please answer question #4. see attachments. thanks

12 Months Ended Dec 31, 2016 S Change 2017 to 2018 M Change 2017 to 2018 s Change 2016 to 2017% Change 2016 to 2017 Dec 31, 2017 $341,745,000 $23,038,000 $40,451,000 $499,625,000 $36,438,000 $941,297,000 $317,699,000 $19,720,000 $35,844,000 $409,120,000 $25,526,000 $807,909,000 $34,931,000.00 $3,034,000.00 $11,637,000.00 $44,052,000.00 $6,353,000.00 $100,007,000.00 $10 $13 $29 $9 $17 $11 $24,046,000.00 $3,318,000.00 $4,607,000.00 $90,505,000.00 $10,912,000.00 $133,388,000.00 8% 17% 13% 22% 43% 17% 7 4 $165.821,000 $154,720,000 $6,680,000 $6,996,000 $479,400,000 $459,765,000 $651.901,000 $621,481,000 SOSO $257,000 $627,000 $289,653,000 $187,055,000 Horizontal Analysis Consolidated Statements of income - USD ($) Dec 31, 2018 REVENUES: Royalty fees $376,676,000 Initial franchise and relicensing fees $26,072,000 Procurement services $52,088,000 Marketing and reservation system $543,677,000 Other $42.791,000 Total revenues $1,041,304,000 OPERATING EXPENSES: Selling general and administrative $170,027,000 Depreciation and amortization $14,330,000 Marketing and reservation system + $534,266,000 Total operating expenses $718,623,000 Impairment of goodwill $4,289,000 Gain on sale of assets, net $82,000 Operating income $318,474,000 OTHER INCOME AND EXPENSES, NET: Interest expense S45.908.000 Interest income -$7.452,000 Other gain) loss $1,437,000 Equity in net income) loss of affiliates $5,323,000 Total other income and expenses, net $45,216,000 Income before income taxes $273,258,000 Income taxes $56,903,000 Net Income $216,355,000 Basic earnings per share: Basic earnings per share (in dollars per share) $3.83 Diluted earnings per share in dollars per share) $3.80 Instructions 10-K Document Questions Balance Sheet $4,206,000.00 $7,650,000.00 $54.866,000.00 $66,722,000.00 $4,289,000.00 $175,000.00 $28,821,000.00 $3 $115 $11 $10 $0 $68) $10 $11,101,000. 001 $316,000.00 $19,635,000. 00 $30,420,000.00 $0.00 -$370,000.00 $102,598,000.00 5% % 5% -59% 55% $45,039,000 $5.920,000 -$3,229.000 $4,546,000 $40,436,000 $249,217,000 $126,890,000 $122.327,000 $44,446,000 $3,535,000 $1,504,000 $492,000 $38.915,000 $148,140,000 $41,428,000 $106.712,000 $869,000.00 $1,532.000.00 $4,566.000.00 $777,000.00 $4,780,000.00 $24,041,000.00 $69.987,000.00 $94,028,000.00 LS2 $26 ($145) $17 $12 $10 ($55) $77 $593,000.00 -$2.385,000.00 -$1.725,000.00 $5,038,000.00 $1,521,000.00 $ 101,077,000.00 $85,462.000,00 $15,615,000.00 67% 1.15% 1024% 45 68% 206% 15% $2.16 $2.15 Income Statement $1.90 $1.89 Statement of Cash Flow $1.67 $1.65 Ratio Analysis $77 $0.26 14% S720. 261496 O Type here to search B e L e 4. The largest item in revenue and in expense is Marketing and reservation system. What are these two items and why are the numbers different? Hint: See page 56 in the MD&A Marketing and Reservation system: $534,266.00 Total operating expenses: $718,623.00 These numbers are different because marketing and reservations system is simply a portion 5. What is the most significant trend based on your horizontal analysis over this three-year period? Why? The trends noticed on this income statement is the impairment goodwill account. Once the Instructions 10-K Document Questions Balance Sheet Income Statement Statement of Cash Flows Ratio Analysis Type here to search Et e LD. Other evene Other revenue is a combination of miscellaneous son marketing and reservation system fore, inclusive of quality assuance on.compliance and franchisee training fees, and is recognized in the period the designated transaction or event has occurred Marketing and reservation e m rerues. The Company's franchise agreements require the payment of marketing and reservation system fees. The Company is obligated to use these markets and reservation system fees to provide marketing and reservation services such as advertising, providing a centralized reservation and property management system providing reservation and revenue management services, and performing certain franchise services to support the operation of the overall france system. These services comprised of multicle Ten cludins the following Fees based on a percentage of press room revenges are recognized in the period the gross room revenge was earned, based on the underlying hotel's sales or usage Fees based on the occurrence of a designated transaction or event are recognized in the period the transaction or event occurred System implementation fees charged to franchisees are deferred and recognized as revenue over the term of the franchise agreement Marketing and reservation system activities also include revenues generated from the Companypoest lova ty potram. The revenge recognition of this program is discussed in ChovaPrhweper Loyalty Program below. Marketing and reservation system expenses are those expenses incurred to facilitate the delivery of marketing and resentation system serios, including direct expenses and an allocation of cost for certain administrative activities required to carry out marketing and reservation services Marketing and reservation system expenses are record arvices are incurred or goods are received, and as such may not equal musketine and reservation system revenges in a specific period but are expected to equal revenues came from franchisees over time. The Company's franchise apreements provide the Company the tipht to advance monies to the franchise system when the red of the watem surpass the balances currently available and recover such d e r in future periods through ditional fe m ents or reduced spending We make certain payments to customers as an incentive to enter into new franchise preements (Franchase agreement acquisition cost"). We capitalize soch payments as intangible assets. These intangibles are amortized on a stracht-line b ote the stated benefit period of the arrangement as an offset to royalty fees and marketing and nation system fees Impairments from hotel terminations are recorded within the S&A expenses and marketing and reservation system expert Company also earn revenues on contracts incidental to the support of operations for franchised hotels, including parchasing operations: + Proc e ries The Company generates procurem e nices revenues from qualified vendors. Procurement services revenues are generally based on marketing services provided by the Company on behalf of the qualified vendors to hotel owners and rests. The Company provide these services in exchange for estar fixed consideration of a percentage of rerupes earned by the qualified endor perting to purchases by the Company's franchisees or guests. Fixed consideration is allocated and recognized atably to each period are the term of the agreement. Variable consideration recognized the period we sales to franchisees or guests from endors are knowrocash payment las been remitted. Qualified render revenues are recognized within Fro s enice terenue Oder revenue. The Company is party to other ton hotel franchising agreements that peonate revenue primary through SaaS arrangements. SaaS agreements typically include fixed constate for installment and other initiation Pres paid at contract one, and variable consideration for recurring subscription revenue paid monthly Fixed consideration is allocated and recognized ratably to each period over the term of the age anable consideration is determined at the conclusion of each period, and record in the current period Dice Prhleges Loyay Program ice Pavileges in the Company's frequent guest loyalty program, which enables members to earn points based on their spending levels with the Company franchise The points was the Company accumulates and tracks on the membershall, may be redeemed forfer commodations or other benefitsee it cards to participating retailers The Company 57 PM 12 Months Ended Dec 31, 2016 S Change 2017 to 2018 M Change 2017 to 2018 s Change 2016 to 2017% Change 2016 to 2017 Dec 31, 2017 $341,745,000 $23,038,000 $40,451,000 $499,625,000 $36,438,000 $941,297,000 $317,699,000 $19,720,000 $35,844,000 $409,120,000 $25,526,000 $807,909,000 $34,931,000.00 $3,034,000.00 $11,637,000.00 $44,052,000.00 $6,353,000.00 $100,007,000.00 $10 $13 $29 $9 $17 $11 $24,046,000.00 $3,318,000.00 $4,607,000.00 $90,505,000.00 $10,912,000.00 $133,388,000.00 8% 17% 13% 22% 43% 17% 7 4 $165.821,000 $154,720,000 $6,680,000 $6,996,000 $479,400,000 $459,765,000 $651.901,000 $621,481,000 SOSO $257,000 $627,000 $289,653,000 $187,055,000 Horizontal Analysis Consolidated Statements of income - USD ($) Dec 31, 2018 REVENUES: Royalty fees $376,676,000 Initial franchise and relicensing fees $26,072,000 Procurement services $52,088,000 Marketing and reservation system $543,677,000 Other $42.791,000 Total revenues $1,041,304,000 OPERATING EXPENSES: Selling general and administrative $170,027,000 Depreciation and amortization $14,330,000 Marketing and reservation system + $534,266,000 Total operating expenses $718,623,000 Impairment of goodwill $4,289,000 Gain on sale of assets, net $82,000 Operating income $318,474,000 OTHER INCOME AND EXPENSES, NET: Interest expense S45.908.000 Interest income -$7.452,000 Other gain) loss $1,437,000 Equity in net income) loss of affiliates $5,323,000 Total other income and expenses, net $45,216,000 Income before income taxes $273,258,000 Income taxes $56,903,000 Net Income $216,355,000 Basic earnings per share: Basic earnings per share (in dollars per share) $3.83 Diluted earnings per share in dollars per share) $3.80 Instructions 10-K Document Questions Balance Sheet $4,206,000.00 $7,650,000.00 $54.866,000.00 $66,722,000.00 $4,289,000.00 $175,000.00 $28,821,000.00 $3 $115 $11 $10 $0 $68) $10 $11,101,000. 001 $316,000.00 $19,635,000. 00 $30,420,000.00 $0.00 -$370,000.00 $102,598,000.00 5% % 5% -59% 55% $45,039,000 $5.920,000 -$3,229.000 $4,546,000 $40,436,000 $249,217,000 $126,890,000 $122.327,000 $44,446,000 $3,535,000 $1,504,000 $492,000 $38.915,000 $148,140,000 $41,428,000 $106.712,000 $869,000.00 $1,532.000.00 $4,566.000.00 $777,000.00 $4,780,000.00 $24,041,000.00 $69.987,000.00 $94,028,000.00 LS2 $26 ($145) $17 $12 $10 ($55) $77 $593,000.00 -$2.385,000.00 -$1.725,000.00 $5,038,000.00 $1,521,000.00 $ 101,077,000.00 $85,462.000,00 $15,615,000.00 67% 1.15% 1024% 45 68% 206% 15% $2.16 $2.15 Income Statement $1.90 $1.89 Statement of Cash Flow $1.67 $1.65 Ratio Analysis $77 $0.26 14% S720. 261496 O Type here to search B e L e 4. The largest item in revenue and in expense is Marketing and reservation system. What are these two items and why are the numbers different? Hint: See page 56 in the MD&A Marketing and Reservation system: $534,266.00 Total operating expenses: $718,623.00 These numbers are different because marketing and reservations system is simply a portion 5. What is the most significant trend based on your horizontal analysis over this three-year period? Why? The trends noticed on this income statement is the impairment goodwill account. Once the Instructions 10-K Document Questions Balance Sheet Income Statement Statement of Cash Flows Ratio Analysis Type here to search Et e LD. Other evene Other revenue is a combination of miscellaneous son marketing and reservation system fore, inclusive of quality assuance on.compliance and franchisee training fees, and is recognized in the period the designated transaction or event has occurred Marketing and reservation e m rerues. The Company's franchise agreements require the payment of marketing and reservation system fees. The Company is obligated to use these markets and reservation system fees to provide marketing and reservation services such as advertising, providing a centralized reservation and property management system providing reservation and revenue management services, and performing certain franchise services to support the operation of the overall france system. These services comprised of multicle Ten cludins the following Fees based on a percentage of press room revenges are recognized in the period the gross room revenge was earned, based on the underlying hotel's sales or usage Fees based on the occurrence of a designated transaction or event are recognized in the period the transaction or event occurred System implementation fees charged to franchisees are deferred and recognized as revenue over the term of the franchise agreement Marketing and reservation system activities also include revenues generated from the Companypoest lova ty potram. The revenge recognition of this program is discussed in ChovaPrhweper Loyalty Program below. Marketing and reservation system expenses are those expenses incurred to facilitate the delivery of marketing and resentation system serios, including direct expenses and an allocation of cost for certain administrative activities required to carry out marketing and reservation services Marketing and reservation system expenses are record arvices are incurred or goods are received, and as such may not equal musketine and reservation system revenges in a specific period but are expected to equal revenues came from franchisees over time. The Company's franchise apreements provide the Company the tipht to advance monies to the franchise system when the red of the watem surpass the balances currently available and recover such d e r in future periods through ditional fe m ents or reduced spending We make certain payments to customers as an incentive to enter into new franchise preements (Franchase agreement acquisition cost"). We capitalize soch payments as intangible assets. These intangibles are amortized on a stracht-line b ote the stated benefit period of the arrangement as an offset to royalty fees and marketing and nation system fees Impairments from hotel terminations are recorded within the S&A expenses and marketing and reservation system expert Company also earn revenues on contracts incidental to the support of operations for franchised hotels, including parchasing operations: + Proc e ries The Company generates procurem e nices revenues from qualified vendors. Procurement services revenues are generally based on marketing services provided by the Company on behalf of the qualified vendors to hotel owners and rests. The Company provide these services in exchange for estar fixed consideration of a percentage of rerupes earned by the qualified endor perting to purchases by the Company's franchisees or guests. Fixed consideration is allocated and recognized atably to each period are the term of the agreement. Variable consideration recognized the period we sales to franchisees or guests from endors are knowrocash payment las been remitted. Qualified render revenues are recognized within Fro s enice terenue Oder revenue. The Company is party to other ton hotel franchising agreements that peonate revenue primary through SaaS arrangements. SaaS agreements typically include fixed constate for installment and other initiation Pres paid at contract one, and variable consideration for recurring subscription revenue paid monthly Fixed consideration is allocated and recognized ratably to each period over the term of the age anable consideration is determined at the conclusion of each period, and record in the current period Dice Prhleges Loyay Program ice Pavileges in the Company's frequent guest loyalty program, which enables members to earn points based on their spending levels with the Company franchise The points was the Company accumulates and tracks on the membershall, may be redeemed forfer commodations or other benefitsee it cards to participating retailers The Company 57 PM