CHOICE HOTELS INTERNATIONAL INC /DECHH

CHOICE HOTELS INTERNATIONAL INC /DE Earnings Per Share Disclosure

10-KFiled Feb 19, 20262 min read
Earnings Per Share
The Company’s shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic earnings per share using the two-class method. The shares of restricted stock are both potential shares of common stock and participating securities so the Company calculates diluted earnings per share by using the more dilutive of the treasury stock method or the two-class method. The calculation of earnings per share for the net income available to common shareholders excludes the distribution of dividends and the undistributed earnings attributable to the participating securities from the numerator. The diluted earnings per share includes stock options, PVRSUs, and RSUs in the calculation of the weighted average shares of common stock outstanding.
The computation of basic and diluted earnings per share was as follows:
 Year Ended December 31,
 (in thousands, except per share amounts)202520242023
Numerator:
Net income$369,946 $299,665 $258,507 
Income allocated to participating securities(1,780)(1,521)(1,379)
Net income available to common shareholders$368,166 $298,144 $257,128 
Denominator:
Weighted average shares of common stock outstanding - basic46,170 47,653 50,341 
Basic earnings per share$7.97 $6.26 $5.11 
Numerator:
Net income$369,946 $299,665 $258,507 
Income allocated to participating securities(1,780)(1,521)(1,379)
Net income available to common shareholders$368,166 $298,144 $257,128 
Denominator:
Weighted average shares of common stock outstanding - basic46,170 47,653 50,341 
Dilutive effect of stock options, PVRSUs, and RSUs410 425 359 
Weighted average shares of common stock outstanding - diluted46,580 48,078 50,700 
Diluted earnings per share$7.90 $6.20 $5.07 
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:
 Year Ended December 31,
(in thousands)202520242023
Stock options202 147 232 
PVRSUs46 7 71 
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Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 20, 2025
2023Feb 20, 2024
2022Mar 1, 2023
2021Feb 24, 2022
2020Feb 26, 2021
2019Mar 2, 2020
2018Feb 26, 2019
2017Mar 1, 2018
2016Feb 27, 2017
2015Feb 29, 2016

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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