Comfort Inn 2003 Annual Report Download - page 23

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
2003 2002 2001
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................................................. $ 71,863 $ 60,844 $ 14,327
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ............................................... 11,225 11,251 12,452
Gain on prepayment of note receivable from Sunburst ............................ (3,383) ——
Provision for bad debts ..................................................... (189) 1,256 476
Non-cash stock compensation and other charges ................................. 2,226 1,666 2,210
Non-cash interest and other investment income .................................. (1,532) (2,128) (4,219)
Equity in net (income) losses of affiliates ...................................... (582) 71 16,436
Impairment of Friendly investment ........................................... —— 22,713
Write-off of deferred financing costs .......................................... —— 650
Changes in assets and liabilities, net of acquisitions:
Receivables .............................................................. (887) (5,538) 6,465
Receivable—marketing and reservation fees, net ................................ 24,726 17,219 20,267
Current liabilities ......................................................... 12,185 (3,911) 9,381
Income taxes payable/receivable and other assets ................................ (422) 2,184 2,729
Deferred income taxes and other liabilities ..................................... 255 16,104 (2,175)
Net cash provided by operating activities .................................... 115,485 99,018 101,712
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from prepayment of note receivable from Sunburst ........................... 44,701 ——
Investment in property and equipment ............................................. (8,480) (12,233) (13,532)
Acquisition of Flag ............................................................ (1,211) (2,173) —
Proceeds from disposition of property ............................................. 498 ——
Proceeds from restructuring of Old Note from Sunburst ............................... —— 101,954
Issuance of notes receivable ..................................................... (4,433) (3,440) (1,228)
(Purchases) sales of investments, net .............................................. (2,673) 191 (532)
Other items, net .............................................................. (618) 2,972 1,076
Net cash provided by (used in) investing activities ............................. 27,784 (14,683) 87,738
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt ................................................... 214,900 314,400 772,028
Principal payments of long-term debt ............................................. (276,104) (288,220) (790,795)
Purchase of treasury stock ...................................................... (80,358) (120,931) (185,807)
Proceeds from exercise of stock options ........................................... 6,097 5,772 12,294
Net cash used in financing activities......................................... (135,465) (88,979) (192,280)
Net change in cash and cash equivalents ......................................... 7,804 (4,644) (2,830)
Cash and cash equivalents at beginning of period ................................. 12,227 16,871 19,701
Cash and cash equivalents at end of period ....................................... $ 20,031 $ 12,227 $ 16,871
Supplemental disclosure of cash flow information
Cash payments during the year for:
Income taxes, net of refunds ............................................ $ 49,559 $ 14,674 $ 29,013
Interest ............................................................. 13,357 14,132 18,039
Non-cash investing activities:
Conversion of note receivable into Flag equity interest ........................ $—$ 1,061 $ —
Property assumed through the restructuring of Sunburst note ................... —— 1,475
Non-cash financing activities:
Declaration of dividend ................................................ $ 6,899 $—$—
Non-cash financing activities related to employee stock options exercised:
Income tax benefit realized ......................................... 1,770 1,762 3,895
Treasury shares received for employee tax withholding obligations .......... 98 ——
Common shares surrendered in-lieu of exercise price ..................... $ 181 $—$—
The accompanying notes are an integral part of these consolidated financial statements.
F-16