Form 11-K 2004



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

(Mark One)

[ X]
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the fiscal year ended December 31, 2004
 
OR

[     ]
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
    
    
For the transition period from ________ to ________

Commission File No. 1-15935
 

 
 A. 
Full title of the plan and the address of the plan, if different from that of the issuer named below:
 
 
 
Outback Steakhouse, Inc.
 Salaried Employees 401(k) Plan and Trust
      
 
 
 
 
 
 B. 
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
 
 
 
Outback Steakhouse, Inc.
 
2202 North West Shore Boulevard, Suite 500, Tampa, Florida 33607



 


Outback Steakhouse, Inc.
Salaried Employees 401(k) Plan and Trust
Report on Audits of Financial Statements
December 31, 2004 and 2003


Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Index
December 31, 2004 and 2003
 

 
   
Page No. 
 
  
 
1
 
Financial Statements
  
 
 
 
2
 
 
3
 
 
4-8
 
Supplemental Schedules
  
 
 
 
9
 

Note:  Other schedules required by Sections 2520.103-10 of the Department of Labor Rules and Regulations for reporting and disclosure under ERISA have been omitted because they are not applicable.







Report of Independent Registered Certified Public Accounting Firm
 

To the Participants and Administrator of
the Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
 
In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust (the “Plan”) at December 31, 2004 and 2003, 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. 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 of these statements 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been 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/ PricewaterhouseCoopers LLP


Tampa, Florida
June 23, 2005

 
 


Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Statements of Net Assets Available for Benefits
December 31, 2004 and 2003
 
   
2004
  
2003
  
ASSETS
              
Investments, at fair value
  
$
48,924,668
  
$
39,902,514
  
Receivables
              
Participant contributions
    
-
   
120,659
 
Employer contributions
    
1,350,000
    
1,026,638
 
Accrued interest and other receivables
    
10,731
   
13,394
 
Total receivables
    
1,360,731
    
1,160,691
 
Net assets available for benefits
  
$
50,285,399
  
$
41,063,205
  


The accompanying notes are an integral part of these financial statements.


2

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2004 and 2003
 
   
2004
  
2003
  
Additions to net assets attributed to
              
Investment income
              
Net appreciation in fair value of investments
  
$
2,673,704
  
$
6,668,669
  
Interest and dividend income
    
1,099,060
   
652,260
 
     
3,772,764
   
7,320,929
 
Contributions
              
Participant
    
6,648,192
   
5,776,241
 
Participant rollovers
    
267,804
   
349,866
 
Employer
    
1,350,000
    
1,035,926
 
     
8,265,996
    
7,162,033
 
Total additions
    
12,038,760
    
14,482,962
 
Deductions from net assets attributed to
              
Benefits paid to participants
    
2,679,289
   
2,346,272
 
Administrative expenses
    
137,277
    
115,521
 
Total deductions
    
2,816,566
    
2,461,793
 
Net increase in net assets
    
9,222,194
    
12,021,169
 
Net assets available for benefits
              
Beginning of year
    
41,063,205
   
29,042,036
 
End of year
  
$
50,285,399
  
$
41,063,205
  


The accompanying notes are an integral part of these financial statements.

3

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Notes to Financial Statements
December 31, 2004 and 2003
 
1.  Description of the Plan
 
The following description of the Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
 
General
The Plan is a defined contribution plan established as of January 1, 1994 by Outback Steakhouse, Inc. and its wholly-owned subsidiaries (the “Company”). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Assets of the Plan are held and invested according to participant direction by the Merrill Lynch Trust Company, FSB (the “Trustee”).
 
Eligibility
Substantially all of the Company’s salaried employees, except union and leased employees, who have reached the age of 18, are eligible to participate in the Plan, as defined by the Plan.
 
Contributions
Each year, participants may contribute from 1% to 20% of their pre-tax annual compensation and may change this contribution percentage prior to any pay period interval throughout the Plan year. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Contributions of non-periodic deferrals, such as bonuses, may also be made, subject to limitations of the Plan. Participants direct their contributions into various investment options offered by the Plan. Total participant contributions are subject to limitations imposed by the Internal Revenue Code.
 
Additional amounts may be contributed by the Company at the discretion of the Company’s Board of Directors in the form of a matching or profit-sharing contribution. Employer matching contributions are allocated in the ratio of a participant’s total elective deferrals for the Plan year to the total elective deferrals of all participants for the Plan year. The profit-sharing contribution is allocated to participants employed by the Company on the last day of the Plan year based on the ratio of a participant’s compensation for the Plan year to the compensation of all participants for the Plan year.
 
The Company declared a profit-sharing contribution of approximately $1,686,000 and $1,269,000 for 2004 and 2003, respectively. The Company used available plan forfeitures of approximately $336,000 and $242,000 to offset the contributions for 2004 and 2003, respectively.
 
Participant Accounts
Each participant’s account is credited with the participant’s contributions, a prorata share of the Plan’s earnings, and any employer contributions. Plan earnings are allocated based upon the participant’s account balance. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
 

4

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Notes to Financial Statements
December 31, 2004 and 2003
 
Vesting
Participants are immediately vested in their contributions, including rollovers, plus actual earnings thereon. Vesting in the Company’s discretionary contributions, plus actual earnings thereon, is based on years of credited service. Upon completion of five years of service, participants become 100% vested in employer contributions.
 
Investment Options
At the time of enrollment in the Plan, a participant may direct his or her contributions, in 1% increments, in any of the nine core investment options, which includes mutual funds, a common collective trust fund and the Company’s common stock. Once enrolled, a participant may direct his or her investment options to include any of the additional twelve non-core investment options.
 
Participant Loans
Loans are available to active participants who maintain an account balance under the Plan, provided that the minimum loan amount is $1,000 with a maximum of $50,000 or 50% of the participant’s vested account balance. Such loans are collateralized by each respective participant’s account with interest and principal payments being credited to the participant’s account according to the then current investment choices. All loans are subject to repayment via payroll deductions over a maximum period of five years, except for the purchase of a primary residence, for which the period is 15 years. The interest for loans is determined as of the first day of each calendar quarter at an interest rate commensurate with local prevailing rates as determined by the Trustee.
 
Payment of Benefits
Upon termination of service due to death, disability or retirement, a participant may elect to receive a lump sum cash payment.  In addition, under very limited circumstances, a participant may receive a financial hardship distribution, in accordance with the Plan agreement.
 
Forfeited Accounts
Forfeitures are used to pay plan expenses and reduce the Company’s profit sharing and/or matching contribution for the Plan year in which the forfeiture occurs. As of December 31, 2004 and 2003, there were approximately $103,000 and $258,000 in forfeitures available, respectively.
 

 

5

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Notes to Financial Statements
December 31, 2004 and 2003
 
2. Summary of Significant Accounting Policies
 
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of accounting, except for benefit payments, which are recorded when paid.
 
Investment Valuation and Income Recognition
The Plan’s investments are stated at fair value. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year end. Participant loans are valued at cost, which approximates fair value.
 
Net realized and unrealized appreciation (depreciation) is recorded in the accompanying statements of changes in net assets available for benefits as net appreciation (depreciation) in fair value of investments.
 
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
 
Administrative Expenses
The Company provides certain administrative and accounting services to the Plan at no cost and also pays certain other administrative expenses on behalf of the Plan.
 
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets available for plan benefits and changes therein. Actual results could differ from those estimates.
 
Risks and Uncertainties
The Plan provides for various investment options which, in turn, invest in any combination of stocks, mutual funds and other investment securities. Generally, all investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risks in the near term could materially affect participant’s account balances, and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.
 

 

6

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Notes to Financial Statements
December 31, 2004 and 2003
 
3.  Investments
 
The following table presents the fair value of investments at December 31, 2004 and 2003. Investments that represent 5% or more of the Plan’s net assets are separately stated.
 
   
2004
  
2003
  
Investments, at fair value as determined by quoted market prices
              
Mutual funds
  
$
28,086,546
  
$
21,100,529
  
Outback Steakhouse, Inc. common stock
    
11,879,705
   
12,110,678
 
Common/collective trust
    
5,174,133
   
3,520,322
 
Participant loans
    
3,784,284
   
3,170,985
 
Total investments
  
$
48,924,668
  
$
39,902,514
  

 
During 2004 and 2003, the Plan’s investments, including gains and losses on investments bought and sold, as well as held during the year, appreciated in value, as follows:
 
   
2004
  
2003
  
           
Mutual funds
  
$
2,328,739
  
$
4,019,034
  
Outback Steakhouse, Inc. common stock
    
344,965
   
2,649,635
 
   
$
2,673,704
  
$
6,668,669
  

 
The following individual investments represent 5% or more of the net assets available for plan benefits at December 31, 2004 and 2003:
 
   
2004
  
2003
  
           
Outback Steakhouse, Inc. common stock
  
$
11,879,705
  
$
12,110,678
  
Merrill Lynch S&P 500 Index Fund Class I
    
7,318,841
   
6,349,275
 
Merrill Lynch Retirement Preservation Trust
    
5,174,133
   
3,520,322
 
Thornburg International Value Fund Class A
    
4,885,712
   
3,309,120
 
Participant Loans
    
3,784,284
   
3,170,985
 
State Street Research Mid Cap Value Fund Class A
    
2,660,106
   
1,786,280
*
PIMCO Total Return Fund Class A
    
2,559,635
   
1,816,866
* 
Merrill Lynch Balanced Capital Fund Class A
    
2,257,528
*   
2,243,814
 
 
* Investment balance did not exceed 5% of the net assets available for plan benefits in this year.
 

7

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Notes to Financial Statements
December 31, 2004 and 2003
 
4. Party-in-Interest Transactions
 
Certain plan investments include shares of Company stock, participant loans and mutual funds that are managed by the Trustee and, therefore, these transactions qualify as party-in-interest transactions. Fees paid during the year for services rendered by parties-in-interest were based on customary rates for such services.
 
5. Plan Termination
 
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue employer contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
 
6. Tax Status
 
The Internal Revenue Service has determined, and informed the Company by a letter dated September 27, 1995, that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (the “IRC”). The Plan has been amended since receiving the original determination letter and the Company received a new letter dated December 11, 2003. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
 
In June 2004, the Plan became aware that operation of the Plan’s salary deferral feature might not meet certain IRC coverage requirements. The Plan does not believe its resolution of this issue had a material impact on the Plan’s status or financial statements.
 
7. Concentrations of Credit Risk
 
Financial instruments which potentially subject the Plan to concentrations of credit risk consist of the Plan’s investments. Approximately 24 and 29 percent of the net assets available for benefits were held in Company stock at December 31, 2004 and 2003, respectively. These assets are exposed to market risk from changes in asset valuations.
 


8

Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
December 31, 2004
Schedule I
 
Identity of issue, borrower,
  
Description of
  
Current
  
lessor, or similar party
  
investment
  
value
  
           
Outback Steakhouse, Inc.*
    
Common Stock
 
$
11,879,705
  
               
Merrill Lynch Retirement Preservation Trust*
    
Common/Collective Trust
    
5,174,133
 
               
AIM International Growth Fund Class A
    
Mutual Fund
    
3,443
 
AIM Small Cap Growth Fund Class A
    
Mutual Fund
    
648,436
 
American Growth Fund of America R3
    
Mutual Fund
    
1,131,116
 
Davis New York Venture Fund Class A
    
Mutual Fund
    
764,723
 
Evergreen Growth & Income Fund Class A
    
Mutual Fund
    
136,769
 
Fidelity Advanced Equity Growth Fund
    
Mutual Fund
    
799,776
 
Merrill Lynch Balanced Capital Fund Class A*
    
Mutual Fund
    
2,257,528
 
Merrill Lynch Basic Value Fund Class A*
    
Mutual Fund
    
94,182
 
Merrill Lynch Fundamental Growth Fund Class A*
    
Mutual Fund
    
587,112
 
Merrill Lynch S&P 500 Index Fund Class I*
    
Mutual Fund
    
7,318,841
 
Merrill Lynch Value Opportunities Class A*
    
Mutual Fund
    
843,291
 
MFS Core Growth Fund Class A
    
Mutual Fund
    
76
 
Oppenheimer Quest International Value Fund Class A
    
Mutual Fund
    
217,955
 
Oppenheimer Strategic Income Fund Class A
    
Mutual Fund
    
196,852
 
PIMCO Mid Cap Growth Fund Class A
    
Mutual Fund
    
638,921
 
PIMCO Small Cap Value Fund Class A
    
Mutual Fund
    
767,405
 
PIMCO Total Return Fund Class A
    
Mutual Fund
    
2,559,635
 
State Street Research Mid Cap Value Fund Class A
    
Mutual Fund
    
2,660,106
 
State Street Research Government Income Fund
    
Mutual Fund
    
209,151
 
Thornburg International Value Fund Class A
    
Mutual Fund
    
4,885,712
 
Van Kampen Equity & Income Fund Class A
    
Mutual Fund
    
330,280
 
Van Kampen Growth & Income Fund Class A
    
Mutual Fund
    
731,771
 
Van Kampen Growth & Income Fund Class B
    
Mutual Fund
    
303,465
 
Total Mutual Funds
    
 
    
28,086,546
 
Participant Loans*
    
Fully amortized with various maturity dates and interest rates ranging from 4.00% to 9.50%
 
  
3,784,284
 
Total
        
$
48,924,668
  

* Items represent party-in-interest

See accompanying Report of Independent Registered Certified Public Accounting Firm.
 

 
9

SIGNATURE



The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.



 
                             
Outback Steakhouse, Inc. Salaried Employees 401(k) Plan and Trust
Date: June 29, 2005
                             
 
                                                              
                             
  
 
 
By: /s/ Joseph J. Kadow                                   
 
 
Joseph J. Kadow
Executive Vice President

 
 

10

Exhibit

23.1
Consent of Independent Registered Certified Public Accounting Firm
                 
                                                                                                                                    

 
 
11