Comfort Inn 2007 Annual Report Download - page 90

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
The following table presents certain financial information for the Company’ s franchising segment.
Year Ended December 31, 2007
Franchising
Corporate
& Other
Elimination
Adjustments
Consolidated
(In thousands)
Revenues........................................................................................... $ 610,802 $ 4,692 — $ 615,494
Operating income (loss).................................................................... 225,536 (40,337) — 185,199
Depreciation and amortization.......................................................... 9,713 7,243 (8,319) 8,637
Capital expenditures.......................................................................... 7,578 4,385 — 11,963
Total assets........................................................................................ 185,770 142,614 — 328,384
Year Ended December 31, 2006
Franchising
Corporate
& Other
Elimination
Adjustments
Consolidated
(In thousands)
Revenues........................................................................................... $ 535,398 $ 4,505 — $ 539,903
Operating income (loss).................................................................... 213,506 (46,881) — 166,625
Depreciation and amortization.......................................................... 10,164 7,455 (7,914) 9,705
Capital expenditures.......................................................................... 5,574 2,133 — 7,707
Total assets........................................................................................ 185,022 118,287 — 303,309
Year Ended December 31, 2005
Franchising
Corporate
& Other
Elimination
Adjustments
Consolidated
(In thousands)
Revenues........................................................................................... $ 467,805 $ 4,293 — $ 472,098
Operating income (loss).................................................................... 185,525 (41,775) — 143,750
Depreciation and amortization.......................................................... 9,595 7,085 (7,629) 9,051
Capital expenditures.......................................................................... 8,973 2,531 — 11,504
Total assets........................................................................................ 190,688 74,583 — 265,271
Long-lived assets related to international operations were $7.1 million, $7.0 million and $7.1 million as of
December 31, 2007, 2006 and 2005, respectively. All other long-lived assets of the Company are associated with domestic
activities.
23. Commitments and Contingencies
The Company is a defendant in a number of lawsuits arising in the ordinary course of business. In the opinion of
management and the Company’ s legal counsel, the ultimate outcome of such litigation will not have a material adverse
effect on the Company’ s business, financial position, results of operations or cash flows.
In April 2007, two federal securities law class actions were filed in the United States District Court for the District of
Colorado on behalf of persons who purchased the Company’ s stock between April 25, 2006, and July 26, 2006. These
substantially-similar lawsuits assert claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder, against the Company, its current Vice Chairman and Chief Executive Officer,
and its former Executive Vice President and Chief Financial Officer. These claims are related to the Company’ s July 25,
2006 announcement of its results of operations for the second quarter of 2006.
Since the initial filings, the Company has filed a motion to transfer the litigation from Colorado to the United States
District Court for the District of Maryland. Additionally, one plaintiff has petitioned the Court to be named lead plaintiff
in the dispute. At this time, the Company has not responded to the complaints filed and is not required to do so until after
a lead plaintiff is appointed and a consolidated complaint is filed. The Company believes that the allegations contained
within these class action lawsuits are without merit and intends to vigorously defend the litigation.
The Company’ s management does not expect that the outcome of any of its currently ongoing legal proceedings
individually or collectively, will have a material adverse effect on the Company’ s financial condition, results of operations
or cash flows.
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