Papa Johns 2010 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2010 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

39
approximately $200,000 lower in 2010 than in the corresponding period, despite an increase of
90 domestic unit openings during 2010. Additionally, we incurred incentive costs of $1.0 million
in 2010, compared to $440,000 in 2009.
•
International Segment. The international segment reported operating losses of approximately
$3.5 million in 2010 and $3.1 million in 2009. The increase in operating losses was due to
increased personnel and franchise support costs as well as from costs associated with the opening
of our new commissary in the United Kingdom, partially offset by increased revenues due to
growth in the number of international units.
•
All Others Segment. Operating income for the “All others” reporting segment decreased
approximately $850,000 in 2010 as compared to 2009. The decrease was primarily due to
increased costs in our online ordering business due to increased infrastructure and support
attributable to the new online ordering system introduced in October 2010. This decline was
partially offset by an improvement in operating results at Preferred, primarily due to cost
reductions implemented in 2009 and 2010.
•
Unallocated Corporate Segment. Unallocated corporate expenses decreased approximately
$6.5 million in 2010 as compared to 2009. The components of unallocated corporate expenses
were as follows (in thousands):
Year Ended Year Ended
December 26,
2010
December 27,
2009
Increase
(Decrease)
General and administrative (a) 25,823$ 26,893$ (1,070)$
Net interest 4,120 4,251 (131)
Depreciation 8,873 8,684 189
Franchise support initiatives (b) 6,489 9,556 (3,067)
Provision (credit) for uncollectible
accounts and notes receivable (c) (340) 1,172 (1,512)
Other income (d) (1,699) (801) (898)
Total unallocated corporate expenses
43,266
$
49,755
$
(6,489)
$
(a) Unallocated general and administrative (G&A) costs decreased in 2010 due to lower costs of
salaries and benefits, resulting from fewer employees and the fact that the prior year
included $800,000 in litigation settlement costs. Severance costs, net of forfeitures of
unvested stock awards, were approximately $900,000 in 2010, as compared to $1.3 million
in 2009. These reductions were partially offset by an increase in short-term incentive
compensation expense.