Buffalo Wild Wings 2012 Annual Report Download - page 31

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leverage ratio is less than or equal to 0.50, or 0.20% if our consolidated total leverage ratio is greater than or equal to 0.51.
Our future cash outflows related to income tax uncertainties amount to $782,000 as of December 30, 2012. These amounts
are excluded from the contractual obligations table due to the high degree of uncertainty regarding the timing of these
liabilities.
Recent Accounting Pronouncements
In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-
02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Assets for Impairment.” ASU 2012-02 gives
companies the option to perform a qualitative assessment before calculating the fair value of the indefinite-lived intangible
asset. Under the guidance in ASU 2012-02, if this option is selected, a company is not required to calculate the fair value of
the indefinite-lived intangible unless the entity determines it is more likely than not that its fair value is less than its carrying
amount. The provisions of ASU 2012-02 are effective for annual and interim impairment tests performed for fiscal years
beginning after September 15, 2012, but early adoption is permitted. We have elected not to early adopt the provisions of
ASU 2012-02 and do not expect ASU 2012-02 to materially impact our consolidated financial statements.
Impact of Inflation
In the last three years we have not operated in a period of high general inflation; however, the cost of commodities,
labor and certain utilities have generally increased or experienced price volatility. Our restaurant operations are subject to
federal and state minimum wage laws governing such matters as working conditions, overtime and tip credits. Significant
numbers of our food service and preparation personnel are paid at rates related to the federal and/or state minimum wage and,
accordingly, increases in the minimum wage have increased our labor costs in the last three years. In addition, costs
associated with our operating leases, such as taxes, maintenance, repairs and insurance, are often subject to upward pressure.
To the extent permitted by competition, we have mitigated increased costs by increasing menu prices and may continue to do
so if deemed necessary in future years.
Quarterly Results of Operations
The following table sets forth, by quarter, the unaudited quarterly results of operations for the two most recent years, as
well as the same data expressed as a percentage of our total revenue for the periods presented. Restaurant operating costs are
expressed as a percentage of restaurant sales. The information for each quarter is unaudited and we have prepared it on the
same basis as the audited financial statements appearing elsewhere in this document. In the opinion of management, all
necessary adjustments, consisting only of normal recurring adjustments, have been included to present fairly the unaudited
quarterly results. All amounts, except per share amounts, are expressed in thousands.
Quarterly and annual operating results may fluctuate significantly as a result of a variety of factors, including increases
or decreases in same-store sales, changes in commodity prices, the timing and number of new restaurant openings and related
preopening expenses, asset impairment charges, store closing charges, general economic conditions, stock-based
compensation, and seasonal fluctuations. As a result, our results of operations are not necessarily indicative of the results that
may be achieved for any future period.