Comfort Inn 2013 Annual Report Download - page 50
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Table of Contents
Summarized financial results for the years ended December 31, 2012 and 2011 are as follows:
Royalty fees
$245,426
Initial franchise and relicensing fees
14,052
Procurement services
18,111
Marketing and reservation
349,036
Hotel operations
4,356
Other
7,812
638,793
Selling, general and administrative
106,404
Depreciation and amortization
8,024
Marketing and reservation
349,036
Hotel operations
3,466
466,930
171,863
Interest expense
12,939
Interest income
(1,306)
Loss on extinguishment of debt
—
Other (gains) and losses
2,442
Equity in net income of affiliates
(269)
13,806
158,057
47,661
$110,396
$1.85
Results of Operations
The Company recorded net income of $120.7 million for the year ended December 31, 2012, a $10.3 million or 9% increase from the year ended
December 31, 2011. The increase in net income for the year ended December 31, 2012 is primarily attributable to a $21.3 million or 12% increase in operating
income and a lower effective income tax rate than the prior year. Net income was further increased by a $4.4 million decline in other (gains) and losses. The
decline in other (gains) and losses was due to a $2.0 million appreciation in the fair value of investments held in the Company's non-qualified benefit plans
compared to a decline of $0.6 million in the fair value of these investments in the prior year and a $1.8 million loss on assets held for sale incurred in the prior
year. These items were partially offset by a $14.3 million increase in interest expense resulting from the issuance of debt to finance the Company's $600.7
million special dividend paid on August 23, 2012 and a $0.5 million loss on extinguishment of debt incurred as a result of refinancing the Company's $300
million revolving credit facility which was scheduled to mature in February 2016.
Adjusted EBITDA increased $21.5 million or 12% as the Company’s franchising revenues increased by $16.8 million or 6% and SG&A expenses
declined $4.6 million or 4%. The key drivers of these fluctuations are described in more detail below.
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