Papa Johns 2005 Annual Report Download - page 81

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79
22. Segment Information (continued)
(4) Unallocated corporate expenses increased $20.1 million in 2005 and increased $6.8 million in 2004
as compared to 2003. The 2005 increase consisted primarily of the following: an increase in business
unit and corporate management bonuses of $7.3 million as a result of meeting pre-established
performance goals; an increase in employee benefits costs of approximately $1.6 million, which
primarily consists of payroll taxes associated with stock option exercises and an increase in the
amount of FICA taxes paid on employee tips and increased health insurance costs; increased
professional fees of $3.7 million related to consulting expenses associated with certain marketing and
franchisee effectiveness projects; an increase in equity compensation of $2.1 million primarily
related to the performance unit program offered to certain executive officers; a $1.8 million
contribution to the Marketing Fund; and a reduction in administrative expenses allocated to operating
units and other expenses of $5.5 million. Additionally, 2004 included a $1.9 million expense related
to certain lease accounting adjustments.
The increase in 2004 unallocated corporate expenses from 2003 is primarily due to: (1) $1.9 million
attributable to a lease adjustment to increase depreciation and rent expense, which was based upon a
review of our accounting for lease expense and depreciation of leasehold improvements; (2) $1.6
million in 2004 compensation expense attributable to stock options awarded in 2003 (no comparable
2003 expense); (3) the previously noted reduction in the corporate allocations to domestic
commissaries approximating $2.5 million; and (4) a reduction in the 2003 unallocated corporate
expenses due to the recognition of $2.0 million of income from the settlement of a litigation matter.
These increases were partially offset by decreases in insurance and benefits costs.
(5) Represents assets of VIE franchisees to which we have extended loans.
23. Quarterly Data - unaudited, in thousands, except per share data
Our quarterly financial data is as follows:
2005 1st 2nd 3rd 4th
Total revenues 248,637$ 238,675$ 233,100$ 248,376$
Operating income (loss) (1) 16,041 17,479 16,997 22,183
Income from continuing operations, net of tax (1) 9,397 10,417 10,403 14,051
Basic earnings (loss) per common share
from continuing operations (1) 0.28$ 0.31$ 0.30$ 0.42$
Earnings (loss) per common share from
continuing operations - assuming dilution (1) 0.28$ 0.31$ 0.30$ 0.41$
2004 1st 2nd 3rd 4th
Total revenues 232,446$ 235,922$ 223,561$ 243,417$
Operating income (loss) (2) 13,493 (4,522) 12,582 15,129
Income from continuing operations, net of tax (2) 7,648 (3,299) 7,067 8,621
Basic earnings (loss) per common share
from continuing operations (2) 0.21$ (0.09)$ 0.21$ 0.26$
Earnings (loss) per common share from
continuing operations - assuming dilution (2) 0.21$ (0.09)$ 0.21$ 0.25$
Quarter
Quarter