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Interest Rate Risk
−Removed: We are exposed to the impact of interest rate changes on our Revolving Facility and our Term Loan Facility, which comprise the PJI Facilities.
+Added: We are exposed to the impact of interest rate changes on our PJI Revolving Facility.
We attempt to minimize interest rate risk exposure by fixing our interest rate through the utilization of interest rate swaps, which are derivative financial instruments.
−Removed: Our swaps are entered into with financial institutions that participate in the PJI Facilities.
+Added: As previously mentioned, these interest rate swaps were eligible for hedge accounting for part of the period and were de-designated following the issuance of the Notes.
+Added: Our swaps are entered into with financial institutions that participate in the PJI Revolving Facility.
By using a derivative instrument to hedge exposures to changes in interest rates, we expose ourselves to credit risk due to the possible failure of the counterparty to perform under the terms of the derivative contract.
We do not enter into contracts for trading purposes and do not use leveraged instruments.
−Removed: The market risks associated with our debt obligations as of June 27, 2021 have not changed from those reported in “Part II.
+Added: The market risks associated with our debt obligations as of September 26, 2021 have not changed from those reported in “Part II.
Quantitative and Qualitative Disclosure About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 27, 2020.
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Our international operations principally consist of distribution sales to franchised Papa John’s restaurants located in the United Kingdom 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.
−Removed: Approximately 7% of our revenues were derived from these operations for the three and six months ended June 27, 2021, as compared to 6% for the prior year comparable periods.
+Added: Approximately 7% of our revenues were derived from these operations for the three and nine months ended September 26, 2021 and September 27, 2020.
We have not historically hedged our exposure to foreign currency fluctuations.
−Removed: Foreign currency exchange rate fluctuations had a favorable impact of approximately $3.8 million and $5.8 million on International revenues for the three and six months ended June 27, 2021, and an unfavorable impact of $1.5 million and $2.0 million for the three and six months ended June 28, 2020, respectively.
−Removed: Foreign currency exchange rate fluctuations had a favorable impact of approximately $900,000 and $1.4 million on operating income for the three and six months ended June 27, 2021, respectively, and an unfavorable impact of $600,000 and $900,000 on operating income for the three and six months ended June 28, 2020, respectively.
+Added: Foreign currency exchange rate fluctuations had a favorable impact of approximately $2.1 million and $7.9 million on International revenues for the three and nine months ended September 26, 2021, respectively, and a favorable impact of approximately $650,000 and an unfavorable impact of approximately $1.4 million for the three and nine months ended September 27, 2020, respectively.
+Added: Foreign currency exchange rate fluctuations had a favorable impact of approximately $400,000 and $1.7 million on operating income for the three and nine months ended September 26, 2021, respectively, and an unfavorable impact of $120,000 and $1.1 million on operating income for the three and nine months ended September 27, 2020, respectively.
Commodity Price Risk
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however, we remain exposed to on-going commodity volatility.
−Removed: The following table presents the actual average block price for cheese by quarter through the second quarter of 2021 and the projected average block price by quarter for 2021 (based on the July 30, 2021 Chicago Mercantile Exchange cheese futures market prices):
+Added: The following table presents the actual average block price for cheese by quarter through the third quarter of 2021 and the projected average block price by quarter for 2021 (based on the October 29, 2021 Chicago Mercantile Exchange cheese futures market prices):
*The full year estimate is based on futures prices and does not include the impact of forward pricing agreements we have for a portion of our cheese purchases for our domestic Company-owned restaurants.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.