Papa Johns 2006 Annual Report Download - page 31

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28
is effective for the Company in fiscal 2007. The adoption of FIN 48 during the first quarter of 2007 is
not expected to have a significant impact on our net income, financial condition or effective tax rate.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 requires
companies to determine fair value based on the price that would be received to sell the asset or paid to
transfer the liability to a market participant. SFAS No. 157 emphasizes that fair value is a market-based
measurement; not an entity-specific measurement. The effective date of SFAS No. 157 will be the first
quarter of 2008. We have not determined the impact, if any, of adopting SFAS No. 157.
Percentage Relationships and Restaurant Data and Unit Progression
The following tables set forth the percentage relationship to total revenues, unless otherwise indicated, of
certain income statement data, and certain restaurant data for the years indicated.
Year Ended
Dec. 31, Dec. 25, Dec. 26,
2006 2005 2004
Income Statement Data:
Domestic revenues:
Company-owned restaurant sales 44.7% 44.9% 44.6%
Variable interest entities restaurant sales 0.8 1.2 1.6
Franchise royalties 5.6 5.4 5.4
Franchise and development fees 0.3 0.3 0.3
Commissary sales 41.2 41.1 40.7
Other sales 5.0 5.2 5.7
International revenues:
Royalties and franchise and development fees 0.8 0.7 0.5
Restaurant and commissary sales 1.6 1.2 1.2
Total revenues 100.0 100.0 100.0
Costs and expenses:
Domestic Company-owned restaurant cost of sales (1) 19.7 21.5 24.2
Domestic Company-owned restaurant operating expenses (1) 57.9 58.2 60.3
Variable interest entities restaurant expenses (2) 85.4 87.0 88.0
Domestic commissary and other expenses (3) 89.3 90.9 92.0
Loss (income) from the franchise cheese purchasing program, net of
minority interest (4) (1.5) (0.5) 1.8
International operating expenses (5) 101.1 100.0 98.9
General and administrative expenses 10.3 9.1 7.7
Minority interests and other general expenses 0.4 0.7 0.3
Depreciation and amortization 2.7 3.0 3.4
Total costs and expenses 90.2 92.5 96.0
Operating income 9.8 7.5 4.0
Net interest expense (0.2) (0.3) (0.5)
Income from continuing operations before income taxes 9.6 7.2 3.5
Income tax expense 3.3 2.6 1.3
Income from continuing operations 6.3 4.6 2.2
Income from discontinued operations, net of tax (6) 0.0 0.2 0.3
Net income 6.3% 4.8% 2.5%