Comfort Inn 2014 Annual Report Download - page 49

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Table of Contents


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.
49