Cracker Barrel 2006 Annual Report Download - page 67

65
As of July 28, 2006, the Company operated 153
Cracker Barrel stores and 73 Logan’s Roadhouse
restaurants in leased facilities and also leased certain
land and advertising billboards (see Note 14). These
leases have been classified as either capital or operat-
ing leases. The interest rates for capital leases vary
from 5% to 10%. Amortization of capital leases is
included with depreciation expense. A majority of the
Company’s lease agreements provide for renewal
options and some of these options contain escalation
clauses. Additionally, certain store leases provide for
percentage lease payments based upon sales volume
in excess of specified minimum levels.
The following is a schedule by year of future
minimum lease payments under capital leases, together
with the present value of the minimum lease payments
as of July 28, 2006:
Year
2007 $123
2008 20
Total minimum lease payments 143
Less amount representing interest 7
Present value of minimum lease payments 136
Less current portion 116
Long-term portion of capital lease obligations $ 20
The following is a schedule by year of the future
minimum rental payments required under operating
leases, excluding leases for advertising billboards, as
of July 28, 2006. Included in the amounts below are
optional renewal periods associated with such leases
that the Company is currently not legally obligated
to exercise; however, it is reasonably assured that the
Company will exercise these options.
Base Term Renewal
and Exercised Periods Not Yet
Year Options* Exercised** Total
2007 $ 35,602 $ 32 $ 35,634
2008 35,724 297 36,021
2009 35,566 564 36,130
2010 34,157 919 35,076
2011 33,903 1,111 35,014
Later years 268,519 387,320 655,839
Total $443,471 $390,243 $833,714
** Includes base terms and certain optional renewal periods that have
been exercised and are included in the lease term in accordance
with SFAS No. 13 (see Note 2).
** Includes certain optional renewal periods that have not yet been
exercised, but are included in the lease term for the straight-line
rent calculation. Such optional renewal periods are included
because it is reasonably assured by the Company that it will exercise
such renewal options (see Note 2).
The following is a schedule by year of the future
minimum rental payments required under operating
leases for advertising billboards as of July 28, 2006:
Year
2007 $19,866
2008 11,717
2009 5,072
2010 97
2011 10
Later years 7
Total $36,769
Rent expense under operating leases, excluding
leases for advertising billboards are recognized on a
straight-line, or average, basis and include any
pre-opening periods during construction for which the
Company is legally obligated under the terms of the
lease, and any optional renewal periods, for which at
the inception of the lease, it is reasonably assured
that the Company will exercise those renewal options.
This lease period is consistent with the period over
which leasehold improvements are amortized. Rent
expense for each of the three years was:
Minimum Contingent Total
2006 $38,084 $840 $38,924
2005 35,531 913 36,444
2004 33,111 852 33,963
Rent expense under operating leases for billboards
for each of the three years was:
Minimum Contingent Total
2006 $24,938 — $24,938
2005 23,374 — 23,374
2004 23,042 — 23,042
13 EMPLOYEE SAVINGS PLANS
The Company sponsors a qualified defined contribution
retirement plan (“Plan I”) covering salaried and
hourly employees who have completed one year of
service and have attained the age of twenty-one. Plan
I allows eligible employees to defer receipt of up
to 16% of their compensation, as defined in the plan.
The Company also sponsors a non-qualified
defined contribution retirement plan (“Plan II”)
covering highly compensated employees, as defined in
the plan. Plan II allows eligible employees to defer
receipt of up to 50% of their base compensation and
100% of their eligible bonuses, as defined in the
plan. Contributions under both Plan I and Plan II may