Papa Johns 2006 Annual Report Download - page 74

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71
7. Goodwill and Other Intangible Assets
Our consolidated balance sheets include $67.4 million and $41.9 million of goodwill at December 31,
2006 and December 25, 2005, respectively, net of accumulated amortization of $6.2 million in 2006 and
2005. The changes in the carrying amount of goodwill by reportable segment for the years ended
December 31, 2006 and December 25, 2005 are as follows:
Variable
Domestic Interest All
(in thousands) Restaurants International Entities Others Total
Balance as of December 26, 2004 20,343$ 19,096$ 2,752$ 436$ 42,627$
Sale of VIEs - - (2,292) - (2,292)
Acquisitions 3,506 - - - 3,506
Sale or closure of restaurants (969) - - - (969)
Impairment charge - (982) - - (982)
Other - (12) - - (12)
Balance as of December 25, 2005 22,880 18,102 460 436 41,878
Acquisitions 22,546 3,592 - - 26,138
Sale of Perfect Pizza - (942) - - (942)
Final adjustments to 2005 acquisitions 283 - - - 283
Balance as of December 31, 2006 45,709$ 20,752$ 460$ 436$ 67,357$
The $2.8 million goodwill balance as of December 26, 2004 resulted from the consolidation of four
franchise entities as required by FIN 46 (see Note 5). During 2005 and 2006, two of the franchise
entities sold their restaurants to third parties; accordingly, we are no longer consolidating the entities
and have reduced goodwill accordingly.
The reduction in International goodwill in 2005 is a result of the $1.1 million impairment charge
associated with our United Kingdom subsidiary.
See Notes 4, 6 and 8 for discussions of acquisitions and dispositions.