Papa Johns 2009 Annual Report Download - page 62

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55
2008 and $31.7 million in 2007. Excluding the impact of the consolidation of BIBP, cash flow was $83.6
million in 2008 as compared to $93.3 million in 2007. The $9.7 million decrease was primarily due to a
decrease in net income.
The Company’s free cash flow for the last three years was as follows (in thousands):
Dec. 27, Dec. 28, Dec. 30,
2009 2008 2007
Net cash provided by operating activities 100,913$ 73,063$ 61,591$
Gain (loss) from BIBP cheese purchasing entity (22,543) 10,540 31,709
Purchase of property and equipment (33,538) (29,271) (31,148)
Free cash flow (a) 44,832$ 54,332$ 62,152$
Year Ended
(a)
Free cash flow is defined as net cash provided by operating activities (from the consolidated
statements of cash flows) excluding the impact of BIBP, less the purchase of property and
equipment. We view free cash flow as an important measure because it is one factor that
management uses in determining the amount of cash available for discretionary investment. Free
cash flow is not a term defined by GAAP and as a result our measure of free cash flow might not
be comparable to similarly titled measures used by other companies. Free cash flow should not
be construed as a substitute for or a better indicator of the Company’s performance than the
Company’s GAAP measures.
During 2007, we acquired 63 Papa John’s restaurants (no significant acquisitions in 2008 or 2009), 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$
*Substantially all of the remaining purchase price was allocated to acquired property and equipment.
The restaurant acquisitions for 2007 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 (no significant divestitures in
2009 or 2007). Total consideration for the sale of the restaurants was $10.5 million, consisting of cash