1998 Annual Report - Four Seasons Hotels and Resorts

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(continued)6. F I X E D A S S E T S:1998 1997Accumulateddepreciation/ Net book Net bookCost amortization value valueLand $ 1,000 $ — $ 1,000 $ 4,402Buildings 8,224 (1,270) 6,954 19,261Furniture, fixtures and equipment 25,876 (5,649) 20,227 16,522Leasehold interests and improvements 4,535 (1,252) 3,283 3,231Depreciation and amortization expense for fixed assets was $2,303 (1997 – $3,464).$ 39,635 $ (8,171) $ 31,464 $ 43,4167. I N V E S T M E N T I N M A N A G E M E N T C O N T R A C T S:1998 1997Management contracts, at cost (notes 2, 5(b) and 8(a)) $ 156,887 $ 142,421Less accumulated amortization (25,182) (36,461)Amortization expense for management contracts was $8,965 (1997 – $7,198).$ 131,705 $ 105,9608. I N V E S T M E N T I N T R A D E M A R K S A N D T R A D E N A M E S:1998 1997Trademarks and trade names, at cost $ 43,007 $ 72,543Less accumulated amortization (3,739) (11,522)$ 39,268 $ 61,021(a) Disposition of “Regent” trade name:In November 1997, the Corporation entered into an agreement with Carlson Hospitality Worldwide (“Carlson”) pursuantto which Carlson acquired the rights to the “Regent” name for new development. The Corporation will continue tooperate and manage the existing Regent hotels. The Corporation will be entitled to receive payments from Carlsoncalculated as a percentage of the gross royalty revenue of the new development effort.The portion of the net book value of the Corporation’s investment in the “Regent” name that relates to the existing“Regent” hotels of US$11,488 was reclassified as “Investment in management contracts” and is being amortized over theterms of the related management contracts. The portion of the net book value that relates to the rights to the “Regent”name transferred to Carlson of US$22,240 was deferred and is being amortized over 40 years.(b) Amortization expense:Amortization expense for trademarks and trade names was $1,023 (1997 – $2,346).72Four Seasons Hotels Inc.