Papa Johns 2014 Annual Report Download - page 85

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72
9. Debt and Credit Arrangements
Our debt is comprised entirely of an unsecured revolving credit facility (“Credit Facility”). The
outstanding balance was $230.5 million as of December 28, 2014 and $157.9 million as of December 29,
2013.
On April 30, 2013, we amended and restated our Credit Facility to increase the amount available for
borrowing to $300 million from $175 million and extend the maturity date to April 30, 2018. On October
31, 2014, we amended our Credit Facility (“Amended Line”) to increase the amount available to $400
million and extend the maturity date to October 31, 2019. Additionally, we have the option to increase the
Amended Line an additional $100 million. The interest rate charged on outstanding balances is LIBOR
plus 75 to 175 basis points. The commitment fee on the unused balance ranges from 15 to 25 basis points.
The remaining availability under the Amended Line, reduced for outstanding letters of credit
approximates $148.2 million.
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, 2014, we were
in compliance with these covenants.
We had the following interest rate swap agreements as of December 28, 2014:
Effective Dates
Floating
Rate Debt
Fixed
Rates
July 30, 2013 through April 30, 2018 $75 million 1.42%
December 30, 2014 through April 30, 2018 $50 million 1.36%
We previously had a $50 million swap that was terminated on July 30, 2013 with a fixed rate of 0.56%.
Our swaps are derivative instruments that are designated as cash flow hedges because the swaps provide a
hedge against the effects of rising interest rates on borrowings. The effective portion of the gain or loss on
the swaps is reported as a component of accumulated other comprehensive income and reclassified into
earnings in the same period or periods during which the swaps affect earnings. Gains or losses on the
swaps representing either hedge ineffectiveness or hedge components excluded from the assessment of
effectiveness are recognized in current earnings. Amounts payable or receivable under the swaps are
accounted for as adjustments to interest expense. As of December 28, 2014, the swaps are highly effective
cash flow hedges with no ineffectiveness during the year ended December 28, 2014.