Papa Johns 2012 Annual Report Download - page 52

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46
Our Amended Credit Facility contains affirmative and negative covenants, including the following
financial covenants, as defined by the Amended Credit Facility:
Permitted Ratio
Actual Ratio for the
Year Ended
December 30, 2012
Leverage Ratio Not to exceed 2.5 to 1.0 0.8 to 1.0
Interest Coverage Ratio Not less than 3.5 to 1.0 5.2 to 1.0
Our leverage ratio is defined as outstanding debt divided by consolidated EBITDA for the most recent
four fiscal quarters. Our interest coverage ratio is defined as the sum of consolidated EBITDA and
consolidated rental expense for the most recent four fiscal quarters divided by the sum of consolidated
interest expense and consolidated rental expense for the most recent four fiscal quarters. We were in
compliance with all covenants for each of our 2012 quarters and at December 30, 2012.
Cash flow provided by operating activities was $104.4 million for the full-year 2012 as compared to
$101.0 million in 2011, primarily due to higher net income, partially offset by unfavorable working
capital changes.
Cash flow provided by operating activities increased to $101.0 million in 2011 from $92.6 million in
2010. The consolidation of BIBP increased cash flow from operations by approximately $6.8 million in
2010. Excluding the impact of the consolidation of BIBP, cash flow was $101.0 million in 2011 as
compared to $85.8 million in 2010, primarily due to higher net income and favorable working capital
changes, including deferred income taxes.
The Company’s free cash flow for the last three years was as follows (in thousands):
Dec. 30, Dec. 25, Dec. 26,
2012 2011 2010
Net cash provided by operating activities 104,379$ 101,008$ 92,581$
Gain from BIBP cheese purchasing entity - - (6,804)
Purchase of property and equipment (42,628) (29,319) (31,125)
Free cash flow (a) 61,751$ 71,689$ 54,652$
Year Ended
(a) We define free cash flow as net cash provided by operating activities (from the consolidated
statements of cash flows) excluding the impact of BIBP, less the purchases of property and
equipment. See “Items Impacting Comparability; Non-GAAP Measures” for more information
about this non-GAAP measure, its limitations and why we present free cash flow alongside the
most directly comparable GAAP measure.
We require capital primarily for the development, acquisition, renovation and maintenance of restaurants,
the development, renovation and maintenance of commissary facilities and equipment and the
enhancement of corporate systems and facilities, including technological enhancements. Purchases of
property and equipment amounted to $42.6 million, $29.3 million, and $31.1 million in 2012, 2011 and