Re: | Panera Bread Company |
1. | Please tell us and disclose how you account for gift cards sold to wholesalers, including any associated commissions, discounts and fees. |
($ in 000's) | Fiscal 2012 | Fiscal 2011 | Fiscal 2010 |
Balance of deferred direct costs - end of fiscal year | $5,240 | $3,634 | $2,587 |
As a percentage of Accrued expenses | 2.0% | 1.6% | 1.3% |
Direct costs recognized | $2,413 | $1,699 | $1,208 |
As a percentage of Bakery-cafe sales, net | 0.1% | 0.1% | 0.1% |
2. | We note the following in regard to your accounting policy for landlord allowances and incentives: “the Company records landlord allowances for structural tenant improvements as a reduction of property and equipment, net in the Consolidated Balance Sheets resulting in decreased depreciation expense over the reasonably assured lease term.” Please explain to us how your treatment complies with ASC 810-20-25-6. Note it has been staff’s position that it is not appropriate to net deferred rent against leasehold improvements in regard to operating leases. For each of the last three fiscal years, please quantify for us the gross amount of landlord allowances and incentives recognized related to structural tenant improvements, the impact on depreciation expense and where in the statement of cash flows the gross amount recognized is reported. |
• | the lease specifically requires the lessee to make the improvement; |
• | the improvement is fairly generic; |
• | the improvement increases the fair value of the property to the lessor; and |
• | the useful life of the improvement is longer than the lease term. |
(in 000's) | Fiscal 2012 | Fiscal 2011 | Fiscal 2010 |
Reimbursements for lessor assets | $10,202 | $7,934 | $6,988 |
• | the lease specifically requires the lessee to make the improvement; |
• | the improvement is fairly generic; |
• | the improvement increases the fair value of the property to the lessor; and |
• | the useful life of the improvement is longer than the lease term. |
3. | We note your statement that “The operating profit related to the sales to company-owned bakery cafes is classified as a reduction of the costs in the cost of food and paper products in the Consolidated Statements of Comprehensive Income” in regard to the fresh dough and other product operations segment. Please explain to us why your treatment is appropriate, as we would expect intercompany profit and related intercompany sales and expenses to be eliminated in consolidation in the consolidated financial statements. Tell us the amount of operating profit of the fresh dough and other product operations segment included in the consolidated statements of comprehensive income for each period presented. |
(in 000's) | Fiscal 2012 | Fiscal 2011 | Fiscal 2010 |
Fresh dough and other product sales to franchisees | $ 148,701 | $ 136,288 | $ 135,132 |
Fresh dough and other product cost of sales to franchisees | (131,006) | (116,267) | (110,986) |
Operating profit of Fresh Dough Segment | $ 17,695 | $ 20,021 | $ 24,146 |
4. | Please include a discussion to accompany the table that provides investors with an understanding of the reasons for the material decreases in the amounts presented here. Address any known trend that such decreases may represent and the associated impact on future results, as appropriate. Provide us with a copy of your intended disclosure. |
5. | We note that cash flows provided by operating activities decreased by approximately $8 million in the current year period compared to the corresponding prior year period. From the cash flow statement it appears there was a favorable change in “prepaid expenses and other” of approximately $17 million and an unfavorable change in “accrued expenses” of approximately $74 million that contributed to the variance in operating cash flows. Please provide an analysis of the factors associated with these changes and how they directly affected your cash provided by operations. Discuss any other material items and their underlying factors directly contributing to your operating cash flows and the variance therein. Provide us with a copy of your intended disclosure. |
• | the Company is responsible for the adequacy and accuracy of the disclosure in its filings; |
• | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
• | the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
N,>%X9>"Q?P!&H?`99``R20#:(P!)9X`4``#BW:
M"J6`[Q-"Y!("!\]FS4QZAP^!$%JB&QOE%N>!)N#X`[A\=1ZQ>L8P`"J@#*D`
M#-Z0F52@`ADP!PQ0YY2S)7[R%YR7+@FQ"5L1$X3RB8JC&A3Q3%RQ)KN.>@DA
M#4DH*0JR"1'S&+8CWV`1`]4\LOK_RB)]=U+1?3ZU5Y$G7!>401E!TKF;C_CSH')P1#KYPFWOK$F!1";-OGS%ZJ4J`>N1'TP]4':@U&C
M:DUD-NL`08P8G?T2-8N9JDV>7+E2!7*4JEH#0VX:Y>J7*X&;2G'<,!"C)Y4Q
M=?ZP6`N#J(Q!A6+\(+`6LTW9&(@"BG%3TZ%1I0K=@.J%8=;)"`,0+5)1^8
MGIB(5.G?)TQ4"$CC8,+2OTF3(OW3I6L2)[S*Y%ZZQ`/3/TQG_@TF/'@%C;*3
M,$6:5-CQ8$N5*D4"-8)3+QA#I&$8Y4\42XFU1@D4% N+X&5"D(J018`
M$#OL@`G@@">H0DXN3"M0RE ]EWR
M227>H"@`+I%V%$FI0-9722-/,0!.+ %(5&R6+#$G4)`!!"P``1@`9C`(CY@_P)88`H9
M:SVCX`\0H`%-$)RU)!Z<0``8(`"W]@]7%&Z8D`1X2@#*(`L6^)/"Y;&X``.'
M8089L`0"<`X/\RT&257M16QG`@R,%P$]Z`("P#B<<`JY@*U3X"X!8`*3ZJ]N
MJ[.<]@\:,Z"1LC1/D`5I4`%OY0);]0NB,`,&Y@DQ8`,9\`H"D+=9LP:A``EY
M$*<8P`PV``QED`]C<`]E4@&[!`L4,
MM8`%H@`.&A`C`F`&3U`!G)`/&(`'U40*V9`!+.,-W2(E&2``2V`"1_0/$B`!
M)D`#.\`.E_`*F[)72"0+V2 "$)B@!)P(O<(P+.
MH(95`(8P,(7=,:;W,@S.3*X(4(#$A`_L\4RR`2"]7`A=L*K70`5,H`)0(((Q
M*((5F*!C')OCVDN^[!!,:(`A:``3F``*D"[J"Q"2(!O3(`IND:X?<:CJ0(S'
MH`Y,``:VC(Q(@(XG_W@#&SB!)R`)^2`D%R&!"?B"%I"&`!@#8'BACP"2!LB&
M`Z``"["$CL`%?;L%6="$5-`>ZF,F](H.\XF`57BH,3B`(2`!BA,"U_@N>S.5
M#`F]D4":>(2%50!!#M&>*6F#)["!6AP%4K`*JR.%15R/0T*/0(`&`1"!4K@&
M3#*1+`"'36"&61`%4"12?W`%+;A(6=B!,>`R5+`JAS@,$KBP']@;"@"`!=@$
M9X"#41":]0&&`8B!#^"`,1``@%.+::@`7V@#DR"D5S`Y+<@&EBP*C#!(HG$>
M+8B66K``AZ`$"B&;' !!"!@
M`7R"'6HP/@!@#_"``*H/&)IV!(ZF[2AA&LY#0 \_YQ#$GTCIL1
MP4030F"#)QC%)PS3@2>B<#JR`"\-%3!) U@!AD`/)(R7*@&`?QUD6D`IZTPGNDD/&45?ATBT"4`L;,`NJ
ML`D7T`2PH`Z5@%LD0`.X0)5VYWHQD1)9`PP50*E_XQ"<,Q/!X)X6('4)<@U2
M8`+_G'`*Q]"(JX07#@`!%/`X(2`*X)`!:?&L[H(2SL*'G_`$;@`.P5@SIG`-
M..>?*`D+&2@6Y)`#6747RF.?D7D)F%D"#^`)KC`"Q<(Y92@$;:`R.5`4A4:I
MEI`%#<`.@[&9JY06DR`\KZ (PD>G$K[.(``'8`F)(*UVP
M'@9YC7_@`6@``2JX`$^@`'7[EMJP.*65@@:YA-8Q"YFIC3:P@%S($Y>3E$J8
M!NU@+]JP@!,P_P$J4"PCC!`4@84SR(4]::U/+(97&($F:,I2*`4@*(%44`94
M.`;;(!%*\($2&`)I4`+?R``3@(:!:@^;J8]]:0`=4`/XF[]@X@L)\`8W_)"6
MM4:%CWN`M4'0Z<>*IZU%S)G@%2\(1"5",\QB1*(88I@$*73C3`G6@A"R4QHE<
MM.\?T&B*,J:`@U!X+1L-0`F0J+E,KO2B$I2@0@EL4*D>.,`7_Q#&)6#PB5.@
M(1*^&-0E*@'%2HQ!%!N(@0A2L0-UC&$""\,/?##``(S4;A2J&.,'\#,$">A"
M#&C_.08,UC`!(/1`&@L(!0T=($FK"$$7EH@`*I(P!0M0\"_N:ZD0`%B2"G!"
M`VD-0`E8>HPU\5650O`+D%)B@0EL0!RD(`51X"-:T8XB%,S@0`B(``).C,`%
M0!"%HSRQA1Y,803"8,DX?;$"%"2K*$89RJA`$T*P!@4T0!>@
ML`0(:$`!3]A*%!+]12FX\0%FU/,#H:@%`$*`B3Z)P0%*8(#%/+,%9M1B$T&[
MR`S>2%&+=8$4`VA``\8`@`.H`B.UF`\_X5,+X!&XP`1VAC]$D0U=`&,$TH1)
M2E@"BTD80@R@6`$)+G`"6>(:4X`&
M)3BQ)*Q0PCO>: XH&C8H;.`1;8
M@0869&F*H`&UN:B:(`_FP`6\YF?5Y#!*J0+.I"HJYC+1;94LB1-*(`_`R!5^
M80AT0#PG@`.^X`LD0``T0078TX-4#BY"`HGJ(`1@)QN(X(P:Z!/``F^P9HH2
M(K(H01!@8`-$P`1"!!;,N5.24@AV(!(L0`72X!&?)&',=C&85`5#PA<`T$N&
M800:H!`@P`94(!=\0!ELI$6.@0V``01*FD:$=PDZ``<80`*X2^-R:1@H`1@>
MX`,F``97*0"@$$32D!3+X"8M*PL+B%+*"$Q
M?GHJR,$54>$#:0`8GF``0DTHQ_@`5$$AOUH%3L$"VL`2:B4,_.$TN*`+0VT4
M\B!(]FX3@P`D1\"B'PGRY(`8N,"*>P``-8%TQ&[$@
MD`4#$P,90`GR*09Z,`'1H`228!_A47[_H`ST,0E%)`:G6!BRK.<(M@D4<`D0
MH@LT4!\>6S,P<+`?H`8G\`J&$+!48`$;_0$=(`%YL`FEZFL)U@+9`$"UX#>2
M=PF9Z`FSX)X/D`218`)*0`%/(-B(]`\68`-.L?\`9OX)WS1IGR`)56U^9L(Q
MJ;T*:2`!S``$17`NDOT)-#`&ZY+J<41=E&`!P(`XYD$C30J0B`$.,#`91"P2
M7:`$08`*)?`!<#`#1[`!0+!>(S`"$=*73)T+6U,))``!:C``OK`1-VQ.#&+`
M/CDJ23,)/+!.LUX)L'A<)J`!9?`$`Z`!$-*Y4.T+2`0I7D15\<=9`@XI0XN[
MD-DM.//0Y,$)E`LI&8?OKB5V)&M93
*H+"X0BE;DP`*4
M0`6?BD&`29`C7A4H`>2`,3X3G```HI`"<^P3"G!(H0'`T,4_-"$"3P3`%`(@
M!S"`8#VDT6"N5R/`"'X"Q/1XY(67P(0.,+`)*8`B`KEH5G0B\)TUHN(<>_(/
M)20V"1E>_R<2;4B""9(`C1'"D!'&B$.*C`V/&))0$/J&@#=F@(8<`>7QB5C_"0#]R@?$.QHJB$<*`1
M%4H(6-B'0(.%:X*,ON.$+#`#9E"#5%@UVAN#6MB$`!`#!QB`(K"`<%@%/JF`
MU>.UA4"M]%BR9!B&8BB)2U"!"G@%@I2C@/`*D`$$B%5"B')_\(BDK0
M!0@0A0-0!75CMT^DB5'``%%H@`B@!@J`0Z'(F36C@&R@"@B0@A4``0WX@(OQ
M&!RP`1H@@2T8JE2J`$PX@Z+0!4V`#DZPIAAY`B"0B0=0@,*(A*E[%TV8%U%0
M!4]X@"P`A1\$P4F0$=]#H7_(!16`!G(XAC"8`F6@A!%P@0Y8@6-X@A1(!73A
M@0E8`%/X@`\```6@@B:P@2T`@`I8@13P!!ACETA0@2+(AHP)``$(`H'9A`O(
MA570A#0``E/P!P<@)&\DL-]3(5(0!5)0@RQPH-ABM5Q(A1UP``"8@`;8DS$Y
M`1KRCP,3Q&+`!`&X@#5`IT^8!A\B(:'PN.;_@`%#$018.`S&2`^7T``36(@)
M.05!*(%6S(8OP`,`N008T(`FD`712B],.(;[ZXA_$++8"R(^8Y+J@)'(:`,5
MH)!`X[VQU)$=`3[PV`$QL``+H`(+.,"'BDLF21+S*1&>!`]U"1$>
`(%R`$(
M8(8`J`UK8RT'J(`1*`,"<`,JQ8$EJ`":L@09ZPP28``,J`53"(5F)`J4:>[H
M"`$&,(5LP`$*&`-`S`!0L(1)6&(X1(]CH`2HSX(&<`&L
[%$18K7KI$R6+(2:DN??HD.%T$:)]0\9U[
MR2JG$C<]_9H00219L!5HK%#Q+[&ER!8K"*&4"T8'*7=,PQ[M"Y4%,9=0$0$;
M07'@T9\X`?^[Q.E?KD^#8VNTM$+"@!68)O'@?"FZ5=B8BE4(QFY*-'&C-FT2
MY6F3IYN_-C'SU&)*@REK)%!0(H%$B#LD-(#;Y,I5`R&7QDASP`:CN.*/@0-*#!QH``,-FG#RUF@15#!)+I=8
M@HIJY)A`P`0]V,7,!QPLX0`'FW1!BA:;Y``,*IQ4A=H_(4A#"C._B&("0VQ=
MLME4`)@2A@M96'`+)I\L,48N*KC!C`5@?1))1<6`0`,6K7Q!AP!4C#!):;DX
M5E8$PLD2)2Q/2"/>+`Q@44HHI/P@@47&75()8I1@$A(T-%0`EBS_$G`@@07*
M5'"&;KU4$HD*%(0BR@0C4'))!5<)`58D_W@54EE@=1K!JK!0XRIR&%'2V3\5
M6&()+!2=:&MDPU!"`PPVN-#$#F2M>LDQ_V`""@"8N3%:1;=BA$H2$GP1`S/<
MB()#"15T.@ETD:12C"64*.8?)J9UU9FSM6SBC!:C'`#3!IMDT\`TE%#!G2?.
M_)*-`HV"94D24H`;R@(MQ+#'!XM@A8C^56A0L
M2.`)T`[-`D031@`:IL0H^`M`H`.D4(T3,&-YWB;_LD\W7NL2@*$]9$$9B((H
MOBD<"H3-EN,8F`,O(B$5(D`(YBD"VN!<\,)T+D$HB"HYV`PQ0(IOA"`25J`$
M=,&8M.HC*F`_3B$=*@$5ND0\-@8S*N$2SL!'P@)-+F%T8(&D*/]AX33M"LD#
M:!X&%6C`!NXH!W1!$Q2//$Q@#@+`!$Z!`&9A`TZ`"'");M2C1#[!!$@@"I;@
M"<("^QZ$,^#K$KZ)*F*G1)!##&B```9``-!HD,1#U'+P
*46XS(]?/^!`L"(
M&V*@N3:A%2;@M2`P+RA!`5KA`%3A`;"@116``$@@!&"`!F"A#?`C$AI`&C9A
M3CT!M6CBN6;"%%`IC&JA"60A3\2L\5`D%]J`V80B,59A!$@@!D:L'I%.&D2A
MN#PA!B0`&MA&?20`V
`X0F.RFF*TY-.(0GT0,RN[P<5]PJW[#>NY@FZ
MH!6\#CRD&3N`X4D4#!;*X`GJ0RB(PCZR<.',,Q78[.L^HSF$*T`4XX`L]@W24@`H6H``4H`%-
M0`0HEA*X$6UPR!)O!6DF$1>K$`1`4P8F$!A%L@IIT8VZP9TS7B"`6T+!OA6YGQ&/'
M,+'F=AR7``VO8`G0T%(L03AH854%];MD80$N@`,XD"!=L`&>0"NB<`T$0(HR
M<3!0$2&ZX`(