|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| |
Years Ended December 31, |
 |
|
| |
2003 |
|
2002 |
|
2001 |
|
|
|
|
| |
(In thousands) |
| CASH FLOWS FROM OPERATING ACTIVITIES |
| Net income |
$ |
71,863 |
|
$ |
60,844 |
|
$ |
14,327 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
| Depreciation and amortization |
|
11,225 |
|
|
11,251 |
|
|
12,452 |
|
| Gain on prepayment of note receivable from Sunburst |
|
(3,383 |
) |
|
— |
|
|
— |
|
| Provision for bad debts |
|
(189 |
) |
|
1,256 |
|
|
476 |
|
| Non-cash stock compensation and other charges |
|
2,226 |
|
|
1,666 |
|
|
2,210 |
|
| Non-cash interest and other investment income |
|
(1,532 |
) |
|
(2,128 |
) |
|
(4,219 |
) |
| Equity in net (income) losses of affiliates |
|
(582 |
) |
|
71 |
|
|
16,436 |
|
| Impairment of Friendly investment |
|
— |
|
|
— |
|
|
22,713 |
|
| Write-off of deferred financing costs |
|
— |
|
|
— |
|
|
650 |
|
| Changes in assets and liabilities, net of acquisitions: |
| Receivables |
|
(887 |
) |
|
(5,538 |
) |
|
6,465 |
|
| Receivable—marketing and reservation fees, net |
|
24,726 |
|
|
17,219 |
|
|
20,267 |
|
| Current liabilities |
|
12,185 |
|
|
(3,911 |
) |
|
9,381 |
|
| Income taxes payable/receivable and other assets |
|
(422 |
) |
|
2,184 |
|
|
2,729 |
|
| Deferred income taxes and other liabilities |
|
255 |
|
|
16,104 |
|
|
(2,175 |
) |
|
|
|
|
| Net cash provided by operating activities |
115,485 |
|
|
99,018 |
|
101,712 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
| Proceeds from prepayment of note receivable from Sunburst |
|
44,701 |
|
|
— |
|
|
— |
|
| Investment in property and equipment |
|
(8,480 |
) |
|
(12,233 |
) |
|
(13,532 |
) |
| Acquisition of Flag |
|
(1,211 |
) |
|
(2,173 |
) |
|
— |
|
| Proceeds from disposition of property |
|
498 |
|
|
— |
|
|
— |
|
| Proceeds from restructuring of Old Note from Sunburst |
|
— |
|
|
— |
|
101,954 |
|
| Issuance of notes receivable |
|
(4,433 |
) |
|
(3,440 |
) |
|
(1,228 |
) |
| (Purchases) sales of investments, net |
|
(2,673 |
) |
|
191 |
|
|
(532 |
) |
| Other items, net |
|
(618 |
) |
|
2,972 |
|
|
1,076 |
|
|
|
|
|
| Net cash provided by (used in) investing activities |
|
27,784 |
|
|
(14,683 |
) |
|
87,738 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
| Proceeds from long-term debt |
214,900 |
|
314,400 |
|
772,028 |
|
| Principal payments of long-term debt |
(276,104 |
) |
(288,220 |
) |
(790,795 |
) |
| Purchase of treasury stock |
|
(80,358 |
) |
(120,931 |
) |
(185,807 |
) |
| Proceeds from exercise of stock options |
|
6,097 |
|
|
5,772 |
|
|
12,294 |
|
|
|
|
|
| Net cash used in financing activities |
(135,465 |
) |
|
(88,979 |
) |
(192,280 |
) |
|
|
|
|
| Net change in cash and cash equivalents |
|
7,804 |
|
|
(4,644 |
) |
|
(2,830 |
) |
| Cash and cash equivalents at beginning of period |
|
12,227 |
|
|
16,871 |
|
|
19,701 |
|
|
|
|
|
| Cash and cash equivalents at end of period |
$ |
20,031 |
|
$ |
12,227 |
|
$ |
16,871 |
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information |
| Cash payments during the year for: |
| Income taxes, net of refunds |
$ |
49,559 |
|
$ |
14,674 |
|
$ |
29,013 |
|
| Interest |
|
13,357 |
|
|
14,132 |
|
|
18,039 |
|
| Non-cash investing activities: |
| Conversion of note receivable into Flag equity interest |
$ |
— |
|
$ |
1,061 |
|
$ |
— |
|
| Property assumed through the restructuring of Sunburst note |
|
— |
|
|
— |
|
|
1,475 |
|
| Non-cash financing activities: |
| Declaration of dividend |
$ |
6,899 |
|
$ |
— |
|
$ |
— |
|
| Non-cash financing activities related to employee stock options exercised: |
| Income tax benefit realized |
|
1,770 |
|
|
1,762 |
|
|
3,895 |
|
| Treasury shares received for employee tax withholding obligations |
|
98 |
|
|
— |
|
|
— |
|
| Common shares surrendered in-lieu of exercise price |
$ |
181 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
