Cracker Barrel 2014 Annual Report Download - page 54

months. At August 1, 2014, the Company was subject to
income tax examinations for its U.S. federal income taxes
aer 2010 and for state and local income taxes generally
aer 2010.
14 NET INCOME PER SHARE AND
WEIGHTED AVEGE SHARES
e following table reconciles the components of diluted
earnings per share computations:
2014 2013 2012
Net income per share
numerator $ 132,128 $ 117,265 $ 103,081
Net income per share
denominator:
Basic weighted average
shares outstanding 23,817,768 23,708,875 23,067,566
Add potential dilution:
Stock options,
nonvested stock
awards and
MSU Grants 148,247 239,446 340,560
Diluted weighted average
shares outstanding 23,966,015 23,948,321 23,408,126
15 COMMITMENTS AND CONTINGENCIES
During 2014 and through September 25, 2014, the Company
was served with several claims led as a putative collective
action alleging violations of the Fair Labor Standards Act
(“FLSA”). e Company believes these claims are without
merit and intends to vigorously defend these lawsuits.
ese proceedings remain in the early stages. At this time,
the Company cannot reasonably estimate the likely results of
these lawsuits or the economic eects of these lawsuits on
the Company, though an adverse outcome could be material
to the Company’s results of operations or nancial
position. See “Item 3. Legal Proceedings” of Part I of this
Annual Report on Form 10-K for further information related
to these claims.
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 manage-
ment, 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 1, 2014, the
Company had $20,637 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 1, 2014, 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 by the primary
obligors under such lease agreements.
e Company enters into certain indemnication agree-
ments in favor of third parties in the ordinary course of
business. At August 1, 2014, the Company recorded a
liability of $252 in the Consolidated Balance Sheet related
to legal costs. e Company believes that the probability
of incurring an actual liability under other indemnication
agreements is suciently remote so that no additional
liability has been recorded in the Consolidated Balance Sheets.
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