Papa Johns 2008 Annual Report Download - page 61

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54
Cash flow provided by operating activities from continuing operations increased to $73.1 million in 2008
from $61.6 million in 2007. The consolidation of BIBP decreased cash flow from operations by
approximately $10.5 million in 2008 and $31.7 million in 2007 (as reflected in the net income and
deferred income taxes captions in the accompanying “Consolidated Statements of Cash Flows”).
Excluding the impact of the consolidation of BIBP, cash flow from continuing operations was $83.6
million in 2008, as compared to $93.3 million in 2007. The $9.7 million decrease was primarily due to a
decrease in net income.
Cash flow provided by operating activities from continuing operations decreased to $61.6 million in 2007
from $85.2 million in 2006. The consolidation of BIBP decreased cash flow from operations by
approximately $31.7 million in 2007 and increased cash flow from operations $19.0 million in 2006.
Excluding the impact of the consolidation of BIBP, cash flow from continuing operations was $93.3
million in 2007 as compared to $66.2 million in 2006. The $27.1 million increase in 2007 was primarily
due to an increase in net income and an improvement in working capital including accounts receivable,
inventories and accounts payable.
During 2007 and 2006, we acquired 63 and 65 Papa John’s restaurants, respectively, (no significant
acquisitions in 2008) as summarized below (dollars in thousands):
Acquistion Number of Cash Recorded
Month Location Restaurants Paid Goodwill
2007
Period 2 Pennsylvania 4 1,000$ 779$
Period 4 Georgia 13 7,400 6,465
Period 7 Missouri and Kansas 31 10,306 7,266
Period 8 Maryland 11 6,062 4,663
Other 4 215 -
Total 2007* 63 24,983$ 19,173$
2006
Period 2 Pennsylvania 3 568$ 361$
Period 6 Mexico City, Mexico 3 632 -
Period 8 Arizona 43 17,658 14,190
Period 10 North Carolina 11 8,800 7,995
Period 12 Beijing, China 5 4,285 3,592
Total 2006* 65 31,943$ 26,138$
*Substantially all of the remaining purchase price was allocated to acquired property and equipment.
The restaurant acquisitions for 2007 and 2006 were accounted for by the purchase method of accounting,
whereby operating results subsequent to the acquisition are included in our consolidated financial results.
During 2008, we divested 62 Company-owned restaurants to franchisees. Total consideration for the sale
of the restaurants was $10.5 million, consisting of cash proceeds of $2.1 million and loans financed by
Papa John’s for $8.4 million. The annual revenues of the divested restaurants approximated $38 million.
We require capital primarily for the development, acquisition, renovation and maintenance of restaurants,
the development, renovation and maintenance of commissary and print and promotions facilities and
equipment and the enhancement of corporate systems and facilities. Purchases of property and equipment