Chili's 2011 Annual Report Download - page 22

processing facilities; however, there are no guarantees that failures will not occur. Failure of third parties to
provide adequate services could have an adverse effect on our results of operations, financial condition or ability
to accomplish our financial and management reporting.
Continuing disruptions in the global financial markets may adversely impact the availability and cost of
credit and consumer spending patterns.
The continuing disruptions to the global financial markets and continuing weak economic recovery has
adversely impacted the availability of credit already arranged and the availability and cost of credit in the future.
The disruptions in the financial markets also had an adverse effect on the U.S. and world economy, which has
negatively impacted consumer spending patterns. There can be no assurance that various U.S. and world
government present and future responses to the disruptions in the financial markets will restore consumer
confidence, stabilize the markets or increase liquidity or the availability of credit.
Declines in the market price of our common stock or changes in other circumstances that may indicate an
impairment of goodwill could adversely affect our financial position and results of operations.
We perform our annual goodwill impairment test in the second quarter of each fiscal year. Interim goodwill
impairment tests are also required when events or circumstances change between annual tests that would more
likely than not reduce the fair value of our reporting units below their carrying value. It is possible that a change
in circumstances such as the decline in the market price of our common stock or changes in consumer spending
levels, or in the numerous variables associated with the judgments, assumptions and estimates made in assessing
the appropriate valuation of our goodwill, could negatively impact the valuation of our brands and create the
potential for a non-cash charge to recognize impairment losses on some or all of our goodwill. If we were
required to write down a portion of our goodwill and record related non-cash impairment charges, our financial
position and results of operations would be adversely affected.
Changes to estimates related to our property and equipment, or operating results that are lower than our
current estimates at certain restaurant locations, may cause us to incur impairment charges on certain
long-lived assets.
We make certain estimates and projections with regards to individual restaurant operations, as well as our
overall performance in connection with our impairment analyses for long-lived assets. An impairment charge is
required when the carrying value of the asset exceeds the estimated fair value or undiscounted future cash flows
of the asset. The projection of future cash flows used in this analysis requires the use of judgment and a number
of estimates and projections of future operating results. If actual results differ from our estimates, additional
charges for asset impairments may be required in the future. If impairment charges are significant, our results of
operations could be adversely affected.
Failure to protect the integrity and security of individually identifiable data of our guests and teammates
could expose us to litigation and damage our reputation.
We receive and maintain certain personal information about our guests and teammates. The use of this
information by us is regulated at the federal and state levels, as well as by certain third party contracts. If our
security and information systems are compromised or our business associates fail to comply with these laws and
regulations and this information is obtained by unauthorized persons or used inappropriately, it could adversely
affect our reputation, as well as operations, results of operations and financial condition, and could result in
litigation against us or the imposition of penalties. As privacy and information security laws and regulations
change, we may incur additional costs to ensure it remains in compliance.
Identification of material weakness in internal control may adversely affect our financial results.
We are subject to the ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002.
Those provisions provide for the identification of material weaknesses in internal control. If such a material
12