The following table reconciles the number of shares used in the basic and diluted earnings per share calculations.

	Years Ended December 31,
		2002			2001			2000
(In millions, except per share amounts)
Computation of Basic Earnings Per Share:
Net income		$60.8			$14.3			$42.4
Weighted average shares outstanding-basic		39.3			44.2			52.9
Basic earnings per share		$1.55			$0.32			$0.80
Computation of Diluted Earnings Per Share:
Net income for diluted earnings per share		$60.8			$14.3			$42.4
Weighted average shares outstanding-basic		39.3			44.2			52.9
Effect of Dilutive Securities:
Employee stock option plan		0.8			0.4			0.4
Weighted average shares outstanding-diluted		40.1			44.6			53.3
Diluted earning per share		$1.52			$0.32			$0.80

     The effect of dilutive securities is computed using the treasury stock method and average market prices during the period. In 2002 and 2000, the Company excluded 50,000 and 2,725,696 anti-dilutive options from the computation of diluted earnings per share, respectively.

17. Leases

     The Company enters into operating leases primarily for office space and computer equipment. Rental expense under non-cancelable operating leases was approximately $12.9 million, $12.0 million and $10.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. The Company received sublease rental income related to computer equipment leased to franchisees totaling $9.1 million, $7.6 million and $5.0 million during the years ended December 31, 2002, 2001 and 2000, respectively. Future minimum lease payments are as follows:

		2003			2004			2005			2006			2007			Thereafter			Total
	(In thousands)
Minimum lease payments		$ 9,395			$ 7,258			$ 4,685			$ 3,457			$ 3,547			$ 20,051			$ 48,393
Minimum sublease rentals		(6,213)			(3,988)			(1,323)			—			—			—			(11,524)
		$ 3,182			$ 3,270			$ 3,362			$ 3,457			$ 3,547			$ 20,051			$ 36,869

18. Reportable Segment Information

     The Company has a single reportable segment encompassing its franchising business. Revenues from the franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation fees, partner services revenue and other revenue. The Company is obligated under its franchise agreements to provide marketing and reservation services appropriate for the successful operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company's franchising business. The revenues received from franchisees that are used to pay for part of the Company's central on-going operations are included in franchising revenues and are offset by the related expenses paid for marketing and reservation activities to calculate franchising operating income. Corporate and other revenue consists of hotel operations. The Company does not allocate interest and dividend income, interest expense or income taxes to its franchising segment.

     The following table presents the financial information for the Company's franchising segment.

	Year Ended December 31, 2002
		Franchising			Corporate & Other			Elimination Adjustments			Consolidated
	(In thousands)
Revenues		$362,231			$ 3,331			—			$365,562
Operating income (loss)		136,182			(31,482)			—			104,700
Depreciation and amortization		13,817			10,460			(13,026)			11,251
Capital expenditures		4,925			7,308			—			12,233
Total assets		215,427			98,955			—			314,382
	Year Ended December 31, 2001
		Franchising			Corporate & Other			Elimination Adjustments			Consolidated
	(In thousands)
Revenues		$338,213			$ 3,215			—			$341,428
Operating income (loss)		138,988			(65,411)			—			73,577
Equity loss on Friendly investment		—			(16,436)			—			(16,436)
Depreciation and amortization		12,485			11,769			(11,802)			12,452
Capital expenditures		6,997			6,535			—			13,532
Total assets		215,381			105,797			—			321,178
	Year Ended December 31, 2000
		Franchising			Corporate & Other			Elimination Adjustments			Consolidated
	(In thousands)
Revenues		$351,592			$ 1,249			—			$352,841
Operating income (loss)		136,985			(44,558)			—			92,427
Equity loss on Friendly investment		—			(12,071)			—			(12,071)
Depreciation and amortization		10,584			11,523			(10,484)			11,623
Capital expenditures		8,665			7,925			—			16,590
Investment in Friendly		—			34,616			—			34,616
Total assets		251,586			232,534			—			484,120

     Long-lived assets related to international operations were $8.1 million, $7.1 million and $10.9 million as of December 31, 2002, 2001 and 2000, respectively. All other long-lived assets of the Company are associated with domestic activities.