UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM 11‑K
X ANNUAL
REPORT PURSUANT TO SECTION 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR
TRANSITION
REPORT PURSUANT TO SECTION 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition year from to
Commission File No. 1-10275
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
BRINKER
INTERNATIONAL, INC.
401(K) SAVINGS PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Brinker
International, Inc.
6820
LBJ Freeway
Dallas,
Texas 75240
| Page | |
| Report of Independent Registered Public Accounting Firm |
1 |
| Financial Statements: | |
| Statements of Net Assets Available for Benefits | |
| as of December 31, 2003 and 2002 |
2 |
| Statements of Changes in Net Assets Available for Benefits | |
| for the Years Ended December 31, 2003 and 2002 |
3 |
| Notes to Financial Statements |
4 |
| Supplemental Schedule* - Schedule H, line 4i - Schedule of Assets | |
| (Held at End of Year) - December 31, 2003 |
9 |
| Exhibit 23- Consent of Independent Registered Public Accounting Firm | |
| Exhibit 99 - Certification by Susan Sieker, Plan Administrator of the | |
| Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to | |
| Section 906 of the Sarbanes-Oxley Act of 2002 |
* All other schedules required by Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable.
Report of Independent Registered Public Accounting Firm
The Plan Committee
Brinker International, Inc. 401(k) Savings Plan and Trust:
We have audited the accompanying statements of net assets available for benefits of the Brinker International, Inc. 401(k) Savings Plan and Trust as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting princip les used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Brinker International, Inc. 401(k) Savings Plan and Trust as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule H, line 4i-schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has b een subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Dallas, Texas
May 28, 2004
BRINKER
INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
2003 2002
Investments - at fair value (Note 2):
Money market $
2,550,940 $ 2,289,623
Mutual funds 25,885,840 16,919,939
Common
Collective Fund
4,437,858 2,700,000
Brinker
International common stock
13,562,751 14,319,034
Participant
loans 2,634,997 2,482,198
49,072,386 38,710,794
Receivables:
Participants'
contributions
221,347 209,706
Employer's
contributions 34,769 31,835
256,116 241,541
Net assets available for benefits $ 49,328,502 $ 38,952,335
See accompanying notes to financial statements.
BRINKER
INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2003 and 2002
2003 2002
Additions:
Contributions:
Participant's
$ 6,697,746 $
6,624,080
Employer's 703,190 907,808
7,400,936 7,531,888
Investment
income (loss):
Net
appreciation (depreciation)
in fair value of investments
6,251,893 (3,218,619)
Interest and dividends 360,547 368,747
6,612,440 (2,849,872)
Total additions 14,013,376 4,682,016
Deductions - - benefits paid to participants 3,637,209 2,722,033
Net increase 10,376,167 1,959,983
Net assets available for benefits at
beginning of
year 38,952,335 36,992,352
Net assets available for benefits at
end of year $ 49,328,502 $ 38,952,335
See accompanying notes to financial statements.
BRINKER INTERNATIONAL,
INC.
401(k) SAVINGS
PLAN AND TRUST
Notes to Financial Statements
December 31, 2003 and 2002
1. DESCRIPTION OF THE PLAN AND ACCOUNTING POLICIES
The following brief description of the provisions of the Brinker International, Inc. 401(k) Savings Plan and Trust (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
General
The Plan, which was implemented on January 1, 1993, is a qualified defined contribution savings plan available to all salaried and hourly employees of Brinker International, Inc. and subsidiaries ("Company" or "Brinker") who are neither an officer nor a five percent shareholder of the Company and whose annual compensation is not in excess of the threshold set forth in Section 414(q) of the Internal Revenue Code of 1986 (the "Code"), as amended. Salaried employees are eligible upon the latter of their date of hire or attainment of age twenty-one while hourly employees who have completed one year of service and have attained the age of twenty-one are eligible to participate in the Plan.
Employees who are members of a collective bargaining unit are not eligible to participate in the Plan. The financial statements are prepared on the accrual basis of accounting and include all of the funds which comprise the Plan.
Contributions
Participants are permitted to contribute from 1% to 50% of their annual eligible compensation, as defined, to the Plan on a tax-deferred basis. Participants are permitted to contribute up to 100% of their bonuses, as defined, to the Plan on a tax-deferred basis. Tips are excluded from the definition of eligible compensation. The Company matches 25% of the first 5% a salaried participant's contributions. Hourly participants do not receive matching contributions.
Participants' Accounts
Participants' contributions are invested in accordance with their elections in the following funds: the AXP Cash Management Fund (a money market fund), the AXP Bond Fund (invests primarily in intermediate-term corporate bonds), the American Century Equity Growth Fund (invests primarily in the equities of large-cap domestic companies), the Wells Fargo Large Company Growth Fund (invests primarily in the equities of medium-to-large-cap domestic companies), the Janus Overseas Fund (invests primarily in the equities of foreign companies), the Neuberger Berman Genesis Fund (invests primarily in the equities of small-cap domestic companies), the Brown Capital Management Small Company Fund (invests primarily in the equities of small-cap domestic companies), the American Express Trust Equity Index Fund II (invests primarily in the equities of the S&P 500 Index) and the Brinker Stock Fund (consists of Company common stock). Employees may update their investment election daily. Company's matching contributions to the Plan are also invested in accordance with their elections in the above funds. Allocations of plan income are made to participant's accounts pro-rata on participant's individual balances in each fund.
BRINKER
INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Notes to Financial Statements
1. DESCRIPTION OF THE PLAN AND ACCOUNTING POLICIES (continued)
Vesting
Participants are immediately vested in their contributions and the earnings thereon. Vesting in the Company's matching contributions is graduated at 25% annually, beginning at the end of the second year of eligible service, up to 100% after five full years of eligible service. Participants who separate from service prior to full vesting of their rights forfeit their share of the Company's contributions to the extent that vesting had not occurred. Forfeitures used to reduce future Company contributions totaled $206,463 for the year ended December 31, 2003. Forfeitures totaled $47,849 and $36,623 for the years ended December 31, 2003 and 2002, respectively.
Payments of Benefits
The normal forms of payment upon a participant's separation from the Company are either a lump-sum payment in cash for the vested portion of the participant's account (less federal tax withholding, when applicable, and additional penalties for withdrawals made prior to retirement age) or a direct rollover of the vested portion of the participant's account into an Individual Retirement Account or another employer's qualified plan. Benefits are recorded when paid.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. A participant may have up to two loans outstanding at a time; however, the total of a participant's loans may not exceed the lesser of $50,000 or 50% of the participant's vested account balance. Loan terms range from one-half year to 5 years or up to 15 years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate of 1% above the prime lending rate determined at the end of the month prior to the month in which the loan request is made. Interest rates on outstanding loans ranged from 5.00% to 10.50% during 2003 and 5.25% to 10.5% during 2002. Principal and interest payments are made through bi-weekly payroll deductions.
Administrative Expenses
The Company pays all administrative expenses related to the Plan.
Use of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires Plan administrators
to make estimates and assumptions that affect the reported amounts of net
assets available for benefits and disclosure of contingent net assets available
for benefits at the date of the financial statements and the reported amounts
of changes in net assets available for benefits during the reporting
period. Actual results could differ
from those estimates.
BRINKER INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Notes to Financial Statements
2. INVESTMENTS
The Plan's investments are stated at fair value using quoted market prices and transactions are recorded on a trade date basis. Participant loans are valued at the outstanding principal balance plus accrued interest which approximates fair value. A summary of investments and related investment income (loss) as of and for the years ended December 31, 2003 and 2002, follows:
2003 2002
Investments at fair value:
American Century Equity Growth Fund $
6,386,632* $ 4,371,677*
Janus Overseas Fund 4,978,981* 3,071,373*
Brinker Stock Fund 13,562,751* 14,319,034*
AET Equity Index Fund II 4,437,858* 2,700,000*
AXP Cash Management Fund 2,550,940* 2,289,623*
AXP Bond Fund 2,885,903* 2,390,727*
Neuberger Berman Genesis Fund 4,033,133* 2,506,080*
Participant Loans 2,634,997* 2,482,198*
Brown Capital Management Small Company
Fund 1,066,939 350,999
Wells Fargo Large Company Growth
Fund 6,534,252* 4,229,083*
Total $ 49,072,386 $ 38,710,794
Investment Income (Loss):
Net appreciation (depreciation)
in fair value:
Mutual funds 4,966,834 (4,332,198)
Common Collective Fund 891,396 -
Brinker stock 393,663 1,113,579
Total $ 6,251,893 $ (3,218,619)
Interest and dividends 360,547 368,747
* Represents 5% or more of total net assets.
BRINKER INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Notes to Financial Statements
All investment programs other than a portion of the Brinker Stock Fund are participant directed. The following information summarizes the net assets and significant components of the changes in net assets relating to the non-participant directed portion of the Brinker Stock Fund for the year ended December 31, 2002. All investment programs during the year ended December 31, 2003 were participant directed.
December 31, 2002
Participant Non-Participant
directed directed Total
Additions to net assets:
Net appreciation in
fair
value of investments $
551,840 $ 561,739 $ 1,113,579
Interest 28,480 23,604 52,084
Employee
contributions 883,003 - 883,003
Employer
contributions - 878,819 878,819
Total additions to net
assets 1,463,323 1,464,162
2,927,485
Deductions
from net
assets:
Benefits paid to
participants 528,968 421,049 950,017
Investment transfers
191,922 148,508 340,430
Total
deductions from
net assets 720,890 569,557 1,290,447
Change in net assets 742,433
894,605 1,637,038
Net
assets at beginning
of year 6,462,281 6,219,715 12,681,996
Net assets at end of
year $ 7,204,714 $
7,114,320 $ 14,319,034
BRINKER INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Notes to Financial Statements
3. PLAN TERMINATION
Although it has no present intention to do so, the Company may terminate the Plan at any time subject to the provisions of ERISA. In the event of Plan termination, all participants will become fully vested in their Company contributions.
4. INCOME TAX STATUS
The Plan received a determination letter on March 22, 2001 in which the Internal Revenue Service stated that the Plan, as currently designed, is in compliance with the applicable requirements of the Internal Revenue Code ("Code"). The Plan has been amended since receiving the determination letter, however, the Plan Administrator believes the Plan is currently designed and being operated in compliance with the applicable requirements of the Code and, therefore, is qualified and tax-exempt from federal income taxes as of the financial statement dates.
Schedule I
BRINKER
INTERNATIONAL, INC.
401(k) SAVINGS
PLAN AND TRUST
Schedule H, line 4i - Schedule of Assets (Held at End of
Year)
December 31, 2003
Current
Identity Description of Investment Value
Money Markets:
*American
Express AXP Cash Management Fund
$ 2,550,940
Commingled
Funds:
*American
Express Trust Equity Index Fund II 4,437,858
Mutual Funds:
*American
Express AXP Bond Fund 2,885,903
American Century Equity Growth Fund 6,386,632
Janus Overseas Fund 4,978,981
Neuberger Berman Genesis Fund 4,033,133
Brown Capital Management Small Company Fund 1,066,939
Wells Fargo Large Company Growth Fund 6,534,252
Common Stock:
*Brinker Stock
Fund (Cost Basis $5,747,397)
13,562,751
Participant
Loans:
*Bearing interest at rates ranging from
5.00% to 10.50% 2,634,997
Total $ 49,072,386
*Party-in-interest
Cost Column not required - participant directed.
See accompanying report of independent registered public accounting firm.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
BRINKER
INTERNATIONAL, INC.
401(K)
SAVINGS PLAN AND TRUST
Date: June 25,
2004 By: /s/
Susan Sieker
Susan
Sieker
Plan
Administrator
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Brinker International:
We consent to the incorporation by reference in registration statement No. 333-42224 on Form S-8 of Brinker International Inc. of our report dated May 28, 2004 related to the statements of net assets available for benefits of the Brinker International, Inc. 401(k) Savings Plan and Trust as of December 31, 2003 and 2002, the related statements of changes in net assets available for benefits for the years then ended and the related supplemental schedule H, 4i - schedule of assets (held at end of year) as of December 31, 2003, which appears in the December 31, 2003 annual report on Form 11-K of the Brinker International, Inc. 401(k) Savings Plan and Trust.
/s/ KPMG LLP
Dallas, Texas June 21, 2004
EXHIBIT 99
CERTIFICATION
In connection with the Annual Report of the Brinker International, Inc. 401 (k) Savings Plan and Trust (the "Plan") on Form 11-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Susan Sieker, Plan Administrator of the Plan, who performs the equivalent to a chief executive officer and chief financial officer of the Plan, hereby certifies, pursuant to 18. U.S.C. Section 1350, that, on the date hereof, (a) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (b) that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan.
Date: June 25, 2004 By: /s/
Susan Sieker
Susan Seiker,
Plan
Administrator
Brinker
International, Inc. 401(k)
Savings
Plan and Trust