Papa Johns 2008 Annual Report Download - page 56

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49
• International Segment. The international operating results, which exclude the Perfect Pizza
operations in the United Kingdom that were sold in March 2006, reported operating losses of
$8.7 million in 2007 as compared to losses of $8.9 million in 2006. Increased current year
revenues due to growth in number of units and unit volumes were substantially offset by
increased personnel and infrastructure investment costs. The 53rd week of operations in 2006 did
not have a significant impact on this segment.
• All Others Segment. The “All others” reporting segment reported operating earnings of $6.3
million in 2007 compared to $5.6 million in 2006. The increase of $720,000 in operating income
was due to improved operating results at our print and promotions operations, reflecting an
increase in our sales to commercial customers and improved operating results at our captive
insurance subsidiary and online operations. The 53rd week of operations in 2006 did not have a
significant impact on this segment.
• Unallocated Corporate Segment. Unallocated corporate expenses decreased approximately
$6.1 million. The impact of the 53rd week of operations in 2006 was approximately $300,000.
The components of the unallocated corporate segment are as follows (in thousands):
Year Ended
December 30,
2007
Year Ended
December 31,
2006
Increase
(decrease)
General and administrative 17,515$ 29,429$ (11,914)$
Net interest 5,891 1,584 4,307
Depreciation 6,702 6,226 476
Other expenses 1,346 284 1,062
Total expense 31,454$ 37,523$ (6,069)$
The decrease in general and administrative costs was primarily due to lower management
incentive costs (see additional discussion below) and lower costs with our workers’
compensation, non-owned automobile and health insurance programs. Net unallocated interest
expense increased approximately $4.3 million in 2007, as compared to 2006, principally due to a
higher average debt balance resulting from share repurchase activity under our share repurchase
program and franchise restaurant acquisitions during the last twelve months. Other expenses
increased due to costs associated with the disposition and write-down of certain assets to fair
value.
The following table summarizes our recorded expense (income) associated with our management
incentive programs (in thousands):
Year Ended
December 30,
2007
Year Ended
December 31,
2006
Equity compensation 4,883$ 4,707$
Performance unit plan (1,198) 2,503
Management incentive bonus plan 2,711 6,474
Total expense
6,396
$
13,684
$
Decrease
(7,288)
$