Papa Johns 2006 Annual Report Download - page 90

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87
22. Segment Information (continued)
(in thousands) 2006 2005 2004
Property and equipment:
Domestic Company-owned restaurants 149,548$ 129,574$ 144,876$
Domestic commissaries 74,526 72,838 77,176
International 6,272 3,860 1,410
Variable interest entities 1,386 2,164 6,693
All others 20,881 13,907 11,880
Unallocated corporate assets 133,784 123,163 116,806
Accumulated depreciation and amortization (188,675) (167,059) (162,046)
Net property and equipment
197,722
$
178,447
$
196,795
$
Expenditures for property and equipment:
Domestic restaurants 21,034$ 6,276$ 6,611$
Domestic commissaries 1,721 783 9,197
International 312 2,277 172
All others 6,705 2,196 395
Unallocated corporate 9,580 6,014 4,575
Total expenditures for property and equipment
39,352
$
17,546
$
20,950
$
(1) The revenues from external customers for variable interest entities are attributable to the franchise
entities to which we have extended loans that qualify as consolidated VIEs. The intersegment
revenues for variable interest entities of $144.1 million in 2006, $151.9 million in 2005 and $138.2
million in 2004 are attributable to BIBP.
(2) The operating results for domestic Company-owned restaurants improved $7.9 million in 2006,
including $1.6 million related to the 53rd week of operations in 2006, and $20.2 million in 2005. The
2006 improvement is primarily due to fixed-cost leverage and related margin improvement associated
with a 3.6% increase in comparable sales and lower commodity costs (primarily cheese). The 2005
improvement, as compared to 2004, is primarily due to the fixed cost leverage associated with an
increase in comparable sales during 2005 and improved margin from an increase in restaurant
pricing, partially offset by increased commodity costs (principally cheese). Additionally, the
Company-owned operating results benefited from the gain of $2.2 million from the sale of 92
restaurants from three transactions.
(3) Domestic commissaries operating income increased $9.2 million in 2006 and $5.6 million in 2005 as
compared to 2004. Approximately $4.3 million of the increase in 2006 is due to the impact of the 53rd
week of operations, income from sales to the Six Flags, Inc. theme-park operator and the closing of
the Jackson, Mississippi facility in 2005. The 2005 improvement is due to improved operating
margin and lower administrative costs, partially offset by increased distribution costs as a result of
higher fuel costs and the pre-tax charge of $925,000 associated with the closing of the Jackson,
Mississippi facility.