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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-39898

https://cdn.kscope.io/95bc21c408718fcda7d79e6fd752f755-drvn-20210925_g1.jpg

Driven Brands Holdings Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
47-3595252
(I.R.S. Employer Identification No.)
440 South Church Street, Suite 700
Charlotte, North Carolina
(Address of principal executive offices)
28202
(Zip Code)
Registrant’s telephone number, including area code: (704) 377-8855

Title of each class
Common Stock, $0.01 par value
Trading Symbol
DRVN
Name of each exchange on which registered
The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Accelerated filer
Small reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

As of November 5, 2021, the Registrant had 167,379,785 shares of Common Stock outstanding.



Driven Brands Holdings Inc.
Table of Contents
Page
PART I. FINANCIAL INFORMATION
PART II. OTHER INFORMATION



Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; and (iv) the competitive environment in which we operate. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 26, 2020, as supplemented by the “Risk Factors” section in our Quarterly Report on Form 10-Q for the quarter ended June 26, 2021 and in this Quarterly Report as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date on which they are made, and we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.




Part I - Financial Information
Item 1. Financial Statements (Unaudited)
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three months endedNine months ended
(in thousands, except per share amounts)September 25, 2021September 26, 2020September 25, 2021September 26, 2020
Revenue:
Franchise royalties and fees$38,953 $36,520 $107,240 $94,214 
Company-operated store sales213,755 140,788 603,808 323,339 
Independently-operated store sales47,941 30,595 160,483 30,595 
Advertising fund contributions19,762 14,927 56,665 42,429 
Supply and other revenue50,737 44,932 147,199 125,115 
Total revenue371,148 267,762 1,075,395 615,692 
Operating expenses:
Company-operated store expenses130,520 85,668 367,095 202,333 
Independently-operated store expenses27,764 17,995 89,664 17,995 
Advertising fund expenses19,762 14,927 56,665 42,429 
Supply and other expenses28,330 25,813 80,417 70,167 
Selling, general and administrative expenses71,565 56,586 218,549 153,107 
Acquisition costs636 12,076 2,674 13,287 
Store opening costs666 119 1,360 1,921 
Depreciation and amortization28,447 16,221 78,722 32,656 
Asset impairment charges and lease terminations(270)321 3,161 6,732 
Total operating expenses307,420 229,726 898,307 540,627 
Operating income63,728 38,036 177,088 75,065 
Other expenses, net:
Interest expense, net17,688 29,594 52,390 64,973 
Net loss (gain) on foreign currency transactions1,074 (2,230)6,356 55 
Loss on debt extinguishment 673 45,576 673 
Total other expenses, net18,762 28,037 104,322 65,701 
Net income before taxes44,966 9,999 72,766 9,364 
Income tax expense11,880 5,888 24,445 6,109 
Net income33,086 4,111 48,321 3,255 
Net (loss) income attributable to non-controlling interests(38)32 (68)(34)
Net income attributable to Driven Brands Holdings Inc.$33,124 $4,079 $48,389 $3,289 
Earnings per share(1):
Basic$0.20 $0.04 $0.30 $0.03 
Diluted$0.19 $0.04 $0.29 $0.03 
Weighted average shares outstanding(1):
Basic162,635 111,950 160,030 96,643 
Diluted 166,630 111,950 163,968 96,643 
(1) Shares and earnings (loss) per share for 2020 have been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 for additional information.
The accompanying notes are an integral part of these consolidated financial statements.
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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Three months endedNine months ended
(in thousands)September 25, 2021September 26, 2020September 25, 2021September 26, 2020
Net income$33,086 $4,111 $48,321 $3,255 
Other comprehensive income (loss):
   Foreign currency translation adjustment(30,844)(2,850)(28,675)(14,096)
   Unrealized gain from cash flow hedges, net of tax(1)552 29 552 
   Defined benefit pension plan actuarial gain, net of tax3  131  
Other comprehensive loss, net(30,842)(2,298)(28,515)(13,544)
Total comprehensive income (loss)2,244 1,813 19,806 (10,289)
Comprehensive income (loss) attributable to non-controlling interests(47)97 (8)(34)
Comprehensive income (loss) attributable to Driven Brands Holdings Inc.$2,291 $1,716 $19,814 $(10,255)
The accompanying notes are an integral part of these consolidated financial statements.
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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
September 25, 2021December 26, 2020
Assets(Unaudited)
Current assets:
Cash and cash equivalents$115,365 $172,611 
Restricted cash 135 15,827 
Accounts and notes receivable, net110,907 84,805 
Inventory44,259 43,039 
Prepaid and other assets26,022 25,070 
Income tax receivable2,619 3,055 
Advertising fund assets, restricted39,698 29,276 
Total current assets339,005 373,683 
Notes receivable, net2,748 3,828 
Property and equipment, net1,121,204 827,392 
Operating lease right-of-use assets905,527 884,927 
Deferred commissions9,878 8,661 
Intangibles, net817,665 829,308 
Goodwill1,810,085 1,727,351 
Total assets$5,006,112 $4,655,150 
Liabilities and shareholders' equity
Current liabilities:
Accounts payable$72,458 $67,802 
Accrued expenses and other liabilities217,589 190,867 
Income tax payable 2,791 3,513 
Current portion of long term debt18,342 22,988 
Advertising fund liabilities25,457 20,276 
Total current liabilities336,637 305,446 
Long-term debt, net1,677,337 2,102,219 
Deferred tax liability261,906 249,043 
Operating lease liabilities843,925 818,001 
Income tax receivable liability155,970  
Deferred revenue24,770 20,757 
Long-term accrued expenses and other liabilities30,070 53,324 
Total liabilities3,330,615 3,548,790 
Common stock, $0.01 par value, 900 million shares authorized at September 25, 2021 and December 26, 2020; 167 million and 127 million shares issued and outstanding at September 25, 2021 and December 26, 2020, respectively(1)
1,674 565 
Additional paid-in capital1,604,342 1,055,172 
Retained earnings80,364 31,975 
Accumulated other comprehensive income (loss)(12,047)16,528 
Total shareholders’ equity attributable to Driven Brands Holdings Inc.1,674,333 1,104,240 
Non-controlling interests1,164 2,120 
Total shareholders' equity1,675,497 1,106,360 
Total liabilities and shareholders' equity$5,006,112 $4,655,150 
    
(1) Common stock at December 26, 2020 has been adjusted to reflect an implied 88,990-for-one stock split that became effective on January 14, 2021. See Note 1 for additional information.
The accompanying notes are an integral part of these consolidated financial statements.
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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’/MEMBERS’ EQUITY (Unaudited)
in thousandsCommon stockAdditional paid-in capitalRetained earningsAccumulated other
comprehensive
income (loss)
Non-controlling
interests
Total shareholders'/members' equity
Balance as of December 26, 2020
$565 $1,055,172 $31,975 $16,528 $2,120 $1,106,360 
Net income (loss)— — (19,939)— 7 (19,932)
Other comprehensive loss— — — (9,085)— (9,085)
Equity-based compensation expense— 983 — — — 983 
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions1,082 660,418 — — — 661,500 
Common stock issued upon underwriter's exercise of over-allotment48 99,177 — — — 99,225 
Repurchase of common stock(21)(42,956)— — — (42,977)
Exercise of stock options— 25 — — — 25 
Establishment of income tax receivable liability— (155,970)— — — (155,970)
IPO fees— (14,757)— — — (14,757)
Other—  — — (63)(63)
Balance as of March 27, 2021$1,674 $1,602,092 $12,036 $7,443 $2,064 $1,625,309 
Net income (loss)— — 35,204 — (37)35,167 
Other comprehensive loss— — — 11,412  11,412 
Equity-based compensation expense— 1,028 — — — 1,028 
At-Pac divestiture— — — — (948)(948)
Other— (25)— (1)— (26)
Balance at June 26, 2021$1,674 $1,603,095 $47,240 $18,854 $1,079 $1,671,942 
Net income (loss)— — 33,124 — (38)33,086 
Other comprehensive income (loss)— — — (30,902)60 (30,842)
Equity-based compensation expense— 933 — — — 933 
Exercise of stock options— 314 — — — 314 
Other— — — 1 63 64 
Balance at September 25, 2021$1,674 $1,604,342 $80,364 $(12,047)$1,164 $1,675,497 
Balance as of December 28, 2019565 242,240 41,983 3,626 1,464 289,878 
Cumulative effect of ASU 2016-02 adoption— — (4,012)— — (4,012)
Cumulative effect of ASU 2016-13 adoption— — (1,797)— — (1,797)
Balance as of December 29, 2019565 242,240 36,174 3,626 1,464 284,069 
Net income (loss)— — 3,289 — (34)3,255 
Other comprehensive (loss)— — — (13,544) (13,544)
Equity-based compensation expense— 508 — — — 508 
Common stock issued in a business combination— 809,000 — — — 809,000 
Acquisition of subsidiary with noncontrolling interest— — — — 400 400 
Balance at September 26, 2020$565 $1,051,748 $39,463 $(9,918)$1,830 $1,083,688 
The accompanying notes are an integral part of these consolidated financial statements.
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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine months ended
(in thousands)September 25, 2021September 26, 2020
Net income$48,321 $3,255 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization78,722 32,656 
Non-cash lease cost56,563 26,254 
Loss on foreign denominated transactions9,301 55 
Gain on derivatives not designed as hedges(2,945) 
Bad debt expense2,535 4,829 
Asset impairment costs3,161 6,732 
Amortization of deferred financing costs and bond discounts5,139 7,176 
Benefit (provision) for deferred income taxes15,898 (4,524)
Loss on extinguishment of debt45,576 673 
Other, net4,257 1,566 
Changes in assets and liabilities, net of acquisitions:
Accounts and notes receivable, net(28,787)(12,349)
Inventory(3,279)(1,328)
Prepaid and other assets(18,414)1,755 
Advertising fund assets and liabilities, restricted5,818 (554)
Deferred commissions(1,205)(1,810)
Deferred revenue3,983 3,438 
Accounts payable(3,903)10,311 
Accrued expenses and other liabilities25,595 8,926 
Income tax receivable(320)7,551 
Operating lease liabilities(47,821)(28,157)
Cash provided by operating activities198,195 66,455 
Cash flows from investing activities:
Capital expenditures(93,627)(35,124)
Cash used in business acquisitions, net of cash acquired(442,488)8,575 
Proceeds from sale-leaseback transactions66,391  
Proceeds from sale of At-Pac business1,532  
Proceeds from disposal of property and equipment5,471  
Cash used in investing activities(462,721)(26,549)
Cash flows from financing activities:
Payment of contingent consideration related to acquisitions (2,783)
Payment of debt extinguishment and issuance costs(2,153)(12,639)
Proceeds from the issuance of long-term debt 175,000 
Repayment of long-term debt(716,542)(11,619)
Proceeds from revolving lines of credit and short-term debt441,800 152,101 
Repayments of revolving lines of credit and short-term debt(212,800)(191,600)
Repayment of principal portion of finance lease liability(1,760)(731)
Proceeds from failed sale-leaseback transactions 3,432 
Proceeds from initial public offering, net of underwriting discounts661,500  
Net proceeds from underwriters' exercise of over-allotment option99,225  
Repurchases of common stock(43,040) 
Payment for termination of interest rate swaps(21,826) 
Stock option exercises339  
Other, net102  
Cash provided by financing activities204,845 111,161 
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Effect of exchange rate changes on cash(2,285)468 
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted(61,966)151,535 
Cash and cash equivalents, beginning of period172,611 34,935 
Cash included in advertising fund assets, restricted, beginning of period19,369 23,091 
Restricted cash, beginning of period15,827  
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, beginning of period207,807 58,026 
Cash and cash equivalents, end of period115,365 184,356 
Cash included in advertising fund assets, restricted, end of period30,341 25,205 
Restricted cash, end of period135  
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period$145,841 $209,561 
Supplemental cash flow disclosures - non-cash items:
Accrued capital expenditures, end of period$6,123 $984 
Supplemental cash flow disclosures - cash paid for:
Interest $53,842 $61,887 
Income taxes 10,593 3,141 

The accompanying notes are an integral part of these consolidated financial statements.
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DRIVEN BRANDS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1—Description of Business
Description of Business
Driven Brands Holdings Inc., together with its subsidiaries (collectively, the “Company”), is a Delaware corporation and is the parent holding company of Driven Brands, Inc. and Shine Holdco (UK) Limited (collectively, “Driven Brands”). Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of more than 4,300 franchised, independently-operated, and company-operated locations across 49 U.S. states and 14 other countries. The Company has a portfolio of highly recognized brands, including Take 5 Oil Change®, Meineke Car Care Centers®, MAACO®, CARSTAR®, and 1-800-Radiator & A/C® that compete in the automotive services industry. Approximately 81% of the Company’s locations are franchised or independently-operated.

Initial Public Offering and Secondary Offering
On January 14, 2021, the Company completed an initial public offering (the “IPO”) of approximately 32 million shares of common stock at $22 per share. On February 10, 2021, the Company’s underwriters exercised their over-allotment option to purchase approximately 5 million additional shares of common stock. The Company received total proceeds of $761 million from these transactions, net of the underwriting discounts and commissions.

The Company used the proceeds from the IPO, along with cash on hand, to fully repay the First Lien Term Loan, Second Lien Term Loan, and revolving credit facility assumed as part of the acquisition of International Car Wash Group (“ICWG”) in 2020 (collectively, the “Car Wash Senior Credit Facilities”), which totaled $725 million with interest and fees. The Company recognized a $46 million loss on debt extinguishment related to this settlement, primarily related to the write-off of unamortized discount. The Company cancelled the interest rate and cross currency swaps associated with these debt agreements as part of the settlement. The Company also used $43 million in proceeds to purchase approximately 2 million shares of common stock from certain of our existing shareholders.

On August 2, 2021, the Company filed a Registration Statement on Form S-1 for a secondary offering of approximately 12 million shares of common stock at $29.50 per share by certain of the Company’s stockholders, Driven Equity LLC and RC IV Cayman ICW Holdings LLC, each of which is a related party of Roark Capital Management, LLC. The Company did not sell any common stock in the offering and did not receive any proceeds from the offering. On September 8, 2021, the underwriters for the secondary offering exercised a portion of their over-allotment option and purchased 881,393 additional shares of common stock. The Company did not receive any proceeds from the exercise of the over-allotment option.

Income Tax Receivable Agreement
The Company expects to be able to utilize certain tax benefits which are related to periods prior to the effective date of the Company’s IPO and are attributed to current and former shareholders. The Company previously entered into an income tax receivable agreement which provides our pre-IPO shareholders with the right to receive payment of 85% of the amount of cash savings, if any, in U.S. and Canadian federal, state, local and provincial income tax that the Company will actually realize. The income tax receivable agreement is effective as of the date of the Company’s IPO, and the Company has recorded a liability of $156 million as of September 25, 2021, which is recorded under long-term liabilities as the income tax receivable liability on the consolidated balance sheet.

Stock Split
On January 14, 2021, the Company’s shareholders approved an amendment to the Company’s certificate of incorporation (the "Amendment") to effect an implied 88,990-for-one stock split of shares of the Company’s outstanding common stock. In addition, the Amendment increased the number of authorized shares of the Company's stock from 10,000 shares to 1 billion shares (900 million shares of common stock and 100 million shares of preferred stock). All share and per-share data in the consolidated financial statements and footnotes has been retroactively adjusted to reflect the stock split for all periods presented. The Company does not have any shares of preferred stock outstanding.

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Note 2— Summary of Significant Accounting Policies

Fiscal Year
The Company operates and reports financial information on a 52- or 53-week year with the fiscal year ending on the last Saturday in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The three and nine months ended September 25, 2021 and September 26, 2020, each consist of 13 and 39 weeks, respectively. The Car Wash segment (primarily ICWG which was acquired in August 2020) is currently consolidated based on a calendar month end. See Note 3 for additional discussion regarding the acquisition of ICWG.

Basis of Presentation
The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of results of operations, balance sheet, cash flows, and shareholders’ equity for the periods presented have been reflected. The adjustments include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

These interim consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 26, 2020. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three and nine months ended September 25, 2021 may not be indicative of the results to be expected for any other interim period or the year ending December 25, 2021.

Use of Estimates    
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes to the consolidated financial statements. Estimates are based upon historical factors, current circumstances and the experience and judgment of the Company’s management. Management evaluates its estimates and assumptions on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on more accurate future information, or different assumptions or conditions, may affect amounts reported in future periods.

Deferred IPO costs
Costs incurred that are directly related to the IPO, such as legal and accounting fees, registration fees, printing expenses, and other similar fees and expenses, totaling $9 million were capitalized and included within prepaid and other assets as of December 26, 2020. Upon completion of the IPO, the Company reclassified these costs, as well as an additional $6 million of IPO costs incurred during the nine months ended September 25, 2021, to Additional paid-in capital.

Fair Value of Financial Instruments
Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity as the ability to access at the measurement date;
Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or
Level 3: Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
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Financial assets and liabilities measured at fair value on a recurring basis as of September 25, 2021 and December 26, 2020 are summarized as follows:

Items Measured at Fair Value at September 25, 2021
(in thousands)Level 1Level 2Total
Mutual fund investments held in rabbi trust$983 $ $983 
Foreign currency derivative liabilities not designated as hedging instruments$ $509 $509 

Items Measured at Fair Value at December 26, 2020
(in thousands)Level 1Level 2Total
Mutual fund investments held in rabbi trust$704 $ $704 
Foreign currency derivative assets not designated as hedging instruments 227 227 
Total assets measured at fair value on a recurring basis$704 $227 $931 
Interest rate swap liabilities designated as hedging instruments$ $9,561 $9,561 
Cross currency swap liabilities not designated as hedging instruments 12,197 12,197 
Total derivative liabilities$ $21,758 $21,758 

The fair value of the Company’s foreign currency derivative instruments are derived from valuation models, which use Level 2 observable inputs such as quoted market prices, interest rates and forward yield curves. Derivative liabilities are included in long-term accrued expenses and other liabilities in the Consolidated Balance Sheet.

The carrying values of cash, restricted cash, and receivables included in the Consolidated Balance Sheet approximate their fair value. The fair value of long-term debt is estimated based on Level 2 inputs using discounted cash flows and market-based expectations for interest rates, credit risk and contractual terms of the debt agreements.

The carrying value and estimated fair value of total long-term debt were as follows:

September 25, 2021December 26, 2020
(in thousands)Carrying valueEstimated fair valueCarrying valueEstimated fair value
Long-term debt$1,695,679 $1,754,963 $2,125,207 $2,169,597 







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Accumulated Other Comprehensive Income (Loss)
The following tables present changes in each component of accumulated other comprehensive income (loss), net of tax.

Three months ended September 25, 2021
(in thousands)Foreign currency translation adjustmentCash flow hedgesDefined benefit pension planAccumulated other comprehensive income (loss)
Balance at June 26, 2021
$19,002 $(57)$(91)$18,854 
     Net change(30,903)(1)3 (30,901)
Balance at September 25, 2021
$(11,901)$(58)$(88)$(12,047)

Three months ended September 26, 2020
(in thousands)Foreign currency translation adjustmentCash flow hedgesDefined benefit pension planAccumulated other comprehensive income (loss)
Balance at June 27, 2020
$(7,489)$ $ $(7,489)
     Net change(2,981)552  (2,429)
Balance at September 26, 2020
$(10,470)$552 $ $(9,918)

Nine months ended September 25, 2021
(in thousands)Foreign currency translation adjustmentCash flow hedgesDefined benefit pension planAccumulated other comprehensive income (loss)
Balance at December 26, 2020
$16,834 $(87)$(219)$16,528 
     Net change(28,735)29 131 (28,575)
Balance at September 25, 2021
$(11,901)$(58)$(88)$(12,047)

Nine months ended September 26, 2020
(in thousands)Foreign currency translation adjustmentCash flow hedgesDefined benefit pension planAccumulated other comprehensive income (loss)
Balance at December 28, 2019
$3,626 $ $ $3,626 
     Net change(14,096)552  (13,544)
Balance at September 26, 2020
$(10,470)$552 $ $(9,918)

Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistency by clarifying and amending existing guidance. The Company adopted the ASU on December 27, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Note 3—Acquisitions and Dispositions
The Company strategically acquires companies and assets in order to increase its footprint and offer products and services that diversify its existing offerings. These acquisitions are accounted for as either business combinations or asset acquisitions, whereby the purchase price is allocated to the assets acquired and liabilities assumed, based on their fair values as of the date of the acquisition.
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2021 Acquisitions

During the nine months ended September 25, 2021, the Company completed 25 acquisitions in the Car Wash segment, representing 66 car wash sites, each individually immaterial (the “2021 Car Wash Acquisitions”), which were deemed to be business combinations. The aggregate cash consideration for these acquisitions, net of cash acquired and liabilities assumed, was approximately $427 million.

The provisional amounts for assets acquired and liabilities assumed for the 2021 Car Wash Acquisitions are as follows:
(in thousands)
Assets:
Cash$161 
Right of use assets2,487 
Land and improvements46,495 
Building232,375 
Equipment46,063 
Inventory311 
Intangibles, net550 
Deferred tax assets212 
Assets held for sale996 
Assets acquired329,650 
Liabilities:
Accrued liability356 
Lease liability2,587 
Deferred tax liabilities812 
Liabilities assumed3,755 
Net assets acquired325,895 
Total consideration427,236 
Goodwill$101,341 

We also acquired separately identifiable intangible assets certain of which have not presented above as the valuation has not yet been performed. All goodwill was allocated to the Car Wash segment and substantially all is deductible for income tax purposes.

In addition, during the nine months ended September 25, 2021, the Company completed four acquisitions in the Maintenance segment representing four maintenance sites, each individually immaterial (the “2021 Maintenance Acquisitions”), which were deemed to be business combinations. The aggregate cash consideration for these acquisitions, net of cash acquired and liabilities assumed, was $8 million.

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