Papa Johns 2003 Annual Report Download - page 58

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57
10. Insurance Reserves (continued)
In addition, beginning in October 2000, our wholly-owned captive insurance subsidiary, RSC, began
providing insurance coverage to franchisees that elect to participate. The insurance provided by the
captive insurance subsidiary is principally workers’ compensation, general liability, property and owned
and non-owned automobile programs.
During 2003, based on updated actuarial valuations, we recorded a $6.3 million increase in existing claim
loss reserves at our captive insurance company, as compared to expected claims costs, which are
included in other operating expenses within the Domestic commissary and other expenses section in the
accompanying consolidated statements of income.
The Company’s estimated liability for claims loss reserves associated with the franchise insurance
program are $15.9 million at December 29, 2003 and $8.3 million at December 29, 2002, and are
included in other long-term liabilities in the accompanying consolidated balance sheets. Investments of
$7.5 million for 2003 and $7.7 million for 2002 are held by the captive insurance subsidiary to fund these
estimated liabilities and are classified as long-term investments in the accompanying consolidated
balance sheets.
We are a party to stand-by letters of credit with off-balance sheet risk associated with our insurance
programs and with RSC. The total amount committed under letters of credit for these programs was
$21.5 million at December 28, 2003.
11. Accrued Expenses
Accrued expenses consist of the following (in thousands):
2003
2002
Insurance reserves
18,478
$
12,247
$
Accrued salaries and benefits
6,154
6,847
Accrued purchases
2,546
2,579
Rent
2,231
2,341
Restaurant closures
1,559
1,256
Consulting and professional fees
1,562
504
Marketing
1,198
1,028
Utilities
1,118
901
Obsolete inventory and equipment disposals
886
1,633
Accrued interest
245
464
Other
4,311
4,858
Total
40,288
$
34,658
$