Comfort Inn 2013 Annual Report Download - page 107
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Table of Contents
The Company enters into operating leases primarily for office space, office equipment and transportation vehicles. Minimum rents as defined in the
Company’s lease agreements including rent escalations, rent holidays and rental concessions are recognized on the straight-line basis over the non-cancellable
lease term. Payments made to or on behalf of the Company for leasehold improvement incentives are considered reductions in rental expense and are amortized
on a straight-line basis over the non-cancellable lease term. Rental expense under non-cancellable operating leases was approximately $12.6 million, $9.2
million and $8.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company received sublease rental income related to real
estate leased to third-parties totaling $0.3 million during the each of the years ended December 31, 2013, 2012 and 2011.
Future minimum lease payments are as follows:
Minimum lease payments $11,775
$11,746
$11,681
$ 10,890
$10,011
$35,971
$ 92,074
Minimum sublease rentals (150)
—
—
—
—
—
(150)
$11,625
$11,746
$11,681
$ 10,890
$10,011
$35,971
$91,924
The Company’s Senior Notes due 2020 and 2022 are guaranteed jointly, severally, fully and unconditionally, subject to certain customary limitations,
by eight wholly owned domestic subsidiaries. There are no legal or regulatory restrictions on the payment of dividends to Choice Hotels International, Inc. from
subsidiaries that do not guarantee the Senior Notes. As a result of the guarantee arrangements, the following condensed consolidating financial statements are
presented. Investments in subsidiaries are accounted for under the equity method of accounting.
As described in Note 1 to the Company's Consolidated Financial Statements, the condensed consolidating statements of cash flows for the years ended
December 31, 2012 and 2011 have been revised from prior filings to reflect the reclassification of certain operating and investing cash flows related to the
misapplication of GAAP to the presentation of cash flows from the Company's forgivable notes receivable. The following tables present the effect of the
correction on select line items included in the Parent and Guarantor's Condensed Consolidating Statement of Cash Flows for the years ended December 31,
2012 and 2011:
Net cash provided by operating
activities $90,690
$(2)
$90,688
$29,087
$(10,896)
$18,191
Investing Activities:
Issuance of mezzanine and
other notes receivable (23,737)
1
(23,736)
(11,188)
11,188
—
Collections of mezzanine and
other notes receivable 3,269
1
3,270
292
(292)
—
Net cash used in investing
activities (28,305)
2
(28,303)
(29,756)
10,896
(18,860)
103