10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 _____________________________________________ 

FORM 10-Q

 _____________________________________________ 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO. 001-13393

 _____________________________________________ 

CHOICE HOTELS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________ 

DELAWARE	52-1209792
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1 CHOICE HOTELS CIRCLE, SUITE 400

ROCKVILLE, MD 20850

(Address of principal executive offices)

(Zip Code)

(301) 592-5000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________________  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months.    Yes  x     No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o No  x

CLASS	SHARES OUSTANDING AT SEPTEMBER 30, 2013
Common Stock, Par Value $0.01 per share	58,570,858

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX

	PAGE NO.
PART I. FINANCIAL INFORMATION:
Item 1—Financial Statements (Unaudited)	4
Consolidated Statements of Income—For the three and nine months ended September 30, 2013 and 2012	4
Consolidated Statements of Comprehensive Income—For the three and nine months ended September 30, 2013 and 2012	5
Consolidated Balance Sheets—As of September 30, 2013 and December 31, 2012	6
Consolidated Statements of Cash Flows—For the nine months ended September 30, 2013 and 2012	7
Notes to Consolidated Financial Statements	9
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3—Quantitative and Qualitative Disclosures About Market Risk	65
Item 4—Controls and Procedures	65
PART II. OTHER INFORMATION:
Item 1—Legal Proceedings	66
Item 1A—Risk Factors	66
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3—Defaults Upon Senior Securities	67
Item 4—Mine Safety Disclosures	67
Item 5—Other Information	67
Item 6—Exhibits	68
SIGNATURES	69

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
REVENUES:
Royalty fees	$	83,107		$	80,845		$	201,222		$	194,762
Initial franchise and relicensing fees	4,650			3,247			12,843			8,953
Procurement services	4,708			3,839			16,204			13,990
Marketing and reservation	126,296			119,062			302,381			284,624
Hotel operations	1,310			1,238			3,600			3,440
Other	3,091			2,182			7,362			7,434
Total revenues	223,162			210,413			543,612			513,203
OPERATING EXPENSES:
Selling, general and administrative	26,982			23,170			84,078			72,073
Depreciation and amortization	2,379			1,995			7,074			5,989
Marketing and reservation	126,296			119,062			302,381			284,624
Hotel operations	956			933			2,742			2,609
Total operating expenses	156,613			145,160			396,275			365,295
Operating income	66,549			65,253			147,337			147,908
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,757			10,166			32,334			16,823
Interest income	(676		)	(425		)	(1,979		)	(1,156		)
Loss on extinguishment of debt	—			526			—			526
Other (gains) and losses	(703		)	(511		)	(1,266		)	(2,137		)
Equity in net (income) loss of affiliates	(421		)	(171		)	(340		)	12
Total other income and expenses, net	8,957			9,585			28,749			14,068
Income before income taxes	57,592			55,668			118,588			133,840
Income taxes	16,080			11,291			33,319			37,604
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Basic earnings per share	$	0.71		$	0.77		$	1.46		$	1.66
Diluted earnings per share	$	0.70		$	0.76		$	1.45		$	1.65

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

4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED, IN THOUSANDS)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013			2012
Net income	$	41,512	$	44,377	$	85,269		$	96,236
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		215		646			646
Foreign currency translation adjustment	512		211		(1,800		)	191
Amortization of pension related costs, net of tax:
Actuarial loss (net of income tax of $12 and $36 for the three and nine months ended September 30, 2012, respectively)	—		20		—			60
Other comprehensive income (loss), net of tax	727		446		(1,154		)	897
Comprehensive income	$	42,239	$	44,823	$	84,115		$	97,133

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

5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AMOUNTS)

	September 30, 2013			December 31, 2012
ASSETS
Current assets
Cash and cash equivalents	$	161,138		$	134,177
Receivables (net of allowance for doubtful accounts of $10,324 and $10,820, respectively)	62,605			52,270
Income taxes receivable	—			2,732
Deferred income taxes	4,136			4,136
Investments, employee benefit plans, at fair value	386			3,486
Other current assets	30,002			36,669
Total current assets	258,267			233,470
Property and equipment, at cost, net	65,540			51,651
Goodwill	65,813			65,813
Franchise rights and other identifiable intangibles, net	10,875			13,473
Advances, marketing and reservation activities	32,564			42,179
Investments, employee benefit plans, at fair value	14,950			12,755
Deferred income taxes	19,496			15,418
Other assets	88,204			76,013
Total assets	$	555,709		$	510,772
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	40,758		$	38,714
Accrued expenses	43,475			55,552
Deferred revenue	61,401			71,154
Current portion of long-term debt	9,132			8,195
Deferred compensation and retirement plan obligations	2,439			2,522
Income taxes payable	21,906			—
Total current liabilities	179,111			176,137
Long-term debt	815,957			847,150
Deferred compensation and retirement plan obligations	21,219			20,399
Other liabilities	24,146			15,990
Total liabilities	1,040,433			1,059,676
Commitments and Contingencies
SHAREHOLDERS’ DEFICIT
Common stock, $0.01 par value, 160,000,000 shares authorized; 95,345,362 shares issued at September 30, 2013 and December 31, 2012 and 58,570,858 and 58,171,059 shares outstanding at September 30, 2013 and December 31, 2012, respectively	586			582
Additional paid-in-capital	114,571			110,246
Accumulated other comprehensive loss	(5,370		)	(4,216		)
Treasury stock (36,774,504 and 37,174,303 shares at September 30, 2013 and December 31, 2012, respectively), at cost	(919,516		)	(927,776		)
Retained earnings	325,005			272,260
Total shareholders’ deficit	(484,724		)	(548,904		)
Total liabilities and shareholders’ deficit	$	555,709		$	510,772

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

6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, IN THOUSANDS)

	Nine Months Ended
	September 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	85,269		$	96,236
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,074			5,989
Provision for bad debts, net	2,054			1,802
Non-cash stock compensation and other charges	8,638			7,306
Non-cash interest and other (income) loss	1,057			(633		)
Deferred income taxes	(4,118		)	(1,627		)
Loss on extinguishment of debt	—			526
Dividends received from equity method investments	1,109			855
Equity in net (income) loss of affiliates	(340		)	12
Changes in assets and liabilities:
Receivables	(13,699		)	(17,405		)
Advances to/from marketing and reservation activities, net	23,756			20,811
Forgivable notes receivable, net	(5,722		)	(2,853		)
Accounts payable	1,280			5,980
Accrued expenses	(22,757		)	(10,309		)
Income taxes payable/receivable	24,638			12,786
Deferred revenue	(9,686		)	8,018
Other assets	(2,395		)	(7,458		)
Other liabilities	8,851			(1,613		)
Net cash provided by operating activities	105,009			118,423
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(26,442		)	(12,525		)
Equity method investments	(3,761		)	(9,454		)
Issuance of mezzanine and other notes receivable	—			(4,236		)
Collections of mezzanine and other notes receivable	224			110
Purchases of investments, employee benefit plans	(1,845		)	(1,191		)
Proceeds from sales of investments, employee benefit plans	4,052			10,909
Other items, net	(578		)	(322		)
Net cash used in investing activities	(28,350		)	(16,709		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) pursuant to revolving credit facilities	(27,500		)	16,725
Proceeds from issuance of long-term debt	3,360			543,500
Principal payments on long-term debt	(6,158		)	(502		)
Purchase of treasury stock	(3,684		)	(22,227		)
Dividends paid	(22,026		)	(632,751		)
Excess tax benefits from stock-based compensation	1,216			793
Debt issuance costs	—			(4,753		)
Proceeds from exercise of stock options	6,677			4,695
Net cash used in financing activities	(48,115		)	(94,520		)
Net change in cash and cash equivalents	28,544			7,194
Effect of foreign exchange rate changes on cash and cash equivalents	(1,583		)	813
Cash and cash equivalents at beginning of period	134,177			107,057
Cash and cash equivalents at end of period	$	161,138		$	115,064
Supplemental disclosure of cash flow information:
Cash payments during the period for:
Income taxes, net of refunds	$	12,990		$	25,700
Interest	$	42,244		$	15,666
Non-cash investing and financing activities:
Dividends declared but not paid	$	10,773		$	10,677
Issuance of restricted shares of common stock	$	8,397		$	9,517
Issuance of performance vested restricted stock units	$	1,298		$	—
Investment in property and equipment acquired in accounts payable	$	763		$	—
Debt issuance costs	$	—		$	6,500

7

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

8

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Company Information and Significant Accounting Policies

The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and subsidiaries (together the “Company”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The year-end balance sheet information was derived from audited financial statements, but does not include all disclosures required by GAAP. The Company believes the disclosures made are adequate to make the information presented not misleading.

The consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012 and notes thereto included in the Company’s Form 10-K, filed with the SEC on February 28, 2013 (the “10-K”). Interim results are not necessarily indicative of the entire year results. All inter-company transactions and balances between Choice Hotels International, Inc. and its subsidiaries have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revision to Prior Period Financial Statements

In connection with the preparation of the consolidated financial statements for the second quarter of 2013, a misapplication of GAAP was identified related to the presentation of cash flows pursuant to forgivable notes receivable. Previously, the Company applied Accounting Standards Codification ("ASC") 230 "Statement of Cash Flows" paragraphs 12 and 13 when reporting cash outflows and cash collections related to these notes receivable and as a result reported these items as cash flows from investing activities. In second quarter of 2013 and the following periods, the Company has revised its presentation of these cash flows in accordance with ASC 230 paragraphs 22 and 23 to reclassify them to operating activities on the Company's Consolidated Statements of Cash Flows.

In conjunction with brand and development programs, the Company issues forgivable notes receivable to qualifying franchisees for property improvements and other purposes. Under the terms of the forgivable promissory notes, the Company ratably reduces the outstanding principal balance and related interest over the term of the loan contingent upon the franchisee remaining within the franchise system and operating in accordance with the terms of the franchise agreement including credit, quality and brand standards. Therefore, the predominant reduction of these notes receivable is through non-cash operating expenses and not cash collections of note receivable amounts. As a result, the Company revised the cash flow classification of these forgivable notes receivable from investing activities to operating activities.

In accordance with ASC 250 (SEC's Staff Accounting Bulletin 99, "Materiality"), the Company assessed the materiality of the misapplication of GAAP and concluded that the reclassification of these cash flows was not material to any of its previously issued annual or interim financial statements. In accordance with the accounting guidance in ASC 250 (SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements"), the Company has revised its previously issued financial statements to correct the presentation of these cash flows in both the current and future quarterly and annual filings beginning with the financial statements in the Quarterly Report on Form 10-Q filed on August 9, 2013 for the quarterly period ended June 30, 2013. These revisions did not impact the Company's previously reported net income, comprehensive income, assets, liabilities or shareholders' deficit.

9

The following tables present the effect of the correction of the classification of the cash flows related to forgivable notes receivable on selected line items included in the Company's Consolidated Statements of Cash Flows for all periods affected:

	Year Ended December 31, 2012									Year Ended December 31, 2011									Year Ended December 31, 2010
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(10,898	)	$	(10,898	)	$	—		$	(3,475	)	$	(3,475	)	$	—		$	(1,120	)	$	(1,120	)
Net cash provided by operating activities	161,020			(10,898		)	150,122			134,844			(3,475		)	131,369			144,935			(1,120		)	143,815
Issuance of mezzanine and other notes receivable	(34,925		)	11,189			(23,736		)	(12,766		)	3,539			(9,227		)	(11,786		)	1,203			(10,583		)
Collections of mezzanine and other notes receivable	3,561			(291		)	3,270			4,754			(64		)	4,690			5,083			(83		)	5,000
Net cash used in investing activities	(57,999		)	10,898			(47,101		)	(23,804		)	3,475			(20,329		)	(32,155		)	1,120			(31,035		)

	Three Months Ended March 31, 2013									Three Months Ended March 31, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,729	)	$	(1,729	)	$	—		$	(475	)	$	(475	)
Net cash provided by operating activities	1,874			(1,729		)	145			4,412			(475		)	3,937
Issuance of mezzanine and other notes receivable	(1,729		)	1,729			—			(3,719		)	583			(3,136		)
Collections of mezzanine and other notes receivable	19			—			19			151			(108		)	43
Net cash used in investing activities	(13,816		)	1,729			(12,087		)	(1,496		)	475			(1,021		)

	Six Months Ended June 30, 2012									Nine Months Ended September 30, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,537	)	$	(1,537	)	$	—		$	(2,853	)	$	(2,853	)
Net cash provided by operating activities	37,802			(1,537		)	36,265			121,276			(2,853		)	118,423
Issuance of mezzanine and other notes receivable	(5,820		)	1,684			(4,136		)	(7,305		)	3,069			(4,236		)
Collections of mezzanine and other notes receivable	210			(147		)	63			326			(216		)	110
Net cash used in investing activities	(10,387		)	1,537			(8,850		)	(19,562		)	2,853			(16,709		)

10

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of purchase to be cash equivalents. As of September 30, 2013 and December 31, 2012, $3.4 million and $5.0 million respectively, of book overdrafts representing outstanding checks in excess of funds on deposit are included in accounts payable in the accompanying consolidated balance sheets.

The Company maintains cash balances in domestic banks, which at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation. In addition, as of September 30, 2013, the Company maintains cash balances of $149.8 million in international banks which do not provide deposit insurance.

Recently Adopted Accounting Guidance

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" (“ASU 2013-02”). This update requires companies to present either in a single note or parenthetically on the face of the financial statements the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety companies would instead cross reference to the related footnote for additional information. ASU 2013-02 became effective for interim and annual periods beginning after December 15, 2012 and the Company adopted this ASU during the first quarter of 2013. The Company has elected to present the required disclosures in a single note rather than on the face of the financial statement. See Note 8 for additional information.

Future Adoption of Recently Announced Accounting Guidance

In February 2013, the FASB issued ASU No. 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date” (“ASU 2013-04”). The ASU requires entities to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. Required disclosures include a description of the joint-and-several arrangement and the total outstanding amount of the obligation for all joint parties. The ASU permits entities to aggregate disclosures (as opposed to providing separate disclosures for each joint-and-several obligation). ASU 2013-04 is effective for all interim and annual periods beginning after December 15, 2013. The ASU should be applied retrospectively to obligations with joint-and-several liabilities existing at the beginning of an entity's fiscal year of adoption. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this statement will have on its financial statement presentation, if any, and will adopt the provisions of this ASU on January 1, 2014.

In March 2013, the FASB issued ASU No. 2013-05, “Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity” (“ASU 2013-05”). ASU 2013-05 clarifies that when a reporting entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity, the parent is required to apply the guidance in ASC 830 "Foreign Currency Matters" Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The provisions of ASU 2013-05 are effective prospectively for reporting periods beginning after December 15, 2013. The Company does not currently believe that the adoption of this update will have a material impact on its financial statements and will adopt the provisions of this ASU on January 1, 2014.

In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss ("NOL") carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. The provisions of ASU 2013-11 are effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application are permitted. The Company does not currently believe that the adoption of this update will have a material impact on its financial statements and will adopt the provisions of this ASU on January 1, 2014.

11

2. Other Current Assets

Other current assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (See Note 3)	$	14,126	$	14,415
Prepaid expenses	12,740		10,694
Land held for sale	—		8,541
Other current assets	3,136		3,019
Total	$	30,002	$	36,669

Land held for sale represents the Company’s purchase of real estate as part of its program to incent franchise development in strategic markets for certain brands. The Company acquired this real estate with the intent to resell it to third-party developers for the construction of hotels operated under the Company’s brands. The real estate, which is no longer classified as land held for sale, was accounted for as assets held for sale and therefore was carried at the lower of its carrying value or its estimated fair value (based on comparable sales), less estimated costs to sell.

3. Notes Receivable and Allowance for Losses

The Company segregates its notes receivable for the purposes of evaluating allowances for credit losses between two categories: Mezzanine and Other Notes Receivable and Forgivable Notes Receivable. The Company utilizes the level of security it has in the various notes receivable as its primary credit quality indicator (i.e. senior, subordinated or unsecured) when determining the appropriate allowances for uncollectible loans within these categories.

The following table shows the composition of our notes receivable balances:

	September 30, 2013						December 31, 2012
	($ in thousands)						($ in thousands)
Credit Quality Indicator	Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total		Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total
Senior	$	—	$	27,548	$	27,548	$	—	$	27,549	$	27,549
Subordinated	—		14,841		14,841		—		15,019		15,019
Unsecured	19,018		1,812		20,830		16,235		1,265		17,500
Total notes receivable	19,018		44,201		63,219		16,235		43,833		60,068
Allowance for losses on non-impaired loans	1,902		1,443		3,345		1,623		638		2,261
Allowance for losses on receivables specifically evaluated for impairment	—		8,453		8,453		—		8,289		8,289
Total loan reserves	1,902		9,896		11,798		1,623		8,927		10,550
Net carrying value	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518
Current portion, net	$	425	$	13,701	$	14,126	$	420	$	13,995	$	14,415
Long-term portion, net	16,691		20,604		37,295		14,192		20,911		35,103
Total	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518

The Company classifies notes receivable due within one year as other current assets and notes receivable with a maturity greater than one year as other assets in the Company’s consolidated balance sheets.

12

The following table summarizes the activity related to the Company’s Forgivable Notes Receivable and Mezzanine and Other Notes Receivable allowance for losses from December 31, 2012 through September 30, 2013:

	Forgivable Notes Receivable			Mezzanine & Other  Notes Receivable
	(In thousands)
Balance, December 31, 2012	$	1,623		$	8,927
Provisions	598			969
Recoveries	(25		)	—
Write-offs	(147		)	—
Other(1)	(147		)	—
Balance, September 30, 2013	$	1,902		$	9,896

(1) Consists of default rate assumption changes

Forgivable Notes Receivable

As of September 30, 2013 and December 31, 2012, the unamortized balance of the Company's forgivable notes receivable totaled $19.0 million and $16.2 million, respectively. The Company recorded an allowance for credit losses on these forgivable notes receivable of $1.9 million and $1.6 million at September 30, 2013 and December 31, 2012, respectively. At September 30, 2013 and December 31, 2012, the Company did not have any forgivable unsecured notes that were past due. Amortization expense included in the accompanying consolidated statements of income related to the notes for the three and nine months ended September 30, 2013 was $1.1 million and $3.0 million, respectively. Amortization expense for the three and nine months ended September 30, 2012 was $0.7 million and $2.0 million, respectively.

Mezzanine and Other Notes Receivable

The Company determined that approximately $13.2 million and $13.3 million of its mezzanine and other notes receivable were impaired at September 30, 2013 and December 31, 2012, respectively. The Company recorded allowance for credit losses on these impaired loans at September 30, 2013 and December 31, 2012 totaling $8.5 million and $8.3 million, respectively, resulting in a carrying value of impaired loans of $4.7 million and $5.0 million, respectively. The Company recognized approximately $81 thousand and $0.2 million of interest income on impaired loans during the three and nine months ended September 30, 2013, respectively, on the cash basis. The Company recognized approximately $38 thousand and $100 thousand of interest income on impaired loans during the three and nine months ended September 30, 2012, respectively, on the cash basis. The Company provided loan reserves on non-impaired loans totaling $1.4 million and $0.6 million at September 30, 2013 and December 31, 2012, respectively.

Past due balances of mezzanine and other notes receivable by credit quality indicators are as follows:

	30-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
	($ in thousands)
As of September 30, 2013
Senior	$	9,500	$	—	$	9,500	$	18,048	$	27,548
Subordinated	—		10,268		10,268		4,573		14,841
Unsecured	—		47		47		1,765		1,812
	$	9,500	$	10,315	$	19,815	$	24,386	$	44,201
As of December 31, 2012
Senior	$	—	$	—	$	—	$	27,549	$	27,549
Subordinated	619		9,629		10,248		4,771		15,019
Unsecured	—		47		47		1,218		1,265
	$	619	$	9,676	$	10,295	$	33,538	$	43,833

Subsequent to September 30, 2013, the amounts reflected in the 30-89 past due column for senior mezzanine notes receivable totaling $9.5 million were repaid in full.

13

Loans Acquired with Deteriorated Credit Quality

On December 2, 2011, the Company acquired an $11.5 million mortgage, held on a franchisee hotel asset, from a financial institution for $7.9 million. At the time of acquisition, the Company determined that it would be unable to collect all contractually required payments under the original mortgage terms. The contractually required payments receivable, including principal and interest, under the terms of the acquired mortgage totaled $12.0 million. The Company expects to collect $9.7 million of these contractually required payments. No prepayments were considered in the determination of contractual cash flows and cash flows expected to be collected. At both September 30, 2013 and December 31, 2012, the carrying amount of this loan, which is reported under senior mezzanine and other notes receivables, was $7.9 million and there was no allowance for uncollectable amounts. The Company's accretable yield at acquisition was $1.8 million or 7.36% and a reconciliation of the accretable yield for the nine months ended September 30, 2013 is as follows:

	Accretable Yield ($ in thousands)
Balance, December 31, 2012	$	1,161
Additions	—
Accretion	(433		)
Disposals	—
Reclassifications from nonaccretable yield	—
Balance, September 30, 2013	$	728

4. Advances, Marketing and Reservation Activities

At September 30, 2013 and December 31, 2012, the Company had incurred cumulative marketing and reservation system expenses in excess of cumulative marketing and reservation system fees earned totaling $32.6 million and $42.2 million, respectively. These costs incurred in excess of fees collected have been deferred and recorded as an asset in the financial statements as the Company has the contractual authority to recover the deficits incurred related to marketing and reservation activities from the franchisees in the system at any given point in time.

Depreciation and amortization expense attributable to marketing and reservation activities for the three months ended September 30, 2013 and 2012 was $3.9 million and $3.7 million, respectively. Depreciation and amortization expense attributable to marketing and reservation activities for the nine months ended September 30, 2013 and 2012 was $12.0 million and $10.7 million, respectively. Interest expense attributable to marketing and reservation activities was $0.9 million for both the three months ended September 30, 2013 and 2012, respectively. Interest expense attributable to marketing and reservation activities was $2.8 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company evaluates the recoverability of marketing and reservation costs incurred in excess of cumulative marketing and reservation system revenues earned on a periodic basis. The Company will record a reserve when, based on current information and events, it is probable that it will be unable to recover the cumulative amounts advanced for marketing and reservation activities according to the contractual terms of the franchise agreements. These advances are considered to be unrecoverable if the expected net, undiscounted cash flows from marketing and reservation activities are less than the carrying amount of the asset. Based on the Company's analysis of projected net cash flows from marketing and reservation activities for all periods presented, the Company concluded that the cumulative advances for marketing and reservation activities recorded as an asset on the balance sheet were fully recoverable and as a result no reserves were necessary.

5. Other Assets

Other assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (see Note 3)	$	37,295	$	35,103
Equity method investments	30,404		27,453
Deferred financing fees, net	9,509		11,174
Land	10,097		1,300
Other assets	899		983
Total	$	88,204	$	76,013

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Land represents the Company’s purchase of real estate as part of its program to incent franchise development in strategic markets for certain brands. The Company has acquired this real estate with the intent to either resell it to third-party developers for the construction of hotels operated under the Company’s brands or contribute the land into joint ventures for the same purpose. The real estate is carried at the lower of its carrying value or its estimated fair value (based on comparable sales), less estimated costs to sell.

Variable Interest Entities

Equity method investments include investments in joint ventures totaling $27.0 million and $24.3 million at September 30, 2013 and December 31, 2012, respectively that the Company determined to be variable interest entities. These investments relate to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Suites hotels in strategic markets. Based on an analysis of who has the power to direct the activities that most significantly impact these entities performance and who has an obligation to absorb losses of these entities or a right to receive benefits from these entities that could potentially be significant to the entity, the Company determined that it is not the primary beneficiary of any of its joint venture investments. The Company based its quantitative analysis on the forecasted cash flows of the entity and its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, operating management and financial agreements. As a result, the Company's investment in these entities is accounted for under the equity method. For the three and nine months ended September 30, 2013, the Company recognized income totaling $81 thousand and $9 thousand, respectively, from these investments. For the three and nine months ended September 30, 2012, the Company recognized income totaling $75 thousand and $84 thousand, respectively, from these investments.

6. Deferred Revenue

Deferred revenue consists of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Loyalty programs	$	55,106	$	64,636
Initial, relicensing and franchise fees	4,369		4,994
Procurement service fees	1,197		1,225
Other	729		299
Total	$	61,401	$	71,154

7. Debt

Debt consists of the following at:

	September 30, 2013		December 31, 2012
	(In thousands)
$400 million senior unsecured notes with an effective interest rate of 5.94% at September 30, 2013 and December 31, 2012	$	400,000	$	400,000
$250 million senior unsecured notes with an effective interest rate of 6.19% less discount of $0.4 million and $0.5 million at September 30, 2013 and December 31, 2012	249,556		249,508
$350 million senior secured credit facility with an effective interest rate of 2.52% and 2.66% at September 30, 2013 and December 31, 2012, respectively	170,125		203,250
Economic development loans with an effective interest rate of 3.00% at September 30, 2013	3,360		—
Capital lease obligations due 2016 with an effective interest rate of 3.18% at September 30, 2013 and December 31, 2012	2,017		2,519
Other notes payable	31		68
Total debt	825,089		$	855,345
Less current portion	9,132		8,195
Total long-term debt	815,957		$	847,150

15

Senior Notes Due 2022

On June 27, 2012, the Company issued unsecured senior notes in the principal amount of $400 million ("the 2012 Senior Notes") at par, bearing a coupon of 5.75% with an effective rate of 5.94%. The 2012 Senior Notes will mature on July 1, 2022, with interest to be paid semi-annually on January 1^st and July 1^st. The Company used the net proceeds of this offering, after deducting underwriting discounts and commissions and other offering expenses, together with a portion of the proceeds from a new credit facility, to pay a special cash dividend totaling approximately $600.7 million paid to shareholders on August 23, 2012. The Company's 2012 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations by eight wholly-owned domestic subsidiaries.

Senior Notes Due 2020

On August 25, 2010, the Company issued unsecured senior notes in the principal amount of $250 million (“the 2010 Senior Notes”) at a discount of $0.6 million, bearing a coupon of 5.7% with an effective rate of 6.19%. The 2010 Senior Notes will mature on August 28, 2020, with interest to be paid semi-annually on February 28^th and August 28^th. The Company used the net proceeds from the offering, after deducting underwriting discounts and other offering expenses, to repay outstanding borrowings and for other general corporate purposes. The Company's 2010 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations by eight wholly-owned domestic subsidiaries.

Revolving Credit Facilities

On July 25, 2012, the Company entered into a $350 million senior secured credit facility, comprised of a $200 million revolving credit tranche (the "New Revolver") and a $150 million term loan tranche (the "Term Loan") with Deutsche Bank AG New York Branch, as administrative agent, Wells Fargo Bank, National Association, as administrative agent and a syndication of lenders (the "New Credit Facility"). The New Credit Facility has a final maturity date of July 25, 2016, subject to an optional one-year extension provided certain conditions are met. Up to $25 million of the borrowings under the New Revolver may be used for letters of credit, up to $10 million of borrowings under the New Revolver may be used for swing-line loans and up to $35 million of borrowings under the New Revolver may be used for alternative currency loans. The Term Loan requires quarterly amortization payments (a) during the first two years, in equal installments aggregating 5% of the original principal amount of the Term Loan per year, (b) during the second two years, in equal installments aggregating 7.5% of the original principal amount of the Term Loan per year, and (c) during the one-year extension period (if exercised), equal installments aggregating 10% of the original principal amount of the Term Loan.

The Company utilized the proceeds from the Term Loan and borrowings from the New Revolver, together with the net proceeds from the Company's 2012 Senior Notes, to pay a special cash dividend of approximately $600.7 million in the aggregate to the Company's stockholders on August 23, 2012.

The New Credit Facility is unconditionally guaranteed, jointly and severally, by certain of the Company's domestic subsidiaries. The subsidiary guarantors currently include the eight wholly-owned subsidiaries that guarantee the obligations under the Company's Indenture governing the terms of its 2010 and 2012 Senior Notes.

The New Credit Facility is secured by first priority pledges of (i) 100% of the ownership interests in certain domestic subsidiaries owned by the Company and the guarantors, (ii) 65% of the ownership interests in (a) Choice Netherlands Antilles N.V. (“Choice NV”), the top-tier foreign holding company of the Company's foreign subsidiaries, and (b) the domestic subsidiary that owns Choice NV and (iii) all presently existing and future domestic franchise agreements (the “Franchise Agreements”) between the Company and individual franchisees, but only to the extent that the Franchise Agreements may be pledged without violating any law of the relevant jurisdiction or conflicting with any existing contractual obligation of the Company or the applicable franchisee. At the time that the maximum total leverage ratio is required to be no greater than 4.0 to 1.0 (beginning of year 4 of the New Credit Facility), the security interest in the Franchise Agreements will be released.

The Company may at any time prior to the final maturity date increase the amount of the New Credit Facility by up to an additional $100 million to the extent that any one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met. Such additional amounts may take the form of an increased revolver or term Loan.

The Company may elect to have borrowings under the New Credit Facility bear interest at a rate equal to (i) LIBOR, plus a margin ranging from 200 to 425 basis points based on the Company's total leverage ratio or (ii) a base rate plus a margin ranging from 100 to 325 basis points based on the Company's total leverage ratio.

The New Credit Facility requires the Company to pay a fee on the undrawn portion of the New Revolver, calculated on the basis of the average daily unused amount of the New Revolver multiplied by 0.30% per annum.

16

The Company may reduce the New Revolver commitment and/or prepay the Term Loan in whole or in part at any time without penalty, subject to reimbursement of customary breakage costs, if any. Any Term Loan prepayments made by the Company shall be applied to reduce the scheduled amortization payments in direct order of maturity.

Additionally, the New Credit Facility requires that the Company and its restricted subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making investments, paying dividends or repurchasing stock, and effecting mergers and/or asset sales. With respect to dividends, the Company may not make any payment if there is an existing event of default or if the payment would create an event of default. In addition, if the Company's total leverage ratio exceeds 4.50 to 1.00, the Company is generally restricted from paying aggregate dividends in excess of $50.0 million during any calendar year.

The New Credit Facility also imposes financial maintenance covenants requiring the Company to maintain:

• a total leverage ratio of not more than 5.75 to 1.00 in year 1, 5.00 to 1.00 in year 2, 4.50 to 1.00 in year 3 and 4.00 to 1.00 thereafter,

• a maximum secured leverage ratio of not more than 2.50 to 1.00 in year 1, 2.25 to 1.00 in year 2, 2.00 to 1.00 in year 3 and 1.75 to 1.00 thereafter, and

• a minimum fixed charge coverage ratio of not less than 2.00 to 1.00 in years 1 and 2, 2.25 to 1.00 in year 3 and 2.50 to 1.00 thereafter.

At September 30, 2013, the Company maintained a total leverage ratio of approximately 3.46x, a maximum secured leverage ratio of 0.72x and a minimum fixed charge coverage ratio of approximately 5.52x.

The New Credit Facility includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the New Credit Facility to be immediately due and payable. At September 30, 2013, the Company was in compliance with all covenants under the New Credit Facility.

At September 30, 2013, the Company had $140.6 million and $29.5 million outstanding under the Term Loan and New Revolver, respectively. At December 31, 2012, the Company had $146.3 million and $57.0 million outstanding under the Term Loan and New Revolver, respectively.

In connection with the entering into the New Credit Facility, the Company's $300 million senior unsecured revolving credit agreement, dated as of February 24, 2011, among the Company, Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders was terminated and replaced by the New Credit Facility.

Economic Development Loans

The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to offset a portion of the corporate headquarter relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. At September 30, 2013, the Company had been advanced approximately $3.4 million pursuant to these agreements and expects to receive the remaining $1 million over the next several years, subject to annual appropriations by the governmental entities. These advances bear interest at a rate of 3% per annum.

Repayment of the advances is contingent upon the Company achieving certain performance conditions. Performance conditions are measured annually on December 31^st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual performance condition, the Company may be required to repay a portion or all of the advances including accrued interest by April 30^th following the measurement date. Any outstanding advances at the expiration of the Company's ten year corporate headquarter lease in 2023 will be forgiven in full. The advances will be included in long-term debt in Company's consolidated balance sheets until the Company determines that the future performance conditions will be met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues interest on the portion of the advances that it expects to repay. The Company was in compliance with all current performance conditions as of September 30, 2013.

17

8. Accumulated Other Comprehensive Income (Loss)

The following represents the changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended September 30, 2013:

	Loss on Cash Flow Hedge			Foreign Currency Items			Total
	($ in thousands)
Balance, December 31, 2012	$	(6,607	)	$	2,391		$	(4,216	)
Other comprehensive income (loss) before reclassification	—			(1,800		)	(1,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	646			—			646
Net current period other comprehensive income (loss)	646			(1,800		)	(1,154		)
Balance, September 30, 2013	$	(5,961	)	$	591		$	(5,370	)

The amounts reclassified from other accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2013 were reclassified to the following line items in the Company's Consolidated Statements of Income.

Component	Amount Reclassified from Accumulated Other Comprehensive Income(Loss)				Affected Line Item in the Consolidated Statement of Net Income
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
	($ in thousands)
Loss on cash flow hedge
Interest rate contract	$	215	$	646	Interest expense
	—		—		Tax (expense) benefit
	$	215	$	646	Net of tax

9. Non-Qualified Retirement, Savings and Investment Plans

The Company sponsors two non-qualified retirement savings and investment plans for certain employees and senior executives. Employee and Company contributions are maintained in separate irrevocable trusts. Legally, the assets of the trusts remain those of the Company; however, access to the trusts' assets is severely restricted. The trusts cannot be revoked by the Company or an acquirer, but the assets are subject to the claims of the Company's general creditors. The participants do not have the right to assign or transfer contractual rights in the trusts.

In 2002, the Company adopted the Choice Hotels International, Inc. Executive Deferred Compensation Plan (“EDCP”) which became effective January 1, 2003. Under the EDCP, certain executive officers may defer a portion of their salary into an irrevocable trust. Prior to January 1, 2010, participants could elect an investment return of either the annual yield of the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points, or a return based on a selection of available diversified investment options. Effective January 1, 2010, the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points is no longer an investment option for salary deferrals made on compensation earned after December 31, 2009. The Company recorded current and long-term deferred compensation liabilities of $10.9 million and $11.7 million, as of September 30, 2013 and December 31, 2012, respectively, related to these deferrals and credited investment returns. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. Compensation expense recorded in SG&A related to the EDCP for the three months ended

18

September 30, 2013 and 2012 was $0.3 million and $0.2 million, respectively. Compensation expense recorded in SG&A related to the EDCP for the nine months ended September 30, 2013 and 2012 was $0.7 million for both periods.

The Company has invested the employee salary deferrals in diversified long-term investments which are intended to provide investment returns that partially offset the earnings credited to the participants. The diversified investments held in the trusts totaled $3.8 million and $6.0 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. At September 30, 2013, the Company expects $0.4 million of the assets held in the trusts to be distributed to participants during the next twelve months. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains related to the EDCP during the three months ended September 30, 2013 and 2012 of approximately $0.2 million and $0.1 million, respectively. The Company recorded investment gains related to the EDCP during the nine months ended September 30, 2013 and 2012 of approximately $0.3 million and $1.2 million, respectively. In addition, the EDCP Plan held shares of the Company's common stock with a market value of $0.2 million and $0.1 million at September 30, 2013 and December 31, 2012, respectively, which were recorded as a component of shareholders' deficit.

In 1997, the Company adopted the Choice Hotels International, Inc. Non-Qualified Retirement Savings and Investment Plan (“Non-Qualified Plan”). The Non-Qualified Plan allows certain employees who do not participate in the EDCP to defer a portion of their salary and invest these amounts in a selection of available diversified investment options. As of September 30, 2013 and December 31, 2012, the Company had recorded a deferred compensation liability of $12.8 million and $11.2 million, respectively, related to these deferrals. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. The net increase in compensation expense recorded in SG&A related to the Non-Qualified Plan for the three months ended September 30, 2013 and 2012 was $0.6 million and $0.2 million, respectively. The net increase in compensation expense recorded in SG&A related to the Non-Qualified Plan for the nine months ended September 30, 2013 and 2012 was $1.3 million and $0.8 million, respectively.

The diversified investments held in the trusts were $11.6 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains related to the Non-Qualified Plan during the three months ended September 30, 2013 and 2012 of approximately $0.5 million and $0.4 million, respectively. The Company recorded investment gains related to the Non-Qualified Plan during the nine months ended September 30, 2013 and 2012 of approximately $1.1 million and $1.0 million, respectively. In addition, the Non-Qualified Plan held shares of the Company's common stock with a market value of $1.2 million and $1.0 million at September 30, 2013 and December 31, 2012, respectively, which are recorded as a component of shareholders' deficit.

10. Fair Value Measurements

The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs.

Level 1: Quoted prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of marketable securities (primarily mutual funds) held in the Company’s EDCP and Non-Qualified Plan deferred compensation plans.

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. The Company’s Level 2 assets consist of money market funds held in the Company’s EDCP and Non-Qualified Plan deferred compensation plans and those recorded in cash and cash equivalents.

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 whose fair value was determined using Level 3 inputs.

19

As of September 30, 2013 and December 31, 2012, the Company had the following assets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
	Total		Level 1		Level 2		Level 3
Assets (in thousands)
As of September 30, 2013
Money market funds, included in cash and cash equivalents	$	50,001	$	—	$	50,001	$	—
Mutual funds(1)	13,201		13,201		—		—
Money market funds(1)	2,135		—		2,135		—
	$	65,337	$	13,201	$	52,136	$	—
As of December 31, 2012
Money market funds, included in cash and cash equivalents	$	20,001	$	—	$	20,001	$	—
Mutual funds(1)	11,884		11,884		—		—
Money market funds(1)	4,357		—		4,357		—
	$	36,242	$	11,884	$	24,358	$	—

________________________ 

(1) Included in Investments, employee benefit plans fair value on the consolidated balance sheets.

The Company's policy is to recognize transfers in and transfers out of the three levels of the fair value hierarchy as of the end of each quarterly reporting period. There were no transfers between Level 1, 2 and 3 assets during the three and nine months ended September 30, 2013.

Other Financial Instruments

The Company believes that the fair value of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rates of the Company's New Credit Facility adjust frequently based on current market rates; accordingly its carrying amount approximates fair value.

The Company estimates the fair value of notes receivable which approximate their carrying value, utilizing an analysis of future cash flows and credit worthiness for similar types of arrangements. Based upon the availability of market data, we have classified these notes receivables as Level 3 inputs. The primary sensitivity in these calculations is based on the selection of appropriate interest and discount rates. For further information on the notes receivables see Note 3.

The fair value of the Company's $250 million and $400 million senior notes are classified as Level 2 as the significant inputs are observable in an active market. At September 30, 2013 and December 31, 2012, the $250 million senior notes had an approximate fair value of $256.9 million and $271.6 million, respectively. At September 30, 2013 and December 31, 2012, the $400 million senior notes had an approximate fair value of $412.0 million and $442.0 million, respectively.

Fair values estimated are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment.  Settlement of such fair value amounts may not be possible and may not be a prudent management decision.

11. Income Taxes

The effective income tax rates were 27.9% and 20.3% for the three months ended September 30, 2013 and 2012, respectively. The effective income tax rates were 28.1% for both the nine months ended September 30, 2013 and 2012, respectively.

The effective income tax rate for the three and nine months ended September 30, 2013 and 2012, were lower than the U.S federal income tax rate of 35% due to the recurring impact of foreign operations, partially offset by state taxes, and reflect adjustments to our federal accruals. Additionally, the effective income tax rate for the nine months ended September 30, 2013 was further reduced by the release of a valuation allowance on local country tax refunds received by our foreign subsidiary, settlements of unrecognized tax positions and by legislation retroactively extending the U.S. controlled foreign corporation look-through rule. The effective income tax rates for the three and nine months ended September 30, 2012 also reflect a nonrecurring favorable adjustment of $4.5 million related to foreign operations.

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12. Share-Based Compensation and Capital Stock

Stock Options

No stock options were granted during the three month periods ended September 30, 2013 and 2012. The Company granted 0.2 million and 0.2 million options to certain employees of the Company at a fair value of $1.7 million and $1.6 million for the nine months ended September 30, 2013 and 2012, respectively. The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2013 Grants			2012 Grants
Risk-free interest rate	0.73		%	0.78		%
Expected volatility	38.14		%	40.15		%
Expected life of stock option	4.5 years			4.4 years
Dividend yield	2.01		%	2.08		%
Requisite service period	4 years			4 years
Contractual life	7 years			7 years
Weighted average fair value of options granted	$	9.89		$	9.98

The expected life of the options and volatility are based on historical data and are not necessarily indicative of exercise patterns or actual volatility that may occur. Historical volatility is calculated based on a period that corresponds to the expected life of the stock option. The dividend yield and the risk-free rate of return are calculated on the grant date based on the then current dividend rate and the risk-free rate of return for the period corresponding to the expected life of the stock option. Compensation expense related to the fair value of these awards is recognized straight-line over the requisite service period based on those awards that ultimately vest.

The aggregate intrinsic value of the stock options outstanding and exercisable at September 30, 2013 was $29.6 million and $23.4 million, respectively. The total intrinsic value of options exercised during the three months ended September 30, 2013 and 2012 was approximately $0.5 million and $0.5 million, respectively. The total intrinsic value of options exercised during the nine months ended September 30, 2013 and 2012 was approximately $3.4 million and $1.0 million, respectively.

The Company received approximately $0.7 million and $4.3 million in proceeds from the exercise of 29,008 and 109,996 employee stock options during the three month periods ended September 30, 2013 and 2012, respectively. The Company received approximately $6.7 million and $4.7 million in proceeds from the exercise of 263,073 and 135,200 employee stock options during the nine month periods ended September 30, 2013 and 2012, respectively.

Restricted Stock

The following table is a summary of activity related to restricted stock grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Restricted share grants	7,646		7,672		223,045		266,159
Weighted average grant date fair value per share	$	39.24	$	32.59	$	37.65	$	35.76
Aggregate grant date fair value ($000)	$	300	$	250	$	8,397	$	9,517
Restricted shares forfeited	25		13,619		27,953		23,921
Vesting service period of shares granted	36 months		36 months		12 - 48 months		12 - 68 months
Grant date fair value of shares vested ($000)	$	94	$	75	$	8,569	$	6,693

Compensation expense related to the fair value of these awards is recognized straight-line over the requisite service period based on those restricted stock grants that ultimately vest. The fair value of grants is measured by the market price of the Company’s stock on the date of grant. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. Awards granted to retirement eligible non-employee directors are recognized over the shorter

21

of the requisite service period or the length of time until retirement since the terms of the grant provide that the awards will vest upon retirement.

Performance Vested Restricted Stock Units

The Company has granted performance vested restricted stock units (“PVRSU”) to certain employees. The fair value is measured by the market price of the Company's common stock on the date of the grant. The vesting of these stock awards is contingent upon the Company achieving performance targets at the end of specified performance periods and the employees' continued employment. The performance conditions affect the number of shares that will ultimately vest. The range of possible stock-based award vesting is generally between 0% and 200% of the initial target. If minimum performance targets are not attained then no awards will vest under the terms of the various PVRSU agreements. Compensation expense related to these awards is recognized over the requisite service period based on the Company's estimate of the achievement of the various performance targets. The Company has currently estimated that between 81% and 165% of the various award targets will be achieved. Compensation expense is recognized ratably over the requisite service period only on those PVRSUs that ultimately vest.

The following table is a summary of activity related to PVRSU grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Performance vested restricted stock units granted at target	—		6,137		58,902		100,046
Weighted average grant date fair value per share	$	—	$	32.59	$	36.76	$	35.68
Aggregate grant date fair value ($000)	$	—	$	200	$	2,165	$	3,570
Stock units forfeited	—		—		—		57,176
Requisite service period	—		41 months		22-36 months		36-60 months

During the three months ended September 30, 2013 and 2012, no PVRSU grants vested. During the nine months ended September 30, 2013, a total of 39,816 PVRSU grants vested at a fair value of $1.3 million. These PVRSU grants were initially granted at a target of 30,624 units. However, since the Company exceeded targeted performance conditions contained in the stock awards granted in prior periods by 130%, an additional 9,192 shares were earned and issued. During the nine months ended September 30, 2012, PVRSU grants totaling 57,176 units were terminated in accordance with an amended and restated employment agreement.

22

A summary of stock-based award activity as of September 30, 2013 and changes during the nine months ended are presented below:

	Stock Options					Restricted Stock				Performance Vested Restricted Stock Units
	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013	1,934,034		$	25.80		606,547		$	35.17	170,116		$	35.56
Granted	173,413		36.76			223,045		37.65		58,902		36.76
Performance based leveraging (1)	—		—			—		—		9,192		32.60
Exercised/Vested	(263,073	)	25.38			(227,890	)	33.94		(39,816	)	32.60
Expired	(75,473	)	36.99			—		—		—		—
Forfeited	—		—			(27,953	)	35.30		—		—
Outstanding at September 30, 2013	1,768,901		$	26.46	3.2 years	573,749		$	36.61	198,394		$	36.37
Options exercisable at September 30, 2013	1,265,481		$	24.70	2.4 years

^{_________________________________} 

⁽¹⁾PVRSU shares have been increased by 9,192 units due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods during the nine months ended September 30, 2013.

The components of the Company’s pretax stock-based compensation expense and associated income tax benefits are as follows for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2013		2012		2013		2012
Stock options	$	0.3	$	0.5	$	1.3	$	1.6
Restricted stock	2.1		1.8		5.7		5.7
Performance vested restricted stock units	0.5		0.8		1.7		1.3
Total	$	2.9	$	3.1	$	8.7	$	8.6
Income tax benefits	$	1.1	$	1.1	$	3.2	$	3.2

Dividends

The Company currently pays a quarterly dividend on its common stock of 0.185 per share, however the declaration of future dividends are subject to the discretion of the board of directors.  In the fourth quarter of 2012, the Company's board of directors elected to pay prior to December 31, 2012 the regular quarterly dividend initially scheduled to be paid in the first quarter of 2013. During the three and nine months ended September 30, 2013, the Company declared dividends totaling $0.185 and $0.56 per share or approximately $10.8 million and $32.3 million in the aggregate, respectively.

In addition, during the nine months ended September 30, 2013, the Company paid previously declared dividends totaling $0.5 million that were contingent upon the vesting of performance vested restricted units. No dividends on performance vested restricted units were paid during the three months ended September 30, 2013. No dividends on performance vested restricted units were paid during the three and nine months ended September 30, 2012.

During the three and nine months ended September 30, 2012, the Company declared regular quarterly cash dividends totaling $0.185 and $0.56 per share or approximately $10.7 million and $32.1 million in the aggregate, respectively. In addition, during the three and nine months ended September 30, 2012, the Company's board of directors declared a special cash dividend to common shareholders in the amount of $10.41 per share or approximately $600.7 million.

23

Share Repurchases and Redemptions

No shares of common stock were purchased by the Company under the share repurchase program during the three and nine months ended September 30, 2013 and no shares of common stock were repurchased under the program during the three months ended September 30, 2012. During the nine months ended September 30, 2012, the Company purchased 0.5 million shares of common stock under the share repurchase program at a total cost of $19.9 million.

During the three and nine months ended September 30, 2013, the Company redeemed 795 and 98,182 shares of common stock at a total cost of approximately $32 thousand and $3.7 million from employees to satisfy statutory minimum tax requirements from the vesting of restricted stock and performance vested restricted stock unit grants. During the three and nine months ended September 30, 2012, the Company redeemed 1,525 and 64,037 shares of common stock at a total cost of approximately $0.1 million and $2.3 million from employees to satisfy statutory minimum tax requirements from the vesting of restricted stock grants. These redemptions were outside the share repurchase program initiated in June 1998.

13. Earnings Per Share

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except per share amounts)	2013			2012			2013			2012
Computation of Basic Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(404		)	(470		)	(851		)	(1,016		)
Net income available to common shareholders	$	41,108		$	43,907		$	84,418		$	95,220
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Basic earnings per share	$	0.71		$	0.77		$	1.46		$	1.66
Computation of Diluted Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(402		)	(493		)	(848		)	(1,032		)
Net income available to common shareholders	$	41,110		$	43,884		$	84,421		$	95,204
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Diluted effect of stock options and PVRSUs	394			225			383			157
Weighted average shares outstanding – diluted	58,372			57,613			58,267			57,612
Diluted earnings per share	$	0.70		$	0.76		$	1.45		$	1.65

The Company's unvested restricted shares contain rights to receive non-forfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share (“EPS”). The calculation of EPS for common stock shown above excludes the income attributable to the unvested restricted share awards from the numerator and excludes the dilutive impact of those awards from the denominator.

At September 30, 2013 and 2012, the Company had 1.8 million and 2.1 million outstanding stock options, respectively. Stock options are included in the diluted earnings per share calculation using the treasury stock method and average market prices during the period, unless the stock options would be anti-dilutive. For the three and nine month periods ended September 30, 2013, the Company did not exclude any anti-dilutive stock options from the diluted earnings per share calculation. For each the three and nine month periods ended September 30, 2012, the Company excluded 0.3 million of anti-dilutive stock options from the diluted earnings per share calculation.

PVRSUs are also included in the diluted earnings per share calculation when the performance conditions have been met at the reporting date. However, at September 30, 2013 and 2012, PVRSUs totaling 198,394 and 152,639, respectively, were excluded from the computation since the performance conditions had not been met.

24

14. Condensed Consolidating Financial Statements

The Company’s Senior Notes due 2020 and 2022 are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations, by eight100%-owned domestic subsidiaries. There are no legal or regulatory restrictions on the payment of dividends to Choice Hotels International, Inc. from subsidiaries that do not guarantee the Senior Notes. As a result of the guarantee arrangements, the following condensed consolidating financial statements are presented. Investments in subsidiaries are accounted for under the equity method of accounting.

Certain revisions have been made to correct immaterial errors in the condensed consolidating statement of income for the three and nine months ended September 30, 2012 and condensed consolidating statement of cash flows for the nine months ended September 30, 2012.  The revisions to the condensed consolidating statement of income decreased the Guarantor's marketing and reservation expense and total operating expenses by $0.8 million and $3.0 million for the three and nine months ended September 30, 2012, respectively. The revisions also increased the Guarantor's interest expense and total other income and expenses, net by $0.8 million and $3.0 million for the three and nine months ended September 30, 2012, respectively. These revisions had offsetting adjustments to the same items in the Eliminations column. The following tables present the effect of the correction of these immaterial errors on selected line items in the Company's Guarantor Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2012.

	For the Three Months Ended September 30, 2012									For the Nine Months Ended September 30, 2012
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Marketing and reservation expense	$	89,498		$	(843	)	$	88,655		$	244,861		$	(2,954	)	$	241,907
Total operating expenses	111,041			(843		)	110,198			314,261			(2,954		)	311,307
Operating income (loss)	(2,470		)	843			(1,627		)	5,812			2,954			8,766
Interest expense	(839		)	843			4			(2,914		)	2,954			40
Total other income and expenses, net	(1,350		)	843			(507		)	(5,051		)	2,954			(2,097		)

25

The condensed consolidating statements of cash flows for the nine months ended September 30, 2012 has been revised from prior filings to reflect the reclassification of certain operating, investing and financing cash flows related to inter-company investment transactions between wholly-owned subsidiaries. The revisions to the condensed consolidating statement of cash flows increased the Guarantors net cash provided (used) by operating activities and decreased investment in affiliates and net cash used in investing activities by $9.7 million and decreased the Non-Guarantor's net cash provided (used) by operating activities and increased proceeds from contributions from affiliates and net cash provided (used) by financing activities by $9.7 million for the nine months ended September 30, 2012, with corresponding offsetting adjustments to the same items in the Eliminations column.  In addition, as described in Note 1 to the Company's Consolidated Financial Statements, the consolidated statements of cash flows have been revised for the correction of the misapplication of GAAP related to the presentation of cash flows from the Company's forgivable notes receivable. As a result of this revision, the Guarantors net cash provided (used) by operating activities and net cash used in investing activities were each decreased by $2.9 million for the nine months ended September 30, 2012. The following tables present the effect of the correction for the aforementioned items on selected line items included in the Company's Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2012:

	For the Nine Months Ended September 30, 2012
	Guarantor									Non-Guarantor
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Net cash provided (used) by operating activities	$	(1,928	)	$	6,869		$	4,941		$	36,131		$	(9,721	)	$	26,410
Investing Activities:
Issuance of mezzanine and other notes receivable	(3,068		)	3,068			—			—			—			—
Collection of mezzanine and other notes receivable	216			(216		)	—			—			—			—
Advances to and investments in affiliates	—			(9,721		)	(9,721		)	—			—			—
Net cash provided (used) in investing activities	1,649			(6,869		)	(5,220		)	(9,636		)	—			(9,636		)
Financing Activities:
Proceeds from contributions from affiliates	—			—			—			—			9,721			9,721
Net cash provided (used) by financing activities	122			—			122			(14		)	9,721			9,707

The Company assessed the materiality of the revisions noted above and concluded that they are not material to any of our previously issued annual or interim condensed consolidating financial statements.

26

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	76,645		$	25,161		$	11,279		$	(29,978	)	$	83,107
Initial franchise and relicensing fees	4,419			—			231			—			4,650
Procurement services	4,375			—			333			—			4,708
Marketing and reservation	114,117			96,626			5,577			(90,024		)	126,296
Other items, net	2,778			1,310			313			—			4,401
Total revenues	202,334			123,097			17,733			(120,002		)	223,162
OPERATING EXPENSES:
Selling, general and administrative	30,619			22,867			3,474			(29,978		)	26,982
Marketing and reservation	119,002			92,747			4,571			(90,024		)	126,296
Other items, net	828			2,285			222			—			3,335
Total operating expenses	150,449			117,899			8,267			(120,002		)	156,613
Operating income	51,885			5,198			9,466			—			66,549
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,691			61			5			—			10,757
Equity in earnings of consolidated subsidiaries	(13,329		)	—			—			13,329			—
Other items, net	(577		)	(697		)	(526		)	—			(1,800		)
Total other income and expenses, net	(3,215		)	(636		)	(521		)	13,329			8,957
Income before income taxes	55,100			5,834			9,987			(13,329		)	57,592
Income taxes	13,588			2,052			440			—			16,080
Net income	$	41,512		$	3,782		$	9,547		$	(13,329	)	$	41,512

27

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months EndedSeptember 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	74,186		$	16,347		$	22,925		$	(32,613	)	$	80,845
Initial franchise and relicensing fees	2,996			—			251			—			3,247
Procurement services	3,489			—			350			—			3,839
Marketing and reservation	109,793			90,986			4,783			(86,500		)	119,062
Other items, net	1,991			1,238			191			—			3,420
Total revenues	192,455			108,571			28,500			(119,113		)	210,413
OPERATING EXPENSES:
Selling, general and administrative	39,781			19,525			(3,523		)	(32,613		)	23,170
Marketing and reservation	111,831			88,655			4,233			(85,657		)	119,062
Other items, net	706			2,018			204			—			2,928
Total operating expenses	152,318			110,198			914			(118,270		)	145,160
Operating income	40,137			(1,627		)	27,586			(843		)	65,253
OTHER INCOME AND EXPENSES, NET:
Interest expense	11,005			4			—			(843		)	10,166
Equity in earnings of consolidated subsidiaries	(27,029		)	—			—			27,029			—
Other items, net	215			(511		)	(285		)	—			(581		)
Total other income and expenses, net	(15,809		)	(507		)	(285		)	26,186			9,585
Income before income taxes	55,946			(1,120		)	27,871			(27,029		)	55,668
Income taxes	11,569			(647		)	369			—			11,291
Net income	$	44,377		$	(473	)	$	27,502		$	(27,029	)	$	44,377

28

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	183,063		$	84,477		$	31,452		$	(97,770	)	$	201,222
Initial franchise and relicensing fees	12,074			—			769			—			12,843
Procurement services	15,559			—			645			—			16,204
Marketing and reservation	267,491			267,308			14,953			(247,371		)	302,381
Other items, net	6,581			3,600			781			—			10,962
Total revenues	484,768			355,385			48,600			(345,141		)	543,612
OPERATING EXPENSES:
Selling, general and administrative	94,693			77,279			9,876			(97,770		)	84,078
Marketing and reservation	278,703			257,107			13,942			(247,371		)	302,381
Other items, net	2,301			6,890			625			—			9,816
Total operating expenses	375,697			341,276			24,443			(345,141		)	396,275
Operating income	109,071			14,109			24,157			—			147,337
OTHER INCOME AND EXPENSES, NET:
Interest expense	32,210			111			13			—			32,334
Equity in earnings of consolidated subsidiaries	(33,215		)	—			—			33,215			—
Other items, net	(1,689		)	(1,261		)	(635		)	—			(3,585		)
Total other income and expenses, net	(2,694		)	(1,150		)	(622		)	33,215			28,749
Income before income taxes	111,765			15,259			24,779			(33,215		)	118,588
Income taxes	26,496			6,058			765			—			33,319
Net income	$	85,269		$	9,201		$	24,014		$	(33,215	)	$	85,269

29

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	175,862		$	68,622		$	39,781		$	(89,503	)	$	194,762
Initial franchise and relicensing fees	8,459			—			494			—			8,953
Procurement services	13,349			—			641			—			13,990
Marketing and reservation	252,951			248,011			13,892			(230,230		)	284,624
Other items, net	6,958			3,440			476			—			10,874
Total revenues	457,579			320,073			55,284			(319,733		)	513,203
OPERATING EXPENSES:
Selling, general and administrative	92,804			63,544			5,228			(89,503		)	72,073
Marketing and reservation	256,936			241,907			13,057			(227,276		)	284,624
Other items, net	2,117			5,856			625			—			8,598
Total operating expenses	351,857			311,307			18,910			(316,779		)	365,295
Operating income	105,722			8,766			36,374			(2,954		)	147,908
OTHER INCOME AND EXPENSES, NET:
Interest expense	19,731			40			6			(2,954		)	16,823
Equity in earnings of consolidated subsidiaries	(42,075		)	—			—			42,075			—
Other items, net	(274		)	(2,137		)	(344		)	—			(2,755		)
Total other income and expenses, net	(22,618		)	(2,097		)	(338		)	39,121			14,068
Income before income taxes	128,340			10,863			36,712			(42,075		)	133,840
Income taxes	32,104			4,663			837			—			37,604
Net income	$	96,236		$	6,200		$	35,875		$	(42,075	)	$	96,236

30

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	41,512	$	3,782	$	9,547	$	(13,329	)	$	41,512
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—		—		—			215
Foreign currency translation adjustment	512		—		512		(512		)	512
Other comprehensive income (loss), net of tax	727		—		512		(512		)	727
Comprehensive income	$	42,239	$	3,782	$	10,059	$	(13,841	)	$	42,239

31

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	44,377	$	(473	)	$	27,502	$	(27,029	)	$	44,377
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—			—		—			215
Foreign currency translation adjustment	211		1			209		(210		)	211
Amortization of pension related costs, net of tax:
Actuarial loss	20		20			—		(20		)	20
Other comprehensive income (loss), net of tax	446		21			209		(230		)	446
Comprehensive income	$	44,823	$	(452	)	$	27,711	$	(27,259	)	$	44,823

32

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	85,269		$	9,201	$	24,014		$	(33,215	)	$	85,269
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646			—		—			—			646
Foreign currency translation adjustment	(1,800		)	—		(1,800		)	1,800			(1,800		)
Other comprehensive income (loss), net of tax	(1,154		)	—		(1,800		)	1,800			(1,154		)
Comprehensive income	$	84,115		$	9,201	$	22,214		$	(31,415	)	$	84,115

33

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	96,236	$	6,200	$	35,875	$	(42,075	)	$	96,236
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646		—		—		—			646
Foreign currency translation adjustment	191		5		171		(176		)	191
Amortization of pension related costs, net of tax:
Actuarial loss	60		60		—		(60		)	60
Other comprehensive income (loss), net of tax	897		65		171		(236		)	897
Comprehensive income	$	97,133	$	6,265	$	36,046	$	(42,311	)	$	97,133

34

Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	10,921		$	437	$	149,780	$	—		$	161,138
Receivables, net	54,842			1,963		5,800		—			62,605
Other current assets	36,200			13,271		728		(15,675		)	34,524
Total current assets	101,963			15,671		156,308		(15,675		)	258,267
Property and equipment, at cost, net	11,351			53,331		858		—			65,540
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	7,113			2,251		1,511		—			10,875
Advances, marketing and reservation activities	32,564			—		—		—			32,564
Investments, employee benefit plans, at fair value	—			14,950		—		—			14,950
Investment in affiliates	362,158			27,307		—		(389,465		)	—
Advances to affiliates	13,985			203,917		10,613		(228,515		)	—
Deferred income taxes	—			29,184		1,058		(10,746		)	19,496
Other assets	30,113			27,839		30,252		—			88,204
Total assets	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	9,098		$	27,757	$	3,903	$	—		$	40,758
Accrued expenses	19,397			22,098		1,980		—			43,475
Deferred revenue	5,995			54,666		740		—			61,401
Current portion of long-term debt	8,437			684		11		—			9,132
Deferred compensation & retirement plan obligations	—			2,439		—		—			2,439
Other current liabilities	13,503			23,616		462		(15,675		)	21,906
Total current liabilities	56,430			131,260		7,096		(15,675		)	179,111
Long-term debt	811,243			4,694		20		—			815,957
Deferred compensation & retirement plan obligations	—			21,212		7		—			21,219
Advances from affiliates	220,721			403		7,390		(228,514		)	—
Other liabilities	16,197			18,211		484		(10,746		)	24,146
Total liabilities	1,104,591			175,780		14,997		(254,935		)	1,040,433
Total shareholders’ (deficit) equity	(484,724		)	203,863		185,603		(389,466		)	(484,724		)
Total liabilities and shareholders’ deficit	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709

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Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of December 31, 2012

(In Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	8,420		$	407	$	125,350	$	—		$	134,177
Receivables, net	44,344			1,797		6,129		—			52,270
Other current assets	41,897			20,110		3,528		(18,512		)	47,023
Total current assets	94,661			22,314		135,007		(18,512		)	233,470
Property and equipment, at cost, net	11,307			39,298		1,046		—			51,651
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	8,669			2,715		2,089		—			13,473
Advances, marketing and reservation activities	42,179			—		—		—			42,179
Investments, employee benefit plans, at fair value	—			12,755		—		—			12,755
Investment in affiliates	329,038			26,194		—		(355,232		)	—
Advances to affiliates	14,252			206,770		13,479		(234,501		)	—
Deferred income taxes	—			28,539		640		(13,761		)	15,418
Other assets	32,085			18,925		25,003		—			76,013
Total assets	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	5,930		$	28,525	$	4,259	$	—		$	38,714
Accrued expenses	18,582			34,576		2,394		—			55,552
Deferred revenue	17,239			53,081		834		—			71,154
Current portion of long-term debt	7,500			675		20		—			8,195
Deferred compensation and retirement plan obligations	—			2,522		—		—			2,522
Other current liabilities	—			17,722		790		(18,512		)	—
Total current liabilities	49,251			137,101		8,297		(18,512		)	176,137
Long-term debt	845,257			1,845		48		—			847,150
Deferred compensation & retirement plan obligations	—			20,390		9		—			20,399
Advances from affiliates	226,917			189		7,395		(234,501		)	—
Other liabilities	20,290			9,216		245		(13,761		)	15,990
Total liabilities	1,141,715			168,741		15,994		(266,774		)	1,059,676
Total shareholders’ (deficit) equity	(548,904		)	193,962		161,270		(355,232		)	(548,904		)
Total liabilities and shareholders' deficit	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772

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Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	60,070		$	18,718		$	26,221		$	—		$	105,009
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(4,083		)	(22,182		)	(177		)	—			(26,442		)
Equity method investments	—			(1,481		)	(2,280		)	—			(3,761		)
Issuance of mezzanine and other notes receivable	—			—			—			—			—
Collections of mezzanine and other notes receivable	224			—			—			—			224
Purchases of investments, employee benefit plans	—			(1,845		)	—			—			(1,845		)
Proceeds from sales of investments, employee benefit plans	—			4,052			—			—			4,052
Advances to and investments in affiliates	(1,000		)	(1,280		)	—			2,280			—
Other items, net	(578		)	—			—			—			(578		)
Net cash provided (used) in investing activities	(5,437		)	(22,736		)	(2,457		)	2,280			(28,350		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments pursuant to revolving credit facilities	(27,500		)	—			—			—			(27,500		)
Proceeds from issuance of long-term debt	—			3,360			—			—			3,360
Principal payments on long-term debt	(5,625		)	(502		)	(31		)	—			(6,158		)
Purchase of treasury stock	(3,684		)	—			—			—			(3,684		)
Dividends paid	(22,026		)	—			—			—			(22,026		)
Excess tax benefits from stock-based compensation	26			1,190			—			—			1,216
Proceeds from contributions from affiliates	—			—			2,280			(2,280		)	—
Proceeds from exercise of stock options	6,677			—			—			—			6,677
Net cash provided (used) by financing activities	(52,132		)	4,048			2,249			(2,280		)	(48,115		)
Net change in cash and cash equivalents	2,501			30			26,013			—			28,544
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			(1,583		)	—			(1,583		)
Cash and cash equivalents at beginning of period	8,420			407			125,350			—			134,177
Cash and cash equivalents at end of period	$	10,921		$	437		$	149,780		$	—		$	161,138

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Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	87,072		$	4,941		$	26,410		$	—		$	118,423
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(7,126		)	(5,217		)	(182		)	—			(12,525		)
Equity method investments	—			—			(9,454		)	—			(9,454		)
Issuance of mezzanine and other notes receivable	(4,236		)	—			—			—			(4,236		)
Collections of mezzanine and other notes receivable	110			—			—			—			110
Purchases of investments, employee benefit plans	—			(1,191		)	—			—			(1,191		)
Proceeds from sales of investments, employee benefit plans	—			10,909			—			—			10,909
Advances to and investments in affiliates	—			(9,721		)	—			9,721			—
Other items, net	(322		)	—			—			—			(322		)
Net cash provided (used) in investing activities	(11,574		)	(5,220		)	(9,636		)	9,721			(16,709		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities	16,725			—			—			—			16,725
Proceeds from issuance of long-term debt	543,500			—			—			—			543,500
Principal payments on long-term debt	—			(488		)	(14		)	—			(502		)
Purchase of treasury stock	(22,227		)	—			—			—			(22,227		)
Dividends paid	(632,751		)	—			—			—			(632,751		)
Excess tax benefits from stock-based compensation	183			610			—			—			793
Debt issuance costs	(4,753		)	—			—			—			(4,753		)
Proceeds from contributions from affiliates	—			—			9,721			(9,721		)	—
Proceeds from exercise of stock options	4,695			—			—			—			4,695
Net cash provided (used) by financing activities	(94,628		)	122			9,707			(9,721		)	(94,520		)
Net change in cash and cash equivalents	(19,130		)	(157		)	26,481			—			7,194
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			813			—			813
Cash and cash equivalents at beginning of period	23,370			432			83,255			—			107,057
Cash and cash equivalents at end of period	$	4,240		$	275		$	110,549		$	—		$	115,064

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15. Reportable Segment Information

Franchising: Franchising includes the Company's hotel franchising operations consisting of its eleven brands. The eleven brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other franchising related revenue. The Company is obligated under its franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company's franchising business. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in franchising revenues and are offset by the related expenses paid for marketing and reservation activities to calculate franchising operating income.

SkyTouch Technology: SkyTouch Technology ("SkyTouch") is a division of the Company that develops and markets cloud-based technology products to hoteliers not under franchise agreements with the Company to improve their efficiency and profitability.

The Company evaluates its segments based primarily on the results of the segment without allocating corporate expenses, income taxes or indirect general and administrative expenses. Equity in earnings or losses from joint ventures is allocated to the Company's franchising segment. Corporate and other revenue consists of hotel operations; corporate and other expenses consist primarily of overhead selling, general and administrative costs such as finance, legal, human resources and other general administrative expenses that are not allocated to the Company's two segments. As described in Note 4, certain interest expenses related to the Company's marketing and reservation activities are allocated to the franchising segment. The Company does not allocate the remaining interest expense, interest income, other gains and losses or income taxes to its segments.

Financial results for the three and nine months ended September 30, 2012, have been updated to reflect the financial results for the Company's SkyTouch segment which was established as a separate segment in 2013. The financial results related to SkyTouch were previously reported as a component of Corporate & Other.

The following table presents the financial information for the Company's segments:

	Three Months Ended September 30, 2013										Three Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	221,839	$	13		$	1,310		$	223,162	$	209,175	$	—		$	1,238		$	210,413
Operating income (loss)	$	75,085	$	(3,271	)	$	(5,265	)	$	66,549	$	76,290	$	(720	)	$	(10,317	)	$	65,253
Income (loss) before income taxes	$	75,506	$	(3,271	)	$	(14,643	)	$	57,592	$	76,461	$	(720	)	$	(20,073	)	$	55,668

	Nine Months Ended September 30, 2013										Nine Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	539,999	$	13		$	3,600		$	543,612	$	509,763	$	—		$	3,440		$	513,203
Operating income (loss)	$	185,491	$	(8,768	)	$	(29,386	)	$	147,337	$	184,096	$	(2,074	)	$	(34,114	)	$	147,908
Income (loss) before income taxes	$	185,831	$	(8,768	)	$	(58,475	)	$	118,588	$	184,084	$	(2,074	)	$	(48,170	)	$	133,840

16. Commitments and Contingencies

Except as noted below, the Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal

39

proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

In May 2013, Choice was added to an ongoing multi-district class action pending in federal court in Dallas, Texas.  The lawsuit alleges that several online travel companies and hotel companies have engaged in anti-competitive practices.  The complaint seeks an unspecified amount of damages and equitable relief.  Choice disputes the allegations and is in the process of vigorously defending itself against these claims.  We currently do not believe this litigation will have a material effect on our consolidated financial position, results of operation or liquidity.

Contingencies

On October 9, 2012, the Company entered into a limited payment guaranty with regards to a developer's $18.0 million bank loan for the construction of a hotel franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to guarantee 25% of the outstanding principal balance and accrued and unpaid interest, as well as any unpaid expenses incurred by the lender. The limited guaranty shall remain in effect until the maximum amount guaranteed by the Company is paid in full. In addition to the limited guaranty, the Company entered into an agreement in which the Company guarantees the completion of the construction of the hotel and an environmental indemnity agreement which indemnifies the lending institution from and against any damages relating to or arising out of possible environmental contamination issues with regards to the property.

Commitments

The Company has the following commitments outstanding at September 30, 2013:

• The Company occasionally provides financing in the form of forgivable promissory notes or cash incentives to franchisees for property improvements, hotel development efforts and other purposes. At September 30, 2013, the Company had commitments to extend an additional $11.3 million for these purposes provided certain conditions are met by its franchisees, of which $6.5 million is expected to be advanced in the next twelve months.

• The Company committed to make additional capital contributions totaling $4.9 million to existing joint ventures related to the construction of various hotels to be operated under the Company's Cambria Suites brand. These commitments are expected to be funded in the next twelve months.

In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as indemnifications of landlords against third party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates potential liability.

17. Termination Charges

During the nine months ended September 30, 2013, the Company recorded a $1.5 million charge in SG&A and marketing and reservation expenses related to salary and continuation benefits provided to employees separating from service with the Company. At September 30, 2013, the Company had approximately $0.5 million of these salary and benefits continuation payments remaining to be paid. During the nine months ended September 30, 2013, the Company paid an additional $3.0 million of termination benefits related to employee termination charges recorded in prior periods and had approximately $0.1 million of these benefits remaining to be paid. At September 30, 2013 and December 31, 2012, total termination benefits of approximately $0.6 million and $3.1 million, respectively, remained payable and were included in current and non-current liabilities in the Company's consolidated financial statements. The Company expects $0.6 million of these benefits to be paid in the next twelve months.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Choice Hotels International, Inc. and subsidiaries (together the “Company”). MD&A is provided as a supplement to-and should be read in conjunction with-our consolidated financial statements and the accompanying notes.

Overview

We are a hotel franchisor with franchise agreements representing 6,303 hotels open and 455 hotels under construction, awaiting conversion or approved for development as of September 30, 2013, with 502,663 rooms and 37,077 rooms, respectively, in 49 states, the District of Columbia and over 35 countries and territories outside the United States. Our brand names include Comfort Inn®, Comfort Suites®, Quality®, Clarion®, Ascend Hotel Collection®, Sleep Inn®, Econo Lodge®, Rodeway Inn®, MainStay Suites®, Suburban Extended Stay Hotel®, and Cambria Suites® (collectively, the “Choice brands”).

The Company's domestic franchising operations are conducted through direct franchising relationships while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee.

Our business philosophy has been to conduct direct franchising in those international markets where both franchising is an accepted business model and we believe our brands can achieve significant distribution. We elect to enter into master franchise agreements in those markets where direct franchising is currently not a prevalent or viable business model. When entering into master franchising relationships, we strive to select partners that have professional hotel and asset management capabilities together with the financial capacity to invest in building the Choice brands in their respective markets. Master franchising relationships typically provide lower revenues to the Company as the master franchisees are responsible for managing certain necessary services (such as training, quality assurance, reservations and marketing) to support the franchised hotels in the master franchise area and therefore retain a larger percentage of the hotel franchise fees to cover their expenses. In certain circumstances, the Company has and may continue to make equity investments in our master franchisees.

As a result of our use of master franchising relationships and international market conditions, total revenues from international franchising operations comprised 8% of our total revenues for the nine months ended September 30, 2013, while representing approximately 19% of hotels open at September 30, 2013. Therefore, our description of the franchise system is primarily focused on the domestic operations.

Our Company generates revenues, income and cash flows primarily from initial, relicensing and continuing royalty fees attributable to our franchise agreements. Revenues are also generated from qualified vendor arrangements, hotel operations and other sources. The hotel industry is seasonal in nature. For most hotels, demand is lower in December through March than during the remainder of the year. Our principal source of revenues is franchise fees based on the gross room revenues of our franchised properties. The Company's franchise fee revenues and operating income reflect the industry's seasonality and historically have been lower in the first quarter than in the second, third or fourth quarters.

With a focus on hotel franchising instead of ownership, we benefit from the economies of scale inherent in the franchising business. The fee and cost structure of our business provides opportunities to improve operating results by increasing the number of franchised hotel rooms and effective royalty rates of our franchise contracts resulting in increased initial fee and relicensing revenue, ongoing royalty fees and procurement services revenues. In addition, our operating results can also be improved through our company-wide efforts related to improving property level performance. The Company currently estimates, based on its current domestic portfolio of hotels under franchise, a 1% change in revenue per available room (“RevPAR”) or rooms under franchise would increase or decrease annual domestic royalty revenues by approximately $2.4 million and a 1 basis point change in the Company's effective royalty rate would increase or decrease annual domestic royalties by approximately $0.6 million. In addition to these revenues, we also collect marketing and reservation system fees to support centralized marketing and reservation activities for the franchise system. As a lodging franchisor, the Company currently has relatively low capital expenditure requirements.

The principal factors that affect the Company's results are: the number and relative mix of franchised hotel rooms in the various hotel lodging price categories; growth in the number of hotel rooms under franchise; occupancy and room rates achieved by the hotels under franchise; the effective royalty rate achieved; the level of franchise sales and relicensing activity; and our ability to

41

manage costs. The number of rooms at franchised properties and occupancy and room rates at those properties significantly affect the Company's results because our fees are based upon room revenues at franchised hotels. The key industry standard for measuring hotel-operating performance is RevPAR, which is calculated by multiplying the percentage of occupied rooms by the average daily room rate realized. Our variable overhead costs associated with franchise system growth of our established brands have historically been less than incremental royalty fees generated from new franchises. Accordingly, continued growth of our franchise business should enable us to realize benefits from the operating leverage in place and improve operating results.

We are required by our franchise agreements to use the marketing and reservation system fees we collect for system-wide marketing and reservation activities. These expenditures, which include advertising costs and costs to maintain our central reservations system, help to enhance awareness and increase consumer preference for our brands. Greater awareness and preference promotes long-term growth in business delivery to our franchisees, which ultimately increases franchise fees earned by the Company.

Our Company articulates its mission as a commitment to our franchisees' profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise. We have developed an operating system dedicated to our franchisees' success that focuses on delivering guests to our franchised hotels and reducing costs for our hotel owners.

We believe that executing our strategic priorities creates value for our shareholders. Our Company focuses on two key goals:

Profitable Growth. Our success is dependent on improving the performance of our hotels, increasing our system size by selling additional hotel franchises, effective royalty rate improvement and maintaining a disciplined cost structure. We attempt to improve our franchisees' revenues and overall profitability by providing a variety of products and services designed to increase business delivery to and/or reduce operating and development costs for our franchisees. These products and services include national marketing campaigns, a central reservation system, property and yield management systems, quality assurance standards and qualified vendor relationships. We believe that healthy brands, which deliver a compelling return on investment for franchisees, will enable us to sell additional hotel franchises and raise royalty rates. We have established multiple brands that meet the needs of many types of guests, and can be developed at various price points and applied to both new and existing hotels. This ensures that we have brands suitable for creating growth in a variety of market conditions. Improving the performance of the hotels under franchise, growing the system through additional franchise sales and improving franchise agreement pricing while maintaining a disciplined cost structure are the keys to profitable growth.

Maximizing Financial Returns and Creating Value for Shareholders. Our capital allocation decisions, including capital structure and uses of capital, are intended to maximize our return on invested capital and create value for our shareholders. We believe our strong and predictable cash flows create a strong financial position that provides us a competitive advantage. Currently, our business does not require significant capital to operate and grow. Therefore, we can maintain a capital structure that generates high financial returns and use our excess cash flow to increase returns to our shareholders.

Historically, we have returned value to our shareholders in two primary ways: share repurchases and dividends. In 1998, we instituted a share repurchase program which has generated substantial value for our shareholders. Since the program's inception through September 30, 2013, we have repurchased 45.3 million shares (including 33.0 million prior to the two-for-one stock split effected in October 2005) of common stock at a total cost of $1.1 billion. Considering the effect of the two-for-one stock split, the Company has repurchased 78.3 million shares at an average price of $13.89 per share. The Company did not purchase any shares under the share repurchase program during the nine months ended September 30, 2013. We currently believe that our cash flows from operations will support our ability to complete the current board of directors repurchase authorization of approximately 1.4 million shares remaining as of September 30, 2013. Upon completion of the current authorization, our board of directors will evaluate the advisability of additional share repurchases.

The Company commenced paying quarterly dividends in 2004 and in 2012 the Company elected to pay a special cash dividend totaling approximately $600 million. The Company currently maintains the payment of a quarterly dividend on its common shares outstanding of $0.185 per share, however the declaration of future dividends are subject to the discretion of the board of directors. In the fourth quarter of 2012, the Company's board of directors elected to pay prior to December 31, 2012 the regular quarterly dividend initially scheduled to be paid in the first quarter of 2013. As a result, the Company did not pay a regular quarterly dividend during the first quarter of 2013. During the nine months ended September 30, 2013, we paid cash dividends totaling approximately $22.0 million. We expect to continue to pay dividends in the future, subject to declaration by our board of directors as well as to future business performance, economic conditions, changes in income tax regulations and other factors. Based on the present dividend rate and outstanding share count, we expect that aggregate annual regular dividends for 2013, excluding the first quarter payment which was paid to shareholders in December 2012, would be approximately $32.8 million.

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Our board of directors previously authorized us to enter into a program which permits us to offer investment, financing and guaranty support to qualified franchisees as well as to acquire and resell real estate to incent franchise development for certain brands in strategic markets. Recent market conditions have resulted in an increase in opportunities to incentivize development under this program and as a result over the next several years, we expect to deploy capital opportunistically pursuant to this program to promote growth of our emerging brands. The amount and timing of the investment will be dependent on market and other conditions. Our current expectation is that our annual investment in this program will range from $20 million to $40 million and we generally expect to recycle these investments within a five year period.

In addition, the Company may allocate capital to exploring additional growth opportunities in business areas that are adjacent or complementary to our core hotel franchising business, which leverage our core competencies and are additive to our franchising business model. The timing and amount of these investments are subject to market and other conditions.

In March 2013, the Company announced the launch of its newest division, SkyTouch Technology ("SkyTouch"), which develops and markets cloud-based technology products for the hotel industry. In conjunction with this new division, the Company expects to incur operating expenses ranging between $12 million and $14 million during the full year ending December 31, 2013, of which the Company has incurred approximately $8.8 million during the nine months ended September 30, 2013. These expenses primarily relate to business development, sales and marketing and continued software development.

Notwithstanding investments in SkyTouch and other alternative growth strategies, the Company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to the discretion of our board of directors as well as to business performance, economic conditions, changes in income tax regulations and other factors.

We believe these investments and strategic priorities, when properly implemented, will enhance our profitability, maximize our financial returns and continue to generate value for our shareholders. The ultimate measure of our success will be reflected in the items below.

Results of Operation: Royalty fees, operating income, net income and diluted earnings per share (“EPS”) represent key measurements of these value drivers. These measurements are primarily driven by the operations of our franchise system and therefore our analysis of the Company's operations is primarily focused on the size, performance and potential growth of the franchise system as well as our variable overhead costs.

Refer to MD&A heading “Operations Review” for additional analysis of our results.

Liquidity and Capital Resources: Historically, the Company has generated significant cash flows from operations. Since our business does not currently require significant reinvestment of capital, we typically utilize cash in ways that management believes provide the greatest returns to our shareholders, which include share repurchases and dividends. We believe the Company's cash flow from operations and available financing capacity is sufficient to meet the expected future operating, investing, and financing needs of the business.

Refer to MD&A heading “Liquidity and Capital Resources” for additional analysis.

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Operations Review

Comparison of Operating Results for the Three-Month Periods Ended September 30, 2013 and 2012

Summarized financial results for the three months ended September 30, 2013 and 2012 are as follows:

(in thousands, except per share amounts)	2013			2012
REVENUES:
Royalty fees	$	83,107		$	80,845
Initial franchise and relicensing fees	4,650			3,247
Procurement services	4,708			3,839
Marketing and reservation	126,296			119,062
Hotel operations	1,310			1,238
Other	3,091			2,182
Total revenues	223,162			210,413
OPERATING EXPENSES:
Selling, general and administrative	26,982			23,170
Depreciation and amortization	2,379			1,995
Marketing and reservation	126,296			119,062
Hotel operations	956			933
Total operating expenses	156,613			145,160
Operating income	66,549			65,253
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,757			10,166
Interest income	(676		)	(425		)
Loss on extinguishment of debt	—			526
Other (gains) and losses	(703		)	(511		)
Equity in net income of affiliates	(421		)	(171		)
Total other income and expenses, net	8,957			9,585
Income before income taxes	57,592			55,668
Income taxes	16,080			11,291
Net income	$	41,512		$	44,377
Diluted earnings per share	$	0.70		$	0.76

The Company utilizes certain measures which do not conform to generally accepted accounting principles in the United States (“GAAP”) when analyzing and discussing its results with the investment community. This information should not be considered as an alternative to any measure of performance as promulgated under GAAP. The Company's calculation of these measures may be different from the calculations used by other companies and therefore comparability may be limited. We have included below a reconciliation of the measures utilized during this period to the comparable GAAP measures as well as our reason for reporting these non-GAAP measures.

Franchising Revenues: The Company utilizes franchising revenues which exclude marketing and reservation system revenues, revenues from the SkyTouch Division and hotel operations rather than total revenues when analyzing the performance of the business. Marketing and reservation activities are excluded from franchising revenues since the Company is required by its franchise agreements to use these fees collected for marketing and reservation activities; as such, no net income or loss to the Company is generated. Cumulative marketing and reservation system fees not expended are recorded as a payable on the Company's financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are recorded as a receivable on the Company's financial statements and recovered in future periods. Hotel operations reflect the company’s ownership of three MainStay Suites hotels. SkyTouch Technology is a division of the Company that develops and markets cloud-based technology products to help industry-wide hoteliers, not under franchise agreements with the Company, improve their efficiency and profitability. Hotel and SkyTouch Technology operations are excluded from franchising revenue since they do not reflect the company’s core franchising business but are adjacent, complimentary lines of business.

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This non-GAAP measure is a commonly used measure of performance in our industry and facilitates comparisons between the Company and its competitors.

Calculation of Franchising Revenues

	Three Months Ended September 30,
	($ amounts in thousands)
	2013			2012
Franchising Revenues:
Total Revenues	$	223,162		$	210,413
Adjustments:
Marketing and reservation system revenues	(126,296		)	(119,062		)
SkyTouch Division	(13		)	—
Hotel operations	(1,310		)	(1,238		)
Franchising Revenues	$	95,543		$	90,113

Adjusted EBITDA: We also utilize adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") to analyze our results which reflects earnings excluding the impact of interest expense, interest income, loss on extinguishment of debt, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider Adjusted EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, to evaluate companies because they exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. Adjusted EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. Additionally, Adjusted EBITDA is also utilized as a performance indicator as it excludes equity in net (income) loss of unconsolidated affiliates and other (gains) and losses which primarily reflect the performance of investments held in the Company's non-qualified retirement, savings and investment plans which can vary widely from period to period based on market conditions.

Calculation of Adjusted EBITDA

	Three Months Ended September 30,
	($ amounts in thousands)
	2013			2012
Adjusted EBITDA:
Net income	$	41,512		$	44,377
Income taxes	16,080			11,291
Interest expense	10,757			10,166
Interest income	(676		)	(425		)
Other (gains) and losses	(703		)	(511		)
Loss on the extinguishment of debt	—			526
Equity in net income of affiliates	(421		)	(171		)
Depreciation and amortization	2,379			1,995
Adjusted EBITDA	$	68,928		$	67,248

Results of Operations

The Company recorded net income of $41.5 million for the three month period ended September 30, 2013, a 6% decline from the $44.4 million recorded for the quarter ended September 30, 2012. The decrease in net income primarily reflects the increase in the Company's effective income tax rate from 20.3% for the three month period ended September 30, 2012 to 27.9% for the current quarter. The effective income tax rate for the three months ended September 30, 2012 reflected a non-recurring

45

favorable adjustment of $4.5 million related to foreign operations. Income before income taxes increased $1.9 million or 3% from the prior year quarter to $57.6 million primarily due to a $1.3 million or 2% increase in operating income.

The increase in operating income primarily reflects an increase in Adjusted EBITDA which increased $1.7 million or 2.5% to $68.9 million for the three month period ended September 30, 2013. The increase in Adjusted EBITDA reflects a $5.4 million or 6% increase in the Company's franchising revenues for the three months ended September 30, 2013 partially offset by a $3.8 million or 16% increase in selling, general and administrative expense ("SG&A").

Franchising Revenues: Franchising revenues were $95.5 million for the three months ended September 30, 2013 compared to $90.1 million for the three months ended September 30, 2012, an increase of 6%. The increase in franchising revenues is primarily due to a $2.3 million or 3% increase in royalty revenues, a $1.4 million increase in initial franchise and relicensing fees, a $0.9 million increase in procurement services revenues and a $0.9 million increase in other revenues.

Royalty Fees

Domestic royalty fees for the three months ended September 30, 2013 increased $2.3 million to $76.7 million, an increase of 3% compared to the three months ended September 30, 2012. The increase in royalties is attributable to a combination of factors including a 3.0% increase in RevPAR, a 0.7% increase in the number of domestic franchised hotel rooms open and a 1 basis point increase in the effective royalty rate from 4.29% to 4.30%. System-wide RevPAR increased due to a combination of a 1.9% increase in average daily rates and a 70 basis point increase in occupancy rates.

A summary of the Company's domestic franchised hotels operating information is as follows:

	For the Three Months Ended September 30, 2013*						For the Three Months Ended September 30, 2012*						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy			RevPAR
Comfort Inn	$	89.49	70.8	%	$	63.35	$	87.58	70.2	%	$	61.46	2.2	%	60		bps	3.1	%
Comfort Suites	91.36		71.2	%	65.05		89.69		70.2	%	62.93		1.9	%	100		bps	3.4	%
Sleep	78.45		66.8	%	52.38		76.09		64.8	%	49.32		3.1	%	200		bps	6.2	%
Quality	75.81		62.5	%	47.36		75.02		61.2	%	45.88		1.1	%	130		bps	3.2	%
Clarion	81.27		59.7	%	48.50		79.73		58.7	%	46.82		1.9	%	100		bps	3.6	%
Econo Lodge	61.76		58.1	%	35.88		60.60		57.7	%	34.97		1.9	%	40		bps	2.6	%
Rodeway	60.78		60.8	%	36.97		59.62		60.8	%	36.23		1.9	%	—		bps	2.0	%
MainStay	76.91		75.2	%	57.82		73.17		76.5	%	55.96		5.1	%	(130	)	bps	3.3	%
Suburban	43.79		73.1	%	32.02		42.62		75.1	%	32.03		2.7	%	(200	)	bps	—	%
Ascend Hotel Collection	125.54		71.6	%	89.86		115.98		71.4	%	82.77		8.2	%	20		bps	8.6	%
Total	$	80.14	65.7	%	$	52.63	$	78.63	65.0	%	$	51.09	1.9	%	70		bps	3.0	%

___________________

*Operating statistics represent hotel operations from June through August and exclude Cambria Suites since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for a twelve month period.

The number of domestic rooms on-line increased by 2,676 rooms or 0.7% to 396,663 as of September 30, 2013 from 393,987 as of September 30, 2012. The total number of domestic hotels on-line increased by 2.0% to 5,134 as of September 30, 2013 from 5,034 as of September 30, 2012.

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A summary of domestic hotels and rooms on-line at September 30, 2013 and 2012 by brand is as follows:

	September 30, 2013		September 30, 2012		Variance
	Hotels	Rooms	Hotels	Rooms	Hotels		Rooms		%		%
Comfort Inn	1,312	102,586	1,367	106,970	(55	)	(4,384	)	(4.0	)%	(4.1	)%
Comfort Suites	590	45,519	603	46,647	(13	)	(1,128	)	(2.2	)%	(2.4	)%
Sleep	378	27,351	390	28,232	(12	)	(881	)	(3.1	)%	(3.1	)%
Quality	1,193	98,788	1,101	95,469	92		3,319		8.4	%	3.5	%
Clarion	188	26,885	187	26,943	1		(58	)	0.5	%	(0.2	)%
Econo Lodge	821	50,230	803	49,248	18		982		2.2	%	2.0	%
Rodeway	434	24,660	409	23,336	25		1,324		6.1	%	5.7	%
MainStay	43	3,331	39	2,997	4		334		10.3	%	11.1	%
Suburban	63	7,213	60	6,978	3		235		5.0	%	3.4	%
Ascend Hotel Collection	94	8,006	56	4,946	38		3,060		67.9	%	61.9	%
Cambria Suites	18	2,094	19	2,221	(1	)	(127	)	(5.3	)%	(5.7	)%
Total Domestic Franchises	5,134	396,663	5,034	393,987	100		2,676		2.0	%	0.7	%

Domestic hotels open and operating increased by 16 hotels during the three months ended September 30, 2013 compared to a net increase of 10 domestic hotels open and operating during the three months ended September 30, 2012. Gross domestic franchise additions increased from 68 for the three months ended September 30, 2012 to 75 for the same period of 2013. New construction hotels represented 7 and 9 of the gross domestic additions during the three months ended September 30, 2013 and 2012, respectively. Gross domestic additions for conversion hotels during the three months ended September 30, 2013 increased by 9 units to 68 from 59 for the three months ended September 30, 2012. The increase in franchise openings primarily reflects an increase in the number of executed contracts over the trailing twelve months ended September 30, 2013. The Company expects the number of new franchise units that will open during 2013 to increase from 308 in 2012 to approximately 338 hotels. Although there has been an increase in the number of projected openings, new construction and conversion openings continue to be impacted by the restrictive lending environment, retention efforts implemented by other hotel brand companies and increased competition for existing hotels seeking a new brand affiliation.

Net domestic franchise terminations increased slightly from 58 in the three months ended September 30, 2012 to 59 for the three months ended September 30, 2013.

International royalties decreased by $0.1 million or 1% from the third quarter of 2012 to $6.4 million for the same period of 2013. International available rooms increased 3.0% to 106,000 as of September 30, 2013 from 102,942 as of September 30, 2012. The total number of international hotels increased 0.3% from 1,165 as of September 30, 2012 to 1,169 as of September 30, 2013. However, the increase in the number of available rooms in the international system was offset by unfavorable foreign currency fluctuations in the countries in which we operate.

Initial Franchise and Relicensing Fees

Domestic initial fee revenue, included in the initial franchise and relicensing fees caption on the Company's statements of income, generated from executed franchise agreements increased $0.8 million to $2.6 million for the three months ended September 30, 2013 from $1.8 million for the three months ended September 30, 2012. Domestic initial fee revenue increased approximately 49% primarily due to a 45% increase in the number of new domestic executed franchise agreements as well as an increase in the amount of deferred revenue recognized in 2013 related to franchise agreements containing developer incentives that were executed in prior years. Revenues associated with agreements including incentives are deferred and recognized when the incentive criteria are met or the agreement is terminated, whichever comes first.

New domestic franchise agreements executed in the three months ended September 30, 2013 totaled 129 representing 10,591 rooms compared to 89 agreements representing 6,913 rooms executed in the third quarter of 2012. During the third quarter of 2013, 20 of the executed agreements were for new construction hotel franchises representing 1,397 rooms compared to 18 contracts representing 1,565 rooms for the three months ended September 30, 2012. Conversion hotel executed franchise agreements totaled 109 representing 9,194 rooms for the three months ended September 30, 2013 compared to 71 agreements representing 5,348 rooms for the same period a year ago.

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A summary of executed domestic franchise agreements by brand for the three months ended September 30, 2013 and 2012 is as follows:

	Three Months Ended September 30, 2013			Three Months Ended September 30, 2012			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
Comfort Inn	7	17	24	4	5	9	75	%	240	%	167	%
Comfort Suites	2	4	6	4	—	4	(50	)%	NM		50	%
Sleep	4	1	5	6	—	6	(33	)%	NM		(17	)%
Quality	—	32	32	—	25	25	NM		28	%	28	%
Clarion	1	5	6	—	7	7	NM		(29	)%	(14	)%
Econo Lodge	—	31	31	—	15	15	NM		107	%	107	%
Rodeway	1	15	16	—	15	15	NM		—	%	7	%
MainStay	1	—	1	1	—	1	—	%	NM		—	%
Suburban	1	—	1	1	—	1	—	%	NM		—	%
Ascend Hotel Collection	2	4	6	—	4	4	NM		—	%	50	%
Cambria Suites	1	—	1	2	—	2	(50	)%	NM		(50	)%
Total Domestic System	20	109	129	18	71	89	11	%	54	%	45	%

Relicensing fees include fees charged to the new owners of a franchised property whenever an ownership change occurs and the property remains in the franchise system as well as fees required to renew expiring franchise contracts. Domestic relicensing and renewal contracts increased 16% from 62 in the third quarter of 2012 to 72 for the three months ended September 30, 2013. As a result of the increase in contracts and an increase in average fees per contract, domestic relicensing revenues increased $0.4 million or 32% from $1.4 million for the three months ended September 30, 2012 to $1.8 million for the three months ended September 30, 2013.

As of September 30, 2013, the Company had 371 franchised hotels with 29,871 rooms under construction, awaiting conversion or approved for development in its domestic system as compared to 360 hotels and 29,142 rooms at September 30, 2012. The number of new construction franchised hotels in the Company's domestic pipeline declined 1% to 217 at September 30, 2013 from 220 at September 30, 2012. Growth in the number of new construction hotels in the domestic pipeline continues to be negatively impacted by the limited availability of hotel construction financing. As a result, the ability of new and existing projects to obtain financing and commence construction has been significantly impacted and has resulted in the execution of fewer franchise agreements for new construction hotels than historically achieved. The number of conversion franchised hotels in the Company's domestic pipeline increased by 14 hotels or 10% from 140 hotels at September 30, 2012 to 154 hotels at September 30, 2013. The Company had an additional 84 franchised hotels with 7,206 rooms under construction, awaiting conversion or approved for development in its international system as of September 30, 2013 compared to 75 hotels and 7,008 rooms at September 30, 2012. While the Company's hotel pipeline provides a strong platform for growth, a hotel in the pipeline does not always result in an open and operating hotel due to various factors.

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A summary of the domestic franchised hotels pipeline which includes hotels under construction, awaiting conversion and approved for development, at September 30, 2013 and 2012 by brand is as follows:

							Variance
	September 30, 2013 Units			September 30, 2012 Units			Conversion				New Construction				Total
	Conversion	New Construction	Total	Conversion	New Construction	Total	Units		%		Units		%		Units		%
Comfort Inn	36	50	86	23	39	62	13		57	%	11		28	%	24		39	%
Comfort Suites	4	47	51	1	77	78	3		300	%	(30	)	(39	)%	(27	)	(35	)%
Sleep	1	45	46	1	38	39	—		—	%	7		18	%	7		18	%
Quality	33	3	36	37	3	40	(4	)	(11	)%	—		—	%	(4	)	(10	)%
Clarion	7	2	9	18	1	19	(11	)	(61	)%	1		100	%	(10	)	(53	)%
Econo Lodge	33	—	33	23	1	24	10		43	%	(1	)	(100	)%	9		38	%
Rodeway	24	1	25	25	—	25	(1	)	(4	)%	1		NM		—		—	%
MainStay	—	26	26	1	18	19	(1	)	(100	)%	8		44	%	7		37	%
Suburban	3	12	15	2	14	16	1		50	%	(2	)	(14	)%	(1	)	(6	)%
Ascend Hotel Collection	13	10	23	9	4	13	4		44	%	6		150	%	10		77	%
Cambria Suites	—	21	21	—	25	25	—		NM		(4	)	(16	)%	(4	)	(16	)%
	154	217	371	140	220	360	14		10	%	(3	)	(1	)%	11		3	%

Procurement Services: Revenues increased $0.9 million or 23% from $3.8 million for the three months ended September 30, 2012 to $4.7 million for the three months ended September 30, 2013. The increase in revenues primarily reflects the implementation of new brand programs as well as an increased volume of business transacted with qualified vendors and strategic alliance partners.

Other Income: Revenue increased $0.9 million from the three months ended September 30, 2012 to $3.1 million for the three months ended September 30, 2013. The increase in other income is primarily due to an increase in liquidated damage collections related to the early termination of franchise agreements as well as an increase in fees collected from franchisees for non-compliance with the Company's rules and regulations.

Selling, General and Administrative Expenses: The cost to operate the franchising business is reflected in SG&A on the consolidated statements of income. SG&A expenses were $27.0 million for the three months ended September 30, 2013, an increase of $3.8 million or 16% from the three months ended September 30, 2012. SG&A for the three months ended September 30, 2013 increased from the prior year primarily due to a $2.5 million increase in alternative growth spending related to the launch of the Company's new SkyTouch Technology division. Excluding the incremental spending associated with the SkyTouch Technology division, SG&A expenses increased $1.3 million or 6% primarily due to a $0.3 million increase in variable franchise sales compensation due to the 49% increase in domestic initial fee revenue recognition and a $0.6 million increase in compensation expense recognized on deferred compensation arrangements. The increase in compensation expense reflects the increase in the fair value of investments held in the Company's Non-Qualified and EDCP retirement and savings plans. The increase in deferred compensation expenses are partially offset by investment gains recorded in other gains and losses.

Marketing and Reservations: The Company's franchise agreements require the payment of franchise fees, which include marketing and reservation system fees. The fees, which are primarily based on a percentage of the franchisees' gross room revenues, are used exclusively by the Company for expenses associated with providing franchise services such as central reservation systems, national marketing and media advertising. The Company is contractually obligated to expend the marketing and reservation system fees it collects from franchisees in accordance with the franchise agreements; as such, no net income or loss to the Company is generated.

Total marketing and reservation system revenues increased 6% from $119.1 million for the three months ended September 30, 2012 to $126.3 million for the three months ended September 30, 2013. The increase in revenues was primarily due to improved system fees resulting from system growth and RevPAR increases and increasing revenues from the Choice Privileges loyalty program resulting from the growth in program membership. Depreciation and amortization attributable to marketing

49

and reservation activities was $3.9 million and $3.7 million for the three months ended September 30, 2013 and 2012, respectively. Interest expense attributable to marketing and reservation activities was approximately $0.9 million for both the three months ended September 30, 2013 and 2012, respectively.

As of September 30, 2013 and December 31, 2012, the Company's balance sheets include deferred costs of $32.6 million and $42.2 million, respectively, from cumulative marketing and reservation expenses incurred in excess of cumulative marketing and reservations system fee revenues earned. During the three months ended September 30, 2013, the Company collected $22.2 million of marketing and reservation revenues in excess of expenses incurred as compared to $18.6 million in the same period of 2012. The fees collected in excess of expenses incurred were utilized to reimburse the Company for a portion of the outstanding cumulative advances for marketing and reservation activities. This resulted in expense recognition of an equivalent amount of previously unrecognized costs. The increase in the excess fees collected in the third quarter of 2013 over 2012 primarily reflects increased revenues related to the growth of the number of units and RevPAR in the franchise system.

The decline in cumulative advances for marketing and reservation activities from December 31, 2012 to September 30, 2013 primarily reflects the timing of various marketing programs and the seasonality of the Company's revenues as the Company's third quarter revenues are typically higher than other quarters due to the U.S. summer travel season. In addition, the decline in cumulative advances reflects the Company's strategy to recover prior year advances for marketing and reservation activities in future periods. These costs incurred in excess of fees collected have been deferred and recorded as an asset in the financial statements as the Company has the contractual authority to recover the deficits incurred related to marketing and reservation activities from the franchisees in the system at any given point in time. The Company's current franchisees are legally obligated to pay any assessment the Company imposes on its franchisees to obtain reimbursement of such deficit regardless of whether those constituents continue to generate gross room revenue and whether or not they joined the system following the deficit's occurrence. The Company expects to recover the deferred costs over a period of time by expending fewer amounts on marketing and reservation activities than marketing and reservation system fees collected, depending on the marketing and reservation needs of the system. Conversely, cumulative marketing and reservation system fees not expended are recorded as a liability in the financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements.

Interest Expense: Interest expense increased $0.6 million for the three months ended September 30, 2013 to $10.8 million due to the issuance of the Company's $350 million senior secured credit facility entered into by the Company on July 25, 2012. The Company utilized the proceeds from this debt issuance as well as the issuance of $400 million in senior notes in June 2012 to pay a special cash dividend on August 23, 2012 totaling approximately $600.7 million to common stockholders.

Loss on Extinguishment of Debt: During the quarter ended September 30, 2012, the Company recognized a $0.5 million loss on extinguishment of debt in conjunction with the refinancing of the Company's prior $300 million revolving credit facility which was scheduled to mature in February 2016.

Income taxes: The effective income tax rates were 27.9% and 20.3% for the three months ended September 30, 2013 and September 30, 2012, respectively. The effective income tax rate for the three months ended September 30, 2013 and 2012 were lower than the U.S federal income tax rate of 35% due to the recurring impact of foreign operations, partially offset by state taxes, and reflect adjustments to our federal accruals. In addition, the effective income tax rate for the three months ended September 30, 2012 reflects a nonrecurring favorable adjustment of $4.5 million related to foreign operations.

Diluted EPS: Diluted EPS decreased 8% to $0.70 for the three months ended September 30, 2013 from $0.76 for the same period of the prior year. The decrease in diluted EPS primarily reflects the items discussed above.

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Comparison of Operating Results for the Nine-Month Periods Ended September 30, 2013 and 2012

Summarized financial results for the nine months ended September 30, 2013 and 2012 and are as follows:

(in thousands, except per share amounts)	2013			2012
REVENUES:
Royalty fees	$	201,222		$	194,762
Initial franchise and relicensing fees	12,843			8,953
Procurement services	16,204			13,990
Marketing and reservation	302,381			284,624
Hotel operations	3,600			3,440
Other	7,362			7,434
Total revenues	543,612			513,203
OPERATING EXPENSES:
Selling, general and administrative	84,078			72,073
Depreciation and amortization	7,074			5,989
Marketing and reservation	302,381			284,624
Hotel operations	2,742			2,609
Total operating expenses	396,275			365,295
Operating income	147,337			147,908
OTHER INCOME AND EXPENSES, NET:
Interest expense	32,334			16,823
Interest income	(1,979		)	(1,156		)
Loss on extinguishment of debt	—			526
Other (gains) and losses	(1,266		)	(2,137		)
Equity in net (income) loss of affiliates	(340		)	12
Total other income and expenses, net	28,749			14,068
Income before income taxes	118,588			133,840
Income taxes	33,319			37,604
Net income	$	85,269		$	96,236
Diluted earnings per share	$	1.45		$	1.65

The Company utilizes certain measures which do not conform to generally accepted accounting principles in the United States (“GAAP”) when analyzing and discussing its results with the investment community. This information should not be considered as an alternative to any measure of performance as promulgated under GAAP. The Company's calculation of these measures may be different from the calculations used by other companies and therefore comparability may be limited. We have included below a reconciliation of the measures utilized during this period to the comparable GAAP measures as well as our reason for reporting these non-GAAP measures.

Franchising Revenues: The Company utilizes franchising revenues which exclude marketing and reservation system revenues, revenues from the SkyTouch Division and hotel operations rather than total revenues when analyzing the performance of the business. Marketing and reservation activities are excluded from franchising revenues since the Company is required by its franchise agreements to use these fees collected for marketing and reservation activities; as such, no net income or loss to the Company is generated. Cumulative marketing and reservation system fees not expended are recorded as a payable on the Company's financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are recorded as a receivable on the Company's financial statements and recovered in future periods. Hotel operations reflect the company’s ownership of three MainStay Suites hotels. SkyTouch Technology is a division of the Company that develops and markets cloud-based technology products to help industry-wide hoteliers, not currently under franchise agreements with the Company, improve their efficiency and profitability. Hotel and SkyTouch Technology operations are excluded from franchising revenue since they do not reflect the company’s core franchising business but are adjacent,

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complimentary lines of business. This non-GAAP measure is a commonly used measure of performance in our industry and facilitates comparisons between the Company and its competitors.

Calculation of Franchising Revenues

	Nine Months Ended September 30,
	($ amounts in thousands)
	2013			2012
Franchising Revenues:
Total Revenues	$	543,612		$	513,203
Adjustments:
Marketing and reservation revenues	(302,381		)	(284,624		)
SkyTouch Division	(13		)	—
Hotel operations	(3,600		)	(3,440		)
Franchising Revenues	$	237,618		$	225,139

Adjusted EBITDA: We also utilize adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") to analyze our results which reflects earnings excluding the impact of interest expense, interest income, loss on extinguishment of debt, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income (loss) of unconsolidated affiliates. We consider Adjusted EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, to evaluate companies because they exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. Adjusted EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. Additionally, Adjusted EBITDA is also utilized as a performance indicator as it excludes equity in net (income) loss of unconsolidated affiliates and other (gains) and losses which primarily reflect the performance of investments held in the Company's non-qualified retirement, savings and investment plans which can vary widely from period to period based on market conditions.

Calculation of Adjusted EBITDA

	Nine Months Ended September 30,
	($ amounts in thousands)
	2013			2012
Adjusted EBITDA:
Net income	$	85,269		$	96,236
Income taxes	33,319			37,604
Interest expense	32,334			16,823
Interest income	(1,979		)	(1,156		)
Other (gains) and losses	(1,266		)	(2,137		)
Loss on the extinguishment of debt	—			526
Equity in net income of affiliates	(340		)	12
Depreciation and amortization	7,074			5,989
Adjusted EBITDA	$	154,411		$	153,897

Results of Operations

The Company recorded net income of $85.3 million for the nine month period ended September 30, 2013, an 11% decline from the $96.2 million recorded for the nine months ended September 30, 2012. The decrease in net income primarily reflects a $15.5 million increase in interest expense resulting from the issuance of debt in June and July of 2012 to finance the Company's $600.7 million special dividend paid on August 23, 2012 and a $0.6 million decline in operating income. Net income was also

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impacted by a decline in other (gains) and losses resulting from a $1.3 million appreciation in the fair value of investments held in the Company's non-qualified employee benefit plans during the nine months ended September 30, 2013 compared to a $2.1 million increase in the fair value of these investments in the same period of the prior year.

The $0.6 million decline in operating income primarily reflects a $1.1 million increase in depreciation and amortization expenses partially offset by a $0.5 million increase in Adjusted EBITDA. The increase in Adjusted EBITDA reflects a $12.5 million or 6% increase in the Company's franchising revenues for the nine months ended September 30, 2013 partially offset by a $12.0 million or 17% increase in selling, general and administrative ("SG&A") expense.

Franchising Revenues: Franchising revenues were $237.6 million for the nine months ended September 30, 2013 compared to $225.1 million for the nine months ended September 30, 2012, an increase of 6%. The increase in franchising revenues is primarily due to a 3% increase in royalty revenues, a $3.9 million, or 43% increase in initial franchise and relicensing fees, and a $2.2 million, or 16% increase in procurement services fees.

Royalty Fees

Domestic royalty fees for the nine months ended September 30, 2013 increased $6.8 million to $183.2 million from $176.4 million during the nine months ended September 30, 2012, an increase of 4%. The increase in royalties is attributable to a combination of factors including a 3.6% increase in RevPAR, a 0.7% increase in the number of domestic franchised hotel rooms and a 3 basis point increase in the effective royalty rate from 4.31% to 4.34%. System-wide RevPAR increased due to a combination of a 2.0% increase in average daily rates and a 90 basis point increase in occupancy rates.

A summary of the Company's domestic franchised hotels operating information is as follows:

	For the Nine Months Ended September 30, 2013*						For the Nine Months Ended September 30, 2012*						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy			RevPAR
Comfort Inn	$	83.44	59.8	%	$	49.92	$	81.52	59.2	%	$	48.24	2.4	%	60		bps	3.5	%
Comfort Suites	87.41		63.0	%	55.05		85.62		61.8	%	52.92		2.1	%	120		bps	4.0	%
Sleep	74.51		58.7	%	43.70		72.29		56.3	%	40.68		3.1	%	240		bps	7.4	%
Quality	70.61		53.2	%	37.54		69.84		51.8	%	36.14		1.1	%	140		bps	3.9	%
Clarion	75.66		51.1	%	38.64		74.98		49.4	%	37.00		0.9	%	170		bps	4.4	%
Econo Lodge	56.94		48.9	%	27.86		55.76		48.7	%	27.13		2.1	%	20		bps	2.7	%
Rodeway	54.63		51.8	%	28.29		53.59		51.3	%	27.48		1.9	%	50		bps	2.9	%
MainStay	72.87		67.6	%	49.29		69.27		70.4	%	48.79		5.2	%	(280	)	bps	1.0	%
Suburban	42.71		70.3	%	30.01		41.24		69.9	%	28.82		3.6	%	40		bps	4.1	%
Ascend Hotel Collection	122.40		64.5	%	78.96		112.27		63.5	%	71.25		9.0	%	100		bps	10.8	%
Total	$	75.10	56.4	%	$	42.37	$	73.65	55.5	%	$	40.89	2.0	%	90		bps	3.6	%

___________________

* Operating statistics represent hotel operations from December through August and exclude Cambria Suites since the operating statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for a twelve month period.

Domestic hotels open and operating increased by 51 hotels during the nine months ended September 30, 2013 compared to an increase of 33 domestic hotels open and operating during the nine months ended September 30, 2012. Gross domestic franchise additions increased from 180 for the nine months ended September 30, 2012 to 236 for the same period in 2013. New construction hotels represented 24 of the gross domestic additions during the nine months ended September 30, 2013 compared to 23 hotels in the same period of the prior year. Gross domestic additions for conversion hotels increased from 157 hotels during nine months ended September 30, 2012 to 212 hotels during the same period of the current year. The increase in franchise openings primarily reflects a strategic marketing alliance entered into with a timeshare company which added 23 hotels to our Ascend Collection and a 37% increase in the number of executed contracts over the trailing twelve months ended September 30, 2013.

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Net domestic franchise terminations increased from 147 for the nine months ended September 30, 2012 to 185 for the same period of the current year. The increase in net terminations is primarily related to the removal of hotels for non-compliance with the Company's rules, regulations and standards as well as non-payment of franchise fees. The Company continues to execute its strategy to replace franchised hotels that do not meet our brand standards or are under performing in their market. As the domestic economy and industry supply growth improve, the Company will continue to focus on improving its system of hotels and utilizing the domestic hotels under development as a strong platform for continued system growth.

International royalties decreased by $0.2 million from $18.3 million during the nine months ended September 30, 2012 to $18.1 million for the same period of 2013 primarily due to RevPAR performance in the various countries in which we operate and foreign currency fluctuations. The declines in RevPAR and foreign currency were partially offset by an increase in international available rooms. International available rooms increased 3.0% to 106,000 as of September 30, 2013 from 102,942 as of September 30, 2012. The total number of international hotels increased 0.3% from 1,165 as of September 30, 2012 to 1,169 as of September 30, 2013.

Initial Franchise and Relicensing Fees

Domestic initial fee revenue, included in the initial franchise and relicensing fees caption on the Company' statements of income, generated from executed franchise agreements increased 40% to $7.3 million for the nine months ended September 30, 2013 from $5.2 million for the nine months ended September 30, 2012. Domestic initial fees increased due to a 22% increase in the number of new franchise agreements executed and an increase in amount of deferred revenue recognized in 2013 related to franchise agreements containing developer incentives that were executed in prior years. Revenues associated with agreements including incentives are deferred and recognized when the incentive criteria are met or the agreement is terminated, whichever comes first.

New domestic franchise agreements executed in the nine months ended September 30, 2013 totaled 315 representing 25,369 rooms compared to 259 agreements representing 20,541 rooms executed during the same period of the prior year. During the nine months ended September 30, 2013, 44 of the executed agreements were for new construction hotel franchises, representing 3,068 rooms, compared to 46 contracts, representing 3,495 rooms for the same period a year ago. Conversion hotel franchise executed contracts totaled 271 representing 22,301 rooms for the nine months ended September 30, 2013 compared to 213 agreements representing 17,046 rooms for the same period a year ago.

A summary of executed domestic franchise agreements by brand for the nine months ended September 30, 2013 and 2012 is as follows:

	For the Nine Months Ended September 30, 2013			For the Nine Months Ended September 30, 2012			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
Comfort Inn	12	35	47	10	17	27	20	%	106	%	74	%
Comfort Suites	7	6	13	11	4	15	(36	)%	50	%	(13	)%
Sleep	9	1	10	17	1	18	(47	)%	—	%	(44	)%
Quality	1	76	77	—	88	88	NM		(14	)%	(13	)%
Clarion	1	12	13	—	14	14	NM		(14	)%	(7	)%
Econo Lodge	—	61	61	—	33	33	NM		85	%	85	%
Rodeway	1	39	40	—	46	46	NM		(15	)%	(13	)%
MainStay	5	—	5	2	1	3	150	%	(100	)%	67	%
Suburban	1	1	2	1	1	2	—	%	—	%	—	%
Ascend Hotel Collection	5	40	45	1	8	9	400	%	400	%	400	%
Cambria Suites	2	—	2	4	—	4	(50	)%	NM		(50	)%
Total Domestic System	44	271	315	46	213	259	(4	)%	27	%	22	%

Relicensing fees include fees charged to the new owners of a franchised property whenever an ownership change occurs and the property remains in the franchise system as well as fees required to renew expiring franchise contracts. Domestic relicensing and renewal contracts increased 29% from 158 during the nine months ended September 30, 2012 to 204 for the same period of 2013. As a result of the increase in contracts and an increase in average fees, domestic relicensing revenues

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increased $1.4 million, or 42% from $3.4 million for the nine months ended September 30, 2012 to $4.8 million for the nine months ended September 30, 2013.

Procurement Services: Revenues increased $2.2 million or 16% from $14.0 million for the nine months ended September 30, 2012 to $16.2 million for the nine months ended September 30, 2013. The increase in procurement services revenue primarily reflects the implementation of new brand programs as well as an increased volume of business transacted with qualified vendors and strategic alliance partners.

Selling, General and Administrative Expenses: The cost to operate the franchising business is reflected in SG&A on the consolidated statements of income. SG&A expenses were $84.1 million for the nine months ended September 30, 2013, a $12.0 million or 17% increase from the nine months ended September 30, 2012. SG&A for the nine months ended September 30, 2013 increased from the prior year primarily due to a $6.5 million increase in alternative growth spending primarily related to the launch of the Company's new SkyTouch Technology division, a $1.5 million increase in occupancy costs related to the relocation of the Company's corporate headquarters and a $0.6 million increase in bad debt and foreign currency exchange losses. Variable expenses increased $1.4 million resulting from increased franchise sales compensation due to a 40% increase in domestic initial fee revenue recognition and an increase in procurement services revenue. In addition, compensation expense recognized on deferred compensation arrangements increased $0.7 million. The increase in compensation expense reflects the increase in the fair value of investments held in the Company's Non-Qualified and EDCP retirement and savings plans. The increase in deferred compensation expenses are partially offset by investment gains recorded in other gains and losses. These increases in SG&A were partially offset by a $1.2 million reduction in litigation settlements compared to the prior year. Excluding these items, SG&A for the nine months ended September 30, 2013 increased by approximately 4% over the same period of the prior year.

Depreciation and Amortization: Expenses increased $1.1 million from $6.0 million for the nine months ended September 30, 2012 to $7.1 million for the nine months ended September 30, 2013. The increase in depreciation and amortization expenses primarily reflects the additional capital expenditures incurred in conjunction with the Company's relocation of its corporate headquarters in April 2013 as well as an increase in amortization related to the issuance of forgivable notes receivable in conjunction with brand and development programs.

Marketing and Reservations: The Company's franchise agreements require the payment of franchise fees, which include marketing and reservation system fees. The fees, which are primarily based on a percentage of the franchisees' gross room revenues, are used exclusively by the Company for expenses associated with providing franchise services such as central reservation systems, national marketing and media advertising. The Company is contractually obligated to expend the marketing and reservation system fees it collects from franchisees in accordance with the franchise agreements; as such, no net income or loss to the Company is generated.

Total marketing and reservations revenues were $302.4 million and $284.6 million for the nine months ended September 30, 2013 and 2012, respectively. The increase in revenues was primarily due to improved system fees resulting from system growth and RevPAR increases as well as increased revenues from the Choice Privileges loyalty program resulting from the growth in program memberships. Depreciation and amortization attributable to marketing and reservation activities was $12.0 million for the nine months ended September 30, 2013, compared to $10.7 million for the nine months ended September 30, 2012. Interest expense attributable to marketing and reservation activities was $2.8 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively.

As of September 30, 2013 and December 31, 2012, the Company's balance sheets include deferred costs of $32.6 million and $42.2 million, respectively, from cumulative marketing and reservation expenses incurred in excess of cumulative marketing and reservations system fee revenues earned. During the nine months ended September 30, 2013, the Company collected $9.6 million of marketing and reservation revenues in excess of expenses incurred as compared to $7.8 million in the same period of 2012. The fees collected in excess of expenses incurred were utilized to reimburse the Company for a portion of the outstanding cumulative advances for marketing and reservation activities. This resulted in expense recognition of an equivalent amount of previously unrecognized costs. The increase in the excess fees collected in 2013 compared to 2012 primarily reflects increased revenues related to the growth of the number of units and RevPAR in the franchise system.

The decline in cumulative advances for marketing and reservation activities from December 31, 2012 to September 30, 2013 primarily reflects the timing of various marketing programs and the seasonality of the Company's revenues as the Company's third quarter revenues are typically higher than other quarters due to the U.S. summer travel season. In addition, the decline in cumulative advances reflects the Company's strategy to recover prior year advances for marketing and reservation activities in future periods. These costs incurred in excess of fees collected have been deferred and recorded as an asset in the financial statements as the Company has the contractual authority to recover the deficits incurred related to marketing and reservation activities from the franchisees in the system at any given point in time. The Company's current franchisees are legally

55

obligated to pay any assessment the Company imposes on its franchisees to obtain reimbursement of such deficit regardless of whether those constituents continue to generate gross room revenue and whether or not they joined the system following the deficit's occurrence. The Company expects to recover the deferred costs over a period of time by expending fewer amounts on marketing and reservation activities than marketing and reservation system fees collected, depending on the marketing and reservation needs of the system. Conversely, cumulative marketing and reservation system fees not expended are recorded as a liability in the financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements.

Interest Expense: Interest expense increased $15.5 million for the nine months ended September 30, 2013 to $32.3 million due to the issuance of the Company's $400 million senior notes due in 2022 with an effective rate of 5.94% on June 27, 2012 as well as the $350 million senior secured credit facility entered into by the Company on July 25, 2012. The Company utilized the proceeds from these debt issuances to pay a special cash dividend on August 23, 2012 totaling approximately $600.7 million to common stockholders.

Loss on Extinguishment of Debt: During the nine months ended September 30, 2012, the Company recognized a $0.5 million loss on extinguishment of debt in conjunction with the refinancing of the Company's prior $300 million revolving credit facility which was scheduled to mature in February 2016.

Other gains and losses: Other gains and losses decreased $0.9 million from a gain of $2.1 million for the nine months ended September 30, 2012 to a gain of $1.3 million in the same period of the current year primarily due to fluctuations in the fair value of investments held in the Company's non-qualified employee benefit plans.

As discussed in the accompanying critical accounting policies, the Company sponsors two non-qualified retirement and savings plans: the Non-Qualified Plan and the EDCP plan. The fair value of the Non-Qualified Plan investments increased $1.1 million during the nine months ended September 30, 2013 compared to a $1.0 million increase in fair value during the same period of 2012. The fair value of the Company's investments held in the EDCP plan appreciated by $0.3 million during the nine months ended September 30, 2013 compared to an increase in fair value of $1.2 million during the same period of the prior year.

The Company accounts for the EDCP Plan and Non-Qualified Plan in accordance with accounting for deferred compensation arrangements when investments are held in a rabbi trust and invested. Therefore, the Company also recognizes compensation expense or benefits in SG&A related to changes in the fair value of investments held in the Non-Qualified Plan and a portion of the investments held in the EDCP Plan, excluding investments in the Company's stock. As a result, during the nine months ended September 30, 2013 and 2012, the Company's SG&A expense was increased by $1.7 million and $1.0 million, respectively, due to the change in fair value of these investments.

Income Taxes: The effective income tax rates were 28.1% for both the nine months ended September 30, 2013 and 2012, respectively. The effective income tax rate for the nine months ended September 30, 2013 and 2012 were lower than the U.S federal income tax rate of 35% due to the recurring impact of foreign operations, partially offset by state taxes, and reflect adjustments to our federal accruals. Additionally, the effective income tax rate for the nine months ended September 30, 2013 was further reduced by the release of a valuation allowance on local country tax refunds received by our foreign subsidiary, settlements of unrecognized tax positions and by legislation retroactively extending the U.S. controlled foreign corporation look-through rule. The effective income tax rate for the nine months ended September 30, 2012 also reflects a nonrecurring favorable adjustment of $4.5 million related to foreign operations.

Diluted EPS: Diluted EPS were $1.45 for nine months ended September 30, 2013 compared to $1.65 for the nine months ended September 30, 2012, respectively. The decrease in diluted EPS primarily reflects the items discussed above.

Liquidity and Capital Resources

Operating Activities

During the nine months ended September 30, 2013, net cash provided by operating activities totaled $105.0 million compared to $118.4 million during the nine months ended September 30, 2012, a decline of $13.4 million. The decrease in cash flows from operating activities primarily reflects a $2.9 million increase in net disbursements to franchisees for property improvements and other purposes utilizing forgivable notes receivable and a $26.6 million increase in cash paid for interest due to the issuance of additional debt in June and July of 2012 to pay a special cash dividend in August 2012 totaling approximately $600.7 million. These declines for net cash provided from operating activities were partially offset by a $12.7 million decline in cash paid for income taxes due to timing and a decline in income before income taxes.

In conjunction with brand and development programs, the Company provides financing to franchisees for property improvements and other purposes in the form of forgivable notes receivable. If the franchisee remains in the system in good

56

standing over the term of the promissory note, the Company forgives the outstanding principal balance and related interest. Since these forgivable notes are predominantly forgiven ratably over the term of the promissory note rather than repaid, the Company classifies the related issuance and collections of these notes as operating activities. During the nine months ended September 30, 2013 and 2012, the Company's net advances for these purposes totaled $5.7 million and $2.9 million, respectively. The timing and amount of these cash flows is dependent on various factors including the implementation of various development and brand incentive programs, the level of franchise sales as well as the timing of hotel openings. At September 30, 2013, the Company had commitments to extend an additional $11.1 million for these purposes provided certain conditions are met by its franchisees, of which $6.4 million is expected to be advanced in the next twelve months.

Net cash provided by marketing and reservation activities totaled $23.8 million during the nine months ended September 30, 2013 compared to $20.8 million during the nine months ended September 30, 2012. The increase in cash provided by marketing and reservation activities primarily reflects improved system fees resulting from system growth and RevPAR increases. Based on the current economic conditions, the Company expects marketing and reservation activities to provide cash flows from operations ranging between $26 million and $30 million in 2013.

Investing Activities

Cash utilized for investing activities totaled $28.4 million and $16.7 million for the nine months ended September 30, 2013 and 2012, respectively. The increase in cash utilized for investing activities for the nine months ended September 30, 2013 primarily reflect an increase in capital expenditures. The increase in capital expenditures was partially offset by a decline in the proceeds from the sale of investments held in trust related to the Company's deferred compensation plans, investments in joint ventures accounted for under the equity method of accounting and issuance of mezzanine and other notes receivable for hotel development efforts during the nine months ended September 30, 2013. Additional information regarding these items is as follows:

During the nine months ended September 30, 2013 and 2012, the Company sold investments totaling $4.1 million and $10.9 million, respectively, and utilized the proceeds to distribute participant deferred compensation balances from the Company' s non-qualified retirement plans. The decline in proceeds from the sale of investments primarily reflects the timing of employee terminations and their deferred compensation distribution elections.

During the nine months ended September 30, 2013 and 2012, capital expenditures totaled $26.4 million and $12.5 million, respectively. The increase in capital expenditures for 2013 primarily reflect tenant improvements related to the relocation of the Company's corporate headquarters and computer equipment purchases made in conjunction with the relocation of the Company's technology data center.

The Company occasionally provides financing to franchisees for hotel development efforts and other purposes in the form of mezzanine and other notes receivable. These loans bear interest and are expected to be repaid in accordance with the terms of the loan agreements. During the nine months ended September 30, 2013, the Company did not advance any monies related to these activities and advanced $4.2 million for these purposes during the nine months ended September 30, 2012.

During the nine months ended September 30, 2013 and 2012, the Company invested $3.8 million and $9.5 million, respectively, in joint ventures accounted for under the equity method of accounting. The Company's investment in these joint ventures primarily relate to ventures that either support the Company's efforts to increase business delivery to its franchisees or promote growth of our emerging brands.

Our board of directors previously authorized us to enter into a program which permits us to offer financing, investment and guaranty support to qualified franchisees as well as to acquire and resell real estate to incent franchise development for certain brands in strategic markets. Recent market conditions have resulted in an increase in opportunities to incentivize development under this program. At September 30, 2013 and December 31, 2012, the Company had approximately $71.1 million and $68.3 million, respectively invested under this program. Over the next several years, we expect to continue to deploy capital opportunistically pursuant to this program to promote growth of our emerging brands. Our current expectation is that our annual investment in this program will range from $20 million to $40 million per year and we generally expect to recycle these investments within a five year period. However, the amount and timing of the investment in this program will be dependent on market and other conditions.

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Financing Activities

Financing cash flows relate primarily to the Company's borrowings, treasury stock purchases and dividends.

Debt

Senior Notes due 2022

On June 27, 2012, the Company issued unsecured senior notes with a principal amount of $400 million ("the 2012 Senior Notes") at par, bearing a coupon of 5.75% with an effective rate of 5.94%. The 2012 Senior Notes will mature on July 1, 2022, with interest to be paid semi-annually on January 1^st and July 1^st. The Company utilized the net proceeds of this offering, after deducting underwriting discounts and commissions and other offering expenses, together with borrowings under the Company's senior credit facility, to pay a special cash dividend totaling approximately $600.7 million paid to stockholders on August 23, 2012. The Company's 2012 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations by eight wholly-owned domestic subsidiaries.

The Company may redeem the 2012 Senior Notes at its option at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) the sum of the present values of the remaining scheduled principal and interest payments from the redemption date to the date of maturity discounted to the redemption date on a semi-annual basis at the Treasury rate, plus 50 basis points.

Senior Notes due 2020

On August 25, 2010, the Company completed a $250 million senior unsecured note offering (“the 2010 Senior Notes”) at a discount of $0.6 million, bearing a coupon of 5.7% with an effective rate of 6.19%. The 2010 Senior Notes will mature on August 28, 2020, with interest on the 2010 Senior Notes to be paid semi-annually on February 28^th and August 28^th. The Company used the net proceeds from the offering, after deducting underwriting discounts and other offering expenses, to repay outstanding borrowings and other general corporate purposes. The Company's 2010 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations, by eight wholly-owned domestic subsidiaries.

The Company may redeem the 2010 Senior Notes at its option at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) the sum of the present values of the remaining scheduled principal and interest payments from the redemption date to the date of maturity discounted to the redemption date on a semi-annual basis at the Treasury rate, plus 45 basis points.

Senior Credit Facility

On July 25, 2012, the Company entered into a $350 million senior secured credit facility, comprised of a $200 million revolving credit tranche ("the New Revolver") and a $150 million term loan tranche (the "Term Loan") with Deutsche Bank AG New York Branch, as administrative agent, Wells Fargo Bank, National Association, as administrative agent, and a syndication of lenders (the "New Credit Facility"). The New Credit Facility has a final maturity date of July 25, 2016, subject to an optional one-year extension, provided certain conditions are met. Up to $25 million of the borrowings under the New Revolver may be used for letters of credit, up to $10 million of borrowings under the New Revolver may be used for swing-line loans and up to $35 million of borrowings under the New Revolver may be used for alternative currency loans. The Term Loan requires quarterly amortization payments (a) during the first two years, in equal installments aggregating 5% of the original principal amount of the Term Loan per year, (b) during the second two years, in equal installments aggregating 7.5% of the original principal amount of the Term Loan per year, and (c) during the one-year extension period (if exercised), equal installments aggregating 10% of the original principal amount of the Term Loan.

The Company utilized the proceeds from the Term Loan and borrowings from the New Revolver, together with the net proceeds from the Company's recently issued senior notes offering, to pay a special cash dividend of approximately $600.7 million in the aggregate to the Company's stockholders on August 23, 2012.

The New Credit Facility is unconditionally guaranteed, jointly and severally, by certain of the Company's domestic subsidiaries. The subsidiary guarantors currently include the eight wholly-owned subsidiaries that guarantee the obligations under the Company's Indenture governing the terms of its 2010 and 2012 Senior Notes.

The New Credit Facility is secured by first priority pledges of (i) 100% of the ownership interests in certain domestic subsidiaries owned by the Company and the guarantors, (ii) 65% of the ownership interests in (a) Choice Netherlands Antilles N.V. (“Choice NV”), the top-tier foreign holding company of the Company's foreign subsidiaries, and (b) the domestic

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subsidiary that owns Choice NV and (iii) all presently existing and future domestic franchise agreements (the “Franchise Agreements”) between the Company and individual franchisees, but only to the extent that the Franchise Agreements may be pledged without violating any law of the relevant jurisdiction or conflicting with any existing contractual obligation of the Company or the applicable franchisee. At the time that the maximum total leverage ratio is required to be no greater than 4.00 to 1.00 (beginning of year 4 of the New Credit Facility), the security interest in the Franchise Agreements will be released.

The Company may at any time prior to the final maturity date increase the amount of the New Credit Facility by up to an additional $100 million to the extent that any one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met. Such additional amounts may take the form of an increased revolver or term loan.

The Company may elect to have borrowings under the New Credit Facility bear interest at a rate equal to (i) LIBOR, plus a margin ranging from 200 to 425 basis points based on the Company's total leverage ratio or (ii) a base rate plus a margin ranging from 100 to 325 basis points based on the Company's total leverage ratio.

The New Credit Facility requires the Company to pay a fee on the undrawn portion of the New Revolver, calculated based on the average daily unused amount of the New Revolver multiplied by 0.30% per annum.

The Company may reduce the New Revolver commitment and/or prepay the Term Loan in whole or in part at any time without penalty, subject to reimbursement of customary breakage costs, if any. Any Term Loan prepayments made by the Company shall be applied to reduce the scheduled amortization payments in direct order of maturity.

Additionally, the New Credit Facility requires that the Company and its restricted subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making investments, paying dividends or repurchasing stock, and effecting mergers and/or asset sales. With respect to dividends, the Company may not make any payments if there is an existing event of default or if the payment would create an event of default. In addition, if the Company's total leverage ratio exceeds 4.5 to 1.0, the Company is generally restricted from paying aggregate dividends in excess of $50 million during any calendar year.

The New Credit Facility also imposes financial maintenance covenants requiring the Company to maintain:

• a total leverage ratio of not more than 5.75 to 1.00 in year 1, 5.00 to 1.00 in year 2, 4.50 to 1.00 in year 3 and 4.00 to 1.00 thereafter,

• a maximum secured leverage ratio of not more than 2.50 to 1.00 in year 1, 2.25 to 1.00 in year 2, 2.00 to 1.00 in year 3 and 1.75 to 1.00 thereafter, and

• a minimum fixed charge coverage ratio of not less than 2.00 to 1.00 in years 1 and 2, 2.25 to 1.00 in year 3 and 2.50 to 1.00 thereafter.

At September 30, 2013, the Company maintained a total leverage ratio of approximately 3.46x, a maximum secured leverage ratio of 0.72x and a minimum fixed charge coverage ratio of approximately 5.52x. At September 30, 2013, the Company was in compliance with all covenants under the New Credit Facility.

The New Credit Facility includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the New Credit Facility to be immediately due and payable.

At September 30, 2013, the Company had $140.6 million and $29.5 million outstanding under the Term Loan and New Revolver, respectively. At December 31, 2012, the Company had $146.3 million and $57.0 million outstanding under the Term Loan and New Revolver, respectively.

In connection with the entry into the New Credit Facility, the Company's $300 million senior unsecured revolving credit agreement, dated as of February 24, 2011, among the Company, Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders (the “Old Credit Facility”), was terminated and replaced by the New Credit Facility. The Old Credit Facility permitted the Company to borrow, repay and re-borrow revolving loans until the scheduled maturity date of February 24, 2016. In addition, the Old Credit Facility bore interest, at the Company's election, at either (i) a base rate plus a margin ranging from 5 to 80 basis points based on the Company's credit rating or (ii) LIBOR plus a margin ranging from 105 to 180 basis points based on the Company's credit rating. The Old Credit Facility also required the Company to pay a quarterly facility fee on the full amount of the commitments under the Old Credit Facility (regardless of usage) ranging from 20 to 45 basis points based upon the credit rating of the Company.

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Economic Development Loans

The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to offset a portion of the corporate headquarter relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. At September 30, 2013, the Company had been advanced approximately $3.4 million pursuant to these agreements and expects to receive the remaining $1 million over the next several years, subject to annual appropriations by the governmental entities. These advances bear interest at a rate of 3% per annum.

Repayment of the advances is contingent upon the Company achieving certain performance conditions. Performance conditions are measured annually on December 31^st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual performance condition, the Company may be required to repay a portion or all of the advances including accrued interest by April 30^th following the measurement date. Any outstanding advances at the expiration of the Company's ten year corporate headquarter lease in 2023 will be forgiven in full. The advances will be included in long-term debt in Company's consolidated balance sheets until the Company determines that the future performance conditions will be met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues interest on the portion of the advances that it expects to repay. The Company was in compliance with all current performance conditions as of September 30, 2013.

Dividends

The Company currently pays a quarterly dividend on its common stock of $0.185 per share, however the declaration of future dividends are subject to the discretion of the board of directors. In the fourth quarter of 2012, the Company's board of directors elected to pay prior to December 31, 2012 the regular quarterly dividend initially scheduled to be paid in the first quarter of 2013. As a result, the Company did not pay a regular quarterly dividend during the first quarter of 2013. During the nine months ended September 30, 2013, the Company paid cash dividends totaling $22.0 million. We expect to continue to pay dividends in the future, subject to the declaration of our board of directors as well as to future business performance, economic conditions, changes in income tax regulations and other factors. Based on the present dividend rate and outstanding share count, we expect that aggregate annual regular dividends for 2013, excluding the first quarter payment which was paid to stockholders in December 2012, would be approximately $32.8 million.

Share Repurchases

Historically, we have returned value to our stockholders in two primary ways: share repurchases and dividends. In 1998, we instituted a share repurchase program which has generated substantial value for our shareholders. Since the program's inception through September 30, 2013, we have repurchased 45.3 million shares (including 33.0 million prior to the two-for-one stock split effected in October 2005) of common stock at a total cost of $1.1 billion. Considering the effect of the two-for-one stock split, the Company has repurchased 78.3 million shares at an average price of $13.89 per share. No shares were repurchased under the share repurchase program during the nine months ended September 30, 2013. As of September 30, 2013, the Company had approximately 1.4 million shares remaining under the board of directors share repurchase authorization and we currently believe that our cash flows from operations will support our ability to complete the current authorization. Upon completion of the current authorization, our board of directors will evaluate the advisability of additional share repurchases.

Other items

Approximately $149.8 million of the Company's cash and cash equivalents at September 30, 2013 pertains to undistributed earnings of the Company's consolidated foreign subsidiaries. Since the Company's intent is for such earnings to be reinvested by the foreign subsidiaries, the Company has not provided additional U.S. income taxes on these amounts. While the Company has no intention to utilize these cash and cash equivalents in its domestic operations, any change to this policy would result in the Company incurring additional U.S. income taxes on any amounts utilized domestically.

During the nine months ended September 30, 2013, the Company recorded one-time employee termination charges totaling $1.5 million in SG&A and marketing and reservation expenses. These charges related to salary and benefits continuation payments for employees separating from service with the Company. At September 30, 2013, the Company had approximately $0.5 million of these salary and benefits continuation payments remaining to be paid. During the nine months ended September 30, 2013, the Company paid an additional $3.0 million of termination benefits related to employee termination charges recorded in prior periods and had approximately $0.1 million of these benefits remaining to be paid. At September 30,

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2013, total termination benefits of approximately $0.6 million remained to be paid and the Company expects $0.6 million of these benefits to be paid in the next twelve months. In addition, the Company expects to satisfy approximately $2.4 million of deferred compensation and retirement plan obligations during the next twelve months.

The Company believes that cash flows from operations and available financing capacity are adequate to meet the expected future operating, investing and financing needs of the business.

Off Balance Sheet Arrangements

On October 9, 2012, the Company entered into a limited payment guaranty with regards to a developer's $18.0 million bank loan for the construction of a hotel franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to guarantee 25% of the outstanding principal balance and accrued and unpaid interest, as well as any unpaid expenses incurred by the lender. The limited guaranty shall remain in effect until the maximum amount guaranteed by the Company is paid in full. In addition to the limited guaranty, the Company entered into an agreement in which the Company guarantees the completion of the construction of the hotel and an environmental indemnity agreement which indemnifies the lending institution from and against any damages relating to or arising out of possible environmental contamination issues with regards to the property.

Critical Accounting Policies

Our accounting policies comply with principles generally accepted in the United States. We have described below those policies that we believe are critical or require the use of complex judgment or significant estimates in their application. Additional discussion of these policies is included in Note 1 to our consolidated financial statements as of and for the year ended December 31, 2012 included in our Annual Report on Form 10-K.

Revenue Recognition.

We recognize continuing franchise fees, including royalty, marketing and reservations system fees, when earned and receivable from our franchisees. Franchise fees are typically based on a percentage of gross room revenues of each franchisee. Our estimate of the allowance for uncollectible royalty fees is charged to SG&A expense and our estimate of the allowance for uncollectible marketing and reservation fees is charged to marketing and reservation expenses.

Initial franchise and relicensing fees are recognized, in most instances, in the period the related franchise agreement is executed because the initial franchise and relicensing fees are non-refundable and the Company is not required to provide initial services to the franchisee prior to hotel opening. However, we defer the initial franchise and relicensing fee revenue related to franchise agreements which include incentives until the incentive criteria are met or the agreement is terminated, whichever occurs first.

The Company may also enter into master development agreements (“MDAs”) with developers that grant limited exclusive development rights and preferential franchise agreement terms for one-time, non-refundable fees. When these fees are not contingent upon the number of agreements executed under the MDA, the Company recognizes the up-front fees over the MDA's contractual life. Fees that are contingent upon the execution of franchise agreements under the MDA are recognized upon execution of the franchise agreement.

The Company recognizes procurement services revenues from qualified vendors when the services are performed or the product delivered, evidence of an arrangement exists, the fee is fixed and determinable and collectibility is probable. We defer the recognition of procurement services revenues related to certain upfront fees and recognize them over a period corresponding to the Company's estimate of the life of the arrangement.

Marketing and Reservation Revenues and Expenses.

The Company's franchise agreements require the payment of certain marketing and reservation system fees, which are used exclusively by the Company for expenses associated with providing franchise services such as national marketing, media advertising, central reservation systems and technology services. The Company is contractually obligated to expend the marketing and reservation system fees it collects from franchisees in accordance with the franchise agreements; as such, no net income or loss to the Company is generated. In accordance with our contracts, we include in marketing and reservation expenses an allocation of costs for certain activities, such as human resources, facilities, legal and accounting, required to carry out marketing and reservation activities.

The Company records marketing and reservation system revenues and expenses on a gross basis since the Company is the primary obligor in the arrangement, maintains the credit risk, establishes the price and nature of the marketing or reservation

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services and retains discretion in supplier selection. In addition, net advances to and recoveries from the franchise system for marketing and reservation activities are presented as cash flows from operating activities.

Marketing and reservation system fees not expended in the current year are recorded as a liability in the Company's balance sheet and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Shortfall amounts are recorded as an asset in the Company's balance sheet, with a corresponding reduction in costs, and are similarly recovered in subsequent years. Under the terms of the franchise agreements, the Company may advance capital and incur costs as necessary for marketing and reservation activities and recover such advances through future fees. Our current assessment is that the credit risk associated with the cumulative cost advances for marketing and reservation system activities is mitigated due to our contractual right to recover these amounts from a large geographically dispersed group of franchisees. However, our ability to recover these advances may be adversely impacted by certain factors, including, among others, declines in the ability of our franchisees to generate revenues at properties they franchise from us, lower than expected franchise system growth of certain brands and/or lower than expected international franchise system growth. An extended period of occupancy or room rate declines or a decline in the number of hotel rooms in our franchise system could result in the generation of insufficient funds to recover marketing and reservation advances as well as meet the ongoing marketing and reservation needs of the overall system.

The Company evaluates the recoverability of marketing and reservation costs incurred in excess of cumulative marketing and reservation system revenues earned on a periodic basis. The Company will record a reserve when, based on current information and events, it is probable that it will be unable to recover the cumulative amounts advanced for marketing and reservation activities according to the contractual terms of the franchise agreements. These advances are considered to be unrecoverable if the expected net, undiscounted cash flows from marketing and reservation activities are less than the carrying amount of the asset.

Choice Privileges is our frequent guest incentive marketing program. Choice Privileges enables members to earn points based on their spending levels with our franchisees and, to a lesser degree, through participation in affiliated partners' programs, such as those offered by credit card companies. The points, which we accumulate and track on the members' behalf, may be redeemed for free accommodations or other benefits.

We provide Choice Privileges as a marketing program to franchised hotels and collect a percentage of program members' room revenue from franchises to operate the program. Revenues are deferred in an amount equal to the estimated fair value of the future redemption obligation. The Company develops an estimate of the eventual redemption rates and point values using various actuarial methods. These judgmental factors determine the required liability attributable to outstanding points. Upon redemption of points, the Company recognizes the previously deferred revenue as well as the corresponding expense relating to the cost of the awards redeemed. Revenues in excess of the estimated future redemption obligation are recognized when earned to reimburse the Company for costs incurred to operate the program, including administrative costs, marketing, promotion and performing member services.

Valuation of Intangibles and Long-Lived Assets

The Company evaluates the potential impairment of property and equipment and other long-lived assets, including franchise rights and other definite-lived intangibles, on an annual basis or whenever an event or other circumstances indicates that we may not be able to recover the carrying value of the asset. Recoverability is measured based on net, undiscounted expected cash flows. Assets are considered to be impaired if the net, undiscounted expected cash flows are less than the carrying amount of the assets. Impairment charges are recorded based upon the difference between the carrying value and the fair value of the asset. Significant management judgment is involved in developing these projections, and they include inherent uncertainties. If different projections are used in the current period, the balances for non-current assets could be materially impacted. Furthermore, if management uses different projections or if different conditions occur in future periods, future-operating results could be materially impacted.

The Company evaluates the impairment of goodwill and trademarks with indefinite lives on an annual basis, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating these assets for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, then no further testing is required. If the conclusion is that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a two-step impairment test is performed. The fair value of the Company's net assets is used to determine if goodwill may be impaired. Indefinite life trademarks are considered to be impaired if the net, undiscounted expected cash flows associated with the trademark are less than their carrying amount.

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Loan Loss Reserves

The Company segregates its notes receivable for the purposes of evaluating allowances for credit losses between two categories: Mezzanine and Other Notes Receivable and Forgivable Notes Receivable. The Company utilizes the level of security it has in the various notes receivable as its primary credit quality indicator (i.e. senior, subordinated or unsecured) when determining the appropriate allowances for uncollectible loans within these categories.

Mezzanine and Other Notes Receivables

The Company has provided financing to franchisees in support of the development of properties in strategic markets. The Company expects the owners to repay the loans in accordance with the loan agreements, or earlier as the hotels mature and capital markets permit. The Company estimates the collectibility and records an allowance for loss on its mezzanine and other notes receivable when recording the receivables in the Company's financial statements. These estimates are updated quarterly based on available information.

The Company considers a loan to be impaired when, based on current information and events, it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means that both the contractual interest payments and the contractual principal payments of a loan will be collected as scheduled in the loan agreement. The Company measures loan impairment based on the present value of expected future cash flows discounted at the loan's original effective interest rate or the estimated fair value of the collateral. For impaired loans, the Company establishes a specific impairment reserve for the difference between the recorded investment in the loan and the present value of the expected future cash flows or the estimated fair value of the collateral. The Company applies its loan impairment policy individually to all mezzanine and other notes receivable in the portfolio and does not aggregate loans for the purpose of applying such policy. For impaired loans, the Company recognizes interest income on a cash basis. If it is likely that a loan will not be collected based on financial or other business indicators it is the Company's policy to charge off these loans to SG&A expenses in the accompanying consolidated statements of income in the quarter when it is deemed uncollectible. Recoveries of impaired loans are recorded as a reduction of SG&A expenses in the quarter received.

The Company assesses the collectibility of its senior notes receivable by comparing the market value of the underlying assets to the carrying value of the outstanding notes. In addition, the Company evaluates the property's operating performance, the borrower's compliance with the terms of the loan and franchise agreements, and all related personal guarantees that have been provided by the borrower. For subordinated or unsecured receivables, the Company assesses the property's operating performance, the subordinated equity available to the Company, the borrower's compliance with the terms of loan and franchise agreements, and the related personal guarantees that have been provided by the borrower.

The Company considers loans to be past due and in default when payments are not made when due. Although the Company considers loans to be in default if payments are not received on the due date, the Company does not suspend the accrual of interest until those payments are more than 30 days past due. The Company applies payments received for loans on non-accrual status first to interest and then principal. The Company does not resume interest accrual until all delinquent payments are received.

Forgivable Notes Receivable

In conjunction with brand and development programs, the Company may provide financing to franchisees for property improvements and other purposes in the form of forgivable promissory notes which bear interest at market rates. Under these promissory notes, the franchisee promises to repay the principal balance together with interest upon maturity unless certain conditions are met throughout the term of the promissory note. The principal balance and related interest are forgiven ratably over the term of the promissory note if the franchisee remains in the system in good standing. If during the term of the promissory note, the franchisee exits our franchise system or is not operating their franchise in accordance with our quality or credit standards, the Company may declare a default under the promissory note and commence collection efforts with respect to the full amount of the then-current outstanding principal and interest.

In accordance with the terms of the promissory notes, the initial principal balance and related interest are ratably reduced over the term of the loan on each anniversary date until the outstanding amounts are reduced to zero as long as the franchisee remains within the franchise system and operates in accordance with our credit, quality and brand standards. As a result, the amounts recorded as an asset on the Company's consolidated balance sheet are also ratably reduced since the amounts forgiven no longer represent probable future economic benefits to the Company. The Company records the reduction of its recorded assets through amortization and marketing and reservation system expenses on its consolidated statements of income. Since these forgivable notes receivable are predominantly forgiven ratably over the term of the promissory note rather than repaid, the

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Company classifies the issuance and collection of these notes receivable as operating activities in its Consolidated Statement of Cash Flows.

The Company fully reserves all defaulted notes in addition to recording a reserve on the estimated uncollectible portion of the remaining notes. For those notes not in default, the Company calculates an allowance for losses and determines the ultimate collectibility on these forgivable notes based on the historical default rates for those unsecured notes that are not forgiven but are required to be repaid. The Company records bad debt expense in SG&A and marketing and reservation system expenses in the accompanying consolidated statements of income in the quarter when the note is deemed uncollectible.

Stock Compensation.

The Company's policy is to recognize compensation cost related to share-based payment transactions in the financial statements based on the fair value of the equity or liability instruments issued. Compensation expense related to the fair value of share-based awards is recognized over the requisite service period based on an estimate of those awards that will ultimately vest. The Company estimates the share-based compensation expense for awards that will ultimately vest upon inception of the grant and adjusts the estimate of share-based compensation for those awards with performance and/or service requirements that will not be satisfied so that compensation cost is recognized only for awards that ultimately vest.

Income Taxes.

Income taxes are recorded using the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not such assets will be unrealized. Deferred U.S. income taxes have not been recorded for temporary differences related to investments in certain foreign subsidiaries and corporate affiliates. The temporary differences consist primarily of undistributed earnings that are considered permanently reinvested in operations outside the U.S. If management’s intentions change in the future, deferred taxes may need to be provided.

With respect to uncertain income tax positions, a tax liability is recorded in full when management determines that the position does not meet the more likely than not threshold of being sustained on examination. A tax liability may also be recognized for a position that meets the more likely than not threshold, based upon management’s assessment of the position’s probable settlement value. The Company records interest and penalties on unrecognized tax benefits in the provision for income taxes.

Pension, Profit Sharing and Incentive Plans

The Company sponsors two non-qualified retirement savings and investment plans for certain employees and senior executives. Employee and Company contributions are maintained in separate irrevocable trusts. Legally, the assets of the trusts remain those of the Company; however, access to the trusts' assets is severely restricted. The trusts cannot be revoked by the Company or an acquirer, but the assets are subject to the claims of the Company's general creditors. The participants do not have the right to assign or transfer contractual rights in the trusts.

In 2002, the Company adopted the Choice Hotels International, Inc. Executive Deferred Compensation Plan (“EDCP”) which became effective January 1, 2003. Under the EDCP, certain executive officers may defer a portion of their salary into an irrevocable trust. Prior to January 1, 2010, participants could elect an investment return of either the annual yield of the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points, or a return based on a selection of available diversified investment options. Effective January 1, 2010, the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points is no longer an investment option for salary deferrals made on compensation earned after December 31, 2009. The Company recorded current and long-term deferred compensation liabilities of $10.9 million and $11.7 million, as of September 30, 2013 and December 31, 2012, respectively, related to these deferrals and credited investment returns. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. Compensation expense recorded in SG&A for the nine months ended September 30, 2013 and 2012 was $0.7 million for both periods.

The Company has invested the employee salary deferrals in diversified long-term investments which are intended to provide investment returns that partially offset the earnings credited to the participants. The diversified investments held in the trusts totaled $3.8 million and $6.0 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. At September 30, 2013, the Company expects $0.4 million of the assets held in the trusts to be distributed to participants during the next twelve months. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains during the nine months ended September 30,

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2013 and 2012 of approximately $0.3 million and $1.2 million, respectively. In addition, the EDCP Plan held shares of the Company's common stock with a market value of $0.2 million and $0.1 million at September 30, 2013 and December 31, 2012, respectively, which were recorded as a component of shareholders' deficit.

In 1997, the Company adopted the Choice Hotels International, Inc. Non-Qualified Retirement Savings and Investment Plan (“Non-Qualified Plan”). The Non-Qualified Plan allows certain employees who do not participate in the EDCP to defer a portion of their salary and invest these amounts in a selection of available diversified investment options. As of September 30, 2013 and December 31, 2012, the Company had recorded a deferred compensation liability of $12.8 million and $11.2 million, respectively, related to these deferrals. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. The net increase in compensation expense recorded in SG&A for the nine months ended September 30, 2013 and 2012 was $1.3 million and $0.8 million, respectively.

The diversified investments held in the trusts were $11.6 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains during the nine months ended September 30, 2013 and 2012 of approximately $1.1 million and $1.0 million, respectively. In addition, the Non-Qualified Plan held shares of the Company's common stock with a market value of $1.2 million and $1.0 million at September 30, 2013 and December 31, 2012, respectively, which are recorded as a component of shareholders' deficit.

New Accounting Standards

See Footnote No. 1 of the Notes to our Financial Statements for information related to our adoption of new accounting standards in 2013 and for information on our anticipated adoption of recently issued accounting standards.

FORWARD-LOOKING STATEMENTS

Certain matters discussed in this quarterly report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Generally, our use of words such as "expect," "estimate," "believe," "anticipate,", "should", "will," "forecast," "plan”," project," "assume" or similar words of futurity identify such forward-looking statements.  These 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 of the Company's revenue, earnings and other financial and operational measures, Company debt levels, ability to repay outstanding indebtedness, payment of dividends, and future operations, among other matters.   We caution you not to place undue reliance on any such forward-looking statements.  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; the level of acceptance of alternative growth strategies we may implement; the outcome of litigation; and our ability to effectively manage 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, 2012, filed with the Securities and Exchange Commission on February 28, 2013.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates and the impact of fluctuations in foreign currencies on the Company's foreign investments and operations. The Company manages its exposure to these market risks through the monitoring of its available financing alternatives including in certain circumstances the use of derivative financial instruments. We are also subject to risk from changes in debt and equity prices from our non-qualified retirement savings plan investments in debt securities and common stock, which have a carrying value of $15.3 million and $16.2 million at September 30, 2013 and December 31, 2012, respectively which we account for as trading securities. The Company will continue to monitor the exposure in these areas and make the appropriate adjustments as market conditions dictate.

At September 30, 2013, the Company had $170.1 million of variable interest rate debt instruments outstanding at an effective rate of 2.5%. A hypothetical change of 10% in the Company’s effective interest rate from September 30, 2013 levels would increase or decrease annual interest expense by $0.4 million. The Company expects to refinance its fixed and variable long-term debt obligations prior to their scheduled maturities.

The Company does not presently have any derivative financial instruments.

ITEM 4. CONTROLS AND PROCEDURES

The Company has a disclosure review committee whose membership includes the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), among others. The CEO and CFO consider the disclosure review committee's procedures in performing their evaluations of the Company's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) and in assessing the accuracy and completeness of the Company's disclosures.

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An evaluation was performed under the supervision and with the participation of the Company's CEO and CFO of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2013.

There has been no change in the Company's internal controls over financial reporting that occurred during the quarter ended September 30, 2013, that materially affected, or is reasonably likely to materially affect the Company's internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Except as noted below, the Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

In May 2013, Choice was added to an ongoing multi-district class action pending in federal court in Dallas, Texas.  The lawsuit alleges that several online travel companies and hotel companies have engaged in anti-competitive practices.  The complaint seeks an unspecified amount of damages and equitable relief.  Choice disputes the allegations and is in the process of vigorously defending itself against these claims.  We currently do not believe this litigation will have a material effect on our consolidated financial position, results of operation or liquidity.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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Issuer Purchases of Equity Securities

The following table sets forth purchases and redemptions of Choice Hotels International, Inc. common stock made by the Company during the nine months ended September 30, 2013:

Month Ending	Total Number of Shares Purchased or Redeemed	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1),(2)	Maximum Number of Shares that may yet be Purchased Under  the Plans or Programs, End of Period
January 31, 2013	—	$	—	—	1,418,991
February 28, 2013	91,788	37.32		—	1,418,991
March 31, 2013	5,189	40.32		—	1,418,991
April 30, 2013	—	—		—	1,418,991
May 31, 2013	410	39.81		—	1,418,991
June 30, 2013	—	—		—	1,418,991
July 31, 2013	—	—		—	1,418,991
August 31, 2013	—	—		—	1,418,991
September 30, 2013	795	40.80		—	1,418,991
Total	98,182	$	37.52	—	1,418,991

 _______________________

(1) The Company’s share repurchase program was initially approved by the board of directors on June 25, 1998. The program has no fixed dollar amount or expiration date.

(2) During the nine months ended September 30, 2013, the Company redeemed 98,182 shares of common stock from employees to satisfy minimum tax-withholding requirements related to the vesting of restricted stock and performance vested restricted stock unit grants. These redemptions were not part of the board repurchase authorization.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None.

67

ITEM 6. EXHIBITS

Exhibit Number and Description

Exhibit Number	Description
3.01(a)	Restated Certificate of Incorporation of Choice Hotels Franchising, Inc. (renamed Choice Hotels International, Inc.)
3.02(b)	Amendment to the Restated Certificate of Incorporation of Choice Hotels International, Inc.
3.03(c)	Amended and Restated Bylaws of Choice Hotels International, Inc.
31.1*	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.2*	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
32*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Label Linkbase Document
101.PRE*	XBRL Taxonomy Presentation Linkbase Document

_______________________

* Filed herewith

(a) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Registration Statement on Form S-4, filed August 31, 1998 (Reg. No. 333-62543).

(b) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc's Current Report of Form 8-K filed May 1, 2013.

(c) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed February 16, 2010.

68

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHOICE HOTELS INTERNATIONAL, INC.
November 12, 2013	By:	/S/ DAVID L. WHITE
		David L. White
		Senior Vice President, Chief Financial Officer & Treasurer

69

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Stephen P. Joyce, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Choice Hotels International, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 12, 2013	/S/ STEPHEN P. JOYCE
	Stephen P. Joyce
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, David L. White, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Choice Hotels International, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 12, 2013	/S/ DAVID L. WHITE
	David L. White
	Senior Vice President, Chief Financial Officer & Treasurer

EX-32

Exhibit 32

WRITTEN STATEMENT

OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

The undersigned hereby certify that the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed by Choice Hotels International, Inc. with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

November 12, 2013	/S/ STEPHEN P. JOYCE
	Stephen P. Joyce
	President and Chief Executive Officer
November 12, 2013	/S/ DAVID L. WHITE
	David L. White
	Senior Vice President, Chief Financial Officer & Treasurer

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs.

Level 1: Quoted prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of marketable securities (primarily mutual funds) held in the Company’s EDCP and Non-Qualified Plan deferred compensation plans.

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. The Company’s Level 2 assets consist of money market funds held in the Company’s EDCP and Non-Qualified Plan deferred compensation plans and those recorded in cash and cash equivalents.

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 whose fair value was determined using Level 3 inputs.

As of September 30, 2013 and December 31, 2012, the Company had the following assets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
	Total		Level 1		Level 2		Level 3
Assets (in thousands)
As of September 30, 2013
Money market funds, included in cash and cash equivalents	$	50,001	$	—	$	50,001	$	—
Mutual funds(1)	13,201		13,201		—		—
Money market funds(1)	2,135		—		2,135		—
	$	65,337	$	13,201	$	52,136	$	—
As of December 31, 2012
Money market funds, included in cash and cash equivalents	$	20,001	$	—	$	20,001	$	—
Mutual funds(1)	11,884		11,884		—		—
Money market funds(1)	4,357		—		4,357		—
	$	36,242	$	11,884	$	24,358	$	—

________________________ 

(1) Included in Investments, employee benefit plans fair value on the consolidated balance sheets.

The Company's policy is to recognize transfers in and transfers out of the three levels of the fair value hierarchy as of the end of each quarterly reporting period. There were no transfers between Level 1, 2 and 3 assets during the three and nine months ended September 30, 2013.

Other Financial Instruments

The Company believes that the fair value of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rates of the Company's New Credit Facility adjust frequently based on current market rates; accordingly its carrying amount approximates fair value.

The Company estimates the fair value of notes receivable which approximate their carrying value, utilizing an analysis of future cash flows and credit worthiness for similar types of arrangements. Based upon the availability of market data, we have classified these notes receivables as Level 3 inputs. The primary sensitivity in these calculations is based on the selection of appropriate interest and discount rates. For further information on the notes receivables see Note 3.

The fair value of the Company's $250 million and $400 million senior notes are classified as Level 2 as the significant inputs are observable in an active market. At September 30, 2013 and December 31, 2012, the $250 million senior notes had an approximate fair value of $256.9 million and $271.6 million, respectively. At September 30, 2013 and December 31, 2012, the $400 million senior notes had an approximate fair value of $412.0 million and $442.0 million, respectively.

Fair values estimated are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment.  Settlement of such fair value amounts may not be possible and may not be a prudent management decision.

XML

Fair Value Measurements Schedule Of Fair Value Of Assets (Details) (USD $)	Sep. 30, 2013		Dec. 31, 2012
Mutual funds and money market funds, fair value	$ 386,000		$ 3,486,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Measurements, Recurring [Member]
Assets measured at fair value	65,337,000		36,242,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Money Market Funds [Member] | Cash and cash equivalents [Member] | Fair Value, Measurements, Recurring [Member]
Money market funds, included in cash and cash equivalents, fair value	50,001,000		20,001,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Money Market Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	2,135,000	[1]	4,357,000	[1]
Estimate of Fair Value, Fair Value Disclosure [Member] | Mutual Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	13,201,000	[1]	11,884,000	[1]
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets measured at fair value	13,201,000		11,884,000
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | Cash and cash equivalents [Member] | Fair Value, Measurements, Recurring [Member]
Money market funds, included in cash and cash equivalents, fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	0	[1]	0	[1]
Fair Value, Inputs, Level 1 [Member] | Mutual Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	13,201,000	[1]	11,884,000	[1]
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets measured at fair value	52,136,000		24,358,000
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | Cash and cash equivalents [Member] | Fair Value, Measurements, Recurring [Member]
Money market funds, included in cash and cash equivalents, fair value	50,001,000		20,001,000
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	2,135,000	[1]	4,357,000	[1]
Fair Value, Inputs, Level 2 [Member] | Mutual Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	0	[1]	0	[1]
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets measured at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | Cash and cash equivalents [Member] | Fair Value, Measurements, Recurring [Member]
Money market funds, included in cash and cash equivalents, fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	0	[1]	0	[1]
Fair Value, Inputs, Level 3 [Member] | Mutual Funds [Member] | Investments, employee benefit plans, at fair value [Member] | Fair Value, Measurements, Recurring [Member]
Mutual funds and money market funds, fair value	$ 0	[1]	$ 0	[1]

[1] Included in Investments, employee benefit plans fair value on the consolidated balance sheets.

XML

Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Actuarial loss, income tax	$ 0	$ 12,000	$ 0	$ 36,000

XML

Notes Receivable and Allowance for Losses

9 Months Ended

Sep. 30, 2013

Accounts and Notes Receivable, Net [Abstract]

Notes Receivable And Allowance For Losses

Notes Receivable and Allowance for Losses

The Company segregates its notes receivable for the purposes of evaluating allowances for credit losses between two categories: Mezzanine and Other Notes Receivable and Forgivable Notes Receivable. The Company utilizes the level of security it has in the various notes receivable as its primary credit quality indicator (i.e. senior, subordinated or unsecured) when determining the appropriate allowances for uncollectible loans within these categories.

The following table shows the composition of our notes receivable balances:

	September 30, 2013						December 31, 2012
	($ in thousands)						($ in thousands)
Credit Quality Indicator	Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total		Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total
Senior	$	—	$	27,548	$	27,548	$	—	$	27,549	$	27,549
Subordinated	—		14,841		14,841		—		15,019		15,019
Unsecured	19,018		1,812		20,830		16,235		1,265		17,500
Total notes receivable	19,018		44,201		63,219		16,235		43,833		60,068
Allowance for losses on non-impaired loans	1,902		1,443		3,345		1,623		638		2,261
Allowance for losses on receivables specifically evaluated for impairment	—		8,453		8,453		—		8,289		8,289
Total loan reserves	1,902		9,896		11,798		1,623		8,927		10,550
Net carrying value	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518
Current portion, net	$	425	$	13,701	$	14,126	$	420	$	13,995	$	14,415
Long-term portion, net	16,691		20,604		37,295		14,192		20,911		35,103
Total	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518

The Company classifies notes receivable due within one year as other current assets and notes receivable with a maturity greater than one year as other assets in the Company’s consolidated balance sheets.

The following table summarizes the activity related to the Company’s Forgivable Notes Receivable and Mezzanine and Other Notes Receivable allowance for losses from December 31, 2012 through September 30, 2013:

	Forgivable Notes Receivable			Mezzanine & Other  Notes Receivable
	(In thousands)
Balance, December 31, 2012	$	1,623		$	8,927
Provisions	598			969
Recoveries	(25		)	—
Write-offs	(147		)	—
Other(1)	(147		)	—
Balance, September 30, 2013	$	1,902		$	9,896

(1) Consists of default rate assumption changes

Forgivable Notes Receivable

As of September 30, 2013 and December 31, 2012, the unamortized balance of the Company's forgivable notes receivable totaled $19.0 million and $16.2 million, respectively. The Company recorded an allowance for credit losses on these forgivable notes receivable of $1.9 million and $1.6 million at September 30, 2013 and December 31, 2012, respectively. At September 30, 2013 and December 31, 2012, the Company did not have any forgivable unsecured notes that were past due. Amortization expense included in the accompanying consolidated statements of income related to the notes for the three and nine months ended September 30, 2013 was $1.1 million and $3.0 million, respectively. Amortization expense for the three and nine months ended September 30, 2012 was $0.7 million and $2.0 million, respectively.

Mezzanine and Other Notes Receivable

The Company determined that approximately $13.2 million and $13.3 million of its mezzanine and other notes receivable were impaired at September 30, 2013 and December 31, 2012, respectively. The Company recorded allowance for credit losses on these impaired loans at September 30, 2013 and December 31, 2012 totaling $8.5 million and $8.3 million, respectively, resulting in a carrying value of impaired loans of $4.7 million and $5.0 million, respectively. The Company recognized approximately $81 thousand and $0.2 million of interest income on impaired loans during the three and nine months ended September 30, 2013, respectively, on the cash basis. The Company recognized approximately $38 thousand and $100 thousand of interest income on impaired loans during the three and nine months ended September 30, 2012, respectively, on the cash basis. The Company provided loan reserves on non-impaired loans totaling $1.4 million and $0.6 million at September 30, 2013 and December 31, 2012, respectively.

Past due balances of mezzanine and other notes receivable by credit quality indicators are as follows:

	30-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
	($ in thousands)
As of September 30, 2013
Senior	$	9,500	$	—	$	9,500	$	18,048	$	27,548
Subordinated	—		10,268		10,268		4,573		14,841
Unsecured	—		47		47		1,765		1,812
	$	9,500	$	10,315	$	19,815	$	24,386	$	44,201
As of December 31, 2012
Senior	$	—	$	—	$	—	$	27,549	$	27,549
Subordinated	619		9,629		10,248		4,771		15,019
Unsecured	—		47		47		1,218		1,265
	$	619	$	9,676	$	10,295	$	33,538	$	43,833

Subsequent to September 30, 2013, the amounts reflected in the 30-89 past due column for senior mezzanine notes receivable totaling $9.5 million were repaid in full.

Loans Acquired with Deteriorated Credit Quality

On December 2, 2011, the Company acquired an $11.5 million mortgage, held on a franchisee hotel asset, from a financial institution for $7.9 million. At the time of acquisition, the Company determined that it would be unable to collect all contractually required payments under the original mortgage terms. The contractually required payments receivable, including principal and interest, under the terms of the acquired mortgage totaled $12.0 million. The Company expects to collect $9.7 million of these contractually required payments. No prepayments were considered in the determination of contractual cash flows and cash flows expected to be collected. At both September 30, 2013 and December 31, 2012, the carrying amount of this loan, which is reported under senior mezzanine and other notes receivables, was $7.9 million and there was no allowance for uncollectable amounts. The Company's accretable yield at acquisition was $1.8 million or 7.36% and a reconciliation of the accretable yield for the nine months ended September 30, 2013 is as follows:

	Accretable Yield ($ in thousands)
Balance, December 31, 2012	$	1,161
Additions	—
Accretion	(433		)
Disposals	—
Reclassifications from nonaccretable yield	—
Balance, September 30, 2013	$	728

XML

Termination Charges

9 Months Ended

Sep. 30, 2013

Restructuring and Related Activities [Abstract]

Termination Charges

Termination Charges

During the nine months ended September 30, 2013, the Company recorded a $1.5 million charge in SG&A and marketing and reservation expenses related to salary and continuation benefits provided to employees separating from service with the Company. At September 30, 2013, the Company had approximately $0.5 million of these salary and benefits continuation payments remaining to be paid. During the nine months ended September 30, 2013, the Company paid an additional $3.0 million of termination benefits related to employee termination charges recorded in prior periods and had approximately $0.1 million of these benefits remaining to be paid. At September 30, 2013 and December 31, 2012, total termination benefits of approximately $0.6 million and $3.1 million, respectively, remained payable and were included in current and non-current liabilities in the Company's consolidated financial statements. The Company expects $0.6 million of these benefits to be paid in the next twelve months.

XML

Condensed Consolidating Statement Of Income (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Royalty fees	$ 83,107,000	$ 80,845,000	$ 201,222,000	$ 194,762,000
Initial franchise and relicensing fees	4,650,000	3,247,000	12,843,000	8,953,000
Procurement services	4,708,000	3,839,000	16,204,000	13,990,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Total revenues	223,162,000	210,413,000	543,612,000	513,203,000
Selling, general and administrative	26,982,000	23,170,000	84,078,000	72,073,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Total operating expenses	156,613,000	145,160,000	396,275,000	365,295,000
Operating income	66,549,000	65,253,000	147,337,000	147,908,000
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000
Total other income and expenses, net	8,957,000	9,585,000	28,749,000	14,068,000
Income before income taxes	57,592,000	55,668,000	118,588,000	133,840,000
Income taxes	16,080,000	11,291,000	33,319,000	37,604,000
Net income	41,512,000	44,377,000	85,269,000	96,236,000
Parent [Member]
Royalty fees	76,645,000	74,186,000	183,063,000	175,862,000
Initial franchise and relicensing fees	4,419,000	2,996,000	12,074,000	8,459,000
Procurement services	4,375,000	3,489,000	15,559,000	13,349,000
Marketing and reservation	114,117,000	109,793,000	267,491,000	252,951,000
Other items, net	2,778,000	1,991,000	6,581,000	6,958,000
Total revenues	202,334,000	192,455,000	484,768,000	457,579,000
Selling, general and administrative	30,619,000	39,781,000	94,693,000	92,804,000
Marketing and reservation	119,002,000	111,831,000	278,703,000	256,936,000
Other items, net	828,000	706,000	2,301,000	2,117,000
Total operating expenses	150,449,000	152,318,000	375,697,000	351,857,000
Operating income	51,885,000	40,137,000	109,071,000	105,722,000
Interest expense	10,691,000	11,005,000	32,210,000	19,731,000
Equity in earnings of consolidated subsidiaries	(13,329,000)	(27,029,000)	(33,215,000)	(42,075,000)
Other items, net	(577,000)	215,000	(1,689,000)	(274,000)
Total other income and expenses, net	(3,215,000)	(15,809,000)	(2,694,000)	(22,618,000)
Income before income taxes	55,100,000	55,946,000	111,765,000	128,340,000
Income taxes	13,588,000	11,569,000	26,496,000	32,104,000
Net income	41,512,000	44,377,000	85,269,000	96,236,000
Guarantor Subsidiaries [Member]
Royalty fees	25,161,000	16,347,000	84,477,000	68,622,000
Initial franchise and relicensing fees	0	0	0	0
Procurement services	0	0	0	0
Marketing and reservation	96,626,000	90,986,000	267,308,000	248,011,000
Other items, net	1,310,000	1,238,000	3,600,000	3,440,000
Total revenues	123,097,000	108,571,000	355,385,000	320,073,000
Selling, general and administrative	22,867,000	19,525,000	77,279,000	63,544,000
Marketing and reservation	92,747,000	88,655,000	257,107,000	241,907,000
Other items, net	2,285,000	2,018,000	6,890,000	5,856,000
Total operating expenses	117,899,000	110,198,000	341,276,000	311,307,000
Operating income	5,198,000	(1,627,000)	14,109,000	8,766,000
Interest expense	61,000	4,000	111,000	40,000
Equity in earnings of consolidated subsidiaries	0	0	0	0
Other items, net	(697,000)	(511,000)	(1,261,000)	(2,137,000)
Total other income and expenses, net	(636,000)	(507,000)	(1,150,000)	(2,097,000)
Income before income taxes	5,834,000	(1,120,000)	15,259,000	10,863,000
Income taxes	2,052,000	(647,000)	6,058,000	4,663,000
Net income	3,782,000	(473,000)	9,201,000	6,200,000
Non-Guarantor Subsidiaries [Member]
Royalty fees	11,279,000	22,925,000	31,452,000	39,781,000
Initial franchise and relicensing fees	231,000	251,000	769,000	494,000
Procurement services	333,000	350,000	645,000	641,000
Marketing and reservation	5,577,000	4,783,000	14,953,000	13,892,000
Other items, net	313,000	191,000	781,000	476,000
Total revenues	17,733,000	28,500,000	48,600,000	55,284,000
Selling, general and administrative	3,474,000	(3,523,000)	9,876,000	5,228,000
Marketing and reservation	4,571,000	4,233,000	13,942,000	13,057,000
Other items, net	222,000	204,000	625,000	625,000
Total operating expenses	8,267,000	914,000	24,443,000	18,910,000
Operating income	9,466,000	27,586,000	24,157,000	36,374,000
Interest expense	5,000	0	13,000	6,000
Equity in earnings of consolidated subsidiaries	0	0	0	0
Other items, net	(526,000)	(285,000)	(635,000)	(344,000)
Total other income and expenses, net	(521,000)	(285,000)	(622,000)	(338,000)
Income before income taxes	9,987,000	27,871,000	24,779,000	36,712,000
Income taxes	440,000	369,000	765,000	837,000
Net income	9,547,000	27,502,000	24,014,000	35,875,000
Eliminations [Member]
Royalty fees	(29,978,000)	(32,613,000)	(97,770,000)	(89,503,000)
Initial franchise and relicensing fees	0	0	0	0
Procurement services	0	0	0	0
Marketing and reservation	(90,024,000)	(86,500,000)	(247,371,000)	(230,230,000)
Other items, net	0	0	0	0
Total revenues	(120,002,000)	(119,113,000)	(345,141,000)	(319,733,000)
Selling, general and administrative	(29,978,000)	(32,613,000)	(97,770,000)	(89,503,000)
Marketing and reservation	(90,024,000)	(85,657,000)	(247,371,000)	(227,276,000)
Other items, net	0	0	0	0
Total operating expenses	(120,002,000)	(118,270,000)	(345,141,000)	(316,779,000)
Operating income	0	(843,000)	0	(2,954,000)
Interest expense	0	(843,000)	0	(2,954,000)
Equity in earnings of consolidated subsidiaries	13,329,000	27,029,000	33,215,000	42,075,000
Other items, net	0	0	0	0
Total other income and expenses, net	13,329,000	26,186,000	33,215,000	39,121,000
Income before income taxes	(13,329,000)	(27,029,000)	(33,215,000)	(42,075,000)
Income taxes	0	0	0	0
Net income	(13,329,000)	(27,029,000)	(33,215,000)	(42,075,000)
Consolidated [Member]
Royalty fees	83,107,000	80,845,000	201,222,000	194,762,000
Initial franchise and relicensing fees	4,650,000	3,247,000	12,843,000	8,953,000
Procurement services	4,708,000	3,839,000	16,204,000	13,990,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Other items, net	4,401,000	3,420,000	10,962,000	10,874,000
Total revenues	223,162,000	210,413,000	543,612,000	513,203,000
Selling, general and administrative	26,982,000	23,170,000	84,078,000	72,073,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Other items, net	3,335,000	2,928,000	9,816,000	8,598,000
Total operating expenses	156,613,000	145,160,000	396,275,000	365,295,000
Operating income	66,549,000	65,253,000	147,337,000	147,908,000
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000
Equity in earnings of consolidated subsidiaries	0	0	0	0
Other items, net	(1,800,000)	(581,000)	(3,585,000)	(2,755,000)
Total other income and expenses, net	8,957,000	9,585,000	28,749,000	14,068,000
Income before income taxes	57,592,000	55,668,000	118,588,000	133,840,000
Income taxes	16,080,000	11,291,000	33,319,000	37,604,000
Net income	$ 41,512,000	$ 44,377,000	$ 85,269,000	$ 96,236,000

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Share-Based Compensation and Capital Stock Weighted Average Assumptions Of Black-Scholes Option-Pricing Model (Details) (Stock Options [Member], USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Stock Options [Member]
Risk-free interest rate	0.73%	0.78%
Expected volatility	38.14%	40.15%
Expected life of stock option	4 years 6 months	4 years 4 months 24 days
Dividend yield	2.01%	2.08%
Requisite service period	4 years	4 years
Contractual life	7 years	7 years
Weighted average fair value of options granted	$ 9.89	$ 9.98

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rates were 27.9% and 20.3% for the three months ended September 30, 2013 and 2012, respectively. The effective income tax rates were 28.1% for both the nine months ended September 30, 2013 and 2012, respectively.

The effective income tax rate for the three and nine months ended September 30, 2013 and 2012, were lower than the U.S federal income tax rate of 35% due to the recurring impact of foreign operations, partially offset by state taxes, and reflect adjustments to our federal accruals. Additionally, the effective income tax rate for the nine months ended September 30, 2013 was further reduced by the release of a valuation allowance on local country tax refunds received by our foreign subsidiary, settlements of unrecognized tax positions and by legislation retroactively extending the U.S. controlled foreign corporation look-through rule. The effective income tax rates for the three and nine months ended September 30, 2012 also reflect a nonrecurring favorable adjustment of $4.5 million related to foreign operations.

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Deferred Revenue Components Of Deferred Revenue (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Deferred revenue	$ 61,401,000	$ 71,154,000
Loyalty programs
Deferred revenue	55,106,000	64,636,000
Initial, relicensing and franchise fees
Deferred revenue	4,369,000	4,994,000
Procurement service fees
Deferred revenue	1,197,000	1,225,000
Other
Deferred revenue	$ 729,000	$ 299,000

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Share-Based Compensation and Capital Stock Summary Of Activity Related To Restricted Stock Grants (Details) (Restricted Stock [Member], USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Granted - shares	7,646	7,672	223,045	266,159
Weighted average grant date fair value per share	$ 39.24	$ 32.59	$ 37.65	$ 35.76
Aggregate grant date fair value	$ 300	$ 250	$ 8,397	$ 9,517
Restricted shares forfeited	25	13,619	27,953	23,921
Vesting service period of shares granted	36 months	36 months
Grant date fair value of shares vested	$ 94	$ 75	$ 8,569	$ 6,693
Minimum [Member]
Vesting service period of shares granted			12 months	12 months
Maximum [Member]
Vesting service period of shares granted			48 months	68 months

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Company Information and Significant Accounting Policies Schedule of Error Corrections and Prior Period Adjustments (Details) (USD $)	9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Mar. 31, 2013 As Previously Reported [Member]	Mar. 31, 2012 As Previously Reported [Member]	Jun. 30, 2012 As Previously Reported [Member]	Sep. 30, 2012 As Previously Reported [Member]	Dec. 31, 2012 As Previously Reported [Member]	Dec. 31, 2011 As Previously Reported [Member]	Dec. 31, 2010 As Previously Reported [Member]	Mar. 31, 2013 Adjustment [Member]	Mar. 31, 2012 Adjustment [Member]	Jun. 30, 2012 Adjustment [Member]	Sep. 30, 2012 Adjustment [Member]	Dec. 31, 2012 Adjustment [Member]	Dec. 31, 2011 Adjustment [Member]	Dec. 31, 2010 Adjustment [Member]	Mar. 31, 2013 As Revised [Member]	Mar. 31, 2012 As Revised [Member]	Jun. 30, 2012 As Revised [Member]	Sep. 30, 2012 As Revised [Member]	Dec. 31, 2012 As Revised [Member]	Dec. 31, 2011 As Revised [Member]	Dec. 31, 2010 As Revised [Member]
Forgivable notes receivable, net	$ (5,722,000)	$ (2,853,000)	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ (1,729,000)	$ (475,000)	$ (1,537,000)	$ (2,853,000)	$ (10,898,000)	$ (3,475,000)	$ (1,120,000)	$ (1,729,000)	$ (475,000)	$ (1,537,000)	$ (2,853,000)	$ (10,898,000)	$ (3,475,000)	$ (1,120,000)
Net cash provided (used) by operating activities	105,009,000	118,423,000	1,874,000	4,412,000	37,802,000	121,276,000	161,020,000	134,844,000	144,935,000	(1,729,000)	(475,000)	(1,537,000)	(2,853,000)	(10,898,000)	(3,475,000)	(1,120,000)	145,000	3,937,000	36,265,000	118,423,000	150,122,000	131,369,000	143,815,000
Issuance of mezzanine and other notes receivable	0	(4,236,000)	(1,729,000)	(3,719,000)	(5,820,000)	(7,305,000)	(34,925,000)	(12,766,000)	(11,786,000)	1,729,000	583,000	1,684,000	3,069,000	11,189,000	3,539,000	1,203,000	0	(3,136,000)	(4,136,000)	(4,236,000)	(23,736,000)	(9,227,000)	(10,583,000)
Collections of mezzanine and other notes receivable	224,000	110,000	19,000	151,000	210,000	326,000	3,561,000	4,754,000	5,083,000	0	(108,000)	(147,000)	(216,000)	(291,000)	(64,000)	(83,000)	19,000	43,000	63,000	110,000	3,270,000	4,690,000	5,000,000
Net cash provided (used) in investing activities	$ 28,350,000	$ 16,709,000	$ (13,816,000)	$ (1,496,000)	$ (10,387,000)	$ (19,562,000)	$ (57,999,000)	$ (23,804,000)	$ (32,155,000)	$ 1,729,000	$ 475,000	$ 1,537,000	$ 2,853,000	$ 10,898,000	$ 3,475,000	$ 1,120,000	$ (12,087,000)	$ (1,021,000)	$ (8,850,000)	$ (16,709,000)	$ (47,101,000)	$ (20,329,000)	$ (31,035,000)

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Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2013

Assets, Current [Abstract]

Schedule Of Other Current Assets

Other current assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (See Note 3)	$	14,126	$	14,415
Prepaid expenses	12,740		10,694
Land held for sale	—		8,541
Other current assets	3,136		3,019
Total	$	30,002	$	36,669

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Company Information and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

The following tables present the effect of the correction of the classification of the cash flows related to forgivable notes receivable on selected line items included in the Company's Consolidated Statements of Cash Flows for all periods affected:

	Year Ended December 31, 2012									Year Ended December 31, 2011									Year Ended December 31, 2010
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(10,898	)	$	(10,898	)	$	—		$	(3,475	)	$	(3,475	)	$	—		$	(1,120	)	$	(1,120	)
Net cash provided by operating activities	161,020			(10,898		)	150,122			134,844			(3,475		)	131,369			144,935			(1,120		)	143,815
Issuance of mezzanine and other notes receivable	(34,925		)	11,189			(23,736		)	(12,766		)	3,539			(9,227		)	(11,786		)	1,203			(10,583		)
Collections of mezzanine and other notes receivable	3,561			(291		)	3,270			4,754			(64		)	4,690			5,083			(83		)	5,000
Net cash used in investing activities	(57,999		)	10,898			(47,101		)	(23,804		)	3,475			(20,329		)	(32,155		)	1,120			(31,035		)

	Three Months Ended March 31, 2013									Three Months Ended March 31, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,729	)	$	(1,729	)	$	—		$	(475	)	$	(475	)
Net cash provided by operating activities	1,874			(1,729		)	145			4,412			(475		)	3,937
Issuance of mezzanine and other notes receivable	(1,729		)	1,729			—			(3,719		)	583			(3,136		)
Collections of mezzanine and other notes receivable	19			—			19			151			(108		)	43
Net cash used in investing activities	(13,816		)	1,729			(12,087		)	(1,496		)	475			(1,021		)

	Six Months Ended June 30, 2012									Nine Months Ended September 30, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,537	)	$	(1,537	)	$	—		$	(2,853	)	$	(2,853	)
Net cash provided by operating activities	37,802			(1,537		)	36,265			121,276			(2,853		)	118,423
Issuance of mezzanine and other notes receivable	(5,820		)	1,684			(4,136		)	(7,305		)	3,069			(4,236		)
Collections of mezzanine and other notes receivable	210			(147		)	63			326			(216		)	110
Net cash used in investing activities	(10,387		)	1,537			(8,850		)	(19,562		)	2,853			(16,709		)

The following tables present the effect of the correction for the aforementioned items on selected line items included in the Company's Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2012:

	For the Nine Months Ended September 30, 2012
	Guarantor									Non-Guarantor
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Net cash provided (used) by operating activities	$	(1,928	)	$	6,869		$	4,941		$	36,131		$	(9,721	)	$	26,410
Investing Activities:
Issuance of mezzanine and other notes receivable	(3,068		)	3,068			—			—			—			—
Collection of mezzanine and other notes receivable	216			(216		)	—			—			—			—
Advances to and investments in affiliates	—			(9,721		)	(9,721		)	—			—			—
Net cash provided (used) in investing activities	1,649			(6,869		)	(5,220		)	(9,636		)	—			(9,636		)
Financing Activities:
Proceeds from contributions from affiliates	—			—			—			—			9,721			9,721
Net cash provided (used) by financing activities	122			—			122			(14		)	9,721			9,707

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Advances, Marketing and Reservation Activities (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Advances, marketing and reservation activities	$ 32,564,000		$ 32,564,000		$ 42,179,000
Depreciation and amortization	2,379,000	1,995,000	7,074,000	5,989,000
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000
Marketing And Reservation Fees [Member]
Depreciation and amortization	3,900,000	3,700,000	12,000,000	10,700,000
Interest expense	$ 900,000	$ 900,000	$ 2,800,000	$ 3,000,000

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Share-Based Compensation and Capital Stock (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Weighted Average Assumptions Of Black-Scholes Option-Pricing Model

The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2013 Grants			2012 Grants
Risk-free interest rate	0.73		%	0.78		%
Expected volatility	38.14		%	40.15		%
Expected life of stock option	4.5 years			4.4 years
Dividend yield	2.01		%	2.08		%
Requisite service period	4 years			4 years
Contractual life	7 years			7 years
Weighted average fair value of options granted	$	9.89		$	9.98

Summary Of Activity Related To Restricted Stock Grants

The following table is a summary of activity related to restricted stock grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Restricted share grants	7,646		7,672		223,045		266,159
Weighted average grant date fair value per share	$	39.24	$	32.59	$	37.65	$	35.76
Aggregate grant date fair value ($000)	$	300	$	250	$	8,397	$	9,517
Restricted shares forfeited	25		13,619		27,953		23,921
Vesting service period of shares granted	36 months		36 months		12 - 48 months		12 - 68 months
Grant date fair value of shares vested ($000)	$	94	$	75	$	8,569	$	6,693

Summary Of Activity Related To PVRSU Grants

The following table is a summary of activity related to PVRSU grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Performance vested restricted stock units granted at target	—		6,137		58,902		100,046
Weighted average grant date fair value per share	$	—	$	32.59	$	36.76	$	35.68
Aggregate grant date fair value ($000)	$	—	$	200	$	2,165	$	3,570
Stock units forfeited	—		—		—		57,176
Requisite service period	—		41 months		22-36 months		36-60 months

Summary Of Change In Stock-Based Award Activity

A summary of stock-based award activity as of September 30, 2013 and changes during the nine months ended are presented below:

	Stock Options					Restricted Stock				Performance Vested Restricted Stock Units
	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013	1,934,034		$	25.80		606,547		$	35.17	170,116		$	35.56
Granted	173,413		36.76			223,045		37.65		58,902		36.76
Performance based leveraging (1)	—		—			—		—		9,192		32.60
Exercised/Vested	(263,073	)	25.38			(227,890	)	33.94		(39,816	)	32.60
Expired	(75,473	)	36.99			—		—		—		—
Forfeited	—		—			(27,953	)	35.30		—		—
Outstanding at September 30, 2013	1,768,901		$	26.46	3.2 years	573,749		$	36.61	198,394		$	36.37
Options exercisable at September 30, 2013	1,265,481		$	24.70	2.4 years

^{_________________________________} 

⁽¹⁾PVRSU shares have been increased by 9,192 units due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods during the nine months ended September 30, 2013.

Pre-Tax Stock-Based Compensation Expenses And Associated Income Tax Benefits

The components of the Company’s pretax stock-based compensation expense and associated income tax benefits are as follows for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2013		2012		2013		2012
Stock options	$	0.3	$	0.5	$	1.3	$	1.6
Restricted stock	2.1		1.8		5.7		5.7
Performance vested restricted stock units	0.5		0.8		1.7		1.3
Total	$	2.9	$	3.1	$	8.7	$	8.6
Income tax benefits	$	1.1	$	1.1	$	3.2	$	3.2

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Other Current Assets Schedule (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Assets, Current [Abstract]
Notes receivable (See Note 3)	$ 14,126,000	$ 14,415,000
Prepaid expenses	12,740,000	10,694,000
Land held for sale	0	8,541,000
Other current assets	3,136,000	3,019,000
Total	$ 30,002,000	$ 36,669,000

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Debt Schedule Of Components Of Debt (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]	Dec. 31, 2012 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]	Jun. 27, 2012 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]	Sep. 30, 2013 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Dec. 31, 2012 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Aug. 25, 2010 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Sep. 30, 2013 Senior Secured Credit Facility [Member] $350 Million Senior Secured Credit Facility [Member]	Dec. 31, 2012 Senior Secured Credit Facility [Member] $350 Million Senior Secured Credit Facility [Member]	Jul. 25, 2012 Senior Secured Credit Facility [Member] $350 Million Senior Secured Credit Facility [Member]	Sep. 30, 2013 Economic Development Loans	Dec. 31, 2012 Economic Development Loans	Sep. 30, 2013 Capital Lease Obligations [Member]	Dec. 31, 2012 Capital Lease Obligations [Member]	Sep. 30, 2013 Other Notes Payable [Member]	Dec. 31, 2012 Other Notes Payable [Member]
Total debt	$ 825,089,000	$ 855,345,000	$ 400,000,000	$ 400,000,000		$ 249,556,000	$ 249,508,000		$ 170,125,000	$ 203,250,000		$ 3,360,000		$ 2,017,000	$ 2,519,000	$ 31,000	$ 68,000
Less current portion	9,132,000	8,195,000
Total long-term debt	815,957,000	847,150,000
Debt instrument face amount					400,000,000			250,000,000			350,000,000
Debt instrument effective interest rate			5.94%	5.94%	5.94%	6.19%	6.19%	6.19%	2.52%	2.66%		3.00%		3.18%	3.18%
Senior notes, discount						$ 400,000	$ 500,000	$ 600,000
Capital Lease Maturity Year														2016	2016

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Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Instruments [Abstract]

Schedule Of Components Of Debt

Debt consists of the following at:

	September 30, 2013		December 31, 2012
	(In thousands)
$400 million senior unsecured notes with an effective interest rate of 5.94% at September 30, 2013 and December 31, 2012	$	400,000	$	400,000
$250 million senior unsecured notes with an effective interest rate of 6.19% less discount of $0.4 million and $0.5 million at September 30, 2013 and December 31, 2012	249,556		249,508
$350 million senior secured credit facility with an effective interest rate of 2.52% and 2.66% at September 30, 2013 and December 31, 2012, respectively	170,125		203,250
Economic development loans with an effective interest rate of 3.00% at September 30, 2013	3,360		—
Capital lease obligations due 2016 with an effective interest rate of 3.18% at September 30, 2013 and December 31, 2012	2,017		2,519
Other notes payable	31		68
Total debt	825,089		$	855,345
Less current portion	9,132		8,195
Total long-term debt	815,957		$	847,150

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Condensed Consolidating Financial Statements Narrative (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended
	Sep. 30, 2013 subsidiaries	Sep. 30, 2012	Sep. 30, 2013 subsidiaries	Sep. 30, 2012	Sep. 30, 2013 Guarantor Subsidiaries [Member]	Sep. 30, 2012 Guarantor Subsidiaries [Member]	Sep. 30, 2013 Guarantor Subsidiaries [Member]	Sep. 30, 2012 Guarantor Subsidiaries [Member]	Sep. 30, 2013 Non-Guarantor Subsidiaries [Member]	Sep. 30, 2012 Non-Guarantor Subsidiaries [Member]	Sep. 30, 2013 Non-Guarantor Subsidiaries [Member]	Sep. 30, 2012 Non-Guarantor Subsidiaries [Member]	Mar. 31, 2013 Adjustment [Member]	Mar. 31, 2012 Adjustment [Member]	Jun. 30, 2012 Adjustment [Member]	Sep. 30, 2012 Adjustment [Member]	Dec. 31, 2012 Adjustment [Member]	Dec. 31, 2011 Adjustment [Member]	Dec. 31, 2010 Adjustment [Member]	Sep. 30, 2012 Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Adjustment [Member] Non-Guarantor Subsidiaries [Member]	Sep. 30, 2012 Forgivable Notes Receivable [Member] Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Investment in and Advances to Affiliates [Member] Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Investment in and Advances to Affiliates [Member] Adjustment [Member] Non-Guarantor Subsidiaries [Member]	Sep. 30, 2012 Mezzanine & Other Notes Receivable [Member] Adjustment [Member] Guarantor Subsidiaries [Member]
Number of Domestic Subsidiaries as a Guarantee to Senior Notes	8		8
Percentage of ownership in subsidiary			100.00%
Marketing and reservation expense	$ 126,296,000	$ 119,062,000	$ 302,381,000	$ 284,624,000	$ 92,747,000	$ 88,655,000	$ 257,107,000	$ 241,907,000	$ 4,571,000	$ 4,233,000	$ 13,942,000	$ 13,057,000								$ (843,000)	$ (2,954,000)			$ (800,000)	$ (3,000,000)
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000	61,000	4,000	111,000	40,000	5,000	0	13,000	6,000								843,000	2,954,000			800,000	3,000,000
Net cash provided (used) by operating activities			(105,009,000)	(118,423,000)			(18,718,000)	(4,941,000)			(26,221,000)	(26,410,000)	1,729,000	475,000	1,537,000	2,853,000	10,898,000	3,475,000	1,120,000		(6,869,000)	9,721,000	2,900,000			(9,700,000)
Advances to and investments in affiliates							(1,280,000)	(9,721,000)			0	0									(9,721,000)	0				(9,700,000)
Proceeds from contributions from affiliates							0	0			2,280,000	9,721,000									0	9,721,000					9,700,000
Net cash provided (used) by financing activities			(48,115,000)	(94,520,000)			4,048,000	122,000			2,249,000	9,707,000									0	9,721,000					9,700,000
Net cash provided (used) in investing activities			(28,350,000)	(16,709,000)			(22,736,000)	(5,220,000)			(2,457,000)	(9,636,000)	(1,729,000)	(475,000)	(1,537,000)	(2,853,000)	(10,898,000)	(3,475,000)	(1,120,000)		(6,869,000)	0				(9,700,000)		(2,900,000)
Total operating expenses	156,613,000	145,160,000	396,275,000	365,295,000	117,899,000	110,198,000	341,276,000	311,307,000	8,267,000	914,000	24,443,000	18,910,000								(843,000)	(2,954,000)
Total other income and expenses, net	$ 8,957,000	$ 9,585,000	$ 28,749,000	$ 14,068,000	$ (636,000)	$ (507,000)	$ (1,150,000)	$ (2,097,000)	$ (521,000)	$ (285,000)	$ (622,000)	$ (338,000)								$ 843,000	$ 2,954,000

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Reportable Segment Information Narrative (Details)	9 Months Ended
	Sep. 30, 2013 segments brand
Segment Reporting [Abstract]
Number of Brands	11
Number of Reportable Segments	2

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Earnings Per Share Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock Options [Member]
Statement [Line Items]
Outstanding stock options	1,800,000	2,100,000	1,800,000	2,100,000
Anti-dilutive stock options excluded from EPS calculation	0	300,000	0	300,000
Performance Vested Restricted Stock Units [Member]
Statement [Line Items]
Dilutive stock excluded from EPS calculation due to performance conditions not met			198,394	152,639

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Notes Receivable and Allowance for Losses Summary Of Activity Related To Allowance For Losses (Details) (USD $)			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Forgivable Notes Receivable [Member]		Sep. 30, 2013 Mezzanine & Other Notes Receivable [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, December 31, 2012	$ 11,798,000	$ 10,550,000	$ 1,623,000		$ 8,927,000
Provisions			598,000		969,000
Recoveries			(25,000)		0
Write-offs			(147,000)		0
Other			(147,000)	[1]	0	[1]
Balance, June 30, 2013	$ 11,798,000	$ 10,550,000	$ 1,902,000		$ 9,896,000

[1] Consists of default rate assumption changes

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Condensed Consolidating Financial Statements Condensed Consolidating Balance Sheet (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Cash and cash equivalents	$ 161,138,000	$ 134,177,000	$ 115,064,000	$ 107,057,000
Receivables, net	62,605,000	52,270,000
Total current assets	258,267,000	233,470,000
Property and equipment, at cost, net	65,540,000	51,651,000
Goodwill	65,813,000	65,813,000
Franchise rights and other identifiable intangibles, net	10,875,000	13,473,000
Advances, marketing and reservation activities	32,564,000	42,179,000
Investments, employee benefit plans, at fair value	14,950,000	12,755,000
Deferred income taxes	19,496,000	15,418,000
Other assets	88,204,000	76,013,000
Total assets	555,709,000	510,772,000
Accounts payable	40,758,000	38,714,000
Accrued expenses	43,475,000	55,552,000
Deferred revenue	61,401,000	71,154,000
Current portion of long-term debt	9,132,000	8,195,000
Deferred compensation & retirement plan obligations	2,439,000	2,522,000
Total current liabilities	179,111,000	176,137,000
Long-term debt	815,957,000	847,150,000
Deferred compensation & retirement plan obligations	21,219,000	20,399,000
Other liabilities	24,146,000	15,990,000
Total liabilities	1,040,433,000	1,059,676,000
Total shareholders' (deficit) equity	(484,724,000)	(548,904,000)
Total liabilities and shareholders' deficit	555,709,000	510,772,000
Parent [Member]
Cash and cash equivalents	10,921,000	8,420,000	4,240,000	23,370,000
Receivables, net	54,842,000	44,344,000
Other current assets	36,200,000	41,897,000
Total current assets	101,963,000	94,661,000
Property and equipment, at cost, net	11,351,000	11,307,000
Goodwill	60,620,000	60,620,000
Franchise rights and other identifiable intangibles, net	7,113,000	8,669,000
Advances, marketing and reservation activities	32,564,000	42,179,000
Investments, employee benefit plans, at fair value	0	0
Investment in affiliates	362,158,000	329,038,000
Advances to affiliates	13,985,000	14,252,000
Deferred income taxes	0	0
Other assets	30,113,000	32,085,000
Total assets	619,867,000	592,811,000
Accounts payable	9,098,000	5,930,000
Accrued expenses	19,397,000	18,582,000
Deferred revenue	5,995,000	17,239,000
Current portion of long-term debt	8,437,000	7,500,000
Deferred compensation & retirement plan obligations	0	0
Other current liabilities	13,503,000	0
Total current liabilities	56,430,000	49,251,000
Long-term debt	811,243,000	845,257,000
Deferred compensation & retirement plan obligations	0	0
Advances from affiliates	220,721,000	226,917,000
Other liabilities	16,197,000	20,290,000
Total liabilities	1,104,591,000	1,141,715,000
Total shareholders' (deficit) equity	(484,724,000)	(548,904,000)
Total liabilities and shareholders' deficit	619,867,000	592,811,000
Guarantor Subsidiaries [Member]
Cash and cash equivalents	437,000	407,000	275,000	432,000
Receivables, net	1,963,000	1,797,000
Other current assets	13,271,000	20,110,000
Total current assets	15,671,000	22,314,000
Property and equipment, at cost, net	53,331,000	39,298,000
Goodwill	5,193,000	5,193,000
Franchise rights and other identifiable intangibles, net	2,251,000	2,715,000
Advances, marketing and reservation activities	0	0
Investments, employee benefit plans, at fair value	14,950,000	12,755,000
Investment in affiliates	27,307,000	26,194,000
Advances to affiliates	203,917,000	206,770,000
Deferred income taxes	29,184,000	28,539,000
Other assets	27,839,000	18,925,000
Total assets	379,643,000	362,703,000
Accounts payable	27,757,000	28,525,000
Accrued expenses	22,098,000	34,576,000
Deferred revenue	54,666,000	53,081,000
Current portion of long-term debt	684,000	675,000
Deferred compensation & retirement plan obligations	2,439,000	2,522,000
Other current liabilities	23,616,000	17,722,000
Total current liabilities	131,260,000	137,101,000
Long-term debt	4,694,000	1,845,000
Deferred compensation & retirement plan obligations	21,212,000	20,390,000
Advances from affiliates	403,000	189,000
Other liabilities	18,211,000	9,216,000
Total liabilities	175,780,000	168,741,000
Total shareholders' (deficit) equity	203,863,000	193,962,000
Total liabilities and shareholders' deficit	379,643,000	362,703,000
Non-Guarantor Subsidiaries [Member]
Cash and cash equivalents	149,780,000	125,350,000	110,549,000	83,255,000
Receivables, net	5,800,000	6,129,000
Other current assets	728,000	3,528,000
Total current assets	156,308,000	135,007,000
Property and equipment, at cost, net	858,000	1,046,000
Goodwill	0	0
Franchise rights and other identifiable intangibles, net	1,511,000	2,089,000
Advances, marketing and reservation activities	0	0
Investments, employee benefit plans, at fair value	0	0
Investment in affiliates	0	0
Advances to affiliates	10,613,000	13,479,000
Deferred income taxes	1,058,000	640,000
Other assets	30,252,000	25,003,000
Total assets	200,600,000	177,264,000
Accounts payable	3,903,000	4,259,000
Accrued expenses	1,980,000	2,394,000
Deferred revenue	740,000	834,000
Current portion of long-term debt	11,000	20,000
Deferred compensation & retirement plan obligations	0	0
Other current liabilities	462,000	790,000
Total current liabilities	7,096,000	8,297,000
Long-term debt	20,000	48,000
Deferred compensation & retirement plan obligations	7,000	9,000
Advances from affiliates	7,390,000	7,395,000
Other liabilities	484,000	245,000
Total liabilities	14,997,000	15,994,000
Total shareholders' (deficit) equity	185,603,000	161,270,000
Total liabilities and shareholders' deficit	200,600,000	177,264,000
Eliminations [Member]
Cash and cash equivalents	0	0	0	0
Receivables, net	0	0
Other current assets	(15,675,000)	(18,512,000)
Total current assets	(15,675,000)	(18,512,000)
Property and equipment, at cost, net	0	0
Goodwill	0	0
Franchise rights and other identifiable intangibles, net	0	0
Advances, marketing and reservation activities	0	0
Investments, employee benefit plans, at fair value	0	0
Investment in affiliates	(389,465,000)	(355,232,000)
Advances to affiliates	(228,515,000)	(234,501,000)
Deferred income taxes	(10,746,000)	(13,761,000)
Other assets	0	0
Total assets	(644,401,000)	(622,006,000)
Accounts payable	0	0
Accrued expenses	0	0
Deferred revenue	0	0
Current portion of long-term debt	0	0
Deferred compensation & retirement plan obligations	0	0
Other current liabilities	(15,675,000)	(18,512,000)
Total current liabilities	(15,675,000)	(18,512,000)
Long-term debt	0	0
Deferred compensation & retirement plan obligations	0	0
Advances from affiliates	(228,514,000)	(234,501,000)
Other liabilities	(10,746,000)	(13,761,000)
Total liabilities	(254,935,000)	(266,774,000)
Total shareholders' (deficit) equity	(389,466,000)	(355,232,000)
Total liabilities and shareholders' deficit	(644,401,000)	(622,006,000)
Consolidated [Member]
Cash and cash equivalents	161,138,000	134,177,000	115,064,000	107,057,000
Receivables, net	62,605,000	52,270,000
Other current assets	34,524,000	47,023,000
Total current assets	258,267,000	233,470,000
Property and equipment, at cost, net	65,540,000	51,651,000
Goodwill	65,813,000	65,813,000
Franchise rights and other identifiable intangibles, net	10,875,000	13,473,000
Advances, marketing and reservation activities	32,564,000	42,179,000
Investments, employee benefit plans, at fair value	14,950,000	12,755,000
Investment in affiliates	0	0
Advances to affiliates	0	0
Deferred income taxes	19,496,000	15,418,000
Other assets	88,204,000	76,013,000
Total assets	555,709,000	510,772,000
Accounts payable	40,758,000	38,714,000
Accrued expenses	43,475,000	55,552,000
Deferred revenue	61,401,000	71,154,000
Current portion of long-term debt	9,132,000	8,195,000
Deferred compensation & retirement plan obligations	2,439,000	2,522,000
Other current liabilities	21,906,000	0
Total current liabilities	179,111,000	176,137,000
Long-term debt	815,957,000	847,150,000
Deferred compensation & retirement plan obligations	21,219,000	20,399,000
Advances from affiliates	0	0
Other liabilities	24,146,000	15,990,000
Total liabilities	1,040,433,000	1,059,676,000
Total shareholders' (deficit) equity	(484,724,000)	(548,904,000)
Total liabilities and shareholders' deficit	$ 555,709,000	$ 510,772,000

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Company Information and Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of purchase to be cash equivalents. As of September 30, 2013 and December 31, 2012, $3.4 million and $5.0 million respectively, of book overdrafts representing outstanding checks in excess of funds on deposit are included in accounts payable in the accompanying consolidated balance sheets.

The Company maintains cash balances in domestic banks, which at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation. In addition, as of September 30, 2013, the Company maintains cash balances of $149.8 million in international banks which do not provide deposit insurance.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Consolidated Balance Sheets
Receivables, allowance for doubtful accounts	$ 10,324	$ 10,820
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	160,000,000	160,000,000
Common stock, shares issued	95,345,362	95,345,362
Common stock, shares outstanding	58,570,858	58,171,059
Treasury stock, shares	36,774,504	37,174,303

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Company Information and Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Company Information and Significant Accounting Policies

Company Information and Significant Accounting Policies

The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and subsidiaries (together the “Company”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The year-end balance sheet information was derived from audited financial statements, but does not include all disclosures required by GAAP. The Company believes the disclosures made are adequate to make the information presented not misleading.

The consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012 and notes thereto included in the Company’s Form 10-K, filed with the SEC on February 28, 2013 (the “10-K”). Interim results are not necessarily indicative of the entire year results. All inter-company transactions and balances between Choice Hotels International, Inc. and its subsidiaries have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revision to Prior Period Financial Statements

In connection with the preparation of the consolidated financial statements for the second quarter of 2013, a misapplication of GAAP was identified related to the presentation of cash flows pursuant to forgivable notes receivable. Previously, the Company applied Accounting Standards Codification ("ASC") 230 "Statement of Cash Flows" paragraphs 12 and 13 when reporting cash outflows and cash collections related to these notes receivable and as a result reported these items as cash flows from investing activities. In second quarter of 2013 and the following periods, the Company has revised its presentation of these cash flows in accordance with ASC 230 paragraphs 22 and 23 to reclassify them to operating activities on the Company's Consolidated Statements of Cash Flows.

In conjunction with brand and development programs, the Company issues forgivable notes receivable to qualifying franchisees for property improvements and other purposes. Under the terms of the forgivable promissory notes, the Company ratably reduces the outstanding principal balance and related interest over the term of the loan contingent upon the franchisee remaining within the franchise system and operating in accordance with the terms of the franchise agreement including credit, quality and brand standards. Therefore, the predominant reduction of these notes receivable is through non-cash operating expenses and not cash collections of note receivable amounts. As a result, the Company revised the cash flow classification of these forgivable notes receivable from investing activities to operating activities.

In accordance with ASC 250 (SEC's Staff Accounting Bulletin 99, "Materiality"), the Company assessed the materiality of the misapplication of GAAP and concluded that the reclassification of these cash flows was not material to any of its previously issued annual or interim financial statements. In accordance with the accounting guidance in ASC 250 (SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements"), the Company has revised its previously issued financial statements to correct the presentation of these cash flows in both the current and future quarterly and annual filings beginning with the financial statements in the Quarterly Report on Form 10-Q filed on August 9, 2013 for the quarterly period ended June 30, 2013. These revisions did not impact the Company's previously reported net income, comprehensive income, assets, liabilities or shareholders' deficit.

The following tables present the effect of the correction of the classification of the cash flows related to forgivable notes receivable on selected line items included in the Company's Consolidated Statements of Cash Flows for all periods affected:

	Year Ended December 31, 2012									Year Ended December 31, 2011									Year Ended December 31, 2010
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(10,898	)	$	(10,898	)	$	—		$	(3,475	)	$	(3,475	)	$	—		$	(1,120	)	$	(1,120	)
Net cash provided by operating activities	161,020			(10,898		)	150,122			134,844			(3,475		)	131,369			144,935			(1,120		)	143,815
Issuance of mezzanine and other notes receivable	(34,925		)	11,189			(23,736		)	(12,766		)	3,539			(9,227		)	(11,786		)	1,203			(10,583		)
Collections of mezzanine and other notes receivable	3,561			(291		)	3,270			4,754			(64		)	4,690			5,083			(83		)	5,000
Net cash used in investing activities	(57,999		)	10,898			(47,101		)	(23,804		)	3,475			(20,329		)	(32,155		)	1,120			(31,035		)

	Three Months Ended March 31, 2013									Three Months Ended March 31, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,729	)	$	(1,729	)	$	—		$	(475	)	$	(475	)
Net cash provided by operating activities	1,874			(1,729		)	145			4,412			(475		)	3,937
Issuance of mezzanine and other notes receivable	(1,729		)	1,729			—			(3,719		)	583			(3,136		)
Collections of mezzanine and other notes receivable	19			—			19			151			(108		)	43
Net cash used in investing activities	(13,816		)	1,729			(12,087		)	(1,496		)	475			(1,021		)

	Six Months Ended June 30, 2012									Nine Months Ended September 30, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,537	)	$	(1,537	)	$	—		$	(2,853	)	$	(2,853	)
Net cash provided by operating activities	37,802			(1,537		)	36,265			121,276			(2,853		)	118,423
Issuance of mezzanine and other notes receivable	(5,820		)	1,684			(4,136		)	(7,305		)	3,069			(4,236		)
Collections of mezzanine and other notes receivable	210			(147		)	63			326			(216		)	110
Net cash used in investing activities	(10,387		)	1,537			(8,850		)	(19,562		)	2,853			(16,709		)

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of purchase to be cash equivalents. As of September 30, 2013 and December 31, 2012, $3.4 million and $5.0 million respectively, of book overdrafts representing outstanding checks in excess of funds on deposit are included in accounts payable in the accompanying consolidated balance sheets.

The Company maintains cash balances in domestic banks, which at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation. In addition, as of September 30, 2013, the Company maintains cash balances of $149.8 million in international banks which do not provide deposit insurance.

Recently Adopted Accounting Guidance

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" (“ASU 2013-02”). This update requires companies to present either in a single note or parenthetically on the face of the financial statements the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety companies would instead cross reference to the related footnote for additional information. ASU 2013-02 became effective for interim and annual periods beginning after December 15, 2012 and the Company adopted this ASU during the first quarter of 2013. The Company has elected to present the required disclosures in a single note rather than on the face of the financial statement. See Note 8 for additional information.

Future Adoption of Recently Announced Accounting Guidance

In February 2013, the FASB issued ASU No. 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date” (“ASU 2013-04”). The ASU requires entities to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. Required disclosures include a description of the joint-and-several arrangement and the total outstanding amount of the obligation for all joint parties. The ASU permits entities to aggregate disclosures (as opposed to providing separate disclosures for each joint-and-several obligation). ASU 2013-04 is effective for all interim and annual periods beginning after December 15, 2013. The ASU should be applied retrospectively to obligations with joint-and-several liabilities existing at the beginning of an entity's fiscal year of adoption. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this statement will have on its financial statement presentation, if any, and will adopt the provisions of this ASU on January 1, 2014.

In March 2013, the FASB issued ASU No. 2013-05, “Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity” (“ASU 2013-05”). ASU 2013-05 clarifies that when a reporting entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity, the parent is required to apply the guidance in ASC 830 "Foreign Currency Matters" Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The provisions of ASU 2013-05 are effective prospectively for reporting periods beginning after December 15, 2013. The Company does not currently believe that the adoption of this update will have a material impact on its financial statements and will adopt the provisions of this ASU on January 1, 2014.

In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss ("NOL") carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. The provisions of ASU 2013-11 are effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application are permitted. The Company does not currently believe that the adoption of this update will have a material impact on its financial statements and will adopt the provisions of this ASU on January 1, 2014.

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Advances, Marketing and Reservation Activities

9 Months Ended

Sep. 30, 2013

Advances, Marketing and Reservation Activities [Abstract]

Advances, Marketing and Reservation Activities

Advances, Marketing and Reservation Activities

At September 30, 2013 and December 31, 2012, the Company had incurred cumulative marketing and reservation system expenses in excess of cumulative marketing and reservation system fees earned totaling $32.6 million and $42.2 million, respectively. These costs incurred in excess of fees collected have been deferred and recorded as an asset in the financial statements as the Company has the contractual authority to recover the deficits incurred related to marketing and reservation activities from the franchisees in the system at any given point in time.

Depreciation and amortization expense attributable to marketing and reservation activities for the three months ended September 30, 2013 and 2012 was $3.9 million and $3.7 million, respectively. Depreciation and amortization expense attributable to marketing and reservation activities for the nine months ended September 30, 2013 and 2012 was $12.0 million and $10.7 million, respectively. Interest expense attributable to marketing and reservation activities was $0.9 million for both the three months ended September 30, 2013 and 2012, respectively. Interest expense attributable to marketing and reservation activities was $2.8 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company evaluates the recoverability of marketing and reservation costs incurred in excess of cumulative marketing and reservation system revenues earned on a periodic basis. The Company will record a reserve when, based on current information and events, it is probable that it will be unable to recover the cumulative amounts advanced for marketing and reservation activities according to the contractual terms of the franchise agreements. These advances are considered to be unrecoverable if the expected net, undiscounted cash flows from marketing and reservation activities are less than the carrying amount of the asset. Based on the Company's analysis of projected net cash flows from marketing and reservation activities for all periods presented, the Company concluded that the cumulative advances for marketing and reservation activities recorded as an asset on the balance sheet were fully recoverable and as a result no reserves were necessary.

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Commitments and Contingencies (Details) (USD $)	Oct. 09, 2012	Sep. 30, 2013 Forgivable Notes Receivable [Member]	Sep. 30, 2013 Forgivable Notes Receivable [Member] Scenario, Forecast [Member]	Sep. 30, 2013 Additional capital contributions [Member] Scenario, Forecast [Member]
Bank Loan Issued to Business Associate, Partially Guaranteed by Parent	$ 18,000,000.0
Bank Loan Issued to Business Associate, Percentage Guaranteed by Parent	25.00%
Other Commitment		11,300,000
Other Commitment, Due in Next Twelve Months			$ 6,500,000	$ 4,900,000

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Other Current Assets

9 Months Ended

Sep. 30, 2013

Assets, Current [Abstract]

Other Current Assets

Other Current Assets

Other current assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (See Note 3)	$	14,126	$	14,415
Prepaid expenses	12,740		10,694
Land held for sale	—		8,541
Other current assets	3,136		3,019
Total	$	30,002	$	36,669

Land held for sale represents the Company’s purchase of real estate as part of its program to incent franchise development in strategic markets for certain brands. The Company acquired this real estate with the intent to resell it to third-party developers for the construction of hotels operated under the Company’s brands. The real estate, which is no longer classified as land held for sale, was accounted for as assets held for sale and therefore was carried at the lower of its carrying value or its estimated fair value (based on comparable sales), less estimated costs to sell.

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Notes Receivable and Allowance for Losses Narrative (Details) (USD $)	3 Months Ended		9 Months Ended					3 Months Ended		9 Months Ended					1 Months Ended						3 Months Ended		9 Months Ended							1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Senior Notes [Member]	Dec. 31, 2012 Senior Notes [Member]	Sep. 30, 2013 Forgivable Notes Receivable [Member]	Sep. 30, 2012 Forgivable Notes Receivable [Member]	Sep. 30, 2013 Forgivable Notes Receivable [Member]	Sep. 30, 2012 Forgivable Notes Receivable [Member]	Dec. 31, 2012 Forgivable Notes Receivable [Member]	Sep. 30, 2013 Forgivable Notes Receivable [Member] Senior Notes [Member]	Dec. 31, 2012 Forgivable Notes Receivable [Member] Senior Notes [Member]	Dec. 31, 2011 Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2013 Mezzanine & Other Notes Receivable [Member]	Dec. 31, 2012 Mezzanine & Other Notes Receivable [Member]	Dec. 02, 2011 Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2013 Mezzanine & Other Notes Receivable [Member] Senior Notes [Member]	Dec. 31, 2012 Mezzanine & Other Notes Receivable [Member] Senior Notes [Member]	Sep. 30, 2013 Impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2012 Impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2013 Impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2012 Impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Dec. 31, 2012 Impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2013 Non-impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Dec. 31, 2012 Non-impaired Loans [Member] Mezzanine & Other Notes Receivable [Member]	Sep. 30, 2013 Minimum [Member]	Sep. 30, 2013 Maximum [Member]	Nov. 12, 2013 Subsequent Event [Member] Mezzanine & Other Notes Receivable [Member] Senior Notes [Member]
Financing Receivable, Recorded Investment, Past Due								$ 0		$ 0		$ 0				$ 19,815,000	$ 10,295,000		$ 9,500,000	$ 0
Notes Receivable, Related Parties	63,219,000		63,219,000		60,068,000	27,548,000	27,549,000	19,018,000		19,018,000		16,235,000	0	0		44,201,000	43,833,000		27,548,000	27,549,000
Allowance for losses on non-impaired loans	11,798,000		11,798,000		10,550,000			1,902,000		1,902,000		1,623,000				9,896,000	8,927,000									1,400,000	600,000
Amortization expense	2,379,000	1,995,000	7,074,000	5,989,000				1,100,000	700,000	3,000,000	2,000,000
Impaired Financing Receivable, Recorded Investment																					13,200,000		13,200,000		13,300,000
Impaired Financing Receivable, Related Allowance																					8,500,000		8,500,000		8,300,000
Face value of notes value deemed impaired																					4,700,000		4,700,000		5,000,000
Impaired Financing Receivable, Interest Income, Cash Basis Method																					81,000	38,000	200,000	100,000
Mortgage Loans Acquired																		11,500,000
Payments to Acquire Mortgage Notes Receivable															7,900,000
Required payments on acquired mortgage																		12,000,000
Expected payments on acquired mortgage																		9,700,000
Financing Receivable, Acquired with Deteriorated Credit Quality																			7,900,000	7,900,000
Accretable yield at acquisition																		1,800,000
Accretable yield percentage at acquisition																		7.36%
Collections of mezzanine and other notes receivable			224,000	110,000																										9,500,000
Mortgage loans receivable, allowance for uncollectable amounts																			$ 0	$ 0
Number of Days Past Due																												30	89

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Notes Receivable and Allowance for Losses (Tables)

9 Months Ended

Sep. 30, 2013

Accounts and Notes Receivable, Net [Abstract]

Schedule Of Notes Receivable

The following table shows the composition of our notes receivable balances:

	September 30, 2013						December 31, 2012
	($ in thousands)						($ in thousands)
Credit Quality Indicator	Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total		Forgivable Notes Receivable		Mezzanine & Other Notes Receivable		Total
Senior	$	—	$	27,548	$	27,548	$	—	$	27,549	$	27,549
Subordinated	—		14,841		14,841		—		15,019		15,019
Unsecured	19,018		1,812		20,830		16,235		1,265		17,500
Total notes receivable	19,018		44,201		63,219		16,235		43,833		60,068
Allowance for losses on non-impaired loans	1,902		1,443		3,345		1,623		638		2,261
Allowance for losses on receivables specifically evaluated for impairment	—		8,453		8,453		—		8,289		8,289
Total loan reserves	1,902		9,896		11,798		1,623		8,927		10,550
Net carrying value	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518
Current portion, net	$	425	$	13,701	$	14,126	$	420	$	13,995	$	14,415
Long-term portion, net	16,691		20,604		37,295		14,192		20,911		35,103
Total	$	17,116	$	34,305	$	51,421	$	14,612	$	34,906	$	49,518

Summary Of Activity Related To Allowance For Losses

The following table summarizes the activity related to the Company’s Forgivable Notes Receivable and Mezzanine and Other Notes Receivable allowance for losses from December 31, 2012 through September 30, 2013:

	Forgivable Notes Receivable			Mezzanine & Other  Notes Receivable
	(In thousands)
Balance, December 31, 2012	$	1,623		$	8,927
Provisions	598			969
Recoveries	(25		)	—
Write-offs	(147		)	—
Other(1)	(147		)	—
Balance, September 30, 2013	$	1,902		$	9,896

(1) Consists of default rate assumption changes

Past Due Balances Of Mezzanine And Other Notes Receivable

Past due balances of mezzanine and other notes receivable by credit quality indicators are as follows:

	30-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
	($ in thousands)
As of September 30, 2013
Senior	$	9,500	$	—	$	9,500	$	18,048	$	27,548
Subordinated	—		10,268		10,268		4,573		14,841
Unsecured	—		47		47		1,765		1,812
	$	9,500	$	10,315	$	19,815	$	24,386	$	44,201
As of December 31, 2012
Senior	$	—	$	—	$	—	$	27,549	$	27,549
Subordinated	619		9,629		10,248		4,771		15,019
Unsecured	—		47		47		1,218		1,265
	$	619	$	9,676	$	10,295	$	33,538	$	43,833

Accretable Yield Reconciliation

The Company's accretable yield at acquisition was $1.8 million or 7.36% and a reconciliation of the accretable yield for the nine months ended September 30, 2013 is as follows:

	Accretable Yield ($ in thousands)
Balance, December 31, 2012	$	1,161
Additions	—
Accretion	(433		)
Disposals	—
Reclassifications from nonaccretable yield	—
Balance, September 30, 2013	$	728

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Loss

The following represents the changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended September 30, 2013:

	Loss on Cash Flow Hedge			Foreign Currency Items			Total
	($ in thousands)
Balance, December 31, 2012	$	(6,607	)	$	2,391		$	(4,216	)
Other comprehensive income (loss) before reclassification	—			(1,800		)	(1,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	646			—			646
Net current period other comprehensive income (loss)	646			(1,800		)	(1,154		)
Balance, September 30, 2013	$	(5,961	)	$	591		$	(5,370	)

Reclassifications From Accumulated Other Comprehensive Income (Loss)

The amounts reclassified from other accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2013 were reclassified to the following line items in the Company's Consolidated Statements of Income.

Component	Amount Reclassified from Accumulated Other Comprehensive Income(Loss)				Affected Line Item in the Consolidated Statement of Net Income
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
	($ in thousands)
Loss on cash flow hedge
Interest rate contract	$	215	$	646	Interest expense
	—		—		Tax (expense) benefit
	$	215	$	646	Net of tax

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Reportable Segment Information Schedule Of Financial Information For Company's Franchising Segment (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues	$ 223,162,000	$ 210,413,000	$ 543,612,000	$ 513,203,000
Operating income (loss)	66,549,000	65,253,000	147,337,000	147,908,000
Income (loss) before income taxes	57,592,000	55,668,000	118,588,000	133,840,000
Franchising [Member]
Revenues	221,839,000	209,175,000	539,999,000	509,763,000
Operating income (loss)	75,085,000	76,290,000	185,491,000	184,096,000
Income (loss) before income taxes	75,506,000	76,461,000	185,831,000	184,084,000
SkyTouch Technology [Member]
Revenues	13,000	0	13,000	0
Operating income (loss)	(3,271,000)	(720,000)	(8,768,000)	(2,074,000)
Income (loss) before income taxes	(3,271,000)	(720,000)	(8,768,000)	(2,074,000)
Corporate & Other [Member]
Revenues	1,310,000	1,238,000	3,600,000	3,440,000
Operating income (loss)	(5,265,000)	(10,317,000)	(29,386,000)	(34,114,000)
Income (loss) before income taxes	$ (14,643,000)	$ (20,073,000)	$ (58,475,000)	$ (48,170,000)

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Reportable Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Schedule Of Financial Information For Company's Franchising Segment

The following table presents the financial information for the Company's segments:

	Three Months Ended September 30, 2013										Three Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	221,839	$	13		$	1,310		$	223,162	$	209,175	$	—		$	1,238		$	210,413
Operating income (loss)	$	75,085	$	(3,271	)	$	(5,265	)	$	66,549	$	76,290	$	(720	)	$	(10,317	)	$	65,253
Income (loss) before income taxes	$	75,506	$	(3,271	)	$	(14,643	)	$	57,592	$	76,461	$	(720	)	$	(20,073	)	$	55,668

	Nine Months Ended September 30, 2013										Nine Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	539,999	$	13		$	3,600		$	543,612	$	509,763	$	—		$	3,440		$	513,203
Operating income (loss)	$	185,491	$	(8,768	)	$	(29,386	)	$	147,337	$	184,096	$	(2,074	)	$	(34,114	)	$	147,908
Income (loss) before income taxes	$	185,831	$	(8,768	)	$	(58,475	)	$	118,588	$	184,084	$	(2,074	)	$	(48,170	)	$	133,840

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Condensed Consolidating Financial Statements Condensed Consolidating Statement Of Cash Flows (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net cash provided by operating activities	$ 105,009,000	$ 118,423,000
Investment in property and equipment	(26,442,000)	(12,525,000)
Equity method investments	(3,761,000)	(9,454,000)
Issuance of mezzanine and other notes receivable	0	(4,236,000)
Collections of mezzanine and other notes receivable	224,000	110,000
Purchases of investments, employee benefit plans	(1,845,000)	(1,191,000)
Proceeds from sales of investments, employee benefit plans	4,052,000	10,909,000
Other items, net	(578,000)	(322,000)
Net cash provided (used) in investing activities	(28,350,000)	(16,709,000)
Net repayments pursuant to revolving credit facilities	27,500,000	(16,725,000)
Proceeds from issuance of long-term debt	3,360,000	543,500,000
Principal payments on long-term debt	(6,158,000)	(502,000)
Purchase of treasury stock	(3,684,000)	(22,227,000)
Dividends paid	(22,026,000)	(632,751,000)
Excess tax benefits from stock-based compensation	1,216,000	793,000
Debt issuance costs	0	(4,753,000)
Proceeds from exercise of stock options	6,677,000	4,695,000
Net cash provided (used) by financing activities	(48,115,000)	(94,520,000)
Net change in cash and cash equivalents	28,544,000	7,194,000
Effect of foreign exchange rate changes on cash and cash equivalents	(1,583,000)	813,000
Cash and cash equivalents at beginning of period	134,177,000	107,057,000
Cash and cash equivalents at end of period	161,138,000	115,064,000
Parent [Member]
Net cash provided by operating activities	60,070,000	87,072,000
Investment in property and equipment	(4,083,000)	(7,126,000)
Equity method investments	0	0
Issuance of mezzanine and other notes receivable	0	(4,236,000)
Collections of mezzanine and other notes receivable	224,000	110,000
Purchases of investments, employee benefit plans	0	0
Proceeds from sales of investments, employee benefit plans	0	0
Advances to and investments in affiliates	(1,000,000)	0
Other items, net	(578,000)	(322,000)
Net cash provided (used) in investing activities	(5,437,000)	(11,574,000)
Net repayments pursuant to revolving credit facilities	(27,500,000)	16,725,000
Proceeds from issuance of long-term debt	0	543,500,000
Principal payments on long-term debt	(5,625,000)	0
Purchase of treasury stock	(3,684,000)	(22,227,000)
Dividends paid	(22,026,000)	(632,751,000)
Excess tax benefits from stock-based compensation	26,000	183,000
Debt issuance costs		(4,753,000)
Proceeds from contributions from affiliates	0	0
Proceeds from exercise of stock options	6,677,000	4,695,000
Net cash provided (used) by financing activities	(52,132,000)	(94,628,000)
Net change in cash and cash equivalents	2,501,000	(19,130,000)
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	8,420,000	23,370,000
Cash and cash equivalents at end of period	10,921,000	4,240,000
Guarantor Subsidiaries [Member]
Net cash provided by operating activities	18,718,000	4,941,000
Investment in property and equipment	(22,182,000)	(5,217,000)
Equity method investments	(1,481,000)	0
Issuance of mezzanine and other notes receivable	0	0
Collections of mezzanine and other notes receivable	0	0
Purchases of investments, employee benefit plans	(1,845,000)	(1,191,000)
Proceeds from sales of investments, employee benefit plans	4,052,000	10,909,000
Advances to and investments in affiliates	(1,280,000)	(9,721,000)
Other items, net	0	0
Net cash provided (used) in investing activities	(22,736,000)	(5,220,000)
Net repayments pursuant to revolving credit facilities	0	0
Proceeds from issuance of long-term debt	3,360,000	0
Principal payments on long-term debt	(502,000)	(488,000)
Purchase of treasury stock	0	0
Dividends paid	0	0
Excess tax benefits from stock-based compensation	1,190,000	610,000
Debt issuance costs		0
Proceeds from contributions from affiliates	0	0
Proceeds from exercise of stock options	0	0
Net cash provided (used) by financing activities	4,048,000	122,000
Net change in cash and cash equivalents	30,000	(157,000)
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	407,000	432,000
Cash and cash equivalents at end of period	437,000	275,000
Non-Guarantor Subsidiaries [Member]
Net cash provided by operating activities	26,221,000	26,410,000
Investment in property and equipment	(177,000)	(182,000)
Equity method investments	(2,280,000)	(9,454,000)
Issuance of mezzanine and other notes receivable	0	0
Collections of mezzanine and other notes receivable	0	0
Purchases of investments, employee benefit plans	0	0
Proceeds from sales of investments, employee benefit plans	0	0
Advances to and investments in affiliates	0	0
Other items, net	0	0
Net cash provided (used) in investing activities	(2,457,000)	(9,636,000)
Net repayments pursuant to revolving credit facilities	0	0
Proceeds from issuance of long-term debt	0	0
Principal payments on long-term debt	(31,000)	(14,000)
Purchase of treasury stock	0	0
Dividends paid	0	0
Excess tax benefits from stock-based compensation	0	0
Debt issuance costs		0
Proceeds from contributions from affiliates	2,280,000	9,721,000
Proceeds from exercise of stock options	0	0
Net cash provided (used) by financing activities	2,249,000	9,707,000
Net change in cash and cash equivalents	26,013,000	26,481,000
Effect of foreign exchange rate changes on cash and cash equivalents	(1,583,000)	813,000
Cash and cash equivalents at beginning of period	125,350,000	83,255,000
Cash and cash equivalents at end of period	149,780,000	110,549,000
Eliminations [Member]
Net cash provided by operating activities	0	0
Investment in property and equipment	0	0
Equity method investments	0	0
Issuance of mezzanine and other notes receivable	0	0
Collections of mezzanine and other notes receivable	0	0
Purchases of investments, employee benefit plans	0	0
Proceeds from sales of investments, employee benefit plans	0	0
Advances to and investments in affiliates	2,280,000	9,721,000
Other items, net	0	0
Net cash provided (used) in investing activities	2,280,000	9,721,000
Net repayments pursuant to revolving credit facilities	0	0
Proceeds from issuance of long-term debt	0	0
Principal payments on long-term debt	0	0
Purchase of treasury stock	0	0
Dividends paid	0	0
Excess tax benefits from stock-based compensation	0	0
Debt issuance costs		0
Proceeds from contributions from affiliates	(2,280,000)	(9,721,000)
Proceeds from exercise of stock options	0	0
Net cash provided (used) by financing activities	(2,280,000)	(9,721,000)
Net change in cash and cash equivalents	0	0
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	0	0
Cash and cash equivalents at end of period	0	0
Consolidated [Member]
Net cash provided by operating activities	105,009,000	118,423,000
Investment in property and equipment	(26,442,000)	(12,525,000)
Equity method investments	(3,761,000)	(9,454,000)
Issuance of mezzanine and other notes receivable	0	(4,236,000)
Collections of mezzanine and other notes receivable	224,000	110,000
Purchases of investments, employee benefit plans	(1,845,000)	(1,191,000)
Proceeds from sales of investments, employee benefit plans	4,052,000	10,909,000
Advances to and investments in affiliates	0	0
Other items, net	(578,000)	(322,000)
Net cash provided (used) in investing activities	(28,350,000)	(16,709,000)
Net repayments pursuant to revolving credit facilities	(27,500,000)	16,725,000
Proceeds from issuance of long-term debt	3,360,000	543,500,000
Principal payments on long-term debt	(6,158,000)	(502,000)
Purchase of treasury stock	(3,684,000)	(22,227,000)
Dividends paid	(22,026,000)	(632,751,000)
Excess tax benefits from stock-based compensation	1,216,000	793,000
Debt issuance costs		(4,753,000)
Proceeds from contributions from affiliates	0	0
Proceeds from exercise of stock options	6,677,000	4,695,000
Net cash provided (used) by financing activities	(48,115,000)	(94,520,000)
Net change in cash and cash equivalents	28,544,000	7,194,000
Effect of foreign exchange rate changes on cash and cash equivalents	(1,583,000)	813,000
Cash and cash equivalents at beginning of period	134,177,000	107,057,000
Cash and cash equivalents at end of period	$ 161,138,000	$ 115,064,000

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Effective income tax rate	27.90%	20.30%	28.10%	28.10%
Federal income tax rate	35.00%	35.00%	35.00%	35.00%
Expense (benefit) from Foreign Operations, Change in Estimate		$ 4.5		$ 4.5

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Debt Narrative (Details) (USD $)			3 Months Ended	9 Months Ended	0 Months Ended	6 Months Ended		15 Months Ended			37 Months Ended			15 Months Ended			15 Months Ended																				15 Months Ended			15 Months Ended			0 Months Ended
	Sep. 30, 2013 subsidiaries	Dec. 31, 2012	Sep. 30, 2012 2012 Special Cash Dividend [Member]	Sep. 30, 2012 2012 Special Cash Dividend [Member]	Aug. 23, 2012 2012 Special Cash Dividend [Member]	Sep. 30, 2013 Economic Development Loans [Member]	Dec. 31, 2012 Economic Development Loans [Member]	Sep. 30, 2013 $400 Million Senior Notes [Member] Senior Unsecured Notes [Member]	Dec. 31, 2012 $400 Million Senior Notes [Member] Senior Unsecured Notes [Member]	Jun. 27, 2012 $400 Million Senior Notes [Member] Senior Unsecured Notes [Member] subsidiaries	Sep. 30, 2013 $250 Million Senior Notes [Member] Senior Unsecured Notes [Member]	Dec. 31, 2012 $250 Million Senior Notes [Member] Senior Unsecured Notes [Member]	Aug. 25, 2010 $250 Million Senior Notes [Member] Senior Unsecured Notes [Member] subsidiaries	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member]	Dec. 31, 2012 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member]	Jul. 25, 2012 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] London Interbank Offered Rate (LIBOR) [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Base Rate [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Minimum [Member] London Interbank Offered Rate (LIBOR) [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Minimum [Member] Base Rate [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Maximum [Member] London Interbank Offered Rate (LIBOR) [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Maximum [Member] Base Rate [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Final Loan Term (Extension) [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Year 1 [Member] Maximum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Year 2 [Member] Maximum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Years 1 and 2 [Member] Minimum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Year 3 [Member] Minimum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] Year 3 [Member] Maximum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] After Year 3 [Member] Minimum [Member]	Sep. 30, 2013 $350 Million Senior Secured Credit Facility [Member] Senior Secured Credit Facility [Member] After Year 3 [Member] Maximum [Member]	Sep. 30, 2013 $200 Million Revolver [Member] Line of Credit [Member]	Dec. 31, 2012 $200 Million Revolver [Member] Line of Credit [Member]	Jul. 25, 2012 $200 Million Revolver [Member] Line of Credit [Member]	Jul. 25, 2012 $200 Million Revolver [Member] Line of Credit [Member] Letter of Credit [Member]	Jul. 25, 2012 $200 Million Revolver [Member] Line of Credit [Member] Swingline Loans [Member]	Jul. 25, 2012 $200 Million Revolver [Member] Line of Credit [Member] Alternative Currency Loans [Member]	Sep. 30, 2013 $150 Million Term Loan [Member] Term Loan, Long-term [Member]	Dec. 31, 2012 $150 Million Term Loan [Member] Term Loan, Long-term [Member]	Jul. 25, 2012 $150 Million Term Loan [Member] Term Loan, Long-term [Member]	Sep. 30, 2013 $150 Million Term Loan [Member] Term Loan, Long-term [Member] Initial Loan Term [Member]	Sep. 30, 2013 $150 Million Term Loan [Member] Term Loan, Long-term [Member] Second Loan Term [Member]	Sep. 30, 2013 $150 Million Term Loan [Member] Term Loan, Long-term [Member] Final Loan Term (Extension) [Member]	Jul. 25, 2012 $300 Million Revolver [Member] [Member] Revolving Credit Facility [Member]
Debt instrument issuance date								Jun. 27, 2012			Aug. 25, 2010			Jul. 25, 2012
Debt instrument face amount										$ 400,000,000			$ 250,000,000			$ 350,000,000																							$ 150,000,000
Debt instrument stated interest rate						3.00%				5.75%			5.70%
Debt instrument effective interest rate						3.00%		5.94%	5.94%	5.94%	6.19%	6.19%	6.19%	2.52%	2.66%
Debt instrument maturity date								Jul. 01, 2022			Aug. 28, 2020			Jul. 25, 2016
Debt instrument payment frequency								semi-annually			semi-annually																										quarterly
Payments of Special Dividends			600,700,000	600,700,000	600,700,000
Dividends Payable, Date to be Paid					Aug. 23, 2012
Number of Domestic Subsidiaries as a Guarantee to Senior Notes	8									8			8
Senior notes, discount											400,000	500,000	600,000
Line of credit maximum borrowing capacity																																	200,000,000	25,000,000	10,000,000	35,000,000
Debt Instrument, Extension, Term																							1 year
Debt Instrument, Amortization Installment Payment Phases																																								2 years	2 years	1 year
Debt Instrument, Amortization Installment Payments, Percentage of Original Principal Balance																																								5.00%	7.50%	10.00%
Percentage Of Ownership In Certain Domestic Subsidiaries included as Security by First Priority Pledges														100.00%
Percentage of Ownership in Certain Foreign and Domestic Subsidiaries and Franchise Agreements included as Security by First Priority Pledges														65.00%
Total Leverage Ratio														4.50										5.75	5.0			4.5		4.0
Debt instrument additional borrowing capacity																100,000,000
Debt Instrument, Description of Variable Rate Basis																	LIBOR	base rate
Debt Instrument, Basis Spread on Variable Rate																			2.00%	1.00%	4.25%	3.25%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage														0.30%
Credit Facility, Dividend Restrictions														50,000,000
Secured Leverage Ratio																								2.50	2.25			2.0		1.75
Fixed Charge Coverage Ratio																										2.00	2.25		2.50
Total Leverage Ratio														3.46
Maximum Secured Leverage Ratio														0.72
Minimum Fixed Charge Coverage Ratio														5.52
Total debt	825,089,000	855,345,000				3,360,000		400,000,000	400,000,000		249,556,000	249,508,000		170,125,000	203,250,000																29,500,000	57,000,000					140,600,000	146,300,000
Termination of Unsecured Revolving Credit Agreement																																											300,000,000
Economic Development Agreements - Total Advances Agreed Upon						4,400,000
Economic Development Agreements - Advances Received						3,400,000
Economic Development Agreements - Advances not yet Received						$ 1,000,000
Economic Development Agreements - Measurement Frequency						annually
Economic Development Agreements - Term (in years)						10

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Notes Receivable and Allowance for Losses Loans Acquired (Details) (Mezzanine & Other Notes Receivable [Member], USD $)	9 Months Ended
	Sep. 30, 2013
Mezzanine & Other Notes Receivable [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, December 31, 2012	$ 1,161,000
Additions	0
Accretion	(433,000)
Disposals	0
Reclassifications from nonaccretable yield	0
Balance, June 30, 2013	$ 728,000

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Consolidated Statements of Comprehensive Income (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 41,512,000	$ 44,377,000	$ 85,269,000	$ 96,236,000
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215,000	215,000	646,000	646,000
Foreign currency translation adjustment	512,000	211,000	(1,800,000)	191,000
Actuarial loss (net of income tax of $12 and $36 for the three and nine months ended September 30, 2012, respectively)	0	20,000	0	60,000
Other comprehensive income (loss), net of tax	727,000	446,000	(1,154,000)	897,000
Comprehensive income	$ 42,239,000	$ 44,823,000	$ 84,115,000	$ 97,133,000

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Debt

9 Months Ended

Sep. 30, 2013

Debt Instruments [Abstract]

Debt

Debt

Debt consists of the following at:

	September 30, 2013		December 31, 2012
	(In thousands)
$400 million senior unsecured notes with an effective interest rate of 5.94% at September 30, 2013 and December 31, 2012	$	400,000	$	400,000
$250 million senior unsecured notes with an effective interest rate of 6.19% less discount of $0.4 million and $0.5 million at September 30, 2013 and December 31, 2012	249,556		249,508
$350 million senior secured credit facility with an effective interest rate of 2.52% and 2.66% at September 30, 2013 and December 31, 2012, respectively	170,125		203,250
Economic development loans with an effective interest rate of 3.00% at September 30, 2013	3,360		—
Capital lease obligations due 2016 with an effective interest rate of 3.18% at September 30, 2013 and December 31, 2012	2,017		2,519
Other notes payable	31		68
Total debt	825,089		$	855,345
Less current portion	9,132		8,195
Total long-term debt	815,957		$	847,150

Senior Notes Due 2022

On June 27, 2012, the Company issued unsecured senior notes in the principal amount of $400 million ("the 2012 Senior Notes") at par, bearing a coupon of 5.75% with an effective rate of 5.94%. The 2012 Senior Notes will mature on July 1, 2022, with interest to be paid semi-annually on January 1^st and July 1^st. The Company used the net proceeds of this offering, after deducting underwriting discounts and commissions and other offering expenses, together with a portion of the proceeds from a new credit facility, to pay a special cash dividend totaling approximately $600.7 million paid to shareholders on August 23, 2012. The Company's 2012 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations by eight wholly-owned domestic subsidiaries.

Senior Notes Due 2020

On August 25, 2010, the Company issued unsecured senior notes in the principal amount of $250 million (“the 2010 Senior Notes”) at a discount of $0.6 million, bearing a coupon of 5.7% with an effective rate of 6.19%. The 2010 Senior Notes will mature on August 28, 2020, with interest to be paid semi-annually on February 28^th and August 28^th. The Company used the net proceeds from the offering, after deducting underwriting discounts and other offering expenses, to repay outstanding borrowings and for other general corporate purposes. The Company's 2010 Senior Notes are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations by eight wholly-owned domestic subsidiaries.

Revolving Credit Facilities

On July 25, 2012, the Company entered into a $350 million senior secured credit facility, comprised of a $200 million revolving credit tranche (the "New Revolver") and a $150 million term loan tranche (the "Term Loan") with Deutsche Bank AG New York Branch, as administrative agent, Wells Fargo Bank, National Association, as administrative agent and a syndication of lenders (the "New Credit Facility"). The New Credit Facility has a final maturity date of July 25, 2016, subject to an optional one-year extension provided certain conditions are met. Up to $25 million of the borrowings under the New Revolver may be used for letters of credit, up to $10 million of borrowings under the New Revolver may be used for swing-line loans and up to $35 million of borrowings under the New Revolver may be used for alternative currency loans. The Term Loan requires quarterly amortization payments (a) during the first two years, in equal installments aggregating 5% of the original principal amount of the Term Loan per year, (b) during the second two years, in equal installments aggregating 7.5% of the original principal amount of the Term Loan per year, and (c) during the one-year extension period (if exercised), equal installments aggregating 10% of the original principal amount of the Term Loan.

The Company utilized the proceeds from the Term Loan and borrowings from the New Revolver, together with the net proceeds from the Company's 2012 Senior Notes, to pay a special cash dividend of approximately $600.7 million in the aggregate to the Company's stockholders on August 23, 2012.

The New Credit Facility is unconditionally guaranteed, jointly and severally, by certain of the Company's domestic subsidiaries. The subsidiary guarantors currently include the eight wholly-owned subsidiaries that guarantee the obligations under the Company's Indenture governing the terms of its 2010 and 2012 Senior Notes.

The New Credit Facility is secured by first priority pledges of (i) 100% of the ownership interests in certain domestic subsidiaries owned by the Company and the guarantors, (ii) 65% of the ownership interests in (a) Choice Netherlands Antilles N.V. (“Choice NV”), the top-tier foreign holding company of the Company's foreign subsidiaries, and (b) the domestic subsidiary that owns Choice NV and (iii) all presently existing and future domestic franchise agreements (the “Franchise Agreements”) between the Company and individual franchisees, but only to the extent that the Franchise Agreements may be pledged without violating any law of the relevant jurisdiction or conflicting with any existing contractual obligation of the Company or the applicable franchisee. At the time that the maximum total leverage ratio is required to be no greater than 4.0 to 1.0 (beginning of year 4 of the New Credit Facility), the security interest in the Franchise Agreements will be released.

The Company may at any time prior to the final maturity date increase the amount of the New Credit Facility by up to an additional $100 million to the extent that any one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met. Such additional amounts may take the form of an increased revolver or term Loan.

The Company may elect to have borrowings under the New Credit Facility bear interest at a rate equal to (i) LIBOR, plus a margin ranging from 200 to 425 basis points based on the Company's total leverage ratio or (ii) a base rate plus a margin ranging from 100 to 325 basis points based on the Company's total leverage ratio.

The New Credit Facility requires the Company to pay a fee on the undrawn portion of the New Revolver, calculated on the basis of the average daily unused amount of the New Revolver multiplied by 0.30% per annum.

The Company may reduce the New Revolver commitment and/or prepay the Term Loan in whole or in part at any time without penalty, subject to reimbursement of customary breakage costs, if any. Any Term Loan prepayments made by the Company shall be applied to reduce the scheduled amortization payments in direct order of maturity.

Additionally, the New Credit Facility requires that the Company and its restricted subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making investments, paying dividends or repurchasing stock, and effecting mergers and/or asset sales. With respect to dividends, the Company may not make any payment if there is an existing event of default or if the payment would create an event of default. In addition, if the Company's total leverage ratio exceeds 4.50 to 1.00, the Company is generally restricted from paying aggregate dividends in excess of $50.0 million during any calendar year.

The New Credit Facility also imposes financial maintenance covenants requiring the Company to maintain:

• a total leverage ratio of not more than 5.75 to 1.00 in year 1, 5.00 to 1.00 in year 2, 4.50 to 1.00 in year 3 and 4.00 to 1.00 thereafter,

• a maximum secured leverage ratio of not more than 2.50 to 1.00 in year 1, 2.25 to 1.00 in year 2, 2.00 to 1.00 in year 3 and 1.75 to 1.00 thereafter, and

• a minimum fixed charge coverage ratio of not less than 2.00 to 1.00 in years 1 and 2, 2.25 to 1.00 in year 3 and 2.50 to 1.00 thereafter.

At September 30, 2013, the Company maintained a total leverage ratio of approximately 3.46x, a maximum secured leverage ratio of 0.72x and a minimum fixed charge coverage ratio of approximately 5.52x.

The New Credit Facility includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the New Credit Facility to be immediately due and payable. At September 30, 2013, the Company was in compliance with all covenants under the New Credit Facility.

At September 30, 2013, the Company had $140.6 million and $29.5 million outstanding under the Term Loan and New Revolver, respectively. At December 31, 2012, the Company had $146.3 million and $57.0 million outstanding under the Term Loan and New Revolver, respectively.

In connection with the entering into the New Credit Facility, the Company's $300 million senior unsecured revolving credit agreement, dated as of February 24, 2011, among the Company, Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders was terminated and replaced by the New Credit Facility.

Economic Development Loans

The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to offset a portion of the corporate headquarter relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. At September 30, 2013, the Company had been advanced approximately $3.4 million pursuant to these agreements and expects to receive the remaining $1 million over the next several years, subject to annual appropriations by the governmental entities. These advances bear interest at a rate of 3% per annum.

Repayment of the advances is contingent upon the Company achieving certain performance conditions. Performance conditions are measured annually on December 31^st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual performance condition, the Company may be required to repay a portion or all of the advances including accrued interest by April 30^th following the measurement date. Any outstanding advances at the expiration of the Company's ten year corporate headquarter lease in 2023 will be forgiven in full. The advances will be included in long-term debt in Company's consolidated balance sheets until the Company determines that the future performance conditions will be met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues interest on the portion of the advances that it expects to repay. The Company was in compliance with all current performance conditions as of September 30, 2013.

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Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 161,138,000	$ 134,177,000
Receivables (net of allowance for doubtful accounts of $10,324 and $10,820, respectively)	62,605,000	52,270,000
Income taxes receivable	0	2,732,000
Deferred income taxes	4,136,000	4,136,000
Investments, employee benefit plans, at fair value	386,000	3,486,000
Other current assets	30,002,000	36,669,000
Total current assets	258,267,000	233,470,000
Property and equipment, at cost, net	65,540,000	51,651,000
Goodwill	65,813,000	65,813,000
Franchise rights and other identifiable intangibles, net	10,875,000	13,473,000
Advances, marketing and reservation activities	32,564,000	42,179,000
Investments, employee benefit plans, at fair value	14,950,000	12,755,000
Deferred income taxes	19,496,000	15,418,000
Other assets	88,204,000	76,013,000
Total assets	555,709,000	510,772,000
Current liabilities
Accounts payable	40,758,000	38,714,000
Accrued expenses	43,475,000	55,552,000
Deferred revenue	61,401,000	71,154,000
Current portion of long-term debt	9,132,000	8,195,000
Deferred compensation and retirement plan obligations	2,439,000	2,522,000
Income taxes payable	21,906,000	0
Total current liabilities	179,111,000	176,137,000
Long-term debt	815,957,000	847,150,000
Deferred compensation and retirement plan obligations	21,219,000	20,399,000
Other liabilities	24,146,000	15,990,000
Total liabilities	1,040,433,000	1,059,676,000
Commitments and Contingencies
SHAREHOLDERS' DEFICIT
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,345,362 shares issued at September 30, 2013 and December 31, 2012 and 58,570,858 and 58,171,059 shares outstanding at September 30, 2013 and December 31, 2012, respectively	586,000	582,000
Additional paid-in-capital	114,571,000	110,246,000
Accumulated other comprehensive loss	(5,370,000)	(4,216,000)
Treasury stock (36,774,504 and 37,174,303 shares at September 30, 2013 and December 31, 2012, respectively), at cost	(919,516,000)	(927,776,000)
Retained earnings	325,005,000	272,260,000
Total shareholders' deficit	(484,724,000)	(548,904,000)
Total liabilities and shareholders' deficit	$ 555,709,000	$ 510,772,000

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Share-Based Compensation and Capital Stock Summary Of Activity Related To PVRSU Grants (Details) (Performance Vested Restricted Stock Units [Member], USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Performance vested restricted stock units granted at target	0	6,137	58,902	100,046
Weighted average grant date fair value per share		$ 32.59	$ 36.76	$ 35.68
Aggregate grant date fair value		$ 200	$ 2,165	$ 3,570
Stock units forfeited	0	0	0	57,176
Requisite service period		41 months
Minimum [Member]
Requisite service period			22 months	36 months
Maximum [Member]
Requisite service period			36 months	60 months

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Consolidated Statements Of Income (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
REVENUES:
Royalty fees	$ 83,107,000	$ 80,845,000	$ 201,222,000	$ 194,762,000
Initial franchise and relicensing fees	4,650,000	3,247,000	12,843,000	8,953,000
Procurement services	4,708,000	3,839,000	16,204,000	13,990,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Hotel operations	1,310,000	1,238,000	3,600,000	3,440,000
Other	3,091,000	2,182,000	7,362,000	7,434,000
Total revenues	223,162,000	210,413,000	543,612,000	513,203,000
OPERATING EXPENSES:
Selling, general and administrative	26,982,000	23,170,000	84,078,000	72,073,000
Depreciation and amortization	2,379,000	1,995,000	7,074,000	5,989,000
Marketing and reservation	126,296,000	119,062,000	302,381,000	284,624,000
Hotel operations	956,000	933,000	2,742,000	2,609,000
Total operating expenses	156,613,000	145,160,000	396,275,000	365,295,000
Operating income (loss)	66,549,000	65,253,000	147,337,000	147,908,000
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000
Interest income	(676,000)	(425,000)	(1,979,000)	(1,156,000)
Loss on extinguishment of debt	0	(526,000)	0	(526,000)
Other gains	(703,000)	(511,000)	(1,266,000)	(2,137,000)
Equity in net loss of affiliates	(421,000)	(171,000)	(340,000)	12,000
Total other income and expenses, net	(8,957,000)	(9,585,000)	(28,749,000)	(14,068,000)
Income before income taxes	57,592,000	55,668,000	118,588,000	133,840,000
Income taxes	16,080,000	11,291,000	33,319,000	37,604,000
Net income	$ 41,512,000	$ 44,377,000	$ 85,269,000	$ 96,236,000
Basic earnings per share	$ 0.71	$ 0.77	$ 1.46	$ 1.66
Diluted earnings per share	$ 0.70	$ 0.76	$ 1.45	$ 1.65

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2012			$ (4,216,000)
Other comprehensive income (loss) before reclassification	512,000	211,000	(1,800,000)	191,000
Amounts reclassified from accumulated other comprehensive income (loss)	215,000	215,000	646,000	646,000
Net current period other comprehensive income (loss)	727,000	446,000	(1,154,000)	897,000
Balance, September 30, 2013	(5,370,000)		(5,370,000)
Interest rate contract	215,000		646,000
Tax (expense) benefit	0		0
Loss on Cash Flow Hedge [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2012			(6,607,000)
Other comprehensive income (loss) before reclassification			0
Amounts reclassified from accumulated other comprehensive income (loss)			646,000
Net current period other comprehensive income (loss)			646,000
Balance, September 30, 2013	(5,961,000)		(5,961,000)
Foreign Currency Items [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2012			2,391,000
Other comprehensive income (loss) before reclassification			(1,800,000)
Amounts reclassified from accumulated other comprehensive income (loss)			0
Net current period other comprehensive income (loss)			(1,800,000)
Balance, September 30, 2013	$ 591,000		$ 591,000

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Other Assets (Table)

9 Months Ended

Sep. 30, 2013

Other Assets, Noncurrent [Abstract]

Components Of Other Assets

Other assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (see Note 3)	$	37,295	$	35,103
Equity method investments	30,404		27,453
Deferred financing fees, net	9,509		11,174
Land	10,097		1,300
Other assets	899		983
Total	$	88,204	$	76,013

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Except as noted below, the Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

In May 2013, Choice was added to an ongoing multi-district class action pending in federal court in Dallas, Texas.  The lawsuit alleges that several online travel companies and hotel companies have engaged in anti-competitive practices.  The complaint seeks an unspecified amount of damages and equitable relief.  Choice disputes the allegations and is in the process of vigorously defending itself against these claims.  We currently do not believe this litigation will have a material effect on our consolidated financial position, results of operation or liquidity.

Contingencies

On October 9, 2012, the Company entered into a limited payment guaranty with regards to a developer's $18.0 million bank loan for the construction of a hotel franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to guarantee 25% of the outstanding principal balance and accrued and unpaid interest, as well as any unpaid expenses incurred by the lender. The limited guaranty shall remain in effect until the maximum amount guaranteed by the Company is paid in full. In addition to the limited guaranty, the Company entered into an agreement in which the Company guarantees the completion of the construction of the hotel and an environmental indemnity agreement which indemnifies the lending institution from and against any damages relating to or arising out of possible environmental contamination issues with regards to the property.

Commitments

The Company has the following commitments outstanding at September 30, 2013:

• The Company occasionally provides financing in the form of forgivable promissory notes or cash incentives to franchisees for property improvements, hotel development efforts and other purposes. At September 30, 2013, the Company had commitments to extend an additional $11.3 million for these purposes provided certain conditions are met by its franchisees, of which $6.5 million is expected to be advanced in the next twelve months.

• The Company committed to make additional capital contributions totaling $4.9 million to existing joint ventures related to the construction of various hotels to be operated under the Company's Cambria Suites brand. These commitments are expected to be funded in the next twelve months.

In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as indemnifications of landlords against third party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates potential liability.

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Notes Receivable and Allowance for Losses Past Due Balances Of Mezzanine And Other Notes Receivable (Details) (Mezzanine & Other Notes Receivable [Member], USD $)	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable 30-89 days Past Due	$ 9,500,000	$ 619,000
Financing Receivable >90 days Past Due	10,315,000	9,676,000
Financing Receivable Total Past Due	19,815,000	10,295,000
Financing Receivable, Current	24,386,000	33,538,000
Total Receivables	44,201,000	43,833,000
Senior Notes [Member]
Financing Receivable 30-89 days Past Due	9,500,000	0
Financing Receivable >90 days Past Due	0	0
Financing Receivable Total Past Due	9,500,000	0
Financing Receivable, Current	18,048,000	27,549,000
Total Receivables	27,548,000	27,549,000
Senior Subordinated Notes [Member]
Financing Receivable 30-89 days Past Due	0	619,000
Financing Receivable >90 days Past Due	10,268,000	9,629,000
Financing Receivable Total Past Due	10,268,000	10,248,000
Financing Receivable, Current	4,573,000	4,771,000
Total Receivables	14,841,000	15,019,000
Unsecured Notes [Member]
Financing Receivable 30-89 days Past Due	0	0
Financing Receivable >90 days Past Due	47,000	47,000
Financing Receivable Total Past Due	47,000	47,000
Financing Receivable, Current	1,765,000	1,218,000
Total Receivables	$ 1,812,000	$ 1,265,000

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Fair Value Measurements Narrative (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Dec. 31, 2012 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Aug. 25, 2010 Senior Unsecured Notes [Member] $250 Million Senior Notes [Member]	Sep. 30, 2013 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]	Dec. 31, 2012 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]	Jun. 27, 2012 Senior Unsecured Notes [Member] $400 Million Senior Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Defined Benefit Plan, Transfers Between Measurement Levels	$ 0	$ 0
Debt instrument face amount					250,000,000			400,000,000
Debt instrument fair value			$ 256,900,000	$ 271,600,000		$ 412,000,000	$ 442,000,000

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Condensed Consolidating Financial Statements Schedule of Error Corrections and Prior Period Adjustments Condensed Consolidating Financial Statements of Income (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Marketing and reservation expense	$ 126,296,000	$ 119,062,000	$ 302,381,000	$ 284,624,000
Total operating expenses	156,613,000	145,160,000	396,275,000	365,295,000
Operating income (loss)	66,549,000	65,253,000	147,337,000	147,908,000
Interest expense	10,757,000	10,166,000	32,334,000	16,823,000
Total other income and expenses, net	8,957,000	9,585,000	28,749,000	14,068,000
Guarantor Subsidiaries [Member]
Marketing and reservation expense	92,747,000	88,655,000	257,107,000	241,907,000
Total operating expenses	117,899,000	110,198,000	341,276,000	311,307,000
Operating income (loss)	5,198,000	(1,627,000)	14,109,000	8,766,000
Interest expense	61,000	4,000	111,000	40,000
Total other income and expenses, net	(636,000)	(507,000)	(1,150,000)	(2,097,000)
Guarantor Subsidiaries [Member] | As Previously Reported [Member]
Marketing and reservation expense		89,498,000		244,861,000
Total operating expenses		111,041,000		314,261,000
Operating income (loss)		(2,470,000)		5,812,000
Interest expense		(839,000)		(2,914,000)
Total other income and expenses, net		(1,350,000)		(5,051,000)
Guarantor Subsidiaries [Member] | Adjustment [Member]
Marketing and reservation expense		(843,000)		(2,954,000)
Total operating expenses		(843,000)		(2,954,000)
Operating income (loss)		843,000		2,954,000
Interest expense		843,000		2,954,000
Total other income and expenses, net		843,000		2,954,000
Guarantor Subsidiaries [Member] | As Revised [Member]
Marketing and reservation expense		88,655,000		241,907,000
Total operating expenses		110,198,000		311,307,000
Operating income (loss)		(1,627,000)		8,766,000
Interest expense		4,000		40,000
Total other income and expenses, net		$ (507,000)		$ (2,097,000)

XML

Company Information and Significant Accounting Policies Narrative (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts Payable [Member]
Book Overdrafts	$ 3.4	$ 5.0
Cash and cash equivalents [Member]
International Cash	$ 149.8

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Common Share

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except per share amounts)	2013			2012			2013			2012
Computation of Basic Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(404		)	(470		)	(851		)	(1,016		)
Net income available to common shareholders	$	41,108		$	43,907		$	84,418		$	95,220
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Basic earnings per share	$	0.71		$	0.77		$	1.46		$	1.66
Computation of Diluted Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(402		)	(493		)	(848		)	(1,032		)
Net income available to common shareholders	$	41,110		$	43,884		$	84,421		$	95,204
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Diluted effect of stock options and PVRSUs	394			225			383			157
Weighted average shares outstanding – diluted	58,372			57,613			58,267			57,612
Diluted earnings per share	$	0.70		$	0.76		$	1.45		$	1.65

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2013

Condensed Consolidating Financial Statements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments Condensed Consolidating Statements of Income [Table Text Block]

The following tables present the effect of the correction of these immaterial errors on selected line items in the Company's Guarantor Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2012.

	For the Three Months Ended September 30, 2012									For the Nine Months Ended September 30, 2012
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Marketing and reservation expense	$	89,498		$	(843	)	$	88,655		$	244,861		$	(2,954	)	$	241,907
Total operating expenses	111,041			(843		)	110,198			314,261			(2,954		)	311,307
Operating income (loss)	(2,470		)	843			(1,627		)	5,812			2,954			8,766
Interest expense	(839		)	843			4			(2,914		)	2,954			40
Total other income and expenses, net	(1,350		)	843			(507		)	(5,051		)	2,954			(2,097		)

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

The following tables present the effect of the correction of the classification of the cash flows related to forgivable notes receivable on selected line items included in the Company's Consolidated Statements of Cash Flows for all periods affected:

	Year Ended December 31, 2012									Year Ended December 31, 2011									Year Ended December 31, 2010
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(10,898	)	$	(10,898	)	$	—		$	(3,475	)	$	(3,475	)	$	—		$	(1,120	)	$	(1,120	)
Net cash provided by operating activities	161,020			(10,898		)	150,122			134,844			(3,475		)	131,369			144,935			(1,120		)	143,815
Issuance of mezzanine and other notes receivable	(34,925		)	11,189			(23,736		)	(12,766		)	3,539			(9,227		)	(11,786		)	1,203			(10,583		)
Collections of mezzanine and other notes receivable	3,561			(291		)	3,270			4,754			(64		)	4,690			5,083			(83		)	5,000
Net cash used in investing activities	(57,999		)	10,898			(47,101		)	(23,804		)	3,475			(20,329		)	(32,155		)	1,120			(31,035		)

	Three Months Ended March 31, 2013									Three Months Ended March 31, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,729	)	$	(1,729	)	$	—		$	(475	)	$	(475	)
Net cash provided by operating activities	1,874			(1,729		)	145			4,412			(475		)	3,937
Issuance of mezzanine and other notes receivable	(1,729		)	1,729			—			(3,719		)	583			(3,136		)
Collections of mezzanine and other notes receivable	19			—			19			151			(108		)	43
Net cash used in investing activities	(13,816		)	1,729			(12,087		)	(1,496		)	475			(1,021		)

	Six Months Ended June 30, 2012									Nine Months Ended September 30, 2012
	(In thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Forgivable notes receivable, net	$	—		$	(1,537	)	$	(1,537	)	$	—		$	(2,853	)	$	(2,853	)
Net cash provided by operating activities	37,802			(1,537		)	36,265			121,276			(2,853		)	118,423
Issuance of mezzanine and other notes receivable	(5,820		)	1,684			(4,136		)	(7,305		)	3,069			(4,236		)
Collections of mezzanine and other notes receivable	210			(147		)	63			326			(216		)	110
Net cash used in investing activities	(10,387		)	1,537			(8,850		)	(19,562		)	2,853			(16,709		)

The following tables present the effect of the correction for the aforementioned items on selected line items included in the Company's Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2012:

	For the Nine Months Ended September 30, 2012
	Guarantor									Non-Guarantor
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Net cash provided (used) by operating activities	$	(1,928	)	$	6,869		$	4,941		$	36,131		$	(9,721	)	$	26,410
Investing Activities:
Issuance of mezzanine and other notes receivable	(3,068		)	3,068			—			—			—			—
Collection of mezzanine and other notes receivable	216			(216		)	—			—			—			—
Advances to and investments in affiliates	—			(9,721		)	(9,721		)	—			—			—
Net cash provided (used) in investing activities	1,649			(6,869		)	(5,220		)	(9,636		)	—			(9,636		)
Financing Activities:
Proceeds from contributions from affiliates	—			—			—			—			9,721			9,721
Net cash provided (used) by financing activities	122			—			122			(14		)	9,721			9,707

Condensed Consolidating Statement Of Income

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	76,645		$	25,161		$	11,279		$	(29,978	)	$	83,107
Initial franchise and relicensing fees	4,419			—			231			—			4,650
Procurement services	4,375			—			333			—			4,708
Marketing and reservation	114,117			96,626			5,577			(90,024		)	126,296
Other items, net	2,778			1,310			313			—			4,401
Total revenues	202,334			123,097			17,733			(120,002		)	223,162
OPERATING EXPENSES:
Selling, general and administrative	30,619			22,867			3,474			(29,978		)	26,982
Marketing and reservation	119,002			92,747			4,571			(90,024		)	126,296
Other items, net	828			2,285			222			—			3,335
Total operating expenses	150,449			117,899			8,267			(120,002		)	156,613
Operating income	51,885			5,198			9,466			—			66,549
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,691			61			5			—			10,757
Equity in earnings of consolidated subsidiaries	(13,329		)	—			—			13,329			—
Other items, net	(577		)	(697		)	(526		)	—			(1,800		)
Total other income and expenses, net	(3,215		)	(636		)	(521		)	13,329			8,957
Income before income taxes	55,100			5,834			9,987			(13,329		)	57,592
Income taxes	13,588			2,052			440			—			16,080
Net income	$	41,512		$	3,782		$	9,547		$	(13,329	)	$	41,512

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months EndedSeptember 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	74,186		$	16,347		$	22,925		$	(32,613	)	$	80,845
Initial franchise and relicensing fees	2,996			—			251			—			3,247
Procurement services	3,489			—			350			—			3,839
Marketing and reservation	109,793			90,986			4,783			(86,500		)	119,062
Other items, net	1,991			1,238			191			—			3,420
Total revenues	192,455			108,571			28,500			(119,113		)	210,413
OPERATING EXPENSES:
Selling, general and administrative	39,781			19,525			(3,523		)	(32,613		)	23,170
Marketing and reservation	111,831			88,655			4,233			(85,657		)	119,062
Other items, net	706			2,018			204			—			2,928
Total operating expenses	152,318			110,198			914			(118,270		)	145,160
Operating income	40,137			(1,627		)	27,586			(843		)	65,253
OTHER INCOME AND EXPENSES, NET:
Interest expense	11,005			4			—			(843		)	10,166
Equity in earnings of consolidated subsidiaries	(27,029		)	—			—			27,029			—
Other items, net	215			(511		)	(285		)	—			(581		)
Total other income and expenses, net	(15,809		)	(507		)	(285		)	26,186			9,585
Income before income taxes	55,946			(1,120		)	27,871			(27,029		)	55,668
Income taxes	11,569			(647		)	369			—			11,291
Net income	$	44,377		$	(473	)	$	27,502		$	(27,029	)	$	44,377

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	183,063		$	84,477		$	31,452		$	(97,770	)	$	201,222
Initial franchise and relicensing fees	12,074			—			769			—			12,843
Procurement services	15,559			—			645			—			16,204
Marketing and reservation	267,491			267,308			14,953			(247,371		)	302,381
Other items, net	6,581			3,600			781			—			10,962
Total revenues	484,768			355,385			48,600			(345,141		)	543,612
OPERATING EXPENSES:
Selling, general and administrative	94,693			77,279			9,876			(97,770		)	84,078
Marketing and reservation	278,703			257,107			13,942			(247,371		)	302,381
Other items, net	2,301			6,890			625			—			9,816
Total operating expenses	375,697			341,276			24,443			(345,141		)	396,275
Operating income	109,071			14,109			24,157			—			147,337
OTHER INCOME AND EXPENSES, NET:
Interest expense	32,210			111			13			—			32,334
Equity in earnings of consolidated subsidiaries	(33,215		)	—			—			33,215			—
Other items, net	(1,689		)	(1,261		)	(635		)	—			(3,585		)
Total other income and expenses, net	(2,694		)	(1,150		)	(622		)	33,215			28,749
Income before income taxes	111,765			15,259			24,779			(33,215		)	118,588
Income taxes	26,496			6,058			765			—			33,319
Net income	$	85,269		$	9,201		$	24,014		$	(33,215	)	$	85,269

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	175,862		$	68,622		$	39,781		$	(89,503	)	$	194,762
Initial franchise and relicensing fees	8,459			—			494			—			8,953
Procurement services	13,349			—			641			—			13,990
Marketing and reservation	252,951			248,011			13,892			(230,230		)	284,624
Other items, net	6,958			3,440			476			—			10,874
Total revenues	457,579			320,073			55,284			(319,733		)	513,203
OPERATING EXPENSES:
Selling, general and administrative	92,804			63,544			5,228			(89,503		)	72,073
Marketing and reservation	256,936			241,907			13,057			(227,276		)	284,624
Other items, net	2,117			5,856			625			—			8,598
Total operating expenses	351,857			311,307			18,910			(316,779		)	365,295
Operating income	105,722			8,766			36,374			(2,954		)	147,908
OTHER INCOME AND EXPENSES, NET:
Interest expense	19,731			40			6			(2,954		)	16,823
Equity in earnings of consolidated subsidiaries	(42,075		)	—			—			42,075			—
Other items, net	(274		)	(2,137		)	(344		)	—			(2,755		)
Total other income and expenses, net	(22,618		)	(2,097		)	(338		)	39,121			14,068
Income before income taxes	128,340			10,863			36,712			(42,075		)	133,840
Income taxes	32,104			4,663			837			—			37,604
Net income	$	96,236		$	6,200		$	35,875		$	(42,075	)	$	96,236

Schedule of Condensed Consolidating Statement of Comprehensive Income

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	41,512	$	3,782	$	9,547	$	(13,329	)	$	41,512
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—		—		—			215
Foreign currency translation adjustment	512		—		512		(512		)	512
Other comprehensive income (loss), net of tax	727		—		512		(512		)	727
Comprehensive income	$	42,239	$	3,782	$	10,059	$	(13,841	)	$	42,239

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	44,377	$	(473	)	$	27,502	$	(27,029	)	$	44,377
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—			—		—			215
Foreign currency translation adjustment	211		1			209		(210		)	211
Amortization of pension related costs, net of tax:
Actuarial loss	20		20			—		(20		)	20
Other comprehensive income (loss), net of tax	446		21			209		(230		)	446
Comprehensive income	$	44,823	$	(452	)	$	27,711	$	(27,259	)	$	44,823

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	85,269		$	9,201	$	24,014		$	(33,215	)	$	85,269
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646			—		—			—			646
Foreign currency translation adjustment	(1,800		)	—		(1,800		)	1,800			(1,800		)
Other comprehensive income (loss), net of tax	(1,154		)	—		(1,800		)	1,800			(1,154		)
Comprehensive income	$	84,115		$	9,201	$	22,214		$	(31,415	)	$	84,115

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	96,236	$	6,200	$	35,875	$	(42,075	)	$	96,236
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646		—		—		—			646
Foreign currency translation adjustment	191		5		171		(176		)	191
Amortization of pension related costs, net of tax:
Actuarial loss	60		60		—		(60		)	60
Other comprehensive income (loss), net of tax	897		65		171		(236		)	897
Comprehensive income	$	97,133	$	6,265	$	36,046	$	(42,311	)	$	97,133

Condensed Consolidating Balance Sheet

Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	10,921		$	437	$	149,780	$	—		$	161,138
Receivables, net	54,842			1,963		5,800		—			62,605
Other current assets	36,200			13,271		728		(15,675		)	34,524
Total current assets	101,963			15,671		156,308		(15,675		)	258,267
Property and equipment, at cost, net	11,351			53,331		858		—			65,540
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	7,113			2,251		1,511		—			10,875
Advances, marketing and reservation activities	32,564			—		—		—			32,564
Investments, employee benefit plans, at fair value	—			14,950		—		—			14,950
Investment in affiliates	362,158			27,307		—		(389,465		)	—
Advances to affiliates	13,985			203,917		10,613		(228,515		)	—
Deferred income taxes	—			29,184		1,058		(10,746		)	19,496
Other assets	30,113			27,839		30,252		—			88,204
Total assets	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	9,098		$	27,757	$	3,903	$	—		$	40,758
Accrued expenses	19,397			22,098		1,980		—			43,475
Deferred revenue	5,995			54,666		740		—			61,401
Current portion of long-term debt	8,437			684		11		—			9,132
Deferred compensation & retirement plan obligations	—			2,439		—		—			2,439
Other current liabilities	13,503			23,616		462		(15,675		)	21,906
Total current liabilities	56,430			131,260		7,096		(15,675		)	179,111
Long-term debt	811,243			4,694		20		—			815,957
Deferred compensation & retirement plan obligations	—			21,212		7		—			21,219
Advances from affiliates	220,721			403		7,390		(228,514		)	—
Other liabilities	16,197			18,211		484		(10,746		)	24,146
Total liabilities	1,104,591			175,780		14,997		(254,935		)	1,040,433
Total shareholders’ (deficit) equity	(484,724		)	203,863		185,603		(389,466		)	(484,724		)
Total liabilities and shareholders’ deficit	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709

Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of December 31, 2012

(In Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	8,420		$	407	$	125,350	$	—		$	134,177
Receivables, net	44,344			1,797		6,129		—			52,270
Other current assets	41,897			20,110		3,528		(18,512		)	47,023
Total current assets	94,661			22,314		135,007		(18,512		)	233,470
Property and equipment, at cost, net	11,307			39,298		1,046		—			51,651
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	8,669			2,715		2,089		—			13,473
Advances, marketing and reservation activities	42,179			—		—		—			42,179
Investments, employee benefit plans, at fair value	—			12,755		—		—			12,755
Investment in affiliates	329,038			26,194		—		(355,232		)	—
Advances to affiliates	14,252			206,770		13,479		(234,501		)	—
Deferred income taxes	—			28,539		640		(13,761		)	15,418
Other assets	32,085			18,925		25,003		—			76,013
Total assets	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	5,930		$	28,525	$	4,259	$	—		$	38,714
Accrued expenses	18,582			34,576		2,394		—			55,552
Deferred revenue	17,239			53,081		834		—			71,154
Current portion of long-term debt	7,500			675		20		—			8,195
Deferred compensation and retirement plan obligations	—			2,522		—		—			2,522
Other current liabilities	—			17,722		790		(18,512		)	—
Total current liabilities	49,251			137,101		8,297		(18,512		)	176,137
Long-term debt	845,257			1,845		48		—			847,150
Deferred compensation & retirement plan obligations	—			20,390		9		—			20,399
Advances from affiliates	226,917			189		7,395		(234,501		)	—
Other liabilities	20,290			9,216		245		(13,761		)	15,990
Total liabilities	1,141,715			168,741		15,994		(266,774		)	1,059,676
Total shareholders’ (deficit) equity	(548,904		)	193,962		161,270		(355,232		)	(548,904		)
Total liabilities and shareholders' deficit	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772

Condensed Consolidating Statement Of Cash Flows

Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	60,070		$	18,718		$	26,221		$	—		$	105,009
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(4,083		)	(22,182		)	(177		)	—			(26,442		)
Equity method investments	—			(1,481		)	(2,280		)	—			(3,761		)
Issuance of mezzanine and other notes receivable	—			—			—			—			—
Collections of mezzanine and other notes receivable	224			—			—			—			224
Purchases of investments, employee benefit plans	—			(1,845		)	—			—			(1,845		)
Proceeds from sales of investments, employee benefit plans	—			4,052			—			—			4,052
Advances to and investments in affiliates	(1,000		)	(1,280		)	—			2,280			—
Other items, net	(578		)	—			—			—			(578		)
Net cash provided (used) in investing activities	(5,437		)	(22,736		)	(2,457		)	2,280			(28,350		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments pursuant to revolving credit facilities	(27,500		)	—			—			—			(27,500		)
Proceeds from issuance of long-term debt	—			3,360			—			—			3,360
Principal payments on long-term debt	(5,625		)	(502		)	(31		)	—			(6,158		)
Purchase of treasury stock	(3,684		)	—			—			—			(3,684		)
Dividends paid	(22,026		)	—			—			—			(22,026		)
Excess tax benefits from stock-based compensation	26			1,190			—			—			1,216
Proceeds from contributions from affiliates	—			—			2,280			(2,280		)	—
Proceeds from exercise of stock options	6,677			—			—			—			6,677
Net cash provided (used) by financing activities	(52,132		)	4,048			2,249			(2,280		)	(48,115		)
Net change in cash and cash equivalents	2,501			30			26,013			—			28,544
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			(1,583		)	—			(1,583		)
Cash and cash equivalents at beginning of period	8,420			407			125,350			—			134,177
Cash and cash equivalents at end of period	$	10,921		$	437		$	149,780		$	—		$	161,138

Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	87,072		$	4,941		$	26,410		$	—		$	118,423
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(7,126		)	(5,217		)	(182		)	—			(12,525		)
Equity method investments	—			—			(9,454		)	—			(9,454		)
Issuance of mezzanine and other notes receivable	(4,236		)	—			—			—			(4,236		)
Collections of mezzanine and other notes receivable	110			—			—			—			110
Purchases of investments, employee benefit plans	—			(1,191		)	—			—			(1,191		)
Proceeds from sales of investments, employee benefit plans	—			10,909			—			—			10,909
Advances to and investments in affiliates	—			(9,721		)	—			9,721			—
Other items, net	(322		)	—			—			—			(322		)
Net cash provided (used) in investing activities	(11,574		)	(5,220		)	(9,636		)	9,721			(16,709		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities	16,725			—			—			—			16,725
Proceeds from issuance of long-term debt	543,500			—			—			—			543,500
Principal payments on long-term debt	—			(488		)	(14		)	—			(502		)
Purchase of treasury stock	(22,227		)	—			—			—			(22,227		)
Dividends paid	(632,751		)	—			—			—			(632,751		)
Excess tax benefits from stock-based compensation	183			610			—			—			793
Debt issuance costs	(4,753		)	—			—			—			(4,753		)
Proceeds from contributions from affiliates	—			—			9,721			(9,721		)	—
Proceeds from exercise of stock options	4,695			—			—			—			4,695
Net cash provided (used) by financing activities	(94,628		)	122			9,707			(9,721		)	(94,520		)
Net change in cash and cash equivalents	(19,130		)	(157		)	26,481			—			7,194
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			813			—			813
Cash and cash equivalents at beginning of period	23,370			432			83,255			—			107,057
Cash and cash equivalents at end of period	$	4,240		$	275		$	110,549		$	—		$	115,064

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Deferred Revenue

9 Months Ended

Sep. 30, 2013

Deferred Revenue and Credits [Abstract]

Deferred Revenue

Deferred Revenue

Deferred revenue consists of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Loyalty programs	$	55,106	$	64,636
Initial, relicensing and franchise fees	4,369		4,994
Procurement service fees	1,197		1,225
Other	729		299
Total	$	61,401	$	71,154

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Earnings Per Share Computation Of Basic And Diluted Earnings Per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Line Items]
Net income	$ 41,512	$ 44,377	$ 85,269	$ 96,236
Basic earnings per share	$ 0.71	$ 0.77	$ 1.46	$ 1.66
Diluted earnings per share	$ 0.70	$ 0.76	$ 1.45	$ 1.65
Basic earnings per share [Member]
Earnings Per Share [Line Items]
Net income	41,512	44,377	85,269	96,236
Income allocated to participating securities	(404)	(470)	(851)	(1,016)
Net income available to common shareholders, basic	41,108	43,907	84,418	95,220
Weighted average common shares outstanding - basic	57,978	57,388	57,884	57,455
Basic earnings per share	$ 0.71	$ 0.77	$ 1.46	$ 1.66
Diluted earnings per share [Member]
Earnings Per Share [Line Items]
Net income	41,512	44,377	85,269	96,236
Income allocated to participating securities	(402)	(493)	(848)	(1,032)
Net income available to common shareholders, diluted	$ 41,110	$ 43,884	$ 84,421	$ 95,204
Weighted average common shares outstanding - basic	57,978	57,388	57,884	57,455
Diluted effect of stock options and PVRSUs	394	225	383	157
Weighted average shares outstanding - diluted	58,372	57,613	58,267	57,612
Diluted earnings per share	$ 0.70	$ 0.76	$ 1.45	$ 1.65

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Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2013

Deferred Revenue and Credits [Abstract]

Components Of Deferred Revenue

Deferred revenue consists of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Loyalty programs	$	55,106	$	64,636
Initial, relicensing and franchise fees	4,369		4,994
Procurement service fees	1,197		1,225
Other	729		299
Total	$	61,401	$	71,154

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Notes Receivable and Allowance for Losses Schedule Of Notes Receivable (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes Receivable, Related Parties	$ 63,219,000	$ 60,068,000
Allowance for losses on non-impaired loans	3,345,000	2,261,000
Allowance for losses on receivables specifically evaluated for impairment	8,453,000	8,289,000
Total loan reserves	11,798,000	10,550,000
Net carrying value	51,421,000	49,518,000
Current portion, net	14,126,000	14,415,000
Long-term portion, net	37,295,000	35,103,000
Forgivable Notes Receivable [Member]
Notes Receivable, Related Parties	19,018,000	16,235,000
Allowance for losses on non-impaired loans	1,902,000	1,623,000
Allowance for losses on receivables specifically evaluated for impairment	0	0
Total loan reserves	1,902,000	1,623,000
Net carrying value	17,116,000	14,612,000
Current portion, net	425,000	420,000
Long-term portion, net	16,691,000	14,192,000
Mezzanine & Other Notes Receivable [Member]
Notes Receivable, Related Parties	44,201,000	43,833,000
Allowance for losses on non-impaired loans	1,443,000	638,000
Allowance for losses on receivables specifically evaluated for impairment	8,453,000	8,289,000
Total loan reserves	9,896,000	8,927,000
Net carrying value	34,305,000	34,906,000
Current portion, net	13,701,000	13,995,000
Long-term portion, net	20,604,000	20,911,000
Senior Notes [Member]
Notes Receivable, Related Parties	27,548,000	27,549,000
Senior Notes [Member] | Forgivable Notes Receivable [Member]
Notes Receivable, Related Parties	0	0
Senior Notes [Member] | Mezzanine & Other Notes Receivable [Member]
Notes Receivable, Related Parties	27,548,000	27,549,000
Senior Subordinated Notes [Member]
Notes Receivable, Related Parties	14,841,000	15,019,000
Senior Subordinated Notes [Member] | Forgivable Notes Receivable [Member]
Notes Receivable, Related Parties	0	0
Senior Subordinated Notes [Member] | Mezzanine & Other Notes Receivable [Member]
Notes Receivable, Related Parties	14,841,000	15,019,000
Unsecured Notes [Member]
Notes Receivable, Related Parties	20,830,000	17,500,000
Unsecured Notes [Member] | Forgivable Notes Receivable [Member]
Notes Receivable, Related Parties	19,018,000	16,235,000
Unsecured Notes [Member] | Mezzanine & Other Notes Receivable [Member]
Notes Receivable, Related Parties	$ 1,812,000	$ 1,265,000

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Non-Qualified Retirement, Savings and Investment Plans

9 Months Ended

Sep. 30, 2013

Compensation Related Costs [Abstract]

Non-Qualified Retirement, Savings and Investment Plans

Non-Qualified Retirement, Savings and Investment Plans

The Company sponsors two non-qualified retirement savings and investment plans for certain employees and senior executives. Employee and Company contributions are maintained in separate irrevocable trusts. Legally, the assets of the trusts remain those of the Company; however, access to the trusts' assets is severely restricted. The trusts cannot be revoked by the Company or an acquirer, but the assets are subject to the claims of the Company's general creditors. The participants do not have the right to assign or transfer contractual rights in the trusts.

In 2002, the Company adopted the Choice Hotels International, Inc. Executive Deferred Compensation Plan (“EDCP”) which became effective January 1, 2003. Under the EDCP, certain executive officers may defer a portion of their salary into an irrevocable trust. Prior to January 1, 2010, participants could elect an investment return of either the annual yield of the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points, or a return based on a selection of available diversified investment options. Effective January 1, 2010, the Moody's Average Corporate Bond Rate Yield Index plus 300 basis points is no longer an investment option for salary deferrals made on compensation earned after December 31, 2009. The Company recorded current and long-term deferred compensation liabilities of $10.9 million and $11.7 million, as of September 30, 2013 and December 31, 2012, respectively, related to these deferrals and credited investment returns. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. Compensation expense recorded in SG&A related to the EDCP for the three months ended September 30, 2013 and 2012 was $0.3 million and $0.2 million, respectively. Compensation expense recorded in SG&A related to the EDCP for the nine months ended September 30, 2013 and 2012 was $0.7 million for both periods.

The Company has invested the employee salary deferrals in diversified long-term investments which are intended to provide investment returns that partially offset the earnings credited to the participants. The diversified investments held in the trusts totaled $3.8 million and $6.0 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. At September 30, 2013, the Company expects $0.4 million of the assets held in the trusts to be distributed to participants during the next twelve months. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains related to the EDCP during the three months ended September 30, 2013 and 2012 of approximately $0.2 million and $0.1 million, respectively. The Company recorded investment gains related to the EDCP during the nine months ended September 30, 2013 and 2012 of approximately $0.3 million and $1.2 million, respectively. In addition, the EDCP Plan held shares of the Company's common stock with a market value of $0.2 million and $0.1 million at September 30, 2013 and December 31, 2012, respectively, which were recorded as a component of shareholders' deficit.

In 1997, the Company adopted the Choice Hotels International, Inc. Non-Qualified Retirement Savings and Investment Plan (“Non-Qualified Plan”). The Non-Qualified Plan allows certain employees who do not participate in the EDCP to defer a portion of their salary and invest these amounts in a selection of available diversified investment options. As of September 30, 2013 and December 31, 2012, the Company had recorded a deferred compensation liability of $12.8 million and $11.2 million, respectively, related to these deferrals. Compensation expense is recorded in SG&A expense on the Company's consolidated statements of income based on the change in the deferred compensation obligation related to earnings credited to participants as well as changes in the fair value of diversified investments. The net increase in compensation expense recorded in SG&A related to the Non-Qualified Plan for the three months ended September 30, 2013 and 2012 was $0.6 million and $0.2 million, respectively. The net increase in compensation expense recorded in SG&A related to the Non-Qualified Plan for the nine months ended September 30, 2013 and 2012 was $1.3 million and $0.8 million, respectively.

The diversified investments held in the trusts were $11.6 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively, and are recorded at their fair value, based on quoted market prices. These investments are considered trading securities and therefore the changes in the fair value of the diversified assets is included in other gains and losses in the accompanying consolidated statements of income. The Company recorded investment gains related to the Non-Qualified Plan during the three months ended September 30, 2013 and 2012 of approximately $0.5 million and $0.4 million, respectively. The Company recorded investment gains related to the Non-Qualified Plan during the nine months ended September 30, 2013 and 2012 of approximately $1.1 million and $1.0 million, respectively. In addition, the Non-Qualified Plan held shares of the Company's common stock with a market value of $1.2 million and $1.0 million at September 30, 2013 and December 31, 2012, respectively, which are recorded as a component of shareholders' deficit.

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Termination Charges (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Salary and Benefits Continuation [Member]	Sep. 30, 2013 Employee Severance [Member]	Sep. 30, 2013 One Time Termination Benefits [Member]	Dec. 31, 2012 One Time Termination Benefits [Member]
Termination charges taken in the current period YTD	$ 1.5
Termination benefits remaining to be remitted		0.5	0.1	0.6	3.1
Payments remitted on prior period termination charges	3.0
Termination benefits expected to be paid within next 12 months	$ 0.6

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Other Assets

9 Months Ended

Sep. 30, 2013

Other Assets, Noncurrent [Abstract]

Other Assets

Other Assets

Other assets consist of the following:

	September 30, 2013		December 31, 2012
	(In thousands)
Notes receivable (see Note 3)	$	37,295	$	35,103
Equity method investments	30,404		27,453
Deferred financing fees, net	9,509		11,174
Land	10,097		1,300
Other assets	899		983
Total	$	88,204	$	76,013

Land represents the Company’s purchase of real estate as part of its program to incent franchise development in strategic markets for certain brands. The Company has acquired this real estate with the intent to either resell it to third-party developers for the construction of hotels operated under the Company’s brands or contribute the land into joint ventures for the same purpose. The real estate is carried at the lower of its carrying value or its estimated fair value (based on comparable sales), less estimated costs to sell.

Variable Interest Entities

Equity method investments include investments in joint ventures totaling $27.0 million and $24.3 million at September 30, 2013 and December 31, 2012, respectively that the Company determined to be variable interest entities. These investments relate to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Suites hotels in strategic markets. Based on an analysis of who has the power to direct the activities that most significantly impact these entities performance and who has an obligation to absorb losses of these entities or a right to receive benefits from these entities that could potentially be significant to the entity, the Company determined that it is not the primary beneficiary of any of its joint venture investments. The Company based its quantitative analysis on the forecasted cash flows of the entity and its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, operating management and financial agreements. As a result, the Company's investment in these entities is accounted for under the equity method. For the three and nine months ended September 30, 2013, the Company recognized income totaling $81 thousand and $9 thousand, respectively, from these investments. For the three and nine months ended September 30, 2012, the Company recognized income totaling $75 thousand and $84 thousand, respectively, from these investments.

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Consolidated Statements Of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 85,269,000	$ 96,236,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,074,000	5,989,000
Provision for bad debts, net	2,054,000	1,802,000
Non-cash stock compensation and other charges	8,638,000	7,306,000
Non-cash interest and other (income) loss	1,057,000	(633,000)
Deferred income taxes	(4,118,000)	(1,627,000)
Loss on extinguishment of debt	0	526,000
Dividends received from equity method investments	1,109,000	855,000
Equity in net (income) loss of affiliates	(340,000)	12,000
Changes in assets and liabilities:
Receivables	(13,699,000)	(17,405,000)
Advances to/from marketing and reservation activities, net	23,756,000	20,811,000
Forgivable notes receivable, net	(5,722,000)	(2,853,000)
Accounts payable	1,280,000	5,980,000
Accrued expenses	(22,757,000)	(10,309,000)
Income taxes payable/receivable	24,638,000	12,786,000
Deferred revenue	(9,686,000)	8,018,000
Other assets	(2,395,000)	(7,458,000)
Other liabilities	8,851,000	(1,613,000)
Net cash provided by operating activities	105,009,000	118,423,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(26,442,000)	(12,525,000)
Equity method investments	(3,761,000)	(9,454,000)
Issuance of mezzanine and other notes receivable	0	(4,236,000)
Collections of mezzanine and other notes receivable	224,000	110,000
Purchases of investments, employee benefit plans	(1,845,000)	(1,191,000)
Proceeds from sales of investments, employee benefit plans	4,052,000	10,909,000
Other items, net	(578,000)	(322,000)
Net cash provided (used) in investing activities	(28,350,000)	(16,709,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) pursuant to revolving credit facilities	27,500,000	(16,725,000)
Proceeds from issuance of long-term debt	3,360,000	543,500,000
Principal payments on long-term debt	(6,158,000)	(502,000)
Purchase of treasury stock	(3,684,000)	(22,227,000)
Dividends paid	(22,026,000)	(632,751,000)
Excess tax benefits from stock-based compensation	1,216,000	793,000
Debt issuance costs	0	(4,753,000)
Proceeds from exercise of stock options	6,677,000	4,695,000
Net cash provided (used) by financing activities	(48,115,000)	(94,520,000)
Net change in cash and cash equivalents	28,544,000	7,194,000
Effect of foreign exchange rate changes on cash and cash equivalents	(1,583,000)	813,000
Cash and cash equivalents at beginning of period	134,177,000	107,057,000
Cash and cash equivalents at end of period	161,138,000	115,064,000
Cash payments during the period for:
Income taxes, net of refunds	12,990,000	25,700,000
Interest	42,244,000	15,666,000
Non-cash investing and financing activities:
Dividends declared but not paid	10,773,000	10,677,000
Issuance of restricted shares of common stock	8,397,000	9,517,000
Issuance of performance vested restricted stock units	1,298,000	0
Investment in property and equipment acquired in accounts payable	763,000	0
Debt issuance costs	$ 0	$ 6,500,000

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Non-Qualified Retirement, Savings and Investment Plans (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2009	Dec. 31, 2012
Schedule of Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
Number of non-qualified retirement savings and investment plans	2		2
Investments, employee benefit plans, at fair value	$ 14,950,000		$ 14,950,000			$ 12,755,000
Executive Deferred Compensation Plan [Member]
Schedule of Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
Basis points					300
Deferred compensation liability, current and long-term	10,900,000		10,900,000			11,700,000
Compensation expense	300,000	200,000	700,000	700,000
Assets held-in-trust	3,800,000		3,800,000			6,000,000
Assets held-in-trust, current	400,000		400,000
Investment gains (losses)	200,000	100,000	300,000	1,200,000
Common stock held by plan	200,000		200,000			100,000
Non-Qualified Plan [Member]
Schedule of Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
Deferred compensation liability, current and long-term	12,800,000		12,800,000			11,200,000
Investment gains (losses)	500,000	400,000	1,100,000	1,000,000
Common stock held by plan	1,200,000		1,200,000			1,000,000
Increase (decrease) in compensation expense	600,000	200,000	1,300,000	800,000
Investments, employee benefit plans, at fair value	$ 11,600,000		$ 11,600,000			$ 10,200,000

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Other Assets Components Of Other Assets (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Other Assets, Noncurrent [Abstract]
Notes receivable (see Note 3)	$ 37,295,000		$ 37,295,000		$ 35,103,000
Equity method investments	30,404,000		30,404,000		27,453,000
Deferred financing fees, net	9,509,000		9,509,000		11,174,000
Land	10,097,000		10,097,000		1,300,000
Other assets	899,000		899,000		983,000
Total	88,204,000		88,204,000		76,013,000
Equity method investments in variable interest entities	27,000,000		27,000,000		24,300,000
Net income (loss) attributable to variable interest entities	$ 81,000	$ 75,000	$ 9,000	$ 84,000

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Schedule Of Fair Value Of Assets

As of September 30, 2013 and December 31, 2012, the Company had the following assets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
	Total		Level 1		Level 2		Level 3
Assets (in thousands)
As of September 30, 2013
Money market funds, included in cash and cash equivalents	$	50,001	$	—	$	50,001	$	—
Mutual funds(1)	13,201		13,201		—		—
Money market funds(1)	2,135		—		2,135		—
	$	65,337	$	13,201	$	52,136	$	—
As of December 31, 2012
Money market funds, included in cash and cash equivalents	$	20,001	$	—	$	20,001	$	—
Mutual funds(1)	11,884		11,884		—		—
Money market funds(1)	4,357		—		4,357		—
	$	36,242	$	11,884	$	24,358	$	—

________________________ 

(1) Included in Investments, employee benefit plans fair value on the consolidated balance sheets.

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Condensed Consolidating Financial Statements Schedule of Error Corrections and Prior Period Adjustments (Details) (USD $)	9 Months Ended						3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Guarantor Subsidiaries [Member]	Sep. 30, 2012 Guarantor Subsidiaries [Member]	Sep. 30, 2013 Non-Guarantor Subsidiaries [Member]	Sep. 30, 2012 Non-Guarantor Subsidiaries [Member]	Mar. 31, 2013 As Previously Reported [Member]	Mar. 31, 2012 As Previously Reported [Member]	Jun. 30, 2012 As Previously Reported [Member]	Sep. 30, 2012 As Previously Reported [Member]	Dec. 31, 2012 As Previously Reported [Member]	Dec. 31, 2011 As Previously Reported [Member]	Dec. 31, 2010 As Previously Reported [Member]	Sep. 30, 2012 As Previously Reported [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 As Previously Reported [Member] Non-Guarantor Subsidiaries [Member]	Mar. 31, 2013 Adjustment [Member]	Mar. 31, 2012 Adjustment [Member]	Jun. 30, 2012 Adjustment [Member]	Sep. 30, 2012 Adjustment [Member]	Dec. 31, 2012 Adjustment [Member]	Dec. 31, 2011 Adjustment [Member]	Dec. 31, 2010 Adjustment [Member]	Sep. 30, 2012 Adjustment [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 Adjustment [Member] Non-Guarantor Subsidiaries [Member]	Mar. 31, 2013 As Revised [Member]	Mar. 31, 2012 As Revised [Member]	Jun. 30, 2012 As Revised [Member]	Sep. 30, 2012 As Revised [Member]	Dec. 31, 2012 As Revised [Member]	Dec. 31, 2011 As Revised [Member]	Dec. 31, 2010 As Revised [Member]	Sep. 30, 2012 As Revised [Member] Guarantor Subsidiaries [Member]	Sep. 30, 2012 As Revised [Member] Non-Guarantor Subsidiaries [Member]
Net cash provided (used) by operating activities	$ 105,009,000	$ 118,423,000	$ 18,718,000	$ 4,941,000	$ 26,221,000	$ 26,410,000	$ 1,874,000	$ 4,412,000	$ 37,802,000	$ 121,276,000	$ 161,020,000	$ 134,844,000	$ 144,935,000	$ (1,928,000)	$ 36,131,000	$ (1,729,000)	$ (475,000)	$ (1,537,000)	$ (2,853,000)	$ (10,898,000)	$ (3,475,000)	$ (1,120,000)	$ 6,869,000	$ (9,721,000)	$ 145,000	$ 3,937,000	$ 36,265,000	$ 118,423,000	$ 150,122,000	$ 131,369,000	$ 143,815,000	$ 4,941,000	$ 26,410,000
Issuance of mezzanine and other notes receivable	0	(4,236,000)	0	0	0	0	(1,729,000)	(3,719,000)	(5,820,000)	(7,305,000)	(34,925,000)	(12,766,000)	(11,786,000)	(3,068,000)	0	1,729,000	583,000	1,684,000	3,069,000	11,189,000	3,539,000	1,203,000	3,068,000	0	0	(3,136,000)	(4,136,000)	(4,236,000)	(23,736,000)	(9,227,000)	(10,583,000)	0	0
Collections of mezzanine and other notes receivable	224,000	110,000	0	0	0	0	19,000	151,000	210,000	326,000	3,561,000	4,754,000	5,083,000	216,000	0	0	(108,000)	(147,000)	(216,000)	(291,000)	(64,000)	(83,000)	(216,000)	0	19,000	43,000	63,000	110,000	3,270,000	4,690,000	5,000,000	0	0
Advances to and investments in affiliates			(1,280,000)	(9,721,000)	0	0								0	0								(9,721,000)	0								(9,721,000)	0
Net cash provided (used) in investing activities	(28,350,000)	(16,709,000)	(22,736,000)	(5,220,000)	(2,457,000)	(9,636,000)	13,816,000	1,496,000	10,387,000	19,562,000	57,999,000	23,804,000	32,155,000	1,649,000	(9,636,000)	(1,729,000)	(475,000)	(1,537,000)	(2,853,000)	(10,898,000)	(3,475,000)	(1,120,000)	(6,869,000)	0	12,087,000	1,021,000	8,850,000	16,709,000	47,101,000	20,329,000	31,035,000	(5,220,000)	(9,636,000)
Proceeds from contributions from affiliates			0	0	2,280,000	9,721,000								0	0								0	9,721,000								0	9,721,000
Net cash provided (used) by financing activities	$ (48,115,000)	$ (94,520,000)	$ 4,048,000	$ 122,000	$ 2,249,000	$ 9,707,000								$ 122,000	$ (14,000)								$ 0	$ 9,721,000								$ 122,000	$ 9,707,000

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Share-Based Compensation and Capital Stock Summary of Change in Stock-Based Award Activity (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at January 1, 2013 - Shares			1,934,034
Granted - Shares			173,413
Exercised - Shares	(29,008)	(109,996)	(263,073)		(135,200)
Expired - Shares			(75,473)
Forfeited - Shares			0
Outstanding at September 30, 2013 - Shares	1,768,901		1,768,901
Options exercisable at September 30, 2013 - Shares	1,265,481		1,265,481
Outstanding at January 1, 2013 - Weighted average exercise price			$ 25.80
Granted - Weighted average exercise price			$ 36.76
Exercised - Weighted average exercise price			$ 25.38
Expired - weighted average exercise price			$ 36.99
Forfeited - Weighted average exercise price			$ 0
Outstanding at September 30, 2013 - Weighted average exercise price	$ 26.46		$ 26.46
Options exercisable at September 30, 2013 - Weighted average exercise price	$ 24.70		$ 24.70
Weighted Average Remaining Contractual Term - Options Outstanding at September 30, 2013			3 years 2 months 12 days
Weighted Average Remaining Contractual Term - Options Exercisable at September 30, 2013			2 years 4 months 24 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Outstanding at January 1, 2013 - Shares			606,547
Granted - shares	7,646	7,672	223,045		266,159
Vested - Shares			(227,890)
Forfeited - Shares	(25)	(13,619)	(27,953)		(23,921)
Outstanding at September 30, 2013 - Shares	573,749		573,749
Outstanding at January 1, 2013 - Weighted average grant date fair value			$ 35.17
Granted - Weighted average grant date fair value	$ 39.24	$ 32.59	$ 37.65		$ 35.76
Vested - Weighted average grant date fair value			$ 33.94
Forfeited - Weighted average grant date fair value			$ 35.30
Outstanding at September 30, 2013 - Weighted average grant date fair value	$ 36.61		$ 36.61
Performance Vested Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Outstanding at January 1, 2013 - Shares			170,116
Granted - shares	0	6,137	58,902		100,046
Performance based leveraging - shares			9,192	[1]
Vested - Shares	0	0	(39,816)
Forfeited - Shares	0	0	0		(57,176)
Outstanding at September 30, 2013 - Shares	198,394		198,394
Outstanding at January 1, 2013 - Weighted average grant date fair value			$ 35.56
Granted - Weighted average grant date fair value		$ 32.59	$ 36.76		$ 35.68
Performance based leveraging - Weighted average grant date fair value			$ 32.60	[1]
Vested - Weighted average grant date fair value			$ 32.60
Forfeited - Weighted average grant date fair value			$ 0
Outstanding at September 30, 2013 - Weighted average grant date fair value	$ 36.37		$ 36.37

[1] PVRSU shares have been increased by 9,192 units due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods during the nine months ended September 30, 2013.

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Share-Based Compensation and Capital Stock

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation and Capital Stock

Share-Based Compensation and Capital Stock

Stock Options

No stock options were granted during the three month periods ended September 30, 2013 and 2012. The Company granted 0.2 million and 0.2 million options to certain employees of the Company at a fair value of $1.7 million and $1.6 million for the nine months ended September 30, 2013 and 2012, respectively. The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2013 Grants			2012 Grants
Risk-free interest rate	0.73		%	0.78		%
Expected volatility	38.14		%	40.15		%
Expected life of stock option	4.5 years			4.4 years
Dividend yield	2.01		%	2.08		%
Requisite service period	4 years			4 years
Contractual life	7 years			7 years
Weighted average fair value of options granted	$	9.89		$	9.98

The expected life of the options and volatility are based on historical data and are not necessarily indicative of exercise patterns or actual volatility that may occur. Historical volatility is calculated based on a period that corresponds to the expected life of the stock option. The dividend yield and the risk-free rate of return are calculated on the grant date based on the then current dividend rate and the risk-free rate of return for the period corresponding to the expected life of the stock option. Compensation expense related to the fair value of these awards is recognized straight-line over the requisite service period based on those awards that ultimately vest.

The aggregate intrinsic value of the stock options outstanding and exercisable at September 30, 2013 was $29.6 million and $23.4 million, respectively. The total intrinsic value of options exercised during the three months ended September 30, 2013 and 2012 was approximately $0.5 million and $0.5 million, respectively. The total intrinsic value of options exercised during the nine months ended September 30, 2013 and 2012 was approximately $3.4 million and $1.0 million, respectively.

The Company received approximately $0.7 million and $4.3 million in proceeds from the exercise of 29,008 and 109,996 employee stock options during the three month periods ended September 30, 2013 and 2012, respectively. The Company received approximately $6.7 million and $4.7 million in proceeds from the exercise of 263,073 and 135,200 employee stock options during the nine month periods ended September 30, 2013 and 2012, respectively.

Restricted Stock

The following table is a summary of activity related to restricted stock grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Restricted share grants	7,646		7,672		223,045		266,159
Weighted average grant date fair value per share	$	39.24	$	32.59	$	37.65	$	35.76
Aggregate grant date fair value ($000)	$	300	$	250	$	8,397	$	9,517
Restricted shares forfeited	25		13,619		27,953		23,921
Vesting service period of shares granted	36 months		36 months		12 - 48 months		12 - 68 months
Grant date fair value of shares vested ($000)	$	94	$	75	$	8,569	$	6,693

Compensation expense related to the fair value of these awards is recognized straight-line over the requisite service period based on those restricted stock grants that ultimately vest. The fair value of grants is measured by the market price of the Company’s stock on the date of grant. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. Awards granted to retirement eligible non-employee directors are recognized over the shorter of the requisite service period or the length of time until retirement since the terms of the grant provide that the awards will vest upon retirement.

Performance Vested Restricted Stock Units

The Company has granted performance vested restricted stock units (“PVRSU”) to certain employees. The fair value is measured by the market price of the Company's common stock on the date of the grant. The vesting of these stock awards is contingent upon the Company achieving performance targets at the end of specified performance periods and the employees' continued employment. The performance conditions affect the number of shares that will ultimately vest. The range of possible stock-based award vesting is generally between 0% and 200% of the initial target. If minimum performance targets are not attained then no awards will vest under the terms of the various PVRSU agreements. Compensation expense related to these awards is recognized over the requisite service period based on the Company's estimate of the achievement of the various performance targets. The Company has currently estimated that between 81% and 165% of the various award targets will be achieved. Compensation expense is recognized ratably over the requisite service period only on those PVRSUs that ultimately vest.

The following table is a summary of activity related to PVRSU grants:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Performance vested restricted stock units granted at target	—		6,137		58,902		100,046
Weighted average grant date fair value per share	$	—	$	32.59	$	36.76	$	35.68
Aggregate grant date fair value ($000)	$	—	$	200	$	2,165	$	3,570
Stock units forfeited	—		—		—		57,176
Requisite service period	—		41 months		22-36 months		36-60 months

During the three months ended September 30, 2013 and 2012, no PVRSU grants vested. During the nine months ended September 30, 2013, a total of 39,816 PVRSU grants vested at a fair value of $1.3 million. These PVRSU grants were initially granted at a target of 30,624 units. However, since the Company exceeded targeted performance conditions contained in the stock awards granted in prior periods by 130%, an additional 9,192 shares were earned and issued. During the nine months ended September 30, 2012, PVRSU grants totaling 57,176 units were terminated in accordance with an amended and restated employment agreement.

A summary of stock-based award activity as of September 30, 2013 and changes during the nine months ended are presented below:

	Stock Options					Restricted Stock				Performance Vested Restricted Stock Units
	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013	1,934,034		$	25.80		606,547		$	35.17	170,116		$	35.56
Granted	173,413		36.76			223,045		37.65		58,902		36.76
Performance based leveraging (1)	—		—			—		—		9,192		32.60
Exercised/Vested	(263,073	)	25.38			(227,890	)	33.94		(39,816	)	32.60
Expired	(75,473	)	36.99			—		—		—		—
Forfeited	—		—			(27,953	)	35.30		—		—
Outstanding at September 30, 2013	1,768,901		$	26.46	3.2 years	573,749		$	36.61	198,394		$	36.37
Options exercisable at September 30, 2013	1,265,481		$	24.70	2.4 years

^{_________________________________} 

⁽¹⁾PVRSU shares have been increased by 9,192 units due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods during the nine months ended September 30, 2013.

The components of the Company’s pretax stock-based compensation expense and associated income tax benefits are as follows for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2013		2012		2013		2012
Stock options	$	0.3	$	0.5	$	1.3	$	1.6
Restricted stock	2.1		1.8		5.7		5.7
Performance vested restricted stock units	0.5		0.8		1.7		1.3
Total	$	2.9	$	3.1	$	8.7	$	8.6
Income tax benefits	$	1.1	$	1.1	$	3.2	$	3.2

Dividends

The Company currently pays a quarterly dividend on its common stock of 0.185 per share, however the declaration of future dividends are subject to the discretion of the board of directors.  In the fourth quarter of 2012, the Company's board of directors elected to pay prior to December 31, 2012 the regular quarterly dividend initially scheduled to be paid in the first quarter of 2013. During the three and nine months ended September 30, 2013, the Company declared dividends totaling $0.185 and $0.56 per share or approximately $10.8 million and $32.3 million in the aggregate, respectively.

In addition, during the nine months ended September 30, 2013, the Company paid previously declared dividends totaling $0.5 million that were contingent upon the vesting of performance vested restricted units. No dividends on performance vested restricted units were paid during the three months ended September 30, 2013. No dividends on performance vested restricted units were paid during the three and nine months ended September 30, 2012.

During the three and nine months ended September 30, 2012, the Company declared regular quarterly cash dividends totaling $0.185 and $0.56 per share or approximately $10.7 million and $32.1 million in the aggregate, respectively. In addition, during the three and nine months ended September 30, 2012, the Company's board of directors declared a special cash dividend to common shareholders in the amount of $10.41 per share or approximately $600.7 million.

Share Repurchases and Redemptions

No shares of common stock were purchased by the Company under the share repurchase program during the three and nine months ended September 30, 2013 and no shares of common stock were repurchased under the program during the three months ended September 30, 2012. During the nine months ended September 30, 2012, the Company purchased 0.5 million shares of common stock under the share repurchase program at a total cost of $19.9 million.

During the three and nine months ended September 30, 2013, the Company redeemed 795 and 98,182 shares of common stock at a total cost of approximately $32 thousand and $3.7 million from employees to satisfy statutory minimum tax requirements from the vesting of restricted stock and performance vested restricted stock unit grants. During the three and nine months ended September 30, 2012, the Company redeemed 1,525 and 64,037 shares of common stock at a total cost of approximately $0.1 million and $2.3 million from employees to satisfy statutory minimum tax requirements from the vesting of restricted stock grants. These redemptions were outside the share repurchase program initiated in June 1998.

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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following represents the changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended September 30, 2013:

	Loss on Cash Flow Hedge			Foreign Currency Items			Total
	($ in thousands)
Balance, December 31, 2012	$	(6,607	)	$	2,391		$	(4,216	)
Other comprehensive income (loss) before reclassification	—			(1,800		)	(1,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	646			—			646
Net current period other comprehensive income (loss)	646			(1,800		)	(1,154		)
Balance, September 30, 2013	$	(5,961	)	$	591		$	(5,370	)

The amounts reclassified from other accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2013 were reclassified to the following line items in the Company's Consolidated Statements of Income.

Component	Amount Reclassified from Accumulated Other Comprehensive Income(Loss)				Affected Line Item in the Consolidated Statement of Net Income
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
	($ in thousands)
Loss on cash flow hedge
Interest rate contract	$	215	$	646	Interest expense
	—		—		Tax (expense) benefit
	$	215	$	646	Net of tax

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Condensed Consolidating Financial Statements Condensed Consolidating Statement Of Comprehensive Income (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income (loss)	$ 41,512,000	$ 44,377,000	$ 85,269,000	$ 96,236,000
Amortization of loss on cash flow hedge	215,000	215,000	646,000	646,000
Foreign currency translation adjustment	512,000	211,000	(1,800,000)	191,000
Actuarial loss	0	20,000	0	60,000
Other comprehensive income (loss), net of tax	727,000	446,000	(1,154,000)	897,000
Comprehensive income	42,239,000	44,823,000	84,115,000	97,133,000
Parent [Member]
Net income (loss)	41,512,000	44,377,000	85,269,000	96,236,000
Amortization of loss on cash flow hedge	215,000	215,000	646,000	646,000
Foreign currency translation adjustment	512,000	211,000	(1,800,000)	191,000
Actuarial loss		20,000		60,000
Other comprehensive income (loss), net of tax	727,000	446,000	(1,154,000)	897,000
Comprehensive income	42,239,000	44,823,000	84,115,000	97,133,000
Guarantor Subsidiaries [Member]
Net income (loss)	3,782,000	(473,000)	9,201,000	6,200,000
Amortization of loss on cash flow hedge	0	0	0	0
Foreign currency translation adjustment	0	1,000	0	5,000
Actuarial loss		20,000		60,000
Other comprehensive income (loss), net of tax	0	21,000	0	65,000
Comprehensive income	3,782,000	(452,000)	9,201,000	6,265,000
Non-Guarantor Subsidiaries [Member]
Net income (loss)	9,547,000	27,502,000	24,014,000	35,875,000
Amortization of loss on cash flow hedge	0	0	0	0
Foreign currency translation adjustment	512,000	209,000	(1,800,000)	171,000
Actuarial loss		0		0
Other comprehensive income (loss), net of tax	512,000	209,000	(1,800,000)	171,000
Comprehensive income	10,059,000	27,711,000	22,214,000	36,046,000
Eliminations [Member]
Net income (loss)	(13,329,000)	(27,029,000)	(33,215,000)	(42,075,000)
Amortization of loss on cash flow hedge	0	0	0	0
Foreign currency translation adjustment	(512,000)	(210,000)	1,800,000	(176,000)
Actuarial loss		(20,000)		(60,000)
Other comprehensive income (loss), net of tax	(512,000)	(230,000)	1,800,000	(236,000)
Comprehensive income	(13,841,000)	(27,259,000)	(31,415,000)	(42,311,000)
Consolidated [Member]
Net income (loss)	41,512,000	44,377,000	85,269,000	96,236,000
Amortization of loss on cash flow hedge	215,000	215,000	646,000	646,000
Foreign currency translation adjustment	512,000	211,000	(1,800,000)	191,000
Actuarial loss		20,000		60,000
Other comprehensive income (loss), net of tax	727,000	446,000	(1,154,000)	897,000
Comprehensive income	$ 42,239,000	$ 44,823,000	$ 84,115,000	$ 97,133,000

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Reportable Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Reportable Segment Information

Reportable Segment Information

Franchising: Franchising includes the Company's hotel franchising operations consisting of its eleven brands. The eleven brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other franchising related revenue. The Company is obligated under its franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company's franchising business. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in franchising revenues and are offset by the related expenses paid for marketing and reservation activities to calculate franchising operating income.

SkyTouch Technology: SkyTouch Technology ("SkyTouch") is a division of the Company that develops and markets cloud-based technology products to hoteliers not under franchise agreements with the Company to improve their efficiency and profitability.

The Company evaluates its segments based primarily on the results of the segment without allocating corporate expenses, income taxes or indirect general and administrative expenses. Equity in earnings or losses from joint ventures is allocated to the Company's franchising segment. Corporate and other revenue consists of hotel operations; corporate and other expenses consist primarily of overhead selling, general and administrative costs such as finance, legal, human resources and other general administrative expenses that are not allocated to the Company's two segments. As described in Note 4, certain interest expenses related to the Company's marketing and reservation activities are allocated to the franchising segment. The Company does not allocate the remaining interest expense, interest income, other gains and losses or income taxes to its segments.

Financial results for the three and nine months ended September 30, 2012, have been updated to reflect the financial results for the Company's SkyTouch segment which was established as a separate segment in 2013. The financial results related to SkyTouch were previously reported as a component of Corporate & Other.

The following table presents the financial information for the Company's segments:

	Three Months Ended September 30, 2013										Three Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	221,839	$	13		$	1,310		$	223,162	$	209,175	$	—		$	1,238		$	210,413
Operating income (loss)	$	75,085	$	(3,271	)	$	(5,265	)	$	66,549	$	76,290	$	(720	)	$	(10,317	)	$	65,253
Income (loss) before income taxes	$	75,506	$	(3,271	)	$	(14,643	)	$	57,592	$	76,461	$	(720	)	$	(20,073	)	$	55,668

	Nine Months Ended September 30, 2013										Nine Months Ended September 30, 2012
(In thousands)	Franchising		SkyTouch Technology			Corporate & Other			Consolidated		Franchising		SkyTouch Technology			Corporate & Other			Consolidated
Revenues	$	539,999	$	13		$	3,600		$	543,612	$	509,763	$	—		$	3,440		$	513,203
Operating income (loss)	$	185,491	$	(8,768	)	$	(29,386	)	$	147,337	$	184,096	$	(2,074	)	$	(34,114	)	$	147,908
Income (loss) before income taxes	$	185,831	$	(8,768	)	$	(58,475	)	$	118,588	$	184,084	$	(2,074	)	$	(48,170	)	$	133,840

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except per share amounts)	2013			2012			2013			2012
Computation of Basic Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(404		)	(470		)	(851		)	(1,016		)
Net income available to common shareholders	$	41,108		$	43,907		$	84,418		$	95,220
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Basic earnings per share	$	0.71		$	0.77		$	1.46		$	1.66
Computation of Diluted Earnings Per Share:
Net income	$	41,512		$	44,377		$	85,269		$	96,236
Income allocated to participating securities	(402		)	(493		)	(848		)	(1,032		)
Net income available to common shareholders	$	41,110		$	43,884		$	84,421		$	95,204
Weighted average common shares outstanding – basic	57,978			57,388			57,884			57,455
Diluted effect of stock options and PVRSUs	394			225			383			157
Weighted average shares outstanding – diluted	58,372			57,613			58,267			57,612
Diluted earnings per share	$	0.70		$	0.76		$	1.45		$	1.65

The Company's unvested restricted shares contain rights to receive non-forfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share (“EPS”). The calculation of EPS for common stock shown above excludes the income attributable to the unvested restricted share awards from the numerator and excludes the dilutive impact of those awards from the denominator.

At September 30, 2013 and 2012, the Company had 1.8 million and 2.1 million outstanding stock options, respectively. Stock options are included in the diluted earnings per share calculation using the treasury stock method and average market prices during the period, unless the stock options would be anti-dilutive. For the three and nine month periods ended September 30, 2013, the Company did not exclude any anti-dilutive stock options from the diluted earnings per share calculation. For each the three and nine month periods ended September 30, 2012, the Company excluded 0.3 million of anti-dilutive stock options from the diluted earnings per share calculation.

PVRSUs are also included in the diluted earnings per share calculation when the performance conditions have been met at the reporting date. However, at September 30, 2013 and 2012, PVRSUs totaling 198,394 and 152,639, respectively, were excluded from the computation since the performance conditions had not been met.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013
Document Information [Line Items]
Entity Registrant Name	CHOICE HOTELS INTERNATIONAL INC /DE
Trading Symbol	chh
Entity Central Index Key	0001046311
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	58,570,858

XML

Condensed Consolidating Financial Statements

9 Months Ended

Sep. 30, 2013

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

The Company’s Senior Notes due 2020 and 2022 are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations, by eight100%-owned domestic subsidiaries. There are no legal or regulatory restrictions on the payment of dividends to Choice Hotels International, Inc. from subsidiaries that do not guarantee the Senior Notes. As a result of the guarantee arrangements, the following condensed consolidating financial statements are presented. Investments in subsidiaries are accounted for under the equity method of accounting.

Certain revisions have been made to correct immaterial errors in the condensed consolidating statement of income for the three and nine months ended September 30, 2012 and condensed consolidating statement of cash flows for the nine months ended September 30, 2012.  The revisions to the condensed consolidating statement of income decreased the Guarantor's marketing and reservation expense and total operating expenses by $0.8 million and $3.0 million for the three and nine months ended September 30, 2012, respectively. The revisions also increased the Guarantor's interest expense and total other income and expenses, net by $0.8 million and $3.0 million for the three and nine months ended September 30, 2012, respectively. These revisions had offsetting adjustments to the same items in the Eliminations column. The following tables present the effect of the correction of these immaterial errors on selected line items in the Company's Guarantor Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2012.

	For the Three Months Ended September 30, 2012									For the Nine Months Ended September 30, 2012
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Marketing and reservation expense	$	89,498		$	(843	)	$	88,655		$	244,861		$	(2,954	)	$	241,907
Total operating expenses	111,041			(843		)	110,198			314,261			(2,954		)	311,307
Operating income (loss)	(2,470		)	843			(1,627		)	5,812			2,954			8,766
Interest expense	(839		)	843			4			(2,914		)	2,954			40
Total other income and expenses, net	(1,350		)	843			(507		)	(5,051		)	2,954			(2,097		)

The condensed consolidating statements of cash flows for the nine months ended September 30, 2012 has been revised from prior filings to reflect the reclassification of certain operating, investing and financing cash flows related to inter-company investment transactions between wholly-owned subsidiaries. The revisions to the condensed consolidating statement of cash flows increased the Guarantors net cash provided (used) by operating activities and decreased investment in affiliates and net cash used in investing activities by $9.7 million and decreased the Non-Guarantor's net cash provided (used) by operating activities and increased proceeds from contributions from affiliates and net cash provided (used) by financing activities by $9.7 million for the nine months ended September 30, 2012, with corresponding offsetting adjustments to the same items in the Eliminations column.  In addition, as described in Note 1 to the Company's Consolidated Financial Statements, the consolidated statements of cash flows have been revised for the correction of the misapplication of GAAP related to the presentation of cash flows from the Company's forgivable notes receivable. As a result of this revision, the Guarantors net cash provided (used) by operating activities and net cash used in investing activities were each decreased by $2.9 million for the nine months ended September 30, 2012. The following tables present the effect of the correction for the aforementioned items on selected line items included in the Company's Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2012:

	For the Nine Months Ended September 30, 2012
	Guarantor									Non-Guarantor
	(in thousands)
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Net cash provided (used) by operating activities	$	(1,928	)	$	6,869		$	4,941		$	36,131		$	(9,721	)	$	26,410
Investing Activities:
Issuance of mezzanine and other notes receivable	(3,068		)	3,068			—			—			—			—
Collection of mezzanine and other notes receivable	216			(216		)	—			—			—			—
Advances to and investments in affiliates	—			(9,721		)	(9,721		)	—			—			—
Net cash provided (used) in investing activities	1,649			(6,869		)	(5,220		)	(9,636		)	—			(9,636		)
Financing Activities:
Proceeds from contributions from affiliates	—			—			—			—			9,721			9,721
Net cash provided (used) by financing activities	122			—			122			(14		)	9,721			9,707

The Company assessed the materiality of the revisions noted above and concluded that they are not material to any of our previously issued annual or interim condensed consolidating financial statements.

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	76,645		$	25,161		$	11,279		$	(29,978	)	$	83,107
Initial franchise and relicensing fees	4,419			—			231			—			4,650
Procurement services	4,375			—			333			—			4,708
Marketing and reservation	114,117			96,626			5,577			(90,024		)	126,296
Other items, net	2,778			1,310			313			—			4,401
Total revenues	202,334			123,097			17,733			(120,002		)	223,162
OPERATING EXPENSES:
Selling, general and administrative	30,619			22,867			3,474			(29,978		)	26,982
Marketing and reservation	119,002			92,747			4,571			(90,024		)	126,296
Other items, net	828			2,285			222			—			3,335
Total operating expenses	150,449			117,899			8,267			(120,002		)	156,613
Operating income	51,885			5,198			9,466			—			66,549
OTHER INCOME AND EXPENSES, NET:
Interest expense	10,691			61			5			—			10,757
Equity in earnings of consolidated subsidiaries	(13,329		)	—			—			13,329			—
Other items, net	(577		)	(697		)	(526		)	—			(1,800		)
Total other income and expenses, net	(3,215		)	(636		)	(521		)	13,329			8,957
Income before income taxes	55,100			5,834			9,987			(13,329		)	57,592
Income taxes	13,588			2,052			440			—			16,080
Net income	$	41,512		$	3,782		$	9,547		$	(13,329	)	$	41,512

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Three Months EndedSeptember 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	74,186		$	16,347		$	22,925		$	(32,613	)	$	80,845
Initial franchise and relicensing fees	2,996			—			251			—			3,247
Procurement services	3,489			—			350			—			3,839
Marketing and reservation	109,793			90,986			4,783			(86,500		)	119,062
Other items, net	1,991			1,238			191			—			3,420
Total revenues	192,455			108,571			28,500			(119,113		)	210,413
OPERATING EXPENSES:
Selling, general and administrative	39,781			19,525			(3,523		)	(32,613		)	23,170
Marketing and reservation	111,831			88,655			4,233			(85,657		)	119,062
Other items, net	706			2,018			204			—			2,928
Total operating expenses	152,318			110,198			914			(118,270		)	145,160
Operating income	40,137			(1,627		)	27,586			(843		)	65,253
OTHER INCOME AND EXPENSES, NET:
Interest expense	11,005			4			—			(843		)	10,166
Equity in earnings of consolidated subsidiaries	(27,029		)	—			—			27,029			—
Other items, net	215			(511		)	(285		)	—			(581		)
Total other income and expenses, net	(15,809		)	(507		)	(285		)	26,186			9,585
Income before income taxes	55,946			(1,120		)	27,871			(27,029		)	55,668
Income taxes	11,569			(647		)	369			—			11,291
Net income	$	44,377		$	(473	)	$	27,502		$	(27,029	)	$	44,377

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	183,063		$	84,477		$	31,452		$	(97,770	)	$	201,222
Initial franchise and relicensing fees	12,074			—			769			—			12,843
Procurement services	15,559			—			645			—			16,204
Marketing and reservation	267,491			267,308			14,953			(247,371		)	302,381
Other items, net	6,581			3,600			781			—			10,962
Total revenues	484,768			355,385			48,600			(345,141		)	543,612
OPERATING EXPENSES:
Selling, general and administrative	94,693			77,279			9,876			(97,770		)	84,078
Marketing and reservation	278,703			257,107			13,942			(247,371		)	302,381
Other items, net	2,301			6,890			625			—			9,816
Total operating expenses	375,697			341,276			24,443			(345,141		)	396,275
Operating income	109,071			14,109			24,157			—			147,337
OTHER INCOME AND EXPENSES, NET:
Interest expense	32,210			111			13			—			32,334
Equity in earnings of consolidated subsidiaries	(33,215		)	—			—			33,215			—
Other items, net	(1,689		)	(1,261		)	(635		)	—			(3,585		)
Total other income and expenses, net	(2,694		)	(1,150		)	(622		)	33,215			28,749
Income before income taxes	111,765			15,259			24,779			(33,215		)	118,588
Income taxes	26,496			6,058			765			—			33,319
Net income	$	85,269		$	9,201		$	24,014		$	(33,215	)	$	85,269

Choice Hotels International, Inc.

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Royalty fees	$	175,862		$	68,622		$	39,781		$	(89,503	)	$	194,762
Initial franchise and relicensing fees	8,459			—			494			—			8,953
Procurement services	13,349			—			641			—			13,990
Marketing and reservation	252,951			248,011			13,892			(230,230		)	284,624
Other items, net	6,958			3,440			476			—			10,874
Total revenues	457,579			320,073			55,284			(319,733		)	513,203
OPERATING EXPENSES:
Selling, general and administrative	92,804			63,544			5,228			(89,503		)	72,073
Marketing and reservation	256,936			241,907			13,057			(227,276		)	284,624
Other items, net	2,117			5,856			625			—			8,598
Total operating expenses	351,857			311,307			18,910			(316,779		)	365,295
Operating income	105,722			8,766			36,374			(2,954		)	147,908
OTHER INCOME AND EXPENSES, NET:
Interest expense	19,731			40			6			(2,954		)	16,823
Equity in earnings of consolidated subsidiaries	(42,075		)	—			—			42,075			—
Other items, net	(274		)	(2,137		)	(344		)	—			(2,755		)
Total other income and expenses, net	(22,618		)	(2,097		)	(338		)	39,121			14,068
Income before income taxes	128,340			10,863			36,712			(42,075		)	133,840
Income taxes	32,104			4,663			837			—			37,604
Net income	$	96,236		$	6,200		$	35,875		$	(42,075	)	$	96,236

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	41,512	$	3,782	$	9,547	$	(13,329	)	$	41,512
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—		—		—			215
Foreign currency translation adjustment	512		—		512		(512		)	512
Other comprehensive income (loss), net of tax	727		—		512		(512		)	727
Comprehensive income	$	42,239	$	3,782	$	10,059	$	(13,841	)	$	42,239

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	44,377	$	(473	)	$	27,502	$	(27,029	)	$	44,377
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	215		—			—		—			215
Foreign currency translation adjustment	211		1			209		(210		)	211
Amortization of pension related costs, net of tax:
Actuarial loss	20		20			—		(20		)	20
Other comprehensive income (loss), net of tax	446		21			209		(230		)	446
Comprehensive income	$	44,823	$	(452	)	$	27,711	$	(27,259	)	$	44,823

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2013

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	85,269		$	9,201	$	24,014		$	(33,215	)	$	85,269
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646			—		—			—			646
Foreign currency translation adjustment	(1,800		)	—		(1,800		)	1,800			(1,800		)
Other comprehensive income (loss), net of tax	(1,154		)	—		(1,800		)	1,800			(1,154		)
Comprehensive income	$	84,115		$	9,201	$	22,214		$	(31,415	)	$	84,115

Choice Hotels International, Inc.

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	96,236	$	6,200	$	35,875	$	(42,075	)	$	96,236
Other comprehensive income (loss), net of tax:
Amortization of loss on cash flow hedge	646		—		—		—			646
Foreign currency translation adjustment	191		5		171		(176		)	191
Amortization of pension related costs, net of tax:
Actuarial loss	60		60		—		(60		)	60
Other comprehensive income (loss), net of tax	897		65		171		(236		)	897
Comprehensive income	$	97,133	$	6,265	$	36,046	$	(42,311	)	$	97,133

Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	10,921		$	437	$	149,780	$	—		$	161,138
Receivables, net	54,842			1,963		5,800		—			62,605
Other current assets	36,200			13,271		728		(15,675		)	34,524
Total current assets	101,963			15,671		156,308		(15,675		)	258,267
Property and equipment, at cost, net	11,351			53,331		858		—			65,540
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	7,113			2,251		1,511		—			10,875
Advances, marketing and reservation activities	32,564			—		—		—			32,564
Investments, employee benefit plans, at fair value	—			14,950		—		—			14,950
Investment in affiliates	362,158			27,307		—		(389,465		)	—
Advances to affiliates	13,985			203,917		10,613		(228,515		)	—
Deferred income taxes	—			29,184		1,058		(10,746		)	19,496
Other assets	30,113			27,839		30,252		—			88,204
Total assets	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	9,098		$	27,757	$	3,903	$	—		$	40,758
Accrued expenses	19,397			22,098		1,980		—			43,475
Deferred revenue	5,995			54,666		740		—			61,401
Current portion of long-term debt	8,437			684		11		—			9,132
Deferred compensation & retirement plan obligations	—			2,439		—		—			2,439
Other current liabilities	13,503			23,616		462		(15,675		)	21,906
Total current liabilities	56,430			131,260		7,096		(15,675		)	179,111
Long-term debt	811,243			4,694		20		—			815,957
Deferred compensation & retirement plan obligations	—			21,212		7		—			21,219
Advances from affiliates	220,721			403		7,390		(228,514		)	—
Other liabilities	16,197			18,211		484		(10,746		)	24,146
Total liabilities	1,104,591			175,780		14,997		(254,935		)	1,040,433
Total shareholders’ (deficit) equity	(484,724		)	203,863		185,603		(389,466		)	(484,724		)
Total liabilities and shareholders’ deficit	$	619,867		$	379,643	$	200,600	$	(644,401	)	$	555,709

Choice Hotels International, Inc.

Condensed Consolidating Balance Sheet

As of December 31, 2012

(In Thousands)

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	8,420		$	407	$	125,350	$	—		$	134,177
Receivables, net	44,344			1,797		6,129		—			52,270
Other current assets	41,897			20,110		3,528		(18,512		)	47,023
Total current assets	94,661			22,314		135,007		(18,512		)	233,470
Property and equipment, at cost, net	11,307			39,298		1,046		—			51,651
Goodwill	60,620			5,193		—		—			65,813
Franchise rights and other identifiable intangibles, net	8,669			2,715		2,089		—			13,473
Advances, marketing and reservation activities	42,179			—		—		—			42,179
Investments, employee benefit plans, at fair value	—			12,755		—		—			12,755
Investment in affiliates	329,038			26,194		—		(355,232		)	—
Advances to affiliates	14,252			206,770		13,479		(234,501		)	—
Deferred income taxes	—			28,539		640		(13,761		)	15,418
Other assets	32,085			18,925		25,003		—			76,013
Total assets	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable	$	5,930		$	28,525	$	4,259	$	—		$	38,714
Accrued expenses	18,582			34,576		2,394		—			55,552
Deferred revenue	17,239			53,081		834		—			71,154
Current portion of long-term debt	7,500			675		20		—			8,195
Deferred compensation and retirement plan obligations	—			2,522		—		—			2,522
Other current liabilities	—			17,722		790		(18,512		)	—
Total current liabilities	49,251			137,101		8,297		(18,512		)	176,137
Long-term debt	845,257			1,845		48		—			847,150
Deferred compensation & retirement plan obligations	—			20,390		9		—			20,399
Advances from affiliates	226,917			189		7,395		(234,501		)	—
Other liabilities	20,290			9,216		245		(13,761		)	15,990
Total liabilities	1,141,715			168,741		15,994		(266,774		)	1,059,676
Total shareholders’ (deficit) equity	(548,904		)	193,962		161,270		(355,232		)	(548,904		)
Total liabilities and shareholders' deficit	$	592,811		$	362,703	$	177,264	$	(622,006	)	$	510,772

Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2013

(Unaudited, in thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	60,070		$	18,718		$	26,221		$	—		$	105,009
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(4,083		)	(22,182		)	(177		)	—			(26,442		)
Equity method investments	—			(1,481		)	(2,280		)	—			(3,761		)
Issuance of mezzanine and other notes receivable	—			—			—			—			—
Collections of mezzanine and other notes receivable	224			—			—			—			224
Purchases of investments, employee benefit plans	—			(1,845		)	—			—			(1,845		)
Proceeds from sales of investments, employee benefit plans	—			4,052			—			—			4,052
Advances to and investments in affiliates	(1,000		)	(1,280		)	—			2,280			—
Other items, net	(578		)	—			—			—			(578		)
Net cash provided (used) in investing activities	(5,437		)	(22,736		)	(2,457		)	2,280			(28,350		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments pursuant to revolving credit facilities	(27,500		)	—			—			—			(27,500		)
Proceeds from issuance of long-term debt	—			3,360			—			—			3,360
Principal payments on long-term debt	(5,625		)	(502		)	(31		)	—			(6,158		)
Purchase of treasury stock	(3,684		)	—			—			—			(3,684		)
Dividends paid	(22,026		)	—			—			—			(22,026		)
Excess tax benefits from stock-based compensation	26			1,190			—			—			1,216
Proceeds from contributions from affiliates	—			—			2,280			(2,280		)	—
Proceeds from exercise of stock options	6,677			—			—			—			6,677
Net cash provided (used) by financing activities	(52,132		)	4,048			2,249			(2,280		)	(48,115		)
Net change in cash and cash equivalents	2,501			30			26,013			—			28,544
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			(1,583		)	—			(1,583		)
Cash and cash equivalents at beginning of period	8,420			407			125,350			—			134,177
Cash and cash equivalents at end of period	$	10,921		$	437		$	149,780		$	—		$	161,138

Choice Hotels International, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2012

(Unaudited, in Thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	87,072		$	4,941		$	26,410		$	—		$	118,423
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment	(7,126		)	(5,217		)	(182		)	—			(12,525		)
Equity method investments	—			—			(9,454		)	—			(9,454		)
Issuance of mezzanine and other notes receivable	(4,236		)	—			—			—			(4,236		)
Collections of mezzanine and other notes receivable	110			—			—			—			110
Purchases of investments, employee benefit plans	—			(1,191		)	—			—			(1,191		)
Proceeds from sales of investments, employee benefit plans	—			10,909			—			—			10,909
Advances to and investments in affiliates	—			(9,721		)	—			9,721			—
Other items, net	(322		)	—			—			—			(322		)
Net cash provided (used) in investing activities	(11,574		)	(5,220		)	(9,636		)	9,721			(16,709		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities	16,725			—			—			—			16,725
Proceeds from issuance of long-term debt	543,500			—			—			—			543,500
Principal payments on long-term debt	—			(488		)	(14		)	—			(502		)
Purchase of treasury stock	(22,227		)	—			—			—			(22,227		)
Dividends paid	(632,751		)	—			—			—			(632,751		)
Excess tax benefits from stock-based compensation	183			610			—			—			793
Debt issuance costs	(4,753		)	—			—			—			(4,753		)
Proceeds from contributions from affiliates	—			—			9,721			(9,721		)	—
Proceeds from exercise of stock options	4,695			—			—			—			4,695
Net cash provided (used) by financing activities	(94,628		)	122			9,707			(9,721		)	(94,520		)
Net change in cash and cash equivalents	(19,130		)	(157		)	26,481			—			7,194
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			813			—			813
Cash and cash equivalents at beginning of period	23,370			432			83,255			—			107,057
Cash and cash equivalents at end of period	$	4,240		$	275		$	110,549		$	—		$	115,064

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Share-Based Compensation and Capital Stock Narrative (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Proceeds from exercise of stock options			$ 6,677,000		$ 4,695,000
Frequency of Dividend Payments			quarterly
Dividends declared, per share	$ 0.185	$ 0.185	$ 0.56		$ 0.56
Dividends declared	10,800,000	10,700,000	32,300,000		32,100,000
Dividends paid			22,026,000		632,751,000
Common stock purchased under stock repurchase program, share	0	0	0		500,000
Stock Repurchased During Period, Value					19,900,000
Shares Paid for Tax Withholding for Share Based Compensation	795	1,525	98,182		64,037
Payments Related to Tax Withholding for Share-based Compensation	32,000	100,000	3,700,000		2,300,000
2012 Special Cash Dividend [Member]
Common Stock, Special Dividends, Per Share, Paid		$ 10.41			$ 10.41
Payments of Special Dividends		600,700,000			600,700,000
Quarterly [Member]
Common Stock Dividends, periodic payment, Per Share			$ 0.185
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0	200,000		200,000
Stock options granted, fair value			1,700,000		1,600,000
Aggregate intrinsic value of stock options, outstanding	29,600,000		29,600,000
Aggregate intrinsic value of stock options, exercisable	23,400,000		23,400,000
Total intrinsic value of options exercised	500,000	500,000	3,400,000		1,000,000
Proceeds from exercise of stock options	700,000	4,300,000	6,700,000		4,700,000
Stock options exercised	29,008	109,996	263,073		135,200
Performance Vested Restricted Stock Units [Member]
Grants vested	0	0	39,816
Grants vested, total fair value			1,300,000
PVRSUs vested, initial grant target			30,624
PVRSU performance percentage target achieved			130.00%
PVRSU increase in shares due to performance percentage target achieved			9,192	[1]
Stock units forfeited	0	0	0		57,176
Dividends paid	$ 0	$ 0	$ 500,000		$ 0
Performance Vested Restricted Stock Units [Member] | Minimum [Member]
Vesting Range			0.00%
Award targets currently estimated to be achieved			81.00%
Performance Vested Restricted Stock Units [Member] | Maximum [Member]
Vesting Range			200.00%
Award targets currently estimated to be achieved			165.00%

[1] PVRSU shares have been increased by 9,192 units due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods during the nine months ended September 30, 2013.

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Share-Based Compensation and Capital Stock Pre-Tax Stock-Based Compensation Expenses And Associated Income Tax Benefits (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Pre-tax stock-based compensation expenses	$ 2.9	$ 3.1	$ 8.7	$ 8.6
Income tax benefits	1.1	1.1	3.2	3.2
Stock Options [Member]
Pre-tax stock-based compensation expenses	0.3	0.5	1.3	1.6
Restricted Stock [Member]
Pre-tax stock-based compensation expenses	2.1	1.8	5.7	5.7
Performance Vested Restricted Stock Units [Member]
Pre-tax stock-based compensation expenses	$ 0.5	$ 0.8	$ 1.7	$ 1.3