Comfort Inn 2014 Annual Report Download - page 93

Table of Contents
The following is a reconciliation of the changes in the projected benefit obligation for the year ended December 31, 2012:


Projected benefit obligation, beginning of year  
Interest cost 
Actuarial loss (gain) 
Benefit payments 
Settlement payments 
Projected benefit obligation, end of year  
For the year ended December 31, 2012 the Company recorded $2.8 million for the expenses related to the SERP which are included in SG&A and
marketing and reservation expense in the accompanying consolidated statements of income.
The following table presents the components of net periodic benefit costs for the year ended December 31, 2012. No periodic benefit costs were
incurred during the years ended December 31, 2014 and 2013 due to the 2012 settlement of the SERP:



Components of net periodic benefit cost:
Interest cost $ 526
Amortization of actuarial loss 128
654
Settlement loss, net 2,162
Net periodic benefit cost $ 2,816
Weighted average assumption:
Discount rate 4.50%
As a result of the settlement of the SERP, the Company recognized a net settlement loss totaling $2.2 million during the year ended December 31,
2012. The net settlement loss consisted of an actuarial gain of $0.1 million representing the difference between actuarial calculation of the lump sum
distribution to participants and the projected benefit obligation and the reclassification of the unamortized accumulated loss from other comprehensive loss
to the net periodic benefit cost totaling $2.3 million. Following the settlement of the SERP, there were no amounts in accumulated other comprehensive
income (loss) that have not yet been recognized as a component of net periodic benefit costs.
 
The Company sponsors two non-qualified retirement savings and investment plans for certain employees and senior executives. Employee and
Company contributions are maintained in separate irrevocable trusts. Legally, the assets of the trusts remain those of the Company; however, access to the
trusts’ assets is severely restricted. The trusts cannot be revoked by the Company or an acquirer, but the assets are subject to the claims of the Company’s
general creditors. The participants do not have the right to assign or transfer contractual rights in the trusts.
In 2002, the Company adopted the Choice Hotels International, Inc. Executive Deferred Compensation Plan ("EDCP") which became effective
January 1, 2003. Under the EDCP, certain executive officers may defer a portion of their salary into an irrevocable trust and invest these amounts in a
selection of available diversified investment options. The Company recorded current and long-term deferred compensation liabilities of $10.2 million and
$11.3 million at December 31, 2014 and 2013, respectively, related to these deferrals and credited investment returns. Compensation expense is recorded in
SG&A expense on the Company’s consolidated statements of income based on the change in the deferred compensation obligation related to earnings
credited to participants as well as changes in the fair value of diversified investments. Compensation expense recorded in SG&A for the years ended
December 31, 2014, 2013 and 2012 were $0.5 million, $0.9 million and $0.8 million, respectively.
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