Income before income taxes is summarized in the following table on a reporting segment basis (in thousands):
|Three Months Ended||Six Months Ended|
|June 24,||June 26,||Increase||June 24,||June 26,||Increase|
|Domestic company-owned restaurants (a)||$||9,358||$||7,421||$||1,937||$||21,679||$||18,304||$||3,375|
|North America franchising||16,619||16,240||379||34,759||34,249||510|
|Unallocated corporate expenses (b)||(10,025||)||(8,517||)||(1,508||)||(25,191||)||(18,286||)||(6,905||)|
|Elimination of intersegment losses (profits)||(481||)||150||(631||)||(471||)||(553||)||82|
|Income before income taxes||24,240||19,067||5,173||51,378||45,847||5,531|
|Incentive Contribution (income) expense||(250||)||-||(250||)||3,471||-||3,471|
|Income before income taxes, excluding Incentive Contribution||$||23,990||$||19,067||$||4,923||$||54,849||$||45,847||$||9,002|
|(a) The six months ended June 24, 2012 includes the benefit of a $1.0 million advertising credit from the Papa John’s Marketing Fund related to the Incentive Contribution.|
|(b) Includes the impact of the Incentive Contribution in 2012 ($250,000 increase for the three-month period and a $4.5 million reduction for the six-month period).|
The increase in income before income taxes for the three months ended June 24, 2012, of $4.9 million is primarily due to the following:
- Domestic company-owned restaurants operating income improved approximately $1.9 million primarily due to comparable sales increases as well as favorable commodity costs.
- Domestic commissaries income improved approximately $3.7 million primarily due to the increase in net units and comparable sales.
- North America Franchising and International improved due to the increase in net units and strong comparable sales results.
- These increases were slightly offset by higher unallocated corporate expenses of $1.5 million primarily due to an increase in short-term management incentive costs.
The increase in income before income taxes for the six months ended June 24, 2012, of $9.0 million is primarily due to the same reasons noted above.
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