Papa John's International (PZZA) 10-Q 4 May 10 2010 Q1 Quarterly report Financial data

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	Mar. 28, 2010		Dec. 27, 2009
Current assets:
Cash and cash equivalents	$42,551	[1]	$25,457	[2]
Accounts receivable, net	24,839	[1]	22,119	[2]
Inventories	15,073	[1]	15,576	[2]
Prepaid expenses	9,692	[1]	8,695	[2]
Other current assets	4,018	[1]	3,748	[2]
Deferred income taxes	8,211	[1]	8,408	[2]
Total current assets	104,384	[1]	84,003	[2]
Investments	1,141	[1]	1,382	[2]
Net property and equipment	188,776	[1]	187,971	[2]
Notes receivable, net	16,098	[1]	16,359	[2]
Deferred income taxes	4,817	[1]	6,804	[2]
Goodwill	74,058	[1]	75,066	[2]
Other assets	22,227	[1]	22,141	[2]
Total assets	411,501	[1]	393,726	[2]
Current liabilities:
Accounts payable	25,785	[1]	26,990	[2]
Income and other taxes	13,224	[1]	5,854	[2]
Accrued expenses	49,866	[1]	54,241	[2]
Current portion of debt	99,041	[1]
Total current liabilities	187,916	[1]	87,085	[2]
Unearned franchise and development fees	5,741	[1]	5,668	[2]
Long-term debt, net of current portion			99,050	[2]
Other long-term liabilities	13,744	[1]	16,886	[2]
Stockholders' equity:
Preferred stock	0	[1]	0	[2]
Common stock	360	[1]	358	[2]
Additional paid-in capital	239,526	[1]	231,720	[2]
Accumulated other comprehensive loss	(2,344)	[1]	(1,084)	[2]
Retained earnings	208,087	[1]	191,212	[2]
Treasury stock	(250,606)	[1]	(245,337)	[2]
Total stockholders' equity, net of noncontrolling interests	195,023	[1]	176,869	[2]
Noncontrolling interests in subsidiaries	9,077	[1]	8,168	[2]
Total stockholders' equity	204,100	[1]	185,037	[2]
Total liabilities and stockholders' equity	$411,501	[1]	$393,726	[2]
[1]Unaudited
[2]The balance sheet at December 27, 2009 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. See Note 2 for modifications made as a result of adopting recent accounting pronouncements.

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Thousands, except Per Share data	3 Months Ended Mar. 28, 2010		3 Months Ended Mar. 29, 2009
Domestic revenues:
Company-owned restaurant sales	$129,644	[1]	$131,705	[1]
Franchise royalties	17,736	[1]	15,361	[1]
Franchise and development fees	46	[1]	228	[1]
Commissary sales	112,640	[1]	109,539	[1]
Other sales	14,513	[1]	14,769	[1]
International revenues:
Royalties and franchise and development fees	3,634	[1]	3,235	[1]
Restaurant and commissary sales	7,573	[1]	6,087	[1]
Total revenues	285,786	[1]	280,924	[1]
Domestic Company-owned restaurant expenses:
Cost of sales	27,286	[1]	25,901	[1]
Salaries and benefits	35,403	[1]	38,203	[1]
Advertising and related costs	11,404	[1]	11,273	[1]
Occupancy costs	7,840	[1]	7,916	[1]
Other operating expenses	18,190	[1]	17,628	[1]
Total domestic Company-owned restaurant expenses	100,123	[1]	100,921	[1]
Domestic commissary and other expenses:
Cost of sales	95,292	[1]	92,184	[1]
Salaries and benefits	8,732	[1]	8,831	[1]
Other operating expenses	11,700	[1]	10,672	[1]
Total domestic commissary and other expenses	115,724	[1]	111,687	[1]
Income from the franchise cheese-purchasing program, net of minority interest	(2,809)	[1]	(7,103)	[1]
International operating expenses	6,776	[1]	5,357	[1]
General and administrative expenses	27,860	[1]	27,537	[1]
Other general expenses	2,290	[1]	4,372	[1]
Depreciation and amortization	7,880	[1]	7,803	[1]
Total costs and expenses	257,844	[1]	250,574	[1]
Operating income	27,942	[1]	30,350	[1]
Investment income	231	[1]	132	[1]
Interest expense	(1,244)	[1]	(1,416)	[1]
Income before income taxes	26,929	[1]	29,066	[1]
Income tax expense	8,965	[1]	10,302	[1]
Net income, including noncontrolling interests	17,964	[1]	18,764	[1]
Less: income attributable to noncontrolling interests	(1,089)	[1]	(925)	[1]
Net income, net of noncontrolling interests	$16,875	[1]	$17,839	[1]
Basic earnings per common share (in dollars per share)	0.62	[1]	0.65	[1]
Earnings per common share - assuming dilution (in dollars per share)	0.62	[1]	0.64	[1]
Basic weighted average shares outstanding (in shares)	27,038	[1]	27,640	[1]
Diluted weighted average shares outstanding (in shares)	27,154	[1]	27,707	[1]
[1]Unaudited

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (USD $)

In Thousands

Common Stock

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Treasury Stock

Noncontrolling Interests in Subsidiaries

Total

Balance at Dec. 28, 2008

$352

$216,553

($3,818)

$133,759

($216,860)

$8,252

$138,238

Balance (in shares) at Dec. 28, 2008

27,637

Comprehensive income:

Net income

17,839

[1]

925

[1]

18,764

[1]

Change in valuation of interest rate swap agreements, net of tax of $282 and $72 during 2010 and 2009, respectively

126

[1]

126

[1]

Other, net

(1,015)

[1]

(1,015)

[1]

Comprehensive income

17,875

[1]

Exercise of stock options

4

[1]

6,121

[1]

6,125

[1]

Exercise of stock options (in shares)

359

[1]

Tax effect related to exercise of non-qualified stock options

(119)

[1]

(119)

[1]

Acquisition of treasury stock

(4,958)

[1]

(4,958)

[1]

Acquisition of treasury stock (in shares)

(275)

[1]

Distributions to noncontrolling interests

(300)

[1]

(300)

[1]

Stock-based compensation expense

921

[1]

921

[1]

Balance at Mar. 29, 2009

356

[1]

223,476

[1]

(4,707)

[1],[2]

151,598

[1]

(221,818)

[1]

8,877

[1]

157,782

[1]

Balance (in shares) at Mar. 29, 2009

27,721

[1]

Balance at Dec. 27, 2009

358

[3]

231,720

[3]

(1,084)

[3]

191,212

[3]

(245,337)

[3]

8,168

[3]

185,037

[3]

Balance (in shares) at Dec. 27, 2009

26,930

[3]

Comprehensive income:

Net income

16,875

[1]

1,089

[1]

17,964

[1]

Change in valuation of interest rate swap agreements, net of tax of $282 and $72 during 2010 and 2009, respectively

502

[1]

502

[1]

Other, net

(1,762)

[1]

(1,762)

[1]

Comprehensive income

16,704

[1]

Exercise of stock options

2

[1]

3,931

[1]

3,933

[1]

Exercise of stock options (in shares)

218

[1]

Tax effect related to exercise of non-qualified stock options

167

[1]

167

[1]

Acquisition of treasury stock

(5,269)

[1]

(5,269)

[1]

Acquisition of treasury stock (in shares)

(215)

[1]

Distributions to noncontrolling interests

(180)

[1]

(180)

[1]

Stock-based compensation expense

1,673

[1]

1,673

[1]

Other

2,035

[1]

2,035

[1]

Other, shares

80

[1]

Balance at Mar. 28, 2010

$360

[1]

$239,526

[1]

($2,344)

[1],[4]

$208,087

[1]

($250,606)

[1]

$9,077

[1]

$204,100

[1]

Balance (in shares) at Mar. 28, 2010

27,013

[1]

[1]Unaudited

[2]At March 29, 2009, the accumulated other comprehensive loss of $4,707 was comprised of a net unrealized loss on the interest rate swap agreements of $3,824, unrealized foreign currency translation losses of $795 and an $88 pension plan liability for PJUK.

[3]The balance sheet at December 27, 2009 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. See Note 2 for modifications made as a result of adopting recent accounting pronouncements.

[4]At March 28, 2010, the accumulated other comprehensive loss of $2,344 was comprised of a net unrealized loss on the interest rate swap agreements of $2,061, unrealized foreign currency translation losses of $231 and a $52 pension plan liability for PJUK.

1_Consolidated Statements of St

Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)
In Thousands	3 Months Ended Mar. 28, 2010		3 Months Ended Mar. 29, 2009
Consolidated Statements of Stockholders' Equity
Change in valuation of interest rate swap agreements, tax	$282	[1]	$72	[1]
Accumulated other comprehensive loss	(2,344)	[1]	(4,707)	[1]
Unrealized loss on the interest rate swap agreements	(2,061)	[1]	(3,824)	[1]
Unrealized foreign currency translation losses	(231)	[1]	(795)	[1]
Pension plan liability	($52)	[1]	($88)	[1]
[1]Unaudited

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Thousands	3 Months Ended Mar. 28, 2010		3 Months Ended Mar. 29, 2009
Operating activities
Net income, net of noncontrolling interests	$16,875	[1]	$17,839	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for uncollectible accounts and notes receivable	497	[1]	1,497	[1]
Depreciation and amortization	7,880	[1]	7,803	[1]
Deferred income taxes	1,901	[1]	2,230	[1]
Stock-based compensation expense	1,673	[1]	921	[1]
Excess tax benefit related to exercise of non-qualified stock options	(207)	[1]
Other	330	[1]	478	[1]
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(3,247)	[1]	(115)	[1]
Inventories	514	[1]	2,056	[1]
Prepaid expenses	(986)	[1]	157	[1]
Other current assets	(270)	[1]	462	[1]
Other assets and liabilities	(645)	[1]	(80)	[1]
Accounts payable	(1,205)	[1]	(3,339)	[1]
Income and other taxes	7,370	[1]	7,780	[1]
Accrued expenses	(4,540)	[1]	(5,487)	[1]
Unearned franchise and development fees	73	[1]	(277)	[1]
Net cash provided by operating activities	26,013	[1]	31,925	[1]
Investing activities
Purchase of property and equipment	(9,125)	[1]	(5,064)	[1]
Purchase of investments			(97)	[1]
Proceeds from sale or maturity of investments	241	[1]
Loans issued	(310)	[1]	(3,988)	[1]
Loan repayments	579	[1]	507	[1]
Other	10	[1]	200	[1]
Net cash used in investing activities	(8,605)	[1]	(8,442)	[1]
Financing activities
Net repayments from line of credit facility			(20,500)	[1]
Net proceeds from short-term debt - variable interest entities			1,375	[1]
Excess tax benefit related to exercise of non-qualified stock options	207	[1]
Proceeds from exercise of stock options	3,933	[1]	6,125	[1]
Acquisition of Company common stock	(5,269)	[1]	(4,958)	[1]
Noncontrolling interests, net of distributions	909	[1]	625	[1]
Other	(10)	[1]	(4)	[1]
Net cash used in financing activities	(230)	[1]	(17,337)	[1]
Effect of exchange rate changes on cash and cash equivalents	(84)	[1]	(9)	[1]
Change in cash and cash equivalents	17,094	[1]	6,137	[1]
Cash and cash equivalents at beginning of period	25,457	[2]	10,917	[1]
Cash and cash equivalents at end of period	$42,551	[1]	$17,054	[1]
[1]Unaudited
[2]The balance sheet at December 27, 2009 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. See Note 2 for modifications made as a result of adopting recent accounting pronouncements.

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 28, 2010
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three months ended March28, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ended December26, 2010. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form10-K for Papa Johns International,Inc. (referred to as the Company, Papa Johns or in the first person notations of we, us and our) for the year ended December27, 2009.

Significant Accounting Policies

Significant Accounting Policies
	3 Months Ended Mar. 28, 2010
Significant Accounting Policies
Significant Accounting Policies	2. Significant Accounting Policies Recently Adopted Accounting Principle In 2009, the Financial Accounting Standards Board (FASB) amended the consolidation principles associated with variable interest entities (VIEs) accounting by replacing the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in the VIE with a qualitative approach. The qualitative approach is focused on identifying which company has both the power to direct the activities of a VIE that most significantly impact the entitys economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on the amended consolidation principles, beginning in fiscal 2010, we are no longer required to consolidate certain franchise entities to which we have extended loans. Accordingly, we did not consolidate the financial results of certain franchise entities in the accompanying financial statements for the three months ended March28, 2010 and have retrospectively applied the provisions to prior period financial statements. The retrospective application resulted in the exclusion of $3.4 million of assets in our accompanying consolidated balance sheet at December27, 2009 (there was no impact on our consolidated statements of stockholders equity from this new accounting pronouncement). Additionally, our consolidated income statement for the three months ended March29, 2009 has been adjusted to exclude $5.7 million of revenues associated with these entities. The operating results of these previously consolidated entities had no impact on Papa Johns operating results or earnings per share for the three months ended March29, 2009. Noncontrolling Interests The Consolidation topic of the Accounting Standards Codification (ASC) requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements, but separate from the equity of the parent company. The Consolidation topic further requires that consolidated net income be reported at amounts attributable to the parent and the noncontrolling interest, rather than expensing the income attributable to the minority interest holder. Additionally, disclosures are required to clearly identify and distinguish between the interests of the parent company and the interests of the noncontrolling owners, including a disclosure on the face of the consolidated statements for income attributable to the noncontrolling interest holder. Papa Johns had two joint venture arrangements as of March28, 2010 and March29, 2009, which were as follows: Restaurants Noncontrolling as of Restaurant Papa Johns Interest March28, 2010 Locations Ownership* Ownership* Star Papa, LP 75 Texas 51 % 49 % Colonels Limited, LLC 52 Maryland and Virginia 70 % 30 % *The ownership percentages were the same for both the 2010 and 2009 periods presented in the accompanying consolidated financial statements. The pre-tax income attributable to the joint ventures for the three months ended Marc

Accounting for Variable Interes

Accounting for Variable Interest Entities
	3 Months Ended Mar. 28, 2010
Accounting for Variable Interest Entities
Accounting for Variable Interest Entities	3. Accounting for Variable Interest Entities The Consolidation topic of the ASC provides a framework for identifying VIEs and determining when a company should include the assets, liabilities, noncontrolling interests and results of activities of a VIE in its consolidated financial statements. In general, a VIE is a corporation, partnership, limited liability company, trust, or any other legal structure used to conduct activities or hold assets that either (1)has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2)has a group of equity owners that are unable to make significant decisions about its activities, or (3)has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Consolidation of a VIE is required if a party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) has both of the following characteristics: (1)has the power to direct the activities of a VIE that most significantly impact the VIEs economic performance and (2)is obligated to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIEs assets, liabilities and noncontrolling interests at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. Disclosures about VIEs that the variable interest holder is not required to consolidate but in which it has a significant variable interest is also required. See Note 2 for the impact on our financial statements from the FASBs recent amendment to VIE accounting. We have a purchasing arrangement with BIBP, a special-purpose entity formed at the direction of our Franchise Advisory Council, for the sole purpose of reducing cheese price volatility to domestic system-wide restaurants. BIBP is an independent, franchisee-owned corporation. BIBP purchases cheese at the market price and sells it to our distribution subsidiary, PJ Food Service,Inc. (PJFS), at a fixed price. PJFS in turn sells cheese to Papa Johns restaurants (both Company-owned and franchised) at a fixed monthly price. PJFS purchased $39.1 million and $36.0 million of cheese from BIBP for the three months ended March28, 2010 and March29, 2009, respectively. We are deemed the primary beneficiary of BIBP, a VIE, for accounting purposes. We recognize the operating losses generated by BIBP if BIBPs shareholders equity is in a net deficit position. Further, we recognize the subsequent operating income generated by BIBP up to the amount of any losses previously recognized. We recognized pre-tax income of $3.5 million ($2.2 million net of tax, or $0.08 per diluted share) and $9.0 million ($5.9 million net of tax, or $0.21 per diluted share) for the three months ended March28, 2010 and March29, 2009, respectively, from the consolidation

Debt

Debt
	3 Months Ended Mar. 28, 2010
Debt
Debt	4. Debt Our debt is comprised of the following (in thousands): March28, December27, 2010 2009 Revolving line of credit $ 99,000 $ 99,000 Other 41 50 Total debt 99,041 99,050 Less: current portion of debt (99,041 ) Long-term debt $ $ 99,050 In January2006, we executed a five-year, unsecured Revolving Credit Facility (Credit Facility) totaling $175.0 million. Under the Credit Facility, outstanding balances accrue interest at 50.0 to 100.0 basis points over the London Interbank Offered Rate (LIBOR) or other bank-developed rates, at our option. The commitment fee on the unused balance ranges from 12.5 to 20.0 basis points. The increment over LIBOR and the commitment fee are determined quarterly based upon the ratio of total indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA), as defined. The remaining availability under our line of credit, reduced for certain outstanding letters of credit, approximated $58.0 million as of March28, 2010 and December27, 2009. The fair value of our outstanding debt approximates the carrying value since our debt agreements are variable-rate instruments. The Credit Facility contains customary affirmative and negative covenants, including financial covenants requiring the maintenance of specified fixed charges and leverage ratios. At March28, 2010 and December27, 2009, we were in compliance with these covenants. The revolving line of credit expires in January2011 and thus the $99.0 million outstanding loan balance is classified as a current liability as of March28, 2010. We plan to renew and extend the line of credit during 2010. We do not anticipate any problems in renewing the line of credit. We presently have two interest rate swap agreements (swaps) that provide fixed interest rates, as compared to LIBOR, as follows: Floating Rate Debt Fixed Rates The first interest rate swap agreement: January16, 2007 to January15, 2009 $ 60 million 4.98 % January15, 2009 to January15, 2011 $ 50 million 4.98 % The second interest rate swap agreement: January31, 2009 to January31, 2011 $ 50 million 3.74 % 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 present and/or forecasted future borrowings. The effective portion of the gain or loss on the swaps is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the swaps affect earnings. Gains or losses on the swaps representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Amounts payable or receivable under the swaps are accounted for as adjustments to interest expense. The following tables provide information on the location and amounts of our swaps in the accompanying consolidated financial statements (in thousands): Fair Values of Derivative Instruments: Liability Derivatives Type of Derivative Balanc

Calculation of Earnings Per Sha

Calculation of Earnings Per Share
	3 Months Ended Mar. 28, 2010
Calculation of Earnings Per Share
Calculation of Earnings Per Share	5. Calculation of Earnings Per Share The calculations of basic earnings per common share and earnings per common share assuming dilution are as follows (in thousands, except per-share data): Three Months Ended March28, March29, 2010 2009 Basic earnings per common share: Net income $ 16,875 $ 17,839 Weighted average shares outstanding 27,038 27,640 Basic earnings per common share $ 0.62 $ 0.65 Earnings per common share - assuming dilution: Net income $ 16,875 $ 17,839 Weighted average shares outstanding 27,038 27,640 Dilutive effect of outstanding common stock options 116 67 Diluted weighted average shares outstanding 27,154 27,707 Earnings per common share - assuming dilution $ 0.62 $ 0.64 Shares subject to options to purchase common stock with an exercise price greater than the average market price for the quarter were not included in the computation of the dilutive effect of common stock options because the effect would have been antidilutive. The weighted average number of shares subject to the antidilutive options was 1.4 million and 1.3 million at March28, 2010 and March29, 2009, respectively.

Notes Receivable

Notes Receivable
	3 Months Ended Mar. 28, 2010
Notes Receivable
Notes Receivable	6. Notes Receivable Selected franchisees have borrowed funds from our subsidiary, Capital Delivery, Ltd., principally for use in the acquisition, construction and development of their restaurants. We have also entered into loan agreements with certain franchisees that purchased restaurants from us. Loans outstanding, net of allowance for doubtful accounts, were approximately $16.1 million as of March28, 2010 and $16.4 million as of December27, 2009. We have recorded reserves of $7.5 million and $7.6 million as of March28, 2010 and December27, 2009, respectively, for potentially uncollectible notes receivable. We concluded the reserves were necessary due to certain borrowers economic performance and underlying collateral value.

Contingencies

Contingencies
	3 Months Ended Mar. 28, 2010
Contingencies
Contingencies	7. Contingencies In connection with the 2006 sale of our former Perfect Pizza operations in the United Kingdom, we remain contingently liable for payment under 62 lease arrangements, primarily associated with Perfect Pizza restaurant sites for which the Perfect Pizza franchisor is primarily liable. The leases have varying terms, the latest of which expires in 2017. As of March28, 2010, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the new owner of Perfect Pizza and associated franchisees was approximately $5.2 million. We have not recorded a liability with respect to such leases at March28, 2010, as our cross-default provisions with the Perfect Pizza franchisor significantly reduce the risk that we will be required to make payments under these leases. We are subject to claims and legal actions in the ordinary course of business. We believe that all such claims and actions currently pending against us are either adequately covered by insurance or would not have a material adverse effect on us if decided in a manner unfavorable to us.

Segment Information

Segment Information
	3 Months Ended Mar. 28, 2010
Segment Information
Segment Information	8. Segment Information We have defined six reportable segments: domestic restaurants, domestic commissaries, domestic franchising, international operations, variable interest entities (VIEs) and all other units. The domestic restaurant segment consists of the operations of all domestic (domestic is defined as contiguous United States) Company-owned restaurants and derives its revenues principally from retail sales of pizza and side items, such as breadsticks, cheesesticks, chicken strips, chicken wings, dessert pizza, and soft drinks to the general public. The domestic commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic Company-owned and franchised restaurants. The domestic franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our domestic franchisees. The international operations segment principally consists of our Company-owned restaurants and distribution sales to franchised Papa Johns restaurants located in the United Kingdom, China and Mexico and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our international franchisees. International franchisees are defined as all franchise operations outside of the 48 contiguous United States. BIBP is a variable interest entity in which we are deemed the primary beneficiary, as defined in Note 3, and is the only activity reflected in the VIE segment for both periods presented. All other business units that do not meet the quantitative thresholds for determining reportable segments consist of operations that derive 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 online and other technology-based ordering platforms. Generally, we evaluate performance and allocate resources based on profit or loss from operations before income taxes and eliminations. Certain administrative and capital costs are allocated to segments based upon predetermined rates or actual estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the related profit in consolidation. Our 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. Our segment information is as follows: Three Months Ended (In thousands) March28, 2010 March29, 2009 Revenues from external customers: Domestic Company-owned restaurants $ 129,644 $ 131,705 Domestic commissaries 112,640 109,539 Domestic franchisin

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 28, 2010	Apr. 27, 2010
Document and Entity Information
Entity Registrant Name	PAPA JOHNS INTERNATIONAL INC
Entity Central Index Key	0000901491
Document Type	10-Q
Document Period End Date	2010-03-28
Amendment Flag	false
Current Fiscal Year End Date	--12-26
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		27,049,882
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1