Papa Johns 2015 Annual Report Download - page 86

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73
10. Net Property and Equipment
Net property and equipment consists of the following (in thousands):
December 27,
2015
December 28,
2014
Land 32,795$ 32,880$
Buildings and improvements 87,010 86,892
Leasehold improvements 110,903 110,323
Equipment and other 333,884 320,480
Construction in progress 10,970 6,466
Total property and equipment 575,562 557,041
Accumulated depreciation and amortization (361,518) (337,584)
Net property and equipment 214,044$ 219,457$
11. Notes Receivable
Selected franchisees have borrowed funds from the Company, principally for use in the construction and
development of their restaurants. We have also entered into loan agreements with certain franchisees that
purchased restaurants from us or from other franchisees. Loans outstanding were approximately $18.9
million on a consolidated basis as of December 27, 2015 and December 28, 2014, net of allowance for
doubtful accounts.
Notes receivable bear interest at fixed or floating rates and are generally secured by the assets of each
restaurant and the ownership interests in the franchisee. The carrying amounts of the loans approximate
fair value. Interest income recorded on franchisee loans was approximately $731,000 in 2015, $658,000
in 2014 and $527,000 in 2013 and is reported in investment income in the accompanying consolidated
statements of income.
Based on our review of certain borrowers’ economic performance and underlying collateral value, we
established allowances of $3.7 million and $3.1 million as of December 27, 2015 and December 28, 2014,
respectively, for potentially uncollectible notes receivable. The following summarizes changes in our
notes receivable allowance for doubtful accounts (in thousands):
Balance as of December 29, 2013 3,387$
Recovered from costs and expenses (502)
Additions, net of notes written off 247
Balance as of December 28, 2014 3,132
Recovered from costs and expenses (100)
Additions, net of notes written off 621
Balance as of December 27, 2015 3,653$