Chili's 2012 Annual Report Download - page 67

100% of their eligible bonuses, as defined in the plan, to various investment funds. We match in cash at a rate of
100% of the first 3% an employee contributes and 50% of the next 2% the employee contributes with immediate
vesting. In fiscal 2012, 2011, and 2010, we contributed approximately $6.7 million, $6.3 million, and $7.3
million, respectively.
We also sponsor a non-qualified defined contribution plan covering a select group of highly compensated
employees, as defined in the plan. Eligible employees are allowed to defer receipt of up to 50% of their base
compensation and bonus, as defined in the plan. There is no company match, but employee contributions earn
interest based on a rate determined and announced in November prior to the start of the plan year. Employee
contributions and earnings thereon vest immediately. A Rabbi Trust is used to fund obligations of the
non-qualified plan. The market value of the trust assets is included in other assets and the liability to plan
participants is included in other liabilities.
13. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and income taxes is as follows (in thousands):
2012 2011 2010
Income taxes, net of refunds ....................... $47,514 $38,340 $20,052
Interest, net of amounts capitalized .................. 24,455 25,810 23,923
Non-cash investing activities are as follows (in thousands):
2012 2011 2010
Retirement of fully depreciated assets ................ $77,249 $60,175 $45,854
14. CONTINGENCIES
In connection with the sale of restaurants to franchisees and brand divestitures, we have, in certain cases,
guaranteed lease payments. As of June 27, 2012 and June 29, 2011, we have outstanding lease guarantees or are
secondarily liable for $142.6 million and $166.1 million, respectively. This amount represents the maximum
potential liability of future payments under the guarantees. These leases have been assigned to the buyers and
expire at the end of the respective lease terms, which range from fiscal 2013 through fiscal 2023. In the event of
default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover
damages incurred. No material liabilities have been recorded as of June 27, 2012.
In August 2004, certain current and former hourly restaurant team members filed a putative class action
lawsuit against us in California Superior Court alleging violations of California labor laws with respect to meal
periods and rest breaks. The lawsuit sought penalties and attorney’s fees and was certified as a class action by the
trial court in July 2006. In July 2008, the California Court of Appeal decertified the class action on all claims
with prejudice. In October 2008, the California Supreme Court granted a writ to review the decision of the Court
of Appeal and oral arguments were heard by the California Supreme Court on November 8, 2011. On April 12,
2012, the California Supreme Court issued an opinion affirming in part, reversing in part, and remanding in part
for further proceedings. The California Supreme Court’s opinion resolved many of the legal standards for meal
periods and rest breaks in our California restaurants and we intend to vigorously defend our position on the
remaining issues upon remand to the trial court. It is not possible at this time to reasonably estimate the possible
loss or range of loss, if any.
We are engaged in various other legal proceedings and have certain unresolved claims pending. Reserves
have been established based on our best estimates of our potential liability in certain of these matters. Based upon
consultation with legal counsel, Management is of the opinion that there are no matters pending or threatened
which are expected to have a material adverse effect, individually or in the aggregate, on our consolidated
financial condition or results of operations.
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