Cracker Barrel 2011 Annual Report Download - page 42

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same market. Unless considered immaterial, if the Company
determines that it has exited the market, then the closed store
will be classified as a discontinued operation. No closed
stores were classified as discontinued operations in 2011,
2010 and 2009. In 2009, certain expenses related to
the 2007 sale of Logan’s Roadhouse, Inc. were reported in
discontinued operations.
Net income per share – Basic consolidated net income
per share is computed by dividing consolidated net income to
common shareholders by the weighted average number of
common shares outstanding for the reporting period. Diluted
consolidated net income per share reflects the potential
dilution that could occur if securities, options or other contracts
to issue common stock were exercised or converted into
common stock and is based upon the weighted average number
of common and common equivalent shares outstanding
during the year. Common equivalent shares related to stock
options and nonvested stock and stock awards issued by
the Company are calculated using the treasury stock method.
Outstanding employee and director stock options and
nonvested stock andstock awards issued by the Company
represent the only dilutive effects on diluted consolidated net
income per share. See Note 15.
Use of estimates – Management of the Company has made
certain estimates and assumptions relating to the reporting of
assets and liabilities and the disclosure of contingent liabilities
at the date of the Consolidated Financial Statements and
the reported amounts of revenues and expenses during the
reporting periods to prepare these Consolidated Financial
Statements in conformity with GAAP. Management believes
that such estimates have been based on reasonable and
supportable assumptions and that the resulting estimates are
reasonable for use in the preparation of the Consolidated
Financial Statements. Actual results, however, could differ from
those estimates.
Reclassications
e Company has reclassified certain prior period amounts in
its Consolidated Statements of Income in order to conform
to the current period presentation in which impairment and
store dispositions are not included in store operating income.
e Company made this change in the third quarter of 2011.
e Company believes that the current period presentation of
store operating income more appropriately reflects the results
of its ongoing store operations. ese reclassifications had no
effect on operating income or net income.
e following table presents the effect of these reclassifica-
tions on store operating income at:
2010 2009
Store operating income as previously reported $310,550 $262,438
Impairment and store dispositions, net2,800 2,088
Store operating income as currently reported $313,350 $264,526
e following table presents the effect of these reclassifica-
tions on store operating income for the quarters ended
October 29, 2010 (“1st Quarter 2011”) and January 28, 2011
(“2nd Quarter 2011”):
1st Quarter 2nd Quarter
2011 2011
Store operating income as previously reported $82,292 $85,540
Impairment and store dispositions, net83 1
Store operating income as currently reported $82,375 $85,541
RECENT ACCOUNTING PRONOUNCEMENTS
NOT YET ADOPTED
Fair Value Measurement and Disclosure Requirements
In May 2011, the Financial Accounting Standards Board
(“FASB”) issued amended accounting guidance which
provides additional guidance on how to determine fair value
under existing standards and expands existing disclosure
requirements on a prospective basis. e guidance is effective
for fiscal years and interim periods beginning aer
December 15, 2011. e Company does not expect that the
adoption of this accounting guidance in the third quarter
of 2012 will have a significant impact on its Consolidated
Financial Statements.
Presentation of Comprehensive Income
In June 2011, the FASB issued amended accounting guidance
which requires companies to present total comprehensive
income and its components and the components of net
income in either a single continuous statement of comprehen-
sive income or in two consecutive statements reporting net
income and comprehensive income. is requirement
eliminates the option to present components of comprehensive
income as part of the statement of changes in shareholders’
40
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