Comfort Inn 2011 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2011 Comfort Inn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

Table of Contents







$98,250
Adjustments:
Employee termination benefits 
2,882
Curtailment loss related to the freezing of benefits under the Company’s SERP
757
Loss on sublease of office space
941
 
$102,830
Weighted average shares outstanding-diluted 
60,224
 
$ 1.63
Adjustments:
Employee termination benefits 
0.05
Curtailment loss related to the freezing of benefits under the Company’s SERP
0.01
Loss on sublease of office space
0.02
  
$ 1.71
The Company recorded adjusted net income of $108.5 million for the year ended December 31, 2010, a $5.7 million or 5.5% increase from $102.8
million for the year ended December 31, 2009. The increase in adjusted net income for the year ended December 31, 2010 is primarily attributable to a $7.1
million or 5% increase in adjusted operating income and a decline in the effective income tax rate from 34.8% to 32.1%. These items were partially offset by a
$5.1 million decline in other income and expenses, net resulting from a lower appreciation in the fair value of investments held in the Company’s non-
qualified employee benefit plans compared to the prior year and an increase in interest expense due to the issuance of $250 million of senior notes which carry
a higher effective interest rate than the Company’s revolving credit facility. Adjusted operating income increased $7.1 million as the Company’s franchising
revenues increased by $8.1 million or 3% partially offset by a $0.9 million increase in adjusted SG&A.
Franchising Revenues: Franchising revenues were $262.8 million for the year ended December 31, 2010 compared to $254.7 million for the year
ended December 31, 2009. The $8.1 million or 3% increase in franchising revenues is primarily due to a $12.1 million or 6% increase in royalty revenues,
offset by a $3.6 million decline in initial franchise and relicensing fees.
Domestic royalty fees for the year ended December 31, 2010 increased $9.3 million to $206.3 million from $197.0 million in 2009, an increase of 5%.
The increase in royalties is attributable to a combination of factors including a 2.8% increase in RevPAR, a 1.3% increase in the number of domestic
franchised hotel rooms and an increase in the effective royalty rate of the domestic hotel system from 4.25% to 4.29%. System-wide RevPAR increased due to a
190 basis point increase in occupancy, partially offset by a 1% decline in average daily rates.
47