Panera Bread 2004 Annual Report Download - page 48

7. Goodwill
The Company adopted SFAS No. 141, “Business Combinations,” for all acquisitions subsequent to June 30, 2001 and SFAS No.
142, “Goodwill and Other Intangible Assets,” effective December 30, 2001, which established new accounting and reporting standards
for purchase business combinations, intangible assets, and goodwill. In compliance with SFAS 141 and SFAS 142, the Company did
not amortize any of the goodwill related to acquisitions subsequent to June 30, 2001 and stopped amortizing all goodwill effective
December 30, 2001.
The changes in the carrying amount of goodwill at December 25, 2004 and December 27, 2003 are as follows (in thousands):
Company Bakery-
Cafe Operations
Fresh Dough
Operations Total
Balance December 28, 2002............................................................................................... 18,242 $ 728 18,970
Louisville/Lexington acquisition........................................................................................ 3,729 — 3,729
Dallas acquisition ............................................................................................................... 410 — 410
Toledo/Michigan acquisition.............................................................................................. 9,634 — 9,634
Balance December 27, 2003............................................................................................... $ 32,015 $ 728 $ 32,743
Dallas acquisition ............................................................................................................... 23 23
Toledo/Michigan acquisition.............................................................................................. 116 116
Minority interest owner acquisition.................................................................................... 2,445 2,445
Balance December 25, 2004............................................................................................... $ 34,599 $ 728 $ 35,327
Goodwill accumulated amortization was $7.9 million at December 25, 2004 and December 27, 2003.
8. Accrued Expenses
Accrued expenses consist of the following (in thousands):
December 25,
2004
(as restated)
December 27,
2003
Compensation and employment related taxes .............................................................................................. $ 12,540 $ 9,260
Capital expenditures ..................................................................................................................................... 9,066 7,196
Rent .............................................................................................................................................................. 3,443 3,679
Unredeemed gift cards and certificates......................................................................................................... 8,044 4,113
Insurance ...................................................................................................................................................... 3,642 2,112
Taxes, other than income tax........................................................................................................................ 1,680 1,410
Income taxes................................................................................................................................................. 3,606 2,247
Other............................................................................................................................................................. 6,884 6,386
$ 48,905 $ 36,403
9. Line of Credit
On December 19, 2003, the Company entered into a $10.0 million unsecured revolving line of credit (revolver). The revolver
matures December 19, 2006 and has an interest rate of LIBOR plus 0.75% to 1.5% depending on the Company’s leverage ratio and
type of loan (resulting in interest rates of approximately 3.06% to 3.81% at December 25, 2004). The revolver contains restrictions
relating to future indebtedness, liens, investments, distributions, mergers, acquisitions, or sales of assets and certain leasing
transactions. The revolver also requires the maintenance of certain financial ratios and covenants. As of December 25, 2004, the
Company was in compliance with all financial ratios and covenants. At December 25, 2004, the Company had $9.8 million available
under the revolver with $0.2 million utilized by an outstanding letter of credit. The Company has not borrowed under its revolver in
any of the last three fiscal years.
The revolver replaced the Company’s previous $10.0 million unsecured revolving line of credit (old revolver). The old revolver
had an interest rate of LIBOR plus 1%. The old revolver contained restrictions relating to future indebtedness, liens, investments,
distributions, mergers, acquisition, or sale of assets and certain leasing transactions. The old revolver also required the maintenance of
certain financial ratios and covenants and contained a commitment fee of 0.225% of the unused portion of the revolving line of credit.
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