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The Company's franchise fee revenues reflect the industry's seasonality and historically have been lower in the first and fourth quarters than in the second and third quarters.

However, as a result of the COVID-19 pandemic, historical trends may not be reliable to predict future performance.

Our business subject to various U.S.

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Our franchisees are responsible for compliance with all laws and government regulations applicable to the hotels they own or operate.

With respect to our owned and managed hotels, we are also subject to laws governing our relationship with employees, including minimum wage requirements, overtime, working conditions and work permit requirements.

In addition, our business is subject to numerous federal, state and local government regulations, including those relating to the preparation and sale of food and beverages (such as health and liquor license laws), safety and health standards, building and zoning requirements, tax laws, and laws governing employee relations, including minimum wage requirements, overtime, working conditions and work permit requirements.

Further, we are also subject to various U.S.

and international privacy and data protections laws, including the California Consumer Protection Act and the European Union General Data Protection Regulation.

federal, state and international privacy and data protections laws, including the California Consumer Protection Act, the Virginia Consumer Data Protection Act, and the European Union General Data Protection Regulation, as well as privacy laws in Connecticut, Colorado and Utah that will take effect during 2023.

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Impact of Inflation and Other External Factors

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A weak economy could also reduce demand for new hotels, negatively impacting the franchise fees received by us.

Among other unpredictable external factors, which may negatively impact us, are wars, acts of terrorism, pandemics, airline strikes, gasoline shortages, severe weather and the risks described below under the Item 1A.

Risk Factors.

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We seek to attract and retain the best talent in the hospitality, franchising, and technology industries and provide an open and inclusive environment.

This delivers a high performing organization that drives positive business outcomes for the Company, our shareholders, and our franchisees.

Our board of directors provides oversight on certain human capital matters, including through the Diversity Committee, which provides guidance to management and the board of directors in developing a workplace culture that values working with diverse groups of people, offering diversity of thought and perspective, and through the Compensation and Management Development Committee, which engages with management on pay for performance alignment, as well as talent review and development.

The quality of our talent delivers a high performing organization that drives positive business outcomes for the Company, our shareholders, and our franchisees.

Our Board of Directors provides oversight on certain human capital matters through two committees.

• Human Capital and Compensation Committee - Providing a broad scope of oversight on talent, including:

(1) overall associate wellbeing, (2) succession planning for the top 30 leadership roles, (3) talent management and leadership development oversight for the top 125 leadership roles, (4) oversight of pay parity goals, and (5) overall organizational engagement, including the work environment.

• Diversity Committee - Providing guidance to management and the Board of Directors in developing a workplace culture that values working with diverse groups of people, offering diversity of thought and perspective.

Career Development

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Guided by a personalized development plan, each associate is empowered to identify and develop the skills and competencies necessary to prepare for their next, and future, desired roles.

As of December 31, 2021, the Company has 1,323 domestic and 137 international associates.

As of December 31, 2022, the Company has 1,659 domestic and 130 international associates, excluding employees at our 13 managed hotels.

Leadership development programs offer level specific career-building experiences, increasing the potential for broader levels of responsibility and leadership.

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The talent landscape is reviewed with the Board of Directors semi-annually, focusing primarily on senior leadership levels.

Further, eleven Corporate Resource Groups (“CRGs”) allow groups of associates to come together based on shared characteristics, life experiences and/or interests.

Further, eleven Choice Resource Groups (“CRGs”) allow groups of associates to come together based on shared demographics and affinities, life experiences and/or interests.

The CRGs are open to all associates to join.

CRGs provide support, enhance career development, contribute to personal development, and provide networking opportunities.

CRGs provide support, enhance career development, contribute to personal development, provide networking opportunities, and enhance wellbeing engagement.

Choice Culture and Diversity

At Choice, we are committed to nurturing an environment where every associate feels welcome, wanted, and respected.

At Choice, we strive to create an environment where every associate feels welcome, wanted, and respected.

Part of how we deliver on this promise is by weaving deliberate diversity initiatives throughout all levels of the enterprise, focusing on three core commitments:

• Diversity – Striving to build a workforce that is an authentic representation of the world we live in where associates from different backgrounds may thrive.

• Equity – Providing fair and competitive pay regardless of gender, race, or other demographics.

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• Equity – Committed to an equitable work environment, inclusive of fair and competitive pay regardless of gender, race, or other demographics.

• Trust, Belonging, and Engagement – Fostering a culture of belonging where associates are inspired and engaged and feel welcome, wanted, and respected.

At the end of fiscal year 2021, our domestic workforce was 34% diverse and 43.5% female.

At the end of fiscal year 2022, our domestic workforce, excluding employees at our 13 managed hotels, was 32% diverse and 46% female.

Our leadership, defined as Senior Director level and above was 11% diverse and 41% female.

For these purposes, we define diverse as the self-identified demographic categories of Black, Hispanic, Asian, and other.

For these purposes, we define diverse as the self-identified demographic categories of American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Islander, or Two or More Races.

We are committed to providing fair and competitive pay.

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based roles and reports the results of this analysis to the Board of Directors.

During 2021, we conducted this analysis and promptly resolved discrepancies identified between diverse / female base salary versus non-diverse / male base salary for positions of similar value (i.e., by career track, level, and salary grade) that cannot be sufficiently explained by the level of experience, performance, or other pay-related attributes.

The board of directors biannually reviews a diversity report focused on success against the Company’s annual diversity, equity, belonging objectives in workplace practices, franchisee development, advertising and marketing goals.

During 2022, we conducted a pay parity analysis of the legacy Choice Hotels corporate-based associate population and discrepancies between diverse / female base salary versus non-diverse / male base salary for positions of similar value (i.e., by career track, level, and salary grade) that cannot be sufficiently explained by the level of experience, performance, or other pay-related attributes were promptly reviewed.

In 2023, our pay parity analysis will include the legacy Radisson associates.

The Board of Directors biannually reviews a diversity report focused on success against the Company’s annual diversity, equity, and belonging objectives in workplace practices, franchisee development, advertising and marketing goals.

The Board of Directors also receives updates on the Diversity Advisory Council (“DAC”), CRGs, and general inclusion activities.

Our Diversity Framework that supports all our efforts is shown below.

The Company is proud to have been named by Forbes magazine in 2021 as one of the “Best Employers for Diversity,” one of the “Best Midsize Employers,” as well as one of the “Best Employers for Veterans.” The Company has also been named one of the "Best Places to Work for People with Disabilities” with a top score in the 2021 Disability Equality Index and one of the “Best Places to Work for LGBTQ Equality” with a 100% Corporate Equality Index designation from the Human Rights Campaign in 2021.

The company was also recognized as one of the “70 Innovative Companies That Are Leading on Leave in 2021” by the National Partnership for Women and Families.

One of our highest priorities has been to safeguard the physical health and emotional well-being of our associates, all of whom show incredible dedication to the needs of our franchisees, guests, and each other amid rapidly evolving circumstances all while caring for their own families.

Key features include mental health support, including employee assistance and financial wellness programs, as well as creating opportunities for belonging and connections within the organization.

In addition, the Company offers a generous benefits package including a 401(k) matching program, paid family leave, paid caregiver leave, wellbeing days, commuter benefits, a legal services plan, charitable gift matching, a LEED certified workspace, and paid volunteer leave.

Health, Wellbeing, and Engagement

One of our highest priorities has been to safeguard the physical health and emotional wellbeing of our associates, all of whom show incredible dedication to the needs of our franchisees, guests, and each other while caring for their own families.

Key features include mental health support, employee assistance and financial wellness programs, as well as creating opportunities for belonging and connections within the organization.

In addition, the Company offers a generous benefits package including a 401(k) matching program (increased the match in 2022 to 100% on the first 5% of associates contributions), paid family leave, paid caregiver leave, wellbeing days, commuter benefits, a legal services plan, charitable gift matching, a LEED certified workspace, and paid volunteer leave.

In 2022, we enhanced our leave offerings with a cultural day for associates to celebrate the cultural observance of their choice.

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We conduct a variety of confidential surveys throughout the year to seek input and better understand the associate life-cycle experience.

In 2022, these touchpoints included:

an engagement survey, diversity, equity and belonging survey, 30-60-90-180-day onboarding surveys, exit surveys, and a Radisson acquisition transition pulse survey.

Nearly 85% of our associates participated in the 2022 engagement survey and we achieved a very high engagement score, five points above the benchmark, meaning associates have a positive commitment to our organization and goals.

Award Winning Culture

The Company is proud to have been named by Forbes magazine in 2022 as one of the “World's Best Employers,” one of "America's Best Midsize Employers,” one of the "Word's Top Female Friendly Companies" as well as one of the “Best Employers for Veterans.” The Company has also been named one of "America's Best Places to Work for Disability Inclusion” with a top score on the 2022 Disability Equality Index for the tenth year in a row, one of the “Best Places to Work for LGBTQ+ Equality” with a 100% Corporate Equality Index designation from the Human Rights Campaign in 2022.

Our CEO was recognized by Comparably as "Best CEO 2022," earned for the fourth year in a row, and the Association for Talent Development recognized Choice as a "Best Award" winner, earned for the third year in a row.

Information about our Executive Officers

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Managing Member of Artis Senior Living, LLC, a developer-owner-operator of assisted living residences, since 2012;

Board of Advisors of UCLA's School of Management and member of the Real Estate Roundtable;

Board of Advisors of UCLA's School of Management;

Director of Realty Investment Company, Inc., a real estate management and investment company, from December 2005 through December 2016 and Chairman from December 2005 through June 2009;

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Prior to joining the Company, he was employed by XO Communications as Chief Financial Officer from July 2015 to February 2017 and Vice President, Financial Planning and Analysis ("FP&A") and Strategic Finance from September 2014 to July 2015.

Before that, he was Senior Director, IR Business Consultancy of Marriott International from October 2013 to September 2014, Global Director of FP&A of NII Holdings, Inc.

Before that, he was Senior Director,

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IR Business Consultancy of Marriott International from October 2013 to September 2014, Global Director of FP&A of NII Holdings, Inc.

from March 2012 to October 2013, and held various management positions at Deloitte Consulting from 2004 to 2012.

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She was Senior Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer from 2012 to 2015.

Prior to joining the Company in 2012, she was employed by XO Communications and its affiliates as Executive Vice President, General Counsel and

Secretary from 2011 until 2012, Senior Vice President, General Counsel and Secretary from 2006 to 2011, Vice President, the acting General Counsel and Secretary from 2005 to 2006, Vice President and Assistant General Counsel from 2004 until 2005, and Senior Corporate Counsel from 2001 until 2004.

Prior to joining the Company in 2012, she was employed by XO Communications and its affiliates as Executive Vice President, General Counsel and Secretary from 2011 until 2012, Senior Vice President, General Counsel and Secretary from 2006 to 2011, Vice President, the acting General Counsel and Secretary from 2005 to 2006, Vice President and Assistant General Counsel from 2004 until 2005, and Senior Corporate Counsel from 2001 until 2004.

Before that she was Vice President of Legal and Business Affairs at LightSource Telecom, held legal and business positions at MCI and AOL, and began her legal career in 1989 at Skadden, Arps, Slate, Meagher & Flom.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business