Comfort Inn 2011 Annual Report Download - page 108
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Table of Contents
granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of
trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for
the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements,
(iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating
agreements. In addition, these parties are also generally indemnified against any third party claim resulting from the transaction that is contemplated in the
underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the
agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future
payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential
amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the
aforementioned indemnities, such as indemnifications of landlords against third party claims for the use of real estate property leased by the Company, the
Company maintains insurance coverage that mitigates potential liability.
Revenues $107,421
$ 149,848
$183,801
$155,006
$596,076
Operating income $23,837
$43,607
$54,877
$38,441
$160,762
Income before income taxes $24,646
$42,024
$55,026
$36,515
$158,211
Net income $15,793
$27,011
$40,494
$24,143
$107,441
Per basic share:
Net income $0.27
$0.45
$ 0.68
$0.41
$1.80
Per diluted share:
Net income $ 0.26
$0.45
$ 0.68
$0.40
$1.80
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 quarter and
higher in the third quarter.
•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.
•Year Ended December 31, 2011 results:
•Termination benefits: The Company’s operating results include employee termination benefits for the first, second, third and fourth
quarters totaling $0.1 million, $0.3 million, $0.4 million and $3.6 million, respectively.
•Land held for Sale: During the first quarter, the Company recorded a $1.8 million loss on assets held for sale resulting from the
reduction of the carrying amount of a parcel of land held for sale to its estimated fair value.
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