Papa Johns 2002 Annual Report Download - page 34

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33
Income Tax Expense. The effective income tax rate was 37.5% in 2002 compared to 37.7% in 2001.
Operating Income and Earnings per Common Share. Operating income in 2002 was $81.4 million, or
8.6% of total revenues, compared to $82.8 million, or 8.5% of total revenues in 2001.
Diluted earnings per share were $2.31 in 2002 compared to $2.08 in 2001. On a pro forma basis,
assuming the adoption of SFAS No. 142 in 2001, operating income would have been $85.6 million, or
8.8% of total revenues, and diluted earnings per share would have been $2.15 in 2001. The decrease in
2002 operating income as a percentage of sales as compared to the pro forma 2001 percentage is
primarily due to increased general and administrative and pre-opening and other general expenses,
partially offset by an increased restaurant operating margin.
In December 1999, we began a repurchase program for our common stock. Through December 29, 2002,
an aggregate of $345.7 million had been repurchased (representing 13.4 million shares, or approximately
43.9% of shares outstanding at the time the repurchase program was initiated, at an average price of
$25.87 per share). The repurchase of our common shares resulted in an increase in diluted earnings per
share of approximately $0.15 in 2002 as compared to 2001.
2001 Compared to 2000
Revenues. Total revenues increased 2.7% to $975.1 million in 2001, from $949.5 million in 2000.
Domestic Company-owned restaurant sales decreased 2.4% to $445.8 million in 2001, from $456.6
million in 2000. This decrease was primarily due to a 2.9% comparable sales decrease in 2001 along with
2000 having 53 weeks while 2001 was a 52-week year (a 1.9% decrease in operating weeks), partially
offset by a 4.0% increase in equivalent units.
Domestic franchise sales increased 7.3% to $1.30 billion in 2001, from $1.21 billion in 2000. This
increase primarily resulted from a 10.1% increase in the number of equivalent franchised domestic
restaurants open in 2001 compared to 2000 and a 1.2% comparable sales increase in 2001, partially offset
by the 1.9% decrease in operating weeks in 2001. Domestic franchise royalties increased 7.7% to $50.8
million in 2001, from $47.1 million in 2000, due to the increase in domestic franchise sales previously
described.