Papa Johns 2003 Annual Report Download - page 39

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38
selling price over time. As a result, for any given quarter, the established price paid by the Company may
be less than or greater than the prevailing average market price. Over the long term, we expect to
purchase cheese at a price approximating the actual average market price, with less short-term volatility.
However, actual cheese market price volatility may significantly impact our operating results beginning
in 2004 as a result of the adoption of new accounting guidance effective as of 2003 year-end requiring
the consolidation of BIBP. See “Note 3” of “Notes to Consolidated Financial Statements” for further
information.
The average quarterly block market price and the equivalent block market price paid by Papa John’s
through purchases by BIBP by quarter for 2003, 2002 and 2001 are as follows:
2003
2002
2001
2003
2002
2001
Quarter 1
1.115
$
1.254
$
1.192
$
1.159
$
1.403
$
1.086
$
Quarter 2
1.134
1.205
1.536
1.122
1.323
1.102
Quarter 3
1.536
1.129
1.697
1.242
1.450
1.497
Quarter 4
1.474
1.155
1.323
1.217
1.290
1.749
Full Year
1.315
$
1.186
$
1.437
$
1.185
$
1.367
$
1.359
$
Price Paid by Papa John's
Block Market Price
We do not generally make use of financial instruments to hedge commodity prices, in part because of the
purchasing arrangement with BIBP.