Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 25, 2016 | Oct. 25, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 25, 2016 | |
Document Fiscal Year Focus | 2,016 | |
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 | --12-25 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,889,475 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 25, 2016 | Dec. 27, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 19,107 | $ 21,006 |
Accounts receivable, net | 59,046 | 63,320 |
Notes receivable, net | 4,269 | 7,816 |
Income taxes receivable | 701 | 272 |
Inventories | 24,328 | 21,564 |
Prepaid expenses | 15,633 | 20,372 |
Other current assets | 8,584 | 8,941 |
Assets held for sale | 8,784 | 9,299 |
Total current assets | 140,452 | 152,590 |
Property and equipment, net | 221,809 | 214,044 |
Notes receivable, less current portion, net | 9,747 | 11,105 |
Goodwill | 86,570 | 79,657 |
Deferred income taxes | 1,428 | 2,415 |
Other assets | 38,782 | 34,247 |
Total assets | 498,788 | 494,058 |
Current liabilities: | ||
Accounts payable | 37,302 | 43,492 |
Income and other taxes payable | 11,909 | 8,527 |
Accrued expenses and other current liabilities | 73,648 | 80,918 |
Total current liabilities | 122,859 | 132,937 |
Deferred revenue | 3,772 | 3,190 |
Long-term debt, net | 311,570 | 255,146 |
Deferred income taxes | 2,215 | 4,610 |
Other long-term liabilities | 61,161 | 47,606 |
Total liabilities | 501,577 | 443,489 |
Redeemable noncontrolling interests | 8,830 | 8,363 |
Stockholders’ (deficit) equity: | ||
Preferred stock ($0.01 par value per share; no shares issued) | ||
Common stock ($0.01 par value per share; issued 44,017 at September 25, 2016 and 43,731 at December 27, 2015) | 440 | 437 |
Additional paid-in capital | 167,626 | 158,348 |
Accumulated other comprehensive loss | (9,011) | (1,836) |
Retained earnings | 193,798 | 143,789 |
Treasury stock (7,227 shares at September 25, 2016 and 5,308 shares at December 27, 2015, at cost) | (377,481) | (271,557) |
Total stockholders' (deficit) equity, net of noncontrolling interests | (24,628) | 29,181 |
Noncontrolling interests in subsidiaries | 13,009 | 13,025 |
Total stockholders’ (deficit) equity | (11,619) | 42,206 |
Total liabilities, redeemable noncontrolling interests and stockholders’ (deficit) equity | $ 498,788 | $ 494,058 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 25, 2016 | Dec. 27, 2015 |
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 | 44,017 | 43,731 |
Treasury stock, shares | 7,227 | 5,308 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2016 | Sep. 27, 2015 | Sep. 25, 2016 | Sep. 27, 2015 | |
Revenues: | ||||
Total revenues | $ 422,442 | $ 389,284 | $ 1,274,001 | $ 1,220,559 |
Costs and expenses: | ||||
General and administrative expenses | 40,549 | 37,660 | 123,419 | 124,456 |
Depreciation and amortization | 10,614 | 10,461 | 30,389 | 30,638 |
Total costs and expenses | 389,059 | 361,847 | 1,160,889 | 1,124,481 |
Operating income | 33,383 | 27,437 | 113,112 | 96,078 |
Legal settlement expense | (12,278) | |||
Net interest expense | (1,756) | (1,180) | (4,876) | (3,576) |
Income before income taxes | 31,627 | 26,257 | 108,236 | 80,224 |
Income tax expense | 8,977 | 7,281 | 33,423 | 24,541 |
Net income before attribution to noncontrolling interests | 22,650 | 18,976 | 74,813 | 55,683 |
Income attributable to noncontrolling interests | (1,183) | (1,005) | (4,623) | (4,696) |
Net income attributable to the Company | 21,467 | 17,971 | 70,190 | 50,987 |
Calculation of income for earnings per share: | ||||
Net income attributable to the Company | 21,467 | 17,971 | 70,190 | 50,987 |
Change in noncontrolling interest redemption value | (157) | 49 | 342 | 192 |
Net income attributable to participating securities | (87) | (73) | (288) | (223) |
Net income attributable to common shareholders | $ 21,223 | $ 17,947 | $ 70,244 | $ 50,956 |
Basic earnings per common share | $ 0.57 | $ 0.46 | $ 1.88 | $ 1.29 |
Diluted earnings per common share | $ 0.57 | $ 0.45 | $ 1.86 | $ 1.27 |
Basic weighted average common shares outstanding | 36,989 | 39,394 | 37,374 | 39,640 |
Diluted weighted average common shares outstanding | 37,359 | 39,895 | 37,712 | 40,210 |
Dividends declared per common share | $ 0.200 | $ 0.175 | $ 0.550 | $ 0.455 |
International | ||||
Revenues: | ||||
Total revenues | $ 28,941 | $ 27,001 | $ 84,856 | $ 78,753 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below) | 18,594 | 16,481 | 53,936 | 48,209 |
Domestic market | Domestic Company-owned restaurants | ||||
Revenues: | ||||
Total revenues | 199,041 | 180,059 | 608,968 | 563,308 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below) | 161,750 | 148,536 | 486,529 | 450,924 |
Domestic market | North America franchising | ||||
Revenues: | ||||
Total revenues | 24,776 | 22,285 | 76,554 | 71,185 |
Domestic market | Domestic commissary and other | ||||
Revenues: | ||||
Total revenues | 169,684 | 159,939 | 503,623 | 507,313 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below) | $ 157,552 | $ 148,709 | $ 466,616 | $ 470,254 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 25, 2016 | Sep. 27, 2015 | Sep. 25, 2016 | Sep. 27, 2015 | ||
Consolidated Statements of Comprehensive Income (Unaudited) | |||||
Net income before attribution to noncontrolling interests | $ 22,650 | $ 18,976 | $ 74,813 | $ 55,683 | |
Other comprehensive (loss) income, before tax: | |||||
Foreign currency translation adjustments | (2,038) | (1,700) | (5,551) | (1,125) | |
Interest rate swaps | [1] | 210 | (1,386) | (5,839) | (2,011) |
Other comprehensive loss, before tax | (1,828) | (3,086) | (11,390) | (3,136) | |
Income tax effect: | |||||
Foreign currency translation adjustments | 754 | 629 | 2,054 | 416 | |
Interest rate swaps | [2] | (78) | 513 | 2,160 | 744 |
Income tax effect | 676 | 1,142 | 4,214 | 1,160 | |
Other comprehensive loss, net of tax | (1,152) | (1,944) | (7,176) | (1,976) | |
Comprehensive income before attribution to noncontrolling interests | 21,498 | 17,032 | 67,637 | 53,707 | |
Comprehensive loss, redeemable noncontrolling interests | (684) | (587) | (2,809) | (2,915) | |
Comprehensive loss, nonredeemable noncontrolling interests | (499) | (418) | (1,814) | (1,781) | |
Comprehensive income attributable to the Company | $ 20,315 | $ 16,027 | $ 63,014 | $ 49,011 | |
[1] | Amounts reclassified out of accumulated other comprehensive loss into net interest expense included $296 and $924 for the three and nine months ended September 25, 2016, respectively, and $390 and $1,177 for the three and nine months ended September 27, 2015, respectively. | ||||
[2] | The income tax effects of amounts reclassified out of accumulated other comprehensive loss into net interest expense were $110 and $342 for the three and nine months ended September 25, 2016, respectively, and $145 and $436 for the three and nine months ended September 27, 2015, respectively. |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income Unaudited (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2016 | Sep. 27, 2015 | Sep. 25, 2016 | Sep. 27, 2015 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net interest expense | $ 1,756 | $ 1,180 | $ 4,876 | $ 3,576 |
Income tax effects | 8,977 | 7,281 | 33,423 | 24,541 |
Qualifying as hedges | Interest rate swap | Amount reclassified from AOCI | ||||
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net interest expense | 296 | 390 | 924 | 1,177 |
Income tax effects | $ 110 | $ 145 | $ 342 | $ 436 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 25, 2016 | Sep. 27, 2015 | |
Operating activities | ||
Net income before attribution to noncontrolling interests | $ 74,813 | $ 55,683 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for uncollectible accounts and notes receivable | 153 | 813 |
Depreciation and amortization | 30,389 | 30,638 |
Deferred income taxes | 4,966 | (7,625) |
Stock-based compensation expense | 7,525 | 7,124 |
Other | 2,811 | 3,268 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 3,867 | (1,994) |
Income taxes receivable | (429) | 8,731 |
Inventories | (2,673) | 2,178 |
Prepaid expenses | 4,755 | 2,033 |
Other current assets | 872 | 367 |
Other assets and liabilities | (3,085) | 819 |
Accounts payable | (6,290) | (3,380) |
Income and other taxes payable | 3,381 | 375 |
Accrued expenses and other current liabilities | (6,484) | 20,508 |
Deferred revenue | 1,411 | 200 |
Net cash provided by operating activities | 115,982 | 119,738 |
Investing activities | ||
Purchases of property and equipment | (38,954) | (26,508) |
Loans issued | (2,216) | (2,497) |
Repayments of loans issued | 6,449 | 3,961 |
Acquisitions, net of cash acquired | (11,202) | (491) |
Other | 193 | 406 |
Net cash used in investing activities | (45,730) | (25,129) |
Financing activities | ||
Net proceeds from issuance of long-term debt | 56,375 | 8,549 |
Cash dividends paid | (20,523) | (17,950) |
Excess tax benefit on equity awards | 5,474 | 9,884 |
Tax payments for equity award issuances | (5,999) | (10,947) |
Proceeds from exercise of stock options | 5,377 | 4,569 |
Acquisition of Company common stock | (109,407) | (80,166) |
Distributions to noncontrolling interest holders | (3,830) | (4,267) |
Other | 481 | 377 |
Net cash used in financing activities | (72,052) | (89,951) |
Effect of exchange rate changes on cash and cash equivalents | (99) | (339) |
Change in cash and cash equivalents | (1,899) | 4,319 |
Cash and cash equivalents at beginning of period | 21,006 | 20,122 |
Cash and cash equivalents at end of period | $ 19,107 | $ 24,441 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 25, 2016 | |
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 25, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ended December 25, 2016. 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 27, 2015. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 25, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Noncontrolling Interests Papa John’s has four joint venture arrangements in which there are noncontrolling interests held by third parties. These joint ventures include 215 restaurants at September 25, 2016 and 208 restaurants at September 27, 2015. 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 25, 2016 and September 27, 2015 was as follows (in thousands): Three Months Ended Nine Months Ended September 25, September 27, September 25, September 27, 2016 2015 2016 2015 Papa John’s International, Inc. $ $ $ $ Noncontrolling interests Total income before income taxes $ $ $ $ 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 Condensed Consolidated Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase their interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase their 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. As of September 25, 2016, we had a net deferred tax liability of approximately $800,000. 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 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 revolving 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 25, 2016 and December 27, 2015 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — December 27, 2015 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — (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”). There were no transfers among levels within the fair value hierarchy during the nine months ended September 25, 2016. 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 Deferred Debt Issuance Costs In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03 “Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). The update requires that deferred debt issuance costs be reported as a reduction to long-term debt (previously reported in other noncurrent assets). We adopted ASU 2015-03 in the first quarter of 2016 and for all retrospective periods, as required. The impact of the adoption was not material to our condensed consolidated financial statements. See Debt Footnote for more details. Accounting Standards to be Adopted in Future Periods Employee Share-Based Payments In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning in fiscal 2017, with early application permitted. Based on the significance of our employee stock compensation program, we expect the adoption could have a material impact to our condensed consolidated statements of income. 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 estimates 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. We are required to adopt ASU 2014-09 in the first quarter of 2018. We are currently evaluating the method of adoption and impact of the new requirements on our condensed consolidated financial statements. We currently do not believe the impact will be significant. Reclassifications Certain prior year captions have been combined in the condensed consolidated statement of income and certain amounts within the consolidated statement of cash flows have been reclassified to conform to the current year presentation. |
Calculation of Earnings Per Sha
Calculation of Earnings Per Share | 9 Months Ended |
Sep. 25, 2016 | |
Earnings Per Share | |
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, in accordance with Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity”, 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 25, September 27, September 25, September 27, 2016 2015 2016 2015 Basic earnings per common share: Net income attributable to the Company $ $ $ $ Change in noncontrolling interest redemption value Net income attributable to participating securities Net income attributable to common shareholders $ $ $ $ Weighted average common shares outstanding Basic earnings per common share $ $ $ $ Diluted earnings per common share: Net income attributable to common shareholders $ $ $ $ Weighted average common shares outstanding Dilutive effect of outstanding equity awards (a) Diluted weighted average common shares outstanding Diluted earnings per common share $ $ $ $ (a) Excludes 22 and 598 awards for the three and nine months ended September 25, 2016, respectively, and 219 and 234 awards for the three and nine months ended September 27, 2015, respectively, as the effect of including such awards would have been antidilutive. |
Acquisitions of Restaurants
Acquisitions of Restaurants | 9 Months Ended |
Sep. 25, 2016 | |
Acquisition of Restaurants | |
Acquisitions 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 purchase price of the acquisitions has been allocated as follows (in thousands): Property and equipment $ Franchise rights Goodwill Other Total purchase price $ 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. 25, 2016 | |
Debt | |
Debt | 5. Long-term debt, net consists of the following (in thousands): September 25, December 27, 2016 2015 Outstanding debt $ $ Debt issuance costs Total long-term debt, net $ $ Our outstanding debt is comprised entirely of an unsecured revolving line of credit (“Credit Facility”) with an expiration date of October 31, 2019. On June 8, 2016, we exercised our option to increase the amount available under our Credit Facility to $500 million from the previous $400 million availability. Including outstanding letters of credit, the remaining availability under the Credit Facility was approximately $162.4 million as of September 25, 2016. The interest rate charged on outstanding balances is LIBOR plus 75 to 175 basis points. The commitment fee on the unused balance ranges from 15 to 25 basis points. The Credit Facility contains customary affirmative and negative covenants, including financial covenants requiring the maintenance of specified fixed charges and leverage ratios. At September 25, 2016, 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 and have reset dates and critical terms that match those of our existing debt and the anticipated critical terms of future debt. 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 25, 2016, 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 $ million % December 30, 2014 through April 30, 2018 $ million % April 30, 2018 through April 30, 2023 $ million % April 30, 2018 through April 30, 2023 $ million % April 30, 2018 through April 30, 2023 $ million % The weighted average interest rates on the Credit Facility, including the impact of the interest rate swap agreements, were 2.1% and 2.0% for the three months ended September 25, 2016 and September 27, 2015, respectively, and 2.1% and 2.0% for the nine months ended September 25, 2016 and September 27, 2015, respectively. Interest paid, including payments made or received under the swaps, was $1.9 million and $1.3 million for the three months ended September 25, 2016 and September 27, 2015, respectively, and $5.3 million and $3.9 million for the nine months ended September 25, 2016 and September 27, 2015, respectively. As of September 25, 2016, the portion of the aggregate $8.1 million interest rate swap liability that would be reclassified into earnings during the next twelve months as interest expense approximates $800,000. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 25, 2016 | |
Segment Information | |
Segment Information | 6. We have five reportable segments: domestic Company-owned restaurants, domestic 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 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 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, risk management services, 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): Three Months Ended Nine Months Ended September 25, 2016 September 27, 2015 September 25, 2016 September 27, 2015 Revenues from external customers: Domestic Company-owned restaurants $ $ $ $ Domestic commissaries North America franchising International All others Total revenues from external customers $ $ $ $ Intersegment revenues: Domestic commissaries $ $ $ $ North America franchising International All others Total intersegment revenues $ $ $ $ Income (loss) before income taxes: Domestic Company-owned restaurants $ $ $ $ Domestic commissaries North America franchising International All others Unallocated corporate expenses Elimination of intersegment profit Total income before income taxes $ $ $ $ Property and equipment: Domestic Company-owned restaurants $ Domestic commissaries International All others Unallocated corporate assets Accumulated depreciation and amortization Net property and equipment $ |
Significant Accounting Polici14
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 25, 2016 | |
Significant Accounting Policies | |
Noncontrolling Interests | Noncontrolling Interests Papa John’s has four joint venture arrangements in which there are noncontrolling interests held by third parties. These joint ventures include 215 restaurants at September 25, 2016 and 208 restaurants at September 27, 2015. 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 25, 2016 and September 27, 2015 was as follows (in thousands): Three Months Ended Nine Months Ended September 25, September 27, September 25, September 27, 2016 2015 2016 2015 Papa John’s International, Inc. $ $ $ $ Noncontrolling interests Total income before income taxes $ $ $ $ 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 Condensed Consolidated Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase their interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase their 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. As of September 25, 2016, we had a net deferred tax liability of approximately $800,000. 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 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 revolving 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 25, 2016 and December 27, 2015 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — December 27, 2015 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — (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”). There were no transfers among levels within the fair value hierarchy during the nine months ended September 25, 2016. |
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 Deferred Debt Issuance Costs In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03 “Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). The update requires that deferred debt issuance costs be reported as a reduction to long-term debt (previously reported in other noncurrent assets). We adopted ASU 2015-03 in the first quarter of 2016 and for all retrospective periods, as required. The impact of the adoption was not material to our condensed consolidated financial statements. See Debt Footnote for more details. Accounting Standards to be Adopted in Future Periods Employee Share-Based Payments In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning in fiscal 2017, with early application permitted. Based on the significance of our employee stock compensation program, we expect the adoption could have a material impact to our condensed consolidated statements of income. 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 estimates 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. We are required to adopt ASU 2014-09 in the first quarter of 2018. We are currently evaluating the method of adoption and impact of the new requirements on our condensed consolidated financial statements. We currently do not believe the impact will be significant. |
Reclassifications | Reclassifications Certain prior year captions have been combined in the condensed consolidated statement of income and certain amounts within the consolidated statement of cash flows have been reclassified to conform to the current year presentation. |
Significant Accounting Polici15
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 25, 2016 | |
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 25, 2016 and September 27, 2015 was as follows (in thousands): Three Months Ended Nine Months Ended September 25, September 27, September 25, September 27, 2016 2015 2016 2015 Papa John’s International, Inc. $ $ $ $ Noncontrolling interests Total income before income taxes $ $ $ $ |
Schedule of Joint Ventures in Which There are Noncontrolling Interests | Type of Joint Venture Arrangement Location within the Condensed Consolidated Balance Sheets Recorded Value Joint venture with no redemption feature Permanent equity Carrying value Option to require the Company to purchase their interest - currently redeemable Temporary equity Redemption value* Option to require the Company to purchase their 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 25, 2016 and December 27, 2015 are as follows (in thousands): Carrying Fair Value Measurements Value Level 1 Level 2 Level 3 September 25, 2016 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — December 27, 2015 Financial assets: Cash surrender value of life insurance policies (a) $ $ $ — $ — Financial liabilities: Interest rate swaps (b) — — (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. 25, 2016 | |
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 25, September 27, September 25, September 27, 2016 2015 2016 2015 Basic earnings per common share: Net income attributable to the Company $ $ $ $ Change in noncontrolling interest redemption value Net income attributable to participating securities Net income attributable to common shareholders $ $ $ $ Weighted average common shares outstanding Basic earnings per common share $ $ $ $ Diluted earnings per common share: Net income attributable to common shareholders $ $ $ $ Weighted average common shares outstanding Dilutive effect of outstanding equity awards (a) Diluted weighted average common shares outstanding Diluted earnings per common share $ $ $ $ (a) Excludes 22 and 598 awards for the three and nine months ended September 25, 2016, respectively, and 219 and 234 awards for the three and nine months ended September 27, 2015, respectively, as the effect of including such awards would have been antidilutive. |
Acquisitions of Restaurants (Ta
Acquisitions of Restaurants (Tables) | 9 Months Ended |
Sep. 25, 2016 | |
Acquisition of Restaurants | |
Schedule of Purchase Price Allocation | The aggregate purchase price of the acquisitions has been allocated as follows (in thousands): Property and equipment $ Franchise rights Goodwill Other Total purchase price $ |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 25, 2016 | |
Debt | |
Schedule of long-term debt | Long-term debt, net consists of the following (in thousands): September 25, December 27, 2016 2015 Outstanding debt $ $ Debt issuance costs Total long-term debt, net $ $ |
Schedule of interest rate swap agreements | Effective Dates Floating Rate Debt Fixed Rates July 30, 2013 through April 30, 2018 $ million % December 30, 2014 through April 30, 2018 $ million % April 30, 2018 through April 30, 2023 $ million % April 30, 2018 through April 30, 2023 $ million % April 30, 2018 through April 30, 2023 $ million % |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 25, 2016 | |
Segment Information | |
Schedule of Segment Reporting Information, by Segment | Our segment information is as follows (in thousands): Three Months Ended Nine Months Ended September 25, 2016 September 27, 2015 September 25, 2016 September 27, 2015 Revenues from external customers: Domestic Company-owned restaurants $ $ $ $ Domestic commissaries North America franchising International All others Total revenues from external customers $ $ $ $ Intersegment revenues: Domestic commissaries $ $ $ $ North America franchising International All others Total intersegment revenues $ $ $ $ Income (loss) before income taxes: Domestic Company-owned restaurants $ $ $ $ Domestic commissaries North America franchising International All others Unallocated corporate expenses Elimination of intersegment profit Total income before income taxes $ $ $ $ Property and equipment: Domestic Company-owned restaurants $ Domestic commissaries International All others Unallocated corporate assets Accumulated depreciation and amortization Net property and equipment $ |
Significant Accounting Polici20
Significant Accounting Policies - Noncontrolling Interest and Joint Ventures (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2016USD ($)restaurantentity | Sep. 27, 2015USD ($)restaurant | Sep. 25, 2016USD ($)restaurantentity | Sep. 27, 2015USD ($)restaurant | |
Income Amounts Attributable to Noncontrolling Interest, Disclosures | ||||
Noncontrolling interests | $ 1,183 | $ 1,005 | $ 4,623 | $ 4,696 |
Total income before income taxes | $ 31,627 | $ 26,257 | $ 108,236 | $ 80,224 |
Joint ventures | ||||
Noncontrolling Interests | ||||
Number of Joint Ventures Having Noncontrolling Interests | entity | 4 | 4 | ||
Number of Restaurants | restaurant | 215 | 208 | 215 | 208 |
Income Amounts Attributable to Noncontrolling Interest, Disclosures | ||||
Papa John's International, Inc. | $ 1,879 | $ 1,570 | $ 7,168 | $ 7,240 |
Noncontrolling interests | 1,183 | 1,005 | 4,623 | 4,696 |
Total income before income taxes | $ 3,062 | $ 2,575 | $ 11,791 | $ 11,936 |
Significant Accounting Polici21
Significant Accounting Policies - Deferred Income Tax Accounts and Tax Reserves (Details) | Sep. 25, 2016USD ($) |
Deferred Income Tax Accounts and Tax Reserves | |
Net deferred tax liability, net | $ 800,000 |
Significant Accounting Polici22
Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 25, 2016 | Dec. 27, 2015 | |
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 | 21,451 | $ 17,916 |
Interest rate swap liabilities | 8,130 | 2,262 |
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 | 21,451 | 17,916 |
Measured on Recurring Basis | Level 2 | ||
Measurement of financial assets and liabilities at fair value on a recurring basis | ||
Interest rate swap liabilities | $ 8,130 | $ 2,262 |
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. 25, 2016 | Sep. 27, 2015 | Sep. 25, 2016 | Sep. 27, 2015 | |
Basic earnings per common share: | ||||
Net income attributable to the Company | $ 21,467 | $ 17,971 | $ 70,190 | $ 50,987 |
Change in noncontrolling interest redemption value | (157) | 49 | 342 | 192 |
Net income attributable to participating securities | (87) | (73) | (288) | (223) |
Net income attributable to common shareholders | $ 21,223 | $ 17,947 | $ 70,244 | $ 50,956 |
Weighted average common shares outstanding | 36,989 | 39,394 | 37,374 | 39,640 |
Basic earnings per common share | $ 0.57 | $ 0.46 | $ 1.88 | $ 1.29 |
Diluted earnings per common share: | ||||
Net income attributable to common shareholders | $ 21,223 | $ 17,947 | $ 70,244 | $ 50,956 |
Weighted average common shares outstanding | 36,989 | 39,394 | 37,374 | 39,640 |
Dilutive effect of outstanding equity awards | 370 | 501 | 338 | 570 |
Diluted weighted average common shares outstanding | 37,359 | 39,895 | 37,712 | 40,210 |
Diluted earnings per common share | $ 0.57 | $ 0.45 | $ 1.86 | $ 1.27 |
Weighted average antidilutive awards excluded from computation of earnings per share | 22 | 219 | 598 | 234 |
Acquisitions of Restaurants (De
Acquisitions of Restaurants (Details) $ in Thousands | 3 Months Ended | ||
Mar. 27, 2016USD ($)itemrestaurant | Sep. 25, 2016USD ($) | Dec. 27, 2015USD ($) | |
Purchase price allocation | |||
Goodwill | $ 86,570 | $ 79,657 | |
Multiple restaurants acquired, 2016 | |||
Acquisition disclosures | |||
Number of restaurants acquired | restaurant | 20 | ||
Number of transactions in which acquisition completed | item | 2 | ||
Purchase price allocation | |||
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. 25, 2016 | Dec. 27, 2015 |
Debt | ||
Outstanding, debt | $ 312,375 | $ 256,000 |
Debt issuance costs | (805) | (854) |
Total long-term debt, net | $ 311,570 | $ 255,146 |
Debt (Details)
Debt (Details) $ in Millions | 9 Months Ended | ||
Sep. 25, 2016USD ($)derivative | Jun. 07, 2016USD ($) | Dec. 27, 2015USD ($)derivative | |
Interest rate swap, July 2013 1.42% fixed | |||
Interest rate swaps | |||
Interest rate swap agreement, fixed interest rate | 1.42% | ||
Interest rate swap agreement, notional amount | $ 75 | ||
Interest rate swap, December 2014 1.36% fixed | |||
Interest rate swaps | |||
Interest rate swap agreement, fixed interest rate | 1.36% | ||
Interest rate swap agreement, notional amount | $ 50 | ||
Interest rate swap, April 2018, 2.33% fixed | |||
Interest rate swaps | |||
Interest rate swap agreement, fixed interest rate | 2.33% | ||
Interest rate swap agreement, notional amount | $ 55 | ||
Interest rate swap, April 2018, 2.36% fixed | |||
Interest rate swaps | |||
Interest rate swap agreement, fixed interest rate | 2.36% | ||
Interest rate swap agreement, notional amount | $ 35 | ||
Interest rate swap, April 2018, 2.34% fixed | |||
Interest rate swaps | |||
Interest rate swap agreement, fixed interest rate | 2.34% | ||
Interest rate swap agreement, notional amount | $ 35 | ||
Interest rate swap | |||
Interest rate swaps | |||
Number of derivatives held | derivative | 2 | ||
Number of additional derivatives executed | derivative | 3 | ||
Interest rate swap agreement, notional amount | $ 125 | ||
Revolving credit facility | |||
Debt | |||
Line of credit facility, maximum borrowing capacity | $ 500 | $ 400 | |
Line of credit facility, remaining availability | $ 162.4 | ||
Revolving credit facility | Minimum | |||
Debt | |||
Percentage of commitment fee on unused credit facility | 0.15% | ||
Revolving credit facility | Maximum | |||
Debt | |||
Percentage of commitment fee on unused credit facility | 0.25% | ||
Revolving credit facility | LIBOR | Minimum | |||
Debt | |||
Interest margin rate on debt | 0.75% | ||
Revolving credit facility | LIBOR | Maximum | |||
Debt | |||
Interest margin rate on debt | 1.75% |
Debt - Derivatives (Details)
Debt - Derivatives (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2016 | Sep. 27, 2015 | Sep. 25, 2016 | Sep. 27, 2015 | |
Debt | ||||
Weighted average interest rate for Credit Facility borrowings, including the impact of interest rate swaps | 2.10% | 2.00% | 2.10% | 2.00% |
Interest paid | $ 1,900,000 | $ 1,300,000 | $ 5,300,000 | $ 3,900,000 |
Interest rate swap | ||||
Debt | ||||
Interest rate swap liabilities | $ 8,100,000 | 8,100,000 | ||
Interest rate swap | Interest expense | ||||
Debt | ||||
Portion of derivative liability that would be reclassified into earnings | $ 800,000 | |||
Estimate of period of time over which portion of derivative liability would be reclassified into earnings | 12 months |
Segment Information - Concentra
Segment Information - Concentration (Details) | Sep. 25, 2016customer |
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. 25, 2016USD ($) | Sep. 27, 2015USD ($) | Sep. 25, 2016USD ($)segment | Sep. 27, 2015USD ($) | Dec. 27, 2015USD ($) | |
Segment Information | |||||
Reportable segments, number | segment | 5 | ||||
Revenues | $ 422,442 | $ 389,284 | $ 1,274,001 | $ 1,220,559 | |
Income before income taxes | 31,627 | 26,257 | 108,236 | 80,224 | |
Accumulated depreciation and amortization | (383,909) | (383,909) | |||
Net property and equipment | 221,809 | 221,809 | $ 214,044 | ||
International | |||||
Segment Information | |||||
Revenues | 28,941 | 27,001 | 84,856 | 78,753 | |
Operating segments | |||||
Segment Information | |||||
Revenues | 422,442 | 389,284 | 1,274,001 | 1,220,559 | |
Operating segments | Domestic Company-owned restaurants | |||||
Segment Information | |||||
Revenues | 199,041 | 180,059 | 608,968 | 563,308 | |
Income before income taxes | 11,576 | 8,088 | 47,088 | 41,185 | |
Property and equipment, gross | 229,546 | 229,546 | |||
Operating segments | Domestic commissaries | |||||
Segment Information | |||||
Revenues | 155,208 | 145,863 | 462,057 | 457,203 | |
Income before income taxes | 11,311 | 10,192 | 34,539 | 32,694 | |
Property and equipment, gross | 116,237 | 116,237 | |||
Operating segments | North America franchising | |||||
Segment Information | |||||
Revenues | 24,776 | 22,285 | 76,554 | 71,185 | |
Income before income taxes | 21,856 | 19,172 | 67,881 | 61,545 | |
Operating segments | International | |||||
Segment Information | |||||
Revenues | 28,941 | 27,001 | 84,856 | 78,753 | |
Income before income taxes | 3,083 | 3,184 | 8,996 | 6,807 | |
Property and equipment, gross | 16,101 | 16,101 | |||
Operating segments | All others | |||||
Segment Information | |||||
Revenues | 14,476 | 14,076 | 41,566 | 50,110 | |
Income before income taxes | 392 | (556) | 868 | (230) | |
Property and equipment, gross | 53,902 | 53,902 | |||
Elimination | |||||
Segment Information | |||||
Revenues | 64,692 | 57,947 | 190,496 | 179,411 | |
Income before income taxes | (231) | (341) | (1,365) | (1,141) | |
Elimination | Domestic commissaries | |||||
Segment Information | |||||
Revenues | 59,811 | 53,398 | 175,859 | 165,744 | |
Elimination | North America franchising | |||||
Segment Information | |||||
Revenues | 688 | 643 | 2,140 | 1,985 | |
Elimination | International | |||||
Segment Information | |||||
Revenues | 64 | 73 | 196 | 223 | |
Elimination | All others | |||||
Segment Information | |||||
Revenues | 4,129 | 3,833 | 12,301 | 11,459 | |
Unallocated corporate | |||||
Segment Information | |||||
Income before income taxes | (16,360) | $ (13,482) | (49,771) | $ (60,636) | |
Property and equipment, gross | $ 189,932 | $ 189,932 |