Chili's 2014 Annual Report Download - page 61

joint venture and opened one restaurant. We accounted for this investment under the equity method of accounting
until April 2012 when we purchased BTTO’s interest in the joint venture for approximately $1.5 million and
began consolidating the entity’s results. In the fourth quarter of fiscal 2013, we fully impaired the property and
equipment and recorded a charge in other gains and charges in the consolidated statement of comprehensive
income. The restaurant was subsequently closed in July 2013.
(b) Other Dispositions
In April 2013, we sold our remaining ownership interest in Romano’s Macaroni Grill (“Macaroni Grill”) for
approximately $8.3 million in cash proceeds. This amount was recorded as a gain in other gains and charges in
the consolidated statement of comprehensive income in fiscal 2013.
4. OTHER GAINS AND CHARGES
Other gains and charges consist of the following (in thousands):
2014 2013 2012
Litigation reserves ................................ $39,500 $ 0 $ 0
Restaurant impairment charges ....................... 4,502 5,276 3,139
Restaurant closure charges .......................... 3,413 3,637 4,655
Severance and other benefits ........................ 2,140 2,235 0
Gain on the sale of assets, net ........................ (608) (11,228) (3,306)
Loss on extinguishment of debt ...................... 0 15,768 0
Impairment of liquor licenses ........................ 0 170 2,641
Other ........................................... 277 1,442 1,845
$49,224 $ 17,300 $ 8,974
Other gains and charges in fiscal 2014 includes charges of approximately $39.5 million related to various
litigation matters including a class action litigation pending in California. 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 organization
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. See Note 8 for
additional disclosures related to fiscal 2013 activity.
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
include expense related to the accelerated vesting of stock-based compensation awards. In fiscal 2013, we also
recognized gains of $11.2 million on the sale of assets, including an $8.3 million gain on the sale of our
remaining interest in Macaroni Grill and net gains of $2.9 million related to land sales.
During fiscal 2012, we recorded restaurant impairment charges of $3.1 million related to underperforming
restaurants that either continue to operate or are scheduled to close. We also recorded $2.6 million of impairment
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