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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. Impact of Recently Issued Accounting Standards
In December 2004, the FASB issued SFAS No. 123 (Revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS No. 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements based on the fair value of the equity or liability instruments issued. Effective, January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” for all employee awards granted, modified, or settled after January 1, 2003. SFAS No. 123R will require the Company to apply fair value recognition provisions to all unvested equity awards as of the first interim reporting period starting after June 15, 2005, which is the Company’s third quarter beginning July 1, 2005. The adoption of SFAS No. 123R is not expected to have a material effect on the Company’s results of operations or financial condition.
23. Selected Quarterly Financial Data – (Unaudited)
| |
First |
|
Second |
|
Third |
|
Fourth |
|
| |
Quarter |
Quarter |
Quarter |
Quarter |
2004 |
 |
|
|
|
|
|
| |
(In thousands, except per share data) |
| Revenues |
$ |
87,235 |
|
$ |
107,175 |
|
$ |
127,510 |
|
$ |
106,886 |
|
$ |
428,806 |
|
| Operating income |
$ |
18,899 |
|
$ |
32,136 |
|
$ |
42,489 |
|
$ |
31,476 |
|
$ |
125,000 |
|
| Income before income taxes |
$ |
16,849 |
|
$ |
29,498 |
|
$ |
38,971 |
|
$ |
29,206 |
|
$ |
114,524 |
|
| Net income |
$ |
10,594 |
|
$ |
18,503 |
|
$ |
24,916 |
|
$ |
20,332 |
|
$ |
74,345 |
|
| Per basic share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
0.31 |
|
$ |
0.55 |
|
$ |
0.76 |
|
$ |
0.63 |
|
$ |
2.24 |
|
| Per diluted share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
0.30 |
|
$ |
0.53 |
|
$ |
0.73 |
|
$ |
0.60 |
|
$ |
2.15 |
|
|
First |
Second |
Third |
Fourth |
| |
Quarter |
Quarter |
Quarter |
Quarter |
2003 |
|
|
|
|
|
|
| |
(In thousands, except per share data) |
| Revenues |
$ |
81,556 |
|
$ |
103,497 |
|
$ |
105,893 |
|
$ |
95,158 |
|
$ |
386,104 |
|
| Operating income |
$ |
17,232 |
|
$ |
28,667 |
|
$ |
39,772 |
|
$ |
28,312 |
|
$ |
113,983 |
|
| Income before income taxes |
$ |
15,562 |
|
$ |
27,487 |
|
$ |
38,554 |
|
$ |
30,804 |
|
$ |
112,407 |
|
| Net income |
$ |
9,687 |
|
$ |
17,111 |
|
$ |
24,345 |
|
$ |
20,720 |
|
$ |
71,863 |
|
| Per basic share: |
| Net income |
$ |
0.26 |
|
$ |
0.48 |
|
$ |
0.68 |
|
$ |
0.59 |
|
$ |
2.01 |
|
| Per diluted share: |
| Net income |
$ |
0.26 |
|
$ |
0.47 |
|
$ |
0.66 |
|
$ |
0.57 |
|
$ |
1.96 |
|
The matters which effect the comparability of our quarterly results include seasonality, the loss on extinguishment of debt in the third quarter 2004 and the gain related to the fourth quarter 2003 note prepayment by Sunburst.
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