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In the fourth quarter, we introduced several more innovative resources that were created at ourtechnology center specifically to meet the needs of our owners and support their profitability. Wewere the first in the industry to launch virtual pay capabilities on our website. Virtual pay allowstravel managers to quickly and effortlessly book stays for their travelers without the guestneeding to present a personal credit card at check-in. We also launched our group managementplatform, an online reservation solution that makes planning and booking group travel easier.Groups and small meetings are growing significantly, and this tool will enable our hotels tocapture more of this business.You all know the importance of loyalty in our industry, which is why we're pleased with thecontinued growth of our Choice Privileges program. Last year marked the 9th consecutive yearof double-digit membership growth and the third straight year of growing by around 5 millionmembers. Choice Privileges is more than 40 million members strong. These guests book longerstays and more frequent stays with us as well as spend more during these stays. They are alsosome of our best brand evangelists, as they rate their stays more highly than nonmembers. Thishas helped Choice Privileges become a top hotel loyalty program in USAToday's 10BestReaders' Choice Awards and U.S. News & World Report for three consecutive years.In addition to building technology to fuel our owners' business, we also pursue innovativerelationships with world-class digital businesses. Last month, Choice announced the decision tomigrate over 1,000 applications from our legacy systems to the Amazon Web Services cloud.This move is consistent with our cloud-first approach, which dates back to 2005. We'll be able tocreate more value for our franchisees and guests by increasing our use of the AWS cloud andimproving our systems' performance, scalability and reliability.Choice has also formed a strategic relationship with Google. At the recent Consumer ElectronicShow, Google announced that Choice was the first hotel partner to launch voice-enabled bookingvia Google's voice controlled home assistant. In November, we enabled Book on Google, whichmakes it easier for guests to book seamlessly on the Google platform while preserving many ofthe benefits of booking direct and minimizing drop-off. When it comes to driving owners'profitability, whether by building systems ourselves or choosing the right strategic relationships,we are never done innovating.Our strong results for 2018 position us well, not just for the year ahead, but for the long haul. Inour long-term view, we measure success by the ability to both maximize shareholder value andfuel our small business owners' profitability through proven brands. Three things tell us we'resucceeding. First, the continuous improvement our value proposition has driven strong demandfor Choice brands in all segments. Second, about 60% of the new franchise contracts awardedlast year were with existing or returning owners, which means we're providing an attractive valueproposition to those who know us well and those who are new to Choice. Third, we maintain anindustry-leading voluntary franchisee retention rate.In other words, our long-term focus shows our owners that we take seriously their decision totrust us with their investment. At Choice, this has always been the case and always will be,whether they own one hotel or a dozen.

I'd now like to turn it over to our CFO, Dom Dragisich, who will share more specifics on ourfinancial results. Dom?Dominic Dragisich: Thanks, Pat, and good morning, everyone.We are very pleased to close out another year with strong financial results, and once again, theseresults exceeded our expectations. Our financial performance reflects our continued investmentsto further strengthen our brands and business delivery capabilities. In fact, the strength of ourbusiness model and our strong financial performance allow us to continually invest in thebusiness for the long-term, grow earnings and return capital to shareholders.In addition to the full year adjusted EBITDA and adjusted diluted earnings per shareoutperformance that Pat highlighted, there are several specifics worth noting at the outset. First,full year net income exceeded the top end of our previously issued guidance by more than 2million to reach 216.4 million. This represents diluted earnings per share of 3.80. Second, fullyear adjusted income, excluding certain items, increased 34% over the prior year to 221.5million. Third, the company exceeded the top end of its full year adjusted EBITDA guidance by 1 million and the top end of its full year adjusted EPS guidance by 0.03 per share. And finally,total revenues for full year 2018 increased 11% year-over-year and now exceed 1 billion. Theseresults are proof that our long-term focus pays off, gives us confidence in the health of ourbusiness and positions us well for future growth.Let's now review fourth quarter results in more detail. Total revenues for the fourth quarter 2018increased 11% over the prior period to nearly 245 million. And adjusted EBITDA for the fourthquarter of 2018 also increased 11% to 76.2 million versus the fourth quarter of 2017. Fourthquarter 2018 adjusted diluted earnings per share were 0.88, a 29% increase over the prior yearquarter and also exceeded the top end of our guidance range by 0.03 per share.This outperformance was driven entirely by better-than-expected revenues from our corefranchising operations. In particular, procurement services performed very well. Fourth quarter2018 procurement services revenue exceeded our expectations and grew 28% over the sameperiod of the prior year. We continue to expand and leverage the procurement services platformby forming new partnerships that benefit both our franchisees and guests.Finally, our recurring effective income tax rate for the fourth quarter was 20.2% and slightlyhigher than our previous forecast of 18.5%.Choice's long-standing commitment to our franchisees' profitability continues to drive strongfranchise operations results. Full year hotel franchising revenues increased 12% over the prioryear to 483.4 million, while fourth quarter hotel franchising revenue increased 13% from thesame period of the prior year to 114.5 million. Hotel franchising revenue growth washighlighted by domestic royalty fees, which increased 11% and totaled 354.7 million for fullyear 2018.The increase in domestic royalty fees stems from growth in all three of our royalty levers. Forfull year 2018 versus the prior year, domestic units increased 6.6%, effective royalty rate

increased 14 basis points and domestic RevPAR increased 1.2%. This top line revenueperformance drove adjusted hotel franchising EBITDA growth of approximately 14% and 9%when excluding the WoodSpring acquisition for full year 2018 versus 2017. We are optimisticthat this growth will continue and are forecasting all three royalty levers to increase in 2019.Our first revenue lever, system size, closed out the quarter and the year on a high note. For fullyear 2018, the number of units in our domestic system increased nearly 7% to nearly 5,900,while room counts increased 9% for a total of over 450,000 domestic rooms. Two major factorscontributed to this domestic unit growth. First is our Quality brand, which as Pat said, recentlysurpassed its 1,600th location. The brand added nearly 100 new hotels to the portfolio during2018, an impressive growth rate of 6%. The other is our domestic upscale portfolio, whichincreased its room count 14% year-over-year. Today, we have approximately 50,000 upscalerooms open and serving guests around the world.Demand to open a hotel with Choice remains high, as 2018 was our best development year inover a decade, with 756 new domestic franchise agreements awarded. Of these, 287 agreementswere granted in the fourth quarter. In particular, new construction domestic franchise agreementsawarded in 2018 increased 30% year-over-year. Additionally, we continue to have success inconverting existing hotels into our brand portfolio and awarded 434 conversion agreements in2018. This healthy balance of new construction and conversion agreements allows us to improveboth the size and quality of our brand portfolio in the near term while maintaining a strong, wellsegmented portfolio of brands for the long-term.Our extended-stay and upscale brands in particular contributed to our strong developmentperformance. The ability to continue to successfully enter and thrive in new segments givescredence to our strategy, execution and future growth prospects. The WoodSpring acquisition,combined with favorable consumer demand trends, brought renewed interest to our entireextended-stay portfolio. As Pat mentioned, versus full year 2017, the number of new domesticfranchise agreements awarded last year increased 156% for our extended-stay portfolio. Evenexcluding WoodSpring, our MainStay Suites and Suburban brands saw significant growth, withnew domestic franchise agreements increasing by 37%.Another brand fueling our strong development year was our upscale Ascend Hotel Collection,which closed out 2018 by awarding the most franchise agreements in the brand's history. Choiceawarded 73 total franchise agreements, 43 domestic and 30 international, fueling the brand'scontinued expansion in key markets and regions across the globe, including Spain, ColumbiaPanama, the Caribbean, Canada and, of course, the U.S. At year-end, our overall domesticpipeline of hotels awaiting conversion, under construction or approved for development reached1,026 hotels, a 20% increase from December 31, 2017. This is the largest pipeline in thecompany's history, and these hotels represent nearly 82,000 rooms, or 18% of the current roomsopen and operating in our system.Our new construction domestic pipeline grew by 27% over the previous year and will be acatalyst for our long-term unit, rooms and RevPAR growth. In fact, hotel construction starts werethe highest since 2009, giving us a solid foundation for future hotel openings. For full year 2019,we expect net domestic unit growth to range between 2% and 3%. This guidance reflects

incremental strategic terminations for underperforming properties throughout 2019. This isaligned with our long-term strategy of ensuring our hotels continue to deliver guests high-qualityand affordable accommodations. We expect our 2020 unit growth rate to accelerate and believethe terminations will have a positive impact on overall brand equity and future RevPAR growth.The second revenue lever, royalty rate, continues to be driven by the pricing of franchiseagreements. Our effective domestic royalty rate for full year 2018 grew by 14 basis points yearover-year and increased 11 basis points for the fourth quarter of 2018 versus the same period ofthe prior year. 2018 is the third consecutive year of double-digit royalty rate growth. Since 2015,our effective royalty rate has increased by 44 basis points, which equates to over 31 million ofincremental royalties on an annualized basis. Given the increasingly attractive value propositionwe provide franchisees and their desire to be affiliated with our brands, we expect continuedgrowth in our effective royalty rate, with an anticipated increase between 8 and 12 basis pointsfor full year 2019.The third and final revenue lever to discuss is RevPAR. Our domestic system wide RevPARincreased 1.2% for the full year, which was in line with our guidance. Overall, fourth quarter2018 RevPAR increased .7% compared to the same period of the prior year, which was slightlybelow our guidance. We attribute this primarily to the continued Comfort transformation effectas well as fourth quarter softness due to tougher comps seen throughout the industry.Based on preliminary results, we are encouraged that our Comfort move to modern program isworking and is expected to become a net contributor to RevPAR growth in the second half ofthis year, when over half of the properties will have completed the renovations. In fact, theproperties that completed renovations by the end of second quarter 2018 saw an averageRevPAR index lift of plus 50 basis points for the full year. For the first quarter of 2019, weexpect RevPAR to remain approximately unchanged against a strong comparable of 3.5%RevPAR growth in the first quarter of 2018. Additionally, we expect full year RevPAR to growbetween .5% and 2%.In 2018, we generated significant operating cash flow, which allows us to continue executingagainst our long-term growth strategy and return capital to our shareholders. Throughout theyear, we returned approximately 200 million back to our shareholders. These returns came inthe form of 49 million in cash dividends and 149 million in share repurchases. Even with thesecapital returns and continued investment in the business, we ended 2018 with a leverage ratio ofapproximately 2.2x, below our target range of 3x to 4x.In closing, our record-setting pipeline, strong brands and the continued momentum of thelodging cycle allow us to make long-term investments in areas that have been and will continueto be key drivers of our performance. Throughout 2019, we expect continued brand investmentswith the completion of Comfort's move to modern program and key initiatives that will fuel thelong-term growth of Clarion Pointe, WoodSpring and Cambria. Additionally, we will makeinvestments in bolstering our consumer insights and predictive analytics capabilities to betterunderstand our guests and our owners and keep us at the forefront of innovation in hospitality.We expect these investments to position us well for 2019 and beyond.

For full year 2019, we expect adjusted EBITDA to range between 354 million and 363 millionand adjusted diluted earnings per share to range between 4 per share and 4.13 per share. Andfor the first quarter of 2019, we expect adjusted diluted earnings per share to range from 0.72 to 0.76 per share.We are very pleased with our 2018 success, and we are optimistic that our strong performancewill continue as we drive results by executing on our long-term strategy and make investmentsthat create additional runway for growth.At this time, Pat and I would be happy to answer any questions. Operator?Questions-and-AnswersOperator: [Operator Instructions] The first question comes from Shaun Kelly with Bank ofAmerica.Shaun Kelly: Maybe just -- hi. So maybe just to start with the guidance and sort of the overallearnings algorithm and bridge here. Dom, you gave a lot of good color in your part of theprepared remarks. And maybe, I think, one of the areas -- so we touched on, I think, RevPARand what your expectations are around royalty rate growth and why net unit growth may be alittle bit dragged. But we do the walk or the bridge to get to your EBITDA guidance, I thinkwe're still implying SG&A growth as probably a bit elevated. I imagine this has to do with someof the investments you alluded to in the last part of your prepared remarks. So could you maybeelaborate a little bit there and give us a sense of how much is SG&A going to be up year-on-yearor any discrete items you could call out for us on that?Dominic Dragisich: Sure thing, Shaun. And you hit the nail on the head. It really is a result ofsome of those investments that we're going to be making in the business. Obviously, there is alsoa timing element. When you take a look at the 2018 EBITDA growth, we were about, call it 9%or so when you normalize for WoodSpring. That EBITDA growth will decelerate slightly justgiven some of the timing, just the tougher comp 2018 to 2019. When you take a look at top linerevenue, you're continuing the trend that you saw in 2018 into 2019. SG&A growth in particular,it is a little bit elevated -- call it 9% or so -- and it does have to do with those investments thatwe're making in the business, consumer insights, some of these other brand investmentopportunities that we see on the horizon. And so when you drag that down to EBITDA, you'retalking about, call it a 5%. Slightly elevated tax rate also in 2019 comp on 2018. That was justsome state and local tax flow through. So net-net, if you do normalize for those taxes as well, ifyou drag it down to EPS, you're essentially at a normalized, call it 7% or 8% EPS growth yearover-year.Shaun Kelly: Great. That's perfect. And then as we think about that elevated -- thoseinvestments, is this something that is going to be more one-time in nature, meaning, okay, maybewe move up to this level but wouldn't repeat from a growth rate perspective as we move out to2020 and beyond? Or are you seeing something in the business or enough opportunities where

you're going to keep attacking these things as they come up? Just to kind of get a sense for a bitof a -- again, the longer-term algorithm here.Patrick Pacious: Yes. Shaun, it's Pat. I think you should look at it as not something that's sort ofgoing to be baked in for the long term. We're at a point in the cycle right now where there's a lotof opportunity for us, when we think about the brand launches we've done and the new segmentsthat we're growing, where we see opportunity, and so there's -- this was a time in the cycle whereyou want to be refreshing your prototypes. We're doing a lot of research now and actuallycollecting a lot of information from our guests in both the upscale, midscale and extended-staysegments and translating that information into consumer insights that's going to lead to brandamenities or potentially new brand extensions or launches is really what we're looking at rightnow. And so I think you should look at these as sort of the investment back in the productportfolio that we sell and also in the proprietary contribution number, which is our valueproposition, continuing to capture that guest demand that's out there. So this is an opportunitytime in this part of the lodging cycle to continue to look at the -- we look at sort of tomorrow'sbrands and the brands that we have in our portfolio that meet that definition. It's really looking atand continuing to invest in those brands as our unit growth and our RevPAR are expected toaccelerate in the next couple of years.Domin

its call center conversion rate by 5 1/2% and corporate account business delivery by 18%. This has resulted in a 7.6% year-over-year RevPAR increase for WoodSpring. As for the brand's size, we opened 12 WoodSpring hotels and top markets across the U.S. last year, including the Chicago, Seattle, Atlanta, Detroit and Charlotte markets. WoodSpring now