Cracker Barrel 2010 Annual Report Download - page 50

nonrecurring basis, such as nonnancial long-lived asset
groups measured at fair value for an impairment assessment.
e adoption did not have an impact on the Company’s
consolidated nancial statements. See Note 3 for further
information related to the Company’s assets and liabilities
measured at fair value on a nonrecurring basis.
3 FAIR VALUE MEASUREMENTS
e Company’s assets and liabilities measured at fair value
on a recurring basis at July 30, 2010 were as follows:
Quoted Prices Signicant
in Active Other Signicant Fair Value
Markets for Observable Unobservable as of
Identical Assets Inputs Inputs July 30,
(Level 1) (Level 2) (Level 3) 2010
Cash equivalents* $ 35,250 $ — $ — $ 35,250
Deferred
compensation
plan assets** 25,935 — — 25,935
Total assets at fair
value $ 61,185 $ — $ — $ 61,185
Interest rate swap
liability (see Note 6) $ — $ 66,281 $ — $ 66,281
Total liabilities at
fair value $ — $ 66,281 $ — $ 66,281
e Company’s assets and liabilities measured at fair value
on a recurring basis at July 31, 2009 were as follows:
Quoted Prices Signicant
in Active Other Signicant Fair Value
Markets for Observable Unobservable as of
Identical Assets Inputs Inputs July 30,
(Level 1) (Level 2) (Level 3) 2009
Cash equivalents* $ 48 $ — $ — $ 48
Deferred
compensation
plan assets** 22,583 — — 22,583
Total assets at fair
value $ 22,631 $ — $ — $ 22,631
Interest rate swap
liability (see Note 6) $ — $ 61,232 $ — $ 61,232
Total liabilities at
fair value $ — $ 61,232 $ — $ 61,232
* Consists of money market fund investments.
** Represents plan assets invested in mutual funds established under a
Rabbi Trust for the Company’s non-qualied savings plan and is
included in the Consolidated Balance Sheet as other assets (see Note 13).
e Company’s money market fund investments and
deferred compensation plan assets are measured at fair value
using quoted market prices. e fair value of the Company’s
interest rate swap liability is determined based on the present
value of expected future cash ows. 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 reected 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. us, the adjustment for
nonperformance risk is also considered a Level 2 input.
During 2010, one leased store was determined to be
impaired. Fair value of the leased store was determined by
using a cash ow model. Assumptions used in the cash ow
model included projected annual revenue growth rates and
projected cash ows and are impacted by economic condi-
tions and management’s expectations. e Company has
determined that the majority of these inputs are unobserv-
able inputs, and thus, are considered Level 3 inputs. Based
on its analysis, the Company determined that the leased store
was fully impaired. is resulted in an impairment charge
of $2,263. Additionally, during 2010, the Company closed
one owned store and recorded an impairment charge of
$409 for the amount that the store’s carrying value exceeded
its fair value. Fair value was determined based upon market
comparables, which are considered Level 2 inputs. See
Note 9 for further information on the impairment of these
long-lived assets.
4 INVENTORIES
Inventories were comprised of the following at:
July 30, July 31,
2010 2009
Retail $ 113,674 $ 108,412
Restaurant 17,586 16,782
Supplies 12,819 12,230
Total $ 144,079 $ 137,424
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