Since the closing of the restructuring transaction in January 2001, the Company continues to closely monitor its strategic options with respect to its investment in Friendly. In the event that Friendly’s financial condition deteriorates, there may not be sufficient cash from operations and available credit lines to fund the business. In the event that Friendly cannot secure additional borrowings or equity, the Company will consider its strategic and financial options, including, but not limited to i) stand-aside to additional funding requirements which would likely result in the insolvency of Friendly, a further or complete write-down of the Company’s investment in Friendly and the Company taking back its franchising rights for the United Kingdom, Ireland and continental Europe, or ii) conversion of its convertible preferred shares into ordinary common stock resulting in control of and full consolidation of Friendly.

The Company recognized $2.2 million and $2.1 million in preferred dividend income from the Friendly investment for the years ended December 31, 1999 and 1998, respectively. As of December 31, 1999 and 1998, accrued but unpaid preferred dividends were $5.8 million and $3.7 million, respectively. The Company also recognized $1.1 million, $2.2 million and $1.4 million in royalty revenue from Friendly for the years ended December 31, 2000, 1999 and 1998, respectively.

The Company owned approximately 5.4%, 5.3% and 5.2% of Friendly’s outstanding ordinary shares at December 31, 2000, 1999, and 1998, respectively. The fair market value of the ordinary shares at December 31, 2000, 1999 and 1998 was $0.7 million, $2.0 million and $1.9 million, respectively.

Summarized unaudited balance sheet data for Friendly is as follows:

Summarized unaudited income statement data for Friendly is as follows:

6. Advances to Marketing and Reservation Funds

The total marketing and reservation fees received by the Company for the years ended December 31, 2000, 1999 and 1998 amounted to $162.4 million, $146.0 million and $127.4 million, respectively. Depreciation and amortization incurred by the marketing and reservation funds for the years ended December 31, 2000, 1999 and 1998 amounted to $10.5 million, $9.6 million and $6.2 million, respectively. Interest expense incurred by the reservation fund was $4.8 million, $3.3 million and $1.8 million for the years ended December 31, 2000, 1999 and 1998, respectively. Under the terms of the franchise agreements, reservation fees and marketing fees not expended in the current year are carried over to the next fiscal year and expended in accordance with the franchise agreements. Shortfall amounts are similarly recovered in subsequent years. Excess or shortfall amounts from the operation of these programs are recorded as a payable or receivable, respectively, from the particular fund. As of December 31, 2000 and 1999, the Company’s consolidated balance sheet includes advances to marketing and reservation funds of $57.8 million (marketing $24.9 million and reservation $32.9 million) and $32.8 million (marketing $12.5 million and reservation $20.3 million), respectively. The Company has the ability under the existing franchise agreements and expects to recover the remaining receivables through future marketing and reservation fees.