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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or income tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We also estimate and accrue for certain tax assessments and the expected resolution of tax contingencies which arise in the course of our business.
Earnings per Share.
Basic earnings per share excludes dilution and is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share, assumes dilution and is computed based on the weighted-average number of common shares outstanding after consideration of the dilutive effect of stock options and unvested restricted stock.
Use of Estimates.
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2.
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Property and Equipment
The components of property and equipment in the consolidated balance sheets are:
|
| |
December 31, |
 |
|
| |
2003 |
|
2002 |
|
|
|
| |
(In thousands) |
| Land and land improvements |
$ |
4,173 |
|
$ |
4,117 |
|
| Facilities in progress |
|
2,313 |
|
|
1,631 |
|
| Computer equipment and software |
|
88,051 |
|
|
83,790 |
|
| Buildings and improvements |
|
38,089 |
|
|
36,283 |
|
| Furniture, fixtures and equipment |
|
10,503 |
|
|
10,479 |
|
|
|
|
| |
|
143,129 |
|
136,300 |
|
| Less: Accumulated depreciation and amortization |
|
(88,876 |
) |
|
(71,650 |
) |
|
|
|
| |
$ |
54,253 |
|
$ |
64,650 |
|
|
|
|
|
|
|
|
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