Papa Johns 2006 Annual Report Download - page 47

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44
Minority interests and other general expenses reflected net expense of $6.9 million in 2005, as compared
to $2.6 million in 2004 as detailed below (in millions): Increase
2005 2004 (Decrease)
Minority interests income (loss) 0.7$ (0.1)$ 0.8$
Disposition and valuation-related costs of other assets 2.1 1.8 0.3
Provision for uncollectible accounts and notes receivable 2.4 1.8 0.6
Pre-opening costs 0.1 0.1 -
Contribution to the Marketing Fund 1.8 - 1.8
Goodwill impairment 1.1 - 1.1
Closing of the Jackson, MS commissary 0.9 - 0.9
Gain on sale of Company-owned restaurants (2.2) (0.2) (2.0)
Gain on sale of unused property - (0.6) 0.6
Other - (0.2) 0.2
Total minority interests and other general expenses 6.9$ 2.6$ 4.3$
Depreciation and amortization was $28.8 million (3.0% of revenues) for 2005, as compared to $31.2
million (3.4% of revenues) for 2004.
Net interest. Net interest expense was $3.1 million in 2005, compared to $4.6 million in 2004. The
interest expense for 2005 and 2004 included approximately $772,000 and $388,000, respectively, related
to BIBP’s debt with a third-party bank. The decline in 2005 net interest expense reflected the decline in
our average outstanding debt balance, and an increase in investment income resulting from increased
interest rates.
Income Tax Expense. The effective income tax rate was 36.4% for 2005 compared to 37.5% for 2004.
The decrease in the effective tax rate was primarily related to an increase in FICA tax credits associated
with an increase in the employer portion of FICA taxes paid on employee tips, which is reported in
general and administrative expenses.
Liquidity and Capital Resources
Our debt is comprised of the following (in thousands) at year-end:
2006 2005
Revolving line of credit 96,500$ 49,000$
Debt associated with VIEs * 525 6,100
Other 11 16
Total debt 97,036 55,116
Less: current portion of debt (525) (6,100)
Long-term debt 96,511$ 49,016$
*The VIEs' third-party creditors do not have any recourse to Papa John's.
In January 2006, we executed a five-year, unsecured Revolving Credit Facility (“New Credit Facility”)
totaling $175.0 million that replaced a $175.0 million Revolving Credit Facility (“Old Credit Facility”).
Under the New Credit Facility, outstanding balances accrue interest at 50.0 to 100.0 basis points over the
London Interbank Offered Rate (LIBOR) or other bank-developed rates, at our option. The commitment