Comfort Inn 2011 Annual Report Download - page 105
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Table of Contents
The following table presents certain financial information for the Company’s franchising segment.
Revenues
Operating income (loss)
Depreciation and amortization
Income (loss) before income taxes
Capital expenditures
Total assets
Revenues $592,045
$4,031
$ —
$596,076
Operating income (loss) 202,522
(41,760)
—
160,762
Depreciation and amortization 13,524
7,265
(12,447)
8,342
Income (loss) before income taxes 203,748
(45,537)
—
158,211
Capital expenditures 22,418
1,950
—
24,368
Total assets 245,529
166,193
—
411,722
Revenues $ 560,038
$4,140
$ —
$564,178
Operating income (loss) 193,383
(45,310)
—
148,073
Depreciation and amortization 11,386
7,296
(10,346)
8,336
Income (loss) before income taxes 194,496
(43,862)
—
150,634
Capital expenditures 8,885
2,250
—
11,135
Total assets 203,140
136,897
—
340,037
Long-lived assets related to international operations were $6.5 million, $7.5 million and $7.0 million as of December 31, 2011, 2010 and 2009,
respectively. All other long-lived assets of the Company are associated with domestic activities.
Effective October 15, 1997, Choice Hotels International, Inc. which included both a franchising business and owned hotel business, separated the
businesses via a spin-off into two companies: Sunburst Hospitality Corporation (referred to hereafter as “Sunburst”) and the Company. Subsequent to the
spin-off, the Company’s largest shareholder retained significant ownership percentages in both Sunburst and the Company. As part of the spin-off, Sunburst
and the Company entered into a strategic alliance agreement. Among other things, the strategic alliance agreement, as amended, provided for the determination
of liquidated damages related to the termination of Choice branded Sunburst properties. The liquidated damage provisions extend through the life of the
existing Sunburst franchise agreements. As of December 31, 2011, Sunburst operates 13 hotels under franchise with the Company.
Total franchise fees, including royalty, marketing and reservation system fees, paid by Sunburst to the Company, included in the accompanying
consolidated financial statements were $4.5 million, $4.4 million and $4.5 million for the years ended December 31, 2011, 2010 and 2009, respectively. As of
December 31, 2011 and 2010, accounts receivable included $0.2 million and $0.3 million, respectively, due from Sunburst.
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