Segment Reporting | SEGMENT REPORTING We operate the Del Frisco’s, Sullivan’s, and Grille brands as operating segments. The restaurant concepts operate solely in the U.S. within the full-service dining industry, providing similar products to similar customers. Sales from external customers are derived principally from food and beverage sales, and we do not rely on any major customers as a source of sales. The restaurant concepts also possess similar economic characteristics, resulting in similar long-term expected financial performance characteristics. However, as Del Frisco’s restaurants typically have higher revenues, driven by their larger physical presence and higher average check, the Del Frisco’s, Sullivan’s, and Grille operating segments have varying operating income and restaurant-level EBITDA margins due to the leveraging of higher revenues on certain fixed operating costs such as management labor, rent, utilities, and building maintenance. The following tables present information about reportable segments (in thousands): 12 Weeks Ended June 13, 2017 Del Frisco's Sullivan's Grille Corporate Consolidated Revenues $ 40,194 $ 15,620 $ 26,487 $ — $ 82,301 Restaurant-level EBITDA 10,909 2,102 3,851 — 16,862 Capital expenditures 2,588 2,457 5,065 33 10,143 Property and equipment 122,925 52,179 124,784 2,566 302,454 12 Weeks Ended June 14, 2016 Del Frisco's Sullivan's Grille Corporate Consolidated Revenues $ 37,945 $ 17,575 $ 24,396 $ — $ 79,916 Restaurant-level EBITDA 10,692 2,642 3,795 — 17,129 Capital expenditures 3,898 388 4,356 40 8,682 Property and equipment 109,652 48,156 104,997 2,498 265,303 24 Weeks Ended June 13, 2017 Del Frisco's Sullivan's Grille Corporate Consolidated Revenues $ 79,955 $ 33,402 $ 52,834 $ — $ 166,191 Restaurant-level EBITDA 21,607 5,559 7,613 — 34,779 Capital expenditures 7,063 6,373 8,352 140 21,928 Property and equipment 122,925 52,179 124,784 2,566 302,454 24 Weeks Ended June 14, 2016 Del Frisco's Sullivan's Grille Corporate Consolidated Revenues $ 76,288 $ 36,476 $ 48,346 $ — $ 161,110 Restaurant-level EBITDA 21,405 6,190 7,563 — 35,158 Capital expenditures 5,182 596 5,626 47 11,451 Property and equipment 109,652 48,156 104,997 2,498 265,303 In addition to using consolidated results in evaluating our performance and allocating our resources, our chief operating decision maker uses restaurant-level EBITDA, which is not a measure defined by GAAP. Management also uses restaurant-level EBITDA to gauge the overall profitability of our core restaurant operations and believes this information is therefore also useful to investors. Restaurant-level EBITDA on a consolidated basis should not be considered a substitute for, or superior to, net income, which is calculated in accordance with GAAP, and the reconciliations to net income set forth below should be carefully evaluated. We define restaurant-level EBITDA as income before income taxes, other income (expenses), net, pre-opening costs, general and administrative costs, consulting project costs, reorganization severance costs, lease termination and closing costs, depreciation and amortization, and insurance settlements. Pre-opening costs are excluded because they vary in timing and magnitude and are not related to the health of ongoing operations. General and administrative costs are only included in our consolidated financial results as they are generally not specifically identifiable to individual operating segments as these costs relate to supporting all of the our restaurant operations of and the extension of our concepts into new markets. Lease termination and closing costs, consulting project costs, reorganization severance costs, depreciation and amortization, and insurance settlements are excluded because they are not ongoing controllable cash expenses, and they are not related to the health of ongoing operations. Property and equipment is the only balance sheet measure used by our chief operating decision maker in allocating resources. The following table reconciles net income to restaurant-level EBITDA (in thousands): 12 Weeks Ended 24 Weeks Ended June 13, 2017 June 14, 2016 June 13, 2017 June 14, 2016 Net income $ 2,090 $ 4,444 $ 5,400 $ 9,855 Income tax expense 824 1,852 1,910 4,289 Net income before income taxes 2,914 6,296 7,310 14,144 Interest expense, net of capitalized interest 9 24 19 55 Other 10 5 11 5 Operating income 2,933 6,325 7,340 14,204 Pre-opening costs 1,619 591 2,008 685 General and administrative costs 5,921 6,030 12,076 11,780 Consulting project costs 597 — 2,633 — Reorganization severance 563 — 719 — Lease termination and closing costs 540 20 538 41 Depreciation and amortization 4,997 4,163 9,813 8,448 Insurance settlements (308 ) — (348 ) — Restaurant-level EBITDA $ 16,862 $ 17,129 $ 34,779 $ 35,158 |