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): December 1, 2009

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 7.01. Regulation FD Disclosure.

The Company is furnishing the following pursuant to Item 7.01, “Regulation FD Disclosure.

On December 1, 2009, Choice Hotels International, Inc. posted a presentation to its website, www.choicehotels.com, which is scheduled to be presented on Tuesday, December 1, 2009 at the FBR Capital Markets 16^th Annual Fall Investor Conference in New York City, New York. Stephen P. Joyce, president and chief executive officer, will be addressing participants at the event. The materials include certain non-GAAP financial measures. A reconciliation of those measures to the most directly related comparable GAAP measures is included in the presentation materials. The presentation materials are attached hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 — Choice Hotels International, Inc. Presentation.

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: December 1, 2009	/S/    DAVID L. WHITE
	David L. White Senior Vice President & Chief Financial Officer & Treasurer

EX-99.1

Investor Presentation

December 2009

Exhibit 99.1

2

DISCLAIMER

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

meaning of the federal securities law. Generally, our use of words such as “expect,” “estimate,” “believe,”

“anticipate,” “will,” “forecast,” “plan,” “project,” “assume” or similar words of futurity identify statements that are

forward-looking and that we intend to be included within the Safe Harbor protections provided by Section 27A of the

Securities Act and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based

on management’s current beliefs, assumptions and expectations regarding future events, which in turn are based

on information currently available to management. Such statements may relate to projections for the company’s

revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends,

and future operations. We caution you not to place undue reliance on any forward-looking statements, which are

made as of the date of this presentation. Forward-looking statements do not guarantee future performance and

involve known and unknown risks, uncertainties and other factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from

those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to,

changes to general, domestic and foreign economic conditions; operating risks common in the lodging and

franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers;

changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in

technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for

hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in

detail in the Risk Factors section of the company’s Form 10-K for the year ended December 31, 2008, filed with the

Securities and Exchange Commission on March 2, 2009.  We undertake no obligation to publicly update or revise

any forward-looking statement, whether as a result of new information, future events or otherwise.

3

CHOICE HOTELS OVERVIEW

Leading gainer of US hotel market

share*

–

9.5% share of branded US hotels (+190

basis points over trailing 5 years)*

–

2nd largest U.S. hotelier*

65+ year-old company with well-known,

diversified brands suitable for various

stages of hotel life cycle

Core competencies and services drive

demand for our brands and deliver

business for our franchisees

Global pipeline of 860 hotels under

construction, awaiting conversion or

approved for development

Source:

Choice

Internal

Data,

September

30,

2009.

Pipeline

data

as

of

September

30,

2009

* Based on number of hotels as of September 30, 2009 (Smith Travel Research)

Fee-for-service business model

Predictable, profitable, long-term growth

in a variety of lodging and economic

environments

Cumulative free cash flows of more than

$1 billion since 1997

–

>99% returned to shareholders through

share repurchases and dividends

Capital “light”

model generates strong

returns on invested capital

Long-term franchise contracts and scale

represent barriers to entry

Strong, Growing, Global Hotel

Franchising Business

Highly Attractive Business Model

With Strong Financial Returns

4

0

2

4

6

8

10

12

14

Wyndham

Choice

IHG

Hilton

Marriott

Best Western

Accor

Carlson

Starwood

Hyatt

2004

2005

2006

2007

2008

2009

ONE OF THE LARGEST HOTELIERS

Source: Smith Travel Research, September 30, 2009.

Market Share

11.5%

9.5%

6.0%      5.9%       5.5%      3.9%      1.9%       1.2%        0.9%        0.6%

5 yr. bps

(04-09)

-60

190

80

150          100         -60

-50          10

10

-80

Leading Gainer of Market Share (% of Hotels Open in U.S.)

5

* Excludes cost of land

Conversion

$45,000+

$105,000+

$50

$70

$100+

Targeted Average Daily Rate

$85

FAMILY OF WELL KNOWN AND

DIVERSIFIED BRANDS

New Construction

Source: Choice Internal Data, April 2009

6

Source: Smith Travel Research, Choice Internal Data, September 30, 2009

WELL POSITIONED FOR LONG-TERM NEW

CONSTRUCTION HOTEL GROWTH IN LIMITED

SERVICE SEGMENT

Domestic Hotels

1,712

1,457

747

615

464

1,672

601

389

Holiday Inn

Express

Hampton

Inn / Inn &

Suites

La Quinta

Inn/Inn &

Suites

Fairfield

Inn

Country Inn

& Suites

7

Source: Smith Travel Research, Choice Internal Data, September 30, 2009

SIGNIFICANT GROWTH OPPORTUNITIES

REMAIN IN LARGE CONVERSION MARKET

Chart does not include

17,000+ independent

hotels

in budget, economy and

mid-scale segments           

Best

Western

Holiday Inn

Express

Motel 6

La Quinta Inn/

La Quinta Inn

& Suites

Hampton Inn /

Hampton Inn

& Suites

Fairfield

Inn

Red Roof

Inn

Knights

Inn

Days Inn

Holiday Inn /

Holiday Inn

Select

Americas

Best Value

Inn

Travelodge

Howard

Johnson

Microtel

Super 8

Ramada/

Ramada

Limited

Domestic Hotels

2,041

1,896

1,712

1,678

1,672

731

747

615

547

366

297

167

309

350

752

795

958

341

963

374

8

DOMESTIC PIPELINE OF 744 HOTELS

194

134

130

65

29

34

31

44

37

43

Mid-scale

Extended Stay

Economy

Upscale

Source: Choice Internal Data, September 30, 2009

New Construction

Conversion

3

9

1,116 properties

Over 35 countries and

territories on 5

continents

Large global “pure

hotel franchising”

business

Track record of

consistent,

conservative,

profitable growth

Significant long-term

growth opportunity in

underrepresented

regions/countries

116 hotels under

construction, awaiting

conversion or

approved for

development

Source: Choice Internal Data, September 30, 2009

STRONG PRESENCE IN MAJOR

TRAVEL MARKETS OUTSIDE OF THE U.S.

279 hotels

Canada

262 hotels

Australia,

New Zealand

& Papa New

Guinea

1 hotel

Singapore

3 hotels

China

58 hotels

Japan

1 hotel

Malaysia

29 hotels

India

53 hotels

Brazil

13 hotels

Central

America

18 hotels

Mexico

1 hotel

Lebanon

237 hotels

Continental

Europe, UK

& Ireland

161 hotels

Scandinavia

10

SERVICES LIFECYCLE IMPROVES

BRANDS AND PROPERTY PERFORMANCE

FRANCHISED

FRANCHISED

PROPERTIES

PROPERTIES

RETURN ON

RETURN ON

INVESTMENT

INVESTMENT

Brand Planning

and Management

•

Targeted, differentiated

programs, amenities and

services for each brand

Brand Performance

•

Revenue and guest service

consulting

•

Inventory and rate

management

•

Local sales and marketing

•

Independent third-party quality

assurance

Training

•

On-site

•

Regional

•

Web-based

•

GM Certification

Opening Services

•

Ensure hotels open

successfully and meet or

exceed brand standards

Portfolio

Management

•

Repositioning

•

Relicensing

•

Termination

Procurement

Services

•

Value-engineered

prototypes and

design packages

•

Negotiated vendor

relationships

11

MARKETING LEVERAGES SIZE,

SCALE AND DISTRIBUTION

$300-plus million in annual marketing and reservation system fees

Leverage expertise in on-line, targeted interactive marketing to influence

guest hotel stay decisions

Multi and single brand advertising campaigns

Focus on driving guests to Choice central channels

Facilitate “one-stop”

shopping

Strong and growing loyalty program

Growing brand awareness

Source: Choice Internal Data, September 2009

12

STRONG AND GROWING AIDED

BRAND AWARENESS

98

77

43

87

72

99

90

62

89

82

95

57

29

20

40

14

14

Comfort

Inn

Comfort

Suites

Sleep Inn

Quality

Clarion

Econo

Lodge

Rodeway

Inn

MainStay

Suburban

Cambria

Suites

Choice

Hotels

2001

2008

Source: Percentage

of

survey

respondents.

Millward

Brown,

December

2008

13

8.3%

10.0%

12.2%

15.3%

16.2%

17.9%

20.3%

24.6%

21.8%

2001

2002

2003

2004

2005

2006

2007

2008

2009 YTD

08/31/09

STRONG, GROWING LOYALTY PROGRAM

Comprehensive loyalty rewards program

More than 9 million members worldwide as of

November

2009

–

contribute

24.6%

of

domestic

gross room revenues

More than 1.75 million members added in 2009

Delivers incremental business to all Choice brand

hotels

Important selling point for franchise sales

Source: Choice Internal Data, November 2009.

Choice Privileges Revenue as Percent

of Domestic Gross Room Revenues

14

LARGE AND GROWING CENTRAL RESERVATIONS

SYSTEM (“CRS”) DELIVERY PUTS “HEADS IN BEDS”

All

Hotel Direct

Reservation

Choice Central

Reservation

Contribution

1/3

Domestic Franchise System

Gross Room Revenue Source

Domestic Choice CRS

Net Room Revenue

$1,161

$1,638

$1,000

$1,200

$1,400

$1,600

$1,800

2005

2006

2007

2008

$ in Millions

Source: Choice Internal Data, December 2008

15

Central Channel ADR

Source: Choice Internal Data, December, 2008

47%

62%

23%

35%

15%

18%

2005

2006

2007

2008

Internet

Voice

Travel Agent (GDS)

Domestic Choice CRS

Net Channel Share

$73.72

$66.11

$77.78

$71.59

$84.03

$73.35

2005

2006

2007

2008

Systemwide

Call Center

choicehotels.com

SIGNIFICANT AVERAGE DAILY RATE PREMIUM

ON CENTRAL RESERVATIONS BOOKINGS

16

MANAGING DIFFERENTLY

IN LODGING DOWNTURN

Leverage brand preference and conversion opportunity during

lodging down cycle to drive market share

Reallocate resources and deliver tools to position franchisees to

capture larger share of shrinking travel demand

Implement contingency plans at all levels of the organization

Delay non-mission critical operating and capital spending

Ensure adequate liquidity

17

LODGING DOWNCYCLE TRENDS

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

GDP

Demand

Supply

1990 +2.0%

1991 - 2.5%

1992 +2.5%

2001  -7.0%

2002 -2.7%

2003  +0.3%

Financial

Markets/

Housing Crisis

IND. REVPAR

IND. REVPAR

1990 +1.7%

1991 - 2.7%

1992 +1.4%

CHH REVPAR

CHH REVPAR

2001  -2.4%

2002  -3.8%

2003  -0.8%

Each

recession

-

supply

grew

faster

than

demand

and

the

economy

(GDP)

9/11

recession

Gulf war

recession

Source: Bureau of Economic Analysis, Blue Chip Economic Indicators, Smith Travel Research, Choice Internal Data, May, 2009

18

184

174

116

63

128

182

237

288

327

261

109

134

124

184

241

342

370

402

432

443

437

355

318

298

300

304

470

552

639

720

770

698

464

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

09/30/09

TTM

New Construction

Conversion

Total

Source: Choice Internal Data, September 30, 2009

CONVERSION BRAND FRANCHISE SALES

OPPORTUNITY IN SOFT NEW CONSTRUCTION

ENVIRONMENT

19

153

188

158

146

190

254

332

147

403

312

378

5.0%

6.0%

4.9%

4.4%

5.5%

7.0%

8.7%

3.2%

7.0%

9.3%

9.6%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

9/30/09

TTM

Relicensing Contracts

Relicensings as % of the prior year's ending system size

Source: Choice Internal Data, September 30, 2009

RELICENSING ACTIVITY SIMILAR TO NEW

CONSTRUCTION BRAND SALES

20

STRONG, STEADY FRANCHISE

SYSTEM GROWTH

3,123

3,244

3,327

3,482

3,636

3,834

4,048

4,211

4,445

4,716

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

258

266

271

282

310

329

339

354

374

294

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Domestic Hotels On-Line

Domestic Rooms On-Line

(in thousands)

Source: Choice Internal Data, December 2008

CAGR = 4.5%

CAGR = 5.3%

CAGR = 4.0%

CAGR = 4.9%

21

FRANCHISING REVENUE STREAM LESS

VOLATILE THAN REVPAR

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$0

$50

$100

$150

$200

$250

$300

$350

CHH RevPAR

STR Chain Scale (Supply Weighted)

Industry RevPAR

Franchising Revenue

Source: Smith Travel Research, Choice Internal Data, December 2008

($ in millions)

22

ADJUSTED EBITDA LESS VOLATILE

THAN INDUSTRY PROFITABILITY

0

5

10

15

20

25

30

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

0

50

100

150

200

250

Industry Profits

Adjusted EBITDA

Source: Smith Travel Research, Choice Internal Data, December 2008

23

CAPITAL “LIGHT”

MODEL GENERATES

STRONG RETURNS ON INVESTED CAPITAL

19.5%

78.5%

15.2%

16.1%

14.7%

27.6%

36.7%

49.7%

62.9%

68.8%

59.5%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Choice Internal Data, December 2008

24

TRACK RECORD OF STRONG

EARNINGS PER SHARE GROWTH

$0.40

$0.51

$0.51

$0.58

$0.76

$0.93

$1.07

$1.26

$1.49

$1.74

$1.75

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Choice Internal Data, December 2008, Per Share Amounts Retroactively Adjusted For 2005 Stock Split

Adjusted Diluted Earnings Per Share

Note: See appendix for reconciliation of adjusted diluted earnings per share to diluted earnings per share. To improve comparability certain employee severance

amounts included in the determination of adjusted diluted earnings per share in this presentation for 2008 and 2007 differ from amounts reported in exhibit 8 of our

February 10, 2009 earnings announcement.

25

-

2.1

7.9

7.2

24.0

10.8

5.7

6.4

4.9

3.2

1.6

2.2

9.8 x

10.2 x

14.8 x

20.3 x

17.0 x

14.9 x

11.0 x

11.9 x

10.2 x

8.6 x

11.3 x

11.9 x

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

9/30/2009

Millions of Shares Repurchased

Avg. TEV/EBITDA

Source: Capital IQ, Choice Internal Data, September 30, 2009. Share amounts for 2005 and prior years retroactively adjusted for 2005 two-for-one stock

split

Remaining authority on current authorization –

3.9 million shares as of September 30, 2009

OPPORTUNISTIC SHARE REPURCHASES KEY

PART OF CAPITAL ALLOCATION STRATEGY

26

CREDIT STRENGTHS

Solid investment grade company

–

Moody’s Baa3

–

Standard & Poor’s BBB

Strong liquidity position

–

$350 million committed revolver matures June 2011 with $58 million

available as of September 30, 2009

–

No debt maturities until 2011

Substantial financial flexibility

Minimal contingent liability exposure

Source: Choice Internal Data, September 30, 2009.

27

ROYALTY FEE “LEVERS”

Domestic Royalty Impact

Estimated

Impact on Full

Year Royalties

1

Estimated

Impact on Full

Year

Diluted EPS

2,3

RevPAR

Improvement

1% =

$2.0 million

$0.02

5% =

$9.9 million

$0.10

New Franchise Growth

1% (49 units) =

$2.0 million

$0.02

5% (245 units) =

$9.9 million

$0.10

Improvement in

Royalty Rate

1 bps increase =

$0.5 million

$0.005

5 bps increase =

$2.3 million

$0.02

(1) Based

on

current

annual

RevPAR

forecast

at

September

30,

2009

(2) Assumes outstanding diluted shares of 60.4 million

(3) Assumed tax rate of 37.2%

Source: Choice Internal Data, September 2009

28

STRATEGIC AGENDA FOR CHOICE’S BRANDS,

GROWTH AND SHAREHOLDERS

Continue core brand market share, unit growth and brand

performance improvements

Continue shareholder-friendly capital allocation policies

Leverage financial capacity/strength to expand scale of emerging

brands

Evaluate opportunities to enter new segments

Continue international expansion

29

Appendix

Reconciliation of Non-GAAP

Financial Measurements to GAAP

30

DISCLAIMER

Adjusted

franchising

margins,

adjusted

earnings

before

interest,

taxes

depreciation

and

amortization (EBITDA), adjusted net income, adjusted diluted earnings per share (EPS),

franchising revenues,  net operating profit after tax (NOPAT), return on average invested

capital (ROIC) and free cash flows are non-GAAP financial measurements. These

financial

measurements

are

presented

as

supplemental

disclosures

because

they

are

used by management in reviewing and analyzing the company’s performance. This

information should not be considered as an alternative to any measure of performance

as

promulgated

under

accounting

principles

generally

accepted

in

the

United

States

(GAAP), such as operating income, net income, diluted earnings per share, total

revenues or net cash provided by operating activities.  The calculation of these non-

GAAP measures may be different from the calculation by other companies and therefore

comparability may be limited. The company has included the following appendix which

reconcile these measures to the comparable GAAP measurement.

31

FRANCHISING REVENUES AND ADJUSTED

FRANCHISING MARGINS

Source: Choice Internal Data, December 2008

($ amounts in thousands)

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2008

2007

2006

2005

2004

2003

Total Revenues

641,680

$      

615,494

$      

539,903

$      

472,098

$      

428,208

$      

385,866

$      

Adjustments:

     Marketing and Reservation 

(336,477)

(316,827)

(273,267)

(237,822)

(220,732)

(195,219)

     Product Sales

-

-

-

-

-

-

     Hotel Operations

(4,936)

(4,692)

(4,505)

(4,293)

(3,729)

(3,565)

Franchising Revenues

300,267

$      

293,975

$      

262,131

$      

229,983

$      

203,747

$      

187,082

$      

Operating Income

174,596

$      

185,199

$      

166,625

$      

143,750

$      

124,983

$      

113,946

$      

Adjustments

     Hotel Operations

(1,502)

(1,451)

(1,311)

(1,068)

(725)

(842)

     Acceleration of Management Succession Plan

6,605

-

-

-

-

-

     Executive Termination Benefits

-

3,690

-

-

-

-

     Loan Reserves Related to Impaired Notes Receivable

7,555

-

-

-

-

-

     Product Sales

-

-

-

-

-

-

     Impairment of Friendly Investment

-

-

-

-

-

-

Net

187,254

$      

187,438

$      

165,314

$      

142,682

$      

124,258

$      

113,104

$      

Adjusted Franchising Margin

62.4%

63.8%

63.1%

62.0%

61.0%

60.5%

Note: To improve comparability certain employee severance amounts included in the determination of adjusted franchising margins in this presentation for 2008

and 2007 differ from amounts reported in exhibit 8 of our February 10, 2009 earnings announcement.

32

FRANCHISING REVENUES AND ADJUSTED

FRANCHISING MARGINS (CONTINUED)

Source: Choice Internal Data, December 2008

($ amounts in thousands)

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2000

1999

1998

1997

Total Revenues

365,562

$      

341,428

$      

352,841

$              

324,203

$              

165,474

$              

175,416

$            

Adjustments:

     Marketing and Reservation 

(190,145)

(168,170)

(185,367)

(162,603)

-

-

     Product Sales

-

-

-

(3,871)

(20,748)

(23,806)

     Hotel Operations

(3,331)

(3,215)

(1,249)

-

(1,098)

(17,303)

Franchising Revenues

172,086

$      

170,043

$      

166,225

$              

157,729

$              

143,628

$              

134,307

$            

Operating Income

104,700

$      

73,577

$        

92,427

$                 

94,170

$                 

85,151

$                 

77,068

$              

Adjustments

     Hotel Operations

(385)

(714)

(640)

-

35

(1,679)

     Acceleration of Management Succession Plan

-

-

-

-

-

-

     Executive Termination Benefits

-

-

-

-

-

-

     Loan Reserves Related to Impaired Notes Receivable

-

-

-

-

-

-

     Product Sales

-

-

-

12

(1,216)

(1,037)

     Impairment of Friendly Investment

-

22,713

-

-

-

-

Net

104,315

$      

95,576

$        

91,787

$                 

94,182

$                 

83,970

$                 

74,352

$              

Adjusted Franchising Margin

60.6%

56.2%

55.2%

59.7%

58.5%

55.4%

33

RETURN ON INVESTED CAPITAL

Source: Choice Internal Data, December 2008

(a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect

of a $22.7 million impairment charge related to the write-off of the company’s investment in Friendly Hotels.

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in millions)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

1997

1998

1999

2000

2001

2002

Operating Income (a)

$77.1

$85.2

$94.2

$92.4

$96.3

$104.7

Tax Rate(a)

41.7%

41.7%

39.5%

39.0%

35.0%

36.5%

After-Tax Operating Income

45.0

49.7

57.0

56.4

62.6

66.5

+ Depreciation &

Amortization

9.2

6.7

7.7

11.6

12.5

11.3

-

Maintenance CAPEX

9.2

6.7

7.7

11.6

12.5

11.3

Net Op. Profit After-tax (NOPAT)

$45.0

$49.7

$57.0

$56.4

$62.6

$66.5

Total Assets

386.4

398.2

464.7

484.1

321.2

316.8

-

Current Liabilities

68.2

64.7

88.7

93.8

71.2

84.3

Invested Capital

318.2

333.6

375.9

390.3

250.0

232.5

Return on Average Invested Capital

17.8%

15.2%

16.1%

14.7%

19.5%

27.6%

34

RETURN ON INVESTED CAPITAL (CONTINUED)

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in millions)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2003

2004

2005

2006

2007

2008

Operating Income (a)

$113.9

$125.0

$143.8

$166.6

$185.2

$174.6

Tax Rate(a)

36.1%

35.1%

33.0%

27.4%

36.0%

36.3%

After-Tax Operating Income

72.8

81.1

96.3

121.0

118.5

111.2

+

Depreciation &

Amortization

11.2

9.9

9.1

9.7

8.6

8.2

-

Maintenance CAPEX

11.2

9.9

9.1

9.7

8.6

8.2

Net Op. Profit After-tax (NOPAT)

$72.8

$81.1

$96.3

$121.0

$118.5

$111.2

Total Assets

267.3

263.4

265.3

303.3

328.4

328.2

-

Current Liabilities

102.2

102.1

120.3

139.8

147.5

135.1

Invested Capital

165.1

161.3

145.0

163.5

180.9

193.1

Return on Average Invested Capital

36.7%

49.7%

62.9%

78.5%

68.8%

59.5%

35

FREE CASH FLOWS

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

($ in thousands)

2008

2007

2006

2005

2004

Net Cash Provided by Operating Activities

104,399

$                   

145,666

$        

153,680

$        

133,588

$        

108,908

$         

Net Cash Provided (Used) by Investing Activities

(20,265)

(21,284)

(17,244)

(24,531)

(14,544)

Free Cash Flows

84,134

$                     

124,382

$        

136,436

$        

109,057

$        

94,364

$           

36

FREE CASH FLOWS (continued)

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

($ in thousands)

2003

2002

2001

2000

1999

1998

Net Cash Provided by Operating Activities

115,304

$        

99,018

$          

101,712

$        

53,879

$          

65,040

$          

38,952

$          

Net Cash Provided (Used) by Investing Activities

27,784

(14,683)

87,738

(16,617)

(36,031)

(9,056)

Free Cash Flows

143,088

$        

84,335

$          

189,450

$        

37,262

$          

29,009

$          

29,896

$          

37

ADJUSTED EBITDA

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in thousands)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2008

2007

2006

2005

2004

2003

Operating Income

174,596

$      

185,199

$      

166,625

$      

143,750

$      

124,983

$      

113,946

$      

Adjustments

Acceleration of Management Succession Plan

6,605

-

-

-

-

-

Executive Termination Benefits

-

3,690

-

-

-

-

Loan Reserves Related to Impaired Notes Receivable

7,555

-

-

-

-

-

Product Sales

-

-

-

-

-

-

Impairment of Friendly investment

-

-

-

-

-

-

Depreciation and Amortization

8,184

8,637

9,705

9,051

9,947

11,225

Adjusted EBITDA

196,940

$      

197,526

$      

176,330

$      

152,801

$      

134,930

$      

125,171

$      

Note: To improve comparability certain employee severance amounts included in the determination of adjusted EBITDA in this presentation for 2008

and 2007 differ from amounts reported in exhibit 8 of our February 10, 2009 earnings announcement.

38

ADJUSTED EBITDA (CONTINUED)

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in thousands)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2000

1999

1998

1997

Operating Income

104,700

$      

73,577

$        

92,427

$        

94,170

$        

85,151

$        

77,068

$        

Adjustments

Acceleration of Management Succession Plan

-

-

-

-

-

-

Executive Termination Benefits

-

-

-

-

-

-

Loan Reserves Related to Impaired Notes Receivable

-

-

-

-

-

-

Product Sales

-

-

-

12

(1,216)

(1,037)

Impairment of Friendly investment

-

22,713

-

-

-

-

Depreciation and Amortization

11,251

12,452

11,623

7,687

6,710

9,173

Adjusted EBITDA

115,951

$      

108,742

$      

104,050

$      

101,869

$      

90,645

$        

85,204

$        

39

ADJUSTED DILUTED EARNINGS PER SHARE

Source: Choice Internal Data, December 2008

Note: To improve comparability certain employee severance amounts included in the determination of adjusted diluted earnings per share in this presentation for

2008 and 2007 differ from amounts reported in exhibit 8 of our February 10, 2009 earnings announcement.

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

(In thousands, except per share amounts)

2008

2007

2006

2005

2004

Net Income

100,211

$                     

111,301

$                     

112,787

$                     

87,565

$                       

74,345

$                       

Adjustments:

Loss(Gain) on Extinguishment of Debt, Net of Taxes

-

-

217

-

433

Acceleration

of

Management

Sucession

Plan,

Net

of

Taxes

4,135

-

-

-

-

Executive Termination Benefits, Net of Taxes

-

2,310

-

-

-

Loan Reserves Related to Impaired Notes Receivable, Net of Taxes

4,729

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

(12,791)

(4,855)

(1,182)

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

1,192

-

Loss(Gain) on Sunburst Note Transactions, Net of Taxes

-

-

-

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes

-

-

-

-

-

Adjusted Net Income

109,075

$                     

113,611

$                     

100,213

$                     

83,902

$                       

73,596

$                       

Weighted Average Shares Outstanding-Diluted

62,521

65,331

67,050

66,336

69,000

Diluted Earnings Per Share

1.60

$                           

1.70

$                           

1.68

$                           

1.32

$                           

1.08

$                           

Adjustments:

Loss(Gain) on Extinguishment of Debt, Net of Taxes

-

-

-

-

0.01

Acceleration

of

Management

Sucession

Plan,

Net

of

Taxes

0.07

-

-

-

-

Executive Termination Benefits, Net of Taxes

-

0.04

-

-

-

Loan Reserves Related to Impaired Notes Receivable, Net of Taxes

0.08

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

(0.19)

(0.08)

(0.02)

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

0.02

-

Loss(Gain) on Sunburst Note Transactions, Net of Taxes

-

-

-

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes

-

-

-

-

-

Adjusted Diluted Earnings Per Share (EPS)

1.75

$                           

1.74

$                           

1.49

$                           

1.26

$                           

1.07

$                           

40

ADJUSTED DILUTED EARNINGS PER SHARE

(CONTINUED)

Source: Choice Internal Data, December 2008

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

(In thousands, except per share amounts)

2003

2002

2001

2000

1999

1998

Net Income

71,863

$                        

60,844

$                        

14,327

$                        

42,445

$                        

57,155

$                        

55,305

$                        

Adjustments:

Loss(Gain) on Extinguishment of Debt, Net of Taxes

-

-

-

-

-

(7,232)

Acceleration of Management Sucession Plan, Net of Taxes

-

-

-

-

-

-

Executive Termination Benefits, Net of Taxes

-

-

-

-

-

-

Loan Reserves Related to Impaired Notes Receivable, Net of Taxes

-

-

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

-

-

-

-

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

-

-

-

Loss(Gain) on Sunburst Note Transactions, Net of Taxes

(3,383)

-

-

4,721

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes

-

-

37,166

7,532

-

-

Adjusted Net Income

68,480

$                        

60,844

$                        

51,493

$                        

54,698

$                        

57,155

$                        

48,073

$                        

Weighted Average Shares Outstanding-Diluted

73,349

80,114

89,144

106,506

111,334

119,096

Diluted Earnings Per Share

0.98

$                            

0.76

$                            

0.16

$                            

0.40

$                            

0.51

$                            

0.46

$                            

Adjustments:

Loss(Gain) on Extinguishment of Debt, Net of Taxes

-

-

-

-

-

(0.06)

Acceleration of Management Sucession Plan, Net of Taxes

-

-

-

-

-

-

Executive Termination Benefits, Net of Taxes

-

-

-

-

-

-

Loan Reserves Related to Impaired Notes Receivable, Net of Taxes

-

-

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

-

-

-

-

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

-

-

-

Loss(Gain) on Sunburst Note Transactions, Net of Taxes

(0.05)

-

-

0.04

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment, Net of Taxes

-

-

0.42

0.07

-

-

Adjusted Diluted Earnings Per Share (EPS)

0.93

$                            

0.76

$                            

0.58

$                            

0.51

$                            

0.51

$                            

0.40

$