Cracker Barrel 2010 Annual Report Download - page 53

capital expenditure requirements and declining operating
performance. See Note 3 for information related to the
determination of the fair value for these stores.
During 2009, the Company incurred impairment charges
of $2,088. During 2009, one owned store was determined
to be impaired, resulting in charges of $933. is store was
impaired due to lower cash ow projections. Additionally,
during 2009, the Company recorded a total impairment of
$1,155 on oce space, property adjacent to the oce space
and the Company’s management trainee housing facility.
e decision to impair these properties was due to changes
in the Company’s planned use of these properties.
During 2008, the Company incurred impairment and store
closing charges resulting from the closing of two stores. In
2008, the Company closed one leased store and one owned
store, which resulted in impairment charges of $532 and
store closing charges of $345. e decision to close the
leased store was due to its age, the expiration of the lease and
the proximity of another Cracker Barrel store. e decision
to close the owned store was due to its age, expected future
capital expenditure requirements and changes in trac
paerns around the store over the years.
e store closing costs, which included employee termina-
tion benets and other costs, are included in the impairment
and store closing charges line on the Consolidated Statement
of Income. At July 30, 2010, a liability of $64 has been
recorded for store closing charges.
e nancial information related to the stores closed in 2010
and 2008 is not material to the Company’s consolidated
nancial position, results of operations or cash ows, and,
therefore, have not been presented as discontinued operations.
10 SALELEASEBACK TNSACTIONS
In the fourth quarter of 2009, the Company completed
sale-leaseback transactions involving 15 of its owned stores
and its retail distribution center. Under the transactions, the
land, buildings and improvements at the locations were sold
for pre-tax net proceeds of $56,260. e stores and the retail
distribution center have been leased back for initial terms
of 20 and 15 years, respectively. Equipment was not included.
e leases include specied renewal options for up to 20
additional years. Net rent expense during the initial term of
the store leases is approximately $4,867 annually, and the
assets sold and leased back previously had depreciation
expense of approximately $753 annually. Net rent expense
during the initial term of the retail distribution center lease is
approximately $1,142 annually, and the assets sold and
leased back previously had depreciation expense of approxi-
mately $331 annually. In 2009, the Company recorded a loss
on three of the stores, which is recorded in other store
operating expenses in the Consolidated Statement of
Income. e gains on the sales of the 12 stores and retail
distribution center are being amortized over the initial lease
terms of 20 and 15 years, respectively. Net proceeds from the
sale-leaseback transactions, along with excess cash from
operations, were used to reduce outstanding borrowings
under the Credit Facility.
On July 31, 2000, the Company completed a sale-lease-
back transaction involving 65 of its owned stores. Under the
transaction, the land, buildings and building improvements
at the locations were sold and leased back for an initial term
of 21 years. e leases for these 65 stores include specied
renewal options for up to 20 additional years and have
certain nancial covenants related to xed charge coverage
for the leased stores. At July 30, 2010 and July 31, 2009, the
Company was in compliance with all those covenants.
11 GAINS ON PROPERTY DISPOSITION
During 2008, the Company sold the one remaining Logan’s
Roadhouse® (“Logan’s”) property that the Company had
retained and leased back following the divestiture of Logan’s
(see Note 15). e Company received net proceeds of approxi-
mately $3,770, which resulted in a pre-tax gain of approximately
$1,810. e gain is recorded in general and administrative
expenses in the Consolidated Statement of Income.
12 SHAREBASED COMPENSATION
Stock Compensation Plans
e Company’s employee compensation plans are adminis-
tered by the Compensation Commiee of the Company’s
Board of Directors (the “Commiee”). e Commiee is
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