Comfort Inn 2013 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2013 Comfort Inn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

Table of Contents
of foreign operations, partially offset by state income taxes. Additionally, the 2012 effective income tax rate includes a $4.5 million benefit related to a change
in estimate of the benefit from foreign operations.
As of December 31, 2013 and 2012 , the Company’s gross unrecognized tax benefits totaled $4.0 million and $4.4 million, respectively. It is expected
that $4.0 million of the total as of December 31, 2013 would favorably affect the effective tax rate if resolved in the Company’s favor. The following table
presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:




Balance, January 1 
$ 4,570
$6,017
Changes for tax positions of prior years 
410
173
Increases for tax positions related to the current year 
—
2,062
Settlements and lapsing of statutes of limitations 
(565)
(3,682)
Balance, December 31 
$ 4,415
$ 4,570
It is reasonably possible that the Company’s unrecognized tax benefits could decrease within the next 12 months by as much as $3.5 million due to
settlements and the expiration of applicable statutes of limitations.
The Internal Revenue Service is currently conducting an examination of the Company's United States federal income tax returns for tax years 2009,
2010, and 2011, as well as a limited examination of the 2007 federal income tax return as amended. As of December 31, 2013, the Company has not been
advised of any material adjustments.
The practice of the Company is to recognize interest and penalties related to income tax matters in the provision for income taxes. The Company did not
incur any material interest or penalties for 2013 and 2012. The Company had $1.6 million and $2.3 million of accrued interest and penalties at December 31,
2013 and 2012, respectively.
The Company has not provided deferred United States income taxes on approximately $169.0 million of accumulated and undistributed earnings of its
foreign subsidiaries. The Company's intent is for such earnings to be permanently reinvested in operations outside the United States. Determination of the
deferred United States income tax liability on these earnings is not practicable because such liability, if any, is dependent on circumstances existing if and
when remittance occurs.
 
Dividends
The Company currently maintains the payment of a quarterly dividend on its common shares outstanding, however, the declaration of future dividends
are subject to the discretion of our board of directors. During the year ended December 31, 2013 and 2012, the Company's board of directors declared
quarterly cash dividends at an annual rate of $0.74 per share totaling $43.2 million and $42.7 million, respectively.
In addition, during the year ended December 31, 2013, the Company paid previously declared but unrecorded dividends totaling $0.5 million that were
contingent upon the vesting of performance vested restricted units. No dividends on performance vested restricted units were paid during the year ended
December 31, 2012.
On July 26, 2012, the Company's board of directors declared a special cash dividend to common shareholders in the amount of $10.41 per share or
approximately $600.7 million ("Special Cash Dividend") which was paid on August 23, 2012.
95