Papa Johns 2008 Annual Report Download - page 86

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79
5. Acquisitions
During 2007 and 2006 (no significant acquisitions in 2008), we acquired 63 and 65 Papa John’s
restaurants, respectively, as summarized below (dollars in thousands).
Acquistion Number of Cash Recorded
Month Location Restaurants Paid Goodwill
2007
Period 2 Pennsylvania 4 1,000$ 779$
Period 4 Georgia 13 7,400 6,465
Period 7 Missouri and Kansas 31 10,306 7,266
Period 8 Maryland 11 6,062 4,663
Other 4 215 -
Total 2007* 63 24,983$ 19,173$
2006
Period 2 Pennsylvania 3 568$ 361$
Period 6 Mexico City, Mexico 3 632 -
Period 8 Arizona 43 17,658 14,190
Period 10 North Carolina 11 8,800 7,995
Period 12 Beijing, China 5 4,285 3,592
Total 2006* 65 31,943$ 26,138$
*Substantially all of the remaining purchase price was allocated to acquired property and equipment.
The business combinations in 2007 and 2006 were accounted for by the purchase method of accounting,
whereby operating results subsequent to the acquisition date are included in our consolidated financial
statements. The goodwill associated with the above-mentioned acquisitions is eligible for deduction over
15 years under U.S. tax regulations.
6. Goodwill and Other Intangible Assets
Our consolidated balance sheets include $76.9 million and $86.5 million of goodwill at December 28,
2008 and December 30, 2007, respectively, net of accumulated amortization of $5.5 million and $6.2
million in 2008 and 2007, respectively. The changes in the carrying amount of goodwill by reportable
segment for the years ended December 28, 2008 and December 30, 2007 are as follows:
Variable
Domestic Interest All
(in thousands) Restaurants International Entities Others Total
Balance as of December 31, 2006 45,709$ 20,752$ 460$ 436$ 67,357$
Acquisitions 19,173 - - - 19,173
Other (16) (4) (5) - (25)
Balance as of December 30, 2007 64,866 20,748 455 436 86,505
Divestitures (11,392) - - - (11,392)
Impairment charge - (2,300) - - (2,300)
Consolidation of VIEs - - 4,101 - 4,101
Balance as of December 28, 2008 53,474$ 18,448$ 4,556$ 436$ 76,914$
See Notes 5 and 7 for discussions of acquisitions and dispositions of Company-owned restaurants.