Papa Johns 2008 Annual Report Download - page 48

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41
• All Others Segment. The “All others” reporting segment reported operating earnings of $9.2
million in 2008 compared to $6.3 million in 2007. The increase in operating income was
primarily due to favorable adjustments in remaining claims loss reserves associated with our
inactive captive insurance program and an increase in sales from our online operations.
• Unallocated Corporate Segment. Unallocated corporate expenses increased $4.7 million as
compared to 2007. The components of the unallocated corporate segment were as follows (in
thousands):
Year Ended
December 28,
2008
Year Ended
December 30,
2007
Increase
(decrease)
General and administrative (a) 16,372$ 17,515$ (1,143)$
Net interest 4,961 5,891 (930)
Depreciation 7,770 6,702 1,068
Marketing contributions (b) 3,900 400 3,500
Provisions for uncollectible accounts
and notes receivable (c) 4,082 203 3,879
Other expense (income) (d) (931) 743 (1,674)
Total unallocated corporate expenses 36,154$ 31,454$ 4,700$
(a) The decrease of $1.1 million in general and administrative costs was primarily due to our
initiative to reduce administrative costs in 2008, including travel expenses and employee
benefits, in response to the economic environment. Additionally, incentive compensation
expense decreased due to non-vested awards forfeited upon resignation by our former CEO
and other former members of management.
The following table summarizes our recorded expense (income) associated with our
management incentive programs (in thousands):
Year Ended
December 28,
2008
Year Ended
December 30,
2007
Equity compensation (1) 2,564$ 4,883$
Performance unit plan (2) 118 (1,198)
Management incentive bonus plan (3) 3,492 2,711
Total expense 6,174$ 6,396$
Decrease (222)$
(1) Stock options were awarded to management and members of our board of directors in
2006, 2007 and 2008. The 2006 option awards follow a two-year cliff-vesting period.
The 2007 and 2008 awards follow either a two-year cliff-vesting period or a three-year
graded vesting period. Additionally, we granted performance and time-based restricted
stock in 2006, 2007 and 2008. The 2006 and 2007 restricted stock grants were
performance-based and are subject to a three-year cliff-vesting period. The 2008
restricted stock grants were both performance-based and time-based and are subject to a
three-year cliff vesting period. At December 28, 2008, there was $3.5 million of
unrecognized compensation cost related to non-vested options and restricted stock, of