Papa Johns 2000 Annual Report Download - page 57

Download and view the complete annual report

Please find page 57 of the 2000 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 81

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81

52
5. Debt and Credit Arrangements (continued)
In connection with the authorization of a common stock share repurchase program (see Note 15), we
entered into a $200.0 million revolving line of credit facility with an expiration date of March 17, 2003.
Outstanding balances for this facility accrue interest at 50.0 to 87.5 basis points over LIBOR or other bank
developed rates at our option. The committed fee on the unused balance ranges from 12.5 to 20.0 basis
points. The increment over LIBOR and the commitment fee are determined quarterly based upon the ratio
of total indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA). At
December 31, 2000, $145.0 million was outstanding under this facility and the average interest rate for
borrowing under this facility during 2000 was 7.13%. The fair value of our outstanding debt approximates
carrying value.
In connection with the line of credit facility, Papa John’ s entered into a no-fee interest rate collar
(“Collar”) with a notional amount of $100.0 million, a 30-day LIBOR rate range of 6.36% (floor) to 9.50%
(ceiling) and an expiration date of March, 2003. The purpose of the Collar is to provide a hedge against
the effects of rising interest rates. Papa John’ s makes payments under the terms of the Collar when the
30-day LIBOR rate is below the floor to raise the effective rate to 6.36%, and receives payments when
the 30-day LIBOR rate is above the ceiling, to lower the effective rate to 9.50%, thus assuring that Papa
John’ s effective 30-day LIBOR rate is always within the above stated range. When the 30-day LIBOR
rate is within the range, no payments are made or received under the Collar. Amounts payable or
receivable under the Collar are accounted for as adjustments to interest expense. No amounts are accrued
at December 31, 2000. The fair value of the Collar, based on quoted rates, is a liability of $1.7 million at
December 31, 2000.
Interest paid, net of amounts capitalized, during fiscal 2000, 1999 and 1998 was $6.9 million, $93,000 and
$647,000, respectively.
6. Net Property and Equipment
Net property and equipment consists of the following (in thousands):
2000 1999
Land 30,449$ 25,798$
Buildings and improvements 78,970 66,494
Leasehold improvements 70,838 60,763
Equipment and other 136,410 121,414
Construction in progress 12,642 23,089
329,309 297,558
Less accumulated depreciation and amortization (83,435) (69,745)
Net property and equipment 245,874$ 227,813$
We capitalized interest costs of $507,000 in 2000, $169,000 in 1999 and $69,000 in 1998.