Cracker Barrel 2013 Annual Report Download - page 54

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15 NET INCOME PER SHARE AND
WEIGHTED AVEGE SHARES
e following table reconciles the components of diluted
earnings per share computations:
2013 2012 2011
Net income per share
numerator $ 117,265 $ 103,081 $ 85,208
Net income per share
denominator:
Basic weighted average
shares outstanding 23,708,875 23,067,566 22,998,200
Add potential dilution:
Stock options,
nonvested stock
awards and MSU
Grants 239,446 340,560 636,475
Diluted weighted average
shares outstanding 23,948,321 23,408,126 23,634,675
16 COMMITMENTS AND CONTINGENCIES
e Company and its subsidiaries are party to various legal
and regulatory proceedings and claims incidental to
their business in the ordinary course. In the opinion of
management, based upon information currently available,
the ultimate liability with respect to these proceedings and
claims will not materially aect the Company’s consolidated
results of operations or nancial position.
e Company maintains insurance coverage for various
aspects of its business and operations. e Company has
elected, however, to retain all or a portion of losses that occur
through the use of various deductibles, limits and retentions
under its insurance programs. is situation may subject
the Company to some future liability for which it is only
partially insured, or completely uninsured. e Company
intends to mitigate any such future liability by continuing to
exercise prudent business judgment in negotiating the terms
and conditions of its contracts. See Note 2 for a further
discussion of insurance and insurance reserves.
Related to its insurance coverage, the Company is contin-
gently liable pursuant to standby leers of credit as credit
guarantees to certain insurers. As of August 2, 2013, the
Company had $28,971 of standby leers of credit related to
securing reserved claims under workers’ compensation
insurance. All standby leers of credit are renewable annually
and reduce the Company’s borrowing availability under its
Revolving Credit facility (see Note 5).
As of August 2, 2013, the Company is secondarily liable
for lease payments associated with two properties. e
Company is not aware of any non-performance under these
lease arrangements that would result in the Company
having to perform in accordance with the terms of those
guarantees, and therefore, no provision has been recorded
in the Consolidated Balance Sheets for amounts to be
paid in case of non-performance by the third parties.
e Company enters into certain indemnication agreements
in favor of third parties in the ordinary course of business.
The Company believes that the probability of incurring an
actual liability under such indemnication agreements is
suciently remote so that no liability has been recorded in the
Consolidated Balance Sheet.
52