Papa Johns 2015 Annual Report Download - page 82

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69
7. Acquisitions and Divestitures
Acquisitions
We acquired restaurants from our domestic franchisees in 2015 and 2014 (none in 2013), which are
summarized as follows:
2015 2014
Number of restaurants acquired 7 13
Location of restaurants acquired North Carolina,
Missouri and
Colorado
Georgia,
North Carolina,
Illinois and
Texas
Purchase price (in thousands):
Cash payment 922$ 4,773$
Cancellation of accounts and notes receivable - 412
Total purchase price 922$ 5,185$
Fair value allocation of purchase price (in thousands):
Property and equipment 648$ 555$
Reacquired franchise right 113 844
Goodwill 152 3,661
Other, including cash 9 125
Total purchase price 922$ 5,185$
The restaurant acquisitions described above were accounted for by the purchase method of accounting,
whereby operating results subsequent to the acquisition date are included in our consolidated financial
results. The excess of the purchase price over the aggregate fair value of net assets acquired was allocated
to goodwill for the Domestic Company-owned restaurants segment and is eligible for deduction over 15
years under U.S. tax regulations.
On January 25, 2016, the Company purchased 19 domestic franchised Papa John’s restaurants in
Alabama and Florida for approximately $11.0 million.
Planned Divestiture
In September 2015, the Company decided to refranchise the China Company-owned market and is
planning a sale of its existing China operations, consisting of 45 Company-owned restaurants and a
commissary. We expect to sell the business during 2016; upon completion of the sale, the Company will
not have any Company-owned international restaurants. We have classified the assets as held for sale
within the consolidated balance sheet. Upon the classification of these assets to held for sale, no loss was
recognized as their fair value exceeded their carrying value.