SILVER SPRING, Md., April 26, 2012 -- Choice Hotels International, Inc., (NYSE: CHH) today reported the following highlights for first quarter 2012:

• Diluted earnings per share ("EPS") for first quarter 2012 were $0.34 compared to adjusted diluted EPS of $0.28 for the first quarter of 2011. Adjusted diluted EPS for the first quarter of 2011 excludes certain special items, as described below, totaling $0.02. Diluted EPS were $0.26 for the three months ended March 31, 2011.
• Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 19% to $33.1 million for the three months ended March 31, 2012, compared to $27.7 million for the three months ended March 31, 2011. Operating income increased 21% from $25.7 million for the three months ended March 31, 2011 to $31.1 million for the same period of 2012.
• Franchising revenues increased 11% to $57.3 million for the three months ended March 31, 2012 from $51.5 million for the same period of 2011. Total revenues increased 12% to $129.2 million for the three months ended March 31, 2012 compared to the same period of 2011.
• Worldwide unit growth increased 0.8 percent from March 31, 2011 comprised of domestic and international unit growth of 0.7 percent and 0.9 percent, respectively.
• Domestic system-wide revenue per available room ("RevPAR") increased 8.6% for the three months ended March 31, 2012 compared to the same period of 2011 as occupancy and average daily rates increased 250 basis points and 2.5 percent, respectively.
• The company executed 64 new domestic hotel franchise contracts for the quarter ended March 31, 2012 compared to 56 new domestic hotel franchise contracts in the same period of the prior year, a 14% increase.
• The number of worldwide hotels under construction, awaiting conversion or approved for development as of March 31, 2012 was 471 hotels representing 38,210 rooms;

"Domestic RevPAR growth exceeded our expectations due to a combination of strong occupancy gains and increases in average daily rates," said Stephen P. Joyce, president and chief executive officer. "While the development environment continues to be challenging, we are pleased with the continued strengthening of leisure travel and the success of our programs designed to drive business through our central reservation channels which deliver guests at the highest average daily rates."

Special Items

During the three months ended March 31, 2011, the company reduced the carrying amount of a parcel of land held for sale resulting in a loss of $1.8 million included in other gains and losses. This amount represented diluted EPS of $0.02 for the three months ended March 31, 2011.

Outlook for 2012

The company's second quarter 2012 diluted EPS is expected to be $0.51. The company expects full-year 2012 diluted EPS to range between $2.03 and $2.08. EBITDA for full-year 2012 are expected to range between $200 million and $203 million. These estimates include the following assumptions:

• The company expects net domestic unit growth to be relatively flat in 2012;
• RevPAR is expected to increase approximately 7% for second quarter of 2012 and increase between approximately 5% and 7% for full-year 2012;
• The effective royalty rate is expected to increase 1 basis point for full-year 2012;
• All figures assume the existing share count and an effective tax rate of 34.5% for the second quarter and full-year 2012.

Use of Free Cash Flow

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

For the three months ended March 31, 2012, the company paid $10.7 million of cash dividends to shareholders. The current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors.

During the three months ended March 31, 2012, the company purchased approximately 0.3 million shares of its common stock at an average price of $36.81 for a total cost of $12.9 million under the share repurchase program. Subsequent to March 31, 2012 and through April 26, 2012, the company repurchased an additional 0.1 million shares for a total cost of $5.3 million at an average price of $37.28 and has authorization to purchase up to an additional 1.5 million shares under this program. We expect to continue making repurchases in the open market and through privately negotiated transactions, subject to market and other conditions. No minimum number of share repurchases has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 45.1 million shares of its common stock for a total cost of $1.1 billion through March 31, 2012. Considering the effect of a two-for-one stock split in October 2005, the company had repurchased 78.1 million shares through March 31, 2012 under the share repurchase program at an average price of $13.83 per share.

Our board of directors previously authorized us to enter into programs which permit us to offer financing, investment and guaranty support to qualified franchisees as well as to acquire and resell real estate to incent franchise development for certain brands in strategic markets. Over the next several years, we expect to continue to opportunistically deploy capital pursuant to these programs to promote growth of our emerging brands. The amount and timing of the investment in these programs will be dependent on market and other conditions. Notwithstanding these programs, 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 Friday, April 27, 2012 at 10:00 a.m. EDT to discuss the company's first quarter 2012 results. The dial-in number to listen to the call is 1-888-396-2356, and the access code is 79227006. International callers should dial 1-617-847-8709 and enter the access code 79227006. The conference call also will be Webcast simultaneously via the company's Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call via the Webcast 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 call will be recorded and available for replay beginning at 12:00 p.m. EDT on Friday, April 27, 2012 through Sunday, May 27, 2012 by calling 1-888-286-8010 and entering access code 90956223. The international dial-in number for the replay is 1-617-801-6888, access code 90956223. In addition, the call will be archived and available on www.choicehotels.com via the Investor Info link.

About Choice Hotels

Choice Hotels International, Inc. franchises more than 6,100 hotels, representing more than 495,000 rooms, in the United States and more than 30 other countries and territories. As of March 31, 2012, more than 350 hotels were under construction, awaiting conversion or approved for development in the United States, representing more than 30,000 rooms, and approximately 80 hotels, representing approximately 7,000 rooms, were under construction, awaiting conversion or approved for development in approximately 20 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands serve guests worldwide. In addition, via its Ascend Collection membership program, travelers in the United States, Canada and the Caribbean have upscale lodging options at historic, boutique and unique hotels.

Additional corporate information may be found on the Choice Hotels International, Inc. web 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 Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan"," project," "assume" or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends, and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; 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, 2011, filed with the Securities and Exchange Commission on February 29, 2012. 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

Adjusted diluted EPS, EBITDA, franchising revenues and franchising margins are non-GAAP financial measurements. 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 diluted earnings per share, operating income, total revenues and operating margins. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles these measures to the comparable GAAP measurement. We discuss management's reasons for reporting these non-GAAP measures below.

Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects earnings excluding the impact of interest expense, tax expense, depreciation and amortization. Our management considers EBITDA to be an indicator of operating performance because it can be used to measure our ability to service debt, fund capital expenditures, and expand our business. EBITDA is a commonly used measure of performance in our industry. In addition, it is used by analysts, lenders, investors and others, as well as by us, to facilitate comparisons between the company and its competitors because it excludes certain items that can vary widely across different industries or among companies within the same industry.

Franchising Revenues and Margins: The company reports franchising revenues and margins which exclude marketing and reservation revenues and hotel operations. Marketing and reservation activities are excluded from revenues and operating margins since the company is required by its franchise agreements to use these fees collected for marketing and reservation activities. Cumulative reservation and marketing system fees not expended are recorded as a liability on the company's financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of system fees collected for marketing and reservation activities are recorded as a receivable on the company's financial statements. In addition, the company has the contractual authority to require that the franchisees in the system at any given point repay the company for any deficits related to marketing and reservation activities. Hotel operations are excluded since they do not reflect the most accurate measure of the company's core franchising business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.

Adjusted Diluted EPS: The company's management uses adjusted diluted EPS, which excludes a reduction in the carrying amount of land held for sale during the three months ended March 31, 2011. The company utilizes this non-GAAP measure to enable investors to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of on-going operations.

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

© 2012 Choice Hotels International, Inc. All rights reserved.