Chili's 2010 Annual Report Download - page 55

BRINKER INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SALE OF ON THE BORDER AND DISCONTINUED OPERATIONS (Continued)
On The Border has been presented as discontinued operations in the consolidated financial statements.
Discontinued operations includes only the revenues and expenses which can be specifically identified with On
The Border and excludes any allocation of corporate costs, including general and administrative expenses. The
results of On The Border consist of the following (in thousands):
2010 2009 2008
Revenues .......................................... $331,247 $344,218 $374,302
Income before income taxes from discontinued operations .... 51,488 7,883 6,613
Income tax expense .................................. 17,506 838 488
Net income from discontinued operations(a) ............. $ 33,982 $ 7,045 $ 6,125
(a) Other gains and charges, net of taxes, was a gain of $8.4 million, a loss of $10.2 million and
a loss of $4.8 million in fiscal 2010, 2009 and 2008, respectively.
Other gains and charges in fiscal 2010 included a $16.5 million gain on the sale of On The Border partially
offset by $2.9 million of charges related to long-lived asset impairments and lease termination charges primarily
associated with the closure of three underperforming restaurants.
Other gains and charges in fiscal 2009 included a $9.0 million charge related to long-lived asset
impairments, $1.0 million of lease termination charges resulting from the decision to close six underperforming
restaurants and $1.6 million of lease termination charges associated with restaurants closed in prior years. Also
included was a $3.7 million impairment charge associated with four underperforming restaurants that are
continuing to operate.
Other gains and charges in fiscal 2008 included a $6.3 million charge related to long-lived asset
impairments resulting from the decision to close 12 underperforming restaurants and a $0.7 million charge
related to the decrease in the estimated sales value of land associated with previously closed restaurants.
3. OTHER RESTAURANT DISPOSITIONS AND EQUITY METHOD INVESTMENTS
(a) Sale of Macaroni Grill
In December 2008, we completed the sale of Macaroni Grill. We received cash proceeds of approximately
$88.0 million and recorded a loss of $40.4 million in other gains and charges in the consolidated statement of
income in fiscal 2009. The net assets sold totaled approximately $110 million and consisted primarily of property
and equipment of $105 million. Macaroni Grill operating results were included in continuing operations for fiscal
2009 (through the sale date of December 18, 2008) and prior years as we have involvement in the ongoing
operations of Macaroni Grill.
In December 2008, we contributed $6.0 million to the new entity representing an 18.2% ownership interest.
In April 2009, we received a $6.0 million distribution representing substantially all of our equity investment in
Macaroni Grill while retaining our ownership interest. We discontinued the application of the equity method of
accounting subsequent to the receipt of the $6.0 million distribution and recording our share of Macaroni Grill’s
net loss during fiscal 2009.
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