Choice Hotels International 8K Regulation FD Disclosure | CHH 3 Mar 10

Investor Presentation

March 2010

Exhibit 99.1

DISCLAIMER

Certain matters discussed throughout all of this presentation constitute forward-looking statements within the

meaning

the

federal

securities

laws.

Generally,

our

use

words

such

“expect,”

“estimate,”

“believe,”

“anticipate,”

“will,”

“forecast,”

“plan,”

“project,”

“assume”

similar

words

futurity

identify

statements

that

are

forward-looking

and

that

intend

included

within

the

Safe

Harbor

protections

provided

Section

27A

the

Securities

Act

and

Section

21E

the

Securities

Exchange

Act

1934.

Such

forward-

looking

statements

are

based

management’s

current

beliefs,

assumptions

and

expectations

regarding

future

events,

which

turn

are

based

information

currently

available

management.

Such

statements

may

relate

projections

for

the

company’s

revenue,

earnings

and

other

financial

and

operational

measures,

company

debt

levels,

payment

stock

dividends,

and

future

operations.

caution

you

not

place

undue

reliance

any

forward-looking

statements,

which

are

made

the

date

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

contemplated

the

forward-looking

statements.

Such

risks

include,

but

are

not

limited

to,

changes

general,

domestic

and

foreign

economic

conditions;

operating

risks

common

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

the

supply

and

demand

for

hotel

rooms;

and

our

ability

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

March

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.

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

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.)

* 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

CHALLENGING NEAR-TERM ENVIRONMENT FOR

NEW CONSTRUCTION HOTEL DEVELOPMENT

Sources: Lodging Econometrics (Q4 2009),Smith Travel Research, December 2009

*2009 -

2010 supply growth projections are averages based on STR and PwC forecasts

Source: Smith Travel Research, Choice Internal Data, December 31, 2009

STRONG LIMITED SERVICE NEW CONSTRUCTION

BRANDS POSITIONED WELL FOR LONG-TERM

GROWTH

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

DOMESTIC PIPELINE OF 727 HOTELS

Mid-scale

Extended Stay

Economy

Upscale

Source: Choice Internal Data, December 31, 2009

New Construction

Conversion

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

SERVICES LIFECYCLE IMPROVES

BRANDS AND PROPERTY PERFORMANCE

FRANCHISED

PROPERTIES

RETURN ON

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

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

STRONG AND GROWING AIDED

BRAND AWARENESS

Comfort

Inn

Comfort

Suites

Sleep Inn

Quality

Clarion

Econo

Lodge*

Rodeway MainStay

Inn*

Suburban

Extended

Stay*

Cambria

Suites

Choice

Hotels

2001

2009

Source:

Percentage

survey

respondents.

Millward

Brown,

December

2009.

*Econo

Lodge, Rodeway

Inn and Suburban Extended Stay, December 2008.

STRONG, GROWING LOYALTY PROGRAM

Comprehensive loyalty rewards program

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

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

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

LODGING DOWNCYCLE TRENDS

9/11

Recession

Gulf war

Recession

Source: Blue Chip Economic Indicators (2/10), Smith Travel Research, Choice Internal Data

Source: Choice Internal Data, December 31, 2009

CONVERSION BRAND FRANCHISE SALES

OPPORTUNITY IN SOFT NEW CONSTRUCTION

ENVIRONMENT

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%

FRANCHISING REVENUE STREAM LESS

VOLATILE THAN REVPAR

$50

$100

$150

$200

$250

$300

$350

-17%

-12%

-7%

-2%

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)

ADJUSTED EBITDA LESS VOLATILE

THAN INDUSTRY PROFITABILITY

Source: Smith Travel Research, Choice Internal Data, December 2009

100

150

200

250

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Industry Profits

Adjusted EBITDA

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

TRACK RECORD OF STRONG

EARNINGS PER SHARE PERFORMANCE

$0.40

$0.51

$0.58

$0.76

$0.93

$1.07

$1.25

$1.48

$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

adjusted

diluted

earnings

per

diluted

earnings

per

share.

improve

comparability

certain

employee

severance

amounts

included

the

determination

adjusted

diluted

earnings

per

this

presentation

for

2009,

2008

and

2007

differ

from

amounts

reported

Exhibits

our

February

11,

2010

and

February

10,

2009

earnings

announcements.

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

2.3%

0.0%

2.9%

0.6%

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

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

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

and

expand

emerging

brands/segments

–

Cambria,

Ascend,

Extended

Stay,

International

Enhance Reservations Delivery

Grow

Choice

Privileges

loyalty

program

–

target

+2.5

million

new

members

2010

Enhance global sales strategy

Deploy revenue management tools designed to improve franchise performance

Allocate

Free

Cash

Flows

“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.

Appendix

Reconciliation of Non-GAAP

Financial Measurements to GAAP

DISCLAIMER

Adjusted

franchising

margins,

adjusted

earnings

before

interest,

taxes

depreciation

and

amortization

(EBITDA),

adjusted

net

income,

adjusted

diluted

earnings

per

(EPS),

franchising

revenues,

net

operating

profit

after

tax

(NOPAT),

return

average

invested

capital

(ROIC)

and

free

cash

flows

are

non-GAAP

financial

measurements.

These

financial

measurements

are

presented

supplemental

disclosures

because

they

are

used

management

reviewing

and

analyzing

the

company’s

performance.

This

information

should

not

considered

alternative

any

measure

performance

promulgated

under

accounting

principles

generally

accepted

the

United

States

(GAAP),

such

operating

income,

net

income,

diluted

earnings

per

share,

total

revenues

net

cash

provided

operating

activities.

The

calculation

these

non-

GAAP

measures

may

different

from

the

calculation

other

companies

and

therefore

comparability

may

limited.

The

company

has

included

the

following

appendix

which

reconcile

these

measures

the

comparable

GAAP

measurement.

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

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%

FRANCHISING REVENUES AND ADJUSTED

FRANCHISING MARGINS

(CONTINUED)

Source: Choice Internal Data, December 2009

($ amounts in thousands)

Year Ended

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)

(1,679)

Acceleration of Management Succession Plan

Executive Termination Benefits

Loan Reserves Related to Impaired Notes Receivable

Product Sales

(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%

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

($ in millions)

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%

RETURN ON INVESTED CAPITAL

(CONTINUED)

Source: Choice Internal Data, December 2009

Year Ended

($ in millions)

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%

FREE CASH FLOWS

Source: Choice Internal Data, December 2009

Year Ended

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

FREE CASH FLOWS (continued)

Source: Choice Internal Data, December 2009

Year Ended

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

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

($ in thousands)

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

ADJUSTED EBITDA (CONTINUED)

Source: Choice Internal Data, December 2009

Year Ended

($ in thousands)

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

(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

ADJUSTED DILUTED EARNINGS PER SHARE

Source: Choice Internal Data, December 2009

Note:

improve

comparability

certain

employee

severance

amounts

included

the

determination

adjusted

diluted

earnings

per

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

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

1.48

1.25

ADJUSTED DILUTED EARNINGS PER SHARE

(CONTINUED)

Source: Choice Internal Data, December 2009

Year Ended

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

0.40

Choice Hotels International (CHH) 8-KRegulation FD Disclosure