UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 27, 2000
Commission File Number 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1914582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6820 LBJ FREEWAY, DALLAS, TEXAS 75240
(Address of principal executive offices)
(Zip Code)
(972) 980-9917
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Number of shares of common stock of registrant outstanding at
January 16, 2001: 99,118,791
BRINKER INTERNATIONAL, INC.
INDEX
Part I - Financial Information
Condensed Consolidated Balance Sheets -
December 27, 2000 (Unaudited) and June 28, 2000 3 - 4
Condensed Consolidated Statements of Income
(Unaudited) - Thirteen week and twenty-six week
periods ended December 27, 2000
and December 29, 1999 5
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Twenty-six week periods ended
December 27, 2000 and December 29, 1999 6
Notes to Condensed Consolidated
Financial Statements (Unaudited) 7 - 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 15
Part II - Other Information 16
PART I. FINANCIAL INFORMATION
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands)
December 27, June 28,
2000 2000
ASSETS (Unaudited)
Current Assets:
Cash and Cash Equivalents $ 35,669 $ 12,343
Accounts Receivable 26,147 20,378
Inventories 16,712 16,448
Prepaid Expenses 50,494 50,327
Deferred Income Taxes 663 2,127
Other 2,000 2,000
Total Current Assets 131,685 103,623
Property and Equipment, at Cost:
Land 196,633 178,025
Buildings and Leasehold Improvements 783,873 739,795
Furniture and Equipment 426,508 396,089
Construction-in-Progress 75,633 57,167
1,482,647 1,371,076
Less Accumulated Depreciation
and Amortization 525,102 482,944
Net Property and Equipment 957,545 888,132
Other Assets:
Goodwill 70,519 71,561
Other 106,609 99,012
Total Other Assets 177,128 170,573
Total Assets $ 1,266,358 $ 1,162,328
(continued)
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
December 27, June 28,
2000 2000
LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited)
Current Liabilities:
Current Installments of Long-term Debt $ 14,635 $ 14,635
Accounts Payable 101,586 104,461
Accrued Liabilities 133,855 111,904
Total Current Liabilities 250,076 231,000
Long-term Debt, Less Current Installments 130,520 110,323
Deferred Income Taxes 11,145 7,667
Other Liabilities 57,835 51,130
Shareholders' Equity:
Preferred Stock - 1,000,000 Authorized
Shares; $1.00 Par Value; No Shares Issued - -
Common Stock - 250,000,000 Authorized
Shares; $.10 Par Value; 117,542,210
Shares Issued and 99,271,133 Shares
Outstanding at December 27, 2000, and
117,542,210 Shares Issued and 98,798,342
Shares Outstanding at June 28, 2000 11,754 11,754
Additional Paid-In Capital 295,472 298,172
Retained Earnings 724,248 656,840
1,031,474 966,766
Less:
Treasury Stock, at Cost (18,271,077
shares at December 27, 2000 and
18,743,868 shares at June 28, 2000) 211,789 201,531
Unearned Compensation 2,903 3,027
Total Shareholders' Equity 816,782 762,208
Total Liabilities and Shareholders' $ 1,266,358 $ 1,162,328
Equity
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
13 Week Periods Ended 26 Week Periods Ended
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
2000 1999 2000 1999
Revenues $ 583,263 $ 520,900 $1,172,546 $1,031,933
Operating Costs and Expenses:
Cost of Sales 156,424 139,539 312,831 275,729
Restaurant Expenses 323,313 290,635 649,442 575,360
Depreciation and Amortization 24,322 22,784 47,752 44,901
General and Administrative 26,698 24,405 53,909 47,912
Total Operating Costs and
Expenses 530,757 477,363 1,063,934 943,902
Operating Income 52,506 43,537 108,612 88,031
Interest Expense 2,278 3,120 3,674 5,518
Other, Net 514 1,486 913 2,072
Income Before Provision for
Income Taxes 49,714 38,931 104,025 80,441
Provision for Income Taxes 17,499 13,509 36,617 27,913
Net Income $ 32,215 $ 25,422 $ 67,408 $ 52,528
Basic Net Income Per Share $ 0.33 $ 0.26 $ 0.68 $ 0.53
Diluted Net Income Per Share $ 0.32 $ 0.25 $ 0.66 $ 0.52
Basic Weighted Average
Shares Outstanding 98,497 98,064 98,571 98,492
Diluted Weighted Average
Shares Outstanding 101,718 100,464 101,638 101,182
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twenty-six Week Periods Ended
December 27, December 29,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 67,408 $ 52,528
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation and Amortization 47,752 44,901
Amortization of Unearned Compensation 773 854
Deferred Income Taxes 4,942 3,767
Changes in Assets and Liabilities:
Receivables (5,769) (554)
Inventories (264) (1,637)
Prepaid Expenses 1,202 1,603
Other Assets (3,354) 891
Accounts Payable (2,875) (7,827)
Accrued Liabilities 22,143 7,774
Other Liabilities 6,705 2,663
Net Cash Provided by Operating Activities 138,663 104,963
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for Property and Equipment (116,857) (98,933)
Investments in Equity Method Investees (3,026) (888)
Net Repayments from Affiliates 325 -
Net Cash Used in Financing Activities (119,558) (99,821)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Credit Facilities 18,020 29,832
Proceeds from Issuances of Treasury Stock 19,759 4,913
Purchases of Treasury Stock (33,558) (31,176)
Net Cash Provided by Financing Activities 4,221 3,569
Net Increase in Cash and Cash Equivalents 23,326 8,711
Cash and Cash Equivalents at Beginning
of Period 12,343 12,597
Cash and Cash Equivalents at End
of Period $ 35,669 $ 21,308
CASH PAID DURING THE PERIOD:
Interest, Net of Amounts Capitalized $ 4,650 $ 4,914
Income Taxes, Net of Refunds $ 43,974 $ 28,680
NON-CASH TRANSACTIONS DURING THE PERIOD:
Restricted Treasury Stock Issued $ 800 $ -
Changes in Fair Market Value of Interest Rate
Swap and Debt $ 2,177 $ -
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of Brinker
International, Inc. and its wholly-owned subsidiaries
(collectively, the "Company") as of December 27, 2000 and June 28,
2000 and for the thirteen week and twenty-six week periods ended
December 27, 2000 and December 29, 1999, respectively, have been
prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). The Company owns,
operates, or franchises various restaurant concepts under the
names of Chili's Grill & Bar ("Chili's"), Romano's Macaroni Grill
("Macaroni Grill"), On The Border Mexican Grill & Cantina ("On The
Border"), Cozymel's Coastal Mexican Grill ("Cozymel's"),
Maggiano's Little Italy ("Maggiano's"), and Corner Bakery Cafe
("Corner Bakery"). In addition, the Company is involved in the
ownership and is or has been involved in the development of the
Big Bowl, Wildfire, and Eatzi's Market and Bakery ("Eatzi's")
concepts.
The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals and adjustments)
which are, in the opinion of management, necessary to fairly state
the operating results for the respective periods. However, these
operating results are not necessarily indicative of the results
expected for the full fiscal year. Certain information and
footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to SEC rules and
regulations. The notes to the condensed consolidated financial
statements should be read in conjunction with the notes to the
consolidated financial statements contained in the June 28, 2000
Form 10-K. Company management believes that the disclosures are
sufficient for interim financial reporting purposes.
2. Stock Split
On December 8, 2000, the Board of Directors declared a three-for-
two stock split, effected in the form of a 50% stock dividend, to
shareholders of record on January 3, 2001, payable on January 16,
2001. As a result of the split, 39.2 million shares of common
stock were issued on January 16, 2001. All references to number
of shares and per share amounts of common stock have been restated
to reflect the stock split. Shareholders' equity accounts have
been restated to reflect the reclassification of an amount equal
to the par value of the increase in issued common shares from the
retained earnings accounts to the common stock account.
3. Treasury Stock
Pursuant to the Company's $210.0 million stock repurchase plan and
in accordance with applicable securities regulations, the Company
repurchased approximately 368,000 shares of its common stock for
$8.2 million during the second quarter of fiscal 2001, resulting
in a cumulative repurchase total of approximately 9,713,000 shares
of its common stock for $159.5 million. The Company's stock
repurchase plan is used by the Company to offset the dilutive
effect of stock option exercises and to increase shareholder
value. The repurchased common stock is reflected as a reduction of
shareholders' equity.
4. Derivative Financial Instruments and Hedging Activities
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and
Hedging Activities," as amended, on June 29, 2000. SFAS No. 133
requires that all derivative instruments be recorded in the
statement of financial position at fair value. The accounting for
the gain or loss due to changes in fair value of the derivative
instrument depends on whether the derivative instrument qualifies
as a hedge. If the derivative instrument does not qualify as a
hedge, the gains or losses are reported in earnings when they
occur. However, if the derivative instrument qualifies as a
hedge, the accounting varies based on the type of risk being
hedged.
The Company attempts to maintain a reasonable balance between
fixed and floating rate debt and uses interest rate swaps and
forward rate agreements to accomplish this objective. The swap
and forward rate contracts are entered into in accordance with
guidelines set forth in the Company's hedging policies. The
Company utilizes interest rate swaps and forward rate agreements
to manage overall borrowing costs and reduce exposure to adverse
fluctuations in interest rates, and to protect the fair value of
debt on the financial statements.
The Company assesses interest rate risk by continually identifying
and monitoring changes in interest rates that may adversely impact
expected future cash flows and the fair value of its debt by
evaluating hedging opportunities. The Company maintains risk
management control systems to monitor the risks attributable to
both the Company's outstanding and forecasted transactions as well
as offsetting hedge positions. The risk management control
systems involve the use of analytical techniques to estimate the
expected impact of changes in interest rates on the Company's
future cash flows and the fair value of its debt. The Company
does not use derivative instruments for purposes other than
hedging. The Company utilizes various derivative hedging
instruments, as discussed below, to hedge its interest rate risk
when appropriate.
The Company's financing activities include both fixed (7.8% senior
notes) and variable (credit facilities) rate debt. The fixed-rate
debt is exposed to changes in fair value as market-based interest
rates fluctuate. Variable-rate debt is exposed to cash flow risk
due to the effects of changes in interest rates. These financial
exposures are monitored and managed by the Company as an integral
part of its overall risk management program.
The Company enters into interest rate swaps to manage fluctuations
in interest expense and to maintain the value of fixed-rate debt.
The Company has entered into two interest rate swaps with a total
notional value of $71.4 million at December 27, 2000. This fair
value hedge changes the fixed-rate interest on the entire balance
of the Company's 7.8% senior notes to variable-rate interest.
Under the terms of the hedges (which expire in fiscal 2005), the
Company pays semi-annually a variable interest rate based on
either LIBOR (6.44% at December 27, 2000) plus 0.530% or LIBOR
plus 0.535%, in arrears, compounded at three-month intervals. The
Company receives semi-annually the fixed interest rate of 7.8% on
the senior notes. The estimated fair value of these agreements at
December 27, 2000 was approximately $2.2 million, which is
included in other assets at December 27, 2000. The Company's
interest rate swap hedges meet the criteria for the "short-cut
method" under SFAS No. 133. Accordingly, the changes in fair
value of the swaps are offset by a like adjustment to the carrying
value of the debt and no hedge ineffectiveness is assumed. As a
result, the adoption of SFAS No. 133 had no effect on earnings at
adoption or during the first two quarters of fiscal 2001.
5. Pending Acquisitions
In November 2000, the Company announced that it had reached an
agreement with franchise partner, NE Restaurant Company, Inc.
("NERCO"), to acquire forty Chili's and seven On The Border
locations in the fourth quarter of fiscal 2001. Additionally,
three Chili's sites currently under development by NERCO will be
part of the acquisition. Total consideration, subject to closing
adjustments, is approximately $93.5 million, of which
approximately $42.0 million represents assumption of debt.
On February 1, 2001, the Company acquired the remaining 50%
interest in the Big Bowl restaurant concept from its joint venture
partner for $38.0 million and sold its interest in the Wildfire
restaurant concept for $5.0 million. The Company financed the
purchase through existing credit facilities and operating cash
flow.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth selected operating data as a
percentage of total revenues for the periods indicated. All
information is derived from the accompanying condensed consolidated
statements of income.
13 Week Periods Ended 26 Week Periods Ended
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
2000 1999 2000 1999
Revenues 100.0% 100.0% 100.0% 100.0%
Operating Costs and Expenses:
Cost of Sales 26.8% 26.8% 26.7% 26.7%
Restaurant Expenses 55.4% 55.8% 55.4% 55.8%
Depreciation and Amortization 4.2% 4.4% 4.1% 4.4%
General and Administrative 4.6% 4.7% 4.6% 4.6%
Total Operating Costs and Expenses 91.0% 91.6% 90.7% 91.5%
Operating Income 9.0% 8.4% 9.3% 8.5%
Interest Expense 0.4% 0.6% 0.3% 0.5%
Other, Net 0.1% 0.3% 0.1% 0.2%
Income Before Provision for Income
Taxes 8.5% 7.5% 8.9% 7.8%
Provision for Income Taxes 3.0% 2.6% 3.1% 2.7%
Net Income 5.5% 4.9% 5.7% 5.1%
The following table details the number of restaurant openings
during the second quarter and year to date and total restaurants
open at the end of the second quarter.
Total Open at End
Second Quarter Openings Year-to-Date Openings of Second Quarter
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2001 2000 2001 2000 2001 2000
Chili's:
Company-owned 6 8 13 20 479 454
Franchised 10 9 18 16 235 202
Total 16 17 31 36 714 656
Macaroni Grill:
Company-owned 2 3 6 9 151 137
Franchised 2 -- 2 -- 6 3
Total 4 3 8 9 157 140
On The Border:
Company-owned 4 5 5 10 87 77
Franchised 1 1 2 3 29 26
Total 5 6 7 13 116 103
Cozymel's -- -- -- -- 13 13
Maggiano's -- 1 1 1 13 11
Corner Bakery:
Company-owned 1 4 2 6 58 55
Franchised 1 1 1 1 2 1
Total 2 5 3 7 60 56
Eatzi's -- -- -- -- 4 5
Wildfire -- -- -- -- 3 3
Big Bowl -- -- -- -- 6 4
Grand total 27 32 50 66 1,086 991
REVENUES
Revenues for the second quarter of fiscal 2001 increased to $583.3
million, 12.0% over the $520.9 million generated for the same
quarter of fiscal 2000. Revenues for the twenty-six week period
ended December 27, 2000 rose 13.6% to $1,172.5 million from the
$1,031.9 million generated for the same period of fiscal 2000. The
increases are primarily attributable to a net increase of 54
company-owned restaurants since December 29, 1999 and an increase
in comparable store sales for the second quarter of fiscal 2001
compared to the same quarter of fiscal 2000. The Company increased
its capacity (as measured in sales weeks) for the second quarter
and year-to-date of fiscal 2001 by 7.3% and 8.1%, respectively,
compared to the respective prior year periods. Comparable store
sales increased 4.5% and 5.4% for the second quarter and year-to-
date, respectively, from the same periods of fiscal 2000. Menu
prices in the aggregate increased 1.7% in fiscal 2001 as compared
to fiscal 2000.
COSTS AND EXPENSES (as a percent of Revenues)
Cost of sales remained flat for the second quarter and year-to-date
of fiscal 2001 as compared to the respective periods of fiscal 2000
due to menu price increases and favorable commodity price variances
for dairy and cheese, which were offset by unfavorable commodity
price variances for produce and product mix changes to menu items
with higher percentage food costs.
Restaurant expenses decreased for the second quarter and year-to-
date of fiscal 2001 compared to the respective periods of fiscal
2000. Restaurant labor wage rates were higher than in the prior
year, but were more than fully offset by increased sales leverage,
improvements in labor productivity, menu price increases, and a
decrease in preopening costs year-over-year.
Depreciation and amortization decreased for both the second quarter
and year-to-date of fiscal 2001 compared to the respective periods
of fiscal 2000. Depreciation and amortization decreases resulted
from increased sales leverage and a declining depreciable asset
base for older units. Partially offsetting these decreases were
increases in depreciation and amortization related to new unit
construction and ongoing remodel costs.
General and administrative expenses decreased in the second quarter
and remained flat for the first six months of fiscal 2001 compared
to the respective periods of fiscal 2000 as a result of the
Company's continued focus on controlling corporate expenditures
relative to increasing revenues.
Interest expense decreased for both the second quarter and year-to-
date of fiscal 2001 compared with the respective periods of fiscal
2000 as a result of decreased average borrowings on the Company's
credit facilities primarily used to fund the Company's continuing
stock repurchase plan, increased sales leverage and a decrease in
interest expense on senior notes due to the scheduled repayment
made in April 2000. These decreases were partially offset by a
decrease in interest capitalization.
NET INCOME AND NET INCOME PER SHARE
Net income for the second quarter and year-to-date of fiscal 2001
increased 26.7% and 28.3%, respectively, compared to the respective
periods of fiscal 2000. Diluted net income per share for the
second quarter and year-to-date of fiscal 2001 increased 28.0% and
26.9%, respectively, compared to the respective periods of fiscal
2000. The increase in both net income and diluted net income per
share was mainly due to an increase in revenues resulting from
increases in capacity (as measured in sales weeks), comparable
store sales, and menu prices and decreases in restaurant and
depreciation and amortization expenses as a percent of revenues.
IMPACT OF INFLATION
The Company has not experienced a significant overall impact from
inflation. As operating expenses increase, the Company, to the
extent permitted by competition, recovers increased costs through
a combination of menu price increases and reviewing, then
implementing, alternative products or processes.
LIQUIDITY AND CAPITAL RESOURCES
The working capital deficit decreased from $127.4 million at June
28, 2000 to $118.4 million at December 27, 2000. Net cash provided
by operating activities increased to $138.7 million for the first
six months of fiscal 2001 from $105.0 million during the same
period in fiscal 2000 due to increased profitability, partially
offset by the timing of operational receipts and payments.
Long-term debt outstanding at December 27, 2000 consisted of $73.6
million of unsecured senior notes ($71.4 million principal plus
$2.2 million representing the effect of changes in interest rates
on the fair value of the debt), $70.0 million of borrowings on
credit facilities, and obligations under capital leases. The
Company has credit facilities totaling $325.0 million. At December
27, 2000, the Company had $255.0 million in available funds from
these facilities.
As of December 27, 2000, $16.2 million of the Company's $25.0
million equipment leasing facility and $22.9 million of the
Company's $50.0 million real estate leasing facility had been
utilized. The remaining real estate leasing facility will be used
to lease real estate through fiscal year 2002.
Capital expenditures consist of purchases of land for future
restaurant sites, new restaurants under construction, purchases of
new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures, net of amounts funded
under the respective equipment and real estate leasing facilities,
were $116.9 million for the first six months of fiscal 2001
compared to $98.9 million for the same period of fiscal 2000. The
increase is due primarily to a reduction in the amount of new
restaurant expenditures funded by leasing facilities and due to the
acquisition of formerly leased equipment in accordance with the
various leasing facilities participated in by the Company,
partially offset by a decrease in the number of new store openings.
The Company estimates that its capital expenditures, net of amounts
expected to be funded under leasing facilities, during the third
quarter of fiscal 2001 will approximate $52.0 million. These
capital expenditures will be funded entirely from existing
operations.
During the remainder of fiscal 2001, the Company anticipates
spending approximately $93.5 million, of which approximately $42.0
million represents assumption of debt, for the purchase of forty
Chili's, three Chili's sites under construction, and seven On The
Border locations from a franchise partner, NE Restaurant Company,
Inc. In addition, the Company acquired the remaining 50% interest
in the Big Bowl restaurant concept from its joint venture partner
for $38.0 million on February 1, 2001, of which $8.0 million is
payable upon satisfaction of certain contingencies, but no later
than June 30, 2001. Both of these acquisitions will be financed
through existing credit facilities, operating cash flow, and funds
received upon the sale of the Company's interest in the Wildfire
restaurant concept in the amount of $5.0 million.
Pursuant to the Company's $210.0 million stock repurchase plan,
approximately 368,000 shares of its common stock were repurchased
for $8.2 million during the second quarter of fiscal 2001 in
accordance with applicable securities regulations. Currently,
approximately 9,713,000 shares have been repurchased for $159.5
million under the stock repurchase plan. The repurchased common
stock was or will be used by the Company to offset the dilutive
effect of stock option exercises and to increase shareholder value.
The repurchased common stock is reflected as a reduction of
shareholders' equity. The Company financed the repurchase program
through a combination of cash provided by operations and borrowings
on its available credit facilities.
The Company is not aware of any other event or trend which would
potentially affect its liquidity. In the event such a trend
develops, the Company believes that there are sufficient funds
available under its lines of credit and that it has strong internal
cash generating capabilities to adequately manage the expansion of
business.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest
rates on debt and certain leasing facilities and from changes in
commodity prices. A discussion of the Company's accounting
policies for derivative financial instruments and hedging
activities is included in the Notes to the Condensed Consolidated
Financial Statements.
The Company's net exposure to interest rate risk consists of
variable rate instruments that are benchmarked to U.S. and
European short-term interest rates. The Company may from time to
time utilize interest rate swaps and forwards to manage overall
borrowing costs and reduce exposure to adverse fluctuations in
interest rates. The Company does not use derivative instruments
for trading purposes and the Company has procedures in place to
monitor and control derivative use.
The Company is exposed to interest rate risk on short-term and
long-term financial instruments carrying variable interest rates.
The Company's variable rate financial instruments, including the
outstanding credit facilities and interest rate swaps, totaled
$141.4 million at December 27, 2000. The impact on the Company's
results of operations for the quarter of a one-point interest rate
change on the outstanding balance of the variable rate financial
instruments as of December 27, 2000 would be approximately
$350,000.
The Company purchases certain commodities such as beef, chicken,
flour and cooking oil. These commodities are generally purchased
based upon market prices established with vendors. These purchase
arrangements may contain contractual features that limit the price
paid by establishing certain price floors or caps. The Company
does not use financial instruments to hedge commodity prices
because existing purchase arrangements help control the ultimate
cost paid and any commodity price aberrations are generally short
term in nature.
This market risk discussion contains forward-looking statements.
Actual results may differ materially from this discussion based
upon general market conditions and changes in domestic and global
financial markets.
FORWARD-LOOKING STATEMENTS
The foregoing Management's Discussion and Analysis of Financial
Condition and Results of Operations contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
assumptions concerning risks and uncertainties that could
significantly affect anticipated results in the future and,
accordingly, could cause the actual results to materially differ
from those expressed in the forward-looking statements. The
Company cautions that the forward-looking statements are qualified
by important factors that could cause actual results to differ
materially from those contained herein including the highly
competitive nature of the restaurant industry, general business
conditions, the seasonality of the Company's business, governmental
regulations, inflation, consumer perceptions of food safety,
changes in consumer tastes, changes in local, regional and national
economic conditions, changes in demographic trends, food, labor,
fuel and utilities costs, future commodity prices, availability of
materials and employees, weather and other acts of God, and the
ability of the Company to meet its growth plan which is subject to
(a) identifying available, suitable and economically viable
locations for new restaurants, (b) obtaining all required
governmental permits (including zoning approvals and liquor
licenses) on a timely basis, (c) hiring all necessary contractors
and subcontractors, and (d) meeting construction schedules.
PART II. OTHER INFORMATION
Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Proxy Statement dated September 22, 2000 for the
Annual Meeting of Shareholders held on November 9, 2000, as filed
with the Securities and Exchange Commission on September 22, 2000,
is incorporated herein by reference.
(a) The Annual Meeting of Shareholders of the Company was held on
November 9, 2000.
(b) Each of the management's nominees, as described in the Proxy
Statement referenced above, was elected a director to hold office
until the next Annual Meeting of Shareholders or until his or her
successor is elected and qualified.
Votes Against or
Votes For Withheld
Ronald A. McDougall 42,596,152 19,790,511
Douglas H. Brooks 61,772,960 613,703
Donald J. Carty 61,802,024 584,639
Dan W. Cook III 61,800,203 586,460
Marvin J. Girouard 61,800,496 586,167
Frederick S. Humphries 61,763,434 623,229
Ronald Kirk 61,792,867 593,796
Jeffrey A. Marcus 61,797,776 588,887
James E. Oesterreicher 61,699,687 716,976
Roger T. Staubach 61,562,385 824,278
The voting results have not been adjusted for the Company's stock
split which occurred on January 3, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BRINKER INTERNATIONAL, INC.
Date: February 6, 2001 By:___/s/____________________________
Ronald A. McDougall, Chairman and
Chief Executive Officer
(Duly Authorized Signatory)
Date: February 6, 2001 By:___/s/_____________________________
Russell G. Owens, Executive Vice
President and Chief Financial and
Strategic Officer
(Principal Financial and Accounting
Officer)