Comfort Inn 2013 Annual Report Download - page 43

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

Summarized financial results for the years ended December 31, 2013 and 2012 are as follows:





Royalty fees 
$260,782
Initial franchise and relicensing fees 
14,203
Procurement services 
17,962
Marketing and reservation  384,784
Hotel operations 
4,573
Other 
9,205
  691,509

Selling, general and administrative 
101,852
Depreciation and amortization 
8,226
Marketing and reservation 
384,784
Hotel operations 
3,505
 
498,367
 
193,142

Interest expense 
27,189
Interest income 
(1,540)
Loss on extinguishment of debt
526
Other (gains) and losses 
(1,989)
Equity in net income of affiliates 
(212)
 
23,974
 
169,168
 
48,481

$120,687
 
$2.07
The Company recorded net income of $112.6 million for the year ended December 31, 2013, an $8.1 million or 7% decline from the year ended
December 31, 2012. The decline in net income for the year ended December 31, 2013 primarily reflects a $15.3 million increase in interest expense resulting
from the issuance of debt in June and July of 2012 to finance the Company's $600.7 million special dividend paid on August 23, 2012, partially offset by a
$1.4 million increase in operating income, a $0.5 million loss on extinguishment of debt incurred in the prior year as a result of refinancing the Company's
$300 million revolving credit facility and a decline in the Company's effective income tax rate from 28.7% in 2012 to 28.2% in the current year.
Operating income increased $1.4 million as the Company’s franchising revenues increased by a $14.2 million or 5% but were partially offset by an
$11.7 million or 12% increase in SG&A expenses and a $1.2 million increase in depreciation and amortization expenses. Adjusted EBITDA for the year
ended December 31, 2013 increased $2.6 million or 1% to $204.0 million. The key drivers of these fluctuations are described in more detail below.
43