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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Reportable Segment Information
The Company has a single reportable segment encompassing its franchising business. Revenues from the franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation fees, partner services revenue and other revenue. The Company is obligated under its franchise agreements to provide marketing and reservation services appropriate for the successful operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company’s franchising business. The revenues received from franchisees that are used to pay for part of the Company’s central on-going operations are included in franchising revenues and are offset by the related expenses paid for marketing and reservation activities to calculate franchising operating income. Corporate and other revenue consists of hotel operations. Except as described in Note 5, the Company does not allocate interest and dividend income, interest expense or income taxes to its franchising segment.
The following table presents certain financial information for the Company’s franchising segment.
| |
Year Ended December 31, 2004 |
 |
|
| |
|
|
Corporate |
|
Elimination |
|
| |
Franchising |
& Other |
Adjustments |
Consolidated |
|
|
|
|
|
| |
(In thousands) |
| Revenues |
$ |
425,077 |
|
$ |
3,729 |
|
|
— |
|
$ |
428,806 |
|
| Operating income (loss) |
|
161,564 |
|
|
(36,564 |
) |
|
— |
|
|
125,000 |
|
| Depreciation and amortization |
|
11,429 |
|
|
7,576 |
|
|
(9,058 |
) |
|
9,947 |
|
| Capital expenditures |
|
5,376 |
|
|
1,483 |
|
|
— |
|
|
6,859 |
|
| Total assets |
|
186,746 |
|
|
75,642 |
|
|
— |
|
|
262,388 |
|
| |
Year Ended December 31, 2003 |
|
|
| |
|
Corporate |
Elimination |
| |
Franchising |
& Other |
Adjustments |
Consolidated |
|
|
|
|
|
| |
(In thousands) |
| Revenues |
$ |
382,539 |
|
$ |
3,565 |
|
|
— |
|
$ |
386,104 |
|
| Operating income (loss) |
|
150,490 |
|
|
(36,507 |
) |
|
— |
|
|
113,983 |
|
| Depreciation and amortization |
|
14,671 |
|
|
8,631 |
|
|
(12,077 |
) |
|
11,225 |
|
| Capital expenditures |
|
7,342 |
|
|
1,138 |
|
|
— |
|
|
8,480 |
|
| Total assets |
|
195,106 |
|
|
72,166 |
|
|
— |
|
|
267,272 |
|
| |
Year Ended December 31, 2002 |
|
|
| |
|
Corporate |
Elimination |
| |
Franchising |
& Other |
Adjustments |
Consolidated |
|
|
|
|
|
| |
(In thousands) |
| Revenues |
$ |
362,231 |
|
$ |
3,331 |
|
|
— |
|
$ |
365,562 |
|
| Operating income (loss) |
|
140,256 |
|
|
(35,556 |
) |
|
— |
|
|
104,700 |
|
| Depreciation and amortization |
|
14,925 |
|
|
9,352 |
|
|
(13,026 |
) |
|
11,251 |
|
| Capital expenditures |
|
7,562 |
|
|
4,671 |
|
|
— |
|
|
12,233 |
|
| Total assets |
|
221,668 |
|
|
95,105 |
|
|
— |
|
|
316,773 |
|
Long-lived assets related to international operations were $9.2 million, $9.9 million and $8.1 million as of December 31, 2004, 2003 and 2002, respectively. All other long-lived assets of the Company are associated with domestic activities.
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