 2009 OUTLOOK December 17, 2008 Exhibit 99.1 |
 2 DISCLAIMER Certain matters discussed throughout all of today’s presentation constitute forward-looking statements within the meaning of the federal securities law. Generally, our use of words such as “expect,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “plan,” “project,” “assume” or similar words of futurity identify statements that are forward-looking and that we intend to be included within the Safe Harbor protections provided by Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Such forward- looking statements are based on management’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections for the company’s revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends, and future operations. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this presentation. Forward- looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors. Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in the Risk Factors section of the company’s Form 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission on February 29, 2008. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. |
 3 CHOICE HOTELS OVERVIEW Leading gainer of US hotel market share* – 9.4% share of branded US hotels (+180 basis points over last 5 years)* – 2nd largest U.S. hotelier* 65+ year-old company with well-known, diversified brands suitable for various stages of hotel life cycle Core competencies and services drive demand for our brands and deliver business for our franchisees Global pipeline of 1,074 hotels under construction, awaiting conversion or approved for development Source: Choice Internal Data, September 30, 2008 * Based on number of hotels as of October 31, 2008 (Smith Travel Research) Fee-for-service business model Predictable, profitable growth in a variety of lodging and economic environments – 10 consecutive years of franchising revenue and adjusted EBITDA growth Cumulative free cash flows of more than $1 billion since 1997 – >99% returned to shareholders through share repurchases and dividends Capital “light” model generates strong returns on invested capital Long-term franchise contracts and scale represent barriers to entry Strong, Growing, Global Hotel Franchising Business Highly Attractive Business Model With Strong Financial Returns |
 4 ONE OF THE LARGEST HOTELIERS Source: Smith Travel Research, Annual data as of October 31. October 2008 Market Share 11.9% 9.4% 5.8% 5.6% 5.2% 4.1% 1.9% 1.2% 0.8% 0.5% 5 yr. bps (03-08) -60 180 80 130 70 -40 -60 10 0 -70 Leading Gainer of Market Share (% of Hotels Open in U.S.) 0 2 4 6 8 10 12 14 Wyndham Choice IHG Hilton Marriott Best Western Accor Carlson Starwood Hyatt 2003 2004 2005 2006 2007 2008 |
 5 * Excludes cost of land Conversion $40,000+ $84,000+ $76,000+ $95,000+ $50 $70 $100+ Targeted Average Daily Rate $61,000+ $54,000+ $80 FAMILY OF WELL KNOWN AND DIVERSIFIED BRANDS Estimated Per Room Investment* New Construction Source: Choice Internal Data, April 2008 $65,000+ |
 6 Source: Smith Travel Research, Choice Internal Data, October 2008 WELL POSITIONED FOR LONG-TERM GROWTH IN LIMITED SERVICE NEW CONSTRUCTION SEGMENT Domestic Hotels 1,606 1,451 678 555 431 363 532 1,557 Holiday Inn Express Hampton Inn / Inn & Suites La Quinta Inn/Inn & Suites Fairfield Inn Country Inn & Suites |
 7 2,029 1,891 1,757 1,703 1,606 1,557 910 899 824 788 787 678 555 555 381 361 347 338 291 281 169 Domestic Hotels Source: Smith Travel Research, Choice Internal Data, October 2008 SIGNIFICANT GROWTH OPPORTUNITIES REMAIN IN LARGE CONVERSION MARKET Chart does not include 17,000+ independent hotels in budget, economy and mid-scale segments Best Western Holiday Inn Express Motel 6 La Quinta Inn/ La Quinta Inn & Suites Hampton Inn / Hampton Inn & Suites Fairfield Inn Red Roof Inn Knights Inn Other (includes 60+ brands) Days Inn Holiday Inn / Holiday Inn Select Americas Best Value Inn Travelodge Howard Johnson Microtel Super 8 Ramada/ Ramada Limited |
 8 DOMESTIC PIPELINE OF 955 HOTELS 63 283 167 149 93 40 40 38 38 44 Mid-scale Extended Stay Economy Upscale Source: Choice Internal Data, September 2008 New Construction Conversion |
 9 275 hotels Canada 16 hotels Mexico 262 hotels Continental Europe, UK & Ireland 155 hotels Scandinavia 48 hotels Brazil 49 hotels Japan 4 hotels China 2 hotels Malaysia 1 hotel Lebanon 25 hotels India 1,100 properties 32 countries and territories on 5 continents Large global “pure hotel franchising” business Track record of consistent, conservative, profitable growth Significant long-term growth opportunity in underrepresented regions/countries 119 hotels under construction, awaiting conversion or approved for development Source: Choice Internal Data, September 2008 STRONG PRESENCE IN MAJOR TRAVEL MARKETS OUTSIDE OF THE U.S. 13 hotels Central America 2 hotels Singapore 258 hotels Australia & New Zealand |
 10 SERVICES LIFECYCLE IMPROVES BRANDS AND PROPERTY PERFORMANCE FRANCHISED FRANCHISED PROPERTIES PROPERTIES RETURN ON RETURN ON INVESTMENT INVESTMENT Brand Planning and Management • Targeted, differentiated programs, amenities and services for each brand Brand Performance • Revenue and guest service consulting • Inventory and rate management • Local sales and marketing • Independent third-party quality assurance Training • On-site • Regional • Web-based • GM Certification Opening Services • Ensure hotels open successfully and meet or exceed brand standards Portfolio Management • Repositioning • Relicensing • Termination Procurement Services • Value-engineered prototypes and design packages • Negotiated vendor relationships |
 11 MARKETING LEVERAGES SIZE, SCALE AND DISTRIBUTION $300-plus million in annual marketing and reservation system fees Leverage expertise in on-line, targeted interactive marketing to influence guest hotel stay decisions Multi and single brand advertising campaigns Focus on driving guests to Choice central channels Facilitate “one-stop” shopping Strong and growing loyalty program Growing brand awareness Source: Choice Internal Data, September 2008 |
 12 STRONG AND GROWING AIDED BRAND AWARENESS 98 90 62 87 83 95 58 29 15 20 41 97 76 44 86 70 13 Comfort Inn Comfort Suites Sleep Inn Quality Clarion Econo Lodge Rodeway MainStay Inn Suburban Cambria Suites Choice Hotels 2001 2008 YTD Source: Millward Brown, September 2008 |
 13 8.3% 10.0% 12.2% 15.3% 16.2% 17.9% 20.0% 21.6% 2001 2002 2003 2004 2005 2006 2007 YTD 10/31/08 STRONG, GROWING LOYALTY PROGRAM Comprehensive loyalty rewards program 7.5 million members worldwide– contribute over 20% of domestic gross room revenues More than 1 million members added in 2008 Delivers incremental business to all Choice brand hotels Important selling point for franchise sales * Excludes Econo Lodge and Rodeway Inn brands Source: Choice Internal Data, October 31, 2008 Choice Privileges Revenue as Percent of Domestic Gross Room Revenues* |
 14 LARGE AND GROWING CENTRAL RESERVATIONS SYSTEM (“CRS”) DELIVERY PUTS “HEADS IN BEDS” All Hotel Direct Reservation Choice Central Reservation Contribution 1/3 Domestic Franchise System Gross Room Revenue Source Domestic Choice CRS Net Room Revenue $1,668 $1,161 $1,000 $1,200 $1,400 $1,600 $1,800 2005 2006 2007 TTM 9/30/08 $ in Millions Source: Choice Internal Data, September 2008 |
 15 Central Channel ADR Source: Choice Internal Data, September 2008 Domestic Choice CRS Net Channel Share $66.11 $73.54 $71.59 $77.90 $73.35 $84.22 2005 2006 2007 TTM 9/30/08 Systemwide Call Center choicehotels.com SIGNIFICANT AVERAGE DAILY RATE PREMIUM ON CENTRAL RESERVATIONS BOOKINGS 47% 61% 23% 35% 16% 18% 2005 2006 2007 Internet Voice Travel Agent (GDS) TMM Sept 2008 |
 16 MANAGING DIFFERENTLY IN LODGING DOWNTURN Leverage brand preference and conversion opportunity during lodging down cycle to drive market share Reallocate resources and deliver tools to position franchisees to capture larger share of shrinking travel demand Implement contingency plans at all levels of the organization Delay non-mission critical operating and capital spending Ensure adequate liquidity |
 17 LODGING DOWNCYCLE TRENDS -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 GDP Demand Supply 1990 +2.0% 1991 - 2.5% 1992 +2.5% 2001 -7.0% 2002 -2.7% 2003 +0.3% Financial Markets/ Housing Crisis IND. REVPAR IND. REVPAR 1990 +1.7% 1991 - 2.7% 1992 +1.4% CHH REVPAR CHH REVPAR 2001 -2.4% 2002 -3.8% 2003 -0.8% Each recession - supply grew faster than demand and the economy (GDP) 9/11 recession Gulf war recession Source: Bureau of Economic Analysis, Blue Chip Economic Indicators, Smith Travel Research, Choice Internal Data, December 2008 |
 18 184 174 116 63 128 182 237 288 327 322 134 124 184 241 342 370 402 432 443 470 318 298 300 304 470 552 639 720 770 792 1999 2000 2001 2002 2003 2004 2005 2006 2007 TTM 9/30/08 New Construction Conversion Total Source: Choice Internal Data, September 2008 CONVERSION BRAND FRANCHISE SALES OPPORTUNITY IN SOFT NEW CONSTRUCTION ENVIRONMENT |
 19 153 188 158 146 190 254 332 403 383 378 5.0% 6.0% 4.9% 4.4% 5.5% 7.0% 8.7% 9.3% 8.7% 9.6% 1999 2000 2001 2002 2003 2004 2005 2006 2007 TTM 9/30/08 Relicensing Contracts Relicensings as % of the prior year's ending system size Source: Choice Internal Data, September 2008 RELICENSING ACTIVITY SIMILAR TO NEW CONSTRUCTION BRAND SALES |
 20 STRONG, STEADY FRANCHISE SYSTEM GROWTH 3,039 3,123 3,244 3,327 3,482 3,636 3,834 4,048 4,211 4,445 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 252 258 266 271 294 310 329 339 354 282 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Domestic Hotels On-Line Domestic Rooms On-Line (in thousands) Source: Choice Internal Data, December 2007 CAGR = 4.4% CAGR = 5.0% CAGR = 3.9% CAGR = 4.7% |
 21 FRANCHISING REVENUE STREAM LESS VOLATILE THAN REVPAR -6% -4% -2% 0% 2% 4% 6% 8% 10% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $0 $50 $100 $150 $200 $250 $300 $350 CHH RevPAR STR Chain Scale (Supply Weighted) Industry RevPAR Franchising Revenue Source: Smith Travel Research, Choice Internal Data, December 2007 ($ in millions) |
 22 ADJUSTED EBITDA LESS VOLATILE THAN INDUSTRY PROFITABILITY 0 5 10 15 20 25 30 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 50 100 150 200 250 Industry Profits Adjusted EBITDA Source: Smith Travel Research, Choice Internal Data, December 2007 |
 23 CAPITAL “LIGHT” MODEL GENERATES STRONG RETURNS ON INVESTED CAPITAL 19.5% 78.5% 15.2% 16.1% 14.7% 27.6% 36.7% 49.7% 62.9% 68.8% 63.3% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 TTM 9/30/08 Source: Choice Internal Data, September 2008 |
 24 TRACK RECORD OF STRONG EARNINGS PER SHARE GROWTH $0.40 $0.51 $0.51 $0.58 $0.76 $0.93 $1.07 $1.26 $1.49 $1.74 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Choice Internal Data, December 2007, Per Share Amounts Retroactively Adjusted For 2005 Stock Split Adjusted Diluted Earnings Per Share |
 25 - 7.9 7.2 24.0 10.8 5.7 6.4 4.9 3.2 1.6 2.2 10.2 x 14.8 x 20.3 x 17.0 x 14.9 x 11.0 x 11.9 x 10.2 x 8.6 x 11.3 x 11.9 x 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD 12/17/08 Millions of Shares Repurchased Avg. TEV/EBITDA Source: Capital IQ, Choice Internal Data, December 2008, Share amounts for 2005 and prior years retroactively adjusted for 2005 two-for-one stock split Remaining authority on current authorization – 5.9 million shares as of December 17, 2008 OPPORTUNISTIC SHARE REPURCHASES KEY PART OF CAPITAL ALLOCATION STRATEGY |
 26 2.17% 0.00% 2.85% 0.00% 0.00% 0.00% 5.94% 2.95% 2.94% 0.00% 0.00% Choice Great Wolf Starwood Morgans Hotel Group Wyndham Gaylord Home Inns Marriott Red Lion Orient-Express IHG Source: Bloomberg Financial, December 12, 2008 HIGH DIVIDEND YIELD COMPARED TO OTHER LODGING C-CORPS |
 27 CREDIT STRENGTHS Solid investment grade company – Moody’s Baa3 – Standard & Poor’s BBB Strong liquidity position – $350 million committed revolver matures June 2011 with $76 million available as of December 15, 2008 – No debt maturities until 2011 Substantial financial flexibility Minimal contingent liability exposure Source: Choice Internal Data, December 2008 |
 28 STRATEGIC AGENDA FOR CHOICE’S BRANDS, GROWTH AND SHAREHOLDERS Continue core brand market share, unit growth and brand performance improvements Continue shareholder-friendly capital allocation policies Leverage financial capacity/strength to expand scale of emerging brands Evaluate opportunities to enter new segments Continue international expansion |
 29 Source: Choice Internal Data, December 2008 FINANCIAL PROJECTIONS Gross Domestic Unit Openings – 2008E – 332 Conversion Units (68%), 156 New Construction Units (32%) – 2009E – 344 Conversion Units (73%), 129 New Construction Units (27%) Adjusted diluted earnings per share projections assume no share repurchases subsequent to December 17, 2008 Outstanding common shares approximately 60.8 million as of December 17, 2008 Previous Expectations Current Expectations Full Year 2008 Full Year 2008 Target 2% RevPAR Sensitivity Unit Growth 5.5% 5.5% 3.5% 3.5% RevPAR Decline -1.50% -1.80% -6.0% -8.0% Effective Royalty Rate Improvement 6 bps 6 bps 3 bps 3 bps Adjusted EBITDA (in millions) $197.5 $196.5 (1) $184.2 $179.8 Adjusted Diluted EPS $1.76 $1.71 (2) $1.74 $1.69 Effective Tax Rate 37.0% 37.0% 36.5% 36.5% (1) Our current expectation for adjusted EBITDA for 2008 has been reduced by an incremental $2.1 million of termination benefits compared to our previous expectation as a result of certain previously unanticipated workforce reductions. (2) Our current expectation for adjusted diluted EPS for 2008 includes termination benefits of $0.02 per share mentioned above and incremental investment losses of approximately $0.03 per diluted share related to assets held in the Company's non-qualified retirement plans compared to our previous expectation. Current Expectations Full Year 2009 |
 30 Appendix Reconciliation of Non-GAAP Financial Measurements to GAAP |
 31 DISCLAIMER Adjusted franchising margins, adjusted earnings before interest depreciation and amortization (EBITDA), adjusted net income, adjusted diluted earnings per share, franchising revenues, net operating profits after taxes (NOPAT), return on invested capital (ROIC) and free cash flows are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are used by management in reviewing and analyzing the company’s performance. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States (GAAP), such as operating income, net income, diluted earnings per share, total revenues or net cash provided by operating activities. The calculation of these non- GAAP measures may be different from the calculation by other companies and therefore comparability may be limited. The company has included the following appendix which reconcile these measures to the comparable GAAP measurement. |
  32 FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS Source: Choice Internal Data, December 2007 ($ amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 2002 Total Revenues 615,494 $ 539,903 $ 472,098 $ 428,208 $ 385,866 $ 365,562 $ Adjustments: Marketing and Reservation (316,827) (273,267) (237,822) (220,732) (195,219) (190,145) Product Sales - - - - - - Hotel Operations (4,692) (4,505) (4,293) (3,729) (3,565) (3,331) Franchising Revenues 293,975 $ 262,131 $ 229,983 $ 203,747 $ 187,082 $ 172,086 $ Operating Income 185,199 $ 166,625 $ 143,750 $ 124,983 $ 113,946 $ 104,700 $ Adjustments Hotel Operations (1,451) (1,311) (1,068) (725) (842) (385) Acceleration of Management Succession Plan Executive Termination Benefits 3,690 - - - - - Product Sales - - - - - - Impairment of Friendly Investment - - - - - - Net 187,438 $ 165,314 $ 142,682 $ 124,258 $ 113,104 $ 104,315 $ Adjusted Franchising Margin 63.8% 63.1% 62.0% 61.0% 60.5% 60.6% |
  33 FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS (CONTINUED) Source: Choice Internal Data, December 2007 ($ amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, 2001 2000 1999 1998 1997 Total Revenues 341,428 $ 352,841 $ 324,203 $ 165,474 $ 175,416 $ Adjustments: Marketing and Reservation (168,170) (185,367) (162,603) - - Product Sales - - (3,871) (20,748) (23,806) Hotel Operations (3,215) (1,249) - (1,098) (17,303) Franchising Revenues 170,043 $ 166,225 $ 157,729 $ 143,628 $ 134,307 $ Operating Income 73,577 $ 92,427 $ 94,170 $ 85,151 $ 77,068 $ Adjustments Hotel Operations (714) (640) - 35 (1,679) Acceleration of Management Succession Plan Executive Termination Benefits - - - - - Product Sales - - 12 (1,216) (1,037) Impairment of Friendly Investment 22,713 - - - - Net 95,576 $ 91,787 $ 94,182 $ 83,970 $ 74,352 $ Adjusted Franchising Margin 56.2% 55.2% 59.7% 58.5% 55.4% |
 34 RETURN ON INVESTED CAPITAL Source: Choice Internal Data, December 2008 (a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect of a $22.7 million impairment charge related to the write-off of the company’s investment in Friendly Hotels. Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended ($ in millions) December 31, December 31, December 31, December 31, December 31, December 31, 1997 1998 1999 2000 2001 2002 Operating Income (a) $77.1 $85.2 $94.2 $92.4 $96.3 $104.7 Tax Rate(a) 41.7% 41.7% 39.5% 39.0% 35.0% 36.5% After-Tax Operating Income 45.0 49.7 57.0 56.4 62.6 66.5 + Depreciation & Amortization 9.2 6.7 7.7 11.6 12.5 11.3 - Maintenance CAPEX 9.2 6.7 7.7 11.6 12.5 11.3 Net Op. Profit After-tax (NOPAT) $45.0 $49.7 $57.0 $56.4 $62.6 $66.5 Total Assets 386.4 398.2 464.7 484.1 321.2 316.8 - Current Liabilities 68.2 64.7 88.7 93.8 71.2 84.3 Invested Capital 318.2 333.6 375.9 390.3 250.0 232.5 Return on Average Invested Capital 17.8% 15.2% 16.1% 14.7% 19.5% 27.6% |
 35 RETURN ON INVESTED CAPITAL (CONTINUED) Trailing Twelve Year Ended Year Ended Year Ended Year Ended Year Ended Months Ended ($ in millions) December 31, December 31, December 31, December 31, December 31, September 30, 2003 2004 2005 2006 2007 2008 Operating Income (a) $113.9 $125.0 $143.8 $166.6 $185.2 $188.6 Tax Rate(a) 36.1% 35.1% 33.0% 27.4% 36.0% 36.6% After-Tax Operating Income 72.8 81.1 96.3 121.0 118.5 119.6 + Depreciation & Amortization 11.2 9.9 9.1 9.7 8.6 8.4 - Maintenance CAPEX 11.2 9.9 9.1 9.7 8.6 8.4 Net Op. Profit After-tax (NOPAT) $72.8 $81.1 $96.3 $121.0 $118.5 $119.6 Total Assets 267.3 263.4 265.3 303.3 328.4 349.9 - Current Liabilities 102.2 102.1 120.3 139.8 147.5 153.1 Invested Capital 165.1 161.3 145.0 163.5 180.9 196.8 Return on Average Invested Capital 36.7% 49.7% 62.9% 78.5% 68.8% 63.3% (a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect of a $22.7 million impairment charge related to the write-off of the company’s investment in Friendly Hotels. Source: Choice Internal Data, December 2008 |
  36 FREE CASH FLOWS Trailing Twelve Months Ended Nine Months Ended Year Ended Year Ended Year Ended Year Ended September 30, September 30, December 31, December 31, December 31, December 31, ($ in thousands) 2008 2008 2007 2006 2005 2004 Net Cash Provided by Operating Activities 138,364 $ 92,391 $ 146,135 $ 153,928 $ 133,588 $ 108,908 $ Net Cash Provided(Used) by Investing Activities (17,610) (14,932) (21,260) (17,331) (24,531) (14,544) Free Cash Flows 120,754 $ 77,459 $ 124,875 $ 136,597 $ 109,057 $ 94,364 $ Source: Choice Internal Data, December 2008 |
  37 FREE CASH FLOWS (continued) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, ($ in thousands) 2003 2002 2001 2000 1999 1998 Net Cash Provided by Operating Activities 115,304 $ 99,018 $ 101,712 $ 53,879 $ 65,040 $ 38,952 $ Net Cash Provided(Used) by Investing Activities 27,784 (14,683) 87,738 (16,617) (36,031) (9,056) Free Cash Flows 143,088 $ 84,335 $ 189,450 $ 37,262 $ 29,009 $ 29,896 $ Source: Choice Internal Data, December 2008 |
 38 ADJUSTED EBITDA Source: Choice Internal Data, December 2008 Forecasted Trailing Twelve Year Ended Months Ended Year Ended Year Ended Year Ended Year Ended ($ in thousands) December 31, September 30, December 31, December 31, December 31, December 31, TARGET 2% RevPAR Sensitivity 2008 2008 2007 2006 2005 2004 Operating Income 175,242 $ 170,802 $ 182,224 $ 188,590 $ 185,199 $ 166,625 $ 143,750 $ 124,983 $ Adjustments Acceleration of Management Succession Plan - - 6,069 6,069 - - - - Executive Termination Benefits - - - - 3,690 - - - Product Sales - - - - - - - - Impairment of Friendly investment - - - - - - - - Depreciation and Amortization 8,994 8,994 8,232 8,392 8,637 9,705 9,051 9,947 Adjusted EBITDA 184,236 $ 179,796 $ 196,525 $ 203,051 $ 197,526 $ 176,330 $ 152,801 $ 134,930 $ Forecasted Year Ended, December 31, 2009 |
 39 ADJUSTED EBITDA (CONTINUED) Source: Choice Internal Data, December 2008 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended ($ in thousands) December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2003 2002 2001 2000 1999 1998 1997 Operating Income 113,946 $ 104,700 $ 73,577 $ 92,427 $ 94,170 $ 85,151 $ 77,068 $ Adjustments Acceleration of Management Succession Plan - - - - - - - Executive Termination Benefits - - - - - - - Product Sales - - - - 12 (1,216) (1,037) Impairment of Friendly investment - - 22,713 - - - - Depreciation and Amortization 11,225 11,251 12,452 11,623 7,687 6,710 9,173 Adjusted EBITDA 125,171 $ 115,951 $ 108,742 $ 104,050 $ 101,869 $ 90,645 $ 85,204 $ |
 40 ADJUSTED DILUTED EARNINGS PER SHARE Source: Choice Internal Data, December 2008 Forecasted Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, (In thousands, except per share amounts) TARGET 2% RevPAR Sensitivity 2008 2007 2006 2005 2004 Net Income 106,747 $ 103,875 $ 103,422 $ 111,301 $ 112,787 $ 87,565 $ 74,345 $ Adjustments: Loss(Gain) on Extinguishment of Debt - - - - 217 - 433 Acceleration of Management Sucession Plan, Net of Taxes - - 3,799 - - - - Executive Termination Benefits, Net of Taxes - - - 2,310 - - - Resolution of Provisions for Income Tax Contingencies - - - - (12,791) (4,855) (1,182) Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - 1,192 - Loss(Gain) on Sunburst Note Transactions - - - - - - - Impairment of and Equity Losses in Friendly Hotels PLC Investment - - - - - - - Adjusted Net Income 106,747 $ 103,875 $ 107,221 $ 113,611 $ 100,213 $ 83,902 $ 73,596 $ Weighted Average Shares Outstanding-Diluted 61,515 61,515 62,523 65,331 67,050 66,336 69,000 Diluted Earnings Per Share 1.74 $ 1.69 $ 1.65 $ 1.70 $ 1.68 $ 1.32 $ 1.08 $ Adjustments: Loss(Gain) on Extinguishment of Debt - - - - - - 0.01 Acceleration of Management Sucession Plan, Net of Taxes - - 0.06 - - - - Executive Termination Benefits, Net of Taxes - - - 0.04 - - - Resolution of Provisions for Income Tax Contingencies - - - - (0.19) (0.08) (0.02) Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - 0.02 - Loss(Gain) on Sunburst Note Transactions - - - - - - - Impairment of and Equity Losses in Friendly Hotels PLC Investment - - - - - - - Adjusted Diluted Earnings Per Share (EPS) 1.74 $ 1.69 $ 1.71 $ 1.74 $ 1.49 $ 1.26 $ 1.07 $ December 31, 2009 Forecasted Year Ending |
 41 ADJUSTED DILUTED EARNINGS PER SHARE (CONTINUED) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, (In thousands, except per share amounts) 2003 2002 2001 2000 1999 1998 Net Income 71,863 $ 60,844 $ 14,327 $ 42,445 $ 57,155 $ 55,305 $ Adjustments: Loss(Gain) on Extinguishment of Debt - - - - - (7,232) Executive Termination Benefits, Net of Taxes - - - - - - Resolution of Provisions for Income Tax Contingencies - - - - - - Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - - Loss(Gain) on Sunburst Note Transactions (3,383) - - 4,721 - - Impairment of and Equity Losses in Friendly Hotels PLC Investment - - 37,166 7,532 - - Adjusted Net Income 68,480 $ 60,844 $ 51,493 $ 54,698 $ 57,155 $ 48,073 $ Weighted Average Shares Outstanding-Diluted 73,349 80,114 89,144 106,506 111,334 119,096 Diluted Earnings Per Share 0.98 $ 0.76 $ 0.16 $ 0.40 $ 0.51 $ 0.46 $ Adjustments: Loss(Gain) on Extinguishment of Debt - - - - - (0.06) Executive Termination Benefits, Net of Taxes - - - - - - Resolution of Provisions for Income Tax Contingencies - - - - - - Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - - Loss(Gain) on Sunburst Note Transactions (0.05) - - 0.04 - - Impairment of and Equity Losses in Friendly Hotels PLC Investment - - 0.42 0.07 - - Adjusted Diluted Earnings Per Share (EPS) 0.93 $ 0.76 $ 0.58 $ 0.51 $ 0.51 $ 0.40 $ Source: Choice Internal Data, December 2008 |