Papa Johns 2008 Annual Report Download - page 89

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82
8. Debt and Credit Arrangements (continued)
The Credit Facility contains customary affirmative and negative covenants, including financial covenants
requiring the maintenance of specified fixed charges and leverage ratios. At December 28, 2008 and
December 30, 2007, we were in compliance with these covenants.
We presently have three interest rate swap agreements that provide for a fixed rate of 4.98%, 5.18% and
3.74% respectively, as compared to LIBOR, on the following amount of floating rate debt:
Floating
Rate Debt
Fixed
Rates
The first interest rate swap agreement:
March 15, 2006 to January 16, 2007 $50 million 4.98%
January 16, 2007 to January 15, 2009 $60 million 4.98%
January 15, 2009 to January 15, 2011 $50 million 4.98%
The second interest rate swap agreement:
March 1, 2007 to January 31, 2009 $30 million 5.18%
The third interest rate swap agreement:
January 31, 2009 to January 31, 2011 $50 million 3.74%
The purpose of the swaps is to provide a hedge against the effects of rising interest rates on forecasted
future borrowings. Amounts payable or receivable under the swaps are accounted for as adjustments to
interest expense.
The net fair value of the swaps was a liability balance of $6.2 million ($4.0 million net of tax) at
December 28, 2008 and $2.0 million ($1.3 million net of tax) at December 30, 2007. The liabilities are
included in other long-term liabilities in the accompanying consolidated balance sheets (offset by
corresponding amounts in stockholders’ equity, representing the net unrealized losses included in
accumulated other comprehensive income (loss)).
The weighted average interest rate for our revolving line of credit, including the impact of the previously
mentioned swap agreements, was 5.0% in fiscal 2008 and 5.7% in both fiscal 2007 and 2006. Interest
paid, including payments made or received under the above-noted swaps, was $7.4 million in both 2008
and 2007 and $3.3 million in 2006.