Comfort Inn 2011 Annual Report Download - page 55

Table of Contents
terminated employees. At December 31, 2011, approximately $4.6 million of the salary and benefits continuation payments remain to be remitted. In addition,
the Company has approximately $0.9 million of benefits remaining to be paid on termination benefits incurred during prior years. The Company expects to
remit $4.5 million of the remaining $5.4 million of benefits payable during the next twelve months. In addition, the Company expects to satisfy approximately
$18.9 million of deferred compensation and retirement plan obligations during the next twelve months
The following table summarizes our contractual obligations as of December 31, 2011:

 







Long-term debt (1) $378.3
$14.3
$28.5
$28.5
$307.0
Capital lease obligations (2) 4.6
1.0
2.0
1.6
—
Purchase obligations (3) 12.0
6.4
5.0
0.3
0.3
Operating lease obligations 104.1
8.5
18.5
19.5
57.6
Other long-term liabilities 30.1
—
9.4
4.2
16.5
Total contractual obligations $529.1
$30.2
$63.4
$ 54.1
$381.4
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(1) Long-term debt amounts include interest on fixed rate debt obligations.
(2) Capital lease obligations include interest and related maintenance agreements on the equipment.
(3) Purchase obligations also include commitments to provide loan and joint venture financing under various Company programs.
(4) The total amount of unrecognized tax positions and the related interest and penalties totaled $6.5 million at December 31, 2011 and is not reflected in
the Contractual Obligations table. We have several open tax positions, and it is reasonably possible that the Company's unrecognized tax positions
could decrease within the next 12 months by as much as $1.4 million.
The Company believes that cash flows from operations and available financing capacity are adequate to meet the expected future operating, investing
and financing needs of the business.

In June 2008, the Company guaranteed $1 million of a bank loan funding a franchisee's construction of a Cambria Suites in Columbus, Ohio. During
the third quarter of 2011, the Company was released from its obligation under the guaranty.
In July 2008, the Company guaranteed $1 million of a bank loan funding a franchisee's construction of a Cambria Suites in Noblesville, Indiana.
During the fourth quarter of 2011, the Company was released from its obligation under the guaranty.

Our accounting policies comply with principles generally accepted in the United States. We have described below those policies that we believe are
critical and require the use of complex judgment or significant estimates in their application. Additional discussion of these policies is included in Note 1 to our
consolidated financial statements.
Revenue Recognition.
We recognize continuing franchise fees, including royalty, marketing and reservations system fees, when earned and receivable from our franchisees.
Franchise fees are typically based on a percentage of gross room revenues of each franchisee. Our estimate of the allowance for uncollectible royalty fees is
charged to SG&A expense and our estimate of the allowance for uncollectible marketing and reservation system fees is charged to marketing and reservation
expenses.
Initial franchise and relicensing fees are recognized, in most instances, in the period the related franchise agreement is executed because the initial
franchise and relicensing fees are non-refundable and the Company is not required to provide initial services to the franchisee prior to hotel opening. We defer
the initial franchise and relicensing fee revenue related to franchise agreements which include incentives until the incentive criteria are met or the agreement is
terminated, whichever occurs first.
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