 Investor Presentation March 2010 Exhibit 99.1 |
 2 DISCLAIMER Certain matters discussed throughout all of this presentation constitute forward-looking statements within the meaning of the federal securities laws. 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 hotel 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, 2009, filed with the Securities and Exchange Commission on March 1, 2010. 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* – 9.6% share of branded US hotels (+160 basis points over trailing 5 years)* – 2nd largest U.S. hotelier 65+ year-old hotel distribution 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 843 hotels under construction, awaiting conversion or approved for development. Source: Choice Internal Data, December 31, 2009 * Based on number of hotels as of December 31, 2009 (Smith Travel Research) Fee-for-service business model Predictable, profitable, long-term growth in a variety of lodging and economic environments 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 after-tax 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 0 2 4 6 8 10 12 14 Wyndham Choice IHG Hilton Marriott Best Western Accor Carlson Starwood Hyatt 2004 2005 2006 2007 2008 2009 ONE OF THE LARGEST HOTELIERS Source: Smith Travel Research, December 31, 2009 Market Share % 11.4% 9.6% 6.0% 5.9% 5.5% 3.9% 2.0% 1.2% 0.9% 0.6% 5 yr. bps (04-09) -30 +160 +80 +150 +100 -50 -70 +10 +20 -80 Leading Gainer of Market Share (% of Hotels Open in U.S.) |
 5 * Excludes cost of land; based on average domestic per-room investment. Conversion $45,000+ $105,000+ $50 $70 $100+ Targeted Average Daily Rate $85 FAMILY OF WELL-KNOWN AND DIVERSIFIED BRANDS New Construction Source: Choice Internal Data, April 2009 |
 6 CHALLENGING NEAR-TERM ENVIRONMENT FOR NEW CONSTRUCTION HOTEL DEVELOPMENT 0% Sources: Lodging Econometrics (Q4 2009),Smith Travel Research, December 2009 *2009 - 2010 supply growth projections are averages based on STR and PwC forecasts |
 7 Source: Smith Travel Research, Choice Internal Data, December 31, 2009 STRONG LIMITED SERVICE NEW CONSTRUCTION BRANDS POSITIONED WELL FOR LONG-TERM GROWTH |
 8 Source: Smith Travel Research, Choice Internal Data, December 31, 2009 SIGNIFICANT GROWTH OPPORTUNITIES REMAIN IN LARGE CONVERSION MARKET Chart does not include 17,000+ independent hotels in budget, economy and mid-scale segments Domestic Hotels Hampton Inn/ Hampton Inn & Suites Holiday Inn Express Days Inn Motel 6 America’s Best Value Inn Holiday Inn/Holiday Inn Select La Quinta Inn/La Quinta Inn & Suites Fairfield Inn Ramada/Ramada Limited Travelodge Red Roof Inn Howard Johnson Knight’s Inn Microtel Best Western Super 8 |
 9 DOMESTIC PIPELINE OF 727 HOTELS Mid-scale Extended Stay Economy Upscale Source: Choice Internal Data, December 31, 2009 New Construction Conversion 6 |
 10 281 hotels Canada 18 hotels Mexico 236 hotels Continental Europe, UK & Ireland 161 hotels Scandinavia 54 hotels Brazil 52 hotels Japan 3 hotels China 1 hotel Malaysia 1 hotel Lebanon 28 hotels India 1,115 properties in more than 30 countries and territories on 5 continents. Multi-year investments in IT and marketing planned to enhance value proposition for international hotels. Significant long-term growth opportunity in underrepresented regions/countries. Source: Choice Internal Data, December 31, 2009 STRONG PRESENCE IN MAJOR TRAVEL MARKETS OUTSIDE OF THE U.S. 13 hotels Central America 1 hotel Singapore 266 hotels Australia, New Zealand & Papa New Guinea |
 11 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 |
 12 MARKETING AND CENTRAL RESERVATION SYSTEM LEVERAGES SIZE, SCALE AND DISTRIBUTION $300-plus million in annual marketing and reservation system fees Leverage expertise and innovation in on-line, targeted interactive marketing to influence guest hotel stay decisions Powerful advertising campaigns Focus on driving guests to Choice central channels Facilitate “one-stop” shopping Strong and growing global loyalty program Increasing brand awareness Source: Choice Internal Data, December 2009 |
 13 STRONG AND GROWING AIDED BRAND AWARENESS 98 77 43 87 72 14 99 90 59 88 80 95 57 26 14 19 43 Comfort Inn Comfort Suites Sleep Inn Quality Clarion Econo Lodge* Rodeway MainStay Inn* Suburban Extended Stay* Cambria Suites Choice Hotels 2001 2009 Source: Percentage of survey respondents. Millward Brown, December 2009. *Econo Lodge, Rodeway Inn and Suburban Extended Stay, December 2008. |
 14 STRONG, GROWING LOYALTY PROGRAM Comprehensive loyalty rewards program More than 9.5 million members worldwide – contribute over ¼ of domestic gross room revenues 2.0 million new members added in 2009 Delivers incremental business to all Choice brand hotels Important selling point for franchise sales Source: Choice Internal Data, December 31, 2009 Choice Privileges Revenue as Percent of Domestic Gross Room Revenues* * 2001-2008 Data Excludes Econo Lodge and Rodeway Inn brands |
 15 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 Source: Choice Internal Data, December 2009 |
 16 Central Channel ADR “Premium” Source: Choice Internal Data, December, 2009 Domestic Choice CRS Net Channel Share 2005 2006 2007 2008 2009 Systemwide Call Center choicehotels.com $66.11 CENTRAL RESERVATIONS BOOKINGS CREATE SIGNIFICANT VALUE FOR FRANCHISEES $71.59 $73.35 $70.71 $ 73.32 $ 79.50 |
 17 LODGING DOWNCYCLE TRENDS 9/11 Recession Gulf war Recession Source: Blue Chip Economic Indicators (2/10), Smith Travel Research, Choice Internal Data |
 18 Source: Choice Internal Data, December 31, 2009 CONVERSION BRAND FRANCHISE SALES OPPORTUNITY IN SOFT NEW CONSTRUCTION ENVIRONMENT |
 19 258 266 271 282 294 310 329 339 354 374 389 19992000200120022003200420052006200720082009 3,123 3,244 3,327 3,482 3,636 3,834 4,048 4,211 4,445 4,716 4,906 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 STRONG, STEADY FRANCHISE SYSTEM GROWTH Domestic Hotels On-Line Domestic Rooms On-Line (in thousands) Source: Choice Internal Data, December 2009 CAGR = 4.6% CAGR = 5.1% CAGR = 4.2% CAGR = 4.6% |
 20 FRANCHISING REVENUE STREAM LESS VOLATILE THAN REVPAR $0 $50 $100 $150 $200 $250 $300 $350 -17% -12% -7% -2% 3% 8% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 CHH RevPAR STR Chain Scale (Supply Weighted) Industry RevPAR Franchising Revenue Source: Smith Travel Research, Choice Internal Data, December 2009 ($ in millions) |
 21 ADJUSTED EBITDA LESS VOLATILE THAN INDUSTRY PROFITABILITY Source: Smith Travel Research, Choice Internal Data, December 2009 0 50 100 150 200 250 0 5 10 15 20 25 30 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Industry Profits Adjusted EBITDA |
 22 CAPITAL “LIGHT” MODEL GENERATES STRONG RETURNS ON INVESTED CAPITAL 15.2% 16.1% 14.7% 19.5% 27.6% 36.7% 49.7% 62.9% 78.5% 68.8% 59.5% 48.1% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Choice Internal Data, December 2009 After-Tax Return On Invested Capital |
 23 TRACK RECORD OF STRONG EARNINGS PER SHARE PERFORMANCE $0.40 $0.51 $0.51 $0.58 $0.76 $0.93 $1.07 $1.25 $1.48 $1.73 $1.73 $1.68 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Choice Internal Data, December 2009, Per Share Amounts Retroactively Adjusted For 2005 Stock Split Adjusted Diluted Earnings Per Share Note: See appendix for reconciliation of adjusted diluted earnings per share to diluted earnings per share. To improve comparability certain employee severance amounts included in the determination of adjusted diluted earnings per share in this presentation for 2009, 2008 and 2007 differ from amounts reported in Exhibits 8 of our February 11, 2010 and February 10, 2009 earnings announcements. |
 24 - 2.1 7.9 7.2 24.0 10.8 5.7 6.4 4.9 3.2 1.6 2.2 10.3 x 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 2008 2009 Millions of Shares Repurchased Avg. TEV/EBITDA Source: Capital IQ, December 29, 2009, Choice Internal Data, December 31, 2009. Share amounts for 2005 and prior years retroactively adjusted for 2005 two-for-one stock split Remaining authority on current authorization – 3.6 million shares as of March 1, 2010 OPPORTUNISTIC SHARE REPURCHASES KEY PART OF CAPITAL ALLOCATION STRATEGY |
 25 2.3% 0.0% 0.0% 0.0% 2.9% 0.6% 0.0% 0.0% 0.5% 2.12% Choice Great Wolf Wyndham Gaylord Hyatt Orient-Express Starwood Red Lion Marriott Source: Bloomberg Financial, February 26, 2010 HIGH CASH DIVIDEND YIELD COMPARED TO OTHER LODGING C-CORPS IHG |
 26 STRONG CREDIT POSITION Investment grade credit rating – Moody’s Baa3 – Standard & Poor’s BBB Strong liquidity position – $350 million committed revolver matures June 2011 – No debt maturities until 2011 Substantial financial flexibility Minimal contingent liability exposure Source: Choice Internal Data, December 2009 |
 27 STRATEGY FOR CHOICE’S BRANDS, GROWTH AND SHAREHOLDERS Grow and Improve Brands Continue progress toward long-term goal of domestic market share leadership Increase portfolio profitability of the Comfort brand family Refresh Sleep Inn to improve long-term brand growth potential Invest in and expand emerging brands/segments – Cambria, Ascend, Extended Stay, International Enhance Reservations Delivery Grow Choice Privileges loyalty program – target +2.5 million new members in 2010 Enhance global sales strategy Deploy revenue management tools designed to improve franchise performance Allocate Free Cash Flows To “Best And Highest” Use Continue shareholder-friendly capital allocation policies Leverage financial capacity/strength to support expansion of emerging brands Evaluate opportunities to enter new segments Invest in IT infrastructure to shore up value proposition for international properties. |
 28 Appendix Reconciliation of Non-GAAP Financial Measurements to GAAP |
 29 DISCLAIMER Adjusted franchising margins, adjusted earnings before interest, taxes depreciation and amortization (EBITDA), adjusted net income, adjusted diluted earnings per share (EPS), franchising revenues, net operating profit after tax (NOPAT), return on average 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. |
 30 FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS Source: Choice Internal Data, December 2009 Note: To improve comparability certain employee severance amounts included in the determination of adjusted franchising margins in this presentation for 2009, 2008 and 2007 differ from amounts reported in exhibits 8 of our February 11, 2010 and February 10, 2009 earnings announcements. ($ amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2009 2008 2007 2006 2005 2004 2003 Total Revenues 564,178 $ 641,680 $ 615,494 $ 539,903 $ 472,098 $ 428,208 $ 385,866 $ Adjustments: Marketing and Reservation (305,379) (336,477) (316,827) (273,267) (237,822) (220,732) (195,219) Product Sales - - - - - - - Hotel Operations (4,140) (4,936) (4,692) (4,505) (4,293) (3,729) (3,565) Franchising Revenues 254,659 $ 300,267 $ 293,975 $ 262,131 $ 229,983 $ 203,747 $ 187,082 $ Operating Income 148,073 $ 174,596 $ 185,199 $ 166,625 $ 143,750 $ 124,983 $ 113,946 $ Adjustments Hotel Operations (987) (1,502) (1,451) (1,311) (1,068) (725) (842) Acceleration of Management Succession Plan - 6,605 - - - - - Executive Termination Benefits 3,321 - 3,690 - - - - Curtailment of SERP 1,209 - - - - - - Loss on Sublease of Office Space 1,503 - - - - - - Loan Reserves Related to Impaired Notes Receivable - 7,555 - - - - - Product Sales - - - - - - - Impairment of Friendly Investment - - - - - - - Net 153,119 $ 187,254 $ 187,438 $ 165,314 $ 142,682 $ 124,258 $ 113,104 $ Adjusted Franchising Margin 60.1% 62.4% 63.8% 63.1% 62.0% 61.0% 60.5% |
 31 FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS (CONTINUED) Source: Choice Internal Data, December 2009 ($ 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, 2002 2001 2000 1999 1998 1997 Total Revenues 365,562 $ 341,428 $ 352,841 $ 324,203 $ 165,474 $ 175,416 $ Adjustments: Marketing and Reservation (190,145) (168,170) (185,367) �� (162,603) - - Product Sales - - - (3,871) (20,748) (23,806) Hotel Operations (3,331) (3,215) (1,249) - (1,098) (17,303) Franchising Revenues 172,086 $ 170,043 $ 166,225 $ 157,729 $ 143,628 $ 134,307 $ Operating Income 104,700 $ 73,577 $ 92,427 $ 94,170 $ 85,151 $ 77,068 $ Adjustments Hotel Operations (385) (714) (640) - 35 (1,679) Acceleration of Management Succession Plan - - - - - - Executive Termination Benefits - - - - - - Loan Reserves Related to Impaired Notes Receivable - - - - - - Product Sales - - - 12 (1,216) (1,037) Impairment of Friendly Investment - 22,713 - - - - Net 104,315 $ 95,576 $ 91,787 $ 94,182 $ 83,970 $ 74,352 $ Adjusted Franchising Margin 60.6% 56.2% 55.2% 59.7% 58.5% 55.4% |
 32 RETURN ON INVESTED CAPITAL Source: Choice Internal Data, December 2009 (a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect of a $22.7 million impairment charge related to the write-off of the company’s investment in Friendly Hotels. Year Ended Year Ended Year Ended Year Ended Year Ended ($ in millions) December 31, December 31, December 31, December 31, December 31, 1998 1999 2000 2001 2002 Operating Income (a) $85.2 $94.2 $92.4 $96.3 $104.7 Tax Rate(a) 41.7% 39.5% 39.0% 35.0% 36.5% After-Tax Operating Income 49.7 57.0 56.4 62.6 66.5 + Depreciation & Amortization 6.7 7.7 11.6 12.5 11.3 - Maintenance CAPEX 6.7 7.7 11.6 12.5 11.3 Net Op. Profit After-tax (NOPAT) $49.7 $57.0 $56.4 $62.6 $66.5 Total Assets 398.2 464.7 484.1 321.2 316.8 - Current Liabilities 64.7 88.7 93.8 71.2 84.3 Invested Capital 333.6 375.9 390.3 250.0 232.5 Return on Average Invested Capital 15.2% 16.1% 14.7% 19.5% 27.6% |
 33 RETURN ON INVESTED CAPITAL (CONTINUED) Source: Choice Internal Data, December 2009 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended ($ in millions) December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2003 2004 2005 2006 2007 2008 2009 Operating Income (a) $113.9 $125.0 $143.8 $166.6 $185.2 $174.6 $148.1 Tax Rate(a) 36.1% 35.1% 33.0% 27.4% 36.0% 36.3% 34.8% After-Tax Operating Income 72.8 81.1 96.3 121.0 118.5 111.2 96.6 + Depreciation & Amortization 11.2 9.9 9.1 9.7 8.6 8.2 8.3 - Maintenance CAPEX 11.2 9.9 9.1 9.7 8.6 8.2 8.3 Net Op. Profit After-tax (NOPAT) $72.8 $81.1 $96.3 $121.0 $118.5 $111.2 $96.6 Total Assets 267.3 263.4 265.3 303.3 328.4 328.2 340.0 - Current Liabilities 102.2 102.1 120.3 139.8 147.5 135.1 131.8 Invested Capital 165.1 161.3 145.0 163.5 180.9 193.1 208.2 Return on Average Invested Capital 36.7% 49.7% 62.9% 78.5% 68.8% 59.5% 48.1% |
 34 FREE CASH FLOWS Source: Choice Internal Data, December 2009 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, ($ in thousands) 2009 2008 2007 2006 2005 2004 Net Cash Provided by Operating Activities 112,216 $ 104,399 $ 145,666 $ 153,680 $ 133,588 $ 108,908 $ Net Cash Provided (Used) by Investing Activities (3,349) (20,265) (21,284) (17,244) (24,531) (14,544) Free Cash Flows 108,867 $ 84,134 $ 124,382 $ 136,436 $ 109,057 $ 94,364 $ |
 35 FREE CASH FLOWS (continued) Source: Choice Internal Data, December 2009 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 $ |
 36 ADJUSTED EBITDA Source: Choice Internal Data, December 2009 Note: To improve comparability certain employee severance amounts included in the determination of adjusted EBITDA in this presentation for 2009, 2008 and 2007 differ from amounts reported in exhibits 8 of our February 11, 2010 and February 10, 2009 earnings announcements. 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, 2009 2008 2007 2006 2005 2004 Operating Income 148,073 $ 174,596 $ 185,199 $ 166,625 $ 143,750 $ 124,983 $ Adjustments Acceleration of Management Succession Plan - 6,605 - - - - Loss on Sublease of Office Space 1,503 - - - - - Executive Termination Benefits 3,321 - 3,690 - - - Curtailment of SERP 1,209 - - - - - Loan Reserves Related to Impaired Notes Receivable - 7,555 - - - - Product Sales - - - - - - Impairment of Friendly investment - - - - - - Depreciation and Amortization 8,336 8,184 8,637 9,705 9,051 9,947 Adjusted EBITDA 162,442 $ 196,940 $ 197,526 $ 176,330 $ 152,801 $ 134,930 $ |
 37 ADJUSTED EBITDA (CONTINUED) Source: Choice Internal Data, December 2009 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 - - - - - - - Loss on Sublease of Office Space - - - - - - - Executive Termination Benefits - - - - - - - Curtailment of SERP - - - - - - - Loan Reserves Related to Impaired Notes Receivable - - - - - - - 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 $ |
  38 ADJUSTED DILUTED EARNINGS PER SHARE Source: Choice Internal Data, December 2009 Note: To improve comparability certain employee severance amounts included in the determination of adjusted diluted earnings per share in this presentation for 2009 2008 and 2007 differ from amounts reported in exhibits 8 of our February 11, 2010 and February 10, 2009 earnings announcements. 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) 2009 2008 2007 2006 2005 Net Income 98,250 $ 100,211 $ 111,301 $ 112,787 $ 87,565 $ Adjustments: Loss(Gain) on Extinguishment of Debt, Net of Taxes - - - 217 - Acceleration of Management Sucession Plan, Net of Taxes - 4,135 - - - Executive Termination Benefits, Net of Taxes 2,079 - 2,310 - - Loss on Sublease of Office Space, Net of Taxes 941 - - - - Curtailment of SERP, Net of Taxes 757 - - - - Loan Reserves Related to Impaired Notes Receivable, Net of Taxes - 4,729 - - - Resolution of Provisions for Income Tax Contingencies - - - (12,791) (4,855) Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - 1,192 Loss(Gain) on Sunburst Note Transactions, Net of Taxes - - - - - Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes - - - - - Adjusted Net Income 102,027 $ 109,075 $ 113,611 $ 100,213 $ 83,902 $ Weighted Average Shares Outstanding-Diluted 60,224 62,994 65,766 67,490 66,759 Diluted Earnings Per Share 1.63 $ 1.59 $ 1.69 $ 1.67 $ 1.31 $ Adjustments: Loss(Gain) on Extinguishment of Debt, Net of Taxes - - - - - Acceleration of Management Sucession Plan, Net of Taxes - 0.07 - - - Executive Termination Benefits, Net of Taxes 0.02 - 0.04 - - Loss on Sublease of Office Space, Net of Taxes 0.02 - - - - Curtailment of SERP, Net of Taxes 0.01 - - - - Loan Reserves Related to Impaired Notes Receivable, Net of Taxes - 0.07 - - - Resolution of Provisions for Income Tax Contingencies - - - (0.19) (0.08) Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - 0.02 Loss(Gain) on Sunburst Note Transactions, Net of Taxes - - - - - Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes - - - - - Adjusted Diluted Earnings Per Share (EPS) 1.68 $ 1.73 $ 1.73 $ 1.48 $ 1.25 $ |
 39 ADJUSTED DILUTED EARNINGS PER SHARE (CONTINUED) Source: Choice Internal Data, December 2009 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, (In thousands, except per share amounts) 2004 2003 2002 2001 2000 1999 1998 Net Income 74,345 $ 71,863 $ 60,844 $ 14,327 $ 42,445 $ 57,155 $ 55,305 $ Adjustments: Loss(Gain) on Extinguishment of Debt, Net of Taxes 433 - - - - - (7,232) Acceleration of Management Sucession Plan, Net of Taxes - - - - - - - Executive Termination Benefits, Net of Taxes - - - - - - - Loss on Sublease of Office Space, Net of Taxes - - - - - - - Curtailment of SERP, Net of Taxes - - - - - - - Loan Reserves Related to Impaired Notes Receivable, Net of Taxes - - - - - - - Resolution of Provisions for Income Tax Contingencies (1,182) - - - - - - Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - - - Loss(Gain) on Sunburst Note Transactions, Net of Taxes - (3,383) - - 4,721 - - Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes - - - 37,166 7,532 - - Adjusted Net Income 73,596 $ 68,480 $ 60,844 $ 51,493 $ 54,698 $ 57,155 $ 48,073 $ Weighted Average Shares Outstanding-Diluted 69,000 73,349 80,114 89,144 106,506 111,334 119,096 Diluted Earnings Per Share 1.08 $ 0.98 $ 0.76 $ 0.16 $ 0.40 $ 0.51 $ 0.46 $ Adjustments: Loss(Gain) on Extinguishment of Debt, Net of Taxes 0.01 - - - - - (0.06) Acceleration of Management Sucession Plan, Net of Taxes - - - - - - - Executive Termination Benefits, Net of Taxes - - - - - - - Loss on Sublease of Office Space, Net of Taxes - - - - - - - Curtailment of SERP, Net of Taxes - - - - - - - Loan Reserves Related to Impaired Notes Receivable, Net of Taxes - - - - - - - Resolution of Provisions for Income Tax Contingencies (0.02) - - - - - - Income Tax Expense Incurred Due to Foreign Earnings Repatriation - - - - - - - Loss(Gain) on Sunburst Note Transactions, Net of Taxes - (0.05) - - 0.04 - - Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes - - - 0.42 0.07 - - Adjusted Diluted Earnings Per Share (EPS) 1.07 $ 0.93 $ 0.76 $ 0.58 $ 0.51 $ 0.51 $ 0.40 $ |