Cracker Barrel 2012 Annual Report Download - page 30

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swaps. A summary of our interest rate swaps at August 3, 2012
is as follows:
Term Notional Fixed
Trade Date Eective Date (in Years) Amount Rate
May 4, 2006 August 3, 2006 7 $525,000 5.57%
August 10, 2010 May 3, 2013 2 200,000 2.73%
July 25, 2011 May 3, 2013 2 50,000 2.00%
July 25, 2011 May 3, 2013 3 50,000 2.45%
September 19, 2011 May 3, 2013 2 25,000 1.05%
September 19, 2011 May 3, 2013 2 25,000 1.05%
December 7, 2011 May 3, 2013 3 50,000 1.40%
At August 3, 2012, our outstanding borrowings were swapped
at a rate of 7.57%, which is the xed rate of our interest
rate swap plus our current credit spread. See Note 6 to our
Consolidated Financial Statements for further discussion
of our interest rate swaps.
Commodity Price Risk. Many of the food products that
we purchase are aected by commodity pricing and are,
therefore, subject to price volatility caused by market conditions,
weather, production problems, delivery diculties and
other factors which are outside our control and which are
generally unpredictable.
e following table highlights the ve food categories
which accounted for the largest shares of our food purchases
in 2012:
Percentage of Food Purchases in 2012
Fruits and vegetables 14%
Dairy (including eggs) 13%
Beef 12%
Poultry 10%
Pork 10%
Other categories aected by the commodities markets,
such as grains and seafood, may each account for as much as
7% of our food purchases. While we have some of our food
items prepared to our specications, our food items are based
on generally available products, and if any existing suppliers
fail, or are unable to deliver in quantities required by us, we
believe that there are sucient other quality suppliers in the
marketplace that our sources of supply can be replaced as
necessary to allow us to avoid any material adverse eects that
could be caused by such unavailability. We also recognize,
however, that commodity pricing is extremely volatile and can
change unpredictably even over short periods of time.
Changes in commodity prices would aect us and our
competitors generally, and depending on the terms and
duration of supply contracts, sometimes simultaneously. We
enter into contracts for certain of our products in an eort to
minimize volatility of supply and pricing. In many cases, or
over the longer term, we believe we will be able to pass
through some or much of the increased commodity costs by
adjusting our menu pricing. From time to time, competitive
circumstances, or judgments about consumer acceptance of
price increases, may limit menu price exibility, and in those
circumstances, increases in commodity prices can result in
lower margins.
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