CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

     The components of property and equipment in the consolidated balance sheets are:

	December 31,
	2004				2003
	(In thousands)
Land and land improvements	$	2,628		$	2,617
Land held for sale		1,540			1,556
Facilities in progress		2,862			2,313
Computer equipment and software		92,491			88,051
Buildings and improvements		36,241			35,330
Furniture, fixtures and equipment		14,142			13,262
		149,904		143,129
Less: Accumulated depreciation and amortization		(102,412	)		(88,876	)
Property and Equipment, at cost, net	$	47,492		$	54,253

     On February 3, 2005, the land held for sale was sold for $1.7 million resulting in a gain on disposition of property totaling $0.1 million.

     As facilities in progress are completed and placed in service, they are transferred to appropriate property and equipment categories and depreciation begins. Depreciation expense, excluding amounts attributable to marketing and reservation activities, for the years ended December 31, 2004, 2003 and 2002 was $5.0 million, $6.5 million and $5.6 million, respectively. Depreciation has been computed for financial reporting purposes using the straight-line method. A summary of the ranges of estimated useful lives upon which depreciation rates are based follows:

     Goodwill relates to the purchase price of a minority interest in the Company for consideration in excess of the recorded minority interest. Pursuant to SFAS No. 142, the Company is not required to amortize goodwill.

     Franchise rights represent the unamortized purchase price assigned to acquire long-term franchise contracts. As of December 31, 2004 and 2003, the unamortized balance relates primarily to the Econo Lodge and Flag franchise rights. The franchise rights are being amortized over lives ranging from 5 to 17 years. Amortization expense for the years ended December 31, 2004, 2003 and 2002 amounted to $3.4 million, $3.4 million and $3.1 million, respectively. Franchise rights are net of accumulated amortization of $42.1 million and $38.6 million at December 31, 2004 and 2003, respectively. The estimated annual amortization expense related to the Company’s franchise rights for each of the years ending December 31, 2005 through 2009 is $3.4 million.

     Other non-current assets include approximately $2.7 million of unamortized intangible assets related to trademarks at December 31, 2004 and 2003, respectively. The trademarks are being amortized over ten years. Amortization expense for the years ended December 31, 2004, 2003 and 2002 amounted to $0.4 million, $0.3 million and $0.4 million, respectively. Trademarks are net of accumulated amortization of $3.3 million and $2.9 million at December 31, 2004 and 2003, respectively. The estimated annual amortization expense related to the Company’s trademarks for each of the years ending December 31, 2005 through 2009 is $0.4 million.