Delaware
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1-15935
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59-3061413
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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Quarter ended December 31, 2009
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Company - owned
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Franchise and development joint venture (1)
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System-wide
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Domestic comparable store sales (stores open 18 months or more)
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Outback Steakhouse
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-5.9%
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-6.6%
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-6.0%
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Carrabba’s Italian Grill
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-3.6%
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n/a
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-3.6%
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Bonefish Grill
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1.0%
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4.8%
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1.1%
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Fleming’s Prime Steakhouse and Wine Bar
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-5.7%
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n/a
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-5.7%
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(1)
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These sales do not represent sales of OSI Restaurant Partners, LLC and are presented only as an indicator of changes in the Company’s restaurant system, which management believes is important information about the Company’s restaurant brands.
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Three months ended
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Years ended
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December 31,
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December 31,
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|||||||||||||||
2009
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2008
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2009
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2008
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Net loss attributable to OSI Restaurant Partners, LLC
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$ | (29,916 | ) | $ | (506,410 | ) | $ | (54,026 | ) | $ | (739,409 | ) | ||||
Provision (benefit) for income taxes
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35,967 | (38,567 | ) | 2,034 | (105,305 | ) | ||||||||||
Interest expense, net
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19,559 | 51,953 | 93,006 | 154,428 | ||||||||||||
Depreciation and amortization
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36,448 | 44,197 | 162,731 | 185,786 | ||||||||||||
EBITDA
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$ | 62,058 | $ | (448,827 | ) | $ | 203,745 | $ | (504,500 | ) | ||||||
Impairments, closings and disposals (1)
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4,178 | 510,748 | 150,607 | 712,915 | ||||||||||||
Stock-based and other compensation expense (2)
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8,561 | 604 | 49,893 | 19,931 | ||||||||||||
Non-cash rent expense (3)
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3,929 | 4,796 | 20,509 | 25,724 | ||||||||||||
Income from operations of unconsolidated affiliates, net (4)
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(1,541 | ) | (464 | ) | (2,196 | ) | (2,343 | ) | ||||||||
Transaction costs (5)
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- | - | - | 1,461 | ||||||||||||
Pre-opening expense (6)
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361 | 2,366 | 3,445 | 12,675 | ||||||||||||
Management fee (7)
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2,445 | 2,633 | 9,786 | 9,906 | ||||||||||||
Unusual or non-recurring expenses (8)
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(4,768 | ) | (7,427 | ) | (125,313 | ) | (2,203 | ) | ||||||||
Other, net (9)
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(108 | ) | 8,415 | (5,310 | ) | 29,066 | ||||||||||
Adjusted EBITDA
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$ | 75,115 | $ | 72,844 | $ | 305,166 | $ | 302,632 | ||||||||
Cash rent (10)
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47,699 | 46,187 | 186,466 | 184,697 | ||||||||||||
Adjusted EBITDAR
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$ | 122,814 | $ | 119,031 | $ | 491,632 | $ | 487,329 |
(1)
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Represents the elimination of non-cash impairment charges of $11,078,000 and $604,071,000 for goodwill, $43,741,000 and $46,420,000 for intangible assets and $76,530,000 and $57,226,000 for fixed assets for the years ended December 31, 2009 and 2008, respectively, cash and non-cash expense from restaurant closings, impairment charges for investments in and advances to unconsolidated affiliates and net gains or losses on the sale of fixed assets. The fixed asset and intangible asset impairment charges noted above for the year ended December 31, 2009 include a $45,962,000 impairment charge to reduce the carrying value of the assets of the Cheeseburger in Paradise concept to their estimated fair market value. In September 2009, this concept was sold to Paradise Restaurant Group, LLC (“PRG”), but the Company continues to consolidate PRG as it represents a variable interest entity for which the Company is the primary beneficiary. Upon the adoption of new accounting guidance for variable interest entities on January 1, 2010, PRG will no longer be consolidated.
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(2)
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Includes ongoing Partner Equity Plan (“PEP”) expense (net of certain PEP distributions) of $12,554,000 and $15,035,000, expenses associated with the vesting of restricted stock and other non-cash charges (net of certain cash distributions) related to compensation programs provided to management, area operating partners and/or restaurant managing partners of $29,792,000 and $15,614,000 and expense (income) incurred as a result of gains (losses) on PEP deferred compensation participant investment accounts of $7,595,000 and ($10,719,000) for the years ended December 31, 2009 and 2008, respectively.
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(3)
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Represents the difference between straight-line and cash rent expenses and the amortization of favorable and unfavorable leases. Includes approximately $6,124,000 and $6,725,000 of non-cash rent expense related to the Company’s sister company, Private Restaurant Properties, LLC (“PRP”), for the years ended December 31, 2009 and 2008, respectively.
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(4)
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Represents the elimination of income from operations of unconsolidated affiliates, net of dividends and distributions received, if any.
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(5)
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Represents the non-recurring fees incurred as a result of the merger transaction on June 14, 2007 and subsequent related filings.
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(6)
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Reflects the elimination of employee travel, training, legal and other costs incurred prior to the opening of new restaurants.
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(7)
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Represents the management fees and expenses paid to a management company owned by affiliates of Bain Capital Partners, LLC, Catterton Partners and Company founders.
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(8)
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Includes a $158,061,000 gain on extinguishment of debt, a $24,500,000 loss related to our guarantee of an uncollateralized line of credit for our Roy’s joint venture partner, severance, certain compensation program expense, certain bad debt expenses and certain expenses and income related to legal claims for the year ended December 31, 2009. Includes a $48,409,000 gain on extinguishment of debt, a $33,150,000 allowance for notes receivable held by a consolidated affiliate, a $3,628,000 loss on the sale of the Lee Roy Selmon’s concept and certain compensation program expense for the year ended December 31, 2008.
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(9)
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Includes foreign currency transaction losses of $201,000 and $10,885,000 for the years ended December 31, 2009 and 2008, respectively, (gain) loss on the cash surrender value of life insurance of ($6,903,000) and $16,005,000 for the years ended December 31, 2009 and 2008, respectively, gains and losses on natural gas derivative instruments and franchise tax expense.
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(10)
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Includes cash rent paid to PRP, exclusive of any amounts included in pre-opening expense above, of approximately $69,912,000 and $70,228,000 for the years ended December 31, 2009 and 2008, respectively.
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Pro Forma
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Cost Savings Initiatives
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Pro Forma
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EBITDA Adjustment
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Savings to
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Twelve-Month
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Year Ended
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Cost Savings Category (in millions):
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Date (4)
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Run-Rate (5)
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December 31, 2009 (6)
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Food (1)
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$ | 8.4 | $ | 12.3 | $ | 3.9 | ||||||
Labor (2)
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1.0 | 1.3 | 0.3 | |||||||||
Other (3)
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5.3 | 7.1 | 1.8 | |||||||||
Total Cost Savings
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$ | 14.7 | $ | 20.7 | $ | 6.0 |
(1)
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Cost savings realized and projected from specific menu item changes.
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(2)
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Cost savings realized and projected from initiatives to reduce restaurant labor hours.
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(3)
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Cost savings realized and projected from supplier contract negotiations and other supply chain efficiency initiatives.
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(4)
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Realized savings for the trailing twelve months ended December 31, 2009. Realized savings are not necessarily indicative of the pro forma twelve-month run-rate since these food, labor and other initiatives were not in place for the entire trailing twelve months ended December 31, 2009.
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(5)
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Pro forma cost savings from the food, labor and other initiatives as if they had been in place for the entire twelve-month period ended December 31, 2009.
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(6)
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Portion of the pro forma cost savings run-rate not yet realized in the last twelve months financial statements.
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Pro Forma Adjusted EBITDA (in millions):
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Adjusted EBITDA, year ended December 31, 2009
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$ | 305.2 | ||
Cost savings initiatives adjustment
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6.0 | |||
Pro forma Adjusted EBITDA
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$ | 311.2 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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OSI RESTAURANT PARTNERS, LLC
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(Registrant)
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Date: March 31, 2010
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By:
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/s/ Dirk A. Montgomery
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Dirk A. Montgomery
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Chief Financial Officer
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