Papa Johns 2015 Annual Report Download - page 45

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32
Items Impacting Comparability; Non-GAAP Measures
The following table reconciles our GAAP financial results to the adjusted (non-GAAP) financial results,
excluding the 2015 legal settlement expense for Perrin v. Papa John’s International, Inc. and Papa
John’s USA, Inc., a conditionally certified collective and class action that was settled in 2016. We present
these non-GAAP measures because we believe the legal settlement impacts the comparability of our
results of operations. For additional information about the legal settlement, see “Note 17” of “Notes to
Consolidated Financial Statements.”
Dec. 27, Dec. 28, Dec. 29
(In thousands, except per share amounts) 2015 2014 2013
Income before income taxes, as reported 119,147$ 114,255$ 106,109$
Legal settlement expense 12,278 - -
Income before income taxes, as adjusted
131,425
$
114,255
$
106,109
$
Net income, as reported 75,682$ 73,315$ 69,537$
Legal settlement expense 7,986 - -
Net income, as adjusted 83,668$ 73,315$ 69,537$
Diluted earnings per share, as reported 1.89$ 1.75$ 1.55$
Legal settlement expense 0.20 - -
Diluted earnings per share, as adjusted
2.09
$
1.75
$
1.55
$
Year Ended
The non-GAAP results shown above and within this document, which exclude the legal settlement,
should not be construed as a substitute for or a better indicator of the Company’s performance than the
Company’s GAAP results. Management believes presenting certain financial information without the
legal settlement is important for purposes of comparison to prior year results. In addition, management
uses this metric to evaluate the Company’s underlying operating performance and to analyze trends. See
“Results of Operations” for further analysis regarding the impact of the legal settlement.
In addition, we present free cash flow in this report, which is a non-GAAP measure. We define free cash
flow as net cash provided by operating activities (from the consolidated statements of cash flows) less the
purchases 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 our performance than the Company’s GAAP measures. See
“Liquidity and Capital Resources” for a reconciliation of free cash flow to the most directly comparable
GAAP measure.
The presentation of the non-GAAP measures in this report is made alongside the most directly
comparable GAAP measures.