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64
2008, the first day of 2009, and did not elect the fair
value option for eligible items that existed at the date
of adoption.
The Emerging Issues Task Force (“EITF”) reached a
consensus on EITF 06-11, “Accounting for Income Tax
Benefits of Dividends on Share-Based Payment Awards”
(“EITF 06-11”) in June 2007. The EITF consensus indicates
that the tax benefit received on dividends associated with
share-based awards that are charged to retained earnings
should be recorded in additional paid-in capital and
included in the pool of excess tax benefits available to
absorb potential future tax deficiencies on share-based
payment awards. The consensus is effective for the tax
benefits of dividends declared in fiscal years beginning
after December 15, 2007. The Company does not expect
that the adoption of EITF 06-11 in the first quarter of
2009 will have a significant impact on its consolidated
financial statements.
In March 2008, the FASB issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging
Activities” (“SFAS No. 161”), which amends SFAS No. 133.
SFAS No. 161 requires enhanced disclosures about how and
why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for
under SFAS No. 133 and its related interpretations, and
how derivative instruments and related hedged items affect
an entity’s financial position, results of operations,
financial performance and cash flows. SFAS No. 161 is
effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008,
with early application encouraged. The Company does not
expect that the adoption of SFAS No. 161 in the third
quarter of 2009 will have a significant impact on its
consolidated financial statements.
In May 2008, the FASB issued SFAS No. 162, “The
Hierarchy of Generally Accepted Accounting Principles”
(“SFAS No. 162”). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting
the principles to be used in the preparation of financial
statements of nongovernmental entities that are presented
in conformity with GAAP. SFAS No. 162 is effective sixty
days following the SEC’s approval of the Public Company
Accounting Oversight Board amendments to AU Section
411, “The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles.” The
Company does not expect that the adoption of SFAS No.
162 will have a significant impact on its consolidated
financial statements.
3DISCONTINUED OPERATIONS
On December 6, 2006, the Company completed the sale of
Logan’s, for total consideration of approximately $485,000.
A portion of the consideration was funded by a real estate
sale-leaseback transaction, which required the Company to
retain three Logan’s restaurant locations at that time.
The Company leased these three properties to Logan’s under
terms and conditions consistent with the sale-leaseback
transaction. Two of these properties were sold in 2007 and
the remaining property was sold in 2008 (see Note 4).
The Company has reported in discontinued operations
certain expenses incurred in 2008 related to the divestiture
of Logan’s, the results of operations of Logan’s through
December 5, 2006 as well as certain expenses of the
Company related to the divestiture through August 3, 2007,
and the results of operations of Logan’s for the full period
ended July 28, 2006, which consist of the following:
August 1, August 3, July 28,
2008 2007 2006
Revenues $ — $154,529 $423,522
(Loss) income before tax benefit
(provision for income taxes)
from discontinued operations (229) 7,450 27,694
Income tax benefit (provision for
income taxes) 80 (2,279) (6,904)
(Loss) income from discontinued
operations, net of tax, before
gain on sale of Logan’s (149) 5,171 20,790
Gain on sale of Logan’s, net of tax
of $215 and $8,592, respectively 399 80,911 —
Income from discontinued
operations, net of tax $ 250 $ 86,082 $ 20,790
In 2008, the Company recorded an adjustment in
accordance with the Logan’s sale agreement related to
taxes, resulting in additional proceeds from the sale of
Logan’s by $614.
A reconciliation of the income tax benefit (provision for
income taxes) from discontinued operations and the
amount computed by multiplying the income before the
income tax benefit (provision for income taxes) from