Papa Johns 2005 Annual Report Download - page 68

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66
9. Debt and Credit Arrangements (continued)
In November 2001, we entered into an interest rate swap agreement (“Swap”) that provides for a fixed
rate of 5.31%, as compared to LIBOR, on $100.0 million of floating rate debt from March 2003 to March
2004, reducing to a notional value of $80.0 million from March 2004 to March 2005, and reducing to a
notional value of $60.0 million in March 2005 with an expiration date of March 2006. During the fourth
quarter of 2005, we entered into a new interest rate swap agreement that provides for a fixed rate of
4.98%, as compared to LIBOR, on the following amount of floating rate debt:
March 15, 2006 to January 16, 2007 $50 million
January 16, 2007 to January 15, 2009 $60 million
January 15, 2009 to January 15, 2011 $50 million
The purpose of the Swaps are 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 $583,000 ($367,000, net of tax) at December
25, 2005 and $1.8 million ($1.1 million, net of tax) at December 26, 2004. 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 loss).
Interest paid during fiscal 2005, 2004 and 2003, including payments made under the above-noted Swaps,
was $4.4 million, $5.8 million and $6.9 million, respectively.
10. Net Property and Equipment
Net property and equipment consists of the following (in thousands):
2005 2004
Land 31,505$ 33,220$
Buildings and improvements 79,364 81,764
Leasehold improvements 70,315 75,732
Equipment and other 162,853 164,405
Construction in progress 1,469 3,720
345,506 358,841
Less accumulated depreciation and amortization (167,059) (162,046)
Net property and equipment 178,447$ 196,795$