|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| |
Years Ended December 31, |
 |
|
| |
2004 |
|
2003 |
|
2002 |
|
|
|
|
| |
(In thousands) |
| CASH FLOWS FROM OPERATING ACTIVITIES |
| Net income |
$ |
74,345 |
|
$ |
71,863 |
|
$ |
60,844 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
| Depreciation and amortization |
|
9,947 |
|
|
11,225 |
|
|
11,251 |
|
| Gain on prepayment of note receivable from Sunburst |
|
— |
|
|
(3,383 |
) |
|
— |
|
| Provision for bad debts |
|
(157 |
) |
|
(189 |
) |
|
1,256 |
|
| Non-cash stock compensation |
|
4,019 |
|
|
2,226 |
|
|
1,666 |
|
| Non-cash interest and other investment income |
|
(463 |
) |
|
(886 |
) |
|
(1,521 |
) |
| Loss on extinguishment of debt |
|
696 |
|
|
— |
|
|
— |
|
| Equity in net (income) losses of affiliates |
|
(722 |
) |
|
(582 |
) |
|
71 |
|
| Changes in assets and liabilities, net of acquisitions: |
| Receivables |
|
(735 |
) |
|
(887 |
) |
|
(5,538 |
) |
| Receivable—marketing and reservation fees, net |
|
19,743 |
|
|
24,726 |
|
|
17,219 |
|
| Accounts payable |
|
978 |
|
|
6,439 |
|
|
(4,958 |
) |
| Accrued expenses and other |
|
12,802 |
|
|
7,616 |
|
|
1,063 |
|
| Income taxes payable |
|
2,854 |
|
|
(2,675 |
) |
|
7,807 |
|
| Deferred income taxes |
|
(14,883 |
) |
|
(7,970 |
) |
|
12,575 |
|
| Other current assets |
|
(599 |
) |
|
383 |
|
|
(2,416 |
) |
| Other liabilities |
|
(26 |
) |
|
7,579 |
|
|
(301 |
) |
|
|
|
|
| Net cash provided by operating activities |
|
107,799 |
|
|
115,485 |
|
|
99,018 |
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
| Investment in property and equipment |
|
(6,859 |
) |
|
(8,480 |
) |
|
(12,233 |
) |
| Proceeds from prepayment of note receivable from Sunburst |
|
— |
|
|
44,701 |
|
|
— |
|
| (Purchases) sales of investments, net |
|
(4,157 |
) |
|
(2,673 |
) |
|
191 |
|
| Issuance of notes receivable |
|
(2,264 |
) |
|
(4,433 |
) |
|
(3,440 |
) |
| Acquisition of Flag |
|
— |
|
|
(1,211 |
) |
|
(2,173 |
) |
| Proceeds from disposition of property |
|
— |
|
|
498 |
|
|
— |
|
| Other items, net |
|
(436 |
) |
|
(618 |
) |
|
2,972 |
|
|
|
|
|
| Net cash (used in) provided by investing activities |
|
(13,716 |
) |
|
27,784 |
|
|
(14,683 |
) |
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
| Proceeds from long-term debt |
|
192,000 |
|
|
— |
|
|
— |
|
| Principal payments of long-term debt |
|
(267,739 |
) |
|
(17,404 |
) |
|
(13,820 |
) |
| Net borrowings (repayments) pursuant to revolving credit facility |
|
157,725 |
|
|
(43,800 |
) |
|
40,000 |
|
| Debt issuance costs |
|
(1,010 |
) |
|
— |
|
|
— |
|
| Purchase of treasury stock |
|
(148,273 |
) |
|
(80,358 |
) |
|
(120,931 |
) |
| Dividends paid |
|
(27,690 |
) |
|
— |
|
|
— |
|
| Proceeds from exercise of stock options |
|
8,427 |
|
|
6,097 |
|
|
5,772 |
|
|
|
|
|
| Net cash used in financing activities |
|
(86,560 |
) |
|
(135,465 |
) |
|
(88,979 |
) |
|
|
|
|
| Net change in cash and cash equivalents |
|
7,523 |
|
|
7,804 |
|
|
(4,644 |
) |
| Cash and cash equivalents at beginning of period |
|
20,031 |
|
|
12,227 |
|
|
16,871 |
|
|
|
|
|
| Cash and cash equivalents at end of period |
$ |
27,554 |
|
$ |
20,031 |
|
$ |
12,227 |
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information: |
| Cash payments during the year for: |
| Income taxes, net of refunds |
$ |
53,622 |
|
$ |
49,559 |
|
$ |
14,674 |
|
| Interest |
$ |
12,639 |
|
$ |
13,357 |
|
$ |
14,132 |
|
| Non-cash investing activities: |
| Conversion of note receivable into Flag equity interest |
|
— |
|
|
— |
|
$ |
1,061 |
|
| Non-cash financing activities: |
| Declaration of dividends |
$ |
28,061 |
|
$ |
6,899 |
|
|
— |
|
| Non-cash financing activities related to employee stock exercises: |
| Income tax benefit realized |
$ |
4,442 |
|
$ |
1,770 |
|
$ |
1,762 |
|
| Treasury shares received for employee tax withholding obligations |
$ |
58 |
|
$ |
98 |
|
|
— |
|
| Issuance of restricted shares of common stock |
$ |
7,973 |
|
$ |
180 |
|
$ |
2,301 |
|
| Common shares surrendered in-lieu of exercise price |
|
— |
|
$ |
181 |
|
|
— |
|
The accompanying notes are an integral part of these consolidated financial statements.
|
