Comfort Inn 2014 Annual Report Download - page 49
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Summarized financial results for the years ended December 31, 2013 and 2012 are as follows:
Royalty fees
$ 261,680
Initial franchise and relicensing fees
14,203
Procurement services
17,962
Marketing and reservation
389,678
Other
9,205
692,728
Selling, general and administrative
101,879
Depreciation and amortization
7,691
Marketing and reservation
389,678
499,248
193,480
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
169,506
48,228
121,278
335
$ 121,613
The Company recorded income from continuing operations, net of income taxes, of $113.4 million for the year ended December 31, 2013, a $7.9
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 $2.8 million increase in operating income and 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.
Operating income increased $2.8 million as the Company’s franchising revenues increased by $13.9 million or 5% but were partially offset by a $9.8
million or 10% increase in SG&A expenses and a $1.4 million increase in depreciation and amortization expenses. Adjusted EBITDA for the year ended
December 31, 2013 increased $4.1 million or 2% to $205.3 million. The key drivers of these fluctuations are described in more detail below.
Franchising Revenues: Franchising revenues were $317.0 million for the year ended December 31, 2013 compared to $303.1 million for the year ended
December 31, 2012, a 5% increase. The increase in franchising revenues is primarily due to a $6.1 million or 2% increase in royalty revenues, a $4.5 million
increase in initial franchise and relicensing fees and a $2.7 million or 15% increase in procurement services fees.
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