Popeye's 2013 Annual Report Download - page 72

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2013, 2012, and 2011 — (Continued)
56
The Company recorded $5.4 million ($3.4 million net of tax), $4.9 million ($3.1 million net of tax), and $2.9 million
($1.9 million net of tax), in total stock-based compensation expense during 2013, 2012, and 2011, respectively.
Subsequent Events.The Company discloses material events that occur after the balance sheet date but before the
financial statements are issued. In general, these events are recognized if the condition existed at the date of the balance
sheet, but not recognized if the condition did not exist at the balance sheet date. The Company discloses non-recognized
events if required to keep the financial statements from being misleading.
Derivative Financial Instruments. The Company used interest rate swap agreements to reduce its interest rate risk
on its floating rate debt under the terms of its 2010 amended credit facility.The Company recognizes all derivatives
on the balance sheet at fair value. At inception and on an on-going basis, the Company assesses whether each derivative
that qualifies for hedge accounting continues to be highly effective in offsetting changes in the cash flows of the hedged
item. If the derivative meets the hedge criteria as defined by certain accounting standards, changes in the fair value of
the derivative are recognized in accumulated other comprehensive income (loss) until the hedged item is recognized
in earnings. The ineffective portion of a derivative’s change in fair value, if any, is immediately recognized in earnings.
Reclassifications. In the accompanying consolidated financial statements and in these notes, certain prior year
amounts have been reclassified to conform with current year's presentation. "Rent from franchised restaurants" and
"Occupancy expenses - franchise restaurants" on the Consolidated Statements of Operations were "Rent and other
revenues" and "Rent and other occupancy expenses", respectively, in prior years.
Note 3 — Recent Accounting Pronouncements That the Company Has Not Yet Adopted
Accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption
until afuture date are expected to have an immaterial impact on the financial statements upon adoption.
Note 4 — Other Current Assets
(in millions) 2013 2012
Deferred tax assets $ — $ 0.3
Prepaid income taxes 5.2 —
Prepaid expenses and other current assets 4.6 3.9
$9.8 $4.2
Note 5— Property and Equipment, Net
(in millions) 2013 2012
Land $ 16.0 $12.1
Buildings and improvements 60.8 43.2
Equipment 33.3 23.3
Properties held for sale and other 0.1 0.7
110.2 79.3
Less accumulated depreciation and amortization (32.6)(28.0)
$77.6 $51.3
The increase in property and equipment, net in 2013 was primarily due to the construction of new company-operated
restaurants and the conversion of the acquired restaurant properties in Minnesota and California.