What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-04 · 164 added, 239 removed, 367 unchanged (52% of the section changed)

3 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Royalty, licensing and management fees $ 147,151 $ 148,512 $ 394,431 $ 396,503

Initial franchise fees 5,866 6,194 19,133 21,240

Platform and procurement services fees 16,178 15,542 58,060 58,186

Three Months Ended

Franchise and management fees $ 145,068 $ 143,410

Partnership services and fees 25,381 19,844

Owned hotels 27,860 24,991

Other 11,127 14,717

Other revenues from franchised and managed properties 212,976 217,634 592,849 602,554

Revenue for reimbursable costs from franchised and managed properties 123,424 128,987

Total revenues 332,860 331,949

4 unchanged sentences

Owned hotels 21,060 19,323

Other expenses from franchised and managed properties 192,916 207,341 575,102 583,095

Reimbursable expenses from franchised and managed properties 143,811 151,549

Total operating expenses 252,928 271,800

3 unchanged sentences

Interest income ( 1,559 ) ( 1,731 )

Loss on extinguishment of debt 331 — 331 —

Other (gain) loss ( 4,013 ) 1,343 ( 133 ) ( 2,752 )

Equity in net gain of affiliates ( 1,310 ) ( 1,801 ) ( 9,088 ) ( 1,923 )

Other loss 436 1,336

Equity in net loss of affiliates 51 155

Total other expenses and income, net 20,170 19,941

9 unchanged sentences

(IN THOUSANDS)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Net income $ 44,534 $ 31,009

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Foreign currency translation adjustment 63 454

Other comprehensive income (loss), net of tax 532 ( 191 ) 292 498

Other comprehensive income, net of tax 63 454

Comprehensive income $ 44,597 $ 31,463

3 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets

15 unchanged sentences

32,832 32,682

Investments in equity securities, at fair value — 116,374

Investments for employee benefit plans, at fair value 44,176 47,603

3 unchanged sentences

Total assets $ 2,577,588 $ 2,530,527

LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current liabilities

2 unchanged sentences

Deferred revenue 115,785 102,114

Current portion of long-term debt — 499,268

Liability for guest loyalty program 89,237 89,013

3 unchanged sentences

Deferred compensation and retirement plan obligations 49,869 53,316

Income taxes payable — 8,601

Operating lease liabilities 112,254 113,255

5 unchanged sentences

160,000,000 shares authorized;

95,065,638 shares issued at September 30, 2024 and December 31, 2023;

46,959,039 and 49,526,245 shares outstanding at September 30, 2024 and December 31, 2023, respectively

95,065,638 shares issued at March 31, 2025 and December 31, 2024;

46,589,011 and 46,856,567 shares outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in-capital 376,014 370,201

1 unchanged sentence

Treasury stock, at cost;

48,106,599 and 45,539,393 shares at September 30, 2024 and December 31, 2023, respectively

48,476,627 and 48,209,071 shares at March 31, 2025 and December 31, 2024, respectively

( 2,467,209 ) ( 2,411,527 )

Retained earnings 2,032,440 2,001,297

Total shareholders’ (deficit) equity ( 96,152 ) 35,598

Total liabilities and shareholders’ (deficit) equity $ 2,544,046 $ 2,394,799

Total shareholders’ deficit ( 63,934 ) ( 45,271 )

Total liabilities and shareholders’ deficit $ 2,577,588 $ 2,530,527

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

2 unchanged sentences

(IN THOUSANDS)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

Depreciation and amortization 13,748 12,815

Depreciation and amortization – other expenses from franchised and managed properties 20,236 27,544

Depreciation and amortization – reimbursable expenses from franchised and managed properties 4,887 5,148

Franchise agreement acquisition cost amortization 9,791 6,185

Non-cash share-based compensation and other charges 9,834 10,597

Non-cash interest, investments, and affiliate income, net ( 7,529 ) ( 1,709 )

Non-cash interest, investments, and affiliate loss, net 1,515 2,510

Deferred income taxes 626 ( 736 )

Equity in net loss (gain) of affiliates, less distributions received 56 ( 621 )

Equity in net loss of affiliates, less distributions received 413 1,200

Franchise agreement acquisition costs, net of reimbursements ( 26,287 ) ( 33,486 )

6 unchanged sentences

Issuances of notes receivable ( 1,952 ) ( 1,042 )

Purchases of investments for employee benefit plans ( 2,504 ) ( 3,678 )

Investments in intangible assets ( 2,133 ) ( 1,893 )

Distributions from sales of affiliates 15,850 868

Collections of notes receivable 1,487 884

Proceeds from sales of equity securities — 1,230

Proceeds from sales of investments for employee benefit plans 2,182 1,263

Other items, net ( 1,067 ) ( 1,714 )

2 unchanged sentences

Net borrowings pursuant to revolving credit facilities 105,500 126,500

Proceeds from the issuance of long-term debt 593,574 —

Repayment of long-term debt ( 500,000 ) —

Debt issuance costs ( 8,069 ) ( 755 )

Purchases of treasury stock ( 64,624 ) ( 59,459 )

1 unchanged sentence

Proceeds from the exercise of stock options 4,803 4,160

Net cash used in financing activities ( 142,168 ) ( 149,009 )

Net cash provided by financing activities 32,208 56,473

Net change in cash and cash equivalents ( 277 ) 15,478

28 unchanged sentences

Treasury purchases ( 494,910 ) — — — ( 57,372 ) — ( 57,372 )

( 1,341,520 ) — — — ( 161,553 ) — ( 161,553 )

Balance as of March 31, 2024 49,284,204 $ 951 $ 335,612 $ ( 5,217 ) $ ( 2,097,840 ) $ 1,773,221 $ 6,727

Net income — — — — — 84,710 84,710

Other comprehensive income, net of tax — — — 295 — — 295

Share-based payment activity (1)

10,508 — 11,336 — 579 — 11,915

Dividends declared ($ 0.2875 per share)

— — — — — ( 14,540 ) ( 14,540 )

Treasury purchases (2)

( 619,059 ) — — — ( 74,697 ) — ( 74,697 )

Balance as of June 30, 2023 50,565,881 $ 951 $ 311,288 $ ( 4,522 ) $ ( 1,917,031 ) $ 1,664,005 $ 54,691

Net income — — — — — 92,024 92,024

Other comprehensive (loss), net of tax — — — ( 191 ) — — ( 191 )

Share-based payment activity (1)

22,372 — 10,502 — 403 — 10,905

Dividends declared ($ 0.2875 per share)

— — — — — ( 14,382 ) ( 14,382 )

Treasury purchases ( 561,820 ) — — — ( 70,634 ) — ( 70,634 )

Balance as of September 30, 2023 50,026,433 $ 951 $ 321,790 $ ( 4,713 ) $ ( 1,987,262 ) $ 1,741,647 $ 72,413

Outstanding Common

13 unchanged sentences

Treasury purchases ( 456,142 ) — — — ( 64,627 ) — ( 64,627 )

( 494,910 ) — — — ( 57,372 ) — ( 57,372 )

Balance as of March 31, 2025 46,589,011 $ 951 $ 376,014 $ ( 6,130 ) $ ( 2,467,209 ) $ 2,032,440 $ ( 63,934 )

Net income — — — — — 87,136 87,136

Other comprehensive (loss), net of tax — — — ( 694 ) — — ( 694 )

Share-based payment activity (1)

17,095 — 8,561 — 685 — 9,246

Dividends declared ($ 0.2875 per share)

— — — — — ( 13,613 ) ( 13,613 )

Treasury purchases (2)

( 1,950,432 ) — — — ( 235,581 ) — ( 235,581 )

Balance as of June 30, 2024 47,350,867 $ 951 $ 344,173 $ ( 5,911 ) $ ( 2,332,736 ) $ 1,846,744 $ ( 146,779 )

Net income — — — — — 105,716 105,716

Other comprehensive income, net of tax — — — 532 — — 532

Share-based payment activity (1)

63,559 — 12,035 — 2,534 — 14,569

Dividends declared ($ 0.2875 per share)

— — — — — ( 13,499 ) ( 13,499 )

Treasury purchases (2)

( 455,387 ) — — — ( 56,691 ) — ( 56,691 )

Balance as of September 30, 2024 46,959,039 $ 951 $ 356,208 $ ( 5,379 ) $ ( 2,386,893 ) $ 1,938,961 $ ( 96,152 )

(1) During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of their performance vested restricted stock units ("PVRSU"), which are presented in Share-based payment activity.

(2) Beginning January 1, 2023, Treasury purchases include a 1% excise tax as imposed by the Inflation Reduction Act of 2022.

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

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Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in the consolidated financial statements presented in accordance with GAAP have been condensed or omitted.

The Company believes the disclosures made are adequate to prevent the information presented from being misleading.

These consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024 and the notes thereto included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 20, 2025.

The interim results are not necessarily indicative of the entire year's results.

Certain prior year amounts in our consolidated financial statements have been reclassified in order to maintain comparability with the current year presentation.

Business combination, diligence and transition costs, which were previously presented in selling, general and administrative expenses, are now presented within a standalone financial statement line item in the consolidated statements of income.

The reclassification had no effect on the Company’s previously reported operating income or net income.

The reclassifications were not as a result of any error in our consolidated financial statements.

The Company reclassified certain prior year amounts in the consolidated statements of income in order to maintain comparability with the current year presentation.

• Royalty, licensing and management fees were revised to franchise and management fees in the consolidated statements of income, and now include the revenues previously presented in royalty, licensing and management fees, with the exception of partnership licensing revenues which are now presented in partnership services and fees in the consolidated statements of income, and the addition of the revenues generated from programs, platforms, and services associated with the Company's franchise operations which were previously presented in other revenues from franchised and managed properties in the consolidated statements of income.

• Initial franchise fees, which were previously presented as a standalone financial statement line item, are now presented within franchise and management fees in the consolidated statements of income.

• Platform and procurement services fees were revised to partnership services and fees in the consolidated statements of income, and now include the revenues previously presented in platform and procurement services fees, with the exception of the revenues from the Company’s annual franchisee convention which are now presented in other revenues, the addition of partnership licensing revenues which were previously presented in royalty, licensing and management fees, and the addition of the revenues generated from other non-franchising agreements which are primarily software as a service (“SaaS”) arrangements for non-franchised hoteliers which were previously presented in other revenues in the consolidated statements of income.

• Other revenues from franchised and managed properties were revised to revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income, and now include the revenues previously presented in other revenues from franchised and managed properties, with the exception of the revenues generated from programs, platforms, and services associated with the Company’s franchise operations which are now presented in franchise and management fees in the consolidated statements of income.

• Selling, general and administrative expenses were revised to include the expenses incurred related to programs, platforms, and services associated with the Company’s franchise operations, which were previously presented in other expenses from franchised and managed properties in the consolidated statements of income.

• Depreciation and amortization was revised to include amortization expense from information technology platforms, which was previously presented in other expenses from franchised and managed properties in the consolidated statements of income.

• Other expenses from franchised and managed properties were revised to reimbursable expenses from franchised and managed properties in the consolidated statements of income, and now include the expenses previously presented in other expenses from franchised and managed properties, with the exception of the expenses incurred from programs, platforms, and services associated with the Company’s franchise operations which are now presented in selling, general and administrative expenses, and amortization expense from information technology platforms which is now presented in depreciation and amortization expense in the consolidated statements of income.

The reclassifications had no effect on the Company's previously reported total revenues, total operating expenses, operating income, or net income.

The following table presents the effect of the reclassifications on the three months ended March 31, 2024 consolidated statement of income.

Three Months Ended

March 31, 2024

As previously reported Reclassification As reclassified

Franchise and management fees $ 105,467 $ 37,943 $ 143,410

Initial franchise fees 6,705 ( 6,705 ) —

Partnership services and fees 13,756 6,088 19,844

Owned hotels 24,991 — 24,991

Other 16,357 ( 1,640 ) 14,717

Revenue for reimbursable costs from franchised and managed properties 164,673 ( 35,686 ) 128,987

Total revenues 331,949 — 331,949

OPERATING EXPENSES

Selling, general and administrative 48,625 23,644 72,269

Business combination, diligence and transition costs 15,844 — 15,844

Depreciation and amortization 10,935 1,880 12,815

Owned hotels 19,323 — 19,323

Reimbursable expenses from franchised and managed properties 177,073 ( 25,524 ) 151,549

Total operating expenses 271,800 — 271,800

Operating income $ 60,149 $ — $ 60,149

The Company also reclassified certain prior year amounts in the consolidated statements of cash flows in order to maintain comparability with the current year presentation.

Depreciation and amortization was revised to include amortization expense from information technology platforms, which was previously presented in depreciation and amortization - other expenses from franchised and managed properties in the consolidated statements of cash flows.

Depreciation and amortization - other expenses from franchised and managed properties was revised to depreciation and amortization - reimbursable expenses from franchised and managed properties in the consolidated statements of cash flows.

Investments in owned hotel properties and investments in other property and equipment, which were previously presented in investments in property and equipment, are now presented within standalone financial statement line items in the consolidated statements of cash flows.

The reclassification had no effect on the Company's previously reported net cash used in investing activities or the net change in cash and cash equivalents.

Certain information and footnote disclosures normally included in the consolidated financial statements presented in accordance with GAAP have been omitted.

Although the Company believes the disclosures made are adequate to prevent the information presented from being misleading, these consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023 and the notes thereto included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 20, 2024.

The interim results are not necessarily indicative of the entire year's results.

Investments in intangible assets, purchases of investments for employee benefits plans, and proceeds from sales of investments for employee benefits plans, which were previously presented in standalone financial statement line items, are now presented within other items, net in the consolidated statements of cash flows.

The reclassifications had no effect on the Company's previously reported net cash provided by operating activities, the net cash used in investing activities, or the net change in cash and cash equivalents.

Summary of Significant Accounting Policies

2 unchanged sentences

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 requires public entities to disclose significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker and included in each reported measure of segment profit or loss on both an annual and an interim basis.

ASU 2023-07 is effective for the annual reporting period beginning after December 15, 2023 and the interim periods within the annual reporting period beginning after December 15, 2024.

Based on the Company's assessment, the adoption of this standard is not expected to have an impact on the Company's consolidated financial statements, but it will require enhanced segment disclosures in the notes to the consolidated financial statements.

ASU 2023-07 requires public entities to disclose significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker and

included in each reported measure of segment profit or loss on both an annual and an interim basis.

ASU 2023-07 was effective for the annual reporting period beginning after December 15, 2023 and the interim periods within the annual reporting period beginning after December 15, 2024.

The Company adopted ASU 2023-07 on a retrospective basis effective December 31, 2024 for annual periods and March 31, 2025 for interim periods.

The adoption of this standard did not have an impact on the Company's consolidated financial statements, but it did require enhanced segment disclosures in the notes to the consolidated financial statements.

Refer to Note 11 for more information.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09").

2 unchanged sentences

Based on the Company's assessment, the adoption of this standard is not expected to have an impact on the Company's consolidated financial statements, but it will require enhanced income tax disclosures in the notes to the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03").

ASU 2024-03 requires public entities to provide detailed disclosure of the income statement expenses in the footnotes to the consolidated financial statements.

ASU 2024-03 does not require any changes to the expense captions on the face of the consolidated income statement.

ASU 2024-03 is effective for the annual reporting period beginning after December 15, 2026 and for the interim periods within the annual reporting period beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the potential impact that ASU 2024-03 will have on the Company's consolidated financial statements.

Contract Liabilities

2 unchanged sentences

Loyalty points are typically redeemed within three years of issuance.

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2023 to September 30, 2024:

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2024 to March 31, 2025:

(in thousands)

2 unchanged sentences

Revenue recognized in the period ( 25,784 )

Balance as of September 30, 2024 $ 214,439

Balance as of March 31, 2025 $ 220,593

Remaining Performance Obligations

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $ 214.4 million as of September 30, 2024.

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $ 220.6 million as of March 31, 2025.

This amount represents the fixed transaction price that will be recognized as revenue in future periods, which is presented as current and non-current deferred revenue in the consolidated balance sheets.

Based on the practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which the Company recognizes revenue at the amount to which it has the right to invoice for the services performed, or (iii) contracts with an expected original duration of one year or less.

Disaggregation of Revenue

The following table presents the Company's revenues by over time and point in time recognition:

Three Months Ended Three Months Ended

September 30, 2024 September 30, 2023

(in thousands) Over time Point in time Total Over time Point in time Total

Royalty, licensing and management fees $ 143,987 $ 3,164 $ 147,151 $ 145,830 $ 2,682 $ 148,512

Initial franchise fees 5,866 — 5,866 6,194 — 6,194

Platform and procurement services fees 15,492 686 16,178 14,874 668 15,542

Owned hotels 24,491 7,445 31,936 19,497 6,742 26,239

Other 13,857 — 13,857 11,436 — 11,436

Other revenues from franchised and managed properties 193,173 19,803 212,976 200,399 17,235 217,634

Total revenues $ 396,866 $ 31,098 $ 427,964 $ 398,230 $ 27,327 $ 425,557

Nine Months Ended Nine Months Ended

September 30, 2024 September 30, 2023

(in thousands) Over time Point in time Total Over time Point in time Total

Royalty, licensing and management fees $ 385,553 $ 8,878 $ 394,431 $ 389,332 $ 7,171 $ 396,503

Initial franchise fees 19,133 — 19,133 21,240 — 21,240

Platform and procurement services fees 56,050 2,010 58,060 56,112 2,074 58,186

Owned hotels 63,742 21,603 85,345 55,544 18,531 74,075

Other 45,251 — 45,251 33,211 — 33,211

Other revenues from franchised and managed properties 524,256 68,593 592,849 546,332 56,222 602,554

Total revenues $ 1,093,985 $ 101,084 $ 1,195,069 $ 1,101,771 $ 83,998 $ 1,185,769

The owned hotels revenues that are recognized at a point in time represent the goods and services that are purchased independently of the hotel stay, such as food and beverage, incidentals, and parking fees.

The remaining revenues that are recognized at a point in time represent the loyalty points that are redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

The loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $ 23.7 million and $ 20.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 79.5 million and $ 65.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As presented in Note 11, the Corporate & Other segment revenue amounts were $ 35.4 million and $ 33.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 94.7 million and $ 86.5 million for the nine months ended September 30, 2024 and 2023, respectively, which are presented in other revenues and owned hotels revenues in the consolidated statements of income.

The remaining revenues relate to the Hotel Franchising & Management reportable segment.

Royalty, licensing and management fees and other revenues from franchised and managed properties are presented net of intersegment revenues of $ 3.2 million and $ 4.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 8.8 million and $ 7.3 million for the nine months ended September 30, 2024 and 2023, respectively .

Based on the practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and SaaS agreements), (ii) variable consideration for which the Company recognizes revenue at the amount to which it has the right to invoice for the services performed, or (iii) contracts with an expected original duration of one year or less.

The loyalty points represent a performance obligation attributable to the usage of the points, and thus the revenues are recognized at the point in time when the loyalty points are redeemed by the members for benefits (with both franchisees and

third-party partners), net of the cost of redemptions.

For both the three months ended March 31, 2025 and 2024, the loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $ 19.5 million.

Receivables and Allowance for Credit Losses

3 unchanged sentences

The following table summarizes the composition of the notes receivable balances by credit quality indicator and the allowance for credit losses:

(in thousands) September 30, 2024 December 31, 2023

(in thousands) March 31, 2025 December 31, 2024

Senior $ 96,520 $ 94,963

13 unchanged sentences

The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:

(in thousands) September 30, 2024 December 31, 2023

(in thousands) March 31, 2025 December 31, 2024

Beginning balance $ 7,331 $ 8,616

Provision for credit losses 1,067 763

Provision (reversal) for credit losses 50 ( 609 )

Recoveries — ( 676 )

Ending balance $ 7,381 $ 7,331

As of September 30, 2024 and December 31, 2023, one note receivable loan with a senior credit quality indicator met the definition of collateral-dependent and is collateralized by the membership interests in the borrowing entities and the associated land parcel.

The Company used a market approach that uses quoted market prices to value the underlying collateral.

During the year ended December 31, 2024, the recoveries were primarily associated with cash collections pursuant to a settlement agreement with a borrower.

As of March 31, 2025 and December 31, 2024, three and one note receivable loans, respectively, with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel.

The Company used both a market approach that uses quoted market prices and an income approach that uses discounted cash flows to value the underlying collateral.

The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections.

1 unchanged sentence

Based on the Company's analysis, the fair value of the collateral secures substantially all of the carrying value of the respective note receivable loan.

The allowance for credit losses attributable to the collateral-dependent note receivable loan was $ 2.2 million as of September 30, 2024 and December 31, 2023.

During the nine months ended September 30, 2024 and during the year ended December 31, 2023, the recoveries were primarily associated with cash collections pursuant to a settlement agreement with a borrower.

The allowance for credit losses attributable to the collateral-dependent note receivable loans was $ 3.2 million and $ 2.2 million as of March 31, 2025 and December 31, 2024, respectively.

The following table summarizes the past due balances by credit quality indicator of the notes receivable:

5 unchanged sentences

Notes Receivable

As of September 30, 2024

As of March 31, 2025

Senior $ 27,700 $ — $ 15,200 $ 42,900 $ 53,620 $ 96,520

7 unchanged sentences

$ — $ — $ 18,248 $ 18,248 $ 97,266 $ 115,514

The amortized cost basis of the notes receivable in a non-accrual status was $ 15.2 million and $ 15.9 million as of September 30, 2024 and December 31, 2023, respectively.

The amortized cost basis of the notes receivable in a non-accrual status was $ 45.2 million and $ 17.5 million as of March 31, 2025 and December 31, 2024, respectively.

Variable Interest through Notes Receivable

The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $ 116.8 million and $ 95.1 million as of September 30, 2024 and December 31, 2023, respectively.

The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $ 104.5 million and $ 103.1 million as of March 31, 2025 and December 31, 2024, respectively.

The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs").

For collateral-dependent loans, the Company has no exposure to the borrowing VIE beyond the respective note receivable and the limited commitments which are addressed in Note 12.

Transactions with Unconsolidated Affiliates

The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates.

The Company had a total principal balance on these loans of $ 66.0 million and $ 66.2 million as of March 31, 2025 and December 31, 2024, respectively.

These loans mature at various dates and bear interest at fixed or variable rates.

Accounts Receivable

Accounts receivable consists primarily of franchise and related fees due from the hotel franchisees and are recorded at the invoiced amount.

During the nine months ended September 30, 2024, the Company recognized provisions for credit losses on accounts receivable of $ 8.2 million in selling, general and administrative expenses, and $ 7.5 million in other expenses from franchised and managed properties, in the consolidated statements of income.

During the year ended December 31, 2023, the Company recognized provisions for credit losses on accounts receivable of $ 7.5 million in selling, general and administrative expenses, and $ 9.0 million in other expenses from franchised and managed properties, in the consolidated statements of income.

During the nine months ended September 30, 2024, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 10.7 million.

During the three months ended March 31, 2025, the Company recognized provisions for credit losses on accounts receivable of $ 5.2 million in selling, general and administrative expenses, and $ 4.0 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income.

During the year ended December 31, 2024, the Company recognized provisions for credit losses on accounts receivable of $ 11.0 million in selling, general and administrative expenses, and $ 9.7 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income.

During the three months ended March 31, 2025, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 3.1 million.

During the year ended December 31, 2024, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 14.4 million.

1 unchanged sentence

The Company has equity method investments in affiliates primarily related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels and Everhome Suites in strategic markets.

As of September 30, 2024 and December 31, 2023, the Company had total investments in affiliates in the consolidated balance sheets of $ 109.7 million and $ 70.6 million, respectively, which included investments in affiliates that represent VIEs of $ 96.8 million and $ 59.4 million, respectively.

As of March 31, 2025 and December 31, 2024, the Company had total investments in affiliates in the consolidated balance sheets of $ 122.1 million and $ 117.0 million, respectively, which included investments in affiliates that represent VIEs of $ 108.8 million and $ 104.2 million, respectively.

The Company has determined that it is not the primary beneficiary of any of these VIEs, however the Company does exercise significant influence through its equity ownership and as a result, the investments in these affiliates are accounted for under the equity method of accounting.

During the three months ended September 30, 2024 and 2023, the Company recognized losses totaling $ 0.6 million and $ 0.9 million, respectively, from these investments that represent VIEs.

During the nine months ended September 30, 2024 and 2023, the Company recognized gains totaling $ 5.0 million and losses totaling $ 3.2 million, respectively, from these investments that represent VIEs.

During the three months ended March 31, 2025 and 2024, the Company recognized losses totaling $ 0.9 million and $ 1.2 million, respectively, from these investments that represent VIEs.

The Company's maximum exposure to losses related to its investments in the VIEs is limited to the total of its respective equity investment as well as certain limited payment guaranties, which are described in Note 12 to these consolidated financial statements.

On May 24, 2024, one of the Company's unconsolidated affiliates sold its underlying assets.

The Company received a distribution from the unconsolidated affiliate and recognized a gain of $ 7.2 million, which was recognized in equity in net gain of affiliates in the consolidated statements of income for the nine months ended September 30, 2024.

During the three and nine months ended September 30, 2024 and 2023, the Company recognized no impairment charges related to its equity method investments.

During the three months ended March 31, 2025 and 2024, the Company recognized no impairment charges related to its equity method investments.

Debt consisted of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in thousands)

$ 400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88 %, less a discount and deferred issuance costs of $ 3.1 million and $ 3.6 million at September 30, 2024 and December 31, 2023, respectively

$ 400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88 %, less a discount and deferred issuance costs of $ 2.8 million and $ 3.0 million at March 31, 2025 and December 31, 2024, respectively

$ 397,192 $ 397,042

$ 450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86 %, less a discount and deferred issuance costs of $ 3.9 million and $ 4.3 million at September 30, 2024 and December 31, 2023, respectively

$ 450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86 %, less a discount and deferred issuance costs of $ 3.5 million and $ 3.7 million at March 31, 2025 and December 31, 2024, respectively

446,452 446,300

$ 600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11 %, less a discount and deferred issuance costs of $ 11.5 million at September 30, 2024

$ 500 million unsecured term loan due 2024 ("2023 Term Loan") with an effective interest rate of 6.83 %, less a discount and deferred issuance costs of $ 0.7 million at December 31, 2023 (1)

$ 1 billion senior unsecured revolving credit facility with an effective interest rate of 6.68 %, less deferred issuance costs of $ 3.8 million and $ 1.9 million at September 30, 2024 and December 31, 2023, respectively

$ 600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11 %, less a discount and deferred issuance costs of $ 10.9 million and $ 11.2 million at March 31, 2025 and December 31, 2024, respectively

589,057 588,764

$ 1 billion senior unsecured revolving credit facility with an effective interest rate of 5.73 %, less deferred issuance costs of $ 3.4 million and $ 3.6 million at March 31, 2025 and December 31, 2024, respectively

442,120 336,420

current portion

Long-term debt $ 1,810,731 $ 1,068,751

(1) The 2023 Term Loan had a maturity date of December 16, 2024.

The Company used the proceeds from the issuance of the 2024 Senior Notes (as defined below) to repay the 2023 Term Loan on July 2, 2024.

Senior Unsecured Revolving Credit Facility

On June 28, 2024, the Company entered into a Second Amended and Restated Senior Unsecured Credit Agreement (the "Restated Credit Agreement"), which amended and restated the Company's existing amended and restated senior unsecured credit agreement dated August 20, 2018 (the "Former Credit Agreement").

The Former Credit Agreement provided for an $ 850 million unsecured revolving credit facility (the "Revolver") with a final maturity date of August 20, 2026.

The Restated Credit Agreement increased the commitments under the Revolver to $ 1 billion and extended the final maturity date of the Revolver to June 28, 2029, subject to optional one-year extensions that can be requested by the Company prior to each of the third, fourth, and fifth anniversaries of the closing date of the Restated Credit Agreement.

The effectiveness of such extension is subject to the consent of the lenders under the Restated Credit Agreement and certain customary conditions.

The Restated Credit Agreement also provides that up to $ 50 million of borrowings under the Revolver may be used for alternative currency loans, up to $ 10 million of capacity under the Revolver may be used for the issuance of letters of credit, and up to $ 25 million of borrowings under the Revolver may be used for swingline loans.

The Company may from time to time designate one or more wholly-owned subsidiaries of the Company as additional borrowers under the Restated Credit Agreement, subject to the consent of the lenders and certain customary conditions.

At any time prior to the final maturity date, the Company may increase the amount of the Revolver or add one or more term loan facilities under the Restated Credit Agreement by up to an additional $ 500 million in the aggregate to the extent that any one or more lenders commit to being a lender for the additional amount of such increase or the term loan facility and certain other customary conditions are met.

2024 Senior Unsecured Notes Due 2034

On July 2, 2024, the Company closed its sale of an aggregate principle amount of $ 600 million of 5.850 % senior notes due 2034 (the “2024 Senior Notes”).

The 2024 Senior Notes bear interest at a fixed rate of 5.850 % per year and mature on August 1, 2034.

Interest on the 2024 Senior Notes is payable semi-annually on February 1 st and August 1 st of each year, commencing on February 1, 2025.

The interest rate payable on the 2024 Senior Notes will be subject to adjustment based on certain rating events.

Total Long-term debt

$ 1,874,821 $ 1,768,526

Refer to Note 12 and the Liquidity and Capital Resources section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2024 and 2023 were as follows:

The changes in accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2025 and 2024 were as follows:

(in thousands)

Balance as of December 31, 2024 $ ( 6,193 )

Other comprehensive income (loss) before reclassification 292

Balance as of September 30, 2024 $ ( 5,379 )

Other comprehensive income before reclassification 63

Balance as of March 31, 2025 $ ( 6,130 )

(in thousands)

Balance as of December 31, 2023 $ ( 5,671 )

Other comprehensive income (loss) before reclassification 498

Balance as of September 30, 2023 $ ( 4,713 )

Other comprehensive income (loss), net of tax, for both the nine months ended September 30, 2024 and 2023 relates entirely to foreign currency items, and there were no amounts reclassified from accumulated other comprehensive loss during either period.

Other comprehensive income before reclassification 454

Balance as of March 31, 2024 $ ( 5,217 )

Other comprehensive loss, net of tax, for both the three months ended March 31, 2025 and 2024 relates entirely to foreign currency items, and there were no amounts reclassified from accumulated other comprehensive loss during either period.

Fair Value Measurements

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Level 1 - Quoted prices in active markets for identical assets and liabilities.

The Company’s Level 1 assets consist of equity securities and mutual funds held in the Company's Deferred Compensation Plan.

The Company’s Level 1 assets consist of mutual funds held in the Company's Deferred Compensation Plan.

Level 2 - Observable inputs, other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable.

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Level 3 - Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument.

The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the nine months ended September 30, 2024 and during the year ended December 31, 2023.

The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the three months ended March 31, 2025 and during the year ended December 31, 2024.

The Company recognized the following assets at fair value on a recurring basis in the consolidated balance sheets:

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(in thousands) Total Level 1 Level 2 Level 3

As of September 30, 2024

Equity securities $ — $ — $ — $ —

As of March 31, 2025

Mutual funds (1)

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As of December 31, 2024

Equity securities $ 116,374 $ 116,374 $ — $ —

Mutual funds (1)

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The long-term assets at fair value noted above are presented in investments for employee benefit plans, at fair value in the consolidated balance sheets.

Investments in Equity Securities

For the nine months ended September 30, 2024, the Company sold approximately 1.4 million shares of equity securities of another issuer for $ 108.1 million and recognized a net loss of $ 8.3 million on the sales of equity securities.

The following table is a summary of the unrealized gains and losses of the investments in equity securities:

As of September 30, 2024 As of December 31, 2023

(in thousands) Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Equity securities $ — $ — $ — $ — $ 112,420 $ 3,954 $ — $ 116,374

Other Financial Instruments Disclosure

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Refer to Note 5 for additional information on debt.

As of September 30, 2024 and December 31, 2023, the carrying amounts and the fair values were as follows:

September 30, 2024 December 31, 2023

As of March 31, 2025 and December 31, 2024, the carrying amounts and the fair values were as follows:

March 31, 2025 December 31, 2024

(in thousands) Carrying Amount Fair Value Carrying Amount Fair Value

2024 Senior Notes $ 588,471 $ 618,360 $ — $ —

2020 Senior Notes $ 446,147 $ 416,219 $ 445,690 $ 389,241

2019 Senior Notes $ 396,891 $ 379,868 $ 396,440 $ 355,068

2019 Senior Notes due 2029 $ 397,192 $ 377,460 $ 397,042 $ 371,600

2020 Senior Notes due 2031 $ 446,452 $ 412,623 $ 446,300 $ 405,351

2024 Senior Notes due 2034 $ 589,057 $ 601,050 $ 588,764 $ 601,836

The fair value estimates are determined at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment.

The settlement of such fair value amounts may not be possible or a prudent management decision.

The Company's effective income tax rates were 22.9 % and 24.1 % for the three months ended September 30, 2024 and 2023, respectively.

The Company's effective income tax rates were 23.8 % and 23.8 % for the nine months ended September 30, 2024 and 2023, respectively.

The effective income tax rates for the three and nine months ended September 30, 2024 and 2023 were higher than the U.S.

The Company's effective income tax rates were 25.5 % and 22.9 % for the three months ended March 31, 2025 and 2024, respectively.

The effective income tax rates were higher than the U.S.

federal income tax rate of 21% primarily due to the impact of state income taxes.

1 unchanged sentence

The components of the Company’s share-based compensation expense were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

3 unchanged sentences

Total share-based compensation expense $ 10,415 $ 9,094

A summary of the share-based award activity during the nine months ended September 30, 2024 is presented below:

A summary of the share-based award activity during the three months ended March 31, 2025 is presented below:

Stock Options Restricted Stock Performance Vested

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Forfeited ( 613 ) 134.58 ( 4,378 ) 121.20 ( 6,707 ) 153.53

Outstanding as of September 30, 2024 872,619 $ 108.19 5.9 years 363,946 $ 136.46 442,973 $ 138.30

Options exercisable as of September 30, 2024 581,011 $ 101.29 4.9 years

(1) Any revisions to the outstanding PVRSUs during the nine months ended September 30, 2024 is based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The fair value of the restricted stock and the PVRSUs with performance conditions that were granted during the nine months ended September 30, 2024 was equal to the market price of the Company’s common stock on the date of the grant.

Outstanding as of March 31, 2025 727,538 $ 111.29 6.0 years 341,333 $ 138.02 505,908 $ 137.61

Options exercisable as of March 31, 2025 582,137 $ 108.03 5.5 years

(1) Any revisions to the outstanding PVRSUs during the three months ended March 31, 2025 is based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The fair value of the restricted stock and the PVRSUs with performance conditions that were granted during the three months ended March 31, 2025 was equal to the market price of the Company’s common stock on the date of the grant.

The fair value of the PVRSUs with market conditions that are based on the Company’s total shareholder return relative to a predetermined peer group was estimated using a Monte Carlo simulation method as of the date of the grant.

The requisite service periods for the restricted stock and the PVRSUs was between 9 months and 48 months.

The PVRSUs have vesting ranges generally between 0 % and 230 % of the initial units granted.

The stock options granted by the Company had an exercise price that was equal to the market price of the Company's common stock on the date of grant.

The fair value of the stock options granted during the nine months ended September 30, 2024 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate 4.27 %

Expected volatility 31.34 %

Expected life of the stock option 6 years

Dividend yield 1.03 %

Requisite service period 4 years

Contractual life 10 years

Weighted average fair value of the stock options granted (per stock option) $ 38.85

Earnings Per Share

4 unchanged sentences

The computation of basic and diluted earnings per share was as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in thousands, except per share amounts) 2025 2024

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The following securities have been excluded from the calculation of the diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive effect:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in thousands) 2025 2024

Stock options 137 231

PVRSUs 7 — 7 —

Reportable Segments

1 unchanged sentence

The 22 brands and brand extensions and hotel management operations are aggregated together within this reportable segment because they have similar economic characteristics, types of customers, distribution channels, and regulatory business environments.

The revenues from the hotel franchising and management business include royalty fees, initial franchise fees and relicensing fees, cost reimbursement revenues, platform and procurement services fees revenue, base and incentive management fees, and other hotel franchising and management-related revenue.

The revenues from the hotel franchising and management business include royalty fees, initial franchise fees and relicensing fees, cost reimbursement revenues, partnership services and fees, base and incentive management fees, and other hotel franchising and management-related revenue.

The Company provides certain services under its franchise and management agreements which result in direct and indirect reimbursements.

1 unchanged sentence

The equity in the earnings or losses from the hotel franchising-related investment in affiliates is allocated to the Hotel Franchising & Management reportable segment.

The Company evaluates its Hotel Franchising & Management reportable segment based primarily on the results of the segment without allocating corporate expenses, indirect general and administrative expenses, interest expense, interest income, and other gains and losses, all of which are included in the Corporate & Other column in the tables presented below.

The Corporate & Other column also reflects the operations of the Company's owned hotels.

The Company evaluates its Hotel Franchising & Management reportable segment based primarily on the operating income of the segment without allocating corporate expenses or indirect general and administrative expenses.

The Corporate & Other column includes the operations of the Company's owned hotels.

Intersegment Eliminations to revenues is the elimination of Hotel Franchising & Management revenue which includes royalty fees, management and cost reimbursement fees charged to our owned hotels against the franchise and management fee expense that is recognized by our owned hotels in Corporate & Other operating income (loss).

Our President and Chief Executive Officer, who is our chief operating decision maker, does not use assets by operating segment when assessing the performance or when making operating segment resource allocation decisions and therefore, assets by segment are not disclosed below.

Our President and Chief Executive Officer, who is our chief operating decision maker ("CODM"), utilizes budgeted and forecasted financial information as well as industry metrics, such as revenue per available room ("RevPar"), occupancy, and average daily room rate ("ADR"), to assess the performance and to make resource allocation decisions.

The CODM does not use assets by operating segment when assessing the performance or when making operating segment resource allocation decisions and therefore, assets by segment are not disclosed below.

The following tables present the financial information for the Company's segments:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(in thousands) Hotel

Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated Hotel

Franchising & Management Corporate &

Three Months Ended March 31, 2025

(in thousands) Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated

Revenues $ 303,184 $ 32,904 $ ( 3,228 ) $ 332,860

Other segment items (1)

192,425 49,983 ( 3,228 ) 239,180

Depreciation and amortization 7,374 6,374 — 13,748

Operating income (loss) 103,385 ( 23,453 ) — 79,932

Income (loss) before income taxes $ 174,911 $ ( 37,763 ) $ — $ 137,148 $ 169,260 $ ( 48,031 ) $ — $ 121,229

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(in thousands) Hotel

Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated Hotel

Franchising & Management Corporate &

Reconciliation of segment profit or loss:

Interest expense 21,242

Interest income ( 1,559 )

Other loss 436

Equity in net loss of affiliates 51

Income before income taxes $ 59,762

Three Months Ended March 31, 2024

(in thousands) Hotel Franchising & Management Corporate &

Other Intersegment Eliminations Consolidated

Revenues $ 299,359 $ 35,137 $ ( 2,547 ) $ 331,949

Other segment items (1)

198,373 63,159 ( 2,547 ) 258,985

Depreciation and amortization 6,138 6,677 — 12,815

Operating income (loss) 94,848 ( 34,699 ) — 60,149

Income (loss) before income taxes $ 442,781 $ ( 148,844 ) $ — $ 293,937 $ 424,804 $ ( 123,533 ) $ — $ 301,271

Reconciliation of segment profit or loss:

Interest expense 20,181

Interest income ( 1,731 )

Other loss 1,336

Equity in net loss of affiliates 155

Income before income taxes $ 40,208

(1) Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.

Commitments and Contingencies

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Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met, such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full, or (d) the Company, through its affiliates, ceases to be a member of the VIE.

As of September 30, 2024, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $ 17.6 million, plus unpaid expenses and accrued but unpaid interest.

As of March 31, 2025, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $ 38.2 million, plus unpaid expenses and accrued but unpaid interest.

The Company believes the likelihood of having to perform under these guaranties is remote.

In the event of performance, the Company has recourse for certain of the guaranties in the form of partial guaranties from third parties.

The Company had the following outstanding commitments as of September 30, 2024:

The Company had the following outstanding commitments as of March 31, 2025:

• As part of the acquisition of Radisson Hotels Americas in August 2022, the Company entered into a long-term management arrangement, with an expiration date of July 31, 2031, to manage hotels owned by a third-party.

As of September 30, 2024, the Company managed seven hotels pursuant to the long-term management arrangement.

As of March 31, 2025, the Company managed seven hotels pursuant to the long-term management arrangement.

In conjunction with the management arrangement, the Company entered into a guarantee with the third-party to fund any shortfalls in the payment of the third-party owner’s priority that is stipulated in the management agreement.

The maximum guarantee under the agreement is $ 22 million.

The Company believes the future performance of the hotels is expected to be sufficient on both an annual basis and over the duration of the agreement.

Accordingly, no liability was recognized as of September 30, 2024 in the consolidated balance sheets.

The Company believes the future performance of the hotels is expected to be sufficient on an annual basis.

Accordingly, no liability was recognized as of March 31, 2025 in the consolidated balance sheets.

• The Company strategically deploys capital in the form of franchise agreement acquisition cost payments across our brands to incentivize franchise development.

2 unchanged sentences

• The Company has committed to provide financing in the form of loans or credit facilities to franchisees for brand development efforts.

As of September 30, 2024, the Company had remaining commitments of up to $ 7.3 million, if certain conditions are met.

As of March 31, 2025, the Company had remaining commitments of up to $ 5.8 million, if certain conditions are met.

• The Company’s franchise agreements require the payment of franchise fees, which include marketing and reservation system fees.

9 unchanged sentences

With respect to certain of the aforementioned indemnities, such as the indemnifications of the landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential liability.

Transactions with Unconsolidated Affiliates

The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates.

The Company had a total principal balance on these loans of $ 66.4 million and $ 64.5 million as of September 30, 2024 and December 31, 2023, respectively.

These loans mature at various dates and bear interest at fixed or variable rates.

The Company has management fee arrangements with certain of its unconsolidated affiliates.

The fees earned and the payroll costs reimbursed under these arrangements totaled $ 2.5 million and $ 2.4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 6.2 million and $ 6.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company has entered into franchise agreements with certain of its unconsolidated affiliates.

Pursuant to these franchise agreements, the Company recognized royalty fees and marketing and reservation system fees of approximately $ 10.0 million and $ 9.4 million for the three months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recognized royalty fees and marketing and reservation system fees of approximately $ 26.3 million and $ 23.1 million, respectively.

The Company recognized $ 8.6 million and $ 4.9 million of gross accounts receivables in the consolidated balance sheets from these unconsolidated affiliates as of September 30, 2024 and December 31, 2023, respectively.

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-Q

Item 1. Financial Statements