Comfort Inn 2011 Annual Report Download - page 41

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Table of Contents






$107,441
Adjustments:
Employee termination benefits 
1,083
Loss on land held for sale 
—
 
$ 108,524
Weighted average shares outstanding-diluted 
59,656
 
$1.80
Adjustments:
Employee termination benefits 
0.02
Loss on land held for sale 
—
  
$ 1.82
The Company recorded adjusted net income of $114.3 million for the year ended December 31, 2011, a $5.8 million or 5% increase from $108.5
million for the year ended December 31, 2010. The increase in adjusted net income for the year ended December 31, 2011 is primarily attributable to a $13.8
million or 9% increase in adjusted operating income and a lower effective income tax rate. These increases were partially offset by a $6.3 million increase in
interest expense due to the issuance of $250 million of senior notes in August 2010 which carry a higher effective interest rate than the Company’s revolving
credit facility in place in 2010 and a $0.6 million decline in the fair value of investments held in the Company's non-qualified employee benefit plans
compared to a $2.1 million appreciation of these investments in the prior year. Adjusted operating income increased 9% as the Company’s franchising
revenues increased by $22.6 million or 9% partially offset by a $9.2 million or 10% increase in adjusted SG&A.
Franchising Revenues: Franchising revenues were $285.4 million for the year ended December 31, 2011 compared to $262.8 million for the year
ended December 31, 2010, a 9% increase. The increase in franchising revenues is primarily due to a $17.1 million or 7% increase in royalty revenues and a
46% increase in initial franchise and relicensing fees.
Domestic royalty fees for the year ended December 31, 2011 increased $13.9 million to $220.3 million from $206.3 million in 2010, an increase of 7%.
The increase in royalties is attributable to a combination of factors including a 6.2% increase in RevPAR and an increase in the effective royalty rate of the
domestic hotel system from 4.29% to 4.32%. System-wide RevPAR increased due to a 220 basis point increase in occupancy and a 1.9% increase in average
daily rates.
40