Papa Johns 2015 Annual Report Download

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QUALITY.
ANNUAL REPORT
2015
GUARANTEED.
“IF YOU’RE GOING TO SAY BETTER, YOU BETTER DELIVER.”

Table of contents

  • Page 1
    QUALITY. GUARANTEED. 2015 ANNUAL REPORT "IF YOU'RE GOING TO SAY BETTER, YOU BETTER DELIVER."

  • Page 2
    LOVE YOUR PIZZA OR GET ANOTHER ONE FREE!

  • Page 3
    .... BETTER PIZZA." WE GUARANTEE IT. Papa John's is committed to using only the freshest-quality ingredients, and we don't use artificial ï¬,avors or synthetic colors in our pizza. That's why we introduced Papa's Quality Guarantee - if you don't love your pizza we'll give you another one free.

  • Page 4
    ... members at franchised stores and over 20,000 team members at Papa John's corporate stores. We generated approximately $3.5 billion in global system-wide sales. These numbers wouldn't be possible if we weren't devoted to making traditional, superior-quality Papa John's pizzas. On that note, the 2015...

  • Page 5
    ... Papa John's earned the top spot in the 2015 American Customer Satisfaction Index. Specifically, we achieved the highest rating in the pizza category for an unprecedented 14th time in the past 16 years - and we also earned the highest rating across all limited-service restaurant companies surveyed...

  • Page 6
    ...our total U.S. sales, both delivery and carryout. Papa John's already has a solid track record of digital "firsts." Fifteen years ago, we were the first commercial pizza chain to allow system-wide online ordering in our traditional restaurants. We were also the first pizza brand to account for 50...

  • Page 7
    ... loyalty program with new redemption options, including side items, to add value and variety for all of our customers. We are still the only national pizza chain with an e-commerce help desk and extended this service to social channels as well. Quality Above All Papa John's will continue to double...

  • Page 8
    " QUALITY IS OUR FOUNDATION AND OUR DISTINCTION. WE'VE ALWAYS HAD BETTER INGREDIENTS, A N D A L W AY S W I L L . "

  • Page 9
    ... Food Service EDMOND M. HEELAN Senior Vice President, North American Operations and Global OST â˜... 18 Years â˜... 15 Years CYNTHIA A. MCCLELLEN Senior Vice President, Information Systems and Project Management Office ROBERT W. SMITH, JR. Senior Vice President, Global Human Resources â˜... 6 Years...

  • Page 10
    ... Directors JOHN H. SCHNATTER Founder, Chairman 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...

  • Page 11
    ...Delaware (State or other jurisdiction of incorporation or organization) 61-1203323 (I.R.S. Employer Identification No.) 2002 Papa Johns Boulevard Louisville, Kentucky (Address of principal executive offices) 40299-2367 (Zip Code) (502) 261-7272 (Registrant's telephone number, including area code...

  • 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 28, 2015, was $2,235,251,445. As of February 16, 2016, there were 37,733,506 shares of the Registrant's common stock outstanding. DOCUMENTS...

  • Page 13
    ..., Executive 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...

  • Page 14
    PART I Item 1. Business General Papa John's International, Inc., a Delaware corporation (referred to as the "Company", "Papa John's" or in the first person notations of "we", "us" and "our") operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-...

  • Page 15
    ... and internationally, including limited time offering pizzas. The new products can become a part of the permanent menu if they meet certain established guidelines. Efficient Operating System. We believe our operating and distribution systems, restaurant layout and designated delivery areas result...

  • Page 16
    ... financial resources and management capability to open single or multiple locations. We devote significant resources to provide Papa John's franchisees with assistance in restaurant operations, operations training, marketing, site selection and restaurant design. Our strategy for global unit growth...

  • Page 17
    ...Supply Chain Management Our domestic QC Center system, comprised of ten full-service regional production and distribution centers, supplies pizza dough, food products, paper products, smallwares and cleaning supplies twice weekly to each traditional restaurant throughout the contiguous United States...

  • Page 18
    ...-op's members. The contribution rate for Co-ops generally may not be below 2% of sales without approval from Papa John's. The restaurant-level and Co-op marketing efforts are supported by media, print, digital and electronic advertising materials that are produced by Papa John's Marketing Fund, Inc...

  • Page 19
    ... 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. We...

  • Page 20
    ... 27, 2015, there were 4,141 franchised Papa John's restaurants operating in all 50 states and 39 countries and territories. During 2015, our franchisees opened an additional 341 (106 North America and 235 international) restaurants. As of December 27, 2015, we have development agreements with our...

  • Page 21
    ... owned print and promotions subsidiary). In 2016, 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 22
    ...The United States Quick Service Restaurant pizza ("QSR Pizza") industry is mature and highly competitive with respect to price, service, location, food quality and product innovation. There are wellestablished competitors with substantially greater financial and other resources than Papa John's. The...

  • Page 23
    ... federal, state, local and international laws affecting the operation of our respective businesses, including laws and regulations related to the preparation and sale of food, including food safety and menu labeling. Each Papa John's restaurant is subject to licensing and regulation by a number of...

  • Page 24
    ...a result of competition in our industry. The QSR Pizza industry is mature and highly competitive. Competition is based on price, service, location, food quality, brand recognition and loyalty, product innovation, effectiveness of marketing and promotional activity, use of technology, and the ability...

  • Page 25
    .... The success of our system-wide business depends on the effectiveness of our marketing and promotional plans. We may not be able to effectively execute our national or local marketing plans, particularly if lower sales result in reduced levels of funds from PJMF. Our marketing strategy utilizes...

  • Page 26
    ... 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, which could make it difficult for us to meet our growth...

  • Page 27
    ... Foods Dairy Products Company ("Leprino") as our sole supplier for cheese, one of our key ingredients. Leprino, one of the major pizza category suppliers of cheese in the United States, currently supplies all of our cheese domestically and substantially all of our cheese internationally. While...

  • Page 28
    ... or maintain profitability or meet planned growth rates. Our international operations could be negatively impacted by changes in international economic, political, security or health conditions in the countries in which the Company or our franchisees operate, especially in emerging markets. In...

  • Page 29
    ... the cost of operation of our domestic system-wide restaurants and QC Centers. Labor shortages, increased employee turnover and health care mandates could increase our system-wide labor costs. A significant number of hourly personnel are paid at rates closely related to the federal and state minimum...

  • Page 30
    ...our outstanding common stock. As a result, he may be able to substantially influence the strategic direction of the Company and the outcome of matters requiring approval by our stockholders. We rely on information technology to operate our businesses and maintain our competitiveness, and any failure...

  • Page 31
    ..., including vendors, customers, franchisees, state and federal agencies, stockholders and employees. From time to time, we are involved in a number of lawsuits, claims, investigations, and proceedings consisting of intellectual property, employment, consumer, personal injury, commercial and other...

  • Page 32
    ... None. Item 2. Properties As of December 27, 2015, there were 4,893 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 33
    ...Texas...Utah...Vermont...Virginia...Washington...West Virginia...Wisconsin...Wyoming...Total U.S. Papa John's Restaurants...Canada...Total North America Papa John's Restaurants...International Restaurants... 65 9 31 21 89 4 9 10 32 18 Company 8 31 87 26 707 707 Franchised 163 31 15 96 5 65 13 82 199 32...

  • Page 34
    ... our corporate headquarters and our printing operations are located in Louisville, KY in buildings owned by us. Internationally, we own a full-service QC Center and lease office space in the United Kingdom. We also lease our QC Centers and office space in Beijing, China and Mexico City, Mexico. Item...

  • Page 35
    ...Chief Development Officer Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer First Elected Executive Officer 1985 2012 2005 2011 (a) Ages are as of January 1, 2016. John H. Schnatter created the Papa John's concept and started operations in 1984. He currently...

  • Page 36
    ... Financial Officer of Evergreen Real Estate, a company owned by John Schnatter. Mr. Tucker is a licensed Certified Public Accountant. There are no family relationships between any of the directors or executive officers of the Company. PART II Item 5. Market for Registrant's Common Equity, Related...

  • Page 37
    ... close of business on February 8, 2016. 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 38
    ...-year period between December 26, 2010 and December 27, 2015 to (i) the NASDAQ Stock Market (U.S.) Index and (ii) a group of the Company's peers consisting of U.S. companies listed on NASDAQ with standard industry classification (SIC) codes 5800-5899 (eating and drinking places). Management believes...

  • Page 39
    ... in Item 7 and Item 8, respectively, of this Form 10-K. (In thousands, except per share data) Dec. 27, 2015 Income Statement Data North America revenues: Domestic Company-owned restaurant sales Franchise royalties (2) Franchise and development fees Domestic commissary sales Other sales International...

  • Page 40
    ... the FOCUS point-of-sale system, and software and related services. We believe that in addition to supporting both Company and franchised profitability and growth, these activities contribute to product quality and consistency throughout the Papa John's system. New unit openings in 2015 were 357...

  • Page 41
    ...the China Company-owned market and is planning a sale of its existing China operations, consisting of 45 Company-owned restaurants and a commissary. We expect to sell the business during 2016; upon completion of the sale, the Company will not have any Company-owned international restaurants. We have...

  • Page 42
    ... based on the market price of the Company's shares on the date of grant. Stock options are valued using a Black-Scholes option pricing model. Our specific assumptions for estimating the fair value of options include the following: 2015 Assumptions (weighted average): Risk-free interest rate Expected...

  • Page 43
    ...information. Fiscal Year Our fiscal year ends on the last Sunday in December of each year. All fiscal years presented in the accompanying consolidated financial statements consist of 52 weeks. Two-for-One Stock Split The Company completed a two-for-one stock split of the Company's outstanding shares...

  • Page 44
    ...proprietary point-of-sale system in our domestic Company-owned and franchised restaurants. FOCUS had the following impact on our consolidated statements of income for the years ended December 27, 2015 and December 28, 2014 (in thousands): Ye ar Ende d Dec. 27, De c. 28, 2015 2014 Franchise royalties...

  • Page 45
    ... 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 46
    ... Year Ended (1) Dec. 28, 2014 Dec. 27, 2015 Income Statement Data: North America revenues: Domestic Company-owned restaurant sales Franchise royalties Franchise and development fees Domestic commissary sales Other sales International revenues: Royalties and franchise and development fees Restaurant...

  • Page 47
    ... restaurant sales (6) Number of domestic Company-owned restaurants included 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...

  • Page 48
    ...2.7% increase in equivalent units. "Equivalent units" represents the number of restaurants open at the beginning of a given period, adjusted for restaurants opened, closed, acquired or sold during the period on a weighted average basis. North America franchise royalty revenue increased approximately...

  • Page 49
    .... 27, Expense 2015 $ 12,278 12,278 $ 56,452 44,721 83,315 10,891 845 (63,618) (1,181) 131,425 $ (In thousands) Domestic Company-owned restaurants Domestic commissaries North America franchising International All others Unallocated corporate expenses Elimination of intersegment profits Total income...

  • Page 50
    ... statements of income; however, our North America franchise royalty revenue is derived from these sales. Average weekly sales for comparable units include restaurants that were open throughout the periods presented below. The comparable sales base for domestic Company-owned and North America...

  • Page 51
    ... and North America franchised restaurants consisted of the following: Year Ended December 27, 2015 Domestic North CompanyAmerica owned Franchised Total domestic units (end of period) Equivalent units Comparable sales base units Comparable sales base percentage Average weekly sales - comparable units...

  • Page 52
    ... salaries and benefits, including an increase in health insurance claim costs, and management incentive compensation costs due to higher annual operating results. Domestic Company-owned restaurant supervisor bonuses increased due to higher sales and higher operating profits. International G&A costs...

  • Page 53
    ... (In thousands) North America Revenues: Domestic Company-owned restaurant sales Franchise royalties Franchise and development fees Domestic commissary sales Other sales International Revenues: Royalties and franchise and development fees Restaurant and commissary sales Total Revenues 635,317 $ 81...

  • Page 54
    ...includes our online and mobile ordering business and our wholly-owned print and promotions subsidiary, Preferred Marketing Solutions, decreased approximately $3.5 million. The decrease was primarily due to higher infrastructure costs to support our digital ordering business and a lower margin at our...

  • Page 55
    ... in weighted average shares outstanding. Additionally, FOCUS system costs reduced diluted earnings per share by $0.06 in 2014. Review of Consolidated Operating Results Revenues. Domestic Company-owned restaurant sales were $701.9 million for 2014 compared to $635.3 million for 2013. As previously...

  • Page 56
    ... and North America franchised restaurants consisted of the following: Year Ended December 28, 2014 Domestic North CompanyAmerica owned Franchised Total domestic units (end of period) Equivalent units Comparable sales base units Comparable sales base percentage Average weekly sales - comparable units...

  • Page 57
    ... the low margin associated with sales of FOCUS equipment 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 58
    ... in 2014 compared to 31.2% in 2013. The higher tax rate in 2014 was primarily due to the prior year including favorable state tax settlements. See "Note 15" of "Notes to Consolidated Financial Statements" for additional information. Liquidity and Capital Resources Debt Our debt is comprised entirely...

  • Page 59
    ...and favorable changes in working capital. The Company's free cash flow for the last three years was as follows (in thousands): Year Ended Dec. 28, 2014 $ 122,632 (48,655) $ 73,977 Dec. 27, 2015 Net cash provided by operating activities Purchase of property and equipment (a) Free cash flow (b) $ 160...

  • Page 60
    ... require capital for share repurchases and the payment of cash dividends. The following is a summary of our common share repurchases, as adjusted for the stock split, for the last three years (in thousands, except average price per share): Number of Shares Repurchased 3,538 2,562 1,845 Average Price...

  • Page 61
    ... 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 transportation equipment. We have certain other commercial commitments where payment...

  • Page 62
    ... ingredients marketing and advertising strategy; the ability of the Company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably, including difficulties finding qualified franchisees, store level employees or suitable sites; increases in food costs...

  • Page 63
    ... outside of the United States, which can adversely impact our revenues, net income and cash flows. Our international operations principally consist of Company-owned restaurants in China and distribution sales to franchised Papa John's restaurants located in the United Kingdom, Mexico and China...

  • Page 64
    ... presents the actual average block price for cheese by quarter in 2015, 2014 and 2013. Also presented is the projected 2016 average block price by quarter (based on the February 16, 2016 Chicago Mercantile Exchange cheese futures prices for 2016): 2016 Projected Market Quarter 1 Quarter 2 Quarter...

  • Page 65
    ... respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Papa John's International, Inc. and Subsidiaries' internal control over financial reporting as of December 27, 2015, based on criteria...

  • Page 66
    Papa John's International, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except per share amounts) December 27, 2015 North America revenues: Domestic Company-owned restaurant sales Franchise royalties Franchise and development fees Domestic commissary sales Other sales ...

  • Page 67
    Papa John's International, Inc. and S ubsidiaries Consolidated S tatements of Comprehensive Income (In thousands) December 27, 2015 Net income before attribution to noncontrolling interests $ Other comprehensive income (loss), before tax: Foreign currency translation adjustments Interest rate swaps ...

  • Page 68
    Papa John's International, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except per share amounts) Years Ended December 27, December 28, 2015 2014 Assets Current assets: Cash and cash equivalents Accounts receivable (less allowance for doubtful accounts of $2,447 in 2015 and $3,...

  • Page 69
    ... 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 70
    Papa John's International, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) December 27, 2015 Operating activities Net income before attribution to noncontrolling interests Adjustments to reconcile net income to net cash provided by operating activities: Provision for ...

  • Page 71
    ...our") operates and franchises pizza delivery and carryout restaurants under the trademark "Papa John's," currently in all 50 states and in 39 international countries and territories. Substantially all revenues are derived from retail sales of pizza and other food and beverage products to the general...

  • Page 72
    ... statements of income. Domestic production and distribution revenues are comprised 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...

  • Page 73
    ... is recognized over the vesting period (generally in equal installments over three years). Restricted stock is valued based on the market price of the Company's shares on the date of grant. Stock options are valued using a Black-Scholes option pricing model. Our specific assumptions for estimating...

  • Page 74
    2. Significant Accounting Policies (continued) 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 beginning ...

  • Page 75
    2. Significant Accounting Policies (continued) 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 up to certain retention levels under ...

  • Page 76
    ... year-end exchange rates. The resulting translation adjustments are included as a component of AOCI net of income taxes. Recent Accounting Pronouncements Income Taxes In November 2015, the Financial Accounting Standards Board ("FASB") issued "Income Taxes (Topic 740): Balance Sheet Classification...

  • Page 77
    ...Policies (continued) Reclassification Certain prior year amounts within cash flows provided by operating activities in the consolidated statements of cash flows have been reclassified to conform to the current year presentation. 3. Stockholders' Equity Shares Authorized and Outstanding The Company...

  • Page 78
    ... basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities. The calculations of basic earnings per common share and diluted earnings per common share for the years ended December 27, 2015, December 28...

  • Page 79
    ...$ 18,238 - $ 376 $ - (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 80
    ...PJ Denver, LLC December 28, 2014 Star Papa, LP Colonel's Limited, LLC PJ Minnesota, LLC PJ Denver, LLC December 29, 2013 Star Papa, LP Colonel's Limited, LLC PJ Minnesota, LLC PJ Denver, LLC Restaurant Locations Papa John's Ownership 87 61 33 32 Texas Maryland and Virginia Minnesota Colorado 51...

  • Page 81
    ... interests is outside of the Company's control, the noncontrolling interests are presented in the caption "Redeemable noncontrolling interests" in the consolidated balance sheets and include the following joint ventures: • The Star Papa, LP agreement contains a redemption feature that is...

  • Page 82
    ... 25, 2016, the Company purchased 19 domestic franchised Papa John's restaurants in Alabama and Florida for approximately $11.0 million. Planned Divestiture In September 2015, the Company decided to refranchise the China Company-owned market and is planning a sale of its existing China operations...

  • Page 83
    ... The international goodwill balances for all years presented are net of accumulated impairment of $2.3 (b) (c) (d) (e) million associated with our PJUK reporting unit, which was recorded in fiscal 2008. Includes 13 restaurants located in four domestic markets. Includes four restaurants located in...

  • Page 84
    ... Our swaps are derivative instruments that are designated as cash flow hedges because the swaps provide a hedge against the effects of rising interest rates on borrowings. The newly executed forward starting swaps are also deemed cash flow hedges based on our intent to replace the existing facility...

  • Page 85
    ... expense. 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 December 27, Balance Sheet Location 2015 Interest rate swaps Other current and long-term liabilities...

  • Page 86
    ...income recorded on franchisee loans was approximately $731,000 in 2015, $658,000 in 2014 and $527,000 in 2013 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, we...

  • Page 87
    ... liabilities consist of the following (in thousands): Salaries, benefits and bonuses Legal costs* Insurance reserves, current Purchases Deposits Customer loyalty program Marketing Rent Utilities Consulting and professional fees Other Total December 27, 2015 $ 24,124 13,163 13,382 10,504 2,953...

  • Page 88
    ... Deferred compensation plan Insurance reserves Accrued rent Other Total $ 18,483 17,168 5,216 6,739 47,606 December 28, 2014 $ 17,599 14,262 5,387 4,627 41,875 $ $ 15. Income Taxes A summary of the provision for income taxes follows (in thousands): 2015 Current: Federal Foreign State and local...

  • Page 89
    .... The net change in the total valuation allowance was a decrease of $66,000 in 2015. A substantial majority of our foreign tax net operating losses do not have an expiration date. The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense for the years ended...

  • Page 90
    ... and year-end balances with franchisees owned by related parties and PJMF (in thousands): 2015 Revenues from affiliates: Commissary sales Other sales Franchise royalties Total $ 2,298 432 394 3,124 $ 2014 2,679 482 385 3,546 $ 2013 2,426 482 351 3,259 $ $ $ December 27, 2015 Accounts...

  • Page 91
    ... pizza giveaways awarded to our online loyalty program customers. PJMF reimbursed Papa John's $1.4 million, $1.2 million, and $782,000 in 2015, 2014, and 2013, respectively, for certain administrative services (i.e., marketing, accounting, and information services), graphic design services, services...

  • Page 92
    ... 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...

  • Page 93
    ... 37.5% 6.0 The risk-free interest rate for the periods within the contractual life of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield was estimated as the annual dividend divided by the market price of the Company's shares on the date...

  • Page 94
    ... 2015 Shares 286 88 70 (13) (247) 184 *Additional shares from the 2012 performance-based restricted stock unit grant due to exceeding the initial 100% target resulting in a 207% payout. 19. Employee Benefit Plans We have established the Papa John's International, Inc. 401(k) Plan (the "401(k) Plan...

  • Page 95
    ... 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 platforms. Generally, we evaluate performance and allocate resources based on profit...

  • Page 96
    ... information is as follows: (In thousands) Revenues from external customers: Domestic Company-owned restaurants Domestic commissaries North America franchising International All others Total revenues from external customers Intersegment revenues: Domestic commissaries North America franchising...

  • Page 97
    ... 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 2015 2014 2013 $ $ 223,246 110,344...

  • Page 98
    ... of the Treadway Commission (2013 Framework). Based on our evaluation under the COSO 2013 Framework, our management concluded that our internal control over financial reporting was effective as of December 27, 2015. Ernst & Young LLP, an independent registered public accounting firm, has audited the...

  • Page 99
    ...(United States), the consolidated balance sheets as of December 27, 2015 and December 28, 2014, 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 27, 2015 of Papa John's International...

  • Page 100
    ... ended December 27, 2015 that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting. Item 9B. Other Information None. PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding executive officers...

  • Page 101
    ... of Certain Beneficial Owners and Management and Related Stockholder Matters The following table provides information as of December 27, 2015 regarding the number of shares of the Company's common stock that may be issued under the Company's equity compensation plans. (c) Number of securities...

  • Page 102
    ... 28, 2014 Consolidated Statements of Stockholders' Equity for the years ended December 27, 2015, December 28, 2014 and December 29, 2013 Consolidated Statements of Cash Flows for the years ended December 27, 2015, December 28, 2014 and December 29, 2013 Notes to Consolidated Financial Statements 89

  • Page 103
    ...foreign net operating losses Fiscal year ended December 28, 2014: Deducted from asset accounts: Reserve for uncollectible accounts receivable Reserve for franchisee notes receivable Valuation allowance on foreign net operating losses Balance at Beginning of Year Balance at End of Year $ $ 3,814...

  • Page 104
    ..., thereunto duly authorized. Date: February 23, 2016 By: PAPA JOHN'S INTERNATIONAL, INC. /s/ John H. Schnatter John H. Schnatter Founder, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

  • Page 105
    ..., 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 is incorporated herein by reference. Papa John's International, Inc. 2008 Omnibus Incentive Plan. Exhibit 10.1 to our Registration Statement on Form...

  • Page 106
    ... from the Annual Report on Form 10-K of Papa John's International, Inc. for the year ended December 27, 2015, filed on February 23, 2016, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv...

  • Page 107
    Papa John's 39 International Markets* CaymanBIslands DominicanBRmpublic Canada Unitmd Kingdom Irmland Cyprus Bmlarus Turkmy Jordan Azmrbaijan Russia South...Bolivia Egypt SaudiBArabia Singaporm Philippinms Kuwait Bahrain Qatar UnitmdBArabBEmiratms Oman * International Locations as of December 27, 2015

  • Page 108