Papa Johns 2010 Annual Report Download - page 64

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57
domestic franchisees to commit to purchase cheese through PJFS, or to pay the franchisee’s portion of
any accumulated cheese liability upon ceasing to purchase cheese from PJFS when a liability exists.
Accordingly, beginning in 2011, the consolidation of BIBP, or a similarly structured program, will no
longer have a significant impact on our consolidated statements of income.
The following table presents the actual average block price for cheese and the BIBP block price by
quarter in 2010, 2009 and 2008 and the projected 2011 average block price for cheese by quarter (based
on the actual average price for the month of January 2011 and the February 15, 2011 Chicago Mercantile
Exchange cheese futures prices for February 2011 through December 2011):
Projected
Market
2010 2009 2008 2010 2009 2008 2011
Quarter 1 1.431$ 1.184$ 1.904$ 1.595$ 1.621$ 1.608$ 1.679$
Quarter 2 1.407 1.178 1.996 1.529 1.479 1.754 1.778
Quarter 3 1.597 1.240 1.859 1.572 1.478 2.042 1.713
Quarter 4 1.578 1.548 1.748 1.645 1.608 1.831 1.685
Full Year 1.503$ 1.288$ 1.877$ 1.585$ 1.547$ 1.809$ 1.714$
BIBP Block PriceActual Block Price
The following table presents the 2010, 2009 and 2008 impact by quarter on our pre-tax income due to
consolidating BIBP (in thousands):
Actual Actual Actual
2010 2009 2008
Quarter 1 3,485$ 9,025$ (7,951)$
Quarter 2 2,678 6,854 (6,302)
Quarter 3 (658) 5,104 2,826
Quarter 4 (a) 15,449 1,560 887
Full Year 20,954$ 22,543$ (10,540)$
(a) Includes a reduction in BIBP’s cost of sales of $14.2 million in 2010 associated with PJFS’s
agreement to pay to BIBP for past cheese purchases an amount equal to its accumulated deficit as
of that date.