Papa Johns 2001 Annual Report Download - page 49

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45
3. Acquisitions and Divestitures
During 2001, we acquired 16 Papa John’s restaurants from franchisees for $5.5 million ($1.3 million in
cash, net of cash acquired, forgiveness of $3.5 million of notes payable to us and assumed liabilities of
$700,000). The allocation for these acquisitions resulted in goodwill of $3.3 million.
During 2000, we acquired 25 Papa John’s restaurants from franchisees for $8.9 million ($6.6 million in
cash, net of cash acquired, $1.6 million of assumed liabilities and forgiveness of notes payable to us of
$670,000). The allocation for these acquisitions resulted in goodwill of $6.9 million.
During 1999, we acquired 28 Papa John’s restaurants from franchisees for $11.0 million ($5.1 million in
cash, forgiveness of a $900,000 note payable to us, and assumed a $5.0 million note payable, which was
paid in 2000). The allocation for these acquisitions resulted in goodwill of $8.4 million.
On November 29, 1999, we acquired Perfect Pizza Holdings Limited (“Perfect Pizza”), a company
which operated and franchised 206 restaurants (12 Company-owned and 194 franchised) in the United
Kingdom, for $27.6 million in cash (net of cash acquired of $4.7 million). The allocation for this
acquisition resulted in goodwill of $30.9 million.
The business combinations in the previous paragraphs were each accounted for by the purchase method of
accounting, whereby operating results subsequent to the acquisition date are included in our consolidated
financial statements.
On March 28, 1999, we acquired Minnesota Pizza Company, LLC (“Minnesota Pizza”), a franchisee that
operated 37 Papa John’s restaurants in the Minneapolis/St. Paul, Minnesota market. We issued 128,119
shares of our common stock having a value of $5.4 million in exchange for all of the issued and
outstanding ownership interests of Minnesota Pizza. The transaction was accounted for as a pooling of
interests for financial reporting purposes and as a taxable transaction for income tax purposes.
The following table summarizes restaurant divestiture and other asset disposition activity during 2001,
2000 and 1999 (dollars in thousands):
2001 2000 1999
Number of restaurants sold 49 7 6
Cash proceeds received 6,732$ 170$ 29$
Notes receivable from franchisees 4,485 2,200 866
Total consideration 11,217$ 2,370$ 895$
Net pre-tax (losses) gains on restaurant and other
asset dispositions (1) (555)$ 200$ (1,400)$
(1) Gains and losses are included in pre-opening and other general expenses.