Papa Johns 2010 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 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

45
Discussion of Operating Results
Our income before income taxes, net of noncontrolling interests, totaled $86.4 million in 2009, as
compared to $56.8 million in 2008 as summarized in the following table on an operating segment basis
(in thousands):
Increase
2009 2008 (Decrease)
Domestic Company-owned restaurants 34,894$ 19,997$ 14,897$
Domestic commissaries 29,393 30,235 (842)
Domestic franchising 53,690 53,610 80
International (3,050) (7,193) 4,143
All others 2,697 9,175 (6,478)
Unallocated corporate expenses (49,755) (36,154) (13,601)
Elimination of intersegment profits (218) (332) 114
Income before income taxes, excluding variable interest entity 67,651 69,338 (1,687)
BIBP, a variable interest entity 22,543 (10,540) 33,083
Total income before income taxes 90,194 58,798 31,396
Income attributable to noncontrolling interests (3,756) (2,022) (1,734)
Total income before income taxes, net of noncontrolling interests
86,438
$
56,776
$
29,662
$
Excluding the impact of the consolidation of BIBP (pre-tax income of $22.5 million or $0.52 per diluted
share in 2009 and pre-tax loss of $10.5 million or $0.24 per diluted share in 2008), 2009 income before
income taxes, net of noncontrolling interests, was $63.9 million (5.8% of total revenues), compared to
$67.3 million (5.9% of total revenues) in 2008. The $3.4 million decrease in income before income taxes,
net of noncontrolling interests (excluding the consolidation of BIBP), was principally due to the
following:
•
Domestic Company-owned Restaurant Segment. Domestic Company-owned restaurants’
operating income increased $14.9 million over the prior year, comprised of the following (in
thousands):
Year Ended Year Ended
December 27, December 28,
2009 2008 Increase
Operating income, excluding
impairment and disposition losses 35,551$ 26,515$ 9,036$
Impairment and disposition losses (657) (6,518) 5,861
Total segment operating income
34,894
$
19,997
$
14,897
$
The increase of $9.0 million in 2009 as compared to 2008 in domestic Company-owned
restaurants’ income from operations, excluding impairment and disposition losses, was primarily
due to lower commodity costs and the sale of 62 restaurants in late 2008 that were collectively
unprofitable.
Restaurant operating margin on an external basis was 21.8% in 2009 compared to 18.5% in 2008.
Excluding the impact of the consolidation of BIBP, restaurant operating margin was 20.7% in
2009 compared to 18.9% in 2008.