Comfort Inn 2013 Annual Report Download - page 61

Table of Contents
The following table summarizes our contractual obligations as of December 31, 2013:
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




Long-term debt (1) $ 1,107.8
$ 49.7
$ 209.7
$ 74.5
$ 773.9
Capital lease obligations (2) 2.6
1.0
1.6
—
—
Purchase obligations (3) 52.6
47.3
4.1
0.8
0.4
Operating lease obligations 92.1
11.8
23.4
20.9
36.0
Other long-term liabilities (4) 22.6
—
2.3
1.7
18.6
Total contractual obligations $1,277.7
$ 109.8
$241.1
$97.9
$828.9
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(1) Long-term debt includes principal as well as interest payments. Assumes forward estimates of LIBOR rates as of December 31, 2013 for our variable
interest rate debt.
(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) Other long-term liabilities primarily consist of deferred compensation plan liabilities.
The total amount of unrecognized tax positions and the related interest and penalties totaled $5.6 million at December 31, 2013 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 $3.5 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.
Off Balance Sheet Arrangements
On October 9, 2012, the Company entered into a limited payment guaranty with regards to a VIE's $18 million bank loan for the construction of a hotel
franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to guarantee 25% of the
outstanding principal balance and accrued and unpaid interest, as well as any unpaid expenses incurred by the lender. The limited guaranty shall remain in
effect until the maximum amount guaranteed by the Company is paid in full. In addition to the limited guaranty, the Company entered into an agreement in
which the Company guarantees the completion of the construction of the hotel and an environmental indemnity agreement which indemnifies the lending
institution from and against any damages relating to or arising out of possible environmental contamination issues with regards to the property.
On November 15, 2013, the Company entered into a limited payment guaranty with regards to a VIE's $46.2 million bank loan for the construction of a hotel
franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to unconditionally
guarantee and become surety for the full and timely payment of the guaranteed outstanding principal balance, as well as any unpaid expenses incurred by the
lender. The guarantee is limited to 25% of the outstanding principal balance of the $46.2 million loan due at any time. The limited guaranty shall remain in
effect until the maximum amount guaranteed by the Company is repaid in full. The maturity date of the VIE's loan is May 2017.
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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 or the number of
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