Red Lobster 2010 Annual Report Download - page 52

the consolidated statements of earnings. Receivables from national retail
outlets and national storage and distribution companies amounted to $42.7
million and $34.4 million at May 30, 2010 and May 31, 2009, respectively.
The allowance for doubtful accounts associated with all of our receivables
amounted to $3.6 million at May 30, 2010 and May 31, 2009.
NOTE 4
ASSET IMPAIRMENT, NET
During fiscal 2010 we recorded $6.2 million of long-lived asset impairment
charges primarily related to the write-down of assets held for disposition
based on updated valuations, the permanent closure of three Red Lobsters
and three LongHorn Steakhouses and the write-down of two LongHorn
Steakhouses and one Olive Garden based on an evaluation of expected cash
flows. During fiscal 2009 we recorded $12.0 million of long-lived asset
impairment charges primarily related to the write-down of assets held for
disposition, the permanent closure of one LongHorn Steakhouse and the
write-down of another LongHorn Steakhouse based on an evaluation of
expected cash flows. During fiscal 2008 we recorded no long-lived asset
impairment charges. These costs are included in asset impairment, net as
a component of earnings from continuing operations in the accompanying
consolidated statements of earnings for fiscal 2010, 2009 and 2008. Impair-
ment charges were measured based on the amount by which the carrying
amount of these assets exceeded their fair value. Fair value is generally
determined based on appraisals or sales prices of comparable assets and
estimates of future cash flows.
The results of operations for all Red Lobster, Olive Garden and LongHorn
Steakhouse restaurants permanently closed in fiscal 2010, 2009 and 2008
that would otherwise have met the criteria for discontinued operations reporting
are not material to our consolidated financial position, results of operations or
cash flows and, therefore, have not been presented as discontinued operations.
NOTE 5
LAND, BUILDINGS AND EQUIPMENT, NET
The components of land, buildings and equipment, net, are as follows:
(in millions) May 30, 2010 May 31, 2009
Land $ 775.2 $ 769.1
Buildings 3,371.6 3,078.8
Equipment 1,385.5 1,302.8
Assets under capital leases 68.6 68.6
Construction in progress 135.6 209.8
Total land, buildings and equipment 5,736.5 5,429.1
Less accumulated depreciation and amortization (2,323.3) (2,116.5)
Less amortization associated
with assets under capital leases (9.5) (5.9)
Land, buildings and equipment, net $ 3,403.7 $ 3,306.7
Our restaurant support center facility houses all of our executive offices,
shared service functions and brand administrative personnel. On August 24,
2006, we completed the sale and leaseback of our previous restaurant
support center facility for $45.2 million. The transaction was completed in
anticipation of moving the restaurant support center facility to a new facility
which occurred approximately three years from the date of sale. As a result of
the sale and subsequent leaseback of the restaurant support center facility,
we recorded a $15.2 million deferred gain, which was recognized over the
three-year leaseback period on a straight-line basis. During fiscal 2010, fiscal
2009 and fiscal 2008, we recognized gains of $2.7 million, $4.6 million and
$5.1 million, respectively, on the sale of the restaurant support center facility,
which is included as a reduction of selling, general and administrative
expenses in our consolidated statements of earnings.
NOTE 6
OTHER ASSETS
The components of other assets are as follows:
(in millions) May 30, 2010 May 31, 2009
Trust-owned life insurance $ 52.8 $ 35.7
Capitalized software costs, net 23.6 22.7
Liquor licenses 42.3 40.9
Acquired below-market leases, net 18.9 21.5
Loan costs, net 14.3 16.8
Marketable securities 31.7 38.6
Miscellaneous 10.3 14.4
Total other assets $193.9 $190.6
NOTE 7
SHORT-TERM DEBT
As of May 30, 2010 we had no short-term debt outstanding. As of May 31,
2009, short-term debt consisted of $150.0 million of borrowings under the
Revolving฀Credit฀Agreement฀(as฀defined฀in฀Note฀9฀–฀Long-Term฀Debt).฀
NOTE 8
OTHER CURRENT LIABILITIES
The components of other current liabilities are as follows:
(in millions) May 30, 2010 May 31, 2009
Non-qualified deferred compensation plan $158.1 $132.1
Sales and other taxes 51.5 61.0
Insurance-related 80.7 75.6
Miscellaneous 50.3 63.1
Employee benefits 32.9 23.5
Accrued interest 17.7 17.0
Total other current liabilities $391.2 $372.3
50 DARDEN RESTAURANTS, INC. | 2010 ANNUAL REPORT
Notes to Consolidated Financial Statements
Darden