The Company makes trade commitments in the course of its normal operations. As of May 26, 2002, and May 27, 2001, the Company was contingently liable for approximately $9,786 and $10,889, respectively, under outstanding trade letters of credit issued in connection with purchase commitments. These letters of credit have terms of one month or less and are used to collateralize the Company’s obligations to third parties for the purchase of inventories.

As collateral for performance on contracts and as credit guarantees to banks and insurers, the Company is contingently liable under standby letters of credit. As of May 26, 2002, and May 27, 2001, the Company had $30,000 and $30,000, respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in the Company’s consolidated financial statements. As of May 26, 2002, and May 27, 2001, the Company had $8,608 and $8,166, respectively, of standby letters of credit related to contractual operating lease obligation and other payments. All standby letters of credit are renewable annually.

As of May 26, 2002, and May 27, 2001, the Company had $5,463 and $6,922, respectively, of guarantees associated with third party sub-lease obligations. The guarantees expire over the lease terms.

The Company is involved in litigation arising from the normal course of business. In the opinion of management, this litigation is not expected to materially impact the Company’s consolidated financial statements.


The following table summarizes unaudited quarterly data for fiscal 2002 and 2001:

D2002ar43-01.jpg 1054x622

(1) Restaurant operating profit is calculated as sales less cost of sales.
(2) Includes after-tax restructuring credits of $1,394 and $183 recorded in the second and fourth quarters of fiscal 2002, respectively. The related basic and diluted net earnings per share impact of the credits recorded in the second and fourth quarters of fiscal 2002 amounted to $0.01 and $0.00, respectively.

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