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Correspondence 10/04

October 26, 2004

Mr. Joseph Foti

Senior Assistant Chief Accountant

Division of Corporate Finance

Securities and Exchange
Commission

Washington, D.C. 20549

RE:       Brinker International

            Form
10-K for the year ended June 30, 2004

            Commission
file #: 1-10275

Dear Mr. Foti:

The purpose of this letter is to
provide the detailed response of Brinker International, Inc. to the comments
set forth in your letter dated October 1, 2004.  For your convenience, your comments have been restated in their
entirety followed by our responses.

Note 1 - Summary of Significant Accounting Policies

(h)  Goodwill and Other Intangibles

1.       Please
confirm to us that your reporting units used in impairment testing were
selected using the criteria set forth in paragraphs 23-25 of SFAS 142.  Also, please supplementally describe the
reporting units used in your testing and how these were determined.  Furthermore, please specifically disclose
how fair value measurements are determined in accordance with the guidance in
paragraphs 23-25 of SFAS 142.  We may
have further comment on your response.

Response:

The reporting units used in
impairment testing were selected using the criteria set forth in paragraphs
30-31 of SFAS 142.  The reporting units
were determined to be the restaurant concept level and include Chili's Grill
& Bar, Maggiano's Little Italy, On The Border Mexican Grill & Cantina,
Corner Bakery Cafe, and Big Bowl Asian Kitchen (there is no goodwill associated
with Romano's Macaroni Grill).  The
concepts were determined to be the reporting units because they are businesses
for which discrete financial information is available and segment management
regularly reviews the operating results to make decisions about resource
allocation and to assess segment performance.
The individual restaurants within each concept have similar economic
characteristics and therefore meet the aggregation criteria.

The fair values of our reporting units are determined
using a present value technique consistent with the guidance provided by
Concept Statement 7.  In accordance with
this guidance, the expected cash flow approach is used to evaluate multiple
scenarios of forecasted cash flows for each reporting unit and probabilities
are assigned to each set of cash flows.
Forecasted cash flows are based on reasonable and supportable
assumptions including

historical cash flow trends, expected growth rates, and
terminal values.  The estimated cash
flows are present valued using a risk-free rate of interest.

Note 3 - Restructure Charges and Other Impairments

2.       Please
expand your disclosure regarding the $31.2 million impairment of long lived
assets to include a description of these assets and the method or methods used
in determining fair value.  Refer to
paragraph 26 of SFAS 144.

Response:

In future filings we will expand our disclosure regarding
the $31.2 million impairment of long-lived assets and note that it consists
primarily of buildings, furniture and equipment.  We will also disclose that the methods used in determining fair
value included obtaining estimates from real estate brokers who examined
comparable property sales values in the respective markets in which the
restaurants were located and offer prices we received from third parties in
connection with the sale of the restaurants.

3.       We
note that you decided to close 30 restaurants during the 2004 fiscal year, and
that this decision was the result of a comprehensive analysis that examined
restaurants not meeting minimum returns on investment and certain other
operating thresholds.  Please
supplementally explain whether each concept president and vice president uses
these thresholds in their evaluation of the restaurants falling under their
control, how often and for how long these measures have been used, and how
restaurants were chosen for closure.  For
example, explain to us if a certain number of years of below-level performance
was necessary for consideration, or if declining performance (not necessarily
below-level performance) was the indicator.
Also, include in your response a discussion of any new facts and
circumstances present during fiscal 2004 that indicated impairment existed that
were not present in 2003 and prior.

Response:

In the past, the concepts had the
responsibility for deciding whether to close restaurants based primarily on unfavorable
market trends and restaurant profitability.
During the third quarter of fiscal 2004, we initiated a company-wide
project that entailed examining all restaurants not meeting minimum return on
investment thresholds and certain other operating performance criteria to
determine whether they should continue to operate.  The operating criteria used to determine whether a restaurant
should be closed included the following:

Less than 10% return on investment during the past 12
months

Marginal operating profit and cash flow

Poor trend analysis and forecasted results

While these criteria have been
used to monitor performance in the past, they were not used collectively as a
basis for making decisions to close restaurants.  Prior to the third quarter of fiscal 2004, the closed restaurants
were subjected to the same analysis we utilize for all restaurants held and
used in operations as required by

SFAS 144, and no impairment existed.  The impairments were the result of closing
the stores based on the new methodology described above and applying the
guidance in SFAS 144 related to long-lived assets to be disposed of by sale and
long-lived assets to be abandoned.
Since the restaurants are constructed specifically for our concepts and
cannot always be easily retrofitted for other uses, it is very difficult to
fully recover the cost of a restaurant once the decision has been made to close
it.  The new methodology used to make
the decision to close the 30 restaurants is now being applied quarterly.

4.       We
note from your discussion of the goodwill impairment charge of $27 million
taken on goodwill related to the Big Bowl concept that your view of the brand's
competitive position and future development have changed.  We also note that the closure of seven
restaurants constituted approximately 1/3 of the restaurants at the time (14
remain open as of June 30, 2004 per your disclosure in Item 2).  Please supplementally explain to us how you
are changing the brand's future development plans and whether the closures of
Big Bowl (or any other concept closures) are in specific geographic areas.

Response:

During fiscal 2004, we received
market research from a consultant suggesting that Big Bowl may not be properly
positioned to reach our previous growth expectations.  As a result of this market research and other internal analyses
related to the concept's competitive positioning, we slowed new restaurant
development in order to perform further research and testing of the concept's
positioning.  Therefore, our revised
projections reflect a delay in development and also assume a decrease in the
forecasted rate of restaurant openings in future years to reflect the increased
competitive pressures the concept faces.
This change in development plans was the primary trigger for the goodwill
impairment.

There were no concepts that had
material closures in specific geographic areas that would require discontinued
operation treatment in accordance with SFAS 144.

OTHER

Note 1(m) - Net Income per Share

5.       Reference
is made to the last sentence in the accounting policy that states your
contingently convertible debt securities are not considered for purposes of
diluted earnings per share unless the required conversion criteria have been
met.  From your disclosures in note 7,
we note that the approximate $430 million of convertible senior debentures
would be convertible into approximately 8 million share of common stock if the
conversion criteria were met.  In this
regard, we note that a conversion will materially impact diluted earnings per
share by reducing such amounts in each period.
Although your current accounting treatment for earnings per share
purposes is appropriate, the Emerging Issues Task Force in Issue No. 04-8 has
reached a tentative conclusion that contingently convertible securities should
be included in the calculation of diluted earnings per share, regardless of
whether the contingencies have been met or whether the market price contingency
is substantive.  Furthermore, this
tentative conclusion, if finalized and ratified by the FASB, would require
retroactive restatement of diluted earnings per share.  In view of the significant impact that this
EITF Issue would

have on your reported diluted earnings per share, we believe
you should provide separate discussion in MD&A of the reasonably expected
impact from this matter.  Specifically,
you should disclose (i) the tentative conclusion reached by the EITF on this
Issue that requires ratification by the FASB; (ii) how the issue will be
treated on a retroactive restatement basis, and (iii) the dollar ($) impact on
you prior interim and annual periods, if this tentative conclusion had been
effective currently.  Please revise
accordingly.

Response:

We will disclose in our Form 10-Q
expected to be filed November 8, 2004, the tentative conclusion reached by the
EITF related to contingently convertible securities, how the issue will be
treated retroactively, and the dollar impact on our prior interim and annual
periods.

Note 4 - Goodwill and Intangibles

6.       With
respect to the $4.4 million of reacquired development rights, it is unclear
whether this involved the acquisition of a business.  In this regard, the reacquisition of developer rights does not
appear to be the acquisition of a business because no incremental revenues will
result from such transactions.  We
believe these types of transactions may be more appropriately characterized as
the termination of a previous contractual arrangement and that, in such
situations, any related termination fees should not be capitalized.  These transactions appear analogous to the
termination of a management contract intended to eliminate future management
fees.  These types of "one-time"
termination fees are generally charged to expense.  Further, when a management contract is terminated, the related management
services are no longer provided.
Similarly, when you reacquire developer rights, the contract previously
granting those rights is, in effect, terminated and the development efforts
previously provided by the area developer are discontinued.  Supplementally explain to us the nature of
the transaction that generated this intangible asset and your basis in the
accounting literature for capitalizing the cost of reacquiring development
rights or if after reconsidering your position, you deem it appropriate not to
capitalize such amounts, please revise your financial statements to write-off
the amounts, accordingly.  If management
believes and can support an assertion that such amounts are not material to
results of operations and financial condition, we would not object to a
write-off in the next quarterly reporting period.

Response:

In 1992, we sold the Chili's Grill & Bar ("Chili's")
master development rights for the Pacific Rim to a Singapore corporation
("PAC-Am").  Under the development
agreement, we were to receive a portion of the revenue stream including
royalties amounting to 2% of sales, a $20,000 franchise fee per unit, and no
development fees for new countries.  The
purpose of this agreement was to leverage PAC-Am's regional experience to
facilitate the expansion of the Chili's concept in a territory that presented
numerous cultural and political obstacles.  PAC-Am was successful in
establishing franchises; however, they did not effectively provide franchisee
support.  During fiscal 1998, we negotiated an asset purchase agreement
(the "Agreement") to repurchase the Chili's

master development rights for the Pacific Rim.  The
purpose of the Agreement was to take control of development in the region and to
provide the level of franchisee support necessary for success in the Pacific
Rim.  Furthermore, the Agreement allowed us to retain the entire revenue
stream (4% for royalties, $40,000 for franchise fees, and $20,000 for
development fees).

We believe that the acquisition of the development rights
is an asset as defined by Concept 6.
Paragraph 25 of Concept 6 defines an asset as "probable future economic
benefits obtained or controlled by a particular entity as a result of past
transactions or events."  Essentially,
we acquired the right to the additional revenues provided for under the
Agreement.  This right not only included
the incremental revenues from restaurants existing at the time of the
acquisition, but also included future incremental revenues expected to be
received from new franchisees.  In
addition, EITF 04-1 states that a reacquired right should be considered an
intangible asset apart from goodwill under the separability criterion because
there is evidence of an exchange transaction for the asset.  Although our reacquired development rights
was not part of a business combination, we believe that if they can be
recognized as an asset under a business combination, it is reasonable to assume
that the development rights can also be purchased outside of a business
combination and recognized as an asset.
EITF 04-1 supports this view and notes that "the accounting for the
settlement of the preexisting relationship generally should be the same whether
within a business combination or absent a business combination."  We do not believe that this transaction is
analogous to termination of a management contract intended to eliminate future
management fees.  As previously noted,
the acquisition of the development rights resulted in incremental revenues that
we would have otherwise not received.
This is not the case when terminating a management contract.

Note 6 - Income Taxes

7.      We
note that "other" deferred tax assets and "other" deferred tax liabilities
comprise a significant portion (approximately 1/3 in each case) of gross
deferred tax assets and liabilities.  We
also note the description reads "other, net" in each case.  Please supplementally tell us why these
would be presented net in both assets and liabilities, and furnish us with a
schedule that details the composition of these accounts.  In addition, your disclosure should be
revised to separately present each significant item.

Response:

There were no assets or
liabilities presented net in the footnote disclosure.  In future filings we will change the description "other, net" to
"other."  A schedule that details the
composition of the "other" accounts is included below.  In future filings we will separately present
all items that exceed 5% of the greater of the total deferred tax assets or
total deferred tax liabilities included in the footnotes.  If this criterion had been used in fiscal
2004, we would have separately presented impairments on investments,
unfavorable interest reserves, and prepaid expenses.

  Deferred

  Tax Asets

  Impairments
  on investments

  $
  9,894

  Unfavorable
  interest reserves

  7,426

  Accrued
  liabilities

  3,448

  Other

    1,745

  $22,513

  Deferred
  Tax Liabilities

  Prepaid
  expenses

  $11,368

  Property
  taxes

  3,343

  Other

      396

  $15,107

We acknowledge that we are
responsible for the adequacy and accuracy of the disclosure in the filings;
staff comments or changes to disclosure in response to staff comments in the
filings reviewed by the staff do not foreclose the Commission from taking any
action with respect to the filing; and we may not assert staff comments as a
defense in any proceedings initiated by the Commission or any person under the
federal securities laws of the United States.

If you have any additional
questions please feel free to contact me at 972-770-9