Significant Accounting Policies (Tables)

3 Months Ended

Mar. 27, 2022

Schedule of net income attributable to Joint Ventures

Net income attributable to these joint ventures for the three months ended March 27, 2022 and March 28, 2021 was as follows (in thousands):



	Three Months Ended
	March 27,		March 28,
	2022		2021

Papa John’s International, Inc.	$	1,621	$	2,349
Noncontrolling interests		933		1,400
Total net income	$	2,554	$	3,749

Schedule of Joint Ventures in Which There are Noncontrolling Interests

The following summarizes the redemption feature, location and related accounting within the Condensed Consolidated Balance Sheets for these joint venture arrangements:



Type of Joint Venture Arrangement	Location within the Balance Sheets	Recorded Value

Joint 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

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 March 27, 2022 and December 26, 2021 are as follows:


	Carrying		Fair Value Measurements
(in thousands)	Value		Level 1		Level 2		Level 3
March 27, 2022
Financial assets:
Cash surrender value of life insurance policies (a)	$	34,205	$	34,205	$	—	$	—

Financial liabilities:
Interest rate swaps (b)	$	1,528	$	—	$	1,528	$	—

December 26, 2021
Financial assets:
Cash surrender value of life insurance policies (a)	$	41,904	$	41,904	$	—	$	—

Financial liabilities:
Interest rate swaps (b)	$	5,536	$	—	$	5,536	$	—

(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 under its credit agreement approximate carrying value due to its 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 has the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of March 27, 2022 and December 26, 2021, respectively:


	March 27, 2022				December 26, 2021
	Carrying		Fair		Carrying		Fair
(in thousands)	Value		Value		Value		Value
3.875% Senior Notes	$	400,000	$	362,000	$	400,000	$	396,000

Schedule rollforward of the allowance for credit losses for accounts receivable, notes receivable and other assets



(in thousands)	Accounts Receivable		Notes Receivable
Balance at December 26, 2021	$	2,364	$	1,500
Current period provision for expected credit losses (1)		2,613		12,560
Write-offs charged against the allowance		(126)		—
Recoveries collected		—		(6)
Balance at March 27, 2022	$	4,851	$	14,054

(1)

The Company recorded $14.6 million of one-time, non-cash reserves for certain accounts receivable and notes receivable primarily associated with a master franchisee with operations principally in Russia.