8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 24, 2007

CHOICE HOTELS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13393	52-1209792
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

10750 Columbia Pike, Silver Spring, Maryland	20901
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (301) 592-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 24, 2007, Choice Hotels International, Inc. issued a press release announcing earnings for the quarter ended September 30, 2007. A copy of the release is furnished herewith as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1—Press Release issued by Choice Hotels International, Inc. dated October 24, 2007.

SIGNATURES

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 hereunto duly authorized.

Date: October 24, 2007	/s/ David L. White
	David L. White
	Chief Financial Officer

EX-99.1

Exhibit 99.1

For Immediate Release

CHOICE HOTELS REPORTS THIRD QUARTER 2007 ADJUSTED DILUTED EPS OF

$0.58, DOMESTIC UNIT GROWTH OF 5.7%,

COMPANY INCREASES FULL-YEAR 2007 EPS ESTIMATE TO $1.67

SILVER SPRING, Md. (October 24, 2007) – Choice Hotels International, Inc., (NYSE:CHH) today reported the following highlights for the third quarter 2007:

• Adjusted diluted earnings per share (“EPS”) for the third quarter increased 16% to $0.58, compared to adjusted diluted EPS of $0.50 for the third quarter 2006. Adjusted diluted earnings per share for the three months ended September 30, 2007 and 2006 exclude reductions of income tax expense related to reversal of provisions for certain income tax contingencies of approximately $0.01 and $0.19 per share, respectively. Diluted EPS for third quarter 2007 was $0.59 compared to $0.69 in the same period of the prior year.

• Operating income for third quarter 2007 increased 14% to $62.4 million compared to $54.6 million for third quarter 2006.

• Earnings before interest, taxes and depreciation (“EBITDA”) were $64.6 million for third quarter 2007, an increase of 14% compared to $56.9 million for third quarter 2006.

• Domestic units increased 5.7 percent from September 30, 2006.

• Domestic system-wide revenue per available room (RevPAR) increased 5.6% for the third quarter of 2007 compared to the same period of the prior year. Domestic RevPAR for the company’s mid-scale without food and beverage brands (Comfort Inn, Comfort Suites and Sleep Inn), which represent approximately half of the company’s domestic rooms online, increased 6.1% for the third quarter of 2007, with average daily rate increasing 5.4% for those brands.

• Executed 182 new domestic hotel franchise contracts during the third quarter of 2007 compared to 178 for third quarter 2006. New construction contracts comprised 46% of executed agreements, as compared to 31% in the prior year’s third quarter. Overall, year-to-date, new domestic hotel franchise contracts executed increased 4% to 469 compared to 453 in the same period of the prior year.

• The number of domestic hotels under construction, awaiting conversion or approved for development increased 18% to 872 hotels representing 68,853 rooms; the worldwide pipeline also increased 18% to 954 hotels representing 76,823 rooms.

• The company opened its second and third Cambria Suites hotels — in Appleton, Wisconsin and Green Bay, Wisconsin. The fourth Cambria Suites hotel, in Minneapolis, Minnesota, is projected to open in the fourth quarter.

• Franchising revenues and total revenues increased 15% and 17%, respectively for third quarter 2007 compared to the same period of the prior year. Year-to-date franchising revenues and total revenues have increased 11% and 12%, respectively, compared to the same period of 2006.

• Franchising margins for the third quarter of 2007 were 70.2% compared to 70.5% for the same period of 2006. Year to date franchising margins were 62.9% compared to 64.9% for the same period of 2006. Franchising margins for the nine months ended September 30, 2007 reflect the impact of $3.7 million of termination benefits for certain executive officers in the first quarter of 2007. Franchising margins for the third quarter 2007 and year-to-date period ended September 30, 2007 also reflect the commencement of direct franchising operations in continental Europe.

• The company purchased approximately 2.9 million shares of its common stock at an average price of $37.45 for a total cost of $109.2 million under its share repurchase program during the third quarter 2007. Year-to-date through October 24, 2007, the company purchased approximately 4.1 million shares of its common stock at an average price of $37.72 for a total cost of $155.2 million under its share repurchase program.

• The Company increased its 2007 diluted EPS estimate from $1.62 to $1.67.

“The fundamental strength of our operating model remains strong, as we continue to add more hotels to our distribution system while returning value to our shareholders through share repurchases and dividends,” said Charles A. Ledsinger, Jr., vice chairman and chief executive officer. “By offering hotel owners a well-segmented mix of brands suitable for new construction and conversion development opportunities, we have been able to successfully grow our system size and market share in the lodging segments in which we operate.”

Items Affecting Comparability

Fourth Quarter 2006 Acquisition of Continental Europe Franchising Operations

During the fourth quarter of 2006, the company terminated the master franchising agreement covering continental Europe and acquired the direct franchising operations in this region from the former master franchisor. As a result of the acquisition, franchising revenues and selling, general and administrative costs for the three months ended September 30, 2007 increased approximately $1.0 million and $0.9 million, respectively, compared to third quarter 2006. Franchising revenues and selling, general and administrative costs for the nine months ended September 30, 2007 increased approximately $2.8 million and $2.6 million, respectively, compared to the same period in 2006.

Outlook for 2007

The company’s fourth quarter 2007 diluted EPS is expected to be $0.41. The company expects full year 2007 diluted EPS of $1.67. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for full-year 2007 are expected to be approximately $189 million. These estimates include the following assumptions.

• The company expects net domestic unit growth of approximately 5% in 2007;

• RevPAR is expected to increase approximately 4% for fourth quarter 2007 and approximately 4% for full-year 2007;

• The effective royalty rate is expected to increase 4 basis points for full-year 2007;

• All figures assume the existing share count and an effective tax rate of 36.0% for fourth quarter 2007 and 36.1 % for full year 2007;

• All figures assume approximately $3.7 million ($0.03 diluted EPS) of termination benefits expense resulting from the previously announced separations of certain executive officers.

Use of Free Cash Flow

The company has consistently used its free cash flow (cash flow from operations less capital expenditures) generated from its operations to return value to shareholders, primarily through share repurchases and dividends.

The annual dividend rate per common share was increased 13 percent by the Board of Directors in September and is now $0.68. For the three and nine months ended September 30, 2007, the company paid $9.8 million and $29.5 million, respectively, of cash dividends to shareholders.

During the quarter, the company’s Board of Directors authorized an increase under the company’s existing stock repurchase program to acquire up to an additional three million shares of its outstanding common stock. For the three months ended September 30, 2007, the company purchased approximately 2.9 million shares of its common stock at an average price of $37.45 for a total cost of $109.2 million under its share repurchase program. For the nine months ended September 30, 2007, the company purchased approximately 4.1 million shares of its common stock at an average price of $37.72 for a total cost of $155.2 million. At September 30, 2007, the company had authorization to purchase up to an additional 4.0 million shares under the share repurchase program. Repurchases will continue to be made in the open market and through privately negotiated transactions subject to market and other conditions. No minimum number of shares has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 37.8 million shares of its common stock for a total cost of $867.1 million through September 30, 2007. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 70.8 million shares under the share repurchase program at an average price of $12.26 per share.

The company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to market and other conditions.

Conference Call

Choice will conduct a conference call on Thursday October 25, 2007 at 9:30 a.m. EDT to discuss the company’s third quarter results. The call-in number to listen to the call is 1-866-269-9613. International callers should dial 612-234-9960. The conference call also will be Web cast simultaneously via the company’s Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call on the Web should go to the Web site and click on the Investor Info link. The Investor Information page will feature a conference call microphone icon to access the call.

The audio of the call will be archived and available on www.choicehotels.com beginning at 1:00 p.m. EDT on October 25 and will be available through November 25 by calling 1-800-475-6701, access code 888352. International callers should dial 320-365-3844 and enter access code 888352.

About Choice Hotels

Choice Hotels International franchises more than 5,500 hotels, representing more than 450,000 rooms, in the United States and 37 countries and territories. As of September 30, 2007, 872 hotels are under development in the United States, representing 68,853 rooms, and an additional 82 hotels, representing 7,970 rooms, are under development in more than 20 countries and territories. The company’s Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and Suburban Extended Stay Hotel brands serve guests worldwide.

Additional corporate information may be found on Choice Hotels’ Internet site, which may be accessed at www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the federal securities law. Generally, our use of words such as “expect,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “plan,” project,” “assume” or similar words of futurity identify statements that are forward-looking and that we intend to be included within the Safe Harbor protections provided by Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on management’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections for the company’s revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends, and future operations. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in Risk Factors section of the company’s Form 10-K for the year ended December 31, 2006, filed with the Securities and Exchange Commission on March 1, 2007. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Statement Concerning Non-GAAP Financial Measurements

Franchising revenues, franchising margins, adjusted diluted EPS and EBITDA are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are used by management in reviewing and analyzing the company’s performance. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States (GAAP), such as total revenues, operating margins, diluted EPS and operating income. The company’s calculation of these measurements may be different from the calculation used by other companies and therefore comparability may be limited. The company has included exhibits accompanying this release that reconcile these measures to the comparable GAAP measurement.

Contacts

David White, Chief Financial Officer

(301) 592-5117

David Peikin, Senior Director, Corporate Communications

(301) 592-6361

Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, and Rodeway Inn are proprietary trademarks and service marks of Choice Hotels International, Inc.

^©2007 Choice Hotels International, Inc. All rights reserved.

Exhibit 1

Choice Hotels International, Inc.

Consolidated Statements of Income

(Unaudited)

	Three Months Ended September 30,											Nine Months Ended September 30,
	2007			2006			Variance					2007			2006			Variance
							$			%								$			%
(In thousands, except per share amounts)
REVENUES:
Royalty fees	$	73,219		$	64,364		$	8,855		14	%	$	175,723		$	157,374		$	18,349		12	%
Initial franchise and relicensing fees		8,902			7,733			1,169		15	%		21,482			20,099			1,383		7	%
Brand solutions		3,622			3,171			451		14	%		12,603			10,853			1,750		16	%
Marketing and reservation		86,795			73,001			13,794		19	%		230,646			203,719			26,927		13	%
Hotel operations		1,196			1,182			14		1	%		3,485			3,342			143		4	%
Other		2,675			1,545			1,130		73	%		6,362			5,567			795		14	%
Total revenues		176,409			150,996			25,413		17	%		450,301			400,954			49,347		12	%
OPERATING EXPENSES:
Selling, general and administrative		24,230			20,279			3,951		19	%		73,735			60,796			12,939		21	%
Depreciation and amortization		2,158			2,344			(186	)	(8	)%		6,410			7,335			(925	)	(13	)%
Marketing and reservation		86,795			73,001			13,794		19	%		230,646			203,719			26,927		13	%
Hotel operations		867			820			47		6	%		2,402			2,365			37		2	%
Total operating expenses		114,050			96,444			17,606		18	%		313,193			274,215			38,978		14	%
Operating income		62,359			54,552			7,807		14	%		137,108			126,739			10,369		8	%
OTHER INCOME AND EXPENSES:
Interest expense		3,992			3,207			785		24	%		10,206			11,291			(1,085	)	(10	)%
Interest and other investment income		(534	)		(569	)		35		(6	)%		(2,856	)		(1,099	)		(1,757	)	160	%
Equity in net income of affiliates		(462	)		(349	)		(113	)	32	%		(837	)		(737	)		(100	)	14	%
Loss on extinguishment of debt		—			—			—		NM			—			342			(342	)	(100	)%
Total other income and expenses, net		2,996			2,289			707		31	%		6,513			9,797			(3,284	)	(34	)%
Income before income taxes		59,363			52,263			7,100		14	%		130,595			116,942			13,653		12	%
Income taxes		20,969			5,906			15,063		255	%		47,241			28,784			18,457		64	%
Net income	$	38,394		$	46,357		$	(7,963	)	(17	)%	$	83,354		$	88,158		$	(4,804	)	(5	)%
Weighted average shares outstanding-basic		63,556			65,668								64,929			65,272
Weighted average shares outstanding-diluted		64,602			67,152								66,077			67,009
Basic earnings per share	$	0.60		$	0.71		$	(0.11	)	(15	)%	$	1.28		$	1.35		$	(0.07	)	(5	)%
Diluted earnings per share	$	0.59		$	0.69		$	(0.10	)	(14	)%	$	1.26		$	1.32		$	(0.06	)	(5	)%

Exhibit 2

Choice Hotels International, Inc.

Consolidated Balance Sheets

(In thousands)	September 30, 2007			December 31, 2006
	(Unaudited)
ASSETS
Cash and cash equivalents	$	47,354		$	35,841
Accounts receivable, net		54,110			41,694
Deferred income taxes		3,062			1,790
Investments, employee benefit plans, at fair value		3,384			—
Other current assets		12,046			7,757
Total current assets		119,956			87,082
Fixed assets and intangibles, net		142,865			144,124
Receivable—marketing fees		87			6,662
Investments, employee benefit plans, at fair value		34,425			31,529
Other assets		40,488			33,912
Total assets	$	337,821		$	303,309
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current portion of long-term debt	$	8,400		$	146
Other current liabilities		142,686			139,645
Total current liabilities		151,086			139,791
Long-term debt		269,962			172,390
Deferred compensation & retirement plan obligations		42,290			40,101
Other liabilities		23,482			13,407
Total liabilities		486,820			365,689
Common stock, $0.01 par value		628			664
Additional paid-in-capital		83,373			81,689
Accumulated other comprehensive income (loss)		830			(772	)
Treasury stock, at cost		(770,212	)		(627,311	)
Retained earnings		536,382			483,350
Total shareholders' deficit		(148,999	)		(62,380	)
Total liabilities and shareholders' deficit	$	337,821		$	303,309

Exhibit 3

Choice Hotels International, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
(In thousands)	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	83,354		$	88,158
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,410			7,335
Provision for bad debts		133			35
Non-cash stock compensation and other charges		9,164			8,250
Non-cash interest and other income		(1,599	)		(385	)
Loss on extinguishment of debt		—			342
Dividends received from equity method investees		495			657
Equity in net income of affiliates		(837	)		(737	)
Changes in assets and liabilities:
Receivables		(12,155	)		(8,149	)
Receivable - marketing and reservation fees, net		17,248			18,585
Accounts payable		(551	)		(2,227	)
Accrued expenses and other		(9,403	)		(17,237	)
Income taxes payable		8,614			19,776
Deferred income taxes		(9,035	)		(12,319	)
Deferred revenue		(80	)		7,142
Other assets		(435	)		476
Other liabilities		9,081			5,888
NET CASH PROVIDED BY OPERATING ACTIVITIES		100,404			115,590
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment		(8,734	)		(5,281	)
Acquisitions, net of cash acquired		(343	)		—
Purchases of investments, employee benefit plans		(7,128	)		(7,976	)
Proceeds from sales of investments, employee benefit plans		2,703			2,885
Issuance of notes receivable		(5,066	)		(1,780	)
Collections of notes receivable		675			772
Other items, net		(468	)		(859	)
NET CASH USED IN INVESTING ACTIVITIES		(18,361	)		(12,239	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt		(422	)		(109	)
Net borrowings (repayments) pursuant to revolving credit facility		106,200			(86,500	)
Debt issuance costs		—			(477	)
Excess tax benefits from stock-based compensation		4,870			12,550
Purchase of treasury stock		(156,749	)		(1,326	)
Dividends paid		(29,522	)		(25,494	)
Proceeds from exercise of stock options		5,093			8,162
NET CASH USED IN FINANCING ACTIVITIES		(70,530	)		(93,194	)
Net change in cash and cash equivalents		11,513			10,157
Cash and cash equivalents at beginning of period		35,841			16,921
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	47,354		$	27,078

EXHIBIT 4

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

	For the Nine Months Ended September 30, 2007						For the Nine Months Ended September 30, 2006						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy	RevPAR
Comfort Inn	$	77.04	62.9	%	$	48.45	$	73.06	62.9	%	$	45.92	5.4	%	—   bps	5.5	%
Comfort Suites		87.54	66.0	%		57.74		83.12	67.4	%		55.99	5.3	%	(140) bps	3.1	%
Sleep		69.53	62.8	%		43.69		66.58	62.3	%		41.48	4.4	%	50 bps	5.3	%
Midscale without Food & Beverage		78.20	63.5	%		49.67		74.22	63.7	%		47.25	5.4	%	(20) bps	5.1	%
Quality		70.45	54.5	%		38.37		67.27	55.6	%		37.40	4.7	%	(110) bps	2.6	%
Clarion		80.39	51.5	%		41.38		79.18	51.2	%		40.56	1.5	%	30 bps	2.0	%
Midscale with Food & Beverage		72.76	53.7	%		39.10		70.10	54.5	%		38.20	3.8	%	(80) bps	2.4	%
Econo Lodge		54.43	48.1	%		26.17		53.21	47.7	%		25.38	2.3	%	40 bps	3.1	%
Rodeway		53.63	47.9	%		25.68		52.32	46.7	%		24.44	2.5	%	120 bps	5.1	%
Economy		54.25	48.0	%		26.06		53.05	47.5	%		25.20	2.3	%	50 bps	3.4	%
MainStay		69.91	67.8	%		47.38		67.39	68.2	%		45.97	3.7	%	(40) bps	3.1	%
Suburban		39.98	68.1	%		27.23		38.34	73.9	%		28.32	4.3	%	(580) bps	(3.8	)%
Extended Stay		46.69	68.0	%		31.76		43.61	72.8	%		31.73	7.1	%	(480) bps	0.1	%
Total	$	72.04	58.0	%	$	41.80	$	68.81	58.5	%	$	40.28	4.7	%	(50) bps	3.8	%
	For the Three Months Ended September 30, 2007						For the Three Months Ended September 30, 2006						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy	RevPAR
Comfort Inn	$	82.60	73.2	%	$	60.51	$	78.25	72.6	%	$	56.79	5.6	%	60 bps	6.6	%
Comfort Suites		90.64	72.7	%		65.88		86.19	73.3	%		63.22	5.2	%	(60) bps	4.2	%
Sleep		73.09	70.8	%		51.72		69.80	69.6	%		48.61	4.7	%	120 bps	6.4	%
Midscale without Food & Beverage		82.93	72.8	%		60.35		78.67	72.3	%		56.88	5.4	%	50 bps	6.1	%
Quality		76.08	63.7	%		48.47		71.73	64.7	%		46.42	6.1	%	(100) bps	4.4	%
Clarion		85.09	60.0	%		51.05		82.51	57.1	%		47.14	3.1	%	290 bps	8.3	%
Midscale with Food & Beverage		78.10	62.8	%		49.08		74.19	62.8	%		46.60	5.3	%	—   bps	5.3	%
Econo Lodge		59.07	56.3	%		33.24		57.22	56.1	%		32.11	3.2	%	20 bps	3.5	%
Rodeway		58.55	57.3	%		33.52		57.14	54.9	%		31.38	2.5	%	240 bps	6.8	%
Economy		58.95	56.5	%		33.31		57.20	55.9	%		31.96	3.1	%	60 bps	4.2	%
MainStay		73.34	75.3	%		55.26		68.86	77.1	%		53.12	6.5	%	(180) bps	4.0	%
Suburban		40.89	70.3	%		28.76		38.95	75.4	%		29.36	5.0	%	(510) bps	(2.0	)%
Extended Stay		49.27	71.6	%		35.26		44.89	75.7	%		34.00	9.8	%	(410) bps	3.7	%
Total	$	76.90	66.9	%	$	51.43	$	72.96	66.8	%	$	48.72	5.4	%	10 bps	5.6	%

	For the Quarter Ended				For the Nine Months Ended
	9/30/2007		9/30/2006		9/30/2007		9/30/2006
System-wide effective royalty rate	4.12	%	4.07	%	4.13	%	4.08	%

EXHIBIT 5

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

	September 30, 2007		September 30, 2006		Variance
	Hotels	Rooms	Hotels	Rooms	Hotels		Rooms		%		%
Comfort Inn	1,429	111,505	1,411	110,525	18		980		1.3	%	0.9	%
Comfort Suites	470	36,688	427	33,573	43		3,115		10.1	%	9.3	%
Sleep	345	25,617	327	24,609	18		1,008		5.5	%	4.1	%
Midscale without Food & Beverage	2,244	173,810	2,165	168,707	79		5,103		3.6	%	3.0	%
Quality	804	77,515	709	69,699	95		7,816		13.4	%	11.2	%
Clarion	166	23,685	160	23,733	6		(48	)	3.8	%	(0.2	)%
Midscale with Food & Beverage	970	101,200	869	93,432	101		7,768		11.6	%	8.3	%
Econo Lodge	824	50,273	815	50,013	9		260		1.1	%	0.5	%
Rodeway	275	16,342	217	13,245	58		3,097		26.7	%	23.4	%
Economy	1,099	66,615	1,032	63,258	67		3,357		6.5	%	5.3	%
MainStay	29	2,166	27	2,046	2		120		7.4	%	5.9	%
Suburban	52	6,691	64	8,441	(12	)	(1,750	)	(18.8	)%	(20.7	)%
Extended Stay	81	8,857	91	10,487	(10	)	(1,630	)	(11.0	)%	(15.5	)%
Cambria Suites	2	219	—	—	2		219		NM		NM
Domestic Franchises	4,396	350,701	4,157	335,884	239		14,817		5.7	%	4.4	%
International Franchises	1,137	99,579	1,171	98,811	(34	)	768		(2.9	)%	0.8	%
Total Franchises	5,533	450,280	5,328	434,695	205		15,585		3.8	%	3.6	%

EXHIBIT 6

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL INFORMATION BY BRAND

DEVELOPMENT RESULTS—DOMESTIC NEW HOTEL CONTRACTS

(UNAUDITED)

	For the Nine Months Ended September 30, 2007			For the Nine Months Ended September 30, 2006			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
Comfort Inn	26	32	58	38	43	81	(32	)%	(26	)%	(28	)%
Comfort Suites	78	4	82	55	3	58	42	%	33	%	41	%
Sleep	33	1	34	27	1	28	22	%	0	%	21	%
Midscale without Food & Beverage	137	37	174	120	47	167	14	%	(21	)%	4	%
Quality	7	96	103	5	100	105	40	%	(4	)%	(2	)%
Clarion	5	28	33	1	22	23	400	%	27	%	43	%
Midscale with Food & Beverage	12	124	136	6	122	128	100	%	2	%	6	%
Econo Lodge	3	50	53	—	43	43	NM		16	%	23	%
Rodeway	2	62	64	2	73	75	0	%	(15	)%	(15	)%
Economy	5	112	117	2	116	118	150	%	(3	)%	(1	)%
MainStay	10	1	11	5	1	6	100	%	0	%	83	%
Suburban	10	3	13	9	5	14	11	%	(40	)%	(7	)%
Extended Stay	20	4	24	14	6	20	43	%	(33	)%	20	%
Cambria Suites	18	—	18	20	—	20	(10	%)	NM		(10	)%
Total Domestic System	192	277	469	162	291	453	19	%	(5	)%	4	%
	For the Three Months Ended September 30, 2007			For the Three Months Ended September 30, 2006			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
Comfort Inn	10	12	22	14	25	39	(29	)%	(52	)%	(44	)%
Comfort Suites	38	1	39	14	1	15	171	%	0	%	160	%
Sleep	17	—	17	17	1	18	0	%	(100	)%	(6	)%
Midscale without Food & Beverage	65	13	78	45	27	72	44	%	(52	)%	8	%
Quality	2	33	35	—	43	43	NM		(23	)%	(19	)%
Clarion	1	7	8	—	4	4	NM		75	%	100	%
Midscale with Food & Beverage	3	40	43	—	47	47	NM		(15	)%	(9	)%
Econo Lodge	1	22	23	—	20	20	NM		10	%	15	%
Rodeway	2	23	25	1	25	26	100	%	(8	)%	(4	)%
Economy	3	45	48	1	45	46	200	%	0	%	4	%
MainStay	6	—	6	2	—	2	200	%	NM		200	%
Suburban	3	1	4	3	3	6	0	%	(67	)%	(33	)%
Extended Stay	9	1	10	5	3	8	80	%	(67	)%	25	%
Cambria Suites	3	—	3	5	—	5	(40	)%	NM		(40	)%
Total Domestic System	83	99	182	56	122	178	48	%	(19	)%	2	%

Exhibit 7

CHOICE HOTELS INTERNATIONAL, INC.

DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT

(UNAUDITED)

A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors.

							Variance
	September 30, 2007 Units			September 30, 2006 Units			Conversion				New Construction				Total
	Conversion	New Construction	Total	Conversion	New Construction	Total	Units		%		Units		%		Units		%
Comfort Inn	41	121	162	50	108	158	(9	)	(18	)%	13		12	%	4		3	%
Comfort Suites	1	258	259	5	197	202	(4	)	(80	)%	61		31	%	57		28	%
Sleep Inn	—	113	113	—	95	95	—		NM		18		19	%	18		19	%
Midscale without Food & Beverage	42	492	534	55	400	455	(13	)	(24	)%	92		23	%	79		17	%
Quality	61	12	73	67	11	78	(6	)	(9	)%	1		9	%	(5	)	(6	)%
Clarion	23	7	30	14	4	18	9		64	%	3		75	%	12		67	%
Midscale with Food & Beverage	84	19	103	81	15	96	3		4	%	4		27	%	7		7	%
Econo Lodge	45	4	49	32	5	37	13		41	%	(1	)	(20	)%	12		32	%
Rodeway	52	3	55	56	2	58	(4	)	(7	)%	1		50	%	(3	)	(5	)%
Economy	97	7	104	88	7	95	9		10	%	—		0	%	9		9	%
MainStay	1	36	37	1	33	34	—		0	%	3		9	%	3		9	%
Suburban	6	31	37	4	19	23	2		50	%	12		63	%	14		61	%
Extended Stay	7	67	74	5	52	57	2		40	%	15		29	%	17		30	%
Cambria Suites	—	57	57	—	33	33	—		NM		24		73	%	24		73	%
	230	642	872	229	507	736	1		0	%	135		27	%	136		18	%

EXHIBIT 8

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollar amounts in thousands)	2007			2006			2007			2006
Franchising Revenues:
Total Revenues	$	176,409		$	150,996		$	450,301		$	400,954
Adjustments:
Marketing and reservation revenues		(86,795	)		(73,001	)		(230,646	)		(203,719	)
Hotel Operations		(1,196	)		(1,182	)		(3,485	)		(3,342	)
Franchising Revenues	$	88,418		$	76,813		$	216,170		$	193,893
Franchising Margins:
Operating Margin:
Total Revenues	$	176,409		$	150,996		$	450,301		$	400,954
Operating Income	$	62,359		$	54,552		$	137,108		$	126,739
Operating Margin		35.3	%		36.1	%		30.4	%		31.6	%
Franchising Margin:
Franchising Revenues	$	88,418		$	76,813		$	216,170		$	193,893
Operating Income	$	62,359		$	54,552		$	137,108		$	126,739
Less: Hotel Operations		329			362			1,083			977
	$	62,030		$	54,190		$	136,025		$	125,762
Franchising Margins		70.2	%		70.5	%		62.9	%		64.9	%
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2007			2006			2007			2006
Net Income	$	38,394		$	46,357		$	83,354		$	88,158
Adjustments:
Loss on Debt Extinguishment Costs		—			—			—			217
Reversal of Provisions for Income Tax Contingencies/Unrecognized Tax Benefits		(679	)		(12,785	)		(301	)		(12,581	)
Adjusted Net Income	$	37,715		$	33,572		$	83,053		$	75,794
Weighted average shares outstanding-diluted		64,602			67,152			66,077			67,009
Diluted Earnings Per Share	$	0.59		$	0.69		$	1.26		$	1.32
Adjustments:
Loss on Debt Extinguishment Costs		—			—						—
Reversal of Provisions for Income Tax Contingencies/Unrecognized Tax Benefits		(0.01	)		(0.19	)		(0.00	)		(0.19	)
Adjusted Diluted Earnings Per Share (EPS)	$	0.58		$	0.50		$	1.26		$	1.13
EBITDA Reconciliation
(in millions)	Q3 2007 Actuals			Q3 2006 Actuals			Full-Year 2007 Outlook
Operating Income (per GAAP)	$	62.4		$	54.6		$	180.4
Depreciation and amortization		2.2			2.3			8.6
Earnings before interest, taxes, depreciation & amortization (non-GAAP)*	$	64.6		$	56.9		$	189.0

* Nine months ended September 30, 2007 franchising margins, operating income and EBITDA include approximately $3.7 million of severance costs related to the previously announced termination of certain executive officers.