Comfort Inn 2004 Annual Report Download - page 51

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. Impact of Recently Issued Accounting Standards
In December 2004, the FASB issued SFAS No. 123 (Revised 2004), “Share-Based Payment” (“SFAS
No. 123R”). SFAS No. 123R requires that the compensation cost relating to share-based payment transactions be
recognized in financial statements based on the fair value of the equity or liability instruments issued. Effective,
January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for
Stock-Based Compensation,” for all employee awards granted, modified, or settled after January 1, 2003. SFAS
No. 123R will require the Company to apply fair value recognition provisions to all unvested equity awards as of
the first interim reporting period starting after June 15, 2005, which is the Company’s third quarter beginning
July 1, 2005. The adoption of SFAS No. 123R is not expected to have a material effect on the Company’s results
of operations or financial condition.
23. Selected Quarterly Financial Data – (Unaudited)
First
Quarter
Second
Quarter
Third
Q uarter
Fourth
Quarter 2004
(In thousands, except per share data)
Revenues .................................... $87,235 $107,175 $127,510 $106,886 $428,806
Operating income ............................. $18,899 $ 32,136 $ 42,489 $ 31,476 $125,000
Income before income taxes .................... $16,849 $ 29,498 $ 38,971 $ 29,206 $114,524
Net income ................................... $10,594 $ 18,503 $ 24,916 $ 20,332 $ 74,345
Per basic share:
Net income ............................... $ 0.31 $ 0.55 $ 0.76 $ 0.63 $ 2.24
Per diluted share:
Net income ............................... $ 0.30 $ 0.53 $ 0.73 $ 0.60 $ 2.15
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter 2003
(In thousands, except per share data)
Revenues .................................... $81,556 $103,497 $105,893 $ 95,158 $386,104
Operating income .............................. $17,232 $ 28,667 $ 39,772 $ 28,312 $113,983
Income before income taxes ...................... $15,562 $ 27,487 $ 38,554 $ 30,804 $112,407
Net income ............................... $ 9,687 $ 17,111 $ 24,345 $ 20,720 $ 71,863
Per basic share:
Net income ............................... $ 0.26 $ 0.48 $ 0.68 $ 0.59 $ 2.01
Per diluted share:
Net income ............................... $ 0.26 $ 0.47 $ 0.66 $ 0.57 $ 1.96
The matters which effect the comparability of our quarterly results include seasonality, the loss on
extinguishment of debt in the third quarter 2004 and the gain related to the fourth quarter 2003 note prepayment
by Sunburst.
F-43