Comfort Inn 2007 Annual Report Download - page 76

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Choice Hotels International, Inc.
Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2005
(In thousands)
Choice Hotels
International, Inc.
Guarantor
Subsidiaries
Non-Guarantor
Subsidiaries
Eliminations
Consolidated
Net Cash Provided (Used) from Operating
Activities........................................................ $ 126,861 $ 18,492 $ (11,765) — $ 133,588
Cash Flows From Investing Activities
Investment in property and equipment................ (6,976) (4,393) (135) — (11,504)
Proceeds from disposition of assets .................... — 1,706 1,105 — 2,811
Acquisition of Suburban, net of cash acquired ... — (7,314) — — (7,314)
Issuance of notes receivable................................ — (2,667) — — (2,667)
Purchases of investments, employee benefit
plans ............................................................... — (8,929) — — (8,929)
Proceeds from sales of investments, employee
benefit plans ................................................... — 3,539 — — 3,539
Other items, net................................................... (1,250) 888 (105) — (467)
Net Cash Provided (Used) from Investing
Activities........................................................ (8,226) (17,170) 865 — (24,531)
Cash Flows from Financing Activities
Principal payment of long-term debt .................. (146) — (4) — (150)
Net repayments pursuant to revolving credit
facilities.......................................................... (54,500) (629) — — (55,129)
Purchase of treasury stock .................................. (49,154) — — — (49,154)
Debt issuance costs ............................................. (193) — — — (193)
Dividends paid .................................................... (30,241) — — — (30,241)
Proceeds from exercise of stock options............. 14,213 — — — 14,213
Net Cash Used in Financing Activities ............ (120,021) (629) (4) — (120,654)
Net change in cash and cash equivalents ............ (1,386) 693 (10,904) — (11,597)
Cash and cash equivalents at beginning of
period ............................................................. 7,234 1,359 19,925 — 28,518
Cash and Cash Equivalents at End of Period. $ 5,848 $ 2,052 $ 9,021 — $ 16,921
14. Foreign Operations
The Company accounts for foreign currency translation in accordance with SFAS No. 52, “Foreign Currency
Translation.” Revenues generated by foreign operations, including royalty, marketing and reservations fees, for the years
ended December 31, 2007, 2006 and 2005 were $43.1 million, $32.0 million, and $24.0 million respectively. Net income,
including equity in the income of equity method investments, attributable to the Company’ s foreign operations was $12.4
million, $10.7 million, and $6.7 million for the years ended December 31, 2007, 2006 and 2005, respectively.
Choice Hotels Franchise GmbH
On October 30, 2006, the Company completed its acquisition of Choice Hotels Franchise GmbH (“CHG”), a
subsidiary of The Real Hotel Company PLC (“RHC”), formerly CHE Hotel Group PLC, which conducted franchising
operations in the central European countries of Austria, Germany, Italy, the Czech Republic, and portions of Switzerland.
Concurrent with the closing of this acquisition, the master franchise agreement between Choice and RHC covering these
countries was also terminated, and all of RHC’ s employees and infrastructure involved in its franchising business were
transferred to CHG. Choice purchased 100% of CHG’ s stock for $0.9 million and began including the results of its
operations in the Company’ s financial statements as of October 30, 2006. The purchase of CHG was recorded in
accordance with SFAS No. 141, “Business Combinations” (“SFAS No. 141”) and the Company allocated the purchase
price based on an assessment of the fair value of assets acquired and liabilities assumed as of October 30, 2006. The
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