Cracker Barrel 2008 Annual Report Download - page 45

43
Material Commitments
For reporting purposes, the schedule of future minimum
rental payments required under operating leases, excluding
billboard leases, uses the same lease term as used in the
straight-line rent calculation. This term includes certain
future renewal options although we are not currently
legally obligated for all optional renewal periods. This
method was deemed appropriate under SFAS No. 13,
“Accounting for Leases,” to be consistent with the lease
term used in the straight-line rent calculation, as described
in Note 2 to the Consolidated Financial Statements.
Our contractual cash obligations and commitments as
of August 1, 2008, are summarized in the tables below:
Payments Due by Year
Less than Over
Contractual Obligations(a) Total 1 year 1-3 years 4-5 years 5 years
Term Loan B $ 633,456 $ 7,168 $ 14,336 $611,952 —
Revolving Credit
Facility 3,200 — 3,200 — —
Delayed-Draw
Term Loan
Facility 151,103 1,530 3,060 146,513 —
Long-term debt
(b)
787,759 8,698 20,596 758,465 —
Operating lease
base term and
exercised options
– excluding
billboards
(c)
310,107 30,129 58,658 54,430 $166,890
Operating lease
renewal periods
not yet exercised
– excluding
billboards
(d)
333,720 165 929 3,950 328,676
Operating leases
for billboards 34,459 21,032 13,403 24 —
Capital leases 110 22 44 44 —
Purchase
obligations
(e)
287,977 96,922 89,127 88,903 13,025
Other long-term
obligations
(f)
33,269 — 2,460 355 30,454
Total contractual
cash
obligations $1,787,401 $156,968 $185,217 $906,171 $539,045
Amounts of Commitment Expirations by Year
Less than Over
Total 1 year 1-3 years 4-5 years 5 years
Revolving Credit
facility $250,000 — $250,000 — —
Standby letters
of credit 29,062 $ 600 28,462 — —
Guarantees
(g)
4,546 662 1,337 $1,204 $ 1,343
Total commitments $283,608 $1,262 $279,799 $ 1,204 $1,343
(a) We adopted FIN 48 effective the first day of 2008. At August 1, 2008,
the entire liability for uncertain tax positions (including penalties
and interest) is classified as a long-term liability. At this time, we are
unable to make a reasonably reliable estimate of the amounts and
timing of payments in individual years due to uncertainties in the
timing of the effective settlement of tax positions. As such, the liability
for uncertain tax positions of $26,602 is not included in the contractual
cash obligations and commitments table above.
(b) The balances on the Term Loan B and Delayed-Draw Term Loan, at
August 1, 2008, are, respectively, $633,456 and $151,103. Using the
minimum principal payment schedules on the Term Loan B and Delayed-
Draw Term Loan facilities and projected interest rates, we will have
interest payments of $53,479, $104,406 and $88,785 in 2009, 2010-
2011 and 2012-2013, respectively. These interest payments are
calculated using a 7.07% and 5.68% interest rate, respectively, for the
swapped and unswapped portion of our debt. The 7.07% interest rate
is the same rate as our fixed rate under our interest rate swap plus our
credit spread at August 1, 2008 of 1.50%. The projected interest rate
of 5.68% was estimated by using the five-year swap rate at August 1,
2008 plus our credit spread of 1.50%. We had $3,200 outstanding
under our variable rate revolving facility as of August 1, 2008. We
repaid the $3,200 on August 5, 2008. In conjunction with these
principal repayments, we paid $2 in interest. We paid $630 in non-use
fees (also known as commitment fees) on the Revolving Credit facility
and Delayed-Draw Term Loan facilities during 2008. Based on the
outstanding revolver balance at August 1, 2008 and our current unused
commitment fee as defined in the 2006 Credit Facility, our unused
commitment fees in 2009 would be $550; however, the actual amount
will differ based on actual usage of the revolver in 2009.
(c) Includes base lease terms and certain optional renewal periods that
have been exercised and are included in the lease term in accordance
with SFAS No. 13.
(d) Includes certain optional renewal periods that have not yet been
exercised, but are included in the lease term for the straight-line rent
calculation, since at the inception of the lease, it is reasonably assured
that we will exercise those renewal options.
(e) Purchase obligations consist of purchase orders for food and retail
merchandise; purchase orders for capital expenditures, supplies and
other operating needs and other services; and commitments under
contracts for maintenance needs and other services. We have excluded
contracts that do not contain minimum purchase obligations. We
excluded long-term agreements for services and operating needs that
can be cancelled within 60 days without penalty. We included long-term
agreements and certain retail purchase orders for services and operating
needs that can be cancelled with more than 60 days notice without
penalty only through the term of the notice. We included long-term
agreements for services and operating needs that only can be cancelled
in the event of an uncured material breach or with a penalty through
the entire term of the contract. Due to the uncertainties of seasonal
demands and promotional calendar changes, our best estimate of usage
for food, supplies and other operating needs and services is ratably over
either the notice period or the remaining life of the contract, as
applicable, unless we had better information available at the time
related to each contract.
(f) Other long-term obligations include our Non-Qualified Savings Plan
($27,033, with a corresponding long-term asset to fund the liability;
see Note 15 to the Consolidated Financial Statements), Deferred
Compensation Plan ($3,420), FY2007 Mid-Term Incentive and Retention
Plan ($323, cash portion only; see Note 10 to the Consolidated
Financial Statements) FY2006, FY2007 and FY2008 Long-Term Retention
Incentive Plans ($2,042) and FY2008 District Manager Long-Term
Performance Plan ($451).
(g) Consists solely of guarantees associated with properties that have
been subleased or assigned. We are not aware of any non-performance
under these arrangements that would result in us having to perform
in accordance with the terms of those guarantees.