I need this done using your own work.

I need to see how you got the answers and try to show work

s we look back on 2014, we are pleased with our accomplishments. We continued to focus for many perception attributes including Value, on our long-term strategy to Enhance the Food Quality, Menu Variety, and Friendly Service. Core business, Expand the Footprint of our stores, and Extend the Cracker Barrel brand. In every quarter of the year, we outperformed the Knapp-TrackTM Casual Dining Index for sales and traffic. This achievement marks eleven consecutive quarters in which we have outperformed this peer group. We grew our restaurant and retail comparable store sales, operating margins, and earnings per diluted share despite continued headwinds within the restaurant industry. In addition, we once In addition, we were named to Forbes Magazine's list of America's 100 Most Trustworthy Companies. This list, developed by GMI Ratings, evaluated the accounting and governance behaviors of more than 8,000 publicly traded companies in North America. We are proud to be on this list, which we believe further demonstrates that Cracker Barrel is a brand not only our customers can trust, but also a solid long-term investment our shareholders can trust. again celebrated record sales on Thanksgiving Day. Financial Performance Our Operations team consistently executed our Our success in the 2014 fiscal year was achieved in mission of Pleasing People and we saw year-over- the face of a challenging economic environment for year increases in several of our guest loyalty our consumer, severe winter weather, and signifi- metrics. Consumer ratings for the 2014 fiscal year cant promotional activity by many of our competitors. indicate that Cracker Barrel received the highest We grew our revenues by 1.5% to $2.7 billion, with overall rating among 32 large restaurant chains comparable store restaurant sales increasing analyzed by Technomic Inc., a well-recognized 0.7% and comparable store retail sales increasing industry research firm. Moreover, we led in ratings 0.4%. Adjusted for proxy contest and severance 1 expenses, we improved our operating margins to 7.9% the Cracker Barrel brand. This culture begins with from 7.8% in the prior fiscal year1. This improvement our mission of Pleasing People. The Pleasing People was the result of the many cost savings initiatives that mission is demonstrated by our employees and is we implemented as part of our strategic plan. Our evidenced in our guests' and employees' survey adjusted earnings per diluted share grew 13.3% to responses about their experience at Cracker Barrel. $5.63, compared to $4.97 in fiscal 2013. During 2014, Overall guest and employee satisfaction remained we directly increased shareholder return by growing high during fiscal 2014. Guests' perceptions of overall our regular quarterly dividend by over 33% to $1.00, value once again showed a year-over-year increase. resulting in an annual yield of approximately 4.0%. Among our front-line store employees, employee morale and sentiment toward the company remained Pl e a s i n g P eo ple high. More than 80% of our hourly and management We believe that Cracker Barrel Old Country Store is one of the most unique and differentiated brands 1 Operating income determined in accordance with GAAP was $208.4 million, or 7.8% of total revenue, for 2014 and $201.5 million, or 7.6% of total revenue, for 2013. Diluted earnings per share in accordance with GAAP were $5.51 for 2014 and $4.90 for 2013. The GAAP amount for 2014 includes proxy contests expenses and their related tax effects. The GAAP amount for 2013 includes proxy contest expenses, other items and their related tax effects. Please see selected financial data for further explanation. in full-service dining. This belief is supported by Technomic Inc. research regarding customer ratings of brand uniqueness. We also believe that our organizational culture is uniquely capable of delivering Cracker Barrel Old Country Store, Inc. DeclaredBarrel Dividends per Share Cracker Old Country Store, Inc. Since FYPer 2010 Declared Dividends Share Since FY 2010 Cracker Barrel Old Country Store, Inc. Earnings Per Country Diluted Share Cracker Barrel Old Store, Inc. From Continuing Operations Earnings Per Diluted Share $3.50 $5.00 $3.00 Declared Dividends Per Share $6.00 $4.00 $3.00 $2.00 $ 1.00 $0 (a) (b) (c) (d) 2010 2011(a) 2012(b) 2013(c) 2014(d) Fiscal Year Fiscal 2011 adjusted for charges related to an impairment, severance and the proxy contest. Fiscal 2012 adjusted for charges related to severance and the proxy contest, and on a 52-week basis. Fiscal 2013 adjusted for charges related to severance, the proxy contest, and retroactive reinstatement of the work opportunities tax credit. Fiscal 2014 adjusted for charges related to proxy contests. $2.50 $2.00 $1.50 $1.00 $ .50 $0 2010 2011 2012 Fiscal Year 2013 2014 employees responded to our annual employee engagement survey that they feel proud to work at Cracker Barrel, while over 90% responded that they would recommend Cracker Barrel as a great place to eat and shop. In addition, our management retention rates have remained high. S t r a t e gic P rio rit ie s At the beginning of 2014, we announced five strategic business priorities for the fiscal year: first, focusing on better-for-you additions and reinforcing everyday value on our menu; second, continuing to message our \"Handcrafted by Cracker Barrel\" theme in support of the brand, menu, and merchandise; third, driving retail sales with improved quality and breadth of our merchandise assortment; fourth, improving operations and margins by applying technology and process improvements; and fifth, focusing on enhancing longterm total shareholder returns. We believe that we made significant progress on all five priorities in 2014. In August, we rolled out a new category within the Cracker Barrel menu to meet our guests' desire for additional healthy menu items. The Wholesome Fixin's category introduced nine complete meals for under 600 calories at breakfast, lunch or dinner. 3 Our guests responded positively to the new menu Country Dinner Plates at a $7.69 price point, further category. We saw improvements in survey scores enhancing the value perception of our menu. measuring guests' attitudes about the brand including \"offers appealing healthy options,\" \"uses fresh ingredients,\" and \"is a restaurant I can trust.\" Our marketing focus at the beginning of the fiscal year was to build awareness around the introduction of the Wholesome Fixin's menu category. We Throughout the year, we continued to build upon the promoted the category with new television and radio Wholesome Fixin's category through our limited commercials which ran for five weeks during our time promotional offerings, and we plan to add these first fiscal quarter. During the holiday season we high- new entrees to the core menu category during fiscal lighted the Cracker Barrel brand and our value year 2015. We look forward to the long-term growth message through national cable television advertising of the Wholesome Fixin's category on our menu. for an additional five weeks. In support of the Through our promotional menu activity, we reinforced summer travel season, we again featured our Country the affordability of our menu by featuring two Dinner Plate value messaging during a national new limited time Weekday Lunch Special entrees at television commercial campaign. $5.99. Additionally, we continued to highlight our Additionally, we continued to promote the Cracker Barrel brand through our more than 1,600 billboards. During the fourth quarter, we refreshed 4 approximately one-fourth of our billboards with Our third strategic priority for the year was to drive new price-point messaging around our $5.99 and retail sales with improved quality and breadth of $7.69 value positions at both lunch and dinner. the merchandise assortment. During the fiscal year, we increased the number of merchandise themes As part of an ongoing sponsorship of military families, we held an online nationwide charity auction. Not only did the online auction generate proceeds to support our returning service men, women, and their families, it also afforded us the opportunity to increase the level of digital engagement and connection with our guests. that we feature each year and shortened their time on the oor in order to keep the merchandise assortment fresh and new. We introduced some eye-catching color themes such as Passion for Purple and Red Hot, with bright dcor, home goods, and women's clothing, which resonated with our guests. Additionally, our merchandising team To enhance our digital market presence during the broadened the appeal of the brand by sourcing summer travel season, we followed \"The Four- products that have seasonal appeal and reach Star Salute: Cracker Barrel's Military Family Online across generations and genders. Charity Auction\" with our \"Summer Stories Sweepstakes.\" The digital sweepstakes allowed our guests to share summer pictures with us and other guests thus generating a two-way personalized online experience between our guests and our brand. We were very pleased with both of these digital media events and the brand impressions that they generated. Our women's apparel and accessories continued process. These technology and process enhance- to be one of our strongest selling categories. To build ments, as well as others that are not listed, upon the strength of this category, we successfully resulted in increased productivity and throughput, introduced women's footwear providing depth to the ultimately contributing in part to our increase assortment. Another leading sales category in in operating margin. 2014 was Dcor. Our guests responded especially well to our sentiment and inspirational dcor items. Our final business priority has been, and will continue to be, a continued focus on maximizing We continue to invest in our employees and their total shareholder return. In 2014 we targeted career development. At the onset of our fiscal year, increasing the quarterly dividend, expanding the we held a very successful General Manager's footprint through new unit growth, and extending conference. This conference provided a platform the brand outside of the four walls. In the third quarter, for the introduction and training of several new we declared a 33% dividend increase to $1.00, technology-based programs. We trained all of our which was paid in the first quarter of 2015. This General Managers on the second phase of our marks a fourth increase in the quarterly dividend labor management system and all of our Retail Managers on improved selling techniques to highlight our fun, unique, and nostalgic merchandise. Other successful process and technology improvements during the year included a new back of house system that supports superior food quality and enhances the employee experience and an inventory management technology system that can be built NOW available at your supermarket premium bacon spiral sliced ham upon to automate the inventory and replenishment 6 cboldcountrystore.com since November 2011, generating a total increase Reflection and Outlook of 400% over that time period. While 2014 was a challenging year within the We delivered \"total shareholder return\" or TSR, which we believe is an appropriate measure of value returned on the shareholders' investment, of approximately 133%, compared to 77% for the S&P 600 restaurant index. Additionally, we successfully opened seven new Cracker Barrel Old Country Store locations during the year, bringing our total store count at the end of the fiscal year to 631. restaurant industry, I am very proud of our leadership teams and our employees who consistently delivered on our mission of Pleasing People and executed our business priorities. As we look to 2015, we are well-positioned with a talented management team and engaged employees. We remain committed to delivering an outstanding dining and retail experience to our guests, providing a positive employee experience, and building In October, we shipped our first licensed products on our accomplishments to provide value to our with John Morrell Food Group under our new shareholders. mark, CB Old Country Store . Our licensed products TM have been well received at grocery stores and Sincerely, at the close of the fiscal year we had 19 products available through our licensing program. Sandra B. Cochran President and Chief Executive Officer 7 C R AC KE R B AR R E L O L D C O U N T RY S T O R E , IN C . Directors 8 Thomas H. Barr James W. Bradford Sandra B. Cochran Interim CEO and Global President of Hailo Network, USA; former Vice President, Global Coffee at Starbucks Corporation Chairman of the Board; Retired; former Dean and Professor for the Practice of Management at Vanderbilt University's Owen Graduate School of Management President and CEO of Cracker Barrel Old Country Store, Inc. Glenn A. Davenport Richard J. Dobkin Norman E. Johnson President of G. A. Food Service, Inc.; former Chairman and CEO of Morrison Management Specialists Retired; former Managing Partner of the Tampa, FL office of Ernst & Young, LLP Retired; former Executive Chairman and CEO of Clarcor, Inc. William W. McCarten Coleman H. Peterson Andrea M. Weiss Chairman of the board of directors of DiamondRock Hospitality Company President and CEO of Hollis Enterprises, LLC; former Chief People Officer of Wal-Mart Stores, Inc. President and CEO of Retail Consulting, Inc.; former President of dELiA*s Corp. 2014 Financial Table of Contents 10 Forward-Looking Statements - Risk Factors 12 Selected Financial Data 13 Shareholder Return Performance Graph 14 Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Management's Report on Internal Control Over Financial Reporting 30 Report Of Independent Registered Public Accounting Firm 31 Report Of Independent Registered Public Accounting Firm 32 Consolidated Balance Sheets 33 Consolidated Statements of Income and Consolidated Statements of Comprehensive Income 34 Consolidated Statements of Changes in Shareholders' Equity 35 Consolidated Statements of Cash Flows 36 Notes To Consolidated Financial Statements 54 Corporate Officers 55 Corporate Information CB Financials_8-14_03.indd 1 9/24/14 6:06 PM Forward-Looking Statements - Risk Factors Except for specific historical information, many of the matters discussed in this Annual Report to Shareholders may express or imply projections of items such as revenues or expenditures, estimated capital expenditures, compliance with debt covenants, plans and objectives for future operations, inventory shrinkage, growth or initiatives, expected future economic performance or the expected outcome or impact of pending or threatened litigation. These and similar statements regarding events or results that Cracker Barrel Old Country Store, Inc. (the \"Company\") expects will or may occur in the future, are forward-looking statements that, by their nature, involve risks, uncertainties and other factors which may cause our actual results and performance to differ materially from those expressed or implied by those statements. All forward-looking information is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these risks, uncertainties and other factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as \"trends,\" \"assumptions,\" \"target,\" \"guidance,\" \"outlook,\" \"opportunity,\" \"future,\" \"plans,\" \"goals,\" \"objectives,\" \"expectations,\" \"near-term,\" \"long-term,\" \"projection,\" \"may,\" \"will,\" \"would,\" \"could,\" \"expect,\" \"intend,\" \"estimate,\" \"anticipate,\" \"believe,\" \"potential,\" \"regular,\" \"should,\" \"projects,\" \"forecasts\" or \"continue\" (or the negative or other derivatives of each of these terms) or similar terminology. We believe the assumptions underlying any forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in or implied by the forward-looking statements. Factors and risks that may result in actual results differing from this forward-looking information include, but are not limited to, those summarized below, as well as other factors discussed throughout this document, including, without limitation, the factors described under \"Critical Accounting Estimates\" on pages 24 to 27 of this Annual Report or, from time to time, in the Company's filings with the Securities and Exchange Commission (\"SEC\"), press releases and other communications. Readers are cautioned not to place undue reliance on forward-looking statements made in this document, since the statements speak only as of the document's date. Except as may be required by law, the Company has no obligation, and does not intend, to publicly update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this document or to reflect the occurrence of unanticipated events. Readers are advised, however, to consult any future public disclosures that the Company may make on related subjects in its documents filed or furnished to the SEC or in its other public disclosures. Set forth below is a summary of the material risks associated with our business and, therefore, any investment in our securities. Our 2014 Annual Report on Form 10-K, filed with the SEC on September 25, 2014 and available at sec.gov, as well as our website, crackerbarrel.com, contains a more comprehensive discussion of these risks, and you are encouraged to review that Annual Report on Form 10-K and all our SEC filings. Risks Related to Our Business General economic, business and societal conditions as well as those specific to the restaurant or retail industries that are largely out of our control may adversely affect our business, financial condition and results of operations. We face intense competition, and if we are unable to continue to compete effectively, our business, financial condition and results of operations would be adversely affected. The price and availability of food, ingredients, retail merchandise and utilities used by our stores could adversely affect our revenues and results of operations. Our plans depend significantly on our strategic priorities and business initiatives designed to enhance our menu and retail offerings, support our brand, improve operating margins and improve the efficiencies and effectiveness of our operations. Failure to achieve or sustain these plans could adversely affect our results of operations. We are dependent upon attracting and retaining qualified employees while also controlling labor costs. 10 CB Financials_8-14_03.indd 10 9/24/14 6:06 PM Our risks are heightened because of our single retail distribution facility and our potential inability or failure to execute on a comprehensive business continuity plan following a major national disaster at or near our corporate facility could adversely affect our business. Our reliance on certain significant vendors, particularly for foreign-sourced retail products, subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business. Our ability to manage our retail inventory levels and changes in merchandise mix may adversely affect our business. Our capital structure contains substantial indebtedness, which may decrease our flexibility, increase our borrowing costs and adversely affect our liquidity. In addition, we cannot provide any guaranty of future cash dividend payments or that we will be able to actively repurchase our common stock pursuant to a share repurchase program. Our advertising is heavily dependent on billboards, which are highly regulated; our evolving marketing strategy involves increased advertising and marketing costs that could adversely affect our results of operations. A material disruption in our information technology, network infrastructure and telecommunication systems could adversely affect our business and results of operations. A privacy breach could adversely affect our business. We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs; our use of third party technologies has increased and if we are unable to maintain our rights to these technologies our business may be harmed. Our business is somewhat seasonal and also can be affected by extreme weather conditions and natural disasters. If we fail to execute our business strategy, which includes our ability to find new store locations and open new stores that are profitable, our business could suffer. Individual store locations are affected by local conditions that could change and adversely affect the carrying value of those locations. Health concerns, government regulation relating to the consumption of food products and widespread infectious diseases could affect consumer preferences and could negatively affect our results of operations. Failure to maximize or to successfully assert our intellectual property rights could adversely affect our business and results of operations. Litigation may adversely affect our business, financial condition and results of operations. Unfavorable publicity could harm our business. In addition, our failure to recognize, respond to and effectively manage the impact of social media could materially impact our business. The loss of key executives or difficulties in recruiting and retaining qualified personnel could jeopardize our future growth and success. We are subject to a number of risks relating to federal, state and local regulation of our business including the areas of minimum wage increases, health care reform and environmental matters, and an insufficient or ineffective response to government regulation may increase our costs and decrease our profit margins. Our current insurance programs may expose us to unexpected costs, which could have a material adverse effect on our financial condition and results of operations. Our reported results can be affected adversely and unexpectedly by the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements. Failure of our internal control over financial reporting could adversely affect our business and financial results. Our annual and quarterly operating results may fluctuate significantly and could fall below the expectations of investors and securities analysts due to a number of factors, some of which are beyond our control, resulting either in volatility or a decline in the price of our securities. Our business could be negatively affected as a result of actions of activist shareholders. Provisions in our charter, Tennessee law and our shareholder rights plan may discourage potential acquirers of our company. 11 CB Financials_8-14_03.indd 11 9/24/14 6:06 PM CR ACK ER B A R R EL OLD COUN T RY STOR E, I NC. Selected Financial Data (Dollars in thousands except percentages and share data) For each of the fiscal years ended August 1, 2014(a) August 2, 2013(b) August 3, 2012(c) July 29, 2011(d) July 30, 2010(e) SELECTED INCOME STATEMENT DATA: Total revenue $\t2,683,677 $\t2,644,630 $\t2,580,195 $\t2,434,435 $\t2,404,515 Net income 132,128 117,265 103,081 85,208 85,258 Net income per share: Basic 5.55 4.95 4.47 3.70 3.71 Diluted 5.51 4.90 4.40 3.61 3.62 Dividends declared per share 3.25 2.25 1.15 0.88 0.80 Dividends paid per share 3.00 1.90 0.97 0.86 0.80 AS PERCENT OF TOTAL REVENUE: Cost of goods sold 32.5% 32.3% 32.1% 31.7% 31.0% Labor and related expenses 36.0 36.5 36.8 37.1 37.8 Other store operating expenses 18.9 18.2 18.0 18.6 18.2 Store operating income 12.6 13.0 13.1 12.6 13.0 General and administrative expenses 4.8 5.4 5.7 5.7 6.1 Impairment and store dispositions, net 0.1 Operating income 7.8 7.6 7.4 6.9 6.8 Income before income taxes 7.1 6.3 5.7 4.8 4.8 SELECTED BALANCE SHEET DATA: Working capital (deficit) $\t(14,789)\t$\t(13,873)\t$ 18,249 $\t(21,188)\t$\t(73,289) Total assets 1,432,248 1,388,306 1,418,992 1,310,884 1,292,067 Current interest rate swap liability 4,704 20,215 Long-term debt 375,000 400,000 525,036 550,143 573,744 Long-term interest rate swap liability 3,239 11,644 14,166 51,604 66,281 Other long-term obligations 123,221 120,073 114,897 105,661 93,822 Shareholders' equity 528,641 484,026 382,675 268,034 191,617 SELECTED CASH FLOW DATA: Purchase of property and equipment, net $ 90,564 $ 73,961 $ 80,170 $ 77,686 $ 69,891 Share repurchases 12,473 3,570 14,923 33,563 62,487 SELECTED OTHER DATA: Common shares outstanding at end of year 23,821,227 23,795,327 23,473,024 22,840,974 22,732,781 Stores open at end of year 631 624 616 603 593 AVERAGE UNIT VOLUMES (f): Restaurant $\t3,415\t$\t3,390\t$\t3,369 $\t3,234\t$\t3,226 Retail 873 869 863 837 832 COMPARABLE STORE SALES (g): Period to period increase (decrease) in comparable store sales: Restaurant 0.7% 3.1% 2.2% 0.2% 0.8% Retail 0.4 2.9 1.6 0.7 (0.9) Memo: Number of stores in comparable base 609 596 591 583 569 12 CB Financials_8-14_03.indd 12 9/24/14 6:06 PM (a) We incurred $4,313 in costs related to the November 2013 proxy contest and April 2014 special shareholders' meeting, which are included in general and administrative expenses. (b) We incurred $4,111 in costs related to the November 2012 proxy contest, which are included in general and administrative expenses. (c) Fiscal 2012 consisted of 53 weeks while all other periods presented consisted of 52 weeks. The estimated impact of the additional week was to increase consolidated fiscal 2012 results as follows: total revenue, $51,059; store operating income, 0.2% of total revenue; operating income, 0.2% of total revenue; net income, 0.2% of total revenue; and diluted net income per share, $0.27. As part of our restructuring of our field organization in April 2012, we incurred severance charges of $1,660, which are included in general and administrative expenses. We also incurred $5,203 in costs related to the December 2011 proxy contest, which are also included in general and administrative expenses. (d) Includes impairment charges of $3,219 before taxes and pre-tax gains on store dispositions of $4,109. Our debt refinancing in the fourth quarter of fiscal 2011 resulted in additional interest expense of $5,136 related to transaction fees and the write-off of deferred financing costs. During the fourth quarter of fiscal 2011, as part of our cost reduction and organization streamlining initiative, we incurred severance charges of $1,768, which are included in general and administrative expenses. We also incurred $404 in costs related to the December 2011 proxy contest, which are also included in general and administrative expenses. (e) Includes impairment charges for two stores of $2,672 before taxes. (f) Average unit volumes include sales of all stores. Fiscal 2012 includes a 53rd week while all other periods presented consist of 52 weeks. (g) Comparable store sales consist of sales of stores open at least six full quarters at the beginning of the year; and are measured on comparable calendar weeks. MARKET PRICE AND DIVIDEND INFORMATION The following table indicates the high and low sales prices of our common stock, as reported by Nasdaq, and dividends declared and paid for the quarters indicated. Fiscal Year 2014 Prices Dividends\tDividends High\tLow\tDeclared Paid Fiscal Year 2013 Prices Dividends\tDividends High\tLow\tDeclared Paid First $\t111.70 $\t96.32 $\t0.75 $\t0.75 $\t69.30 $\t62.06 $\t0.50 $\t0.40 Second 118.63 96.41 0.75 0.75 65.94 60.07 0.50 0.50 Third 103.30 93.59 1.75 0.75 84.41 64.53 0.50 0.50 Fourth 103.32 92.84 0.75 102.95 83.02 0.75 0.50 CR ACK ER BA ROld R ELCountry OL D COU N T RY Cracker Barrel Store, Inc.STO R E, The graph (left) shows the changes over the past six-year period in the value of $100 invested in Cracker Barrel Old Country Store, Inc. Common Stock, the Standard & Poor's Small Cap Index, and the Standard & Poor's 600 Restaurant Index which we believe is an adequate peer composite for the Company. The plotted points represent the closing price on the last day of the fiscal year indicated and assume the reinvestment of dividends. The data set forth in the graph has been provided by FactSet Research Systems, Inc. I N C. Shareholder Return Performance Graph $500 $450 $400 In Dollars $350 $300 $250 $200 $150 $100 $50 $0 2008 2009 2010 Cracker Barrel Old Country Store, Inc. S&P Small Cap 2011 2012 2013 2014 S&P 600 Restaurant 13 CB Financials_8-14_03.indd 13 9/24/14 6:06 PM CR ACK ER B A R R EL OLD COUN T RY STOR E, I NC. Management's Discussion and Analysis of Financial Condition and Results of Operations The following Management's Discussion and Analysis of Financial Condition and Results of Operations (\"MD&A\") provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. MD&A should be read in conjunction with the Consolidated Financial Statements and notes thereto. Readers also should carefully review the information presented under the section entitled \"Risk Factors\" and other cautionary statements in this report. All dollar amounts (other than per share amounts) reported or discussed in this MD&A are shown in thousands. References in MD&A to a year or quarter are to our fiscal year or quarter unless expressly noted or the context clearly indicates otherwise. This overview summarizes the MD&A, which includes the following sections: Executive Overview - a general description of our business, the restaurant and retail industries, our key performance indicators and the Company's performance in 2014. Results of Operations - an analysis of our consolidated statements of income for the three years presented in our Consolidated Financial Statements. Liquidity and Capital Resources - an analysis of our primary sources of liquidity, capital expenditures and material commitments. Critical Accounting Estimates - a discussion of accounting policies that require critical judgments and estimates. EXECUTIVE OVERVIEW Cracker Barrel Old Country Store, Inc. (the \"Company,\" \"our\" or \"we\") is a publicly traded (Nasdaq: CBRL) company that, through its operations and those of certain subsidiaries, is engaged in the operation and development of the Cracker Barrel Old Country Store (\"Cracker Barrel\") concept. Each Cracker Barrel store consists of a restaurant with a gift shop. The restaurants serve breakfast, lunch and dinner. The gift shop area offers a variety of decorative and functional items specializing in rocking chairs, holiday gifts, toys, apparel and foods. As of September 18, 2014, the Company operated 633 Cracker Barrel stores located in 42 states and had 8,473 shareholders of record. Restaurant and Retail Industries Our stores operate in both the restaurant and retail industries in the United States. The restaurant and retail industries are highly competitive with respect to quality, variety and price of the food products and retail merchandise offered. We compete with a significant number of national and regional restaurant and retail chains. Additionally, there are many segments within the restaurant industry, such as family dining, casual dining, fast casual and quick service, which often overlap and provide competition for widely diverse restaurant concepts. We operate in the full-service segment of the restaurant industry. Competition also exists in securing prime real estate locations for new stores, in hiring qualified employees, in advertising, in the attractiveness of facilities and with competitors having similar menu offerings or convenience. The restaurant and retail industries are often affected by changes in consumer taste and preference; national, regional or local economic conditions; demographic trends; traffic patterns; the type, number and location of competing restaurants and retailers; and consumers' discretionary purchasing power. Additionally, economic, seasonal and weather conditions affect the restaurant and retail industries. Adverse economic conditions and unemployment rates affect consumer discretionary income and dining and shopping habits. Historically, interstate tourist traffic and the propensity to dine out have been much higher during the summer months, thereby contributing to higher profits in our fourth quarter. Retail sales, which are made substantially to our restaurant guests, are strongest in the second quarter, which includes the Christmas holiday shopping season. Severe weather also affects restaurant and retail sales adversely from time to time. Key Performance Indicators Management uses a number of key performance measures to evaluate our operational and financial performance, including the following: Comparable store restaurant sales and restaurant guest traffic consist of sales and calculated number of guests, respectively, 14 CB Financials_8-14_03.indd 14 9/24/14 6:06 PM of stores open at least six full quarters at the beginning of the year and are measured on comparable calendar weeks. This measure excludes the impact of new store openings. Percentage of retail sales to total sales indicates the relative proportion of spending by guests on retail product at our stores and helps identify overall effectiveness of our retail operations. Management uses this measure to analyze a store's ability to convert restaurant traffic into retail sales since we believe that the substantial majority of our retail customers are also guests in our restaurants. Average check per guest is an indicator which management uses to analyze the dollars spent per guest in our stores on restaurant purchases. This measure aids management in identifying trends in guest preferences as well as the effectiveness of menu price increases and other menu changes. Store operating margins are defined as total revenue less cost of goods sold, labor and other related expenses and other store operating expenses, all as a percentage of total revenue. Management uses this indicator as a primary measure of operating profitability. Company Performance in 2014 Management believes that the Cracker Barrel brand remains one of the strongest and most differentiated brands in the restaurant industry. During 2014, we focused on five key business priorities which were based on our previously announced long-term strategy. Our long-term strategy includes the following: Enhancing the core business by increasing our brand's relevance to customers in order to drive guest traffic and sales in both restaurant and retail, implementing geographic pricing tiers to optimize average check and re-engineering store processes to increase operating margins. Expanding the footprint through continued use of our proven site selection tools, introducing a new and more efficient building and equipment prototype and the selective entry into new markets. Extending the brand by building on the initial success of our licensing business, leveraging our brand strengths into a new fast casual concept and growing our retail business into an omni-channel business. Our five priorities for 2014 were to: 1) Focus on better-for-you additions to and reinforce everyday value on our menu. In the first quarter of 2014, we rolled-out a new menu category, Wholesome Fixin's, to meet our guests' desire for additional healthy menu items. The Wholesome Fixin's launch introduced nine complete meals for fewer than 600 calories. We believe that our guests responded positively to the new menu category. Throughout the year, we built upon the Wholesome Fixin's category through our limited time promotional offerings. We reinforced the affordability of our menu by featuring two new limited time Weekday Lunch Special entrees at $5.99. Additionally, we continued to highlight our Country Dinner Plates at a $7.69 price point, which we believe further enhances the value perception of our menu. 2) Continue messaging with our Handcrafted by Cracker Barrel theme in support of the brand, menu and merchandise. To help build awareness and support of the Wholesome Fixin's roll-out, we promoted the menu category with new television and radio commercials which ran for five weeks during our first quarter of 2014. During the holiday season, we highlighted the Cracker Barrel brand and our value message through national cable television advertising. In support of the summer travel season, we again featured our Country Dinner Plate value messaging during a national television commercial campaign. Additionally, we continued to promote the Cracker Barrel brand through our more than 1,600 billboards. During the fourth quarter of 2014, we refreshed approximately one-fourth of our billboards with new price-point messaging around our $5.99 and $7.69 value positions at both lunch and dinner, respectively. 3) Drive retail sales with improved quality and breadth of our merchandise assortment. During 2014, we increased the number of merchandise themes that we feature each year and shortened their time on the floor in order to keep the merchandise assortment fresh and new. 15 CB Financials_8-14_03.indd 15 9/24/14 6:06 PM We introduced some eye-catching color themes, with bright dcor, home goods, and women's clothing, which we believe resonated well with our guests. Additionally, our merchandising team broadened the appeal of the brand by sourcing products that have seasonal appeal and reach across the generations and genders. Our women's apparel and accessories continued to be one of our strongest selling categories. To build upon the strength of this category, we introduced women's footwear providing depth to the assortment. 4) Apply technology and process enhancements to improve the employee experience, the guest experience and operating margins. At the beginning of 2014, we held a General Manager's conference. This conference provided a platform for the introduction and training of several new technology-based programs, including the second phase of our labor management system. We also trained all of our retail managers on improved selling techniques. Other process and technology improvements during the year included an enhancement to our food production system to automate inventory labeling which resulted in increased productivity and through-put which we believe allows us to continue a very strong value platform. Guest survey responses to overall value once again measured a year-over-year increase. 5) Focus on enhancing long-term total shareholder returns. In 2014, we increased our regular quarterly dividend, continued to expand our store footprint, and began extending the brand beyond our existing stores. In the third quarter of 2014, we declared a 33% increase in our regular quarterly dividend to $1.00. This marks the fourth increase in the quarterly dividend since November 2011, generating a total increase of 400% over that time period. We opened seven new Cracker Barrel stores during the year bringing our total store count at the end of 2014 to 631. In the first quarter of 2014, we launched our licensing platform with John Morrell Food Group under our new trademark, CB Old Country Store. We believe that our licensed products have been well received at the grocery stores, and at the end of 2014 we had 19 products available through our licensing program. We believe the successful implementation of these five priorities resulted in our revenue growth during the year, positive comparable store restaurant and retail sales for the year with both comparable store traffic and sales outperforming the Knapp-Track Casual Dining Index for the year, and higher operating margin and profit as compared to the prior year. All of these were accomplished despite the pressures from widespread discounting within the restaurant industry, the challenges from a continuing uncertain consumer environment and severe winter weather. RESULTS OF OPERATIONS The following table highlights operating results over the past three years: Relationship to Total Revenue 2014 2013\t2012* Total revenue 100.0% 100.0% 100.0% Cost of goods sold 32.5 32.3 32.1 Gross profit 67.5 67.7 67.9 Labor and other related expenses 36.0 36.5 36.8 Other store operating expenses 18.9 18.2 18.0 Store operating income 12.6 13.0 13.1 General and administrative 4.8 5.4 5.7 Operating income 7.8 7.6 7.4 Interest expense 0.7 1.3 1.7 Income before income taxes 7.1 6.3 5.7 Provision for income taxes 2.2 1.9 1.7 Net income 4.9 4.4 4.0 * 2012 consists of 53 weeks while the other periods presented consist of 52 weeks. 16 CB Financials_8-14_03.indd 16 9/24/14 6:06 PM Total Revenue The following table highlights the key components of revenue for the past three years: 2014 2013 2012 Revenue in dollars: Restaurant $\t2,137,405 $\t2,104,768 $\t2,054,127 Retail 546,272 539,862 526,068 Total revenue $\t2,683,677 $\t2,644,630 $\t2,580,195 Total revenue percentage increase (1) 1.5% 2.5% 6.0% Total revenue by percentage relationships: Restaurant 79.6% 79.6% 79.6% Retail 20.4% 20.4% 20.4% Comparable number of stores 609 596 591 Comparable store averages per store: (2) Restaurant $ 3,422\t$ 3,409\t$ 3,375 Retail 871 871 861 Total $ 4,293\t$ 4,280\t$ 4,236 Restaurant average weekly sales (3) $ 65.7\t$ 65.2\t$ 63.6 Retail average weekly sales (3) 16.8 16.7 16.3 (1) (1) 2012 consists of 53 weeks while the other periods presented consist of 52 weeks. (2) 2012 is calculated on a 53-week basis while the other periods are calculated on a 52-week basis. (3) Average weekly sales are calculated by dividing net sales by operating weeks and include all stores. Total revenue benefited from the opening of 7, 8 and 13 stores in 2014, 2013 and 2012, respectively. Total revenue in 2012 also benefited from the additional week in 2012, which resulted in an increase in revenues of $51,059. The following table highlights comparable store sales* results over the past two years: Period to Period Increase 2014 vs 2013 2013 vs 2012 (609 Stores) (596 Stores) Restaurant 0.7% 3.1% Retail 0.4 2.9 Restaurant & Retail 0.6 3.0 * Comparable store sales consist of sales of stores open at least six full quarters at the beginning of the year and are measured on comparable calendar weeks. Our comparable store restaurant sales increased from 2013 to 2014 resulting from a higher average check of 2.6%, including a 2.1% average menu price increase, partially offset by a decrease in guest traffic of 1.9%. Our comparable store restaurant sales increased from 2012 to 2013 resulting from a higher average check of 2.5%, including a 2.2% average menu price increase, and an increase in guest traffic of 0.6%. The comparable store retail sales increase from 2013 to 2014 resulted primarily from strong performance in apparel and accessories and home dcor merchandise categories partially offset by a decline in the bed and bath merchandise category and the decrease in guest traffic. The comparable store retail sales increase from 2012 to 2013 resulted primarily from strong performance in apparel and accessories merchandise category and the increase in guest traffic. Cost of Goods Sold The following table highlights the components of cost of goods sold in dollar amounts for the past three years: 2014 2013 2012* Cost of Goods Sold: Restaurant $\t589,390 $\t571,825 $\t553,478 Retail 283,368 282,859 274,006 Total Cost of Goods Sold $\t872,758 $\t854,684 $\t827,484 * 2012 consists of 53 weeks while all other periods presented consist of 52 weeks. The following table highlights restaurant cost of goods sold as a percentage of restaurant revenue for the past three years: 2014 2013 2012 Restaurant Cost of Goods Sold 27.6% 27.2% 26.9% The increase from 2013 to 2014 was primarily the result of food commodity inflation of 1.8%, a shift to higher cost menu items and higher food waste partially offset by our menu price increase referenced above. Higher cost menu items and higher food waste accounted for 0.3% and 0.1%, respectively, in restaurant cost of goods sold as a percentage of restaurant revenue. The increase from 2012 to 2013 was primarily the result of food commodity inflation of 3.4% partially offset by our menu price increase referenced above and a reduction in food waste. The reduction in food waste from 2012 to 2013 17 CB Financials_8-14_03.indd 17 9/24/14 6:06 PM accounted for a 0.2% decrease in restaurant cost of goods sold as a percentage of restaurant revenue. We presently expect the rate of commodity inflation to be approximately 4% to 5% in 2015 as compared to 2014. We expect to partially offset the effects of food commodity inflation through a combination of menu price increases, supply contracts and other cost reduction initiatives. The following table highlights retail cost of goods sold as a percentage of retail revenue for the past three years: 2014 2013 2012 Retail Cost of Goods Sold 51.9% 52.4% 52.1% The decrease in retail cost of goods sold as a percentage of retail revenue in 2014 as compared to 2013 resulted primarily from lower freight, higher initial markup on retail merchandise, lower shrinkage and a reduction in the obsolescence inventory reserve partially offset by higher markdowns. 2013 to 2014 (Decrease) Increase as a Percentage of Total Revenue Freight (0.4%) Higher initial markup on merchandise (0.2%) Retail inventory shrinkage (0.1%) Obsolescence inventory reserve (0.1%) Markdowns 0.4% The increase in retail cost of goods sold as a percentage of retail revenue in 2013 as compared to 2012 resulted from lower initial markup on retail merchandise partially offset by lower freight and shrinkage. 2012 to 2013 Increase (Decrease) as a Percentage of Total Revenue Lower initial markup on merchandise 0.6% Freight (0.2%) Retail inventory shrinkage (0.1%) Labor and Related Expenses Labor and other related expenses include all direct and indirect labor and related costs incurred in store operations. The following table highlights labor and other related expenses as a percentage of total revenue for the past three years: 2014 Labor and other related expenses 2013 2012 36.0% 36.5% 36.8% The year-to-year percentage change from 2013 to 2014 resulted from the following: 2013 to 2014 (Decrease) as a Percentage of Total Revenue Store bonus expense Employee health care expenses Store hourly labor (0.3%) (0.1%) (0.1%) Lower store bonus expense in 2014 as compared to 2013 reflected lower performance against financial objectives in 2014 as compared to the prior year. The decrease in our employee health care expenses as compared to the prior year is primarily the result of the reimbursement of approximately $4,700 for certain health care premiums related to the plan year ending December 31, 2013 partially offset by higher enrollment and higher net premium costs related to the plan year ending December 31, 2014. During 2014, we recorded a receivable of $6,200 for reimbursement of certain health care premiums related to the plan year ending December 31, 2014 of which $3,600 reduced employee health care expenses in 2014. We presently expect to record an additional reimbursement of approximately $2,000 to $4,000 in 2015 related to the plan year ending December 31, 2014. The decrease in store hourly labor costs as a percentage of total revenue from 2013 to 2014 resulted from menu price increases being higher than wage inflation and improved productivity. The year-to-year percentage change from 2012 to 2013 resulted from the following: 2012 to 2013 (Decrease) Increase as a Percentage of Total Revenue Store hourly labor Store bonus expense (0.5%) 0.2% The decrease in store hourly labor costs as a percentage of total revenue from 2012 to 2013 resulted from menu price increases being higher than wage inflation and improved productivity. Higher store bonus expense in 2013 as compared to 2012 reflected better performance against financial objectives in 2013 as compared to the prior year. 18 CB Financials_8-14_03.indd 18 9/24/14 6:06 PM Other Store Operating Expenses Other store operating expenses include all store-level operating costs, the major components of which are utilities, operating supplies, repairs and maintenance, depreciation and amortization, advertising, rent, credit card fees, real and personal property taxes and general insurance. The following table highlights other store operating expenses as a percentage of total revenue for the past three years: 2014 Other store operating expenses 2013 2012 18.9% 18.2% 18.0% The increase in advertising expense from 2012 to 2013 resulted primarily from higher media spending. Higher maintenance expenses resulted primarily from planned increases in nationally managed repair and preventative maintenance programs. Lower utilities expense resulted primarily from lower electricity costs. General and Administrative Expenses The following table highlights general and administrative expenses as a percentage of total revenue for the past three years: 2014 The year-to-year percentage change from 2013 to 2014 resulted primarily from the following: 2013 to 2014 Increase as a Percentage of Total Revenue Utilities 0.1% Advertising 0.1% Store manager conference expense 0.1% Maintenance 0.1% The increase in utilities expense from 2013 to 2014 resulted primarily from higher heating costs due to unseasonably cold weather experienced at many of our store locations during the winter months in 2014. The increase in advertising expense from 2013 to 2014 resulted primarily from higher media spending. We plan to spend approximately 2.5% of our total revenue on advertising in 2015 compared to 2.4% of total revenue in 2014. In the first quarter of 2014, we held a general manager conference which was attended by our store operations management team. The last such conference was held during the first quarter of 2012 and the next conference is scheduled to be held in the first quarter of 2016. Higher maintenance expenses resulted primarily from increases in lighting replacement costs, snow removal, kitchen equipment repairs and national inspection and repair programs. The year-to-year percentage change from 2012 to 2013 resulted from the following: 2012 to 2013 Increase (Decrease) as a Percentage of Total Revenue General and administrative expenses 2013 4.8% 2012 5.4% 5.7% The year-to-year percentage change from 2013 to 2014 resulted primarily from lower incentive compensation. Lower incentive compensation in 2014 as compared to 2013 resulted primarily from lower performance against financial objectives as compared to the prior year and a decrease in the price of our common stock in 2014. The year-to-year percentage change from 2012 to 2013 resulted from the following: 2012 to 2013 (Decrease) as a Percentage of Total Revenue Payroll and related expenses Manager conference expense (0.2%) (0.1%) Lower payroll and related expenses in 2013 as compared to 2012 resulted primarily from fewer store managers in training due to lower turnover and our opening fewer stores in 2013 as compared to 2012. The decrease in general and administrative expenses in 2013 as compared to 2012 also resulted from the non-recurrence of expenses associated with a biannual manager conference which was held in the first quarter of 2012. Interest Expense The following table highlights interest expense for the past three years: 2014 2013 Interest expense $\t17,557 $\t35,742 2012 $\t44,687 Advertising 0.1% Maintenance 0.1% Litigation settlement received in 2012 0.1% Utilities (0.1%) 19 CB Financials_8-14_03.indd 19 9/24/14 6:06 PM The year-to-year decrease from 2013 to 2014 resulted primarily from lower interest rates because of the expiration of our seven-year interest rate swap on May 3, 2013, which had a fixed interest rate of 5.57% plus our credit spread and lower debt outstanding. The year-to-year decrease from 2012 to 2013 resulted primarily from lower debt outstanding and lower interest rates because of a reduction in our credit spread and the expiration of our seven-year interest rate swap on May 3, 2013, which had a fixed interest rate of 5.57% plus our credit spread. Provision for Income Taxes The following table highlights the provision for income taxes as a percentage of income before income taxes (\"effective tax rate\") for the past three years: 2014 Effective tax rate 2013 2012 30.8% 29.3% 29.5% The increase in our effective tax rate from 2013 to 2014 resulted primarily from the expiration of the Work Opportunity Tax Credit (\"WOTC\") as of December 31, 2013. The decrease in our effective tax rate from 2012 to 2013 resulted primarily from the retroactive extension by Congress of the WOTC through the end of calendar 2013 partially offset by the increase in pretax income. We presently expect our effective tax rate for 2015 to be between 32% and 33%. This estimate assumes that the WOTC, which expired on December 31, 2013, is not renewed. We estimate that the renewal of the WOTC could reduce our provision for income taxes by $5,000 to $6,000 in 2015. LIQUIDITY AND CAPITAL RESOURCES The following table presents a summary of our cash flows for the last three years: 2014 2013 2012 Net cash provided by operating activities $\t177,625 $ 208,499 $\t219,822 Net cash used in investing activities (88,815) (73,406) (79,547) Net cash used in financing activities (91,167) (165,337) (40,587) Net (decrease) increase in cash and cash equivalents $ (2,357) $ (30,244) $ 99,688 Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under our revolving credit facility. Our internally generated cash, along with cash on hand at August 2, 2013, was sufficient to finance all of our growth, dividend payments, working capital needs, share repurchases and other cash payment obligations in 2014. We believe that cash at August 1, 2014, along with cash expected to be generated from our operating activities and the borrowing capacity under our revolving credit facility will be sufficient to finance our continuing operations, our continuing expansion plans and our expected dividend payments for 2015. Cash Generated from Operations The decrease in net cash flow provided by operating activities from 2013 to 2014 reflected the timing of payments for accounts payable and higher retail inventories. Higher retail inventories at the end of 2014 resulted primarily from the early receipt of holiday and other merchandise and lower than anticipated sales in 2014. The decrease in net cash flow provided by operating activities from 2012 to 2013 reflected higher annual and long-term incentive bonus payments and related taxes made in 2013 as a result of the prior year's performance and the timing of payments for income taxes partially offset by higher net income and the timing of payments for interest and accounts payable. 20 CB Financials_8-14_03.indd 20 9/24/14 6:06 PM Capital Expenditures The following table presents our capital expenditures (purchase of property and equipment), net of proceeds from insurance recoveries, for the last three years: 2014 2013\t2012 Capital expenditures, net of proceeds from insurance recoveries $\t90,564 $\t73,961 $\t80,170 Our capital expenditures consisted primarily of costs of new store locations and capital expenditures for maintenance programs. The increase in capital expenditures from 2013 to 2014 resulted primarily from an increase in the number of new store locations acquired and under construction as compared to the prior year and higher maintenance capital expenditures due to our aging store base. The decrease in capital expenditures from 2012 to 2013 resulted primarily from a decrease in the number of new store locations acquired and under construction as compared to the prior year partially offset by higher capital expenditures for operational initiatives and maintenance programs. We estimate that our capital expenditures during 2015 will be between $100,000 and $110,000. This estimate includes the acquisition of sites and construction costs of approximately six or seven new stores that will open during 2015, as well as acquisition and construction costs for store locations to be opened in 2016. We also expect to increase capital expenditures for maintenance programs related to our aging store base and technology and operational improvements, which are intended to improve the guest experience and improve margins. We intend to fund our capital expenditures with cash generated by operations and borrowings under our revolving credit facility, as necessary. Borrowing Capacity and Debt Covenants In July 2011, we entered into a five-year $750,000 credit facility (the \"Credit Facility\") consisting of a $250,000 term loan (aggregate principal amount outstanding at both August 1, 2014 and August 2, 2013 was $187,500) and a $500,000 revolving credit facility (\"the Revolving Credit Facility\"). The Credit Facility expires on July 8, 2016. We currently plan to refinance the Credit Facility before the end of 2015. The following table highlights our borrowing capacity and outstanding borrowings under the Revolving Credit Facility, our standby letters of credit and our borrowing availability under the Revolving Credit Facility as of August 1, 2014: August 1, 2014 Borrowing capacity under the Revolving Credit Facility $\t500,000 Less: Outstanding borrowings under the Revolving Credit Facility 212,500 Less: Standby letters of credit* 20,637 Borrowing availability under the Revolving Credit Facility $\t266,863 * Our standby letters of credit relate to securing reserved claims under workers' compensation insurance and reduce our borrowing availability under the Revolving Credit Facility. We prepaid our 2014 required principal payments under our term loan in 2013. As a result, we did not make any debt payments under our Credit Facility in 2014. We reduced our borrowings under our Credit Facility by $125,000 and $25,000 in 2013 and 2012, respectively, by making optional prepayments using excess cash generated from operations. See \"Material Commitments\" below and Note 5 to our Consolidated Financial Statements for further information on our long-term debt. The Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio. We presently are and expect to remain in compliance with the Credit Facility's financial covenants for the remaining term of the facility. Dividends, Share Repurchases and Share-Based Compensation Awards Our Credit Facility imposes restrictions on the amount of dividends we are permitted to pay and the amount of shares we are permitted to repurchase. Provided there is no default existing and the total of our availability under the Revolving 21 CB Financials_8-14_03.indd 21 9/24/14 6:06 PM Credit Facility plus our cash and cash equivalents on hand is at least $100,000 (the \"liquidity requirements\"), we may declare and pay cash dividends on shares of our common stock and repurchase shares of our common stock if the aggregate amount of dividends paid and shares repurchased during any fiscal year is less than the sum of (1) 20% of Consolidated EBITDA from continuing operations (as defined in the Credit Facility) (the \"20% limitation\") during the immediately preceding fiscal year and (2) provided our consolidated total leverage ratio is 3.25 to 1.00 or less, $100,000 (less the amount of any share repurchases during the current fiscal year). In any event, as long as the liquidity requirements are met, dividends may be declared and paid in any fiscal year up to the amount of dividends permitted and paid in the preceding fiscal year without regard to the 20% limitation. During the first three quarters of 2014, we declared a quarterly dividend of $0.75 per share of our common stock. Additionally, during the third quarter of 2014, we increased our quarterly dividend by 33% by declaring a dividend of $1.00 per share payable on August 5, 2014 to shareholders of record on July 18, 2014. The following table highlights the dividends per share we paid for the last three years: 2014 2013 2012 Dividends per share paid $\t3.00 $\t1.90 $\t0.97 Our current criteria for share repurchases are that they be accretive to expected net income per share and are within the limits imposed by our Credit Facility. Under our Credit Facility, we may repurchase shares up to a maximum amount of $100,000 less the amount of dividends paid provided the liquidity requirements are met. Subject to the limits imposed by the Credit Facility, in 2014, 2013 and 2012, we were authorized by our Board of Directors to repurchase shares at the discretion of management up to $50,000, $100,000 and $65,000, respectively. The following table highlights our share repurchases for the last three years: 2014 2013 2012 Shares of common stock repurchased 120,000 44,300 265,538 Cost of shares repurchased $ 12,473 $ 3,570 $ 14,923 In 2014, related tax withholding payments on certain share-based compensation awards exceeded proceeds received from the exercise of stock options which resulted in a net use of cash of $8,457. In 2013 and 2012, proceeds received from the exercise of share-based compensation awards were $6,454 and $17,602, respectively. Working Capital In the restaurant industry, substantially all sales are either for cash or third-party credit card. Like many other restaurant companies, we are able to, and often do, operate with negative working capital. Restaurant inventories purchased through our principal food distributor are on terms of net zero days, while other restaurant inventories purchased locally are generally financed through trade credit at terms of 30 days or less. Because of our gift shop, which has a lower product turnover than the restaurant, we carry larger inventories than many other companies in the restaurant industry. Retail inventories are generally financed through trade credit at terms of 60 days or less. These various trade terms are aided by rapid turnover of the restaurant inventory. Employees generally are paid on weekly or semi-monthly schedules in arrears for hours worked except for bonuses that are paid either quarterly or annually in arrears. Many other operating expenses have normal trade terms and certain expenses such as certain taxes and some benefits are deferred for longer periods of time. The following table highlights our working capital: 2014 Working capital (deficit) $\t(14,789) 2013 $\t(13,873) 2012 $\t18,249 The change in working capital at August 1, 2014 compared to August 2, 2013 primarily reflected our current maturities on our debt, the increase in our dividend payable, an increase in deferred revenue related to the sales of our gift cards and 22 CB Financials_8-14_03.indd 22 9/24/14 6:06 PM the current portion of our interest rate swaps partially offset by higher retail inventory and the timing of payments for accounts payable and estimated income taxes. The change in working capital at August 2, 2013 compared to August 3, 2012 primarily reflected a decrease in cash due to optional debt payments and higher dividend payments in 2013. Off-Balance Sheet Arrangements Other than various operating leases, which are disclosed more fully in \"Material Commitments\" below and Notes 2 and 9 to our Consolidated Financial Statements, we have no other material off-balance sheet arrangements. Material Commitments Our contractual cash obligations and commitments as of August 1, 2014, are summarized in the tables below: Contractual Obligations (a) Total 2015 Payments due by Year 2016-2017 2018-2019 After 2019 Term loan (b) $\t187,500\t$\t25,000\t$ 162,500 Revolving Credit Facility (b) 212,500 212,500 Operating leases (c) 755,649 60,569 92,800\t$ 83,518\t$ 518,762 Purchase obligations (d) 97,991 61,985 24,899 11,107 Other long-term obligations (e) 34,308 1,803 5,912 207 26,386 Total contractual cash obligations $1,287,948\t$ 149,357\t$ 498,611\t$ 94,832\t$ 545,148 Total Amount of Commitment Expirations by Year 2015 2016-2017 2018-2019 After 2019 Revolving Credit Facility (b) $\t500,000 $\t500,000 Standby letters of credit (f) 20,637\t$ 1,070 19,567 Guarantees (g) 659 111 235\t$ 235 $ 78 Total commitments $\t521,296 $\t1,181 $\t519,802 $\t235 $\t78 (a) At August 1, 2014, the entire liability for uncertain tax positions (including penalties and interest) is classified as a long-term liability. At this time, we are unable to make a reasonably reliable estimate of the amounts and timing of payments in individual years because of uncertainties in the timing of the effective settlement of tax positions. As such, the liability for uncertain tax positions of $31,391 is not included in the contractual cash obligations and commitments table above. (b) Our term loan is payable on or before July 8, 2016 and our Revolving Credit Facility expires on July 8, 2016. Even though our current credit facility expires in 2016, we have the intent and ability to refinance our debt to maintain a sufficient amount of outs