Popeye's 2013 Annual Report Download - page 33

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17
approximately $1.7 million. The net impact of the 53rd week earnings per share was approximately $0.01
per diluted share.
(2) Factors that impact the comparability of sales by company-operated restaurants for the years presented
include:
(a) The Company opened nine, five and two company restaurants in 2013, 2012 and 2011, respectively. The
impact of new restaurant openings net of one closure in 2013 was an increase in company-operated sales
of $14.9 million in 2013 compared to 2012, $5.5 million in 2012 compared to 2011, and $1.3 million in
2011 compared to 2010.
(b) In 2009, the Company completed the re-franchising of 16 company-operated restaurants in its Nashville,
Tennessee and Atlanta, Georgia markets resulting in a decrease in 2010 revenues of $6.5 million as compared
to 2009 (net of franchise royalties earned).
(3) Factors that impact franchise royalties and fees include:
(a) Franchise revenues are principally composed of royalty payments from franchisees that are are generally
5% of franchise net restaurant sales. While franchise sales are not recorded as revenue by the Company,
management believes they are important in understanding the Company’s financial performance because
these sales are indicative of the Company’shealth, given the Company’s strategic focus on growing its
overall business through franchising. Total franchisee sales were $2.358 billion in 2013, $2.189 billion in
2012, $1.932 billion in 2011, $1.811billion in 2010, and $1.716 billion in 2009.
(b) In 2012, the Company completed an acquisition of twenty-seven restaurants in Minnesota and California.
The restaurants were in the trade image of another quick service restaurant concept. Twenty-six of the
acquired restaurants were converted into the Popeyes Louisiana Kitchen image and leased to Popeyes
franchisees to operate under our standard franchise agreement. The remaining restaurant property was sold
in 2013. Non-recurring franchise fees associated with twenty-four conversions completed in 2013 were
$5.5 million compared to $0.5 million for two conversions completed in 2012.
(4) Rent from franchised restaurants are composed of rents and percentage rents associated with properties leased
or sub-leased to franchisees. Percentage rents earned from twenty-six restaurant properties converted and
franchised in Minnesota and California increased rent from franchised restaurants $1.9 million in 2013 compared
to 2012. The assignment of leases to franchisees and lease terminations in 2013 and 2012 reduced rent from
franchised restaurants by $0.6 million in 2013 compared to 2012.
(5) Factors that impact the comparability of other expenses (income), net for the years presented include:
(a) During 2012, other income includes a$0.3 million gain on the sale of real estate to a franchisee and the
recognition of $0.5 million in deferred gains related to seven properties formerly leased to a franchisee.
(b) During 2011, the Company sold two properties to a franchisee for approximately $0.7 million and recognized
again of $0.5 million.
(c) The Company recognized $0.8 million in expense for the corporate support center relocation in 2011.
(d) During 2009, the Company sold ten real estate properties for again of approximately $3.6 million.
(e) During 2013, 2012, 2011, 2010, and 2009 disposals of fixed assets were approximately $0.4 million, $0.3
million, $0.5 million, $0.7 million, and $0.6 million, respectively.
(6) Factors that impact the comparability of interest expense, net for the years presented include:
(a) During 2013 we expensed $0.4 million as a component of interest expense, net in connection with the re-
financing of our 2013 Credit Facility.See Note 9to our Consolidated Financial Statements included in this
Form 10-K for details on the 2013 Credit Facility.
(b) In 2011, interest from term loans decreased $3.2 million compared to 2010 primarily due to lower interest
rates from the credit facility refinanced in 2010. See Note 9to our Consolidated Financial Statements
included in this Form 10-K for details on the 2010 Credit Facility.