Comfort Inn 2004 Annual Report Download - page 43

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Income Taxes
Income before income taxes was derived from the following:
Years ended December 31,
2004 2003 2002
(In thousands)
Income before income taxes:
Domestic operations ........................... $109,424 $108,760 $93,418
Foreign operations ............................ 5,100 3,647 2,400
Income before income taxes ......................... $114,524 $112,407 $95,818
The provisions for income taxes were as follows:
Years ended December 31,
2004 2003 2002
(In thousands)
Current tax expense
Federal ....................................... $ 52,334 $44,040 $21,374
State ......................................... 4,288 3,979 631
Foreign ...................................... (315) 758 661
Deferred tax (benefit) expense
Federal ....................................... (15,308) (7,306) 11,297
State ......................................... (794) (942) 1,012
Foreign ...................................... (26) 15 (1)
Income taxes ...................................... $ 40,179 $40,544 $34,974
Deferred tax assets (liabilities) were comprised of the following:
December 31,
2004 2003
(In thousands)
Depreciation and amortization ................................ $(12,543) $(16,554)
Prepaid expenses ........................................... (7,327) (11,478)
Foreign Operations ......................................... (57) —
Other .................................................... (2,871) (5,510)
Gross deferred tax liabilities .................................. (22,798) (33,542)
Foreign operations ......................................... —2,553
Accrued expenses .......................................... 9,277 7,894
Accrued compensation ...................................... 7,338 1,982
Other .................................................... 1,461 1,508
Gross deferred tax assets .................................... 18,076 13,937
Net deferred tax liability ..................................... $ (4,722) $(19,605)
F-35