|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Income Taxes
Income before income taxes was derived from the following:
| |
Years Ended December 31, |
 |
|
| |
2004 |
|
2003 |
|
2002 |
|
|
|
|
| |
(In thousands) |
| Income before income taxes: |
| Domestic operations |
$ |
109,424 |
|
$ |
108,760 |
|
$ |
93,418 |
|
| Foreign operations |
|
5,100 |
|
|
3,647 |
|
|
2,400 |
|
|
|
|
|
| Income before income taxes |
$ |
114,524 |
|
$ |
112,407 |
|
$ |
95,818 |
|
|
|
|
|
|
|
|
|
|
The provisions for income taxes were as follows:
| |
Years Ended December 31, |
|
|
| |
2004 |
|
2003 |
|
2002 |
|
|
|
|
| |
(In thousands) |
| Current tax expense |
| Federal |
$ |
52,334 |
|
$ |
44,040 |
|
$ |
21,374 |
|
| State |
|
4,288 |
|
|
3,979 |
|
|
631 |
|
| Foreign |
|
(315 |
) |
|
758 |
|
|
661 |
|
| Deferred tax (benefit) expense |
| Federal |
|
(15,308 |
) |
|
(7,306 |
) |
|
11,297 |
|
| State |
|
(794 |
) |
|
(942 |
) |
|
1,012 |
|
| Foreign |
|
(26 |
) |
|
15 |
|
|
(1 |
) |
|
|
|
|
| Income taxes |
$ |
40,179 |
|
$ |
40,544 |
|
$ |
34,974 |
|
|
|
|
|
|
|
|
|
|
Deferred tax assets (liabilities) were comprised of the following:
| |
December 31, |
|
|
| |
2004 |
|
2003 |
|
|
|
| |
(In thousands) |
| Depreciation and amortization |
$ |
(12,543 |
) |
$ |
(16,554 |
) |
| Prepaid expenses |
|
(7,327 |
) |
|
(11,478 |
) |
| Foreign Operations |
|
(57 |
) |
|
— |
|
| Other |
|
(2,871 |
) |
|
(5,510 |
) |
|
|
|
| Gross deferred tax liabilities |
|
(22,798 |
) |
|
(33,542 |
) |
|
|
|
| Foreign operations |
|
— |
|
|
2,553 |
|
| Accrued expenses |
|
9,277 |
|
|
7,894 |
|
| Accrued compensation |
|
7,338 |
|
|
1,982 |
|
| Other |
|
1,461 |
|
|
1,508 |
|
|
|
|
| Gross deferred tax assets |
|
18,076 |
|
|
13,937 |
|
|
|
|
| Net deferred tax liability |
$ |
(4,722 |
) |
$ |
(19,605 |
) |
|
|
|
|
|
|
|
|
