Cracker Barrel 2009 Annual Report Download - page 67

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The Company’s money market fund investments and
deferred compensation plan assets are measured at fair
value using quoted market prices. The fair value of the
Company’s interest rate swap liability is determined based
on the present value of expected future cash flows. Since
the interest rate swap is based on the LIBOR forward curve,
which is observable at commonly quoted intervals for the
full term of the swap, it is considered a Level 2 input.
Nonperformance risk is reflected in determining the interest
rate swap’s fair value by using the Company’s credit spread
less the risk-free interest rate, both of which are observable
at commonly quoted intervals for the swap’s term. Thus,
the adjustment for nonperformance risk is also considered
a Level 2 input.
4INVENTORIES
Inventories were comprised of the following at:
July 31, August 1,
2009 2008
Retail $108,412 $124,572
Restaurant 16,782 17,439
Supplies 12,230 13,943
Total $137,424 $155,954
5DEBT
Long-term debt consisted of the following at:
July 31, August 1,
2009 2008
Term Loan B
payable on or before April 27, 2013 $600,000 $633,456
Delayed-Draw Term Loan Facility
payable on or before April 27, 2013 45,000 151,103
Revolving Credit Facility
payable on or before April 27, 2011 — 3,200
Note payable 444 —
645,444 787,759
Current maturities (7,404) (8,698)
Long-term debt $638,040 $779,061
The aggregate maturities of long-term debt subsequent
to July 31, 2009 are as follows:
Year
2010 $ 7,404
2011 7,407
2012 7,410
2013 623,187
2014 36
Total $645,444
Credit Facility
The Company’s credit facility (the “Credit Facility”) consists
of the Term Loan B facility and the Delayed-Draw Term Loan
facility with a scheduled maturity date of April 27, 2013 and
a $250,000 Revolving Credit facility expiring April 27, 2011.
Loan acquisition costs associated with the Term Loan B
facility, the Delayed-Draw Term Loan facility and the
Revolving Credit facility were capitalized in the amount of
$7,122, $2,456, and $1,964, respectively. These costs are
amortized over the respective terms of the facilities.
The interest rates for the Term Loan B facility, Delayed-
Draw Term Loan facility and the Revolving Credit facility are
based on either LIBOR or prime. A spread is added to the
interest rates according to a defined schedule based on the
Company’s consolidated total leverage ratio as defined in
the Credit Facility, 1.50% as of July 31, 2009 and August 1,
2008. As of July 31, 2009 and August 1, 2008, the interest
rates on the Term Loan B facility were 2.52% and 4.29%,
respectively. As of July 31, 2009, $40,000 of the
outstanding balance under the Delayed-Draw Term facility
had an interest rate of 3.75% and the remaining $5,000
had an interest rate of 1.79%. As of August 1, 2008, the
interest rate on the Delayed-Draw Term Loan B facility
was 4.29%. In 2006, the Company entered into an interest
rate swap which resulted in the swapped portion of the
Company’s outstanding term loans being fixed at 7.07%
at July 31, 2009 and August 1, 2008 (see Note 6). At
July 31, 2009, the Company did not have any outstanding
borrowings under the Revolving Credit Facility. As of
August 1, 2008, the interest rate on the Revolving Credit
facility was 5.50%. At July 31, 2009, the Company had
$33,892 of standby letters of credit, which reduce the
Company’s availability under the Revolving Credit facility
(see Note 18). At July 31, 2009, the Company had
$216,108 available under the Revolving Credit facility.
The Credit Facility contains customary financial
covenants, which are specified in the agreement and
include maintenance of a maximum consolidated total
leverage ratio and a minimum consolidated interest
coverage ratio. At July 31, 2009 and August 1, 2008, the
Company was in compliance with all debt covenants.
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