Panera Bread 2005 Annual Report Download - page 33

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Operating Activities
Funds provided by operating activities for the fiscal year ended December 27, 2005, December 25, 2004, and December 27, 2003
were $110.6 million, $84.3 million, and $73.1 million, respectively. Funds provided by operating activities for all three fiscal years
primarily resulted from net income, depreciation and amortization, tax benefit from exercise of stock options, deferred rent, and
accrued expenses, partially offset by increased trade and other accounts receivable.
Investing Activities
Total capital expenditures for the fiscal year ended December 27, 2005 were $82.1 million and were primarily related to the
opening of 66 Company-owned bakery-cafes in 2005, costs incurred on Company-owned bakery-cafes to be opened in the first and
second quarter of 2006, and the maintaining or remodeling of existing bakery-cafes and fresh dough facilities. Additionally, we
acquired 21 operating cafes and two cafes under construction from a franchisee for $28.0 million. See Note 3 to the Consolidated
Financial Statements for further information on this transaction. Total capital expenditures were $80.4 million for the fiscal year ended
December 25, 2004 and were primarily related to the opening of 54 Company-owned bakery-cafes in 2004, costs incurred on
Company-owned bakery-cafes to be opened in the first and second quarter of 2005, and the maintaining or remodeling of existing
bakery-cafes and fresh dough facilities. Additionally, in 2004, we acquired one operating bakery-cafe from a franchisee for $0.2
million and acquired the membership interest of the former minority interest owner for $4.9 million plus the transfer of two operating
bakery-cafes and one bakery-cafe under construction. Total capital expenditures were $45.8 million for the fiscal year ended
December 27, 2003 and were primarily related to the opening of 29 Company-owned bakery-cafes in 2003, costs incurred on
Company-owned bakery-cafes to be opened in the first and second quarter of 2004, the opening of three fresh dough facilities, and the
maintaining or remodeling of existing bakery-cafes and fresh dough facilities. Additionally, in 2003, we acquired 15 operating bakery-
cafes, two closed bakery-cafes, and two bakery-cafes under construction from franchisees for $21.0 million.
As of December 27, 2005 and December 25, 2004, we had investments of $46.3 million and $28.4 million, respectively, in United
States treasury notes and government agency securities. Investments are classified as short or long-term in the accompanying
consolidated balance sheet based upon their stated maturity dates. As of December 27, 2005, all investments were classified as held-
to-maturity as we have the intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost,
adjusted for amortization of premiums to maturity, which approximates fair value at December 27, 2005.
Financing Activities
On December 19, 2003, we entered into a $10.0 million unsecured revolving line of credit (revolver). The revolver matures
December 19, 2006 and has an interest rate of LIBOR plus 0.75% to 1.5% depending on our leverage ratio and type of loan (resulting
in interest rates of approximately 5.0% to 5.8% at December 27, 2005). The revolver contains restrictions relating to future
indebtedness, liens, investments, distributions, mergers, acquisition, or sale of assets and certain leasing transactions. The revolver
also requires the maintenance of certain financial ratios and covenants. As of December 27, 2005, we were in compliance with all debt
covenants. At December 27, 2005, we had $9.8 million available under the revolver with $0.2 million utilized by an outstanding letter
of credit. We have not borrowed under our revolver in any of the last three fiscal years.
Financing activities provided $13.8 million, $5.2 million, and $6.2 million for the fiscal years ended December 27, 2005,
December 25, 2004, and December 27, 2003, respectively. The financing activities in the fiscal year ended December 27, 2005
included $12.6 million from the exercise of stock options and $1.2 million from the issuance of common stock under employee benefit
plans. The financing activities for the fiscal year ended December 25, 2004 primarily included $3.6 million from the exercise of stock
options and $1.1 million from the issuance of common stock under employee benefit plans. The financing activities for the fiscal year
ended December 27, 2003 primarily included $4.2 million from the exercise of stock options and $1.2 million from capital
investments by our former minority interest owner.