1. Which revenue category is the most important to forecast accurately? Explain your rationale for your selection and how you developed your three estimates thoroughly.
2. Which expense category is the most important to forecast accurately? Explain your rationale for your selection and how you developed your three estimates thoroughly.
3. Explain thoroughly how you developed your budget estimates for all revenue and operating expense accounts.
   

Forecast Forecast Forecast Budget Low Midpoint High Consolidated Statements of Income - USD ($) Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 REVENUES: Royalty fees $388,151 $ 397,855 $ 395,914 | $ 397,855 $ 399,796 Initial franchise and relicensing fees $27,489 $ 28,176 $ 28,039 S 28,176 28,314 Procurement services $61,429 S 62,965 52,658 $ 62,965 S 63,272 Marketing and reservation system $577,426 $ 591,862 588,975 $ 591,862 594,749 Owned Hotels $20,282 $ 20,789 20,688 S 20,789 20,890 Other $40,043 41,044 40,844 S 41,044 41,244 Total revenues $1,114,820 $ 1,142,691 $ 1,137,116 1,142,691 1,148,265 OPERATING EXPENSES: Selling, general and administrative $168,833 $ 170,521 $ 172,210 $ 173,054 173,898 Depreciation and amortization $18,828 $ 19,016 $ 19,205 S 19,299 19,393 Marketing and reservation system $579,139 $ 584,930 $ 590,722 S 593,617 S 596,513 Owned Hotels $14,448 $ 14,592 14,737 14,809 14,881 Total operating expenses $781,248 $ 789,060 $ 796,873 S 800,779 $ 804,685 Impairment of goodwill -$3,097 $ (3,128) $ (3,159) S (3,174) $ (3,190) Gain on sale of assets, net $100 $ 101 102 103 $ 103 Operating income $318,642 $ 321,828 325,015 $ 326,608 328,201 OTHER INCOME AND EXPENSES, NET: Interest expense $46,807 $ 47,275 47,743 $ 47,977 | $ 48,211 Interest income -$9,996 (10,096) $ [10,196) S (10,246) S 10,296 Loss on extinguishment of debt $7,188 $ 7,260 7,332 $ 7,368 $ 7,404 Other (gain) loss -$4,862 $ (4,911) $ (4,959) $ 4,984) $ 5,008) Equity in net (income) loss of affiliates $9,576 $ 9,672 $ ,768 9,815 9,863 Total other income and expenses, net $48,713 $ 49,200 $ 49,687 $ 49,931 S 50,174 Income before income taxes $269,929 272,628 S 275,328 $ 276,677 278,027 Income taxes $47,051 $ 59,978 60,572 50,869 $ 61,166 Net income $222,878 $ 212,650.07 214,756 215,808 216,861 Basic earnings per share: Basic earnings per share (in dollars per share) $4.00 $ 4.10 4.08 $ 4.10 S 4.12 Diluted earnings per share (in dollars per share) $3.98 4.08 4.06 4.08 S 4.10 Target Expectation Expectation Expectation