Papa Johns 1999 Annual Report Download - page 63

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During the fourth quarter of 1997, we acquired a 49% equity ownership interest in Mountain Pizza Group, L.L.C. (“MPG”), for
$150,000 in cash. In July 1998, we acquired the remaining 51% for $565,000 in cash. In connection with the 1998 acquisition, we
also assumed $2.4 million in MPG debt. MPG, an entity which operated seven Papa John’s restaurants in Denver, Colorado, was
owned by our Vice Chairman and President. The operating results of MPG were accounted for by the equity method until the remain-
ing 51% was acquired in 1998. Also during the fourth quarter of 1997, we acquired three Papa John’s restaurants near Denver,
Colorado for $720,000 in cash. These restaurants were owned by our Chief Executive Officer and his wife.
During the second quarter of 1997, we acquired 16 Papa John’s restaurants in North Carolina for $5.0 million (consisting of
$4,960,000 in cash and a credit of $40,000 towards future development fees). A majority ownership interest in the franchisee of the
North Carolina restaurants was held by certain of our directors and officers, including our Chief Executive Officer.
The above acquisitions were accounted for by the purchase method of accounting, whereby operating results subsequent to the
acquisition date are included in our financial statements.
13. Lease Commitments
We lease office, retail and commissary space under operating leases with terms generally ranging from three to five years and
providing for at least one renewal. Certain leases further provide that the lease payments may be increased annually based on the
Consumer Price Index. We also lease certain equipment under operating leases with terms ranging from three to seven years. Future
minimum lease payments are as follows: 2000 - $16.8 million; 2001 - $14.6 million; 2002 - $12.1 million; 2003 - $10.2 million;
2004 - $8.4 million and thereafter - $30.7 million. Total rent expense was $12.4 million in 1999, $11.2 million in 1998, and
$8.5 million in 1997.
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