Cracker Barrel 2011 Annual Report Download - page 46

During 2011, as part of the Company’s cost reduction and
organization streamlining initiative (see Note 13), the
Company recorded an impairment charge of $1,044 for office
space that is expected to be sold within one year. Additionally,
during 2011, the Company determined that one leased store
was impaired, resulting in an impairment charge of $2,175.
During 2010, the Company also determined that one leased
store was impaired, resulting in an impairment charge of
$2,263. Each of these leased stores was impaired because of
declining operating performance and resulting negative
cash flow projections. Additionally,during2010, the Company
closed one store, which resulted in an impairment charge
of $409. e decision to close this store was because of its age,
expected future capital expenditure requirements and
declining operating performance. e Company also incurred
store closing costs of $84 and $128, respectively, in 2011
and 2010 related to this closed store. e store closing costs
included employee termination benefits and other costs.
See Note 3 for information related to the determination of the
fair value for these stores and office space.
During 2009, one owned store was determined to be
impaired, resultingin charges of $933. is store was impaired
because of lower cash flow projections. Additionally, during
2009, the Company recorded a total impairment of $1,155 on
office space, property adjacent to the office space and the
Company’s management trainee housing facility. e decision
to impair these properties resulted from changes in the
Company’s planned use of these properties.
During 2011, the Company’s gain on disposition of stores
included gains resulting from the sale of two closed stores and
a condemnation award resulting from an eminent domain
proceeding. e Company received net proceeds of $1,054
from the sale of the two closed stores, which resulted in a gain
of $485. e condemnation award consisted of net proceeds
of $6,576, which resulted in a gain of $3,624. In 2011, the
Company closed the store on which the condemnation award
was received and incurred store closing costs of $181, which
included employee termination benefits and other costs.
10 LEASES
As of July 29, 2011, the Company operated 199 stores in
leased facilities and also leased certain land and advertising
billboards.
Rent expense under operating leases, excluding leases for
advertising billboards and including the sale-leaseback
transactions discussed below, for each of the three years was:
Minimum Contingent Total
2011 $39,391 $179 $39,570
2010 39,793 519 40,312
2009 33,929 535 34,464
e following is a schedule by year of the future minimum
rental payments required under operating leases, excluding
leases for advertising billboards and including the sale-lease-
back transactions discussed below, as of July 29, 2011:
Year
2012 $37,312
2013 37,692
2014 38,126
2015 38,144
2016 38,286
Later years 563,369
Total $752,929
Rent expense under operating leases for billboards was
$26,487, $25,558 and $25,950 for 2011, 2010 and 2009,
respectively. e following is a schedule by year of the future
minimum rental payments required under operating leases
for advertising billboards as of July 29, 2011:
Year
2012 $18,372
2013 9,314
2014 3,310
Total $30,996
Sale-Leaseback Transactions
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 and leased back for terms of 20 and 15 years, respec-
tively. Equipment was not included. e leases include specified
renewal options for up to 20 additional years.
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