Brinker International operates Chili's, Macaroni Grill, and other restaurant chains. The following items are classified as current liabilities on Brinker International's balance sheets as of June 30, 2010, and June 24, 2009:

__________________________________________________                ___2010                  2009

_______________________________________________________                    (In thousands)

Current Liabilities:

Current installments of long-term debt…………………………..$ 16,866……….$ 1,815

Accounts payable……………………………………….............…………112,824………121,483

Accrued liabilities……………………………………………...............……300,540……...285,406

Income taxes payable………………………………………….............…....…19,647……………—

Liabilities associated with assets held for sale…....…………...……………—………….9,798

Total current liabilities………………………………………….................$449,877……..$418,502

Required

1. Brinker uses the indirect method to prepare its statement of cash flows. Prepare the Operating Activities section of the cash flow statement, which indicates how each item will be reflected as an adjustment to net income.

2. Explain why a decrease in a current liability account such as Accounts Payable appears as a negative amount on the statement of cash flows.