Panera Bread 2007 Annual Report Download - page 25

Our investments of certain cash balances in short-term investments are subject to risks which may cause
losses and affect the liquidity of these investments.
At December 25, 2007, our short-term investments consist of a private placement of units of beneficial interest
in the Columbia Strategic Cash Portfolio, or the Columbia Portfolio, which is an enhanced cash fund sold as an
alternative to traditional money-market funds. We have historically invested a portion of our on hand cash balances
in this fund. These investments are subject to credit, liquidity, market and interest rate risk. For example, the
Columbia Portfolio includes investments in certain asset backed securities and structured investment vehicles that
are collateralized by sub-prime mortgage securities or related to mortgage securities, among other assets. As a result
of adverse market conditions that have unfavorably affected the fair value and liquidity of collateral underlying the
Columbia Portfolio, the Columbia Portfolio was overwhelmed with withdrawal requests from investors and it was
closed with a restriction placed upon the cash redemption ability of its holders in the fourth quarter of 2007.
These Columbia Portfolio units are no longer trading and have no readily determinable market value. Based on
the information available to us, we have estimated the fair value of the Columbia Portfolio units at $0.960 per unit as
of December 25, 2007 and we recorded an unrealized loss on the Columbia Portfolio units of $1.0 million in the
fiscal year ended December 25, 2007. Giving effect to these losses, our investment in the Columbia Portfolio at
December 25, 2007 includes an estimated fair value of approximately $23.2 million. As of December 25, 2007, we
have received $2.4 million of cash redemptions subsequent to the withdrawal restriction and recognized $0.03 mil-
lion of realized losses. Information and the markets relating to these investments remain dynamic, and there may be
further declines in the value of these investments, the value of the collateral held by these entities, and the liquidity
of our investments. To the extent we determine that there is a further decline in fair value, we may recognize
additional losses in future periods up to the aggregate amount of these investments. Subsequent to our December 25,
2007 fiscal year end and through February 22, 2008, the date of our 2007 fiscal year Form 10-K filing, we have
received additional cash redemptions of $8.0 million at approximately $0.986 per unit. We believe cash redemp-
tions of the remaining units of the Columbia Portfolio, as included in our accompanying consolidated financial
statements at December 25, 2007, will be received within the next twelve months based on the redemptions received
to-date; however, no commitments on the timing and ability of future redemptions have been made by the Columbia
Portfolio.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The average size of a Company-owned bakery-cafe is approximately 4,600 square feet for Panera and
3,200 square feet for Paradise. The square footage of each of our fresh dough facilities is provided below. We lease
all of our bakery-cafe locations and fresh dough facilities. Lease terms for our bakery-cafes and fresh dough
facilities are generally for ten years with renewal options at most locations and generally require us to pay a
proportionate share of real estate taxes, insurance, common area, and other operating costs. Many bakery-cafe
leases provide for contingent rental (i.e. percentage rent) payments based on sales in excess of specified amounts.
Certain of our lease agreements provide for scheduled rent increases during the lease terms or for rental payments
commencing at a date other than the date of initial occupancy. See Note 2 to the consolidated financial statements
for further information on our accounting for leases.
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