Papa Johns 2002 Annual Report Download - page 49

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48
2. Significant Accounting Policies (continued)
Earnings per Share
The calculation of basic earnings per common share and earnings per common share – assuming dilution
for the years ended December 29, 2002, December 30, 2001 and December 31, 2000 are as follows (in
thousands, except per share data):
2002 2001 2000
Basic earnings per common share:
Net income 46,797$ 47,245$ 31,824$
Weighted average shares outstanding 20,068 22,600 24,703
Basic earnings per common share 2.33$ 2.09$ 1.29$
Earnings per common share - assuming dilution:
Net income 46,797$ 47,245$ 31,824$
Weighted average shares outstanding 20,068 22,600 24,703
Dilutive effect of outstanding common stock options 232 153 204
Diluted weighted average shares outstanding 20,300 22,753 24,907
Earnings per common share - assuming dilution 2.31$ 2.08$ 1.28$
Options to purchase common stock with an exercise price greater than the average market price were not
included in the computation of the dilutive effect of common stock options because the effect would have
been antidilutive. The number of antidilutive options was 1.8 million in 2002, 3.0 million in 2001 and 3.7
million in 2000.
Accounting Changes
In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No.142, Goodwill and
Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. With the adoption
of SFAS No. 142, companies no longer amortize goodwill and intangible assets with indefinite useful
lives. Instead, goodwill and intangible assets with indefinite useful lives are subject to an annual review
for impairment. Other intangible assets will continue to be amortized over their useful lives and reviewed
for impairment. See Note 5 for additional information.
In 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, effective for the Company in fiscal year 2002. SFAS No. 144 superseded SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and
the accounting and reporting provisions of Accounting Principles Board Opinion No. 30, Reporting the
Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions. SFAS No. 144 required one accounting
model to be used for long-lived assets to be disposed of by sale, whether previously held or used or newly
acquired, and it broadened the presentation of discontinued operations to include more disposal
transactions. The adoption of SFAS No. 144 did not have a significant impact on our results of operations
or our consolidated financial statement presentation in 2002. See Note 6 for additional information.