Comfort Inn 2002 Annual Report Download - page 37

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company collects 5% of program member’s room revenue from participating franchises. Revenues are
deferred equal to the fair value of the future redemption obligation. Actuarial methods are used to estimate the
eventual redemption rates and point values. Upon redemption of points, the Company recognizes the previously
deferred revenue as well as the corresponding expense relating to the cost of the awards redeemed.
10. Long-Term Debt
Debt consisted of the following at:
December 31,
2002 2001
(In thousands)
$265 million competitive advance and multi-currency revolving credit facility with an
effective rate of 3.05% and 3.69% at December 31, 2002 and 2001, respectively ...... $200,708 $180,525
$100 million senior notes with an effective rate of 7.22% at December 31, 2002 and 2001 99,655 99,591
$10 million line of credit with an effective rate of 2.50% at December 31, 2002 ........ 6,400 —
Other notes with an average effective rate of 3.30% and 4.90% at December 31, 2002 and
2001, respectively ....................................................... 1,028 1,180
Total debt ................................................................ $307,791 $281,296
Scheduled maturities of debt as of December 31, 2002 were as follows:
Year (In thousands)
2003 ........................................................... $ 23,796
2004 ........................................................... 21,237
2005 ........................................................... 26,503
2006 ........................................................... 136,177
2007 ........................................................... 146
Thereafter ...................................................... 99,932
Total ........................................................... $307,791
On June 29, 2001, the Company refinanced its senior credit facility (the “New Credit Facility”) in the
amount of $260 million with a new maturity date of June 29, 2006. The New Credit Facility originally provided
for a term loan of $150 million and a revolving credit facility of $110 million, $37 million of which is available
for borrowings in foreign currencies. On September 29, 2001, the Company signed an amendment to the New
Credit Facility, for an additional $5 million under the revolving credit facility, bringing the total amount of
available commitments to $265 million. The amendment also transferred $35 million from the term loan to the
revolving credit facility. As amended, the term loan amount is $115 million and the revolving credit facility is
$150 million. The New Credit Facility includes customary financial and other covenants that require the
maintenance of certain ratios including maximum leverage and interest coverage and restricts the Company’s
ability to make certain investments, incur debt and dispose of assets, among other restrictions. As of
December 31, 2002, the Company is in compliance with all covenants under the New Credit Facility. The term
loan ($98.7 million of which is outstanding at December 31, 2002) is payable over five years, $17.3 million of
which is due in 2003. Borrowings under the New Credit Facility are, at the option of the borrower, at one of
several rates including LIBOR plus 0.60% to 2.0%, based upon the credit rating of the Company and the loan
type. In addition, the Company has the option to request participating banks to bid on loan participation at lower
rates than those contractually provided by the New Credit Facility. The New Credit Facility requires the
Company to pay annual fees of
1
⁄ 15 of 1% to
1
⁄ 2 of 1%, based upon the credit rating of the Company.
F-29