1997 Annual Report - Four Seasons Hotels and Resorts

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(continued)(i) Earnings per share:Earnings per share is based on the weighted average number of Variable Multiple Voting Shares and Limited Voting Sharesoutstanding during the years (note 11(a)). Conversion of outstanding options to purchase Limited Voting Shares is not dilutive.2. H O T E L D I S P O S I T I O N S A N D A C Q U I S I T I O N S:(a) In 1992, in connection with the acquisition of Regent, the Corporation and Hotel Investment Corporation (“HIC”)contributed their ownership and leasehold interests in 10 hotels to a group of related partnerships (referred tocollectively as “FRA Properties”). Since that time, FRA Properties has sold its ownership interests in all the propertiesthat were contributed (other than the 100% leasehold interests in the Four Seasons Hotel Vancouver and The PierreNew York), including the hotels contributed to FRA Properties by the Corporation.Effective December 30, 1996, the Corporation transferred its 19.9% limited partnership interest in FRA Propertiesto HIC, and acquired 100% of FRC Properties, which holds the leasehold interests in the Four Seasons Hotel Vancouverand The Pierre New York. In addition, as at December 31, 1996, FRC Properties held a long-term receivablerelating to the sale of the Inn on the Park Toronto, a residual interest in certain property adjacent to the Inn on thePark Toronto, and owed $12,600 to a Canadian chartered bank (previously secured by the Inn on the Park Torontoand which was guaranteed by the Corporation). This bank loan was fully repaid by FRC Properties in January 1997.(b) In November 1996, the Corporation completed the sale of its minority ownership interest in the Four SeasonsResort Nevis for proceeds of $2,101.In connection with this sale, the Corporation executed an amended hotel management contract with the new ownerof the hotel that provided for enhanced management fees (both basic and incentive fees) and a longer term compared tothe predecessor contract. In addition, the Corporation’s loan to the former owner of the hotel of US$3,000 plus accruedinterest was settled, and the Corporation contributed US$4,732 to the former owner as the Corporation’s share of thefunds necessary to discharge the mortgage on the property.3. R E C E I V A B L E S:1997 1996Trade accounts of consolidated hotels $ 11,369 $ 9,803Receivable from hotel partnerships, affiliates and managed hotels 22,511 17,994Receivable from sale of hotel investment (note 5) — 13,000Other 10,867 10,415$ 44,747 $ 51,212Receivables at December 31, 1997 are recorded net of an allowance for doubtful accounts of $3,811 (1996 – $2,815). Thebad debt expense for the year ended December 31, 1997 was $2,051 (1996 – $225).60Four Seasons Hotels Inc.