Panera Bread 2009 Annual Report Download - page 78

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15. Deposits and Other
Deposits and other consisted of the following (in thousands):
December 29,
2009
December 30,
2008
Deposits ............................................... $3,800 $2,869
Deferred financing costs .................................... 821 1,125
Deferred income taxes ..................................... — 3,349
Company-owned life insurance program ........................ — 1,031
Note receivable .......................................... — 589
Total deposits and other .................................... $4,621 $8,963
The Company established a company-owned life insurance (“COLI”) program covering a substantial portion
of its employees to help manage long-term employee benefit cost and to obtain tax deductions on interest payments
on insurance policy loans. However, due to tax law changes, the Company froze this program in 1998. Based on
current actuarial estimates, the program is expected to end in 2011.
At December 29, 2009, the cash surrender value of $0.7 million and the insurance policy loans of $0.7 million
related to the COLI program were netted and included in deposits and other assets in the Company’s Consolidated
Balance Sheets. At December 30, 2008, the cash surrender value of $1.7 million, the mortality income receivable of
$1.0 million, and the insurance policy loans $1.7 million, related to the COLI program were netted and included in
deposits and other assets in the Company’s Consolidated Balance Sheets. Mortality income receivable represents
the dividend or death benefits the Company is due from its insurance carrier at the fiscal year end. The insurance
policy loans are collateralized by the cash values of the underlying life insurance policies and required interest
payments at a rate of 9.08 percent for the year ended December 29, 2009. Interest accrued on insurance policy loans
is netted with other COLI related income statement transactions in other (income) expense, net in the Consolidated
Statements of Operations, which netted income of $1.0 million, loss of $0.1 million, and loss of $0.5 million, in
fiscal years 2009, 2008, and 2007, respectively, the components of which are as follows (in thousands):
December 29,
2009
December 30,
2008
December 25,
2007
Cash value loss ............................... $1,018 $639 $1,485
Mortlity income .............................. (1,894) (644) (1,283)
Interest (income) expense ....................... (111) 71 292
Total (income) expense, net .................... $ (987) $ 66 $ 494
The cash value loss is the cumulative change in the cash surrender value for the year and is adjusted quarterly.
Mortality income is recorded periodically as charges are deducted from cash value. These amounts are recovered by
the Company through payment of death benefits and mortality dividends received. Interest (income) expense is
recorded on the accrual basis.
16. Stockholders’ Equity
Common Stock
The holders of Class A common stock are entitled to one vote for each share owned. The holders of Class B
common stock are entitled to three votes for each share owned. Each share of Class B common stock has the same
dividend and liquidation rights as each share of Class A common stock. Each share of Class B common stock is
convertible, at the stockholder’s option, into Class A common stock on a one-for-one basis. At December 29, 2009,
the Company had reserved 2,682,931 shares of its Class A common stock for issuance upon exercise of awards
72
PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)