Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of BJ’s Restaurants, Inc. (referred to herein as the “Company,” “we,” “us” and “our”) and our wholly owned subsidiaries. The consolidated financial statements presented herein include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of our financial condition, results of operations, changes in shareholders’ equity and cash flows for the period. Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures normally included in consolidated financial statements in accordance with U.S. GAAP have been omitted pursuant to the U.S. Securities and Exchange Commission (“SEC”) rules. The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual amounts could differ from these estimates. A description of our accounting policies and other financial information is included in our audited consolidated financial statements filed with the SEC on Form 10-K for the year ended January 1, 2019. The disclosures included in our accompanying interim consolidated financial statements and footnotes should be read in conjunction with our consolidated financial statements and notes thereto included in the Annual Report on Form 10-K and our other reports filed from time to time with the Securities and Exchange Commission. Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). This update clarifies the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We will adopt ASU 2018-15 during the first quarter of fiscal 2020. We are currently evaluating the impact this guidance will have on our consolidated financial statements. Recently Adopted Accounting Standards On January 2, 2019, the first day of fiscal 2019, we adopted ASU 2016-02, Leases (Topic 842), along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, we have not applied the standard to the comparative periods presented on our consolidated financial statements. Our practical expedient implications as of January 2, 2019 were as follows: Practical expedient package We have not reassessed whether any expired or existing contracts are, or contain, leases. We have not reassessed the lease classification for any expired or existing leases. We have not reassessed initial direct costs for any expired or existing leases. Hindsight practical expedient We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term, including option periods, and impairment of operating lease assets. Related to the adoption of Topic 842, our policy elections were as follows: Separation of lease and non-lease components We elected to account for lease and non-lease components as a single component for office and beverage gas equipment Short-term policy We have elected the short-term lease recognition exemption for all classes of underlying assets. E for short-term leases eases with an initial term of 12 months or less and that do not include an option to purchase the underlying asset that we are reasonably certain to exercise are not recorded on the balance sheet. The impact on our consolidated opening balance sheet was as follows: January 1, 2019 Topic 842 Adjustments January 2, 2019 (1) (unaudited) Assets Current assets: Cash and cash equivalents $ 29,224 $ — $ 29,224 Accounts and other receivables, net 31,190 — 31,190 Inventories, net 10,133 — 10,133 Prepaid expenses and other current assets 7,940 — 7,940 Total current assets 78,487 — 78,487 Property and equipment, net 582,754 — 582,754 Operating lease assets — 377,035 377,035 Goodwill 4,673 — 4,673 Other assets, net 29,193 — 29,193 Total assets $ 695,107 $ 377,035 $ 1,072,142 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 36,505 $ — $ 36,505 Accrued expenses 113,920 (6,869 ) 107,051 Current operating lease obligation — 30,529 30,529 Total current liabilities 150,425 23,660 174,085 Long-term operating lease obligation — 443,316 443,316 Deferred income taxes 15,977 6,499 22,476 Deferred rent 35,088 (35,088 ) — Deferred lease incentives 54,264 (54,264 ) — Long-term debt 95,000 — 95,000 Other liabilities 35,132 (27,051 ) 8,081 Total liabilities 385,886 357,072 742,958 Commitments and contingencies Shareholders’ equity: Preferred stock, 5,000 shares authorized, none issued or outstanding — — — Common stock, no — — — Capital surplus 64,342 — 64,342 Retained earnings 244,879 19,963 (2) 264,842 Total shareholders’ equity 309,221 19,963 329,184 Total liabilities and shareholders’ equity $ 695,107 $ 377,035 $ 1,072,142 (1) Adjustments represent non-cash activities for Consolidated Statements of Cash Flow purposes. (2) Primarily composed of an increase of $28.8 million for deferred sale-leaseback gains no longer amortizable, a decrease of $2.3 million to impair the right-of-use asset related to previously impaired properties and a $6.5 million decrease for the deferred tax impact of the cumulative effect adjustments. |