Papa John's International (PZZA) 10-Q 31 Oct 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 24, 2017	Oct. 24, 2017
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 24, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Trading Symbol	PZZA
Entity Registrant Name	PAPA JOHNS INTERNATIONAL INC
Entity Central Index Key	901,491
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		35,042,057

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 24, 2017	Dec. 25, 2016
Current assets:
Cash and cash equivalents	$ 39,543	$ 15,563
Accounts receivable, net	63,266	59,691
Notes receivable, net	3,829	3,417
Income taxes receivable	577	2,372
Inventories	28,369	25,132
Prepaid expenses	14,846	24,105
Other current assets	8,885	9,038
Assets held for sale	8,274	6,257
Total current assets	167,589	145,575
Property and equipment, net	236,812	230,473
Notes receivable, less current portion, net	10,921	10,141
Goodwill	86,825	85,529
Deferred income taxes	289	769
Other assets	48,492	40,078
Total assets	550,928	512,565
Current liabilities:
Accounts payable	38,235	42,701
Income and other taxes payable	10,443	8,540
Accrued expenses and other current liabilities	69,376	76,789
Current portion of long-term debt	20,000
Total current liabilities	138,054	128,030
Deferred revenue	2,987	3,313
Long-term debt, less current portion, net	378,548	299,820
Deferred income taxes	11,823	10,047
Other long-term liabilities	58,898	53,093
Total liabilities	590,310	494,303
Redeemable noncontrolling interests	6,434	8,461
Stockholders’ equity (deficit):
Preferred stock ($0.01 par value per share; no shares issued)
Common stock ($0.01 par value per share; issued 44,214 at September 24, 2017 and 44,066 at December 25, 2016)	442	441
Additional paid-in capital	182,212	172,573
Accumulated other comprehensive loss	(4,230)	(5,887)
Retained earnings	271,601	219,278
Treasury stock (8,905 shares at September 24, 2017 and 7,383 shares at December 25, 2016, at cost)	(509,323)	(390,316)
Total stockholders' equity (deficit), net of noncontrolling interests	(59,298)	(3,911)
Noncontrolling interests in subsidiaries	13,482	13,712
Total stockholders’ equity (deficit)	(45,816)	9,801
Total liabilities, redeemable noncontrolling interests and stockholders’ equity (deficit)	$ 550,928	$ 512,565

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 24, 2017	Dec. 25, 2016
Condensed Consolidated Balance Sheets
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	44,214	44,066
Treasury stock, shares	8,905	7,383

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Revenues:
Total revenues	$ 431,709	$ 422,442	$ 1,315,753	$ 1,274,001
Costs and expenses:
General and administrative expenses	37,330	40,549	117,340	123,419
Depreciation and amortization	11,181	10,614	32,292	30,389
Total costs and expenses	398,194	389,059	1,201,340	1,160,889
Operating income	33,515	33,383	114,413	113,112
Net interest expense	(2,566)	(1,756)	(6,135)	(4,876)
Income before income taxes	30,949	31,627	108,278	108,236
Income tax expense	8,280	8,977	30,728	33,423
Net income before attribution to noncontrolling interests	22,669	22,650	77,550	74,813
Income attributable to noncontrolling interests	(852)	(1,183)	(3,767)	(4,623)
Net income attributable to the Company	21,817	21,467	73,783	70,190
Calculation of income for earnings per share:
Net income attributable to the Company	21,817	21,467	73,783	70,190
Change in noncontrolling interest redemption value	237	(157)	1,419	342
Net income attributable to participating securities	(89)	(87)	(305)	(288)
Net income attributable to common shareholders	$ 21,965	$ 21,223	$ 74,897	$ 70,244
Basic earnings per common share	$ 0.61	$ 0.57	$ 2.05	$ 1.88
Diluted earnings per common share	$ 0.60	$ 0.57	$ 2.02	$ 1.86
Basic weighted average common shares outstanding	36,146	36,989	36,563	37,374
Diluted weighted average common shares outstanding	36,581	37,359	37,047	37,712
Dividends declared per common share	$ 0.225	$ 0.200	$ 0.625	$ 0.550
Domestic Company-owned restaurants
Revenues:
Total revenues	$ 196,267	$ 199,041	$ 605,919	$ 608,968
Costs and expenses:
Operating costs (excluding depreciation and amortization shown separately below)	161,867	161,750	489,719	486,529
North America franchising
Revenues:
Total revenues	25,567	24,776	79,762	76,554
North America commissary and other
Revenues:
Total revenues	178,083	169,684	539,532	503,623
Costs and expenses:
Operating costs (excluding depreciation and amortization shown separately below)	168,031	157,552	504,732	466,616
International
Revenues:
Total revenues	31,792	28,941	90,540	84,856
Costs and expenses:
Operating costs (excluding depreciation and amortization shown separately below)	$ 19,785	$ 18,594	$ 57,257	$ 53,936

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Consolidated Statements of Comprehensive Income (Unaudited)
Net income before attribution to noncontrolling interests	$ 22,669	$ 22,650	$ 77,550	$ 74,813
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	2,894	(2,038)	4,315	(5,551)
Interest rate swaps	641	210	(1,684)	(5,839)
Other comprehensive income (loss), before tax	3,535	(1,828)	2,631	(11,390)
Income tax effect:
Foreign currency translation adjustments	(1,071)	754	(1,597)	2,054
Interest rate swaps	(237)	(78)	623	2,160
Income tax effect	(1,308)	676	(974)	4,214
Other comprehensive income (loss), net of tax	2,227	(1,152)	1,657	(7,176)
Comprehensive income before attribution to noncontrolling interests	24,896	21,498	79,207	67,637
Less: comprehensive income, redeemable noncontrolling interests	(352)	(684)	(1,891)	(2,809)
Less: comprehensive income, nonredeemable noncontrolling interests	(500)	(499)	(1,876)	(1,814)
Comprehensive income attributable to the Company	$ 24,044	$ 20,315	$ 75,440	$ 63,014

Consolidated Statements of Com6

Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Consolidated Statements of Comprehensive Income (Unaudited)
Net interest expense	$ 2,566	$ 1,756	$ 6,135	$ 4,876
Income tax effects	8,280	8,977	30,728	33,423
Qualifying as hedges | Interest rate swap | Amount reclassified from AOCI
Consolidated Statements of Comprehensive Income (Unaudited)
Net interest expense	54	296	378	924
Income tax effects	$ 20	$ 110	$ 140	$ 342

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016
Operating activities
Net income before attribution to noncontrolling interests	$ 77,550	$ 74,813
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for uncollectible accounts and notes receivable	(353)	153
Depreciation and amortization	32,292	30,389
Deferred income taxes	1,283	4,966
Stock-based compensation expense	8,094	7,525
Other	3,004	2,811
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(5,131)	3,867
Income taxes receivable	1,795	5,045
Inventories	(3,234)	(2,673)
Prepaid expenses	9,262	4,755
Other current assets	(1,297)	872
Other assets and liabilities	(4,092)	(3,085)
Accounts payable	(2,480)	(6,290)
Income and other taxes payable	1,779	3,381
Accrued expenses and other current liabilities	(3,229)	(6,484)
Deferred revenue	(326)	1,411
Net cash provided by operating activities	114,917	121,456
Investing activities
Purchases of property and equipment	(43,195)	(38,954)
Loans issued	(2,376)	(2,216)
Repayments of loans issued	3,151	6,449
Acquisitions, net of cash acquired	(21)	(11,202)
Other	25	193
Net cash used in investing activities	(42,416)	(45,730)
Financing activities
Proceeds from issuance of term loan	400,000
Net (repayments) proceeds of revolving credit facility	(300,575)	56,375
Debt issuance costs	(3,181)
Cash dividends paid	(22,886)	(20,523)
Tax payments for equity award issuances	(2,411)	(5,999)
Proceeds from exercise of stock options	5,974	5,377
Acquisition of Company common stock	(121,705)	(109,407)
Distributions to noncontrolling interest holders	(4,606)	(3,830)
Other	580	481
Net cash used in financing activities	(48,810)	(77,526)
Effect of exchange rate changes on cash and cash equivalents	289	(99)
Change in cash and cash equivalents	23,980	(1,899)
Cash and cash equivalents at beginning of period	15,563	21,006
Cash and cash equivalents at end of period	$ 39,543	$ 19,107

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 24, 2017
Basis of Presentation
Basis of Presentation	1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual 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 and nine months ended September 24, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for Papa John’s International, Inc. (referred to as the “Company”, “Papa John’s” or in the first person notations of “we”, “us” and “our”) for the year ended December 25, 2016.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 24, 2017
Significant Accounting Policies
Significant Accounting Policies	2. Noncontrolling Interests Papa John’s has five joint venture arrangements in which there are noncontrolling interests held by third parties. These joint ventures include 222 restaurants at September 24, 2017 and 215 restaurants at September 25, 2016. Subsequent to the end of the third quarter, on September 25, 2017, the Company sold 25 Company-owned restaurants to a current 70% owned joint venture. We are required to report the consolidated net income at amounts attributable to the Company and the noncontrolling interests. Additionally, disclosures are required to clearly identify and distinguish between the interests of the Company and the interests of the noncontrolling owners, including a disclosure on the face of the condensed consolidated statements of income attributable to the noncontrolling interest holder. The income before income taxes attributable to these joint ventures for the three and nine months ended September 24, 2017 and September 25, 2016 was as follows (in thousands): Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Papa John’s International, Inc. $ 1,469 $ 1,879 $ 6,172 $ 7,168 Noncontrolling interests 852 1,183 3,767 4,623 Total income before income taxes $ 2,321 $ 3,062 $ 9,939 $ 11,791 The following summarizes the redemption feature, location and related accounting within the condensed consolidated balance sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase the noncontrolling interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase the noncontrolling interest - not currently redeemable Temporary equity Carrying value *The change in redemption value is recorded as an adjustment to “Redeemable noncontrolling interests” and “Retained earnings” in the condensed consolidated balance sheets. Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining our provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. We use an estimated annual effective rate based on expected annual income to determine our quarterly provision for income taxes. Discrete items are recorded in the quarter in which they occur. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted. As a result, our effective tax rate may fluctuate. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues on a quarterly basis to adjust for events, such as statute of limitations expirations, court or state rulings or audit settlements, which may impact our ultimate payment for such exposures. Fair Value Measurements and Disclosures The Company is required to determine the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Fair value is a market-based measurement, not an entity specific measurement. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash, accounts receivable and accounts payable. The carrying value of our notes receivable net of allowances also approximates fair value. The fair value of the amount outstanding under our Credit Agreement and previous Credit Facility approximates its carrying value due to its variable market-based interest rate. These assets and liabilities are categorized as Level 1 as defined below. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following categories: · Level 1: Quoted market prices in active markets for identical assets or liabilities. · Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. · Level 3: Unobservable inputs that are not corroborated by market data. Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 24, 2017 and December 25, 2016 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 24, 2017 Financial assets: Cash surrender value of life insurance policies (a) $ 27,254 $ 27,254 $ — $ — Financial liabilities: Interest rate swaps (b) 2,454 — 2,454 — December 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ 21,690 $ 21,690 $ — $ — Financial liabilities: Interest rate swaps (b) 770 — 770 — (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 rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”). Our assets and liabilities that were measured at fair value on a non-recurring basis as of September 24, 2017 and December 25, 2016 include assets and liabilities held for sale. The fair value was determined using a discounted cash flow model with unobservable inputs (Level 3) less any estimated selling costs. There were no transfers among levels within the fair value hierarchy during the nine months ended September 24, 2017. Variable Interest Entity Papa John’s domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating domestic restaurants. PJMF is a variable interest entity as it does not have sufficient equity to fund its operations without ongoing financial support and contributions from its members. Based on the ownership and governance structure and operating procedures of PJMF, we have determined that we do not have the power to direct the most significant activities of PJMF and therefore are not the primary beneficiary. Accordingly, consolidation of PJMF is not appropriate. Accounting Standards Adopted Employee Share-Based Payments In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The guidance simplified the accounting and financial reporting of the income tax impact of stock-based compensation arrangements. This guidance requires excess tax benefits to be recorded as a discrete item within income tax expense rather than additional paid-in capital. In addition, excess tax benefits are required to be classified as cash from operating activities rather than cash from financing activities. The Company adopted this guidance as of the beginning of fiscal 2017. The Company elected to apply the cash flow guidance of ASU 2016-09 retrospectively to all prior periods. The impact of retrospectively applying this guidance to the consolidated statement of cash flows for the nine months ended September 25, 2016 was a $5.5 million increase in net cash provided by operating activities and a corresponding increase in net cash used in financing activities. The Company elected to continue to estimate forfeitures, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. Accounting Standards to be Adopted in Future Periods Leases In February 2016, the FASB issued ASU 2016-02, “Leases,” (“ASU 2016-02”), which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and capital leases (financing) with lease terms greater than twelve months. The lease liability will be equal to the present value of lease payments. The lease asset will be based on the lease liability, subject to adjustment, such as for initial direct costs. For income statement purposes, leases will continue to be classified as operating or capital (financing) with lease expense in both cases calculated substantially the same as under the prior leasing guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 (fiscal 2019 for the Company), and early adoption is permitted. The Company has not yet determined the effect of the adoption on its condensed consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (“ASU 2014-09”), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. This update requires companies to recognize revenue at amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services at the time of transfer. In doing so, companies will need to use more judgment and make more estimates than under existing guidance. Such areas may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Companies can either apply a full retrospective adoption or a modified retrospective adoption. In March and April 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”. We are required to adopt ASU 2014-09 in the first quarter of 2018. We do not expect the adoption will significantly impact our recognition of revenue from Company-owned restaurants, commissary sales or our continuing royalties or other fees from franchisees that are based on a percentage of the franchise sales. We are continuing to evaluate the impact on other transactions including our loyalty program (including a change to a deferred revenue approach from the incremental cost accrual model), the impact on local cooperative advertising funds (including a change to gross revenue and expense presentation from net presentation), and the timing of recognizing franchise and development fees. We expect to use the modified retrospective method of adoption. Hedging In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) which intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendment attempts to simplify the application of hedge accounting guidance. T he pronouncement is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We plan to early adopt this guidance in the fourth quarter of 2017; we do not anticipate the impact will be material to our consolidated financial statements.

Calculation of Earnings per Sha

Calculation of Earnings per Share	9 Months Ended
	Sep. 24, 2017
Calculation of Earnings per Share
Calculation of Earnings per Share	3. We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. We consider time-based restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights. Under the two-class method, undistributed earnings allocated to participating securities are subtracted from net income attributable to the Company in determining net income attributable to common shareholders. Additionally, the change in the redemption value for the noncontrolling interest of one of our joint ventures increases or decreases income attributable to common shareholders. The calculations of basic and diluted earnings per common share are as follows (in thousands, except per-share data): Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Basic earnings per common share: Net income attributable to the Company $ 21,817 $ 21,467 $ 73,783 $ 70,190 Change in noncontrolling interest redemption value 237 (157) 1,419 342 Net income attributable to participating securities (89) (87) (305) (288) Net income attributable to common shareholders $ 21,965 $ 21,223 $ 74,897 $ 70,244 Weighted average common shares outstanding 36,146 36,989 36,563 37,374 Basic earnings per common share $ 0.61 $ 0.57 $ 2.05 $ 1.88 Diluted earnings per common share: Net income attributable to common shareholders $ 21,965 $ 21,223 $ 74,897 $ 70,244 Weighted average common shares outstanding 36,146 36,989 36,563 37,374 Dilutive effect of outstanding equity awards (a) 435 370 484 338 Diluted weighted average common shares outstanding 36,581 37,359 37,047 37,712 Diluted earnings per common share $ 0.60 $ 0.57 $ 2.02 $ 1.86 (a) Excludes 328 and 261 awards for the three and nine months ended September 24, 2017, respectively, and 22 and 598 awards for the three and nine months ended September 25, 2016, respectively, as the effect of including such awards would have been antidilutive.

Acquisition of Restaurants

Acquisition of Restaurants	9 Months Ended
	Sep. 24, 2017
Acquisition of Restaurants
Acquisition of Restaurants	4. In the first quarter of 2016, we completed the acquisition of 20 franchised Papa John’s restaurants located in Alabama, Florida and Kentucky in two separate transactions with an aggregate purchase price of $11.2 million. These acquisitions were accounted for by the purchase method of accounting, whereby operating results subsequent to the acquisition date are included in our consolidated financial results. The aggregate final purchase price of the 2016 acquisitions has been allocated as follows (in thousands): Property and equipment $ 1,028 Franchise rights 1,230 Goodwill 8,837 Other 107 Total purchase price $ 11,202 The excess of the purchase price over the aggregate fair value of net assets acquired was allocated to goodwill for the domestic Company-owned restaurants segment and is eligible for deduction over 15 years under U.S. tax regulations.

Debt

Debt	9 Months Ended
	Sep. 24, 2017
Debt
Debt	5. Long-term debt, net consists of the following (in thousands): September 24, December 25, 2017 2016 Outstanding debt $ 400,000 $ 300,575 Unamortized debt issuance costs (1,452) (755) Current portion of long-term debt (20,000) - Total long term debt, less current portion, net $ 378,548 $ 299,820 Our outstanding debt of $300.6 million at December 25, 2016 represented amounts outstanding under a $500 million unsecured revolving line of credit (“previous Credit Facility”) with an expiration date of October 31, 2019. The interest rate charged on outstanding balances was LIBOR plus 75 to 175 basis points. The commitment fee on the unused balance ranged from 15 to 25 basis points. On August 30, 2017, we entered into a new Credit Agreement (the “Credit Agreement”) replacing the previous Credit Facility. This Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $600.0 million (the “Revolving Facility”) and an unsecured term loan facility in an aggregate principal amount of $400.0 million (the “Term Loan Facility” and together with the Revolving Facility, the “Facilities”). Additionally, we have the option to increase the Revolving Facility or the Term Loan Facility in an aggregate amount of up to $300.0 million, subject to certain conditions. Our outstanding debt as of September 24, 2017 under the Facilities was $400.0 million, which was comprised entirely of principal amounts due under the Term Loan Facility. Including outstanding letters of credit, the remaining availability under the Facilities was approximately $569.2 million as of September 24, 2017. In connection with the Credit Agreement, the Company capitalized $3.2 million of debt issuance costs, which are being amortized into interest expense, over the term of the Facilities. Debt issuance costs attributable to the Term Loan of approximately $1.5 million were netted against debt and the remaining amounts attributable to the Revolving Facility were reported in other long term assets. Loans under the Facilities accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 75 to 200 basis points or a base rate (generally determined by a prime rate, federal funds rate or a LIBOR rate plus 1.00%) plus a margin ranging from 0 to 100 basis points. In each case, the actual margin is determined according to a ratio of the Company’s total indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA“) for the then most recently ended four quarter period (the “ Leverage Ratio ”). An unused commitment fee at a rate ranging from 15 to 30 basis points per annum, determined according to the Leverage Ratio, applies to the unutilized commitments under the Revolving Facility. Loans outstanding under the Credit Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings for which a LIBOR rate election is in effect. Up to $35.0 million of the Revolving Facility may be advanced in certain agreed foreign currencies, including Euros, Pounds Sterling, Canadian Dollars, Japanese Yen, and Mexican Pesos. The Facilities mature on August 30, 2022. Quarterly amortization payments are required to be made on the Term Loan Facility in the amount of $5.0 million beginning in the fourth quarter of 2017. The obligations under the Credit Agreement are guaranteed by certain direct and indirect material subsidiaries of the Company. The Credit Agreement contains customary affirmative and negative covenants, including financial covenants requiring the maintenance of specified fixed charges and leverage ratios. At September 24, 2017, we were in compliance with these covenants. We attempt to minimize interest risk exposure by fixing our rate through the utilization of interest rate swaps, which are derivative financial instruments. Our swaps are entered into with financial institutions that participate in our Credit Agreement. By using a derivative instrument to hedge exposures to changes in interest rates, we expose ourselves to credit risk. Credit risk is due to the possible failure of the counterparty to perform under the terms of the derivative contract. As of September 24, 2017, we have the following interest rate swap agreements, including three forward starting swaps executed in 2015 that become effective in 2018 upon expiration of the two existing swaps for $125 million: Effective Dates Floating Rate Debt Fixed Rates July 30, 2013 through April 30, 2018 $ 75 million 1.42 % December 30, 2014 through April 30, 2018 $ 50 million 1.36 % April 30, 2018 through April 30, 2023 $ 55 million 2.33 % April 30, 2018 through April 30, 2023 $ 35 million 2.36 % April 30, 2018 through April 30, 2023 $ 35 million 2.34 % Subsequent to the end of the third quarter, in October 2017, we executed the following additional interest rate swaps for $275 million, which are forward starting swaps that become effective in 2018. Effective Dates Floating Rate Debt Fixed Rates January 30, 2018 through August 30, 2022 $ million 1.99 % January 30, 2018 through August 30, 2022 $ 75 million 1.99 % January 30, 2018 through August 30, 2022 $ 75 million 2.00 % January 30, 2018 through August 30, 2022 $ 25 million 1.99 % The weighted average interest rates on our debt, including the impact of the interest rate swap agreements, were 2.7% and 2.4% for the three and nine months ended September 24, 2017, respectively, and 2.1% for both the three and nine months ended September 25, 2016. Interest paid, including payments made or received under the swaps, was $2.0 million and $1.9 million for the three months ended September 24, 2017 and September 25, 2016, respectively, and $5.9 million and $5.3 million for the nine months ended September 24, 2017 and September 25, 2016, respectively. As of September 24, 2017, the portion of the aggregate $2.5 million interest rate swap liability that would be reclassified into earnings during the next twelve months as interest expense approximates $210,000.

Segment Information

Segment Information	9 Months Ended
	Sep. 24, 2017
Segment Information
Segment Information	6. We have five reportable segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and “all other” units. The domestic Company-owned 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, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. The North America 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 in the United States and Canada. The North America 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 franchisees located in the United States and Canada. The international operations segment principally consists of Company-owned restaurants in China and distribution sales to franchised Papa John’s restaurants located in the United Kingdom, Mexico and China 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 United States and Canada. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as our “all other” segment, which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, and information systems and related services used in restaurant operations, including our point-of-sale system, 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 intercompany 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 activity 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 (in thousands): (In thousands) Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Revenues from external customers: Domestic Company-owned restaurants $ 196,267 $ 199,041 $ 605,919 $ 608,968 North America commissaries 164,028 155,208 495,427 462,057 North America franchising 25,567 24,776 79,762 76,554 International 31,792 28,941 90,540 84,856 All others 14,055 14,476 44,105 41,566 Total revenues from external customers $ 431,709 $ 422,442 $ 1,315,753 $ 1,274,001 Intersegment revenues: North America commissaries $ 60,364 $ 59,811 $ 181,302 $ 175,859 North America franchising 709 688 2,224 2,140 International 71 64 202 196 All others 3,716 4,129 12,826 12,301 Total intersegment revenues $ 64,860 $ 64,692 $ 196,554 $ 190,496 Income (loss) before income taxes: Domestic Company-owned restaurants $ 8,449 $ 11,576 $ 39,486 $ 47,088 North America commissaries 10,087 11,311 34,418 34,539 North America franchising 22,858 21,856 71,732 67,881 International 3,909 3,083 11,518 8,996 All others 9 392 (135) 868 Unallocated corporate expenses (14,336) (16,360) (48,294) (49,771) Elimination of intersegment profit and losses (27) (231) (447) (1,365) Total income before income taxes $ 30,949 $ 31,627 $ 108,278 $ 108,236 Property and equipment: Domestic Company-owned restaurants $ 231,543 North America commissaries 136,270 International 18,246 All others 56,794 Unallocated corporate assets 188,631 Accumulated depreciation and amortization (394,672) Net property and equipment $ 236,812

Significant Accounting Polici14

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 24, 2017
Significant Accounting Policies
Noncontrolling Interests	Noncontrolling Interests Papa John’s has five joint venture arrangements in which there are noncontrolling interests held by third parties. These joint ventures include 222 restaurants at September 24, 2017 and 215 restaurants at September 25, 2016. Subsequent to the end of the third quarter, on September 25, 2017, the Company sold 25 Company-owned restaurants to a current 70% owned joint venture. We are required to report the consolidated net income at amounts attributable to the Company and the noncontrolling interests. Additionally, disclosures are required to clearly identify and distinguish between the interests of the Company and the interests of the noncontrolling owners, including a disclosure on the face of the condensed consolidated statements of income attributable to the noncontrolling interest holder. The income before income taxes attributable to these joint ventures for the three and nine months ended September 24, 2017 and September 25, 2016 was as follows (in thousands): Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Papa John’s International, Inc. $ 1,469 $ 1,879 $ 6,172 $ 7,168 Noncontrolling interests 852 1,183 3,767 4,623 Total income before income taxes $ 2,321 $ 3,062 $ 9,939 $ 11,791 The following summarizes the redemption feature, location and related accounting within the condensed consolidated balance sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase the noncontrolling interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase the noncontrolling interest - not currently redeemable Temporary equity Carrying value *The change in redemption value is recorded as an adjustment to “Redeemable noncontrolling interests” and “Retained earnings” in the condensed consolidated balance sheets.
Deferred Income Tax Accounts and Tax Reserves	Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining our provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. We use an estimated annual effective rate based on expected annual income to determine our quarterly provision for income taxes. Discrete items are recorded in the quarter in which they occur. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted. As a result, our effective tax rate may fluctuate. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues on a quarterly basis to adjust for events, such as statute of limitations expirations, court or state rulings or audit settlements, which may impact our ultimate payment for such exposures.
Fair Value Measurements and Disclosures	Fair Value Measurements and Disclosures The Company is required to determine the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Fair value is a market-based measurement, not an entity specific measurement. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash, accounts receivable and accounts payable. The carrying value of our notes receivable net of allowances also approximates fair value. The fair value of the amount outstanding under our Credit Agreement and previous Credit Facility approximates its carrying value due to its variable market-based interest rate. These assets and liabilities are categorized as Level 1 as defined below. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following categories: · Level 1: Quoted market prices in active markets for identical assets or liabilities. · Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. · Level 3: Unobservable inputs that are not corroborated by market data. Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 24, 2017 and December 25, 2016 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 24, 2017 Financial assets: Cash surrender value of life insurance policies (a) $ 27,254 $ 27,254 $ — $ — Financial liabilities: Interest rate swaps (b) 2,454 — 2,454 — December 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ 21,690 $ 21,690 $ — $ — Financial liabilities: Interest rate swaps (b) 770 — 770 — (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 rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”). Our assets and liabilities that were measured at fair value on a non-recurring basis as of September 24, 2017 and December 25, 2016 include assets and liabilities held for sale. The fair value was determined using a discounted cash flow model with unobservable inputs (Level 3) less any estimated selling costs. There were no transfers among levels within the fair value hierarchy during the nine months ended September 24, 2017.
Variable Interest Entity	Variable Interest Entity Papa John’s domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating domestic restaurants. PJMF is a variable interest entity as it does not have sufficient equity to fund its operations without ongoing financial support and contributions from its members. Based on the ownership and governance structure and operating procedures of PJMF, we have determined that we do not have the power to direct the most significant activities of PJMF and therefore are not the primary beneficiary. Accordingly, consolidation of PJMF is not appropriate.
Recent Accounting Pronouncements	Accounting Standards Adopted Employee Share-Based Payments In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The guidance simplified the accounting and financial reporting of the income tax impact of stock-based compensation arrangements. This guidance requires excess tax benefits to be recorded as a discrete item within income tax expense rather than additional paid-in capital. In addition, excess tax benefits are required to be classified as cash from operating activities rather than cash from financing activities. The Company adopted this guidance as of the beginning of fiscal 2017. The Company elected to apply the cash flow guidance of ASU 2016-09 retrospectively to all prior periods. The impact of retrospectively applying this guidance to the consolidated statement of cash flows for the nine months ended September 25, 2016 was a $5.5 million increase in net cash provided by operating activities and a corresponding increase in net cash used in financing activities. The Company elected to continue to estimate forfeitures, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. Accounting Standards to be Adopted in Future Periods Leases In February 2016, the FASB issued ASU 2016-02, “Leases,” (“ASU 2016-02”), which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and capital leases (financing) with lease terms greater than twelve months. The lease liability will be equal to the present value of lease payments. The lease asset will be based on the lease liability, subject to adjustment, such as for initial direct costs. For income statement purposes, leases will continue to be classified as operating or capital (financing) with lease expense in both cases calculated substantially the same as under the prior leasing guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 (fiscal 2019 for the Company), and early adoption is permitted. The Company has not yet determined the effect of the adoption on its condensed consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (“ASU 2014-09”), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. This update requires companies to recognize revenue at amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services at the time of transfer. In doing so, companies will need to use more judgment and make more estimates than under existing guidance. Such areas may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Companies can either apply a full retrospective adoption or a modified retrospective adoption. In March and April 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”. We are required to adopt ASU 2014-09 in the first quarter of 2018. We do not expect the adoption will significantly impact our recognition of revenue from Company-owned restaurants, commissary sales or our continuing royalties or other fees from franchisees that are based on a percentage of the franchise sales. We are continuing to evaluate the impact on other transactions including our loyalty program (including a change to a deferred revenue approach from the incremental cost accrual model), the impact on local cooperative advertising funds (including a change to gross revenue and expense presentation from net presentation), and the timing of recognizing franchise and development fees. We expect to use the modified retrospective method of adoption. Hedging In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) which intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendment attempts to simplify the application of hedge accounting guidance. T he pronouncement is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We plan to early adopt this guidance in the fourth quarter of 2017; we do not anticipate the impact will be material to our consolidated financial statements.

Significant Accounting Polici15

Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 24, 2017
Significant Accounting Policies
Schedule of Income Before Income Taxes Attributable to Joint Ventures	The income before income taxes attributable to these joint ventures for the three and nine months ended September 24, 2017 and September 25, 2016 was as follows (in thousands): Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Papa John’s International, Inc. $ 1,469 $ 1,879 $ 6,172 $ 7,168 Noncontrolling interests 852 1,183 3,767 4,623 Total income before income taxes $ 2,321 $ 3,062 $ 9,939 $ 11,791
Schedule of Joint Ventures in Which There are Noncontrolling Interests	The following summarizes the redemption feature, location and related accounting within the condensed consolidated balance sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase the noncontrolling interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase the noncontrolling interest - not currently redeemable Temporary equity Carrying value *The change in redemption value is recorded as an adjustment to “Redeemable noncontrolling interests” and “Retained earnings” in the condensed consolidated balance sheets.
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis	Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 24, 2017 and December 25, 2016 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 24, 2017 Financial assets: Cash surrender value of life insurance policies (a) $ 27,254 $ 27,254 $ — $ — Financial liabilities: Interest rate swaps (b) 2,454 — 2,454 — December 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ 21,690 $ 21,690 $ — $ — Financial liabilities: Interest rate swaps (b) 770 — 770 — (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 rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”).

Calculation of Earnings Per S16

Calculation of Earnings Per Share (Tables)	9 Months Ended
	Sep. 24, 2017
Calculation of Earnings per Share
Schedule of Earnings Per Share, Basic and Diluted	The calculations of basic and diluted earnings per common share are as follows (in thousands, except per-share data): Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Basic earnings per common share: Net income attributable to the Company $ 21,817 $ 21,467 $ 73,783 $ 70,190 Change in noncontrolling interest redemption value 237 (157) 1,419 342 Net income attributable to participating securities (89) (87) (305) (288) Net income attributable to common shareholders $ 21,965 $ 21,223 $ 74,897 $ 70,244 Weighted average common shares outstanding 36,146 36,989 36,563 37,374 Basic earnings per common share $ 0.61 $ 0.57 $ 2.05 $ 1.88 Diluted earnings per common share: Net income attributable to common shareholders $ 21,965 $ 21,223 $ 74,897 $ 70,244 Weighted average common shares outstanding 36,146 36,989 36,563 37,374 Dilutive effect of outstanding equity awards (a) 435 370 484 338 Diluted weighted average common shares outstanding 36,581 37,359 37,047 37,712 Diluted earnings per common share $ 0.60 $ 0.57 $ 2.02 $ 1.86 (a) Excludes 328 and 261 awards for the three and nine months ended September 24, 2017, respectively, and 22 and 598 awards for the three and nine months ended September 25, 2016, respectively, as the effect of including such awards would have been antidilutive.

Acquisition of Restaurants (Tab

Acquisition of Restaurants (Tables)	9 Months Ended
	Sep. 24, 2017
Acquisition of Restaurants
Schedule of Acquired Restaurants	The aggregate final purchase price of the 2016 acquisitions has been allocated as follows (in thousands): Property and equipment $ 1,028 Franchise rights 1,230 Goodwill 8,837 Other 107 Total purchase price $ 11,202

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 24, 2017
Debt
Schedule of long-term debt, net	Long-term debt, net consists of the following (in thousands): September 24, December 25, 2017 2016 Outstanding debt $ 400,000 $ 300,575 Unamortized debt issuance costs (1,452) (755) Current portion of long-term debt (20,000) - Total long term debt, less current portion, net $ 378,548 $ 299,820
Schedule of Interest Rate Swap Agreements	As of September 24, 2017, we have the following interest rate swap agreements, including three forward starting swaps executed in 2015 that become effective in 2018 upon expiration of the two existing swaps for $125 million: Effective Dates Floating Rate Debt Fixed Rates July 30, 2013 through April 30, 2018 $ 75 million 1.42 % December 30, 2014 through April 30, 2018 $ 50 million 1.36 % April 30, 2018 through April 30, 2023 $ 55 million 2.33 % April 30, 2018 through April 30, 2023 $ 35 million 2.36 % April 30, 2018 through April 30, 2023 $ 35 million 2.34 % Subsequent to the end of the third quarter, in October 2017, we executed the following additional interest rate swaps for $275 million, which are forward starting swaps that become effective in 2018. Effective Dates Floating Rate Debt Fixed Rates January 30, 2018 through August 30, 2022 $ million 1.99 % January 30, 2018 through August 30, 2022 $ 75 million 1.99 % January 30, 2018 through August 30, 2022 $ 75 million 2.00 % January 30, 2018 through August 30, 2022 $ 25 million 1.99 %

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 24, 2017
Segment Information
Schedule of Segment Reporting Information, by Segment	Our segment information is as follows (in thousands): (In thousands) Three Months Ended Nine Months Ended September 24, September 25, September 24, September 25, 2017 2016 2017 2016 Revenues from external customers: Domestic Company-owned restaurants $ 196,267 $ 199,041 $ 605,919 $ 608,968 North America commissaries 164,028 155,208 495,427 462,057 North America franchising 25,567 24,776 79,762 76,554 International 31,792 28,941 90,540 84,856 All others 14,055 14,476 44,105 41,566 Total revenues from external customers $ 431,709 $ 422,442 $ 1,315,753 $ 1,274,001 Intersegment revenues: North America commissaries $ 60,364 $ 59,811 $ 181,302 $ 175,859 North America franchising 709 688 2,224 2,140 International 71 64 202 196 All others 3,716 4,129 12,826 12,301 Total intersegment revenues $ 64,860 $ 64,692 $ 196,554 $ 190,496 Income (loss) before income taxes: Domestic Company-owned restaurants $ 8,449 $ 11,576 $ 39,486 $ 47,088 North America commissaries 10,087 11,311 34,418 34,539 North America franchising 22,858 21,856 71,732 67,881 International 3,909 3,083 11,518 8,996 All others 9 392 (135) 868 Unallocated corporate expenses (14,336) (16,360) (48,294) (49,771) Elimination of intersegment profit and losses (27) (231) (447) (1,365) Total income before income taxes $ 30,949 $ 31,627 $ 108,278 $ 108,236 Property and equipment: Domestic Company-owned restaurants $ 231,543 North America commissaries 136,270 International 18,246 All others 56,794 Unallocated corporate assets 188,631 Accumulated depreciation and amortization (394,672) Net property and equipment $ 236,812

Significant Accounting Polici20

Significant Accounting Policies - Noncontrolling Interest and Joint Ventures (Details) $ in Thousands	Sep. 25, 2017restaurant	Sep. 24, 2017USD ($)restaurantentity	Sep. 25, 2016USD ($)restaurant	Sep. 24, 2017USD ($)restaurantentity	Sep. 25, 2016USD ($)restaurant
Income Amounts Attributable to Noncontrolling Interest, Disclosures
Noncontrolling interests		$ 852	$ 1,183	$ 3,767	$ 4,623
Total income before income taxes		$ 30,949	$ 31,627	$ 108,278	$ 108,236
Joint ventures
Noncontrolling Interests
Number of Joint Ventures Having Noncontrolling Interests | entity		5		5
Number of Restaurants | restaurant		222	215	222	215
Income Amounts Attributable to Noncontrolling Interest, Disclosures
Papa John's International, Inc.		$ 1,469	$ 1,879	$ 6,172	$ 7,168
Noncontrolling interests		852	1,183	3,767	4,623
Total income before income taxes		$ 2,321	$ 3,062	$ 9,939	$ 11,791
70% joint venture | Subsequent event
Noncontrolling Interests
Number of restaurants sold | restaurant	25
Joint venture ownership percentage	70.00%

Significant Accounting Polici21

Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2017	Dec. 25, 2016
Measurement of financial assets and liabilities at fair value on a recurring basis
Transfers among levels within the fair value hierarchy	$ 0
Carrying Value
Measurement of financial assets and liabilities at fair value on a recurring basis
Cash surrender value of life insurance policies	27,254	$ 21,690
Interest rate swap liabilities	2,454	770
Measured on Recurring Basis | Level 1
Measurement of financial assets and liabilities at fair value on a recurring basis
Cash surrender value of life insurance policies	27,254	21,690
Measured on Recurring Basis | Level 2
Measurement of financial assets and liabilities at fair value on a recurring basis
Interest rate swap liabilities	$ 2,454	$ 770

Significant Accounting Polici22

Significant Accounting Policies – Accounting Standards Adopted (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities	$ 114,917	$ 121,456
Net cash used in financing activities	$ 48,810	77,526
Accounting Standards Update 2016-09 | Restatement
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities		5,500
Net cash used in financing activities		$ 5,500

Calculation of Earnings Per S23

Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Basic earnings per common share:
Net income attributable to the Company	$ 21,817	$ 21,467	$ 73,783	$ 70,190
Change in noncontrolling interest redemption value	237	(157)	1,419	342
Net income attributable to participating securities	(89)	(87)	(305)	(288)
Net income attributable to common shareholders	$ 21,965	$ 21,223	$ 74,897	$ 70,244
Weighted average common shares outstanding	36,146	36,989	36,563	37,374
Basic earnings per common share	$ 0.61	$ 0.57	$ 2.05	$ 1.88
Diluted earnings per common share:
Net income attributable to common shareholders	$ 21,965	$ 21,223	$ 74,897	$ 70,244
Weighted average common shares outstanding	36,146	36,989	36,563	37,374
Dilutive effect of outstanding equity awards	435	370	484	338
Diluted weighted average common shares outstanding	36,581	37,359	37,047	37,712
Diluted earnings per common share	$ 0.60	$ 0.57	$ 2.02	$ 1.86
Weighted average antidilutive awards excluded from computation of earnings per share	328	22	261	598

Acquisition of Restaurants (Det

Acquisition of Restaurants (Details) $ in Thousands	3 Months Ended
	Mar. 27, 2016USD ($)restaurantitem	Sep. 24, 2017USD ($)	Dec. 25, 2016USD ($)
Fair value allocation of purchase price
Goodwill		$ 86,825	$ 85,529
Multiple restaurants acquired, 2016
Purchase price
Number of restaurants acquired | restaurant	20
Number of transactions in which acquisition completed | item	2
Fair value allocation of purchase price
Property and equipment	$ 1,028
Franchise rights	1,230
Goodwill	8,837
Other	107
Total purchase price	$ 11,202

Debt - Schedule of Long Term De

Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands	Sep. 24, 2017	Dec. 25, 2016
Debt
Outstanding debt	$ 400,000	$ 300,575
Unamortized debt issuance costs	(1,452)	(755)
Current portion of long-term debt	(20,000)
Total long-term debt, less current portion, net	$ 378,548	$ 299,820

Debt - Credit Agreements (Detai

Debt - Credit Agreements (Details) $ in Thousands	Aug. 30, 2017USD ($)item	Dec. 25, 2016USD ($)	Sep. 24, 2017USD ($)
Debt
Aggregate principal amount		$ 300,575	$ 400,000
Debt issuance costs		755	1,452
Previous Credit Facility
Debt
Outstanding debt		300,600
Line of credit facility, maximum borrowing capacity		$ 500,000
Previous Credit Facility | Minimum
Debt
Percentage of commitment fee on unused credit facility		0.15%
Previous Credit Facility | Maximum
Debt
Percentage of commitment fee on unused credit facility		0.25%
Previous Credit Facility | LIBOR | Minimum
Debt
Interest margin rate on debt		0.75%
Previous Credit Facility | LIBOR | Maximum
Debt
Interest margin rate on debt		1.75%
Credit Agreement
Debt
Outstanding debt			400,000
Additional amount that company has option to increase borrowing capacity	$ 300,000
Line of credit facility, remaining availability			$ 569,200
Debt issuance costs	$ 3,200
Number of quarters in interest margin period | item	4
Credit Agreement | LIBOR | Minimum
Debt
Interest margin rate on debt	0.75%
Credit Agreement | LIBOR | Maximum
Debt
Interest margin rate on debt	2.00%
Credit Agreement | Base rate | Minimum
Debt
Interest margin rate on debt	0.00%
Credit Agreement | Base rate | Maximum
Debt
Interest margin rate on debt	1.00%
Revolving Facility | Credit Agreement
Debt
Line of credit facility, maximum borrowing capacity	$ 600,000
Line of credit facility, maximum borrowing capacity of foreign currencies	$ 35,000
Revolving Facility | Credit Agreement | Minimum
Debt
Percentage of commitment fee on unused credit facility	0.15%
Revolving Facility | Credit Agreement | Maximum
Debt
Percentage of commitment fee on unused credit facility	0.30%
Term Loan Facility | Credit Agreement
Debt
Aggregate principal amount	$ 400,000
Debt issuance costs	1,500
Quarterly amortization payment	$ 5,000

Debt - Derivatives (Details)

Debt - Derivatives (Details)	3 Months Ended		9 Months Ended
	Sep. 24, 2017USD ($)derivative	Sep. 25, 2016USD ($)	Sep. 24, 2017USD ($)derivative	Sep. 25, 2016USD ($)	Oct. 31, 2017USD ($)
Interest rate swaps
Weighted average interest rates on debt, including impact of interest rate swaps	2.70%	2.10%	2.40%	2.10%
Interest paid	$ 2,000,000	$ 1,900,000	$ 5,900,000	$ 5,300,000
Interest rate swap
Interest rate swaps
Interest rate swap liabilities	$ 2,500,000		2,500,000
Interest rate swap | Interest expense
Interest rate swaps
Portion of derivative liability that would be reclassified into earnings			$ 210,000
Estimate of period of time over which portion of derivative liability would be reclassified into earnings			12 months
Interest rate swaps executed before 2015
Interest rate swaps
Number of derivatives held | derivative	2		2
Interest rate swap agreement, notional amount	$ 125,000,000		$ 125,000,000
Interest rate swaps executed in 2015
Interest rate swaps
Number of derivatives held | derivative	3		3
Interest rate swaps executed in October 2017 | Subsequent event
Interest rate swaps
Interest rate swap agreement, notional amount					$ 275,000,000
Interest rate swap, July 2013, 1.42% fixed
Interest rate swaps
Interest rate swap agreement, notional amount	$ 75,000,000		$ 75,000,000
Interest rate swap agreement, fixed interest rate	1.42%		1.42%
Interest rate swap, December 2014, 1.36% fixed
Interest rate swaps
Interest rate swap agreement, notional amount	$ 50,000,000		$ 50,000,000
Interest rate swap agreement, fixed interest rate	1.36%		1.36%
Interest rate swap, April 2018, 2.33% fixed
Interest rate swaps
Interest rate swap agreement, notional amount	$ 55,000,000		$ 55,000,000
Interest rate swap agreement, fixed interest rate	2.33%		2.33%
Interest rate swap, April 2018, 2.36% fixed
Interest rate swaps
Interest rate swap agreement, notional amount	$ 35,000,000		$ 35,000,000
Interest rate swap agreement, fixed interest rate	2.36%		2.36%
Interest rate swap, April 2018, 2.34% fixed
Interest rate swaps
Interest rate swap agreement, notional amount	$ 35,000,000		$ 35,000,000
Interest rate swap agreement, fixed interest rate	2.34%		2.34%
Interest rate swap, January 2018, 1.99% fixed, $100 million notional amount | Subsequent event
Interest rate swaps
Interest rate swap agreement, notional amount					$ 100,000,000
Interest rate swap agreement, fixed interest rate					1.99%
Interest rate swap, January 2018, 1.99% fixed, $75 million notional amount | Subsequent event
Interest rate swaps
Interest rate swap agreement, notional amount					$ 75,000,000
Interest rate swap agreement, fixed interest rate					1.99%
Interest rate swap, January 2018, 2.00% fixed, $75 million notional amount | Subsequent event
Interest rate swaps
Interest rate swap agreement, notional amount					$ 75,000,000
Interest rate swap agreement, fixed interest rate					2.00%
Interest rate swap, January 2018, 1.99% fixed, $25 million notional amount | Subsequent event
Interest rate swaps
Interest rate swap agreement, notional amount					$ 25,000,000
Interest rate swap agreement, fixed interest rate					1.99%

Segment Information - Concentra

Segment Information - Concentration (Details)	Sep. 24, 2017customer
Consolidated revenues
Major customers disclosures
Concentration risk, number	0

Segment Information - Schedule

Segment Information - Schedule of Segment Reporting Information, by Segment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2017USD ($)	Sep. 25, 2016USD ($)	Sep. 24, 2017USD ($)segment	Sep. 25, 2016USD ($)	Dec. 25, 2016USD ($)
Segment Information
Reportable segments, number | segment			5
Revenues	$ 431,709	$ 422,442	$ 1,315,753	$ 1,274,001
Income (loss) before income taxes	30,949	31,627	108,278	108,236
Accumulated depreciation and amortization	(394,672)		(394,672)
Net property and equipment	236,812		236,812		$ 230,473
Domestic Company-owned restaurants
Segment Information
Revenues	196,267	199,041	605,919	608,968
North America franchising
Segment Information
Revenues	25,567	24,776	79,762	76,554
International
Segment Information
Revenues	31,792	28,941	90,540	84,856
Operating segments
Segment Information
Revenues	431,709	422,442	1,315,753	1,274,001
Operating segments | Domestic Company-owned restaurants
Segment Information
Revenues	196,267	199,041	605,919	608,968
Income (loss) before income taxes	8,449	11,576	39,486	47,088
Property and equipment, gross	231,543		231,543
Operating segments | North America commissaries
Segment Information
Revenues	164,028	155,208	495,427	462,057
Income (loss) before income taxes	10,087	11,311	34,418	34,539
Property and equipment, gross	136,270		136,270
Operating segments | North America franchising
Segment Information
Revenues	25,567	24,776	79,762	76,554
Income (loss) before income taxes	22,858	21,856	71,732	67,881
Operating segments | International
Segment Information
Revenues	31,792	28,941	90,540	84,856
Income (loss) before income taxes	3,909	3,083	11,518	8,996
Property and equipment, gross	18,246		18,246
Operating segments | All others
Segment Information
Revenues	14,055	14,476	44,105	41,566
Income (loss) before income taxes	9	392	(135)	868
Property and equipment, gross	56,794		56,794
Elimination
Segment Information
Revenues	64,860	64,692	196,554	190,496
Income (loss) before income taxes	(27)	(231)	(447)	(1,365)
Elimination | North America commissaries
Segment Information
Revenues	60,364	59,811	181,302	175,859
Elimination | North America franchising
Segment Information
Revenues	709	688	2,224	2,140
Elimination | International
Segment Information
Revenues	71	64	202	196
Elimination | All others
Segment Information
Revenues	3,716	4,129	12,826	12,301
Unallocated corporate
Segment Information
Income (loss) before income taxes	(14,336)	$ (16,360)	(48,294)	$ (49,771)
Property and equipment, gross	$ 188,631		$ 188,631