Panera Bread 2004 Annual Report Download - page 45

recognize the impact of recording rent expense over the reasonably assured lease period, to record depreciation on leasehold
improvements over the shorter of their estimated useful lives or the reasonably assured lease term, and to classify landlord allowances
for normal tenant improvements as deferred rent and amortize them over the reasonably assured lease term as a reduction to rent
expense rather than depreciation.
The cumulative effect of the restatement through fiscal 2001 of $1.7 million was recorded as a reduction of the Company’s
beginning retained earnings balance at December 29, 2001, as reflected in its consolidated statements of stockholders’ equity. The
cumulative effect of the restatement through fiscal 2003 increased property and equipment by $10.0 million, increased deferred rent
liability by $12.5 million, increased accrued expenses by $0.9 million, and decreased deferred income tax liability by $1.2 million.
Bakery-cafe occupancy for fiscal years 2003 and 2002 increased by $1.0 million and $0.8 million, respectively, and bakery-cafe cost
of food and paper products for the same fiscal years increased by $0.2 million and $0.1 million, respectively, while depreciation and
amortization for the same fiscal years decreased by $1.2 million and $0.2 million, respectively; operating profit for fiscal year 2003
increased by $0.03 million and decreased by $0.7 million in fiscal 2002, and income before cumulative effect of accounting change
and net income for fiscal year 2003 increased by $0.02 million and net income decreased by $0.5 million in fiscal 2002. The
restatement did not change previously reported diluted earnings per share for the fiscal year ended 2003, but decreased previously
reported diluted earnings per share by $0.02 for the fiscal year ended 2002. The restatement did not impact the Company’s previously
reported net cash flows, revenues or comparable bakery-cafe sales, or compliance with revolving line of credit covenants.
The following table shows the impact of these changes on the consolidated balance sheet for fiscal year 2003 and the consolidated
statements of operations for fiscal years 2002 and 2003 (in thousands, except per share data):
Fiscal Year 2003
As Previously
Reported Adjustments As Restated
Consolidated Balance Sheet
Property and equipment, net ................................................................................................. $ 136,367 $ 9,995 $ 146,362
Deferred income taxes .......................................................................................................... — 897 897
Total assets ........................................................................................................................... $ 245,943 $ 10,892 $ 256,835
Accrued expense................................................................................................................... 35,552 851 36,403
Deferred income taxes .......................................................................................................... 328 (328) —
Deferred rent......................................................................................................................... — 12,501 12,501
Total liabilities...................................................................................................................... 46,235 13,024 59,259
Retained earnings ................................................................................................................. 74,842 (2,132) 72,710
Total stockholder’s equity .................................................................................................... 195,937 (2,132) 193,805
Total liabilities and stockholders’ equity.............................................................................. $ 245,943 $ 10,892 $ 256,835
Consolidated Statement of Operations
Cost of food and paper products........................................................................................... $ 73,727 $ 158 $ 73,885
Occupancy ............................................................................................................................ 17,990 991 18,981
Total bakery-cafe expenses................................................................................................... 209,673 1,149 210,822
Depreciation and amortization.............................................................................................. 19,487 (1,183) 18,304
Total costs and expenses....................................................................................................... 313,798 (34) 313,764
Operating profit .................................................................................................................... 49,904 34 49,938
Income before income taxes and cumulative effect of accounting change........................... 48,264 34 48,298
Income taxes......................................................................................................................... 17,616 13 17,629
Income before cumulative effect of accounting change ....................................................... 30,648 21 30,669
Cumulative effect of accounting change............................................................................... (239) — (239)
Net income............................................................................................................................ $ 30,409 $ 21 $ 30,430
Basic earnings per common share:
Before cumulative effect of accounting change ................................................................. $ 1.03 $ — $ 1.03
Cumulative effect of accounting change............................................................................ (0.01) — (0.01)
Net income ......................................................................................................................... $ 1.02 $ — $ 1.02
Diluted earnings per common share:
Before cumulative effect of accounting change ................................................................. $ 1.01 $ — $ 1.01
Cumulative effect of accounting change............................................................................ (0.01) — (0.01)
Net income ......................................................................................................................... $ 1.00 $ — $ 1.00
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