Selected Quarterly Financial Data—(Unaudited)



	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		2018⁽¹⁾
	(in thousands, except per share data)
Revenues	$	209,394	$	295,441	$	291,490	$	244,979	$	1,041,304
Operating income	$	46,249	$	109,016	$	111,168	$	52,041	$	318,474
Income before income taxes	$	30,461	$	100,024	$	102,443	$	40,330	$	273,258
Net income	$	25,086	$	79,839	$	79,959	$	31,471	$	216,355
Earnings per share:
Basic	$	0.44	$	1.41	$	1.42	$	0.56	$	3.83
Diluted	$	0.44	$	1.40	$	1.41	$	0.56	$	3.80



	First Quarter		Second Quarter		Third Quarter		Fourth Quarter			2017⁽¹⁾
	(in thousands, except per share data)
Revenues	$	188,868	$	261,016	$	269,930	$	221,483		$	941,297
Operating income	$	45,403	$	86,539	$	93,063	$	64,648		$	289,653
Income before income taxes	$	34,279	$	76,414	$	83,743	$	54,781		$	249,217
Net income (loss)	$	24,269	$	50,685	$	57,189	$	(9,816	)	$	122,327
Earnings (loss) per share:
Basic	$	0.43	$	0.90	$	1.01	$	(0.17	)	$	2.16
Diluted	$	0.43	$	0.89	$	1.01	$	(0.17	)	$	2.15

⁽¹⁾The sum of the earnings per share for the four quarters may differ from annual earnings per share due to the required method of computing the weighted average shares in interim periods.

The matters which affect the comparability of the quarterly results include the following:


•	Seasonality: The Company’s revenues and operating income reflect the industry’s seasonality and as a result are lower in the first and fourth quarters and higher in the second and third quarters.

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Marketing and Reservation System Activities: Due to the seasonal nature of the Company’s hotel franchising business or multi-year investments that are required to support franchise operations, quarterly or annual deficits and surpluses may be generated from the Company’s contractual obligation to utilize marketing and reservation system revenues to provide franchise services defined in the franchise agreements. During the year ended December 31, 2018, the Company incurred surpluses (deficits) from marketing and reservation system activities totaling ($12.2) million, $20.8 million, $14.0 million and ($13.2) million, respectively, in the first, second, third and fourth quarters. During the year ended December 31, 2017, the Company incurred surpluses (deficits) from marketing and reservation system activities totaling ($9.1) million, $11.7 million, $14.2 million and $3.4 million, respectively, in the first, second, third and fourth quarters.


•	Investment income and losses: The Company’s net income reflects gains and losses related to the Company’s investments held in non-qualified retirement plans and are subject to market conditions.


•	The Company acquired WoodSpring on February 1, 2018 and incurred acquisition transaction and integration costs totaling $4.2 million, $0.8 million, $0.6 million and $1.3 million in the first, second, third and fourth quarters of 2018, respectively.


•	The Company's fourth quarter 2018 results reflect an impairment of non-hotel franchising goodwill of $4.3 million in the impairment of goodwill line item and a loan valuation allowance charge of $2.8 million in SG&A expenses.


•	The Company's third quarter 2017 results reflect $12.0 million in compensation expenses related to the acceleration of the Company's chief executive offer succession plan. In addition, SG&A expenses were reduced by a $1.2 million impairment of below market lease acquisition costs associated with an office building owned by the Company.


•	The Company's fourth quarter 2017 results were impacted by comprehensive tax legislation enacted on December 22, 2017. Refer to Note 16. The impact of the tax legislation on net income for the fourth quarter of 2017 was a reduction of approximately $48.5 million.