PAPA JOHNS INTERNATIONAL INC 10-Q

Item 1. Financial Statements ​ Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 26, December 27, (In thousands, except per share amounts) ​ 2021 ​ 2020 ​ ​ (Unaudited) ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 105,813 ​ $ 130,204 Accounts receivable, net ​ ​ 79,534 ​ ​ 90,135 Notes receivable, current portion ​ 13,075 ​ 11,318 Income tax receivable ​ ​ 599 ​ ​ 1,273 Inventories ​ 33,490 ​ 30,265 Prepaid expenses and other current assets ​ 39,249 ​ 43,212 Total current assets ​ 271,760 ​ 306,407 Property and equipment, net ​ 209,072 ​ 200,895 Finance lease right-of-use assets, net ​ ​ 21,917 ​ ​ 16,840 Operating lease right-of-use assets ​ ​ 174,119 ​ ​ 148,110 Notes receivable, less current portion, net ​ 37,263 ​ 36,538 Goodwill ​ 80,906 ​ 80,791 Deferred income taxes ​ ​ 13,926 ​ ​ 10,800 Other assets ​ 80,991 ​ 72,389 Total assets ​ $ 889,954 ​ $ 872,770 ​ ​ ​ ​ ​ ​ ​ Liabilities, Series B Convertible Preferred Stock, Redeemable noncontrolling interests and Stockholders’ deficit ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 42,384 ​ $ 37,370 Income and other taxes payable ​ 26,221 ​ 10,263 Accrued expenses and other current liabilities ​ 201,528 ​ 174,563 Current deferred revenue ​ ​ 20,617 ​ ​ 19,590 Current finance lease liabilities ​ ​ 4,914 ​ ​ 3,545 Current operating lease liabilities ​ ​ 22,455 ​ ​ 23,538 Current portion of long-term debt ​ ​ — ​ ​ 20,000 Total current liabilities ​ 318,119 ​ 288,869 Deferred revenue ​ 12,471 ​ 13,664 Long-term finance lease liabilities ​ ​ 17,555 ​ ​ 13,531 Long-term operating lease liabilities ​ ​ 157,359 ​ ​ 124,666 Long-term debt, less current portion, net ​ 414,915 ​ 328,292 Deferred income taxes ​ 178 ​ 948 Other long-term liabilities ​ 98,872 ​ 111,364 Total liabilities ​ 1,019,469 ​ 881,334 ​ ​ ​ ​ ​ ​ ​ Series B Convertible Preferred Stock; $ 0.01 par value; no shares authorized, issued or outstanding at September 26, 2021, compared to 260.0 shares authorized, 252.5 shares issued and outstanding at December 27, 2020 ​ ​ — ​ ​ 251,901 Redeemable noncontrolling interests ​ 7,531 ​ 6,474 ​ ​ ​ ​ ​ ​ ​ Stockholders’ deficit: ​ ​ ​ ​ ​ ​ Common stock ($ 0.01 par value per share; issued 48,989 at September 26, 2021 and 45,288 at December 27, 2020) ​ ​ 490 ​ ​ 453 Additional paid-in capital ​ 440,742 ​ 254,103 Accumulated other comprehensive loss ​ ( 9,910 ) ​ ( 14,168 ) Retained earnings ​ 171,378 ​ 219,158 Treasury stock ( 12,806 shares at September 26, 2021 and 12,743 shares at December 27, 2020, at cost) ​ ( 755,035 ) ​ ( 741,724 ) Total stockholders’ deficit ​ ( 152,335 ) ​ ( 282,178 ) Noncontrolling interests in subsidiaries ​ 15,289 ​ 15,239 Total Stockholders’ deficit ​ ( 137,046 ) ​ ( 266,939 ) Total liabilities, Series B Convertible Preferred Stock, Redeemable noncontrolling interests and Stockholders’ deficit ​ $ 889,954 ​ $ 872,770 ​ See accompanying notes. ​ 3 Table of Contents Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 26, ​ September 27, ​ September 26, ​ September 27, (In thousands, except per share amounts) 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic Company-owned restaurant sales ​ $ 191,584 ​ $ 178,371 ​ $ 584,942 ​ $ 526,317 North America franchise royalties and fees ​ 31,933 ​ 25,281 ​ 97,123 ​ 68,895 North America commissary revenues ​ 189,224 ​ 181,338 ​ 560,743 ​ 504,379 International revenues ​ 38,408 ​ ​ 33,440 ​ 110,629 ​ 87,592 Other revenues ​ ​ 61,633 ​ ​ 54,511 ​ ​ 186,099 ​ ​ 156,240 Total revenues ​ 512,782 ​ 472,941 ​ 1,539,536 ​ 1,343,423 Costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating costs (excluding depreciation and amortization shown separately below): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic Company-owned restaurant expenses ​ ​ 155,477 ​ ​ 144,803 ​ ​ 465,658 ​ ​ 419,082 North America commissary expenses ​ ​ 175,399 ​ ​ 167,937 ​ ​ 518,310 ​ ​ 466,676 International expenses ​ ​ 21,743 ​ ​ 19,370 ​ ​ 62,791 ​ ​ 52,775 Other expenses ​ ​ 56,039 ​ ​ 50,917 ​ ​ 168,092 ​ ​ 148,219 General and administrative expenses ​ 54,070 ​ 52,601 ​ 157,779 ​ 148,680 Depreciation and amortization ​ 11,477 ​ 12,764 ​ 36,830 ​ 37,436 Total costs and expenses ​ 474,205 ​ 448,392 ​ 1,409,460 ​ 1,272,868 Operating income ​ 38,577 ​ 24,549 ​ 130,076 ​ 70,555 Net interest expense ​ ( 3,979 ) ​ ​ ( 3,636 ) ​ ( 11,275 ) ​ ( 11,230 ) Income before income taxes ​ 34,598 ​ 20,913 ​ 118,801 ​ 59,325 Income tax expense ​ 4,057 ​ 4,516 ​ 19,387 ​ 11,984 Net income before attribution to noncontrolling interests ​ 30,541 ​ 16,397 ​ 99,414 ​ 47,341 Net income attributable to noncontrolling interests ​ ( 1,285 ) ​ ( 689 ) ​ ( 4,021 ) ​ ( 2,576 ) Net income attributable to the Company ​ $ 29,256 ​ $ 15,708 ​ $ 95,393 ​ $ 44,765 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Calculation of net income (loss) for earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to the Company ​ $ 29,256 ​ $ 15,708 ​ $ 95,393 ​ $ 44,765 Dividends on redemption of Series B Convertible Preferred Stock ​ ​ — ​ ​ — ​ ​ ( 109,852 ) ​ ​ — Dividends paid to participating securities ​ ( 137 ) ​ ( 3,548 ) ​ ( 5,964 ) ​ ( 10,546 ) Net income attributable to participating securities ​ ( 158 ) ​ ( 703 ) ​ — ​ ( 1,809 ) Net income (loss) attributable to common shareholders ​ $ 28,961 ​ $ 11,457 ​ $ ( 20,423 ) ​ $ 32,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per common share ​ $ 0.80 ​ $ 0.35 ​ $ ( 0.59 ) ​ $ 1.00 Diluted earnings (loss) per common share ​ $ 0.79 ​ $ 0.35 ​ $ ( 0.59 ) ​ $ 0.99 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic weighted average common shares outstanding ​ 36,387 ​ 32,616 ​ 34,619 ​ 32,347 Diluted weighted average common shares outstanding ​ 36,719 ​ 32,971 ​ 34,619 ​ 32,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends declared per common share ​ $ 0.350 ​ $ 0.225 ​ $ 0.800 ​ $ 0.675 ​ ​ See accompanying notes. ​ 4 Table of Contents ​ ​ Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 26, ​ September 27, ​ September 26, ​ September 27, (In thousands) 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income before attribution to noncontrolling interests ​ $ 30,541 ​ $ 16,397 ​ $ 99,414 ​ $ 47,341 Other comprehensive income (loss), before tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ ​ ( 1,113 ) ​ ​ 1,721 ​ ​ 383 ​ ​ ( 1,438 ) Interest rate swaps (1) ​ 1,535 ​ 1,647 ​ 5,147 ​ ( 9,375 ) Other comprehensive income (loss), before tax ​ 422 ​ 3,368 ​ 5,530 ​ ( 10,813 ) Income tax effect: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ 256 ​ ( 395 ) ​ ( 88 ) ​ 332 Interest rate swaps (2) ​ ( 353 ) ​ ( 379 ) ​ ( 1,184 ) ​ 2,156 Income tax effect ​ ( 97 ) ​ ( 774 ) ​ ( 1,272 ) ​ 2,488 Other comprehensive income (loss), net of tax ​ 325 ​ 2,594 ​ 4,258 ​ ( 8,325 ) Comprehensive income before attribution to noncontrolling interests ​ 30,866 ​ 18,991 ​ 103,672 ​ 39,016 Less: comprehensive (income), redeemable noncontrolling interests ​ ( 692 ) ​ ( 301 ) ​ ( 2,192 ) ​ ( 1,184 ) Less: comprehensive (income), nonredeemable noncontrolling interests ​ ( 593 ) ​ ( 388 ) ​ ( 1,829 ) ​ ( 1,392 ) Comprehensive income attributable to the Company ​ $ 29,581 ​ $ 18,302 ​ $ 99,651 ​ $ 36,440 ​ ​ (1) Amounts reclassified out of accumulated other comprehensive loss into net interest expense include ($ 1,644 ) and ($ 5,084 ) for the three and nine months ended September 26, 2021, respectively, and ( $ 1,674 ) and ( $ 3,376 ) for the three and nine months ended September 27, 2020, respectively. ​ (2) The income tax effects of amounts reclassified out of accumulated other comprehensive loss into net interest expense were $ 368 and $ 1,139 for the three and nine months ended September 26, 2021, respectively, and $ 378 and $ 763 for the three and nine months ended September 27, 2020, respectively. ​ See accompanying notes. ​ ​ 5 Table of Contents ​ Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Papa John’s International, Inc. ​ ​ ​ ​ ​ ​ ​ Common ​ ​ Accumulated ​ ​ ​ ​ ​ ​ Stock ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ Noncontrolling ​ Total (In thousands) ​ Shares ​ Common ​ Paid-In ​ Comprehensive ​ Retained ​ Treasury ​ Interests in ​ Stockholders’ For the three months ended September 26, 2021 ​ Outstanding ​ Stock ​ Capital ​ Loss ​ Earnings ​ Stock ​ Subsidiaries ​ Deficit Balance at June 27, 2021 ​ 36,215 ​ $ 489 ​ $ 435,608 ​ $ ( 10,235 ) ​ $ 154,769 ​ $ ( 743,819 ) ​ $ 15,290 ​ $ ( 147,898 ) Net income (1) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 29,256 ​ ​ — ​ ​ 593 ​ ​ 29,849 Other comprehensive income, net of tax ​ — ​ ​ — ​ ​ — ​ ​ 325 ​ ​ — ​ ​ — ​ ​ — ​ ​ 325 Cash dividends on common stock ​ — ​ ​ — ​ ​ 48 ​ ​ — ​ ​ ( 12,845 ) ​ ​ — ​ ​ — ​ ​ ( 12,797 ) Exercise of stock options ​ 51 ​ ​ 1 ​ ​ 3,111 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,112 Acquisition of Company common stock ​ ( 103 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 12,367 ) ​ ​ — ​ ​ ( 12,367 ) Stock-based compensation expense ​ — ​ ​ — ​ ​ 4,317 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,317 Issuance of restricted stock ​ 15 ​ ​ — ​ ​ ( 873 ) ​ ​ — ​ ​ — ​ ​ 873 ​ ​ — ​ ​ — Tax effect of restricted stock awards ​ — ​ ​ — ​ ​ ( 1,423 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,423 ) Distributions to noncontrolling interests ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 594 ) ​ ​ ( 594 ) Other ​ 5 ​ ​ — ​ ​ ( 46 ) ​ ​ — ​ ​ 198 ​ ​ 278 ​ ​ — ​ ​ 430 Balance at September 26, 2021 36,183 ​ $ 490 ​ $ 440,742 ​ $ ( 9,910 ) ​ $ 171,378 ​ $ ( 755,035 ) ​ $ 15,289 ​ $ ( 137,046 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the nine months ended September 26, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 27, 2020 32,545 ​ $ 453 ​ $ 254,103 ​ $ ( 14,168 ) ​ $ 219,158 ​ $ ( 741,724 ) ​ $ 15,239 ​ $ ( 266,939 ) Net income (1) — ​ — ​ — ​ — ​ 95,393 ​ — ​ 1,829 ​ 97,222 Other comprehensive income, net of tax — ​ — ​ — ​ 4,258 ​ — ​ — ​ — ​ 4,258 Repurchase and conversion of Series B Convertible Preferred Stock ​ 3,489 ​ ​ 35 ​ ​ 174,631 ​ ​ — ​ ​ ( 110,498 ) ​ ​ — ​ ​ — ​ ​ 64,168 Cash dividends on common stock ​ — ​ ​ — ​ ​ 110 ​ ​ — ​ ​ ( 27,750 ) ​ ​ — ​ ​ — ​ ​ ( 27,640 ) Cash dividends on preferred stock — ​ — ​ — ​ — ​ ( 4,121 ) ​ — ​ — ​ ( 4,121 ) Exercise of stock options 199 ​ 2 ​ 11,209 ​ — ​ — ​ — ​ — ​ 11,211 Acquisition of Company common stock ​ ( 187 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 20,555 ) ​ ​ — ​ ​ ( 20,555 ) Stock-based compensation expense — ​ — ​ 12,519 ​ — ​ — ​ — ​ — ​ 12,519 Issuance of restricted stock 125 ​ — ​ ( 6,538 ) ​ — ​ — ​ 6,538 ​ — ​ — Tax effect of restricted stock awards ​ — ​ ​ — ​ ​ ( 5,310 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,310 ) Distributions to noncontrolling interests — ​ — ​ — ​ — ​ — ​ — ​ ( 1,779 ) ​ ( 1,779 ) Other 12 ​ — ​ 18 ​ — ​ ( 804 ) ​ 706 ​ — ​ ( 80 ) Balance at September 26, 2021 ​ 36,183 ​ $ 490 ​ $ 440,742 ​ $ ( 9,910 ) ​ $ 171,378 ​ $ ( 755,035 ) ​ $ 15,289 ​ $ ( 137,046 ) ​ (1) Net income to the Company for the three and nine months ended September 26, 2021 excludes $ 692 and $ 2,192 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. ​ At September 26, 2021, the accumulated other comprehensive loss of $ 9,910 was comprised of net unrealized foreign currency translation loss of $ 3,499 and net unrealized loss on the interest rate swap agreements of $ 6,411 . ​ See accompanying notes. ​ ​ 6 Table of Contents Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Papa John’s International, Inc. ​ ​ ​ ​ ​ ​ ​ Common ​ ​ Accumulated ​ ​ ​ ​ ​ ​ Stock ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ Noncontrolling ​ Total (In thousands) ​ Shares ​ Common ​ Paid-In ​ Comprehensive ​ Retained ​ Treasury ​ Interests in ​ Stockholders’ For the three months ended September 27, 2020 ​ Outstanding ​ Stock ​ Capital ​ Loss ​ Earnings ​ Stock ​ Subsidiaries ​ Deficit Balance at June 28, 2020 32,349 ​ $ 451 ​ $ 243,577 ​ $ ( 21,104 ) ​ $ 212,104 ​ $ ( 742,600 ) ​ $ 15,724 ​ $ ( 291,848 ) Net income (2) — ​ — ​ — ​ — ​ 15,708 ​ — ​ 388 ​ 16,096 Other comprehensive income, net of tax — ​ — ​ — ​ 2,594 ​ — ​ — ​ — ​ 2,594 Cash dividends on common stock — ​ — ​ 78 ​ — ​ ( 7,414 ) ​ — ​ — ​ ( 7,336 ) Cash dividends on preferred stock ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,412 ) ​ ​ — ​ ​ — ​ ​ ( 3,412 ) Exercise of stock options 131 ​ 1 ​ 7,499 ​ — ​ — ​ — ​ — ​ 7,500 Stock-based compensation expense — ​ — ​ 4,328 ​ — ​ — ​ — ​ — ​ 4,328 Issuance of restricted stock 2 ​ — ​ ( 105 ) ​ — ​ — ​ 105 ​ — ​ — Tax effect of restricted stock awards — ​ — ​ ( 86 ) ​ — ​ — ​ — ​ — ​ ​ ( 86 ) Distributions to noncontrolling interests ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 697 ) ​ ​ ( 697 ) Other 3 ​ — ​ ( 81 ) ​ — ​ ( 75 ) ​ 172 ​ — ​ 16 Balance at September 27, 2020 32,485 ​ $ 452 ​ $ 255,210 ​ $ ( 18,510 ) ​ $ 216,911 ​ $ ( 742,323 ) ​ $ 15,415 ​ $ ( 272,845 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the nine months ended September 27, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 29, 2019 31,894 ​ $ 447 ​ $ 219,047 ​ $ ( 10,185 ) ​ $ 205,697 ​ $ ( 747,327 ) ​ $ 15,665 ​ $ ( 316,656 ) Cumulative effect of adoption of ASU 2016-13 (1) — ​ — ​ — ​ — ​ ( 1,066 ) ​ — ​ — ​ ( 1,066 ) Adjusted Balance at December 30, 2019 31,894 ​ $ 447 ​ $ 219,047 ​ $ ( 10,185 ) ​ $ 204,631 ​ $ ( 747,327 ) ​ $ 15,665 ​ $ ( 317,722 ) Net income (2) — ​ — ​ — ​ — ​ 44,765 ​ — ​ 1,392 ​ 46,157 Other comprehensive loss, net of tax — ​ — ​ — ​ ( 8,325 ) ​ — ​ — ​ — ​ ( 8,325 ) Cash dividends on common stock — ​ — ​ 210 ​ — ​ ( 22,066 ) ​ — ​ — ​ ( 21,856 ) Cash dividends on preferred stock ​ — ​ — ​ — ​ — ​ ( 10,237 ) ​ — ​ — ​ ( 10,237 ) Exercise of stock options 505 ​ 5 ​ 29,199 ​ — ​ — ​ — ​ — ​ 29,204 Stock-based compensation expense — ​ — ​ 13,071 ​ — ​ — ​ — ​ — ​ 13,071 Issuance of restricted stock 79 ​ — ​ ( 4,573 ) ​ — ​ — ​ 4,573 ​ — ​ — Tax effect of restricted stock awards — ​ — ​ ( 1,665 ) ​ — ​ — ​ — ​ — ​ ​ ( 1,665 ) Distributions to noncontrolling interests ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,642 ) ​ ​ ( 1,642 ) Other 7 ​ — ​ ( 79 ) ​ — ​ ( 182 ) ​ 431 ​ — ​ 170 Balance at September 27, 2020 32,485 ​ $ 452 ​ $ 255,210 ​ $ ( 18,510 ) ​ $ 216,911 ​ $ ( 742,323 ) ​ $ 15,415 ​ $ ( 272,845 ) ​ ​ (1) As of December 30, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. (2) Net income to the Company for the three and nine months ended September 27, 2020 excludes $ 301 and $ 1,184 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. ​ At September 27, 2020, the accumulated other comprehensive loss of $ 18,510 was comprised of net unrealized foreign currency translation loss of $ 6,705 and net unrealized loss on the interest rate swap agreements of $ 11,805 . ​ See accompanying notes. ​ ​ 7 Table of Contents ​ ​ Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 26, ​ September 27, (In thousands) 2021 2020 ​ ​ ​ ​ ​ ​ ​ Operating activities ​ ​ ​ ​ ​ ​ Net income before attribution to noncontrolling interests ​ $ 99,414 ​ $ 47,341 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Benefit for allowance for credit losses on accounts and notes receivable ​ ( 920 ) ​ ( 334 ) Depreciation and amortization ​ 36,830 ​ 37,436 Deferred income taxes ​ ( 5,113 ) ​ ( 4,696 ) Stock-based compensation expense ​ 12,519 ​ 13,071 Other ​ 1,052 ​ 1,233 Changes in operating assets and liabilities, net of acquisitions: ​ ​ ​ ​ ​ ​ Accounts receivable ​ 5,955 ​ ( 4,378 ) Income tax receivable ​ ​ 674 ​ ​ 3,131 Inventories ​ ( 3,217 ) ​ ( 1,173 ) Prepaid expenses and other current assets ​ 11,277 ​ 14,393 Other assets and liabilities ​ ( 8,627 ) ​ 18,080 Accounts payable ​ 5,014 ​ 3,147 Income and other taxes payable ​ 15,958 ​ 2,435 Accrued expenses and other current liabilities ​ 24,001 ​ 40,112 Deferred revenue ​ ( 1,193 ) ​ ( 1,251 ) Net cash provided by operating activities ​ 193,624 ​ 168,547 Investing activities ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 41,328 ) ​ ( 24,269 ) Notes issued ​ ( 14,637 ) ​ ( 13,240 ) Repayments of notes issued ​ 15,352 ​ 8,906 Acquisitions, net of cash acquired ​ ( 699 ) ​ — Other ​ 121 ​ 15 Net cash used in investing activities ​ ( 41,191 ) ​ ( 28,588 ) Financing activities ​ ​ ​ ​ ​ ​ Proceeds from issuance of senior notes ​ ​ 400,000 ​ ​ — Repayment of term loan ​ ​ ( 340,000 ) ​ ​ ( 15,000 ) Net proceeds (repayments) of revolving credit facilities ​ 15,000 ​ ( 5,000 ) Debt issuance costs ​ ​ ( 9,179 ) ​ ​ — Proceeds from exercise of stock options ​ 11,211 ​ 29,204 Dividends paid to common stockholders ​ ​ ( 27,640 ) ​ ​ ( 21,856 ) Dividends paid to preferred stockholders ​ ( 6,394 ) ​ ( 10,237 ) Tax payments for equity award issuances ​ ( 5,310 ) ​ ( 1,665 ) Repurchase of Series B Convertible Preferred Stock ​ ​ ( 188,647 ) ​ ​ — Acquisition of Company common stock ​ ( 20,555 ) ​ — Distributions to noncontrolling interests ​ ( 2,914 ) ​ ( 1,778 ) Other ​ ( 2,630 ) ​ ( 1,105 ) Net cash used in financing activities ​ ( 177,058 ) ​ ( 27,437 ) Effect of exchange rate changes on cash and cash equivalents ​ 234 ​ ( 383 ) Change in cash and cash equivalents ​ ( 24,391 ) ​ 112,139 Cash and cash equivalents at beginning of period ​ 130,204 ​ 27,911 Cash and cash equivalents at end of period ​ $ 105,813 ​ $ 140,050 ​ ​ See accompanying notes . ​ ​ 8 Table of Contents Papa John’s International, Inc. and Subsidiaries ​ Notes to Condensed Consolidated Financial Statements (Unaudited) ​ September 26, 2021 ​ 1. Basis of Presentation ​ The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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 26, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 26, 2021. 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, 2020. ​ 2. Significant Accounting Policies ​ Use of Estimates ​ The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant items that are subject to such estimates and assumptions include allowance for credit losses on accounts and notes receivable, intangible assets, contract assets and contract liabilities, including the online customer loyalty program obligation and gift card breakage, right-of-use assets and lease liabilities, insurance reserves and tax reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. ​ 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 as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the domestic restaurants, of which approximately 80 % are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidations.” ​ Noncontrolling Interests ​ Papa John’s has four joint venture arrangements in which there are noncontrolling interests held by third parties that include 188 and 192 restaurants at September 26, 2021 and September 27, 2020, respectively. ​ Consolidated net income is required to be reported separately at amounts attributable to both 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 Operations of net income attributable to noncontrolling interests. ​ 9 Table of Contents Net income attributable to these joint ventures for the three and nine months ended September 26, 2021 and September 27, 2020 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 26, ​ September 27, ​ September 26, ​ September 27, ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Papa John’s International, Inc. ​ $ 2,171 ​ $ 1,292 ​ $ 6,816 ​ $ 4,743 Noncontrolling interests ​ 1,285 ​ 689 ​ 4,021 ​ 2,576 Total net income ​ $ 3,456 ​ $ 1,981 ​ $ 10,837 ​ $ 7,319 ​ 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 ventures with no redemption feature Permanent equity Carrying value Joint ventures with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value ​ 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 Papa John’s 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. The effective income tax rate includes the estimated domestic state effective income tax rate and applicable foreign income tax rates. The effective income tax rate is also impacted by various permanent items and credits, net of any related valuation allowances, and can vary based on changes in estimated annual income. 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 attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted. 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 determines 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. 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 three 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. ​ ​ 10 Table of Contents Fair value is a market-based measurement, not an entity-specific measurement. Considerable judgment is required to interpret market data to estimate fair value; accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange. ​ Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 26, 2021 and December 27, 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ Fair Value Measurements (in thousands) Value Level 1 Level 2 Level 3 September 26, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash surrender value of life insurance policies (a) ​ $ 40,482 ​ $ 40,482 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps (b) ​ ​ 8,162 ​ ​ — ​ ​ 8,162 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash surrender value of life insurance policies (a) ​ $ 37,578 ​ $ 37,578 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps (b) ​ ​ 13,452 ​ ​ — ​ ​ 13,452 ​ ​ — ​ (a) Represents life insurance policies held in our non-qualified deferred compensation plan. (b) The fair value of our interest rate swaps is 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”). ​ The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable. The carrying value of notes receivable, net of allowances, also approximates fair value. The Company’s revolving credit facilities and term debt under the Previous Credit Facility approximate carrying value due to their variable market-based interest rate. The Company’s 3.875 % senior notes are classified as a Level 2 fair value measurement since the Company estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of September 26, 2021 and December 27, 2020, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 26, 2021 ​ December 27, 2020 ​ ​ Carrying ​ Fair ​ Carrying ​ Fair (in thousands) ​ Value ​ Value ​ Value ​ Value 3.875 % Senior Notes ​ $ 400,000 ​ $ 401,000 ​ $ — ​ $ — ​ Allowance for Credit Losses ​ Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged off against the allowance after recovery efforts have ceased. ​ ​ ​ ​ ​ 11 Table of Contents The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ Accounts Receivable ​ Notes Receivable Balance at December 27, 2020 ​ $ 3,622 ​ $ 3,211 Current period benefit for expected credit losses ​ ​ ( 80 ) ​ ​ ( 563 ) Write-offs charged against the allowance ​ ​ ( 1,212 ) ​ ​ ( 843 ) Recoveries collected ​ ​ — ​ ​ ( 277 ) Balance at September 26, 2021 ​ $ 2,330 ​ $ 1,528 ​ ​ 3. Leases ​ Lessor Operating Leases We sublease certain retail space to our franchisees in the United Kingdom which are primarily operating leases. At September 26, 2021, we leased and subleased approximately 410 Papa John’s restaurants to franchisees in the United Kingdom. The initial lease terms on the franchised sites in the United Kingdom are generally 15 years . The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. Rental income, primarily derived from properties leased and subleased to franchisees in the United Kingdom, is recognized on a straight-line basis over the respective operating lease terms. We recognized total sublease income of $ 9.0 million and $ 7.6 million within Other revenues in the Condensed Consolidated Statements of Operations for the nine months ended September 26, 2021 and September 27, 2020, respectively. Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of 71 domestic leases. These leases have varying terms, the latest of which expires in 2036. As of September 26, 2021, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 12.1 million. This contingent liability is not included in the Condensed Consolidated Balance Sheet as it is not probable to occur. The fair value of the guarantee is not material. ​ Supplemental Cash Flow & Other Information ​ Supplemental cash flow information related to leases for the periods reported is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended (in thousands) ​ ​ September 26, 2021 ​ ​ September 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from finance leases ​ $ 864 ​ $ 435 Financing cash flows from finance leases ​ ​ 3,358 ​ ​ 1,438 Operating cash flows from operating leases (a) ​ ​ 28,830 ​ ​ 27,965 Right-of-use assets obtained in exchange for new finance lease liabilities ​ ​ 9,190 ​ ​ 1,056 Right-of-use assets obtained in exchange for new operating lease liabilities (b) ​ ​ 52,462 ​ ​ 18,421 Cash received from sublease income ​ ​ 8,728 ​ ​ 7,641 ​ ​ ​ ​ ​ ​ ​ (a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. (b) Includes right-of-use assets of approximately $ 21.8 million for the nine months ended September 26, 2021 associated with the lease commencement of our Atlanta, Georgia corporate office. ​ ​ 12 Table of Contents 4. Papa John’s Marketing Fund, Inc. ​ PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States, for the purpose of designing and administering advertising and promotional programs for all participating domestic restaurants. Contributions and expenditures are reported on a gross basis in the Condensed Consolidated Statements of Operations within Other revenues and Other expenses. ​ Assets and liabilities of PJMF, which are restricted in their use, included in the Condensed Consolidated Balance Sheets were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 26, ​ December 27, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 32,629 ​ $ 9,394 Accounts receivable, net ​ ​ 13,078 ​ ​ 23,711 Income tax receivable ​ ​ 191 ​ ​ 192 Prepaid expenses and other current assets ​ ​ 1,802 ​ ​ 1,914 Total current assets ​ ​ 47,700 ​ ​ 35,211 Deferred income taxes ​ ​ 595 ​ ​ 588 Total assets ​ $ 48,295 ​ $ 35,799 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 9,810 ​ $ 5,429 Income and other taxes payable ​ ​ 2 ​ ​ 2 Accrued expenses and other current liabilities ​ ​ 39,663 ​ ​ 32,578 Current deferred revenue ​ ​ 3,235 ​ ​ 3,938 Total current liabilities ​ ​ 52,710 ​ ​ 41,947 Deferred revenue ​ ​ 1,881 ​ ​ 2,419 Total liabilities ​ $ 54,591 ​ $ 44,366 ​ ​ 5. Revenue Recognition ​ Contract Balances ​ Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify as Deferred revenue on the Condensed Consolidated Balance Sheets. During the three and nine months ended September 26, 2021, the Company recognized $ 9.2 million and $ 27.3 million in revenue, respectively, related to deferred revenue, compared to $ 8.4 million and $ 24.7 million for the three and nine months ended September 27, 2020. ​ The following table includes a breakout of contract liability balances (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Liabilities ​ ​ ​ September 26, 2021 ​ ​ December 27, 2020 ​ ​ Change Franchise fees and unredeemed gift card liabilities ​ $ 17,949 ​ $ 19,890 ​ $ ( 1,941 ) Customer loyalty program obligations ​ ​ 15,139 ​ ​ 13,364 ​ ​ 1,775 Total contract liabilities ​ $ 33,088 ​ $ 33,254 ​ $ ( 166 ) ​ Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. As of September 26, 2021 and December 27, 2020, the contract assets were approximately $ 5.6 million and $ 5.1 million, respectively. For the three and nine months ended September 26, 2021, revenue was reduced approximately $ 0.8 million 13 Table of Contents and $ 2.2 million, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets. ​ Transaction Price Allocated to the Remaining Performance Obligations ​ The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance Obligations by Period ​ ​ Less than 1 Year ​ 1-2 Years ​ 2-3 Years ​ 3-4 Years ​ 4-5 Years ​ Thereafter ​ Total Franchise fees ​ $ 2,242 ​ $ 2,003 ​ $ 1,766 ​ $ 1,550 ​ $ 1,294 ​ $ 2,477 ​ $ 11,332 ​ Approximately $ 1.5 million of area development fees related to unopened stores and international unearned royalties are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of store openings and franchisees’ revenues. Gift card liabilities of approximately $ 5.1 million, included in Deferred revenue, will be recognized in Company-owned restaurant revenues when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. ​ The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. ​ 6. Common Stock and Series B Convertible Preferred Stock ​ Shares Authorized and Outstanding ​ The Company has authorized 5.0 million shares of preferred stock (of which none were issued or outstanding at September 26, 2021 and December 27, 2020, respectively) and 100.0 million shares of common stock as of September 26, 2021 and December 27, 2020, respectively. There were 36.2 million shares of the Company’s common stock outstanding at September 26, 2021 compared to 32.5 million shares at December 27, 2020. ​ During the second quarter of 2021, the Company entered into a Share Repurchase Agreement with certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), pursuant to which (i) the Company repurchased from Starboard 78,387 shares of the Series B Convertible Preferred Stock, par value $ 0.01 per share, of the Company (“Series B Preferred Stock”) and (ii) Starboard converted the remaining 171,613 shares of Series B Preferred Stock that it owned into 3,458,360 shares of the Company’s common stock pursuant to the terms of the Certificate of Designation of the Series B Preferred Stock. Additionally, the Company entered into agreements with certain franchisee investors to repurchase 1,000 shares of the outstanding Series B Preferred Stock and convert the remaining 1,530 shares of Series B Preferred Stock into 30,769 shares of common stock. The Company paid Starboard and the franchisee investors aggregate one-time cash payments of $ 188.6 million for the repurchase and conversion of all of the outstanding shares of Series B Preferred Stock. The excess of the cash payment over the carrying value of the respective Series B Preferred Stock redeemed resulted in $ 109.9 million of dividends on redemption of Series B Convertible Preferred Stock in the Condensed Consolidated Statement of Operations, which reduced net income attributable to common stockholders during the second quarter of 2021. Diluted earnings per share for the nine months ended September 26, 2021 was reduced by $ 3.14 as a result of this transaction. ​ On August 3, 2021, the Company filed a Certificate of Elimination (the “Certificate of Elimination”) with the Secretary of State of the State of Delaware to eliminate the Series B Preferred Stock. No shares of Series B Preferred Stock were issued or outstanding following the repurchase and conversion thereof in the second quarter of 2021. Effective upon filing, the Certificate of Elimination eliminated from the Company’s Amended and Restated Certificate of Incorporation all matters set forth in the Certificate of Designation with respect to the Series B Preferred Stock. The shares that were designated to such series were returned to the status of authorized but unissued shares of preferred stock, par value $ 0.01 per share, of the Company, without designation as to series. ​ 14 Table of Contents Share Repurchase Program ​ Our Board of Directors has authorized the repurchase of up to $ 75.0 million of common stock under a share repurchase program that began on November 4, 2020 and is effective through December 26, 2021. Through September 26, 2021, a total of approximately 219,000 shares with an aggregate cost of $ 23.3 million and an average price of $ 106.16 per share were repurchased under this program. Funding for the share repurchase program has been provided through our operating cash flows. Subsequent to September 26, 2021, we acquired an additional 158,000 shares at an aggregate cost of $ 19.8 million and an average price of $ 125.50 per share. Approximately $ 31.9 million remained available under this share repurchase program as of October 29, 2021. ​ Subsequent to the end of the third quarter, on October 28, 2021, our Board of Directors approved a new share repurchase program for up to $ 425.0 million of the Company’s common stock, with an indefinite duration. This represents approximately 9.4 % of the Company’s currently outstanding common stock based on the closing stock price as of October 29, 2021. The new share repurchase program will initially operate alongside the Company’s existing $ 75.0 million share repurchase authorization, which expires on December 26, 2021. ​ The timing and volume of share repurchases under the Company’s share repurchase programs may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements. Repurchases under the programs may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate. Repurchases under the Company’s share repurchase programs may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase programs will be provided through our credit facility, operating cash flow, stock option exercises and cash and cash equivalents. ​ Dividends ​ The Company recorded dividends of approximately $ 33.2 million for the nine months ended September 26, 2021 consisting of the following: ​ ● $ 27.6 million paid to common stockholders ($ 0.80 per share); ● $ 3.0 million in preferred dividends on the Series B Preferred Stock ( 3.6 % of the investment per annum); ● $ 1.5 million of common stock deemed dividend distributions in conjunction with the repurchase and conversion of the Series B Preferred Stock; and ● $ 1.1 million in common stock “pass-through” dividends paid to Series B Preferred Stockholders on an as-converted basis ($ 0.45 per share). ​ On October 28, 2021, our Board of Directors declared a fourth quarter dividend of $ 0.35 per common share, of which approximately $ 12.8 million will be paid to common stockholders. The common share dividend will be paid on November 19, 2021 to stockholders of record as of the close of business on November 9, 2021. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. ​ 7. Earnings (Loss) Per Share ​ We compute earnings (loss) per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings (loss) per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The shares of Series B Preferred Stock, which were repurchased by the Company or converted into shares of common stock during the second quarter of 2021, and time-based restricted stock awards are participating securities because holders of such shares have non-forfeitable dividend rights and participate in undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net income (loss) attributable to common shareholders. Additionally, any accretion to the redemption value for the Series B Preferred Stock or cash payments in excess of their respective carrying values upon redemption was treated as a deemed dividend in the two-class earnings per share calculation. 15 Table of Contents The calculations of basic and diluted earnings (loss) per common share are as follows (in thousands, except per-share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 26, ​ September 27, ​ September 26, ​ September 27, ​ ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to the Company ​ $ 29,256 ​ $ 15,708 ​ $ 95,393 ​ $ 44,765 Dividends on redemption of Series B Convertible Preferred Stock ​ ​ — ​ ​ — ​ ​ ( 109,852 ) ​ ​ — Dividends paid to participating securities ​ ​ ( 137 ) ​ ​ ( 3,548 ) ​ ​ ( 5,964 ) ​ ​ ( 10,546 ) Net income attributable to participating securities ​ ( 158 ) ​ ( 703 ) ​ — ​ ( 1,809 ) Net income (loss) attributable to common shareholders ​ $ 28,961 ​ $ 11,457 ​ $ ( 20,423 ) ​ $ 32,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic weighted average common shares outstanding ​ 36,387 ​ 32,616 ​ 34,619 ​ 32,347 Basic earnings (loss) per common share ​ $ 0.80 ​ $ 0.35 ​ $ ( 0.59 ) ​ $ 1.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings (loss) per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to common shareholders ​ $ 28,961 ​ $ 11,457 ​ $ ( 20,423 ) ​ $ 32,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ 36,387 ​ 32,616 ​ 34,619 ​ 32,347 Dilutive effect of outstanding equity awards (a) ​ 332 ​ 355 ​ — ​ 296 Diluted weighted average common shares outstanding (b) ​ 36,719 ​ 32,971 ​ 34,619 ​ 32,643 Diluted earnings (loss) per common share ​ $ 0.79 ​ $ 0.35 ​ $ ( 0.59 ) ​ $ 0.99 (a) Excludes 132 equity awards for the nine months ended September 27, 2020, as the effect of including such awards would have been anti-dilutive. (b) The Company had 252.5 shares of Series B Preferred Stock outstanding at September 27, 2020 ( no ne at September 26, 2021). For the fully diluted calculation, the Series B Preferred stock dividends were added back to net income attributable to common shareholders. The Company then applied the if-converted method to calculate dilution on the Series B Preferred Stock, which resulted in 5.0 million additional common shares for September 27, 2020. This calculation was anti-dilutive for the September 27, 2020 period and as such was excluded. ​ ​ 8. Debt ​ Long-term debt, net, consists of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 26, ​ ​ December 27, ​ ​ ​ ​ 2021 ​ ​ 2020 Outstanding debt ​ ​ $ 425,000 ​ $ 350,000 Unamortized debt issuance costs ​ ​ ​ ( 10,085 ) ​ ​ ( 1,708 ) Current portion of long-term debt ​ ​ ​ — ​ ​ ( 20,000 ) Total long-term debt, net ​ ​ $ 414,915 ​ $ 328,292 ​ Our outstanding debt as of September 26, 2021 was $ 425.0 million, which was comprised of $ 400.0 million outstanding under our 3.875 % senior notes due 2029 (the “Notes”) and $ 25.0 million under the PJI Revolving Facility (as defined below). Including outstanding letters of credit, the remaining availability under the PJI Revolving Facility was approximately $ 572.3 million as of September 26, 2021. ​ Senior Notes ​ On September 14, 2021, the Company issued $ 400.0 million of Notes which will mature on September 15, 2029. The Notes are guaranteed by each of the Company’s existing and future domestic restricted subsidiaries that are guarantors or borrowers under the Amended Credit Agreement (as defined below) or other certain indebtedness. The Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or to persons outside the United States under Regulation S of 16 Table of Contents the Securities Act. Interest on the Notes will be payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on March 15, 2022, at a fixed interest rate of 3.875 % per annum. In connection with the Notes, the Company recorded $ 7.1 million of debt issuance costs, which are being amortized into net interest expense over the term of the Notes. ​ The net proceeds from the Notes, together with borrowings under the Amended Credit Agreement (as defined below), were used to repay outstanding revolver and term loan borrowings under the Company’s Previous Credit Agreement (as defined below). ​ The Company may redeem the Notes, in whole or in part, at any time on or after September 15, 2024 at established redemption prices ranging from 97 to 194 basis points depending on when the Notes are redeemed. At any time prior to September 15, 2024, the Company may also redeem up to 40 % of the Notes with net cash proceeds of certain equity offerings at a redemption price equal to 103.875 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, excluding the redemption date. In addition, at any time prior to September 15, 2024, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest and an applicable “make-whole” premium. The Notes also contain customary redemption provisions related to asset sales and certain change of control transactions. ​ The Indenture governing the Notes contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Notes and certain provisions related to bankruptcy events. The Indenture also contains customary negative covenants. ​ Amended Credit Agreement ​ Concurrently with the closing of the Notes, the Company entered into an amended and restated credit agreement (the “Amended Credit Agreement”) replacing the previous $ 800.0 million credit agreement (“Previous Credit Agreement”). The Amended Credit Agreement provides for a senior secured revolving credit facility in an aggregate available principal amount of $ 600.0 million (the “PJI Revolving Facility”), of which up to $ 40.0 million is available as swingline loans and up to $ 80.0 million is available as letters of credit. The PJI Revolving Facility will mature on September 14, 2026. In connection with the Amended Credit Agreement, the Company recorded $ 2.1 million of debt issuance costs, which are being amortized into net interest expense over the term of the Amended Credit Agreement. ​ Up to $ 50.0 million of the PJI Revolving Facility may be advanced in certain agreed foreign currencies, including Euros, Pounds Sterling, Canadian Dollars, Japanese Yen, and Mexican Pesos. Additionally, the Amended Credit Agreement includes an accordion feature allowing for a future increase of the PJI Revolving Facility and/or incremental term loans in an aggregate amount of up to $ 500.0 million, subject to certain conditions, including obtaining commitments from one or more new or existing lenders to provide such increased amounts and ongoing compliance with financial covenants. ​ Loans under the PJI Revolving Facility accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 1.25 % to 2.00 % or a base rate (generally determined according to the greater of a prime rate, federal funds rate plus 0.50 %, or a LIBOR rate plus 1.00 %) plus a margin ranging from 0.25 % to 1.00 %. 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 ranging from 18 to 30 basis points per annum, determined according to the Leverage Ratio, applies to the unutilized commitments under the PJI Revolving Facility. Loans outstanding under the PJI Revolving Facility 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. The Amended Credit Agreement also contain provisions specifying alternative interest rate calculations to be used at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings. ​ The Amended Credit Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, and restrict, subject to certain exceptions, the incurrence of additional indebtedness and liens, the consummation of certain mergers, consolidations, sales of assets and similar transactions, the making of investments, equity distributions and other restricted payments, and transactions with affiliates. In addition, the Company 17 Table of Contents will be subject to the following financial covenants: (1) a maximum Leverage Ratio of 5.25 to 1.00, subject to the Company’s election to increase the maximum Leverage Ratio by 0.50 to 1.00 in connection with material acquisitions if the Company satisfies certain requirements, and (2) a minimum interest coverage ratio defined as EBITDA plus consolidated rental expense to consolidated interest expense plus consolidated rental expense of 2.00 to 1.00. We were in compliance with these financial covenants at September 26, 2021. ​ Obligations under the Amended Credit Agreement are guaranteed by certain direct and indirect material domestic subsidiaries of the Company (the “Guarantors”) and are secured by a security interest in substantially all of the capital stock and equity interests of the Company’s and the Guarantors’ domestic and first tier material foreign subsidiaries. The Amended Credit Agreement contains customary events of default including, among other things, payment defaults, breach of covenants, cross acceleration to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events. The occurrence of an event of default may result in the termination of the PJI Revolving Facility, acceleration of repayment obligations and the exercise of remedies by the Lenders with respect to the subsidiary guarantors. ​ PJMF Revolving Facility ​ PJMF has a $ 20.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015 with U.S. Bank National Association, as lender. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving Facility matures on September 30, 2022. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of the one-month LIBOR plus 1.75 % . The applicable interest rates on the PJMF Revolving Facility were 1.9 % and 2.7 % for the three and nine months ended September 27, 2020, respectively. There was no debt outstanding under the PJMF Revolving Facility as of September 26, 2021 or December 27, 2020. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the PJI Credit Agreement. ​ Derivative Financial Instruments ​ As of September 26, 2021, we have the following interest rate swap agreements with a total notional value of $ 350.0 million: ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective Dates Floating Rate Debt Fixed Rates 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 % January 30, 2018 through August 30, 2022 ​ $ 100 million ​ 1.99 % January 30, 2018 through August 30, 2022 ​ $ 75 million ​ 1.99 % January 30, 2018 through August 30, 2022 ​ $ 50 million ​ 2.00 % ​ In September 2021, we de-designated $ 350.0 million of our interest rate swaps as cash flow hedges following the issuance of the Notes. For these de-designated hedges, the portion of gains or losses on the derivative instruments previously recognized in accumulated other comprehensive loss (“AOCL”) will be reclassified into earnings as adjustments to interest expense on a straight-line basis over the remaining life of the originally hedged transactions. ​ The following table provides information on the location and amounts of our swaps in the accompanying condensed consolidated financial statements (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate Swap Derivatives ​ ​ Fair Value ​ Fair Value ​ ​ September 26, ​ December 27, Balance Sheet Location ​ 2021 ​ 2020 Other current and long-term liabilities ​ $ 8,162 ​ $ 13,452 ​ 18 Table of Contents The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location of Gain ​ Amount of Gain ​ ​ Derivatives - ​ Amount of Gain or ​ or (Loss) ​ or (Loss) ​ Total Net Interest Expense Cash Flow ​ (Loss) Recognized ​ Reclassified from ​ Reclassified from ​ on Condensed Hedging ​ in AOCL ​ AOCL into ​ AOCL into ​ Consolidated Statements Relationships ​ on Derivative ​ Income ​ Income ​ of Operations Interest rate swaps for the three months ended: September 26, 2021 ​ $ 1,182 ​ Interest expense ​ $ ( 1,644 ) ​ $ ( 3,979 ) September 27, 2020 ​ $ 1,268 ​ Interest expense ​ $ ( 1,674 ) ​ $ ( 3,636 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps for the nine months ended: September 26, 2021 ​ $ 3,963 ​ ​ Interest expense ​ $ ( 5,084 ) ​ $ ( 11,275 ) September 27, 2020 ​ $ ( 7,219 ) ​ Interest expense ​ $ ( 3,376 ) ​ $ ( 11,230 ) ​ Interest paid, including payments made or received under the swaps, was $ 4.1 million and $ 3.9 million for the three months ended September 26, 2021 and September 27, 2020, respectively, and $ 11.1 million and $ 12.0 million for the nine months ended September 26, 2021 and September 27, 2020, respectively. ​ 9. Commitments and Contingencies ​ Litigation ​ The Company is involved in a number of lawsuits, claims, investigations and proceedings, including those specifically identified below, consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. In accordance with ASC 450, “ Contingencies ” the Company has made accruals with respect to these matters where appropriate, which are reflected in the Company’s condensed consolidated financial statements. We review these provisions at least quarterly and adjust them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. ​ Durling et al v. Papa John’s International, Inc. , is a conditionally certified collective action filed in May 2016 in the United States District Court for the Southern District of New York, alleging that corporate restaurant delivery drivers were not properly reimbursed for vehicle mileage and expenses in accordance with the Fair Labor Standards Act. In July 2018, the District Court granted a motion to certify a conditional corporate collective class and the opt-in notice process has been completed. As of the close of the opt-in period on October 29, 2018, 9,571 drivers opted into the collective class. The Company continues to deny any liability or wrongdoing in this matter and intends to vigorously defend this action. The Company has no t recorded any liability related to this lawsuit as of September 26, 2021 as it does not believe a loss is probable or reasonably estimable. ​ 19 Table of Contents 10. Strategic Corporate Reorganization for Long-term Growth ​ On September 17, 2020, we announced plans to open an office in Atlanta, Georgia located in Three Ballpark Center at The Battery Atlanta. The space is designed to drive continued menu innovation and optimize integration across marketing, communications, customer experience, operations, human resources, diversity, equity and inclusion, financial planning and analysis, investor relations and development functions. Our information technology, finance, supply chain, and legal teams will continue to operate in our Louisville, Kentucky office, which remains critical to our success. We also maintain an office outside of London, United Kingdom, where our international operations are managed. All affected employees were either offered an opportunity to continue with the organization or were offered a severance package. As a result, we expect to incur certain one-time corporate reorganization costs of approximately $ 17.0 to $ 20.0 million related to employee severance and transition, recruitment and relocation, and third party and other costs through 2021. Of these costs, we have cumulatively incurred approximately $ 15.3 million through September 26, 2021 which include $ 8.3 million of employee severance and other employee transition costs, $ 4.0 million of recruiting and professional fees, $ 2.9 million of relocation costs, and $ 1.0 million of other costs, offset by ($ 0.9 ) million of stock-based compensation forfeitures on unvested awards. ​ We record severance as a one-time termination benefit and recognize the expense ratably over the employees’ required future service period. All other costs, including employee transition costs, recruitment and relocation costs, and third-party costs, are recognized in the period incurred. All strategic corporate reorganization costs have been recorded in General and administrative expenses on the Condensed Consolidated Statement of Operations. ​ As of September 26, 2021 and December 27, 2020, the estimate of incurred but unpaid strategic corporate reorganization costs are included in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The following table summarizes the activity for the nine months ended September 26, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ ​ ​ ​ ​ ​ Balance at ​ December 27, ​ ​ ​ ​ ​ ​ ​ September 26, ​ 2020 ​ Charges ​ Payments ​ 2021 Employee severance and other employee transition costs $ 4,615 ​ $ 3,576 ​ $ ( 7,235 ) ​ $ 956 Recruiting and professional fees ​ 145 ​ ​ 2,431 ​ ​ ( 2,576 ) ​ ​ — Relocation costs ​ 101 ​ ​ 2,608 ​ ​ ( 1,677 ) ​ ​ 1,032 Other costs ​ — ​ ​ 749 ​ ​ ( 749 ) ​ ​ — Total strategic corporate reorganization liability $ 4,861 ​ $ 9,364 ​ $ ( 12,237 ) ​ $ 1,988 ​ We expect to recognize additional costs associated with the corporate reorganization in the remainder of 2021 of approximately $ 2.0 to $ 5.0 million. ​ ​ 20 Table of Contents 11. Segment Information ​ We have four reportable segments: domestic Company-owned restaurants, North America franchising, North America commissaries, and international operations. 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, Papadias, which are flatbread-style sandwiches, 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 segment principally consists 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. 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 “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, franchise contributions to marketing funds 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 operating income and intercompany eliminations. Certain administrative and capital costs are allocated to segments based upon predetermined rates or 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. 21 Table of Contents Our segment information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 26, ​ September 27, ​ September 26, ​ September 27, (In thousands) ​ 2021 2020 2021 2020 Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic Company-owned restaurants ​ ​ $ 191,584 ​ $ 178,371 ​ $ 584,942 ​ $ 526,317 North America franchising ​ ​ 31,933 ​ 25,281 ​ 97,123 ​ 68,895 North America commissaries ​ ​ 189,224 ​ 181,338 ​ 560,743 ​ 504,379 International ​ ​ 46,880 ​ 40,328 ​ 135,761 ​ 106,846 All others ​ ​ 53,161 ​ 47,623 ​ 160,967 ​ 136,986 Total revenues ​ ​ $ 512,782 ​ $ 472,941 ​ $ 1,539,536 ​ $ 1,343,423 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intersegment revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ North America franchising ​ ​ $ 1,037 ​ $ 824 ​ $ 3,138 ​ $ 2,291 North America commissaries ​ ​ ​ 53,454 ​ ​ 50,306 ​ ​ 158,952 ​ ​ 142,169 All others ​ ​ 18,522 ​ 27,168 ​ 56,613 ​ 66,509 Total intersegment revenues ​ ​ $ 73,013 ​ $ 78,298 ​ $ 218,703 ​ $ 210,969 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic Company-owned restaurants ​ ​ $ 9,480 ​ $ 8,439 ​ $ 40,165 ​ $ 33,852 North America franchising ​ ​ 29,830 ​ 23,353 ​ 90,791 ​ 62,855 North America commissaries ​ ​ 9,598 ​ 8,208 ​ 29,089 ​ 24,579 International ​ ​ 9,618 ​ 7,986 ​ 26,665 ​ 16,836 All others ​ ​ 3,848 ​ 3,193 ​ 14,860 ​ 5,030 Unallocated corporate expenses ​ ​ ( 23,158 ) ​ ( 26,921 ) ​ ( 70,937 ) ​ ( 71,978 ) Elimination of intersegment losses (profits) ​ ​ ( 639 ) ​ 291 ​ ( 557 ) ​ ( 619 ) Total operating income ​ ​ $ 38,577 ​ $ 24,549 ​ $ 130,076 ​ $ 70,555 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic Company-owned restaurants ​ ​ $ 237,155 ​ ​ ​ ​ ​ ​ ​ ​ ​ North America commissaries ​ ​ ​ 147,186 ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ ​ ​ 15,026 ​ ​ ​ ​ ​ ​ ​ ​ ​ All others ​ ​ ​ 103,054 ​ ​ ​ ​ ​ ​ ​ ​ ​ Unallocated corporate assets ​ ​ ​ 229,359 ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation and amortization ​ ​ ​ ( 522,708 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, net ​ ​ $ 209,072 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22 Table of Contents Disaggregation of Revenue ​ In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reportable Segments ​ ​ Three Months Ended September 26, 2021 Major Products/Services Lines ​ ​ Domestic Company-owned restaurants ​ ​ North America franchising ​ ​ North America commissaries ​ ​ International ​ ​ All others ​ ​ Total Company-owned restaurant sales ​ $ 191,584 ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 191,584 Franchise royalties and fees ​ ​ - ​ ​ 32,970 ​ ​ - ​ ​ 14,031 ​ ​ - ​ ​ 47,001 Commissary sales ​ ​ - ​ ​ - ​ ​ 242,678 ​ ​ 24,377 ​ ​ - ​ ​ 267,055 Other revenues ​ ​ - ​ ​ - ​ ​ - ​ ​ 8,472 ​ ​ 71,683 ​ ​ 80,155 Eliminations ​ ​ - ​ ​ ( 1,037 ) ​ ​ ( 53,454 ) ​ ​ - ​ ​ ( 18,522 ) ​ ​ ( 73,013 ) Total segment revenues ​ $ 191,584 ​ $ 31,933 ​ $ 189,224 ​ $ 46,880 ​ $ 53,161 ​ $ 512,782 International other revenues (1) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 8,472 ) ​ ​ 8,472 ​ ​ - Total revenues ​ $ 191,584 ​ $ 31,933 ​ $ 189,224 ​ $ 38,408 ​ $ 61,633 ​ $ 512,782 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reportable Segments ​ ​ Three Months Ended September 27, 2020 Major Products/Services Lines ​ ​ Domestic Company-owned restaurants ​ ​ North America franchising ​ ​ North America commissaries ​ ​ International ​ ​ All others ​ ​ Total Company-owned restaurant sales ​ $ 178,371 ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 178,371 Franchise royalties and fees ​ ​ - ​ ​ 26,105 ​ ​ - ​ ​ 10,703 ​ ​ - ​ ​ 36,808 Commissary sales ​ ​ - ​ ​ - ​ ​ 231,644 ​ ​ 22,737 ​ ​ - ​ ​ 254,381 Other revenues ​ ​ - ​ ​ - ​ ​ - ​ ​ 6,888 ​ ​ 74,791 ​ ​ 81,679 Eliminations ​ ​ - ​ ​ ( 824 ) ​ ​ ( 50,306 ) ​ ​ - ​ ​ ( 27,168 ) ​ ​ ( 78,298 ) Total segment revenues ​ $ 178,371 ​ $ 25,281 ​ $ 181,338 ​ $ 40,328 ​ $ 47,623 ​ $ 472,941 International other revenues (1) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 6,888 ) ​ ​ 6,888 ​ ​ - Total revenues ​ $ 178,371 ​ $ 25,281 ​ $ 181,338 ​ $ 33,440 ​ $ 54,511 ​ $ 472,941 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reportable Segments ​ ​ ​ Nine Months Ended September 26, 2021 Major Products/Services Lines ​ ​ Domestic Company-owned restaurants ​ ​ North America franchising ​ ​ North America commissaries ​ ​ International ​ ​ All others ​ ​ Total Company-owned restaurant sales ​ $ 584,942 ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 584,942 Franchise royalties and fees ​ ​ - ​ ​ 100,261 ​ ​ - ​ ​ 39,396 ​ ​ - ​ ​ 139,657 Commissary sales ​ ​ - ​ ​ - ​ ​ 719,695 ​ ​ 71,233 ​ ​ - ​ ​ 790,928 Other revenues ​ ​ - ​ ​ - ​ ​ - ​ ​ 25,132 ​ ​ 217,580 ​ ​ 242,712 Eliminations ​ ​ - ​ ​ ( 3,138 ) ​ ​ ( 158,952 ) ​ ​ - ​ ​ ( 56,613 ) ​ ​ ( 218,703 ) Total segment revenues ​ $ 584,942 ​ $ 97,123 ​ $ 560,743 ​ $ 135,761 ​ $ 160,967 ​ $ 1,539,536 International other revenues (1) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 25,132 ) ​ ​ 25,132 ​ ​ - Total revenues ​ $ 584,942 ​ $ 97,123 ​ $ 560,743 ​ $ 110,629 ​ $ 186,099 ​ $ 1,539,536 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reportable Segments ​ ​ Nine Months Ended September 27, 2020 Major Products/Services Lines ​ ​ Domestic Company-owned restaurants ​ ​ North America franchising ​ ​ North America commissaries ​ ​ International ​ ​ All others ​ ​ Total Company-owned restaurant sales ​ $ 526,317 ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 526,317 Franchise royalties and fees ​ ​ - ​ ​ 71,186 ​ ​ - ​ ​ 27,962 ​ ​ - ​ ​ 99,148 Commissary sales ​ ​ - ​ ​ - ​ ​ 646,548 ​ ​ 59,630 ​ ​ - ​ ​ 706,178 Other revenues ​ ​ - ​ ​ - ​ ​ - ​ ​ 19,254 ​ ​ 203,495 ​ ​ 222,749 Eliminations ​ ​ - ​ ​ ( 2,291 ) ​ ​ ( 142,169 ) ​ ​ - ​ ​ ( 66,509 ) ​ ​ ( 210,969 ) Total segment revenues ​ $ 526,317 ​ $ 68,895 ​ $ 504,379 ​ $ 106,846 ​ $ 136,986 ​ $ 1,343,423 International other revenues (1) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 19,254 ) ​ ​ 19,254 ​ ​ - Total revenues ​ $ 526,317 ​ $ 68,895 ​ $ 504,379 ​ $ 87,592 ​ $ 156,240 ​ $ 1,343,423 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 23 Table of Contents (1) Other revenues as reported in the Condensed Consolidated Statements of Operations include $ 8.5 million and $ 25.1 million of revenue for the three and nine months ended September 26, 2021, respectively, and $ 6.9 million and $ 19.3 million of revenue for the three and nine months ended September 27, 2020, respectively, that are part of the international reporting segment. These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to operating income but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations. ​ ​ ​ ​ 24 Table of Contents ​ ​ ​ ​