Papa Johns 2010 Annual Report Download - page 95

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88
18. Employee Benefit Plans (continued)
PJUK, the Company’s United Kingdom subsidiary, provided a pension plan that was frozen in 1999.
There are approximately 21 participants in the PJUK pension plan. The Company recorded expense of
$258,000, $260,000 and $312,000 associated with the pension plan for the fiscal years ended 2010, 2009
and 2008, respectively. The future annual contributions and expense to the PJUK pension plan are
expected to approximate $260,000.
19. Segment Information
We have defined six reportable segments: domestic restaurants, domestic commissaries, domestic
franchising, international operations, variable interest entities (VIEs) and “all other” units.
The domestic restaurant segment consists of the operations of all domestic (“domestic” is defined as
contiguous United States) Company-owned restaurants and derives its revenues principally from retail
sales of pizza and side items, such as breadsticks, cheesesticks, chicken strips, chicken wings, dessert
pizza and soft drinks to the general public. The domestic commissary segment consists of the operations
of our regional dough production and product distribution centers and derives its revenues principally
from the sale and distribution of food and paper products to domestic Company-owned and franchised
restaurants. The domestic franchising segment consists of our franchise sales and support activities and
derives its revenues from sales of franchise and development rights and collection of royalties from our
domestic franchisees. The international operations segment principally consists of our Company-owned
restaurants and distribution sales to franchised Papa John’s restaurants located in the United Kingdom,
Mexico and China and our franchise sales and support activities, which derive revenues from sales of
franchise and development rights and the collection of royalties from our international franchisees. VIEs
consist of entities in which we are the primary beneficiary, as defined in Note 3, and include BIBP. All
other business units that do not meet the quantitative thresholds for determining reportable segments
consist of operations that derive revenues from the sale, principally to Company-owned and franchised
restaurants, of printing and promotional items, risk management services, and information systems and
related services used in restaurant operations and certain partnership development activities.
Generally, we evaluate performance and allocate resources based on profit or loss from operations before
income taxes and eliminations. Certain administrative and capital costs are allocated to segments based
upon predetermined rates or actual estimated resource usage. We account for intercompany sales and
transfers as if the sales or transfers were to third parties and eliminate the related profit in consolidation.