Papa Johns 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

Table of contents

  • Page 1

  • Page 2
    Celebrating 30 Years of Better Ingredients. Better Pizza.

  • Page 3
    "Quality is our foundation and our distinction - we've always had better ingredients, and always will."

  • Page 4
    ... drive of our operators, our Board of Directors and our executive team. We have many team members that started either making or delivering pizza that are now top executives at Papa John's- notably Steve Ritchie, who started with Papa John's as a delivery driver 18 years ago, and was promoted...

  • Page 5
    ... information about what goes into our products and onto our pizzas, go to www.papajohns.com/better. Customers continue to respond favorably to our 'Better Ingredients. Better Pizza.' promise. Papa John's earned the top spot in the 2014 American Customer Satisfaction Index (ACSI) earlier this year...

  • Page 6
    ... than our technology team. As digital pioneers, Papa John's continued to blaze new technology trails in 2014, all in pursuit of a singular aim: improving the customer experience. As of year end, digital and mobile channels now account for more than 50 percent of our total U.S. sales (delivery and...

  • Page 7
    ...offer health care to 100% of team members with great benefits. Our training and development team has worked hard at building a new, upgraded online learning management system that supports operations and team member development through leadership principles. And, through the Papa Fund, we internally...

  • Page 8
    People Are Priority Always. We're as passionate about people as we are about pizza. From building better communities to investing in the Papa John's team, we're steadfast in our commitment to improving lives.

  • Page 9
    ... Supply Chain Management Cynthia A. McClellen Senior Vice President, Information Systems and Project Management Office Caroline Miller Oyler Senior Vice President, General Counsel R. Shane Hutchins Senior Vice President, PJ Food Service Robert C. Kraut Senior Vice President and Chief Marketing...

  • Page 10
    ...Chairman, President and Chief Executive Officer Corporate Information Corporate Headquarters 2002 Papa John's Boulevard Louisville, Kentucky 40299 502-261-7272 Stock Listing Papa John's stock is listed on The NASDAQ Global Select Market under the ticker symbol PZZA Annual Meeting The annual meeting...

  • Page 11
    ... Commission File Number: 0-21660 PAPA JOHN'S INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 61-1203323 (I.R.S. Employer Identification No.) 2002 Papa Johns Boulevard Louisville, Kentucky (Address...

  • Page 12
    ... to the closing sale price on The NASDAQ Stock Market as of the last business day of the Registrant's most recently completed second fiscal quarter, June 29, 2014, was $1,289,380,885. As of February 17, 2015, there were 39,779,082 shares of the Registrant's common stock outstanding. DOCUMENTS...

  • Page 13
    ... Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits, Financial Statement...

  • Page 14
    ... North China. Papa John's has defined five reportable segments: domestic Company-owned restaurants, domestic commissaries (Quality Control Centers), North America franchising, international operations, and "all other" business units. North America is defined as the United States and Canada. Domestic...

  • Page 15
    ... focuses on reaching customers who live or work within a small radius of a Papa John's restaurant. Our international markets use a combination of advertising strategies, including television, radio, digital, and print depending on the size of the local market. Strong Franchise System. We are...

  • Page 16
    .... In 2014, we opened two Company-owned restaurants in China with an average investment cost of approximately $290,000. Most of our international Papa John's restaurants are slightly smaller and average between 900 and 1,400 square feet; however, in order to meet certain local customer preferences...

  • Page 17
    ...We plan to continue to grow our international units during the next several years, substantially all of which will be franchised. QC Center System and Supply Chain Management Our domestic QC Centers, comprised of ten full-service regional production and distribution centers, supply pizza dough, food...

  • Page 18
    ...supported by media, print, digital and electronic advertising materials that are produced by Papa John's Marketing Fund, Inc. ("PJMF"). PJMF is an unconsolidated nonstock corporation designed to operate at break-even for the purpose of designing and administering advertising and promotional programs...

  • Page 19
    ...We also employ directors of operations who are responsible for overseeing an average of seven Company-owned restaurants. Senior management and corporate staff also support the field teams in many areas, including, but not limited to, quality assurance, food safety, training, marketing and technology...

  • Page 20
    ... owned print and promotions subsidiary). In 2015, we plan to offer some or all of these domestic franchise support initiatives. International Development and Franchise Agreements. We opened our first franchised restaurant outside the United States in 1998. We define "international" as all markets...

  • Page 21
    ... team. Multiunit franchisees are encouraged to appoint training store general managers or hire a full-time training coordinator certified to deliver Company-approved operational training programs. International Franchise Operations Support. We employ or contract with international business directors...

  • Page 22
    regional vice presidents. Senior management and corporate staff also support the international field teams in many areas, including but not limited to food safety, quality assurance, training, marketing and technology. Franchise Operations. All franchisees are required to operate their Papa John's ...

  • Page 23
    ..., including health care legislation, "living wage," menu labeling, legislation imposing "joint employer liability" or other current or proposed regulations and increases in minimum wage rates affect Papa John's as well as others within the restaurant industry. As we expand internationally, we...

  • Page 24
    ...established in the markets where restaurants operated by us or our franchisees are, or may be, located. Demographic trends, traffic patterns, the type, number and location of competing restaurants, and changes in pricing or other marketing initiatives or promotional strategies, including new product...

  • Page 25
    ... commodity or operating costs, including, but not limited to, employee compensation and benefits or insurance costs, could slow the rate of new store openings or increase the number of store closings. Our business is susceptible to adverse changes in local, national and global economic conditions...

  • Page 26
    ... our business. Changes in purchasing practices by our domestic franchisees could harm our commissary business. Although our domestic franchisees currently purchase substantially all food products from our QC Centers, they are only required to purchase from our QC Centers tomato sauce, dough and...

  • Page 27
    ... our financial performance. Domestic system-wide restaurant and QC Center operations are subject to federal and state laws governing such matters as wages, benefits, working conditions, citizenship requirements and overtime. A significant number of hourly personnel are paid at rates closely related...

  • Page 28
    ...network sites or service providers, including a breach of confidential customer information from our digital ordering business. We are subject to a number of privacy and data protection laws and regulations. Our business requires the collection and retention of large volumes of internal and customer...

  • Page 29
    ..., customers, franchisees, state and federal agencies, and employees. We are involved in a number of lawsuits, claims, investigations, and proceedings consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. We are currently...

  • Page 30
    Item 2. Properties As of December 28, 2014, there were 4,663 Papa John's restaurants system-wide. The following tables provide the locations of our restaurants. We define "North America" as the United States and Canada and "domestic" as the contiguous United States. North America Restaurants: ...

  • Page 31
    ...Wyoming...Total U.S. Papa John's Restaurants...Canada...Total North America Papa John's Restaurants...International Restaurants: Azerbaijan......80 3 9 7 28 16 19 17 65 22 91 6 17 38 282 37 1,323 Company 26 686 686 Franchised 32 1 116 56 21 27 9 2,564 90 2,654 Total 32 1 142 56 21 27 9 3,250 90 3,340...

  • Page 32
    ... require us to pay all or a portion of the cost of insurance, taxes and utilities. Additionally, we lease our Company-owned restaurant sites in Beijing and North China. At December 28, 2014, we leased and subleased to franchisees in the United Kingdom 204 of the 282 franchised Papa John's restaurant...

  • Page 33
    ... Senior Vice President and Chief Operating Officer Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer First Elected Executive Officer 1985 2013 2005 2012 Lance F. Tucker 45 2011 (a) Ages are as of January 1, 2015. John H. Schnatter created the Papa John...

  • Page 34
    ... close of business on February 9, 2015. We anticipate continuing the payment of quarterly cash dividends. The actual amount of such dividends is subject to declaration by our Board of Directors and will depend upon future earnings, results of operations, capital requirements, our financial condition...

  • Page 35
    .../28/2014 Total Number of Shares Purchased 221 133 148 Average Price Paid per Share $40.92 $46.85 $53.93 The Company utilizes a written trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, from time to time to facilitate the repurchase of shares of our common stock...

  • Page 36
    ....18 118.43 134.68 Dec. 25, 2011 154.99 119.06 172.82 Dec. 30, 2012 216.45 140.85 201.20 Dec. 29, 2013 370.73 199.25 307.84 Dec. 28, 2014 464.00 234.24 330.86 Papa John's International, Inc. NASDAQ Stock Market (U.S. Companies) NASDAQ Stocks (SIC 5800-5899 U.S. Companies) Eating and Drinking 23

  • Page 37
    ...per diluted share for 2012. (2) North America franchise royalties were derived from franchised restaurant sales of $2.04 billion in 2014, $1.91 billion in 2013, $1.85 billion in 2012 ($1.82 billion on a 52 week basis), $1.71 billion in 2011 and $1.62 billion in 2010. (3) International royalties were...

  • Page 38
    ... by Company-owned restaurants, franchise royalties, sales of franchise and development rights, sales to franchisees of food and paper products, printing and promotional items, risk management services, and information systems and related services used in their operations. New unit openings in 2014...

  • Page 39
    ... to supporting both Company and franchised profitability and growth, these activities contribute to product quality and consistency throughout the Papa John's system. Critical Accounting Policies and Estimates The results of operations are based on our consolidated financial statements, which...

  • Page 40
    ...net cash flows, with various growth assumptions, over a ten-year discrete period and a terminal value, which were discounted using appropriate rates. The selected discount rate considered the risk and nature of each reporting unit's cash flow and the rates of return market participants would require...

  • Page 41
    ... Financial Statements" for additional information. Fiscal Year The Company follows a fiscal year ending on the last Sunday of December, generally consisting of 52 weeks made up of four 13-week quarters. The 13-week quarters consist of two four-week periods followed by one five-week period. Our 2014...

  • Page 42
    ... a franchisee has a late payment in excess of 60 days. The guarantee is limited to the greater of 10% of all loans or 100% of all loans that have higher risk profiles. Higher risk profiles are determined based on preestablished criteria including length of time in business, credit rating, and other...

  • Page 43
    ... agreement ($1.0 million per year). In 2012, the Company contributed the supplier marketing payment to the Papa John's Marketing Fund ("PJMF"), an unconsolidated nonstock corporation designed to operate at break even for the purpose of designing and administering advertising and promotional programs...

  • Page 44
    ... this report, which is a non-GAAP measure. We define free cash flow as net cash provided by operating activities (from the consolidated statements of cash flows) less the purchases of property and equipment. We view free cash flow as an important measure because it is one factor that management uses...

  • Page 45
    ... the years indicated: Year Ended (1) Dec. 29, 2013 52 weeks 44.2% 5.7 0.1 40.2 3.7 1.5 4.6 100.0 24.6 56.9 77.5 14.8 90.0 84.9 9.3 0.5 2.4 92.6 7.4 (0.1) 7.3 2.3 5.0 (0.2) 4.8% Dec. 28, 2014 Income Statement Data: North America revenues: Domestic Company-owned restaurant sales Franchise royalties...

  • Page 46
    ... in the most recent full year's comparable restaurant base Average sales for domestic Company-owned restaurants included in the most recent comparable restaurant base Papa John's Restaurant Progression: North America Company-owned: Beginning of period Opened Closed Acquired from franchisees Sold to...

  • Page 47
    ... Kingdom, with increases in units and higher comparable sales. This was somewhat offset by the 2013 year including an additional month of revenues at our China Company-owned operations as we changed the reporting cycle in the fourth quarter of 2013 to no longer consolidate the results one month in...

  • Page 48
    .... Based on prior experience in other underpenetrated markets, some operating losses can occur as the business is being established. All Others Segment. The "All others" segment, which primarily includes our online and mobile ordering business and our wholly-owned print and promotions subsidiary...

  • Page 49
    ... infrastructure costs to support our digital ordering business and a lower margin at our print and promotions business, primarily associated with an increased number of discounted direct mail campaigns in comparison to 2013. ï,· Unallocated Corporate Segment. Unallocated corporate expenses increased...

  • Page 50
    .... Average weekly sales for non-traditional units not subject to continuous operation are calculated based upon actual days open. The comparable sales base and average weekly sales for 2014 and 2013 for domestic Company-owned and North America franchised restaurants consisted of the following: Year...

  • Page 51
    ... to the low margin associated with sales of FOCUS systems to franchisees, higher infrastructure costs to support our online operations and the impact of an increased number of reduced cost direct mail campaigns offered to our domestic franchised restaurants by Preferred. International restaurant and...

  • Page 52
    ...higher average outstanding debt balance and a higher effective interest rate. (b) See "Notes 2 and 6" of "Notes to Consolidated Financial Statements" for additional information. Income Tax Expense. Our effective income tax rate was 32.0% in 2014 compared to 31.2% in 2013. The higher tax rate in 2014...

  • Page 53
    ..., revenues increased 8.9%. Year Ended Dec. 29, 2013 52 weeks $ 635,317 81,692 1,181 578,870 53,322 $ Dec. 30, 2012 53 weeks 592,203 79,567 806 545,924 51,223 $ 53rd Week Adjusted Increase $ Adjusted Increase % (In thousands) North America Revenues: Domestic Company-owned restaurant sales Franchise...

  • Page 54
    ...53rd week so that the 52 weeks of 2013 can be compared to an equivalent 52 weeks in 2012. (b) Includes the $5.0 million of expense related to the 2012 Incentive Contribution to PJMF and the related benefit of a $1.0 million advertising credit from PJMF that was received by the Domestic Company-owned...

  • Page 55
    ... online and mobile ordering ("eCommerce") business due to higher online volumes. This increase was somewhat offset by reduced operating results at Preferred, due to reduced cost direct mail campaigns offered to our domestic franchised restaurants. Unallocated Corporate Segment. Unallocated corporate...

  • Page 56
    by higher interest costs on our line of credit due to both a higher average debt balance and a higher effective interest rate. (c) The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom. See "Note 17" of "...

  • Page 57
    ... cheese, dough and meats, as well as lower national promotion pricing. 2012 also included various supplier incentives, as previously noted. Salaries and benefits were 0.3% lower as a percentage of sales in 2013, primarily due to the benefit of higher sales volumes. Advertising and related costs...

  • Page 58
    ... reflected net expense of $6.7 million in 2013, as compared to $8.3 million in 2012 as detailed below (in thousands): 2013 Supplier marketing payment (a) Franchise and development incentives and initiatives (b) Disposition and impairment losses (c) Pre-opening restaurant costs Perfect Pizza lease...

  • Page 59
    ... "Notes to Consolidated Financial Statements" for additional information. Income Tax Expense. Our effective income tax rate was 31.2% in 2013 compared to 32.9% in 2012. The lower tax rate in 2013 includes both higher levels of tax credits, including Work Opportunity Tax Credit and state and federal...

  • Page 60
    ... (in thousands): Dec. 28, 2014 Net cash provided by operating activities Purchase of property and equipment (a) Free cash flow (b) $ 122,632 (48,655) $ 73,977 Year Ended Dec. 29, 2013 $ 101,360 (50,750) $ 50,610 Dec. 30, 2012 $ 104,379 (42,628) $ 61,751 (a) We require capital primarily for the...

  • Page 61
    ... was paid on February 20, 2015 to shareholders of record as of the close of business on February 9, 2015. The declaration and payment of any future dividends will be at the discretion of the Board of Directors, subject to the Company's financial results, cash requirements, and other factors deemed...

  • Page 62
    ... able to predict the timing of the redemptions. Off-Balance Sheet Arrangements The off-balance sheet arrangements that are reasonably likely to have a current or future effect on the Company's financial condition are operating leases of Company-owned restaurant sites, QC Centers, office space and...

  • Page 63
    ... in our forward-looking statements include, but are not limited to aggressive changes in pricing or other marketing or promotional strategies by competitors, which may adversely affect sales; and new product and concept developments by food industry competitors; changes in consumer preferences or...

  • Page 64
    ... into financial instruments to manage foreign currency exchange rates since only 6.4% of our total revenues are derived from sales to customers and royalties outside the United States. Commodity Price Risk In the ordinary course of business, the food and paper products we purchase, including cheese...

  • Page 65
    ... average block price for cheese by quarter in 2014, 2013 and 2012. Also presented is the projected 2015 average block price by quarter (based on the February 17, 2015 Chicago Mercantile Exchange cheese futures prices for 2015): 2015 Projected Market Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year...

  • Page 66
    ... balance sheets of Papa John's International, Inc. and Subsidiaries as of December 28, 2014 and December 29, 2013, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 28, 2014...

  • Page 67
    Papa John's International, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except per share amounts) December 28, 2014 North America revenues: Domestic Company-owned restaurant sales Franchise royalties Franchise and development fees Domestic commissary sales Other sales ...

  • Page 68
    Papa John's International, Inc. and S ubsidiaries Consolidated S tatements of Comprehensive Income (In thousands) December 28, 2014 Net income before attribution to noncontrolling interests Other comprehensive income (loss), before tax: Foreign currency translation adjustments Interest rate swaps ...

  • Page 69
    Papa John's International, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except per share amounts) Years Ended December 28, December 29, 2014 2013 Assets Current assets: Cash and cash equivalents Accounts receivable (less allowance for doubtful accounts of $3,814 in 2014 and $4,...

  • Page 70
    ... interests Other Balance at December 29, 2013 Net income attributable to the Company (1) Other comprehensive loss Cash dividends paid Exercise of stock options Tax effect of equity awards Acquisition of Company common stock Stock-based compensation expense Issuance of restricted stock Change in...

  • Page 71
    Papa John's International, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) December 28, 2014 Operating activities Net income before attribution to noncontrolling interests Adjustments to reconcile net income to net cash provided by operating activities: Provision for ...

  • Page 72
    ... public by Company-owned restaurants, franchise royalties, sales of franchise and development rights, and sales to franchisees of food and paper products, printing and promotional items, risk management services, and information systems and related services used in their operations. 2. Significant...

  • Page 73
    ... of food, promotional items and supplies sold to franchised restaurants located in the United States and are recognized as revenue upon shipment of the related products to the franchisees. Fees for information services, including software maintenance fees, help desk fees and online ordering fees are...

  • Page 74
    ... of food, paper products, restaurant equipment, printing and promotional items, risk management services, information systems and related services, and royalties. Credit is extended based on an evaluation of the franchisee's financial condition and collateral is generally not required. A reserve...

  • Page 75
    ... in 2014, $34.5 million in 2013 and $32.1 million in 2012. Deferred Costs We defer certain information systems development and related costs that meet established criteria. Amounts deferred, which are included in property and equipment, are amortized principally over periods not exceeding five years...

  • Page 76
    ...rulings or audit settlements, which may impact our ultimate payment for such exposures. Insurance Reserves Our insurance programs for workers' compensation, owned and non-owned automobiles, general liability, property, and health insurance coverage provided to our employees are funded by the Company...

  • Page 77
    ...year-end exchange rates. The resulting translation adjustments are included as a component of accumulated other comprehensive income (loss) net of income taxes. Recent Accounting Pronouncements Revenue from Contract with Customers In May 2014, the Financial Accounting Standards Board issued "Revenue...

  • Page 78
    ... 31, 2015. Funding for the share repurchase program has been provided through a credit facility, operating cash flow, stock option exercises and cash and cash equivalents. We repurchased 2.6 million and 3.5 million shares of our common stock for $117.4 million and $118.6 million in 2014 and 2013...

  • Page 79
    ...than the average market price for the year were not included in the computation of diluted earnings per common share because the effect would have been antidilutive. The weighted average number of shares subject to antidilutive options was 226,000 in 2014 and 129,000 in 2013 (none in 2012). See Note...

  • Page 80
    ...$ 16,798 - $ 76 $ - (a) Represents life insurance policies held in our non-qualified deferred compensation plan. (b) The fair value of our interest rate swaps are based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest...

  • Page 81
    ... in the joint venture from the Company. The income before income taxes attributable to these joint ventures for the years ended December 28, 2014, December 29, 2013 and December 30, 2012 were as follows (in thousands): 2014 Papa John's International, Inc. Noncontrolling interests Total income before...

  • Page 82
    ... from temporary equity to "Stockholders' equity" in the consolidated balance sheet at December 29, 2013, at carrying value. The following summarizes changes in our redeemable noncontrolling interests in 2014 and 2013 (in thousands): Our fourth joint venture, Colonel's Limited, LLC, had a mandatory...

  • Page 83
    ...for deduction over 15 years under U.S. tax regulations. In July 2012, Papa John's and a third party formed a limited liability company (PJ Minnesota, LLC) to operate the previously acquired Minneapolis restaurants. The Company's equity (80% ownership at that time) in the operations was funded by the...

  • Page 84
    ...required to fully consolidate the financial results of this limited liability company. See Note 6 for additional information. 8. Goodwill The following summarizes changes to the Company's goodwill, by reporting segment (in thousands): Domestic Companyowned Restaurants Balance as of December 30, 2012...

  • Page 85
    ... fee on the unused balance ranges from 15 to 25 basis points. The remaining availability under the Amended Line, reduced for outstanding letters of credit approximates $148.2 million. The Credit Facility contains customary affirmative and negative covenants, including financial covenants requiring...

  • Page 86
    9. Debt and Credit Arrangements (continued) The following table provides information on the location and amounts of our swaps in the accompanying consolidated financial statements (in thousands): Liability Derivatives Fair Value Dec. 28, Balance Sheet Location 2014 Fair Value Dec. 29, 2013 The ...

  • Page 87
    ...approximately $658,000 in 2014, $527,000 in 2013 and $631,000 in 2012 and is reported in investment income in the accompanying consolidated statements of income. Based on our review of certain borrowers' economic performance and underlying collateral value, w e established allowances of $3.1 million...

  • Page 88
    ... changes in our insurance program reserves (in thousands): Balance as of December 30, 2012 Additions Payments Balance as of December 29, 2013 Additions Payments Balance as of December 28, 2014 $ 22,303 23,187 (26,025) 19,465 33,926 (27,980) 25,411 $ We are a party to standby letters of credit...

  • Page 89
    ...as of December 28, 2014 and December 29, 2013, respectively. The Company had approximately $2.9 million and $7.7 million of a valuation allowance primarily related to these foreign net operating losses as of December 28, 2014 and December 29, 2013, respectively. The net change in the total valuation...

  • Page 90
    ...were $27.0 million in 2014, $29.3 million in 2013 and $25.3 million in 2012. The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company, with few exceptions, is no longer subject to U.S. federal, state and local, or non-U.S. income...

  • Page 91
    ... certain costs associated with national pizza giveaways awarded to our online loyalty program customers. PJMF reimbursed Papa John's $1.2 million, $782,000, and $917,000 in 2014, 2013, and 2012, respectively, for certain administrative services (i.e., marketing, accounting, and information services...

  • Page 92
    ... the close of the claims period. The actual settlement cost was $2.9 million, and all settlement and fee payments were made in 2013. Perrin v. Papa John's International, Inc. and Papa John's USA, Inc. is a conditionally certified collective action filed in August 2009 in the United States District...

  • Page 93
    ... financial statements resulting in the Company's net investment cost being reported in net property and equipment. 18. Equity Compensation We award stock options, time-based restricted stock and performance-based restricted stock units from time to time under the Papa John's International, Inc. 2011...

  • Page 94
    ...benefit recognized in the income statement for share-based compensation arrangements was $3.2 million in 2014, $2.7 million in 2013 and $2.4 million in 2012. At December 28, 2014, there was $7.0 million of unrecognized compensation cost related to nonvested option awards, time-based restricted stock...

  • Page 95
    ... in February 2015. The fair value of both time-based restricted stock and performance-based restricted stock units is based on the market price of the Company's shares on the grant date. Information pertaining to restricted stock activity during 2014, 2013 and 2012 is as follows (shares in thousands...

  • Page 96
    ... revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, risk management services, and information systems and related services used in restaurant operations, including our pointof-sale system, online and other technology-based ordering...

  • Page 97
    ...reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for 10% or more of our consolidated revenues...

  • Page 98
    ... Accumulated depreciation and amortization Net property and equipment Expenditures for property and equipment: Domestic Company-owned restaurants Domestic commissaries International All others Unallocated corporate Total expenditures for property and equipment 2014 2013 2012 $ $ 208,488 107,992...

  • Page 99
    ... - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 28, 2014. Ernst & Young LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10...

  • Page 100
    ...), the consolidated balance sheets as of December 28, 2014 and December 29, 2013, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 28, 2014 of Papa John's International, Inc. and...

  • Page 101
    ...internal control over financial reporting. Item 9B. Other Information On February 19, 2015, the Compensation Committee of the Board of Directors approved new employment agreements effective March 1, 2015, originally entered into for 3-year terms in March 2012, with members of the Company's executive...

  • Page 102
    ...120 days after the end of the fiscal year covered by this Report. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table provides information as of December 28, 2014 regarding the number of shares of the Company's common stock that...

  • Page 103
    ..., 2014, December 29, 2013 and December 30, 2012 Consolidated Balance Sheets as of December 28, 2014 and December 29, 2013 Consolidated Statements of Stockholders' Equity for the years ended December 28, 2014, December 29, 2013 and December 30, 2012 Consolidated Statements of Cash Flows for the years...

  • Page 104
    ... is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. (a)(3) Exhibits: The exhibits listed in the accompanying index to Exhibits are filed as part of this...

  • Page 105
    ..., thereunto duly authorized. Date: February 24, 2015 By: PAPA JOHN'S INTERNATIONAL, INC. /s/ John H. Schnatter John H. Schnatter Founder, Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 106
    ... Trust Company, as a lender. Exhibit 10.1 to our Report on Form 8-K as filed on November 4, 2014 is incorporated herein by reference. Papa John's International, Inc. Deferred Compensation Plan, as amended through December 5, 2012. Exhibit 10.1 to our report on Form 10-K as filed on February 28, 2013...

  • Page 107
    ... from the Annual Report on Form 10-K of Papa John's International, Inc. for the year ended December 28, 2014, filed on February 24, 2015, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv...

  • Page 108

  • Page 109
    Papa Johh's 36 Ihterhatiohal Markets* Cayman Islands Dominican Republic Canada United Kingdom Ireland Cyprus Russia Turkey Jordan Azerbaijan South Korea China ...Egypt Malaysia Saudi Arabia Philippines Kuwait Bahrain Qatar United Arab Emirates Oman * International Locations as of December 28, 2014

  • Page 110
    "Winning is habit. Unfortunately, so is losing. " - Vince Lombardi Our team members, franchisees, and supply partners have a habit of winning.