Comfort Inn 2005 Annual Report Download - page 39

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3. Other Current Assets
Other current assets consist of the following at:
December 31,
2005 2004
(In thousands)
Prepaidexpenses................................................. $5,972 $3,911
Other current assets .............................................. 336 301
Total .......................................................... $6,308 $4,212
4. Property and Equipment
The components of property and equipment in the consolidated balance sheets are:
December 31,
2005 2004
(In thousands)
Landandlandimprovements ....................................... $ 2,642 $ 2,628
Land held for sale ................................................ —1,540
Facilities in progress and software under development ................... 3,833 2,862
Computerequipmentandsoftware................................... 101,243 92,491
Buildingsandimprovements ....................................... 37,302 36,241
Furniture,fixturesandequipment ................................... 14,587 14,142
159,607 149,904
Less: Accumulated depreciation and amortization ....................... (113,326) (102,412)
Property and Equipment, at cost, net ................................. $ 46,281 $ 47,492
On February 3, 2005, a parcel of land held for sale was sold for $1.7 million resulting in a gain on
disposition of property totaling $0.1 million.
As facilities in progress are completed and placed in service, they are transferred to appropriate property and
equipment categories and depreciation begins. Depreciation expense, excluding amounts attributable to
marketing and reservation activities, for the years ended December 31, 2005, 2004 and 2003 was $4.0 million,
$5.0 million and $6.5 million, respectively. Depreciation has been computed for financial reporting purposes
using the straight-line method. A summary of the ranges of estimated useful lives upon which depreciation rates
are based follows:
Computerequipmentandsoftware............................................ 3-7years
Buildingsandimprovements ................................................ 10-40years
Furniture,fixturesandequipment ............................................ 3-15years
5. Goodwill, Franchise Rights and Other Intangibles
Goodwill relates to the purchase price of a minority interest in the Company for consideration in excess of
the recorded minority interest and the Suburban Transaction. The components of goodwill are as follows:
December 31,
2005 2004
(In thousands)
Minority interest ................................................. $60,620 $60,620
Suburban Transaction (See Note 12) ................................. 5,208 —
Total .......................................................... $65,828 $60,620
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