|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Included in the accompanying consolidated balance sheet as follows:
| |
December 31, |
 |
|
| |
2003 |
|
2002 |
|
|
|
| |
(In thousands) |
| Current net deferred tax assets |
$ |
1,957 |
|
$ |
2,232 |
|
| Non-current net deferred tax liabilities |
|
(21,562 |
) |
|
(29,807 |
) |
|
|
|
| Net deferred tax liability |
|
(19,605 |
) |
|
(27,575 |
) |
|
|
|
|
|
|
|
No provision has been made for U.S. federal income taxes on approximately $21 million of accumulated and undistributed earnings of foreign subsidiaries at December 31, 2003 since these earnings are considered to be permanently invested in foreign operations.
A reconciliation of income tax expense at the statutory rate to income tax expense included in the accompanying consolidated statements of income follows:
| |
Years ended December 31, |
|
|
| |
2003 |
|
2002 |
|
2001 |
|
|
|
|
| |
(In thousands, except Federal |
| |
income tax rate) |
| Federal income tax rate |
|
35 |
% |
|
35 |
% |
|
35 |
% |
| Federal taxes at statutory rate |
$ |
39,342 |
|
$ |
33,536 |
|
$ |
15,896 |
|
| State income taxes, net of federal tax benefit |
|
1,974 |
|
|
1,068 |
|
|
1,120 |
|
| Unrealized tax benefits |
|
(617 |
) |
|
— |
|
|
12,737 |
|
| Other |
|
(155 |
) |
|
370 |
|
|
1,337 |
|
|
|
|
|
| Income tax expense |
$ |
40,544 |
|
$ |
34,974 |
|
$ |
31,090 |
|
|
|
|
|
|
|
|
|
|
We have estimated and accrued for certain tax assessments and the expected resolution of tax contingencies which arise in the course of our business. The ultimate outcome of these tax-related contingencies impact the determination of income tax expense and may not be resolved until several years after the related tax returns have been filed. Predicting the outcome of such tax assessments involves uncertainty; however, we believe that recorded tax liabilities adequately account for our analysis of probable outcomes.
14. Other Non-Current Liabilities
Other non-current liabilities consist of the following at.
| |
Year ended |
| |
December 31, |
|
|
| |
2003 |
|
2002 |
|
|
|
| |
(in thousands) |
| Deferred revenue |
|
4,006 |
|
1,299 |
|
| Other liabilities and contingencies |
|
21,160 |
|
21,513 |
|
|
|
|
| Total |
$ |
40,224 |
|
$32,462 |
|
|
|
|
|
|
|
|
Other liabilities and contingencies includes long-term deposits and accruals for tax contingencies. These accruals have been recorded to address potential exposures involving tax positions that could be challenged by taxing authorities.
|
