Cracker Barrel 2005 Annual Report Download - page 43

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of 2005 and the first quarter of 2006. Additionally, on
September 22, 2005, the Board declared a dividend of
$0.13 per share payable on November 8, 2005 to
shareholders of record on October 14, 2005. This divi-
dend reflects an 8.3% increase from the previous quar-
terly dividend.
The Company estimates that its capital expenditures
(purchase of property and equipment) for 2006 will
be approximately $205,000 to $210,000, most of
which will be related to the acquisition of sites and
construction of 26 new Cracker Barrel stores and 22-24
new Logan’s restaurants and openings that will occur
during 2006, as well as for acquisition and construction
costs for locations to be opened in early 2007.
Management believes that cash at July 29, 2005,
along with cash generated from the Company’s operat-
ing activities, stock option exercises and available
borrowings under the Revolving Credit Facility, will be
sufficient to finance its continued operations, its
remaining share repurchase authorization, its contin-
ued expansion plans and its dividend payments through
2006. At July 29, 2005, the Company had $278,500
available under its Revolving Credit Facility. The
Company estimates that net cash provided by operating
activities will exceed cash used for purchase of prop-
erty and equipment by $50,000 or more in 2006, which
would make 2006 the sixth consecutive year in which
this has happened. The Company intends to use this
excess cash along with proceeds from the exercise of
stock options in 2006 to apply toward completing its
remaining 821,081 share repurchase authorization,
possible future share repurchase authorizations and
dividend payments or other general corporate purposes.
OFF-BALANCE SHEET ARRANGEMENTS
Other than various operating leases, as disclosed more
fully in the Material Commitments section below
and Note 10 to the Company’s Consolidated Financial
Statements, the Company has no other material off-
balance sheet arrangements.
MATERIAL COMMITMENTS
For reporting purposes, the schedule of future mini-
mum rental payments required under operating leases,
excluding billboard leases, uses the same lease term
as used in the straight-line rent calculation. This term
includes certain future renewal options although
the Company is not currently legally obligated for all
optional renewal periods. This method was deemed
appropriate under SFAS No. 13, “Accounting for
Leases,” to be consistent with the lease term used in
the straight-line rent calculation, as described
in Note 2 to the Consolidated Financial Statements.
The Company’s contractual cash obligations and
commitments as of July 29, 2005, are summarized in
the tables below:
Payments due by Year
Total 2006 2007-2008 2009-2010 After 2010
Convertible debt $ 190,718 — — — $190,718
Revolving
credit facility 21,500 — $ 21,500 — —
Long-term Debt
(a)
212,218 — 21,500 — 190,718
Operating lease base
term and exercised
options–excluding
billboards
(b)
449,412 $ 33,310 66,672 $65,145 284,285
Operating lease
renewal periods not
yet exercised–
excluding
billboards
(c)
336,836 190 953 2,119 333,574
Operating leases
for billboards 39,404 21,854 17,400 150 —
Trade letters of credit 4,343 4,343 — — —
Capital leases 402 235 167 — —
Purchase
obligations
(d)
317,269 274,306 42,803 160 —
Other long-term
obligations
(e)
22,820 — 258 194 22,368
Total contractual cash
obligations $1,382,704 $334,238 $149,753 $67,768 $830,945
Amount of Commitment Expirations by Year
Total 2006 2007-2008 2009-2010 After 2010
Revolving
credit facility $300,000 — $300,000 — —
Standby letters
of credit 32,436 $32,436 — — —
Guarantees(f) 4,134 467 934 $934 $1,799
Total commitments $336,570 $32,903 $300,934 $934 $1,799
(a) The convertible debt was issued at a discount representing a
yield to maturity of 3.00% per annum. The $190,718 balance is
the accreted carrying value of the debt at July 29, 2005. The
convertible debt will continue to accrete at 3.00% per annum
and if held to maturity on April 2, 2032 the obligation will
total $422,050. The Company had $21,500 outstanding under
its variable rate Revolving Credit Facility as of July 29, 2005.
The Company repaid $11,500 on August 9, 2005 and $10,000
on August 29, 2005. In conjunction with these principal repay-
ments the Company paid $70 in interest. The Company paid
$634 in non-use fees (also known as commitment fees) on the
Revolving Credit Facility during 2005. Based on the Company’s
outstanding revolver balance of $21,500 at July 29, 2005 and
the Company’s current unused commitment fee as defined in
the Revolving Credit Agreement, the Company’s unused commit-
ment fees in 2006 would be $696; however, the actual amount
will differ based on actual usage of the Revolving Credit Facility
in 2006.