Chili's 2015 Annual Report Download - page 62

4. OTHER GAINS AND CHARGES
Other gains and charges consist of the following (in thousands):
2015 2014 2013
Litigation ...................................... $(2,753) $39,500 $ 0
Restaurant impairment charges ..................... 2,255 4,502 5,276
Restaurant closure charges ........................ 1,736 3,413 3,637
Severance and other benefits ....................... 1,182 2,140 2,235
Acquisition costs ................................ 1,100 0 0
Loss (gain) on the sale of assets, net ................. 1,093 (608) (11,228)
Impairment of franchise rights ..................... 440 0 0
Impairment of liquor licenses ...................... 205 0 170
Loss on extinguishment of debt ..................... 0 0 15,768
Other ......................................... (494) 277 1,442
$ 4,764 $49,224 $ 17,300
During fiscal 2015, we were a plaintiff in the antitrust litigation against Visa and MasterCard styled as
Progressive Casualty Insurance Co., et al. v. Visa, Inc., et al. A settlement agreement was fully executed by all
parties in January 2015 and we recognized a gain of approximately $8.6 million.
During fiscal 2015, the class action lawsuit styled as Hohnbaum, et al. v. Brinker Restaurant Corp., et al.
(“Hohnbaum case”) was finalized resulting in an additional charge of approximately $5.8 million to adjust our
previous estimate of the final settlement amount. See Note 14 for additional disclosures.
We recorded restaurant impairment charges of $2.3 million related to underperforming restaurants that
either continue to operate or are scheduled to close. We also recorded restaurant closure charges of $1.7 million
primarily related to lease termination charges and a $1.1 million loss primarily related to the sale of two company
owned restaurants located in Mexico. Furthermore, we incurred $1.2 million in severance other benefits related
to organizational changes made during the fiscal year. The severance charges include expense related to the
accelerated vesting of stock-based compensation awards. We also incurred expenses of approximately $1.1
million during fiscal 2015 related to the acquisition of a franchisee which owns 103 Chili’s restaurants
subsequent to the end of the year. See Note 16 for additional disclosures.
Other gains and charges in fiscal 2014 includes charges of approximately $39.5 million related to various
litigation matters including the Hohnbaum case. See Note 14 for additional disclosures.
During fiscal 2014, we recorded restaurant impairment charges of $4.5 million related to underperforming
restaurants that either continue to operate or are scheduled to close. We also recorded $3.4 million of restaurant
closure charges consisting primarily of lease termination charges and other costs associated with closed
restaurants. Additionally, we incurred $2.1 million in severance and other benefits related to organizational
changes made during the fiscal year. The severance charges include expense related to the accelerated vesting of
stock-based compensation awards. Furthermore, a $0.6 million gain was recorded primarily related to land sales.
In June 2013, we redeemed the 5.75% notes due May 2014, resulting in a charge of $15.8 million
representing the remaining interest payments and unamortized debt issuance costs and discount.
During fiscal 2013, we recorded restaurant impairment charges of $5.3 million primarily related to the
impairment of the company-owned restaurant in Brazil which subsequently closed in fiscal 2014. We also
recorded $3.6 million of restaurant closure charges, consisting primarily of $2.3 million of lease termination
charges and $0.9 million related to the write-down of land associated with a closed facility. Additionally, we
incurred $2.2 million in severance and other benefits related to organizational changes. The severance charges
F-26