Cracker Barrel 2008 Annual Report Download - page 67

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discontinued operations by the U.S. federal statutory rate
of 35% was as follows:
August 1, August 3, July 28,
2008 2007 2006
Income tax benefit (provision)
computed at federal statutory
income tax rate $135 $(11,955) $(9,693)
State and local income taxes,
net of federal benefit — 621 713
Employer tax credits for FICA taxes
paid on employee tip income — 478 1,158
Federal reserve adjustments — — 978
Other-net — (15) (60)
Total income tax benefit (provision)
from discontinued operations $ 135 $(10,871) $(6,904)
4GAINS ON PROPERTY DISPOSITION
During 2008, the Company sold the one remaining Logan’s
property that the Company had retained and leased
back to Logan’s (see Note 3). This property was classified
as property held for sale and had a net book value of
approximately $1,960. The Company received proceeds of
approximately $3,770, which resulted in a pre-tax gain
of approximately $1,810. The gain is recorded in general
and administrative expenses in the Consolidated
Statement of Income.
During 2007, the Company sold two of the three Logan’s
properties the Company had retained and leased to
Logan’s. These properties were classified as property held
for sale and had a combined net book value of
approximately $3,682. The Company received total proceeds
of approximately $6,187 on the two properties, which
resulted in a total pre-tax gain of approximately $2,505.
The gain is recorded in general and administrative
expenses in the Consolidated Statement of Income.
Additionally, during 2007, the State of New York condemned
a portion of the land on which a Cracker Barrel store was
located to build a road. The Company received condemnation
proceeds of approximately $760 and recorded a pre-tax
gain of approximately $500 in other store operating
expenses in the Consolidated Statement of Income.
5INVENTORIES
Inventories were comprised of the following at:
August 3, August 3,
2008 2007
Retail $124,572 $109,891
Restaurant 17,439 16,593
Supplies 13,943 17,932
Total $155,954 $144,416
6NET INCOME PER SHARE
AND WEIGHTED AVERAGE SHARES
Basic consolidated net income per share is computed by
dividing consolidated net income available to common
shareholders by the weighted average number of common
shares outstanding for the reporting period. Diluted
consolidated net income per share reflects the potential
dilution that could occur if securities, options or other
contracts to issue common stock were exercised or converted
into common stock and is based upon the weighted average
number of common and common equivalent shares
outstanding during the year. Common equivalent shares
related to stock options and nonvested stock and stock
awards issued by the Company are calculated using the
treasury stock method.
During 2007, a portion of the Company’s Senior Notes
was exchanged for New Notes (see Note 8). The New Notes
were substantially the same as the Senior Notes except
the New Notes had a net share settlement feature which
allowed the Company, upon conversion of a New Note, to
settle the accreted principal amount of the debt for cash
and issue shares of the Company’s common stock for the
conversion value in excess of the accreted value. The Senior
Notes required the issuance of the Company’s common
stock upon conversion. The Company’s Senior Notes and
New Notes were redeemed during 2007. Prior to
redemption, the New Notes were included in the calculation
of diluted consolidated net income per share if their
inclusion was dilutive under the treasury stock method and
the Senior Notes were included in the calculation of diluted
consolidated net income per share if their inclusion was
dilutive under the “if-converted” method pursuant to EITF
No. 04-8. Additionally, diluted consolidated net income per
share was calculated excluding the after-tax interest and
financing expenses associated with the Senior Notes since