Panera Bread 2004 Annual Report Download - page 32

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In December 2004, the FASB issued Staff Position No. FAS 109-1, “Application of SFAS No. 109, Accounting for Income Taxes,
to the Tax Deduction on Qualified Production Activities provided by the American Jobs Creation Act of 2004” (“FSP 109-1”). FSP
109-1 states that qualified domestic production activities should be accounted for as a special deduction under SFAS No. 109,
“Accounting for Income Taxes.” The provisions of FSP 109-1 are effective immediately. The Company is currently evaluating the
impact of the new Act, which may allow the Company to qualify for a benefit beginning in fiscal 2005.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of December 25, 2004, the Company had no derivative financial interests or derivative commodity instruments. We do
however purchase certain commodities, such as flour, butter, and coffee, for use in our business. These purchases are sometimes
purchased under agreements of one to three year time frames usually at a fixed price. As a result, we are subject to market risk that
current market prices may be above or below our contractual price. However, we were not using financial instruments to hedge
commodity prices as of December 25, 2004.
The Company’s unsecured revolver bears an interest rate using LIBOR as the basis, and therefore is subject to additional expense
should there be an increase in LIBOR interest rates. The Company has not borrowed under the revolver in the last three years. As of
December 25, 2005, the Company had no foreign operations, and accordingly, no foreign exchange rate fluctuation risk at that time.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Company are included in response to this item:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 25, 2004 and December 27, 2003 (as restated)
Consolidated Statements of Operations for the fiscal years ended December 25, 2004, December 27, 2003 (as restated), and
December 28, 2002 (as restated)
Consolidated Statements of Cash Flows for the fiscal years ended December 25, 2004, December 27, 2003 (as restated), and
December 28, 2002 (as restated)
Consolidated Statements of Stockholders’ Equity for the fiscal years ended December 25, 2004, December 27, 2003 (as restated),
and December 28, 2002 (as restated)
Notes to the Consolidated Financial Statements
Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or
notes thereto.
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