Cracker Barrel 2012 Annual Report Download - page 21

the prior year as a result of our entry into the national cable
market in 2012.
e year-to-year percentage change from 2010 to 2011
resulted primarily from the following:
2010 to 2011
Increase as a Percentage
of Total Revenue
Advertising 0.1%
Supplies 0.1%
General insurance expenses 0.1%
e increase in advertising expense resulted from increased
spending related to billboards and consumer research as
compared to the prior year. We purchased additional
billboard coverage during the 2011 summer travel season to
beer capture available guest trac. Additionally, the
incremental consumer research was conducted to gain
consumer insight into menu oerings and recent guest trac
trends. e increase in supplies expense resulted from
increases in numerous supply categories including oce
supplies and shopping bags. Higher general insurance expense
resulted from favorable actuarial reserve adjustments made in
the prior year.
General and Administrative Expenses
General and administrative expenses as a percentage of
total revenue were 5.7%, 5.7% and 6.1% in 2012, 2011 and
2010, respectively.
General and administrative expenses as a percentage of
total revenue remained at at 5.7% in 2012 as compared to
2011 as a result of the following oseing variances:
2011 to 2012
(Decrease) Increase as a
Percentage of Total Revenue
Payroll and related expenses (0.5%)
Incentive compensation 0.3%
Expenses related to December 2011 proxy contest 0.2%
Lower payroll and related expenses in 2012 as compared
to 2011 resulted primarily from our organizational restruc-
turings (see sub-section above entitled “Restructurings”).
Higher incentive compensation in 2012 as compared
to 2011 resulted primarily from beer performance against
nancial objectives.
In August 2012, we were notied by a shareholder of its
intent to nominate two candidates for election to our board of
directors at the 2012 Annual Meeting of Shareholders in
November 2012. Should this nomination result in a proxy
contest at the upcoming Annual Meeting of Shareholders, we
would likely incur proxy contest costs in 2013, but
management currently expects these costs to be modestly
lower than incurred in 2012.
e year-to-year percentage change from 2010 to 2011
resulted from the following:
2010 to 2011
(Decrease) Increase as a
Percentage of Total Revenue
Incentive compensation (0.6%)
Payroll and related expenses 0.2%
e decrease in incentive compensation reected lower
performance against nancial objectives in 2011 as compared
to the prior year. e increase in payroll and related expenses
resulted primarily from severance charges related to our
restructuring in July 2011 (see sub-section above entitled
“Restructurings”) and an increase in the number of store
managers in training.
Impairment and Store Dispositions, Net
Impairment and store dispositions, net consisted of the
following at:
2012 2011 2010
Impair ment $ — $ 3,219 $ 2,672
Gains on disposition of stores — (4,109) —
Store closing costs — 265 128
Total $ — $ (625) $ 2,800
In 2011, we recorded impairment charges of $1,044 and
$2,175, respectively, for oce space classied as property
held for sale and a leased store. e leased store was impaired
because of declining operating performance and resulting
negative cash ow projections. During 2010, we also
determined that one leased store was impaired and closed one
owned store, resulting in total impairment charges of $2,672.
During 2011, we sold two closed stores. Additionally, one
of our stores was acquired by the State of Florida for road
expansion pursuant to eminent domain. ese transactions
resulted in a net gain of $4,109.
Interest Expense
e following table highlights interest expense for the past
three years:
2012 2011 2010
Interest expense $ 44,687 $ 51,490 $ 48,959
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