Comfort Inn 2002 Annual Report Download - page 45

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
F-37