Choice Hotels Reports Second Quarter 2007 Diluted EPS of $0.43, Domestic Unit Growth of 5.1%

SILVER SPRING, Md., July 24 /PRNewswire-FirstCall/ -- Choice Hotels International, Inc., today reported the following highlights for the second quarter 2007:

-- Diluted earnings per share ("EPS") for second quarter 2007 increased 19% to $0.43 compared to $0.36 in the same period of the prior year. Operating income for second quarter 2007 increased 12% to $47.4 million compared to $42.1 million for second quarter 2006. -- Earnings before interest, taxes and depreciation ("EBITDA") were $49.5 million for second quarter 2007, an increase of 11% compared to $44.7 million for second quarter 2006. -- Domestic units increased 5.1 percent from June 30, 2006. -- Domestic system-wide revenue per available room (RevPAR) increased 3.3% for the second 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 represents approximately half of the company's domestic rooms online, increased 4.8% for the second quarter of 2007, with average daily rate increasing 5.3% for those brands. -- Executed 176 new domestic hotel franchise contracts during the second quarter of 2007, an increase of 14% compared to 155 for second quarter 2006, with new construction contracts comprising 39% of executed agreements. Overall, year-to-date, new domestic hotel franchise contracts executed increased 4% to 287 compared to 275 in the same period of the prior year. -- The number of domestic hotels under construction, awaiting conversion or approved for development increased 25% to 858 hotels representing 67,740 rooms; the worldwide pipeline also increased 25% to 943 hotels representing 75,747 rooms. -- Executed first direct franchise agreements in Canada for Cambria Suites and MainStay Suites brands, with contracts for two Cambria Suites hotels to be developed in the Toronto metropolitan area and agreements for four MainStay Suites hotels to be developed in Ontario and Alberta. -- Executed 11 new hotel franchise contracts for the Cambria Suites brand, including the two Canadian hotels, during the second quarter of 2007, with sixty hotel franchise contracts executed since the brand's launch in 2005. During the quarter, the company executed a contract for a 300-room Cambria Suites hotel in Brooklyn, the brand's largest property currently under contract. -- Franchising revenues and total revenues both increased 12% for second quarter 2007 compared to the same period of the prior year. Year-to- date franchising revenues and total revenues have increased 9% and 10%, respectively, compared to the same period of 2006. -- Franchising margins for the second quarter of 2007 were 62.9% compared to 62.6% for the second quarter of 2006. Year to date franchising margins were 57.9% compared to 61.1% for the same period of 2006. Franchising margins for the six months ended June 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 second quarter 2007 and year-to-date period ended June 30, 2007 also reflect the commencement of direct franchising operations in continental Europe. -- Interest and other investment income increased $1.9 million for second quarter 2007 compared to the same period of the prior year due to favorable performance of employee benefit plan investments. -- The company purchased approximately 0.7 million shares of its common stock at an average price of $38.72 for a total cost of $28.3 million under its share repurchase program during the second quarter 2007. Year-to-date through July 24, 2007, the company purchased approximately 1.5 million shares of its common stock at an average price of $38.60 for a total cost of $57.8 million under its share repurchase program.

"We continue to work closely with our franchisees to improve their unit profitability by driving incremental business to their hotels and providing them with targeted services and support to enhance property-level operating performance," said Charles A. Ledsinger, Jr., vice chairman and chief executive officer. "At the same time, we are committed to continuously improving brand quality and consistency by working collaboratively with our franchisees so that we are positioned to gain market share. This operating philosophy has proven successful for Choice, as over the last five years, we have increased our domestic market share of branded hotels by 350 basis points to nearly 17% of the market, as measured by room supply in the midscale & economy segments."

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 June 30, 2007 increased approximately $1.1 million and $0.7 million, respectively, compared to second quarter 2006. Franchising revenues and selling, general and administrative costs for the six months ended June 30, 2007 increased approximately $1.8 million and $1.6 million, respectively, compared to the same period in 2006.

Outlook for 2007

The company's third quarter 2007 diluted EPS is expected to be at least $0.52. The company expects full year 2007 diluted EPS of $1.62. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for full-year 2007 is expected to be approximately $187.5 million. These estimates include the following assumptions.

-- The company expects net domestic unit growth of approximately 4% in 2007; -- RevPAR is expected to increase approximately 4.5% for third quarter 2007 and approximately 4% for full-year 2007; -- The effective royalty rate is expected to increase 3 basis points for full-year 2007; -- All figures assume the existing share count and an effective tax rate of 36.3% for third quarter 2007 and 36.5% 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.

For the three and six months ended June 30, 2007, the company paid $9.9 million and $19.8 million, respectively, of cash dividends to shareholders. The annual dividend rate per common share is $0.60.

For the three months ended June 30, 2007, the company purchased approximately 0.7 million shares of its common stock at an average price of $38.72 for a total cost of $28.3 million under its share repurchase program. For the six months ended June 30, 2007, the company purchased approximately 1.2 million shares of its common stock at an average price of $38.33 for a total cost of $46.1 million. At June 30, 2007, the company had authorization to purchase up to an additional 3.9 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 34.8 million shares of its common stock for a total cost of $758 million through June 30, 2007. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 67.8 million shares under the share repurchase program at an average price of $11.17 per share. Subsequent to June 30, 2007 through July 24, 2007, the Company has repurchased an additional 0.3 million shares of its common stock at a total cost of $11.8 million.

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 Wednesday July 25, 2007 at 9:30 a.m. EDT to discuss the company's second quarter results. The call-in number to listen to the call is 1-888-423-3273. International callers should dial 612-332-0923. The conference call also will be Web cast simultaneously via the company's Web site, http://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 http://www.choicehotels.com/ beginning at 1:00 p.m. EDT on July 25 and will be available through August 25 by calling 1-800-475-6701, access code 877036. International callers should dial 320-365-3844 and enter access code 877036.

About Choice Hotels

Choice Hotels International franchises more than 5,400 hotels, representing more than 445,000 rooms, in the United States and 38 countries and territories. As of June 30, 2007, 858 hotels are under development in the United States, representing 67,740 rooms, and an additional 85 hotels, representing 8,007 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 http://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, 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 income, and operating margins. 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.

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.

Choice Hotels International, Inc. Exhibit 1 Consolidated Statements of Income (Unaudited) Three Months Ended June 30, Variance 2007 2006 $ % (In thousands, except per share amounts) REVENUES: Royalty fees $59,176 $53,146 $6,030 11% Initial franchise and relicensing fees 7,649 6,723 926 14% Brand solutions 5,995 4,900 1,095 22% Marketing and reservation 81,810 72,742 9,068 12% Hotel operations 1,193 1,180 13 1% Other 1,886 1,849 37 2% Total revenues 157,709 140,540 17,169 12% OPERATING EXPENSES: Selling, general and administrative 25,605 22,242 3,363 15% Depreciation and amortization 2,137 2,642 (505) (19%) Marketing and reservation 81,810 72,742 9,068 12% Hotel operations 794 800 (6) (1%) Total operating expenses 110,346 98,426 11,920 12% Operating income 47,363 42,114 5,249 12% OTHER INCOME AND EXPENSES: Interest expense 3,217 4,044 (827) (20%) Interest and other investment (income) loss (1,721) 174 (1,895) (1089%) Equity in net income of affiliates (181) (130) (51) 39% Loss on extinguishment of debt - 342 (342) (100%) Total other income and expenses, net 1,315 4,430 (3,115) (70%) Income before income taxes 46,048 37,684 8,364 22% Income taxes 17,403 13,548 3,855 28% Net income $28,645 $24,136 $4,509 19% Weighted average shares outstanding- basic 65,475 65,356 Weighted average shares outstanding- diluted 66,599 67,105 Basic earnings per share $0.44 $0.37 $0.07 19% Diluted earnings per share $0.43 $0.36 $0.07 19% Six Months Ended June 30, Variance 2007 2006 $ % (In thousands, except per share amounts) REVENUES: Royalty fees $102,504 $93,010 $9,494 10% Initial franchise and relicensing fees 12,580 12,366 214 2% Brand solutions 8,981 7,682 1,299 17% Marketing and reservation 143,851 130,718 13,133 10% Hotel operations 2,289 2,160 129 6% Other 3,687 4,022 (335) (8%) Total revenues 273,892 249,958 23,934 10% OPERATING EXPENSES: Selling, general and administrative 49,505 40,517 8,988 22% Depreciation and amortization 4,252 4,991 (739) (15%) Marketing and reservation 143,851 130,718 13,133 10% Hotel operations 1,535 1,545 (10) (1%) Total operating expenses 199,143 177,771 21,372 12% Operating income 74,749 72,187 2,562 4% OTHER INCOME AND EXPENSES: Interest expense 6,214 8,084 (1,870) (23%) Interest and other investment (income) loss (2,322) (530) (1,792) 338% Equity in net income of affiliates (375) (388) 13 (3%) Loss on extinguishment of debt - 342 (342) (100%) Total other income and expenses, net 3,517 7,508 (3,991) (53%) Income before income taxes 71,232 64,679 6,553 10% Income taxes 26,272 22,878 3,394 15% Net income $44,960 $41,801 $3,159 8% Weighted average shares outstanding- basic 65,627 65,070 Weighted average shares outstanding- diluted 66,823 66,925 Basic earnings per share $0.69 $0.64 $0.05 8% Diluted earnings per share $0.67 $0.62 $0.05 8% Choice Hotels International, Inc. Exhibit 2 Consolidated Balance Sheets (In thousands) June 30, December 31, 2007 2006 (Unaudited) ASSETS Cash and cash equivalents $47,330 $35,841 Accounts receivable, net 45,995 41,694 Deferred income taxes 3,061 1,790 Other current assets 11,745 7,757 Total current assets 108,131 87,082 Fixed assets and intangibles, net 143,164 144,124 Receivable -- marketing fees 7,139 6,662 Investments, employee benefit plans, at fair value 37,426 31,529 Other assets 36,184 33,912 Total assets 332,044 303,309 LIABILITIES AND SHAREHOLDERS' DEFICIT Current portion of long-term debt - 146 Other current liabilities 147,751 139,645 Total current liabilities 147,751 139,791 Long-term debt 199,146 172,390 Deferred compensation & retirement plan obligations 41,067 40,101 Other liabilities 15,484 13,407 Total liabilities 403,448 365,689 Total shareholders' deficit (71,404) (62,380) Total liabilities and shareholders' deficit $332,044 $303,309 Choice Hotels International, Inc. Exhibit 3 Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $44,960 $41,801 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,252 4,991 Provision for bad debts (528) (127) Non-cash stock compensation and other charges 7,263 5,550 Non-cash interest and other income (1,598) (107) Loss on extinguishment of debt - 342 Dividends received from equity method investees 295 169 Equity in net income of affiliates (376) (388) Changes in assets and liabilities: Receivables (3,654) (3,414) Receivable - marketing and reservation fees, net 1,731 670 Accounts payable (277) 8,404 Accrued expenses and other (11,031) (7,549) Income taxes payable 12,958 4,815 Deferred income taxes (4,680) (1,912) Deferred revenue 1,817 3,603 Other assets (1,278) (420) Other liabilities 6,843 6,200 NET CASH PROVIDED BY OPERATING ACTIVITIES 56,697 62,628 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in property and equipment (5,786) (4,045) Acquisitions, net of cash acquired (343) - Purchases of investments, employee benefit plans (5,701) (5,784) Proceeds from sales of investments, employee benefit plans 1,551 1,387 Issuance of notes receivable (3,255) (1,277) Collections of notes receivable 469 359 Other items, net (359) (296) NET CASH USED IN INVESTING ACTIVITIES (13,424) (9,656) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments of long-term debt (422) (73) Net (repayments) borrowings pursuant to revolving credit facility 27,000 (49,600) Debt issuance costs - (472) Excess tax benefits from stock-based compensation 4,214 11,983 Purchase of treasury stock (47,341) (1,132) Dividends paid (19,751) (16,925) Proceeds from exercise of stock options 4,516 7,984 NET CASH USED IN FINANCING ACTIVITIES (31,784) (48,235) Net change in cash and cash equivalents 11,489 4,737 Cash and cash equivalents at beginning of period 35,841 16,921 CASH AND CASH EQUIVALENTS AT END OF PERIOD $47,330 $21,658 CHOICE HOTELS INTERNATIONAL, INC. Exhibit 4 SUPPLEMENTAL OPERATING INFORMATION DOMESTIC HOTEL SYSTEM (UNAUDITED) For the Six Months Ended June 30, 2007 Average Daily Rate Occupancy RevPAR Comfort Inn $73.42 57.6% $42.29 Comfort Suites 85.64 62.4% 53.45 Sleep 67.32 58.7% 39.55 Midscale without Food & Beverage 75.19 58.8% 44.18 Quality 66.62 49.6% 33.03 Clarion 77.42 47.2% 36.57 Midscale with Food & Beverage 69.18 49.0% 33.90 Econo Lodge 51.36 43.9% 22.52 Rodeway 49.87 42.6% 21.23 Economy 51.04 43.6% 22.24 MainStay 67.91 64.0% 43.47 Suburban 39.58 67.2% 26.59 Extended Stay 45.47 66.5% 30.23 Total Domestic System $68.89 53.5% $36.83 For the Six Months Ended June 30, 2006 Average Daily Rate Occupancy RevPAR Comfort Inn $69.76 57.9% $40.40 Comfort Suites 81.30 64.3% 52.24 Sleep 64.64 58.6% 37.87 Midscale without Food & Beverage 71.46 59.2% 42.34 Quality 64.26 50.8% 32.63 Clarion 77.11 48.1% 37.11 Midscale with Food & Beverage 67.39 50.1% 33.77 Econo Lodge 50.52 43.3% 21.89 Rodeway 48.57 41.9% 20.33 Economy 50.18 43.1% 21.61 MainStay 66.48 63.7% 42.33 Suburban 38.02 73.1% 27.79 Extended Stay 42.93 71.3% 30.60 Total Domestic System $66.16 54.3% $35.90 Change Average Daily Rate Occupancy RevPAR Comfort Inn 5.2% (30)bps 4.7% Comfort Suites 5.3% (190)bps 2.3% Sleep 4.1% 10 bps 4.4% Midscale without Food & Beverage 5.2% (40)bps 4.3% Quality 3.7% (120)bps 1.2% Clarion 0.4% (90)bps (1.5%) Midscale with Food & Beverage 2.7% (110)bps 0.4% Econo Lodge 1.7% 60 bps 2.9% Rodeway 2.7% 70 bps 4.4% Economy 1.7% 50 bps 2.9% MainStay 2.2% 30 bps 2.7% Suburban 4.1% (590)bps (4.3%) Extended Stay 5.9% (480)bps (1.2%) Total Domestic System 4.1% (80)bps 2.6% For the Three Months Ended June 30, 2007 Average Daily Rate Occupancy RevPAR Comfort Inn $75.62 63.9% $48.29 Comfort Suites 87.54 67.8% 59.36 Sleep 69.74 65.4% 45.63 Midscale without Food & Beverage 77.32 64.9% 50.18 Quality 68.96 55.4% 38.19 Clarion 80.13 53.1% 42.51 Midscale with Food & Beverage 71.58 54.8% 39.24 Econo Lodge 52.85 48.4% 25.55 Rodeway 51.47 46.1% 23.71 Economy 52.56 47.8% 25.14 MainStay 69.53 69.7% 48.43 Suburban 40.39 70.7% 28.56 Extended Stay 46.65 70.5% 32.88 Total Domestic System $70.98 59.1% $41.92 For the Three Months Ended June 30, 2006 Average Daily Rate Occupancy RevPAR Comfort Inn $71.84 64.0% $45.97 Comfort Suites 83.04 69.5% 57.72 Sleep 66.69 65.2% 43.47 Midscale without Food & Beverage 73.42 65.2% 47.90 Quality 66.18 56.5% 37.36 Clarion 77.77 53.5% 41.63 Midscale with Food & Beverage 69.01 55.7% 38.44 Econo Lodge 52.09 47.5% 24.75 Rodeway 49.98 44.5% 22.23 Economy 51.72 47.0% 24.29 MainStay 67.43 70.3% 47.39 Suburban 38.95 76.8% 29.91 Extended Stay 44.05 75.5% 33.27 Total Domestic System $67.98 59.7% $40.58 Change Average Daily Rate Occupancy RevPAR Comfort Inn 5.3% (10)bps 5.0% Comfort Suites 5.4% (170)bps 2.8% Sleep 4.6% 20 bps 5.0% Midscale without Food & Beverage 5.3% (30)bps 4.8% Quality 4.2% (110)bps 2.2% Clarion 3.0% (40)bps 2.1% Midscale with Food & Beverage 3.7% (90)bps 2.1% Econo Lodge 1.5% 90 bps 3.2% Rodeway 3.0% 160 bps 6.7% Economy 1.6% 80 bps 3.5% MainStay 3.1% (60)bps 2.2% Suburban 3.7% (610)bps (4.5%) Extended Stay 5.9% (500)bps (1.2%) Total Domestic System 4.4% (60)bps 3.3% For the Quarter For the Six Months Ended Ended 06/30/2007 06/30/2006 06/30/2007 06/30/2006 System-wide effective royalty rate 4.14 % 4.10 % 4.14 % 4.09 % CHOICE HOTELS INTERNATIONAL, INC. Exhibit 5 SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA (UNAUDITED) June 30, 2007 June 30, 2006 Hotels Rooms Hotels Rooms Comfort Inn 1,424 111,230 1,411 110,440 Comfort Suites 453 35,494 417 32,786 Sleep 340 25,338 320 24,133 Midscale without Food & Beverage 2,217 172,062 2,148 167,359 Quality 783 75,840 692 68,407 Clarion 161 23,378 157 23,262 Midscale with Food & Beverage 944 99,218 849 91,669 Econo Lodge 819 49,882 825 50,673 Rodeway 256 15,412 203 12,469 Economy 1,075 65,294 1,028 63,142 MainStay 29 2,166 27 2,047 Suburban 60 7,853 64 8,439 Extended Stay 89 10,019 91 10,486 Cambria Suites 1 119 - - Domestic Franchises 4,326 346,712 4,116 332,656 International Franchises 1,148 99,114 1,168 98,818 Total Franchises 5,474 445,826 5,284 431,474 Variance Hotels Rooms % % Comfort Inn 13 790 0.9% 0.7% Comfort Suites 36 2,708 8.6% 8.3% Sleep 20 1,205 6.3% 5.0% Midscale without Food & Beverage 69 4,703 3.2% 2.8% Quality 91 7,433 13.2% 10.9% Clarion 4 116 2.5% 0.5% Midscale with Food & Beverage 95 7,549 11.2% 8.2% Econo Lodge (6) (791) (0.7%) (1.6%) Rodeway 53 2,943 26.1% 23.6% Economy 47 2,152 4.6% 3.4% MainStay 2 119 7.4% 5.8% Suburban (4) (586) (6.3%) (6.9%) Extended Stay (2) (467) (2.2%) (4.5%) Cambria Suites 1 119 NM NM Domestic Franchises 210 14,056 5.1% 4.2% International Franchises (20) 296 (1.7%) 0.3% Total Franchises 190 14,352 3.6% 3.3% CHOICE HOTELS INTERNATIONAL, INC. Exhibit 6 SUPPLEMENTAL INFORMATION BY BRAND DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS (UNAUDITED) For the Six Months Ended June 30, 2007 New Construction Conversion Total Comfort Inn 16 20 36 Comfort Suites 40 3 43 Sleep 16 1 17 Midscale without Food & Beverage 72 24 96 Quality 5 63 68 Clarion 4 21 25 Midscale with Food & Beverage 9 84 93 Econo Lodge 2 28 30 Rodeway - 39 39 Economy 2 67 69 MainStay 4 1 5 Suburban 7 2 9 Extended Stay 11 3 14 Cambria Suites 15 - 15 Total Domestic System 109 178 287 For the Six Months Ended June 30, 2006 New Construction Conversion Total Comfort Inn 24 18 42 Comfort Suites 41 2 43 Sleep 10 - 10 Midscale without Food & Beverage 75 20 95 Quality 5 57 62 Clarion 1 18 19 Midscale with Food & Beverage 6 75 81 Econo Lodge - 23 23 Rodeway 1 48 49 Economy 1 71 72 MainStay 3 1 4 Suburban 6 2 8 Extended Stay 9 3 12 Cambria Suites 15 - 15 Total Domestic System 106 169 275 % Change New Construction Conversion Total Comfort Inn (33%) 11% (14%) Comfort Suites (2%) 50% 0% Sleep 60% NM 70% Midscale without Food & Beverage (4%) 20% 1% Quality 0% 11% 10% Clarion 300% 17% 32% Midscale with Food & Beverage 50% 12% 15% Econo Lodge NM 22% 30% Rodeway (100%) (19%) (20%) Economy 100% (6%) (4%) MainStay 33% 0% 25% Suburban 17% 0% 13% Extended Stay 22% 0% 17% Cambria Suites 0% NM 0% Total Domestic System 3% 5% 4% For the Three Months Ended June 30, 2007 New Construction Conversion Total Comfort Inn 11 17 28 Comfort Suites 26 2 28 Sleep 8 1 9 Midscale without Food & Beverage 45 20 65 Quality 4 28 32 Clarion 2 15 17 Midscale with Food & Beverage 6 43 49 Econo Lodge 1 15 16 Rodeway - 28 28 Economy 1 43 44 MainStay 4 1 5 Suburban 3 1 4 Extended Stay 7 2 9 Cambria Suites 9 - 9 Total Domestic System 68 108 176 For the Three Months Ended June 30, 2006 New Construction Conversion Total Comfort Inn 9 5 14 Comfort Suites 29 2 31 Sleep 7 - 7 Midscale without Food & Beverage 45 7 52 Quality 3 32 35 Clarion - 9 9 Midscale with Food & Beverage 3 41 44 Econo Lodge - 14 14 Rodeway 1 33 34 Economy 1 47 48 MainStay 1 - 1 Suburban 3 2 5 Extended Stay 4 2 6 Cambria Suites 5 - 5 Total Domestic System 58 97 155 % Change New Construction Conversion Total Comfort Inn 22% 240% 100% Comfort Suites (10%) 0% (10%) Sleep 14% NM 29% Midscale without Food & Beverage 0% 186% 25% Quality 33% (13%) (9%) Clarion NM 67% 89% Midscale with Food & Beverage 100% 5% 11% Econo Lodge NM 7% 14% Rodeway (100%) (15%) (18%) Economy 0% (9%) (8%) MainStay 300% NM 400% Suburban 0% (50%) (20%) Extended Stay 75% 0% 50% Cambria Suites 80% NM 80% Total Domestic System 17% 11% 14% CHOICE HOTELS INTERNATIONAL, INC. Exhibit 7 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. June 30, 2007 Units New Conversion Construction Total Comfort Inn 42 121 163 Comfort Suites 3 240 243 Sleep Inn - 108 108 Midscale without Food & Beverage 45 469 514 Quality 68 11 79 Clarion 23 7 30 Midscale with Food & Beverage 91 18 109 Econo Lodge 44 4 48 Rodeway 61 1 62 Economy 105 5 110 MainStay 1 33 34 Suburban 5 30 35 Extended Stay 6 63 69 Cambria Suites - 56 56 247 611 858 June 30, 2006 Units New Conversion Construction Total Comfort Inn 40 101 141 Comfort Suites 4 202 206 Sleep Inn - 85 85 Midscale without Food & Beverage 44 388 432 Quality 55 14 69 Clarion 18 4 22 Midscale with Food & Beverage 73 18 91 Econo Lodge 24 6 30 Rodeway 50 1 51 Economy 74 7 81 MainStay 1 35 36 Suburban 1 18 19 Extended Stay 2 53 55 Cambria Suites - 28 28 193 494 687 Variance New Conversion Construction Total Units % Units % Units % Comfort Inn 2 5% 20 20% 22 16% Comfort Suites (1) (25%) 38 19% 37 18% Sleep Inn - NM 23 27% 23 27% Midscale without Food & Beverage 1 2% 81 21% 82 19% Quality 13 24% (3) (21%) 10 14% Clarion 5 28% 3 75% 8 36% Midscale with Food & Beverage 18 25% - 0% 18 20% Econo Lodge 20 83% (2) (33%) 18 60% Rodeway 11 22% - 0% 11 22% Economy 31 42% (2) (29%) 29 36% MainStay - 0% (2) (6%) (2) (6%) Suburban 4 400% 12 67% 16 84% Extended Stay 4 200% 10 19% 14 25% Cambria Suites - NM 28 100% 28 100% 54 28% 117 24% 171 25% CHOICE HOTELS INTERNATIONAL, INC. Exhibit 8 SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (UNAUDITED) CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS Three Months Ended Six Months Ended (dollar amounts in thousands) June 30, June 30, 2007 2006 2007 2006 Franchising Revenues: Total Revenues $157,709 $140,540 $273,892 $249,958 Adjustments: Marketing and reservation revenues (81,810) (72,742) (143,851) (130,718) Hotel Operations (1,193) (1,180) (2,289) (2,160) Franchising Revenues $74,706 $66,618 $127,752 $117,080 Franchising Margins: Operating Margin: Total Revenues $157,709 $140,540 $273,892 $249,958 Operating Income $47,363 $42,114 $74,749 $72,187 Operating Margin 30.0% 30.0% 27.3% 28.9% Franchising Margin: Franchising Revenues $74,706 $66,618 $127,752 $117,080 Operating Income $47,363 $42,114 $74,749 $72,187 Less: Hotel Operations 399 380 754 615 $46,964 $41,734 $73,995 $71,572 Franchising Margins 62.9% 62.6% 57.9% 61.1% CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) (In thousands, except per share Three Months Ended Six Months Ended amounts) June 30, June 30, 2007 2006 2007 2006 Net Income $28,645 $24,136 $44,960 $41,801 Adjustments: Loss on Debt Extinguishment Costs - 217 - 217 Adjusted Net Income $28,645 $24,353 $44,960 $42,018 Weighted average shares outstanding- diluted 66,599 67,105 66,823 66,925 Diluted Earnings Per Share $0.43 $0.36 $0.67 $0.62 Adjustments: Loss on Debt Extinguishment Costs - - 0.01 Adjusted Diluted Earnings Per Share (EPS) $0.43 $0.36 $0.67 $0.63 EBITDA Reconciliation (in millions) Full-Year Q2 2007 Q2 2006 2007 Actuals Actuals Outlook Operating Income (per GAAP) $47.4 $42.1 $178.5 Depreciation and amortization 2.1 2.6 9.0 Earnings before interest, taxes, depreciation & amortization (non- GAAP)* $49.5 $44.7 $187.5 * Six months ended June 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.