Popeye's 2015 Annual Report Download - page 84

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2015, 2014, and 2013 — (Continued)
The Company files income tax returns in the United States and various state jurisdictions. The U.S. federal tax years 2011
through 2014 are open to audit. In general, the state tax years open to audit range from 2011 through 2014.
Note 19 — Components of Earnings Per Share Computation
(in millions) 2015 2014 2013
Net income $ 44.1 $ 38.0 $ 34.1
Denominator for basic earnings per share — weighted average shares 22.7 23.3 23.6
Dilutive employee stock options 0.4 0.5 0.5
Denominator for diluted earnings per share 23.1 23.8 24.1
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 was $0.1 million in 2015 and was
not significant for the fiscal years 2014 and 2013.
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.
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