Chili's 2007 Annual Report Download - page 73

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The components of basic and diluted earnings per share are as follows (in thousands, except per share
amounts):
2007 2006 2005
Income from continuing operations (w) ......... $230,049 $213,950 $158,456
Adjustment for interest on convertible debt, net of
tax.................................. ——2,650
Income from continuing operations—as adjusted
(x) .................................. $230,049 $213,950 $161,106
Basic weighted average shares outstanding (y) .... 121,062 128,766 132,795
Dilutive effect of stock options and restricted share
awards ............................... 3,054 2,168 1,901
Dilutive effect of convertible debt ............. ——6,648
Diluted weighted average shares outstanding (z) . . . 124,116 130,934 141,344
Basic earnings per share from continuing
operations (w)/(y) ....................... $ 1.90 $ 1.66 $ 1.19
Diluted earnings per share from continuing
operations (x)/(z) ....................... $ 1.85 $ 1.63 $ 1.14
(t) Segment Reporting
Operating segments are components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. SFAS No. 131, ‘‘Disclosures about Segments of an Enterprise and
Related Information’’ permits two or more operating segments to be aggregated into a single operating
segment if they have similar economic characteristics and are similar in the following areas:
• The nature of products and services
• Nature of production processes
• Type or class of customer
• Methods used to distribute products or provide services
• The nature of the regulatory environment, if applicable
Our four brands have similar types of products, contracts, customers, and employees and all operate
as full-service restaurants offering lunch and dinner in the casual-dining segment of the industry. In
addition, food costs, labor and facility-related costs comprise the majority of our brands’ total costs and
drive similar long-term average margins across all of our brands. Therefore, we believe we meet the criteria
for aggregating operating segments into a single reporting segment.
F-23