Comfort Inn 2014 Annual Report Download - page 58

Table of Contents
facility fee on the full amount of the commitments under the Old Credit Facility (regardless of usage) ranging from 20 to 45 basis points based upon the credit
rating of the Company.
At December 31, 2014 and 2013, the Company had $129.4 million and $138.8 million outstanding under the Term Loan, respectively. At December 31,
2014 and 2013, no amounts were outstanding under the New Revolver.
Fixed Rate Collateralized Mortgage
On December 30, 2014, a court awarded the Company title to an office building as settlement for a portion of an outstanding loan receivable for which
the building was pledged as collateral. In conjunction with the court award, the Company also assumed the $9.5 million mortgage on the property with a
fixed interest rate of 7.26%. The mortgage which is collateralized by the office building requires monthly payments of principal and interest and matures in
December 2020 with a a balloon payment due of $6.9 million. At the time of acquisition, the Company determined that the fixed interest rate of 7.26%
exceeded market interest rates and therefore the Company increased the carrying value of the debt by $1.2 million to record the debt at fair value. The fair
value adjustment will be amortized over the remaining term of the mortgage utilizing the effective interest method.
Economic Development Loans
The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate
headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to
offset a portion of the corporate headquarters relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees
within the jurisdictions. At December 31, 2014, the Company had been advanced approximately $3.5 million pursuant to these agreements and expects to
receive the remaining $0.9 million over the next several years, subject to annual appropriations by the governmental entities. These advances bear interest at
a rate of 3% per annum.
Repayment of the advances is contingent upon the Company achieving certain performance conditions. Performance conditions are measured annually
on December 31st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual
performance condition, the Company may be required to repay a portion or all of the advances including accrued interest by April 30th following the
measurement date. Any outstanding advances at the expiration of the Company's ten year corporate headquarters lease in 2023 will be forgiven in full. The
advances will be included in long-term debt in Company's consolidated balance sheets until the Company determines that the future performance conditions
will be met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues interest on the portion
of the advances that it expects to repay. The Company was in compliance with all current performance conditions as of December 31, 2014.
Regular Quarterly 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 years ended December 31, 2014, 2013 and 2012, the Company paid cash dividends at a
quarterly rate of $0.185 per share. In December 2014, the Company's board of directors increased the quarterly dividend rate to $0.195 per share, beginning
with the first dividend payable in 2015, representing a 5% increase from the previous quarterly declarations.
During the year ended December 31, 2014, 2013 and 2012, the Company paid regular quarterly cash dividends totaling $43.5 million, $32.8 million
and $53.4 million, respectively. Dividend payments during the years ended December 31, 2013 and 2012, reflect the Company's board of directors decision
to pay the regular quarterly dividend initially scheduled to be paid in the first quarter of 2013 in December 2012. As a result, the dividends paid during 2013
reflect three quarterly payments as compared to five payments in the prior year. We expect that cash dividends will continue to be paid in the future, subject
to declaration by our board of directors, future business performance, economic conditions, changes in tax regulations and other matters. Based on our
present dividend rate and outstanding share count, aggregate annual regular dividends for 2015 are estimated to be approximately $44.7 million.
Special Cash Dividend
On July 26, 2012, the Company's board of directors declared a special cash dividend in the amount of $10.41 per share or approximately $600.7 million
in the aggregate, which was paid on August 23, 2012. The Company utilized the proceeds from the 2012 Senior Notes and the New Credit Facility for
payment of the special cash dividend.
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