John H. Schnatter - Founder, Chairman and Chief Executive Officer Lance F. Tucker - Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer Tony Thompson - President and Chief Operating Officer Steve Ritchie - Senior Vice President, Global Operations & Global Operations Support and Training Robert C. Kraut - Senior Vice President and Chief Marketing Officer

Michael Halen - Sidoti & Company Peter Saleh - Telsey Advisory Group David Carlson - KeyBanc Capital Markets Mark Smith - Feltl and Company Alexander Slagle - Jefferies

Good day, ladies and gentlemen, and welcome to the Papa John's Fourth Quarter 2013 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this call is being recorded. I'd now like to introduce your host for today’s conference, Lance Tucker. You may begin. Lance F. Tucker: Thank you, Tom. Good morning. With me on the call today are our Founder, Chairman and CEO, John Schnatter; President and COO, Tony Thompson; SVP of Global Operations, Steve Ritchie, and other members of our senior management team. After a brief financial update, John and Tony will have comments about our business and the management team will then be available for Q&A. Our discussion today will contain forward-looking statements that involve risks and uncertainties relating to future events. Actual events may differ materially from the projections discussed today. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings press release and the risk factors included in our SEC filings. All statements made on this call are as of today, and we undertake no obligation to update the information on this call in the event facts or circumstances subsequently change. In addition, certain financial measures we use on this call are expressed on a non-GAAP basis. Our GAAP to non-GAAP results reconciliation can be found in our earnings press release available on the Investor Relations section of our website. Unless otherwise noted, all comparisons are versus the comparable 13 and 52 week periods from a year ago. This call is being taped and the replay will be available for a limited time on our website and in downloadable podcast format. Finally, we ask any media to be in a listen-only mode, since this is primarily an investor call. Now on to a discussion of our fourth quarter and full year operating results; for the fourth quarter, our diluted earnings per share were $0.41, up 32% versus 2012. Our full year 2013 diluted EPS was $1.55, an increase of 20% versus 2012. Our fourth quarter revenues increased 12.2% versus the fourth quarter of 2012 driving the increase for comp sales of 9% for North America and 7% for international as well as a 6.4% increase in the number of units operating globally on a year-over-year basis. The North American comps and increased unit count also drove higher PJ Food Service revenues. For the full-year, revenues increased 8.9%. Again, these results were driven by strong comp of 4% in North America, 7.5% for international and increasing global units and the increase in PJ Food Service volumes. We opened 132 net global units in the fourth quarter and 265 net global units in 2013, of which 183 were international and 82 were in North America. On a business segment basis, operating income for domestic company-owned restaurants was up over $600,000 in the fourth quarter. Incremental profits from our 11.5% comp were largely offset by lower growth margins due primarily to higher commodities and lower national promotion pricing as well as increased restaurant level bonuses. For the full year, operating income for domestic company-owned restaurants was down $900,000 and 6% comp sales were more than offset by higher commodity costs. Operating income for the North America franchising segment increased approximately $1 million in the fourth quarter and $2.3 million for the year, due primarily to the increase in net units and comparable sales of 8.1% in the fourth quarter and 3.1% for the full year. Operating income for our domestic commissaries business segment increased by approximately $4.4 million in the fourth quarter and $4.7 million for the year, due primarily to the incremental volumes associated with higher restaurant sales for both periods. Operating results for our international segment decreased approximately $800,000 in the fourth quarter. Its higher royalties associated with 7% comps were more than offset by higher losses in our company-owned China restaurants as detailed in our press release and 10-K. For the full year, operating income for international was up approximately $150,000. As with our quarterly results, 7.5% comps were largely offset by higher losses in our company-owned China restaurants. Unallocated corporate expenses improved approximately $900,000 in the fourth quarter and $2.2 million for the year, due primarily to lower legal costs and lower short-term management incentive costs. Our effective tax rate was 29.4% in the fourth quarter and 31.2% for the full year, down 1.3% and 1.7% from prior year periods. Our effective rate included higher levels of credits earned and the one-time settlement of specific state tax issues. We repurchased approximately $49 million of stock during the fourth quarter and $118.5 million during the year. The Company has approximately $110 million of remaining share repurchase authorization. Our free cash flow, a non-GAAP measure we define as cash flow from operations less capital expenditures, was approximately $51 million in 2013. Our net debt position, defined as total debt less cash and cash equivalents, was $144 million at year-end. As detailed in our press release, the Company also released 2014 guidance. Highlights include the following. Diluted EPS is projected to be in a range of $1.64 to $1.72 per share including approximately $5 million or $0.08 of higher cost relative to 2013 due to implementation of our new FOCUS POS system. Excluding the impact of FOCUS, this represents an 11% to 16% increase from 2013. North America comparable sales are projected to range from 2% to 4.5%. International comparable sales are projected to range from 5% to 7%. Pre-tax income margin is expected to increase 20 to 40 basis points excluding the impact of FOCUS, due mainly to projected improvements in international profitability including improvements in our company-owned China market. Worldwide net unit growth is projected in the range of 220 to 250 units, of which approximately 70% are expected in international markets. Income tax rates are expected to return to more historical levels between 32.25% and 33.75%. Please see yesterday's press release for additional guidance. And now, I'd like to turn the call over to our Founder, Chairman and CEO, John Schnatter. John? John H. Schnatter: Thanks, Lance, and good morning everyone. We're glad you're able to join us this morning as we discuss our fourth quarter and full year 2013 results. I'd like to start out by congratulating our franchisees and operators throughout the world for an outstanding fourth quarter and an equally impressive 2013. In the face of increasing competitive pressures throughout the year and a global economy that is still struggling to gain its footing, our global systems continues to excel at the fundamentals and delivering on our 'Better Ingredients. Better Pizza.' brand promise throughout the world. That focus resulted in North America comp sales of 9% for the quarter and 4% for the full year, representing the 10th consecutive year of flat to positive comp sales. On the international front, that focus led us to 7% international comp sales for the quarter and 7.5% for the full year. It also led us to a strong EPS increase of 10.8% for the quarter and 20.2% for the full-year. Our 2013 accomplishments are the direct result of our exceptional management team led by Tony Thompson and our world-class operations team led by Steve Ritchie. As you know, we spend a great deal of time and money each year to ensure our restaurants are making good and delivering the industry's highest superior quality pizzas with world-class customer service. As you can see, that investment continues to pay off. Our quality and service scores were higher than any year in recent memory. This led Papa John's earning a highest rating in the prestigious American Customer Satisfaction Index for the 12th time in the last 14 years. It also led to the [fifth] (ph) year of pre-tax income growth in our North America franchise segment. Having founded the Company 30 years ago with an unwavering commitment to quality, it goes without saying that I'm very pleased with the results we continue to produce by executing the fundamentals. Satisfied customers lead to more loyal customers and loyal customers lead to more profitable franchisees who want to grow their business. It also leads to new franchisees entering the system who want to partner with the winner and want to be part of something special. To that end, I'm also very pleased with the restaurant growth numbers during the quarter and the year. We opened our 1,000th restaurant out of North America at [indiscernible] North America, and finished 2013 with 1,142 international restaurants opened in 35 countries and territories. Today we are approaching 4,500 restaurants globally, with a strong global development pipeline with agreements in place to open approximately 1,200 restaurants over the next six years. I'm very excited about the future of our brand worldwide. Our global footprint continues to expand in large parts [indiscernible] and our overall cost to the business. Strong performance in the U.K., we were able to successfully leverage our official pizza sponsor at the football league in the United Kingdom along with continued momentum throughout much of the world including Russia and Latin America to help drive our performance and position us for future success. I'd like to conclude by commenting briefly on our marketing and branding. In 2013, we enjoyed another solid year as the official pizza sponsor of the NFL and did a better job than ever in activating that sponsorship. In fact in a recent survey conducted by Street & Smith Business Report, 41% of the respondents identified Papa John's as the best activating around NFL. It's higher than any other sponsor including well established brands. Additionally and overwhelmingly, 62% named Peyton Manning as the face of an NFL. We are confident that our NFL sponsorship and our partnership with Peyton Manning, who you recall is also a franchisee with 25 restaurants in the Denver market, will continue to pay dividends for the brand for years to come. I'm proud of our team, I'm proud of our momentum, and I think we had a great quarter and a great year. With that, I'll turn it over to Tony Thompson for remarks. Tony?

Thanks John. I would also like to start by congratulating our system on a tremendous quarter and year. In addition to our solid operations and execution of the fundamentals, when I look back at 2013, two areas in particular stand out, our digital leadership position and the strengthening of our LTO pipeline. We continued to extend our technology leadership position in 2013 by becoming the first national pizza company to have more than 45% of domestic system sales coming through our digital channels. In doing so, we topped the $5 billion mark in all-time digital sales during the year. We are well on our way to becoming the first national pizza chain to achieve a domestic system-wide digital sales mix of 50%. Let me repeat that. We are well on our way to becoming the first national pizza chain to achieve a domestic system-wide digital sales mix of 50%. This is the latest in a long list of technology firsts that continues to keep Papa John's in the lead digitally in the pizza industry. Among others, Papa John's was the first national pizza company to offer system-wide online ordering in 2001. We were the first to offer system-wide text ordering in 2007 and we were the first and still the only pizza company with a system-wide digital loyalty program, Papa Rewards, which launched in 2010. Our digital leadership continues to play a vital role in moving the needle for our brand, both in terms of sales and customer satisfaction. In addition, our technology leadership continues beyond consumer facing innovation to back-of-house initiatives such as our new point-of-sale system that we will soon begin to rollout to our domestic restaurants. The new POS system which we call, FOCUS, is a technologically advanced system designed specifically and uniquely for our model and will support continued store level productivity and profitability. In 2013, we also invested in a fully automated dough production facility at our current distribution location in New Jersey. This state-of-the-art quality control center is now producing our fresh dough and distributing other high-quality ingredients for our restaurants in the Northeast more efficiently and is better able to support our continued growth in that region of the U.S. Now turning to our LTO pipeline; in 2013, we introduced some exciting LTO products from a very robust pipeline. Our 2013 lineup included our award winning Buffalo Chicken Pizza which won the Nation's Restaurant News MenuMasters Award for best LTO pizza; our Chipotle Chicken & Bacon Pizza; and a new delicious complementary side, our Mega Chocolate Chip Cookie that continue to be very popular with consumers. Our LTO offerings in 2013 have served as a springboard for introducing more high quality and innovative products in 2014, including our Double Cheeseburger Pizza which is our latest and current offering. The Double Cheeseburger Pizza continues to be very popular with consumers and at a $12 national price point proves again that consumers are willing to pay a premium for quality. On the branding and marketing front, this week we announced that we have selected Grey as our national advertising agency of record after a search process that included 17 different agencies. We've challenged Grey with evolving and freshening our TV creative and fully integrating digital advertising and social media as part of our 360-degree marketing approach. The entire executive leadership team was impressed with Grey and the creative direction they developed for the brand that leverages our quality leadership position. We believe our partnership with Grey will continue to elevate the brand and help us achieve our next level of growth. And with that, I'm going to turn it back over to Lance for questions. Lance F. Tucker: Thanks Tony. Tom, I think we're ready for questions.

(Operator Instructions) Our first question comes from the line of Michael Halen from Sidoti. Your line is now open. Michael Halen - Sidoti & Company: Good morning and congrats on a very strong year. Could you speak about some of the efficiencies the new POS system will create in the restaurants?

This is Tony, Michael. At this point, we're not prepared to provide a lot of color around the efficiencies and ROI and details of that nature. As you know, implementing a change like this across 3,600 restaurants with the intent of being largely complete by the end of this year is not a small undertaking. So just the changed management process, training, et cetera, will be something new for operators, but along the way we'll provide information as it warrants.

Michael, it's Steve. Maybe I'll provide a little bit of color there to Tony's point. I won't try to quantify anything in terms of return on investment, but what I will say is, we invested into technology 17 years ago with our PROFIT System as we call it. So, not a significant change in terms of software but a significant change in terms of hardware, so we are moving to touchscreen technology which will drive efficiency in terms of speed and accuracy on order entry. Also we have state-of-the-art labor-management systems and we also have state-of-the-art driver dispatch system. So those things comprehensively will drive efficiencies in our business in the long-term. Michael Halen - Sidoti & Company: Okay, thank you. And in terms of the quarter, with such a strong comp, I was surprised about the lack of operating leverage in the quarter. Can you give some more color, maybe which commodities caused the most pressure and any color you can give would be helpful? Lance F. Tucker: This is Lance. I'll start with really the commodity situation, cheese wasn't much of an impact on the quarter, really we saw some more on the meat, dough and boxes. So I'm not going to give you the exact amounts there but cheese was relatively neutral. It was the other items that drove the cost up a bit. Michael Halen - Sidoti & Company: Alright, great, thanks. And then, just one more quick question, what are your assumptions for commodity prices and foreign exchange that are baked into the 2014 guidance? Lance F. Tucker: I'll start with that. This is Lance. On foreign exchange, that for 2013 was still a relatively small number and we expect it to remain relatively small in 2014. So I'd say negligible on that front. So that commodity costs were kind of [indiscernible] flat to up 1% for our commodity basket, and certainly you can see what's going on with cheese right now. The future is well over $1.90 and the stop price approaching $2.20 again after it comes down a little bit. So what I would tell you is from a cheese standpoint we have kind of mid to high $1.80s built-in if cheese stays where it is. As I'm sure other folks are telling you, we'll reassess as we go. Michael Halen - Sidoti & Company: Great, thank you very much. Thanks everybody.

Your next question comes from the line of Peter Saleh from Telsey Advisory Group. Your line is now open. Peter Saleh - Telsey Advisory Group: Just wanted to ask on the comp trajectory, so on a one and three-year basis, domestic system-wide same-store sales accelerated pretty significantly, and just curious if you could just talk about some of the things that happened in the fourth quarter. I mean the Mega Chocolate Chip Cookie which was different from last year, Thursday night promotions with the NFL which was also different from last year, if you had to rank order the real drivers of the acceleration, how would you rank order those? John H. Schnatter: Peter, this is John Schnatter here. The two year comp increase for the system is 7.6 and the three year is 11, and the three year interestingly enough for corporate restaurants is 16.3 new points. I'll hit Peyton and then turn it over to Tony. He can give you a little more detail. Peyton has been a big part of our success. He's kind of a simple humble man, so I'll keep my comments with regard to him short and factual. In the fourth quarter, we actually had a larger competitor who spent three times more money than we did, who also has a professional NFL quarterback [indiscernible]. Papa John's and Peyton Manning in the same quarter spent a third as much and ranked plus nine. So we are very keen on the association and the success we're having with Peyton. When we got involved first with Peyton Manning, the market capital of Papa John's was $900 million, today it's over $2.2 billion, and I got to tell you, any company or organization that has an opportunity to get involved with Peyton Manning and/or the Manning family should jump all over. Tony?

Thanks John. Peter, this is Tony. Fourth quarter really was a composite of a lot of things, it's not any single one thing, it's really a continued momentum from prior quarters as we continue to talk about. But first and foremost, our continued excellence and execution from our operations team, and John mentioned in his opening script, we measure very sophisticated measurements on quality and service and we are continuing to break records on that and that's what it's all about. We're better ingredients, better pizza, so our products and service is a foremost focus for us. We had some really compelling offers during the quarter which I'm sure you're aware and it's still a very competitive price environment. We had some new innovative creative in the fourth quarter. I'm sure you saw some of our commercials taking a little bit different approach. We had some very strong LTOs all throughout the quarter. And then from a menu enhancement standpoint, our new complementary side with our Chocolate Chip Cookie also just – it was accretive and just another positive product for us in our menu. And then finally back to John's point on our NFL partnership, we just continue to get stronger with that partnership and how we activate it and they are great partners. Steve, any comments?

Yes, I mean I'll just touch on there. I think touching back again as John talked about, the two and the three year comps on an annual basis, if you look at the two and the three year comps on a quarterly basis, the corporate side of the business was up 18.4% in two year comps and almost 20% on a three-year basis and the franchise not far behind. So it's just again demonstrating in the fourth quarter our sponsorship of the NFL is planned to keep part of that from a national perspective, but we should also mention we are very comprehensive from a local to a national. So we now sponsor over 19 teams in the NFL and all the resources that we have to leverage to drive that, and as Tony spoke to before, our leadership position in digital. So the activation that we apply to those sponsorships at the local level are continuing to drive the market share gains for us and our business. Peter Saleh - Telsey Advisory Group: Is there any reason why this momentum shouldn't carry over into the first quarter of 2014?

This is Tony. We certainly expect continued moment as a whole, but as you can see from our full-year guidance that we put together, we're looking at – we provided that in the context of the full year not a specific quarter. So I'm not going to give any real color or detail around Q1 but it's all about this consistency, and then a key message for us over time the team is focused and we are going to consistently deliver. Peter Saleh - Telsey Advisory Group: Great. And then quickly shifting gears to international, will we get to China profitability in 2014? Lance F. Tucker: Peter, this is Lance, I'll start with that and let the others jump in. We're not going to put an exact timeframe around when we are going to hit profitability in China. What we can tell you and then I'll hand it over to Tony or Steve or John here, is that it takes a while to build out a big market as you've heard John say before on prior calls and we're making progress and we feel good about China long time. Why don't you guys jump in there? John H. Schnatter: Peter, this is John Schnatter. There is nothing happening in China or anything internationally that we didn't experience in the U.S., in Atlanta and Dallas, the big markets. So they always take a little bit more time even though we don't like it, it's pretty predictable. And back in November, as Lance mentioned, I also spoke about how we're very, very consistent and we think that consistency is what makes us strong over the long term. I can tell you the competitive advantage we have and the [indiscernible] difference we have in our product and our marketing in the U.S. is actually exacerbated worldwide, in other words the difference between us and our competitors on products and image worldwide is even stronger than it is in the U.S. because we've spent the money and we've taken the time to implement consistencies through the gold standards on both marketing and the product, and I think that's applicable to China. Tony?

Thanks, John, and a few comments, Peter, on China. We are investing for the long term and I know we say that on these calls probably quite a bit, we are very long term focused, and we are also focused on success. So we go in and we know it's going to take some time, it's going to take some investment and we have a balance now in Beijing of delivery, carry-out plus full-service restaurants. So that's a little bit new territory for us. We knew that going in. But we also we're investing in the right things. From a digital standpoint, we just launched our online ordering system in China in January. So that's part of some of that infrastructure in investment that you're seeing. John H. Schnatter: Peter, this is John again. As we have talked in the past, the quarters will bounce around a little bit but over a yearly basis, as long as the momentum and the direction of the business is on the right vector, we'll be fine.

Peter, I'll just provide my closing comments. I think what I would call China in 2013 is a foundational investment year really to develop a springboard into 2014. So although we don't want to quantify exact timing in terms of profitability, what you can expect is significant profitability improvements in China in 2014 to build momentum for the long-term. Peter Saleh - Telsey Advisory Group: Great, and then just on the unit growth side, the 220 to 250 global net units, it seems a little low to me. Can you just talk about what's going on with franchisees domestically? It seems like the international number may be similar to what you have put up in 2013. Any reason why we're not seeing an acceleration in new unit development? Lance F. Tucker: Peter, this is Lance. I'll start here again and hand it off. We provided guidance that we feel based on what we know today is the best range and our best estimate range, and certainly if that needs to change, it will as we get further into the year but we're very comfortable with where we are for now.

And Peter, I would just say again, and very repetitive in what we say here, but I mean the key thing for us is strategically providing balance. So we don't want our investment and our build-outs to outpace the infrastructure and move away from overall our strategy of what we do from a brand standpoint. So feel comfortable with the 220 to 250 and continue to provide that kind of growth that we are looking for going back to our EPS guidance. Peter Saleh - Telsey Advisory Group: Great, thanks. I'll hop off and maybe hop back in the queue.

Our next question comes from the line of David Carlson from KeyBanc. Your line is now open. David Carlson - KeyBanc Capital Markets: Couple of quick questions and then I have a follow-up. How much did promotional activity helped comp during the quarter, and can you kind of help us understand, as a follow-up to that, how you balance gaining market share without potentially risking cheapening the brand through discounting and eroding this premium position that you guys have worked so hard to convey to the public? Robert C. Kraut: This is Bob Kraut, CMO, and one of the things that we are doing for 2014 is consciously pulling forward a strategy to maintain our premium pricing by reducing pass-throughs and reinvestments in the form of discounts and interesting that in marketing to build the brand, to create a stronger emotional connection and to get credit and reinforce the benefits of the brand which would give people both emotional and rational reasons to pay and retain pay for the brand and retain more of the net price. The other thing that we are doing is looking at the total spend and being much more aggressive in investing media in the digital and social media arena, in addition to strong very competitive weight levels in television. So in the answer to that question, I think we are doing a lot to maintain the premium pricing, and as Steve had mentioned, the Double Cheeseburger which is a full-priced $12 premium price pizza is very, very popular and a very – I would say it's up there and one of our top performing limited time offers in the recent years. What was your second question?

And to the first part before you have your follow-up, David, this is Tonty, 2013 for us really was a transitional year and we are looking at 2014 being more transformational if you look at, just segue some of the things that Bob shared on the pulled away from, we're still in a very competitive environment, value seeking consumers, the economy still on the rebound still tough. So we recognize that, so how we position our brand. We know we're the premium leader within the category and we just announced this week a new ad agency that we're going to be working with that is going to help elevate our brand message and reach so we are meeting consumers where they are and make sure that message really, really penetrates on 'Better Ingredients. Better Pizza' and we're also just starting this year to Bob's point on the Double Cheeseburger Pizza on a price point standpoint, but 2014 we think is a really good opportunity to break away from being viewed in a grouping of pizza restaurants that are typically value and price oriented. John H. Schnatter: This is John. As you may remember, as I stated in the August 7 earnings call, at the end of the day the pizza consumer recognizes that you get what you pay for and a $5 or $6 or $7 pizza is really not a pizza that reflects quality, it's just not. And again, you just can't make a superior quality pizza with superior quality ingredients for $5 or $6 or $7, it's impossible.

David, you had another question or follow-up? David Carlson - KeyBanc Capital Markets: I did. The bottom line is that you guys did promotional activity, we should expect to be down this year from what we saw in 2013, correct?

David, it's Steve. I think what you're going to see is something very similar in terms of our overall strategy. Don't want to get too specific in terms of the pricing related to the promotion but we are going to stay very consistent with our overall strategy that you saw in 2013 into 2014 in terms of our relationships from partnership standpoint and leveraging as what Tony alluded to before that very robust product pipeline. John H. Schnatter: David, this is John again. I don't see anything that doesn't say that our execution couldn't get better. Our marketing is going to get better and our scale is getting better. I don't see anything but good. David Carlson - KeyBanc Capital Markets: And then a follow-up question, given the cheese price movements that you guys alluded to several minutes ago and that we have seen here over the last couple of months, staying at these elevated prices, any idea what we might be looking at in terms of gross margin in the first quarter, and to [indiscernible] onto that, would you be willing to pull back on promotional spending to help protect gross margin? Lance F. Tucker: David, this is Lance. We are not going to give quarter by quarter margin kind of information, that's something we'd stay with. I think the theme you've heard from this group is we're looking at the long-term and we are going to do what's right long-term for the brand and we're not going to make quarter to quarter decisions and thin k kind of short-term. So that's the short answer. I'll let anybody else add on if they'd like.

Any other follow-ups, David? David Carlson - KeyBanc Capital Markets: Thank you.

Our next question comes from the line of Mark Smith from Feltl and Company. Your line is now open. Mark Smith - Feltl and Company: Could you give us more insight into G&A spending in 2014 with the rollout of the new point-of-sale system? Will you guys be able to leverage this line? Lance F. Tucker: Mark, this is Lance, I'll start with this one. As it specifically relates to the new system, again we are not going to quantify any kind of ROI or any kind of improved efficiencies at this time. In general as I look at the G&A line for 2014, what we expect is it will be flat, maybe just a little bit up, and the reason for that we do have significant IAS and international costs that runs through that G&A line on the face of the P&L and we are going to continue to make investments that will solidify our leadership position in technology and allow us to continue to grow international for the long-term. So, flat to just a little bit up on the G&A line. Mark Smith - Feltl and Company: So most of that is not coming from your traditional corporate office, if you will? John H. Schnatter: Mark, this is John. We really look at the business from – we're actually out two or three years in our vision. I can tell you next year 2015 when we have the call we are having today, Papa John's will be a better company than it is today. So we realize that we have to hit the quarter, we have to hit the number, but from a mindset we are already two or three years out with our Company. Mark Smith - Feltl and Company: Lance, when you say flat to maybe up, you're talking as a percent of sales? Lance F. Tucker: Yes. Mark Smith - Feltl and Company: Okay. I guess I'm just trying to get into your pre-tax margin guidance of approximate, what you saw in 2013 if we're looking at G&A roughly flat, is it safe to assume restaurant operating margins [indiscernible] some of the cheese commodity pressure mixed with labor pressure been able to really profitability in international and maybe a little improvement in commissary and other? Lance F. Tucker: Mark, what we noted in our guidance, and I'm going to really stick to that, we're seeing 20 to 40 basis points if you exclude FOCUS of margin improvement and the large driver of that is in fact going to be on the international side of the business. Everything else will be flat to a little up or a little down, but the real meaningful part is going to be coming from international. Mark Smith - Feltl and Company: And you guys just walked here a lot on pricing and promotions, can you talk about what you're seeing out there competitively as far as pricing right now with cheese over $2 and is there an opportunity as we see cheese prices higher that maybe some mom-and-pop shut doors and you guys are able to descend this pressure a little bit better than smaller players?

This is Tony. There's no question that the larger chains are gaining share at the expense of the regional and smaller chains and that's obviously due in part to share just – as far as share voice, our digital leadership that I talked about, pricing efficiencies, et cetera, and from a pricing standpoint you're still seeing some pretty competitive aggressive price points from not only the national players but even some regional change and that's competitive environment that I mentioned that we have to be sensitive to. As you know, we have the quality and premium position, there is just some price elasticity there that we got to be careful, and as I mentioned the Double Cheeseburger Pizza promotion that we are running right now, we are at a national price point that's higher than anybody else. And so we certainly have confidence as we move forward, we are going to be able to continue to do that because of our position, but don't want to comment too much on what the competitors are doing. We certainly pay attention to what they're doing but we manage out of our playbook. John H. Schnatter: Mark, this is John. I really feel with our momentum and our positioning and our product quality that we are in the best position to continue with the momentum and that momentum makes it a lot easier to absorb higher food costs. In other words, the worst place you'd want to be in right now is to have to sell pizzas for $10 or less and be on the negative. That would be the worst place you'd want to be in this environment.

Yes, and Mark, it's Steve, I'll add one more thing. I mean I think without a doubt this category is all about top line sales and taking market share as I alluded to before. I mean if you look at our fourth quarter, one and two and three year comps, we are taking share, and yes, we are taking share from the independents and the regionals but it's not hard to dissect the numbers and see Papa John's created a separation and taking share from even some of the national and larger regional chains out there. In terms of being able to sustain some of the pressures from a commodity standpoint on cheese prices, again it's all about sales. So higher average unit volumes are going to be able to continue to push and grow with those independents and the regionals that are smaller or lower average unit volumes are going to be more pressuring and you are likely to continue to see further consolidation within the category and closures of those sorts.

This is Tony. One more comment I would like to add just to make sure we're being clear to that. Historically we have implemented some pretty aggressive promotions strategically at the right time because we pay attention to the healthy balance off ticket as well as traffic, to what Steve was alluding to. So from time to time, we will get more aggressive on a particular offer based on maybe what's happening within that particular quarter, again with a long-term focus in mind and making sure that we're not doing things to degrade our prime position. Mark Smith - Feltl and Company: Last question I had, I just wanted to probably dig a little bit more into the health of your domestic franchisees. We saw North America net unit growth slightly miss your guidance Q4, this year your guidance is lower for net openings in 2014, is there anything to read into this, is this more just saturation and not as many markets and stores to open or what's the demand from your franchisees to really open new stores?

This is Tony. I'll start, then I'll hand it over to Steve for some comments. First, we monitor our system health very, very closely and very carefully and have a very, very good working relationship with our franchisees through our Franchise Advisory Council and profitability is at the forefront of all of our minds. As John indicated in his script, profitable restaurants and franchisees indicates earnings growth. So that's very, very important. So not only do we have the monitoring approach but we are very well penetrated in a large part of the country, and remaining development areas we are seeing, there you're not going to end up potentially seeing some of the sales levels as some of the highly penetrated markets that we're in today and I think that's just a statement of available market areas. So Steve, you want to add anything to that?

I think, you [indiscernible] Tony, it's market speed again, so I think it's the key piece of franchise health, again good indication for that franchise health. We tie everything to top line sales. So you look at our one, two, three year comps, the three year comps at nearly 10%, that's a good indication of how we're driving top line growth, we are getting good margins and franchisees are making money. Number two, you look at our unit builds in North America over the last three years, we got a very robust pipeline, our gross unit openings have been strong, another indication of franchisees doing well. With that being said, yes, it's been a very challenging competitive pricing environment, a very challenging economic environment related to commodities. So we recognize those challenges and strategically balance everything that we do to drive the business, provide incentives from a development standpoint and other special incentives to help support those franchisees to ensure they have health. Without the health of the franchisees, we have no business and that is certainly a big priority for our brand. Mark Smith - Feltl and Company: Did you expect any or you saw some bigger closures in Q3 on domestic franchisees, is there anything inlay that's built into the guidance that you guys see on the horizon? Lance F. Tucker: Mark, this is Lance. We don't have anything big built in but frankly we wouldn't share real specifics around that anyway. Mark Smith - Feltl and Company: Thank you.

We have a follow-up question from the line of Peter Saleh from Telsey Advisory Group. Your line is now open. Peter Saleh - Telsey Advisory Group: Lance, could you just go through the CapEx for 2014 and how maybe that breaks down? I assume the CapEx would be similar to 2013 but we would expect operating cash flows to be up, yet you are calling for free cash flow also to be kind of similar to 2013, so maybe you can just walk us through the CapEx breakdown and how we get to kind of neutral-ish on free cash flow? Lance F. Tucker: Peter, what I'll do, I'm not going to give a whole lot of detail but I'll give you a little bit. From a CapEx standpoint what you're going to see is you're going to see continued stores [indiscernible] in China, you're going to see continued – probably the biggest part of our CapEx is continued investments in the technology side. So we will be rolling out the FOCUS system to our corporate restaurants at 650 restaurants, that all flow into our CapEx number as you can imagine. Other technology investments we will be making to make sure we retain our leadership position on the technology side. And then good maintenance and keeping up our restaurants frankly and making sure that our image stays right at the very top of the category. So I think from a CapEx standpoint, very similar to last year. Last year you had more the development of the FOCUS system, this year that transitioned to more the hardware of the new system in our restaurants. From a free cash flow standpoint, again you will see an increase in operating income and it's just kind of a matter how some of the working capital items work themselves through. So we will give better updates on that as we go throughout the year on a net cash flow standpoint. John H. Schnatter: Peter, this is John. I think you and Mark kind of alluded to a little bit of the conservatism in our projections and with cheese over $2 a pound and the huge task of rolling out 3,600 computers in 2014, we're off to a good start. We just finished [P2] (ph) [indiscernible] we're off to a very good start. With that the incentive, you could paint the picture in [P8] (ph) where we have thousands of computers rolled out, cheese is back to $1.80 and we are seeing some improvement because of the technology, that would be a different picture, but we have some work to do here and we have got work ahead of us. So I feel very good about it but I think we need to be a little bit cautious with what we've got to get done. Peter Saleh - Telsey Advisory Group: Alright, thank you very much.

Our last question comes from the line of Alex Slagle from Jefferies. Your line is now open. Alexander Slagle - Jefferies: A question on the international franchise revenue, royalties and fees, in the fourth quarter only up a couple of percent on a year-over-year basis, 13 week to 13 week, it had been up 15% to 20% consistently for a number of quarters, just wanted if you could talk to what transpired in the fourth quarter in terms of your strategy and your timing? Lance F. Tucker: This is Lance, I'll start with it. As we noted, we ran a pretty significant comp in the fourth quarter of 7%, really just there was not anything in particular with any given market, we just had kind of general across the board royalty increase. So I don't think there was anything real significant there. Alexander Slagle - Jefferies: Okay, and the international franchise fees, just looking at the year-over-year increase, the royalty revenue, am I right with it, sort of up a couple of percent or am I looking at the wrong thing fourth quarter? Lance F. Tucker: I'd tell you the other thing, Alex, prior year had a 53rd week or had an extra week in it. So if you are not normalizing that for an extra week of operations in 2012, that percentage is not going to look as high. I apologize I didn't catch that a moment ago, but that is – we can work through the math offline if you'd like but that's – with the 7% comp, the difference is the 53rd week. Alexander Slagle - Jefferies: Okay, and on the North American company-owned business, I guess a few non-traditionals opened up in the fourth quarter, kind of where they are, how big they are and is that something you're going to be focused on accelerating in the future? Lance F. Tucker: This is Lance again. We don't typically give the specifics around where and how big those non-trads are. I will let Tony or Steve speak to what our thoughts around non-trads are in the future.

It's Steve. I mean I think, Alex, yes it's part of our overall strategy, materially it's not a significant impact to the overall. From a comp perspective, obviously they are judged by non-comp, so our non-traditional venues are typically more seasonal, specific and higher ad and we had to do some stadiums and things of that sort. It's part of the overall strategy but not a significant part of how we'll continue to grow the brand. But from a brand awareness standpoint, which is typically how we use that asset on the non-trade side of the business. Alexander Slagle - Jefferies: Okay. And then just a follow-up on the China question earlier and just trying to get a little more on your confidence to turn toward profitability in 2014 and what needs to happen over the course of the next couple of quarters, anything about the status of the infrastructure build or anything else that might help us see the improvement that you see coming? Lance F. Tucker: Alex, this is Lance. I'll start then hand it over to Tony. I would say a couple of things there. One thing that we should point out in common, they were in the neighborhood of $1 million of one-time type costs in the fourth quarter. So when you look at that fourth quarter in China, we had some asset closures, some asset write-offs, we did have an extra month of operations in there, so there were a few things that happened that will hopefully not be recurring. So certainly there is a little bit bounce we're going to get from just the one-time things. And we also opened a number of stores right at the very end of the year where you pick up a lot of preopening expense and those kinds of things. I'll let Tony go from here.

My comment, Alex, is going to be that we have a corporate presence in that market very frequently. As a matter of fact many of us from the executive team are about to embark on an international trip this afternoon and that's the first place we are going. So we are hands-on from the executive team all the way down in the key markets that are very important to us long-term and certainly China is very, very important to us and we are very confident in the team and all the investments that we're making, the strategy, and as Lance alluded to I think, and again we've indicated that the profitability improvement in international, certainly China is going to be a contributor to that. So, very confident and again we're not going to give quite detail on timing because we have a long-term approach, but in 2014, we feel good about the plan we have in place. Alexander Slagle - Jefferies: Thank you.

Thank you and I'm showing no further questions at this time. I'd now like to turn the call back over to Lance Tucker for closing remarks. Lance F. Tucker: Great. Thank you, Tom, and thanks everybody for being on the line and we look forward to catching you up at the end of the first quarter. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a good day.