Cracker Barrel 2011 Annual Report Download - page 45

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43
Note Payable
e note payable consists of a five-year note with a vendor
with an original principal amount of $507 and represents the
financing of prepaid maintenance for telecommunications
equipment. e note payable is payable in monthlyinstallments
of principal and interest of $9 through October 16, 2013
andbears interest at 2.88%.
6DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES
e estimated fair values of the Company’s derivative
instrument were as follows:
July 29, July 30,
Balance Sheet Location 2011 2010
Interest rate swap
(See Note 3) Interest rate swap liability $51,604 $66,281
e estimated fair value of the Company’s interest rate swap
liability incorporates the Company’s non-performance risk.
e adjustment related to the Company’s non-performance
risk at July 29, 2011 and July 30, 2010 resulted in reductions
of $1,546 and $3,915, respectively, in the fair value of the
interest rate swap liability. e offset to the interest rate swap
liability is recorded in accumulated other comprehensive
loss (“AOCL”), net of the deferred tax asset, and will be
reclassified into earnings over the term of the underlying debt.
As of July 29, 2011, the estimated pre-tax portion of AOCL
that is expected to be reclassified into earnings over the
next twelve months is $28,275. Cash flows related to the
interest rate swap are included in interest expense and in
operating activities.
e following table summarizes the pre-tax effects of the
Company’s derivative instrument on AOCL at:
2011 2010 2009
Cash flow hedges:
Interest rate swaps $14,677 $(5,049) $(21,614)
Location of Loss
Reclassified from
AOCL into Income
(Effective Portion)2011 2010 2009
Cash flow hedges:
Interest rate swaps Interest Expense $30,355 $30,722 $19,469
Any portion of the fair value of the swaps determined to be
ineffective will be recognized currently in earnings. No
ineffectiveness has been recorded in 2011, 2010 and 2009.
7SHARE REPURCHASES
In 2011 and 2010, the Company was authorized to repurchase
shares to offset share dilution that results from the issuance
of shares under its equity compensation plans. In 2011, the
Company repurchased 676,600 shares of its common stock in
the open market at an aggregate cost of $33,563. In 2010, the
Company repurchased 1,352,000 shares of its common stock
in the open market at an aggregate cost of $62,487. In 2012,
the Company has been authorized to repurchase shares up to a
maximum aggregate cost of $65,000.
8SEGMENT INFORMATION
Cracker Barrel stores represent a single, integrated operation
with two related and substantially integrated product lines.
e operating expenses of the restaurant and retail product
lines of a Cracker Barrel store are shared and are indistinguish-
able in many respects. Accordingly, the Company manages
its business on the basis of one reportable operating segment.
All of the Company’s operations are located within the
United States.
Total revenue was comprised of the following at:
2011 2010 2009
Restaurant $ 1,934,049 $1,911,664 $1,875,688
Retail500,386 492,851 491,597
Total revenue $2,434,435 $2,404,515 $2,367,285
9IMPAIRMENT AND
STORE DISPOSITIONS, NET
Impairment and store dispositions, net consisted of the
following at:
2011 2010 2009
Impairment $ 3,219 $2,672 $2,088
Gains on disposition
of stores (4,109) — —
Store closing costs 265 128 —
Total $(625) $2,800 $2,088
Amount of Income (Loss) Recognized in
AOCL on Derivative (Effective Portion)
Amountof Loss Reclassied from
AOCL into Income (Eective Portion)