Popeye's 2014 Annual Report Download - page 85

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2014, 2013, and 2012 — (Continued)
67
Note 19 — Components of Earnings Per Share Computation
(in millions) 2014 2013 2012
Net income $ 38.0 $ 34.1 $ 30.4
Denominator for basic earnings per share — weighted average shares 23.3 23.6 23.9
Dilutive employee stock options 0.5 0.5 0.6
Denominator for diluted earnings per share 23.8 24.1 24.5
The Company’s basic earnings per share calculation is computed based on the weighted-average number of common shares
outstanding. Diluted earnings per share calculation is computed based on the weighted-average number of common shares
outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common
shares been issued. Potentially dilutive common shares include employee stock options, outstanding restricted stock awards and
unvested restricted share units. Performance based awards are included in the average diluted shares outstanding each period if
the performance criteria have been met at the end of the respective periods.
Potentially dilutive shares are excluded from the diluted earnings per share computation in periods in which they have an anti-
dilutive effect. The weighted average number of shares subject to antidilutive options were not significant for the fiscal year 2014,
2013 and 2012.
Note 20 — Segment Information
The Company is engaged in developing, operating and franchising Popeyes Louisiana Kitchen quick-service restaurants. Based
on its internal reporting and management structure, the Company has determined that it has two reportable segments: franchise
operations and company-operated restaurants. The company-operated restaurant segment derives its revenues from the operation
of company owned restaurants. The franchise segment consists of domestic and international franchising activities and derives its
revenues principally from (1) ongoing royalty payments that are determined based on a percentage of franchisee sales; (2) franchise
fees associated with new restaurant openings; (3) development fees associated with the opening of new franchised restaurants in
a given market; and (4) rental income associated with properties leased or subleased to franchisees.