Document and Entity Information
Document and Entity Information - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Jun. 26, 2019 | Aug. 12, 2019 | |
Document Documentand Entity Information [Abstract] | ||
Entity Registrant Name | BRINKER INTERNATIONAL, INC | |
Entity Central Index Key | 0000703351 | |
Current Fiscal Year End Date | --06-26 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-K | |
Document Period End Date | Jun. 26, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 37.5 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 1,649.4 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |||
Revenues | |||||
Revenues | $ 3,217.9 | $ 3,135.4 | $ 3,150.8 | ||
Total revenues | 3,217.9 | 3,135.4 | 3,150.8 | ||
Operating costs and expenses | |||||
Cost of sales | 823 | 796 | 791.3 | ||
Restaurant labor | 1,059.7 | 1,033.9 | 1,017.9 | ||
Restaurant expenses (Note 1) | 812.3 | 757.5 | 773.5 | ||
Company restaurant expenses | [1] | 2,695 | 2,587.4 | 2,582.7 | |
Depreciation and amortization | 147.6 | 151.4 | 156.4 | ||
General and administrative | 149.1 | 136 | 132.8 | ||
Other (gains) and charges | (4.5) | [2] | 34.5 | 22.7 | |
Total operating costs and expenses | 2,987.2 | 2,909.3 | 2,894.6 | ||
Operating income | 230.7 | 226.1 | 256.2 | ||
Interest expense | 61.6 | 59 | 49.6 | ||
Other (income), net | (2.7) | (3.1) | (1.9) | ||
Income before provision for income taxes | 171.8 | 170.2 | 208.5 | ||
Provision for income taxes | 16.9 | 44.3 | 57.7 | ||
Net income | $ 154.9 | $ 125.9 | $ 150.8 | ||
Basic net income per share: | |||||
Basic net income per share | $ 4.04 | $ 2.75 | $ 2.98 | ||
Diluted net income per share: | |||||
Diluted net income per share | $ 3.96 | $ 2.72 | $ 2.94 | ||
Basic weighted average shares outstanding | 38.3 | 45.7 | 50.6 | ||
Diluted weighted average shares outstanding | 39.1 | 46.3 | 51.2 | ||
Other comprehensive income (loss) | |||||
Foreign currency translation adjustment | $ 0.2 | $ 0.2 | $ (0.3) | ||
Other comprehensive income (loss) | 0.2 | 0.2 | (0.3) | ||
Comprehensive income | 155.1 | 126.1 | 150.5 | ||
Company sales [Member] | |||||
Revenues | |||||
Revenues, from contract with customer, excluding assessed tax | 3,106.2 | ||||
Revenues | 3,041.5 | 3,062.5 | |||
Total revenues | 3,041.5 | 3,062.5 | |||
Franchise and other revenues [Member] | |||||
Revenues | |||||
Revenues, from contract with customer, excluding assessed tax | $ 111.7 | ||||
Revenues | 93.9 | 88.3 | |||
Total revenues | $ 93.9 | $ 88.3 | |||
[1] | Company restaurant expenses includes Cost of sales , Restaurant labor and Restaurant expenses , including advertising. With the adoption of ASC 606, for the fiscal year ended June 26, 2019 , advertising contributions received from Chili’s franchisees are recorded as Franchise fees and other revenues within Total revenues , which differs from the fiscal years ended June 27, 2018 and June 28, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses. | ||||
[2] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 | ||
Current assets | ||||
Cash and cash equivalents | $ 13.4 | $ 10.9 | ||
Accounts receivable, net | 55 | 53.7 | ||
Inventories | 23.2 | 24.2 | ||
Restaurant supplies | 47.1 | 46.7 | ||
Prepaid expenses | 23.7 | 20.8 | ||
Income taxes receivable, net | 14.6 | 0 | ||
Total current assets | 177 | 156.3 | ||
Property and equipment, at cost | ||||
Land | 33.4 | 154 | ||
Buildings and leasehold improvements | 1,454.6 | 1,673.3 | ||
Furniture and equipment | 757.5 | 722 | ||
Construction-in-progress | 19.2 | 22.1 | ||
Gross property and equipment | 2,264.7 | 2,571.4 | ||
Less accumulated depreciation and amortization | (1,509.6) | (1,632.5) | ||
Net property and equipment | 755.1 | 938.9 | ||
Other assets | ||||
Goodwill | 165.5 | 163.8 | ||
Deferred income taxes, net | 112 | 33.6 | [1] | |
Intangibles, net | 22.3 | 24 | ||
Other | 26.4 | 30.7 | ||
Total other assets | 326.2 | 252.1 | ||
Total assets | 1,258.3 | [2] | 1,347.3 | |
Current liabilities | ||||
Current installments of long-term debt | 9.7 | 7.1 | ||
Accounts payable | 97.5 | 104.7 | ||
Gift card liability | 100.9 | 119.1 | [3] | |
Accrued payroll | 82.1 | 74.5 | ||
Other accrued liabilities | 131.4 | 127.2 | [4] | |
Income taxes payable, net | 0 | 1.7 | ||
Total current liabilities | 421.6 | 434.3 | ||
Long-term debt, less current installments | 1,206.6 | 1,499.6 | ||
Deferred sale leaseback gain, long-term portion | 255.3 | 0 | ||
Other liabilities | 153 | 131.7 | [4] | |
Commitments and contingencies (Note 10 and Note 15) | ||||
Shareholders’ deficit | ||||
Common stock (250.0 million authorized shares; $0.10 par value; 176.2 million shares issued and 37.5 million shares outstanding at June 26, 2019, and 176.2 million shares issued and 40.8 million shares outstanding at June 27, 2018) | 17.6 | 17.6 | ||
Additional paid-in capital | 522 | 511.6 | ||
Accumulated other comprehensive loss | (5.6) | (5.8) | ||
Retained earnings | 2,771.2 | 2,683 | ||
Shareholders' equity including treasury stock | 3,305.2 | 3,206.4 | ||
Less treasury stock, at cost (138.7 million shares at June 26, 2019, and 135.4 million shares at June 27, 2018) | (4,083.4) | (3,924.7) | ||
Total shareholders’ deficit | (778.2) | (718.3) | [3],[4] | |
Total liabilities and shareholders’ deficit | $ 1,258.3 | $ 1,347.3 | ||
[1] | (1) Deferred income taxes, net adjustment relates to the net change in liabilities and equity as a result of the adoption of ASC 606 described in notes (2) and (3) below. | |||
[2] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. | |||
[3] | (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . | |||
[4] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Jun. 26, 2019 | Jun. 27, 2018 |
Common stock, authorized shares | 250 | 250 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares issued | 176.2 | 176.2 |
Common stock, shares outstanding | 37.5 | 40.8 |
Treasury stock, shares | 138.7 | 135.4 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Cash flows from operating activities | |||
Net income | $ 154.9 | $ 125.9 | $ 150.8 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||
Depreciation and amortization | 147.6 | 151.4 | 156.4 |
Stock-based compensation | 16.4 | 14.2 | 14.5 |
Restructure charges and other impairments | 26.5 | 21.7 | 14.4 |
Net (gain) loss on disposal of assets | (33.1) | 1.6 | (0.4) |
Undistributed loss on equity investments | 0 | 0.3 | 0 |
Other | 3 | 3.1 | 3 |
Changes in assets and liabilities: | |||
Accounts receivable, net | (3) | (3.3) | 3.5 |
Inventories | 1 | 0 | 0 |
Restaurant supplies | (0.6) | (1.2) | (1.5) |
Prepaid expenses | (3) | (1.7) | (0.7) |
Deferred income taxes, net | (75.8) | 3.4 | (22.7) |
Other assets | 0.9 | 0.3 | 0.3 |
Accounts payable | (4.1) | 1.6 | 3 |
Gift card liability | (10.1) | (7.3) | 4.2 |
Accrued payroll | 6.8 | 4.2 | (0.7) |
Other accrued liabilities | (7.7) | (6.8) | (5.8) |
Current income taxes | (12.7) | (14.9) | (7.7) |
Other liabilities | 5.7 | (8) | 4.5 |
Net cash provided by operating activities | 212.7 | 284.5 | 315.1 |
Cash flows from investing activities | |||
Payments for property and equipment | (167.6) | (101.3) | (102.6) |
Payments for franchise restaurant acquisitions | (3.1) | 0 | 0 |
Proceeds from sale of assets | 1.6 | 19.9 | 3.2 |
Proceeds from note receivable | 2.8 | 1.9 | 0 |
Insurance recoveries | 1.7 | 1.7 | 0 |
Proceeds from sale leaseback transactions, net of related expenses | 485.9 | 0 | 0 |
Net cash provided by (used in) investing activities | 321.3 | (77.8) | (99.4) |
Cash flows from financing activities | |||
Borrowings on revolving credit facility | 853 | 1,016 | 250 |
Payments on revolving credit facility | (1,150) | (588) | (388) |
Purchases of treasury stock | (167.7) | (303.2) | (370.9) |
Payments of dividends | (60.3) | (70) | (70.8) |
Payments on long-term debt | (9.5) | (260.3) | (3.8) |
Proceeds from issuances of treasury stock | 3 | 2.3 | 5.6 |
Payments for debt issuance costs | 0 | (1.6) | (10.2) |
Proceeds from issuance of long-term debt | 0 | 0 | 350 |
Net cash used in financing activities | (531.5) | (204.8) | (238.1) |
Net change in cash and cash equivalents | 2.5 | 1.9 | (22.4) |
Cash and cash equivalents at beginning of period | 10.9 | 9 | 31.4 |
Cash and cash equivalents at end of period | $ 13.4 | $ 10.9 | $ 9 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | |
Balance, shares at Jun. 29, 2016 | 55.4 | ||||||
Balance at Jun. 29, 2016 | $ (225.5) | $ 17.6 | $ 495.1 | $ 2,545.8 | $ (3,272.4) | $ (11.6) | |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||||
Net income | 150.8 | 0 | 0 | 150.8 | 0 | 0 | |
Other comprehensive income (loss) | (0.3) | 0 | 0 | 0 | 0 | (0.3) | |
Dividends | (69.5) | 0 | 0 | (69.5) | 0 | 0 | |
Stock-based compensation | 14.5 | 0 | 14.5 | 0 | 0 | 0 | |
Purchases of treasury stock | (370.9) | $ 0 | (1.8) | 0 | (369.1) | 0 | |
Purchases of treasury stock, shares | (7.5) | ||||||
Issuances of common stock | 5.6 | $ 0 | (7.4) | 0 | 13 | 0 | |
Issuances of common stock, shares | 0.5 | ||||||
Excess tax benefit from stock-based compensation | 1.7 | $ 0 | 1.7 | 0 | 0 | 0 | |
Balance, shares at Jun. 28, 2017 | 48.4 | ||||||
Balance at Jun. 28, 2017 | (493.6) | $ 17.6 | 502.1 | 2,627.1 | (3,628.5) | (11.9) | |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||||
Net income | 125.9 | 0 | 0 | 125.9 | 0 | 0 | |
Other comprehensive income (loss) | 0.2 | 0 | 0 | 0 | 0 | 0.2 | |
Dividends | (70) | 0 | 0 | (70) | 0 | 0 | |
Stock-based compensation | 14.2 | 0 | 14.2 | 0 | 0 | 0 | |
Purchases of treasury stock | (303.2) | $ 0 | (0.2) | 0 | (303) | 0 | |
Purchases of treasury stock, shares | (7.9) | ||||||
Issuances of common stock | 2.3 | $ 0 | (4.5) | 0 | 6.8 | 0 | |
Issuances of common stock, shares | 0.3 | ||||||
Disposition of equity method investment | $ 5.9 | $ 0 | 0 | 0 | 0 | 5.9 | |
Balance, shares at Jun. 27, 2018 | 40.8 | 40.8 | |||||
Balance at Jun. 27, 2018 | $ (718.3) | [1],[2] | $ 17.6 | 511.6 | 2,683 | (3,924.7) | (5.8) |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||||
Net income | 154.9 | 0 | 0 | 154.9 | 0 | 0 | |
Other comprehensive income (loss) | 0.2 | 0 | 0 | 0 | 0 | 0.2 | |
Dividends | (59.3) | 0 | 0 | (59.3) | 0 | 0 | |
Stock-based compensation | 16.4 | 0 | 16.4 | 0 | 0 | 0 | |
Purchases of treasury stock | (167.7) | $ 0 | (0.6) | 0 | (167.1) | 0 | |
Purchases of treasury stock, shares | (3.6) | ||||||
Issuances of common stock | 3 | $ 0 | (5.4) | 0 | 8.4 | 0 | |
Issuances of common stock, shares | 0.3 | ||||||
Adoption of new accounting standards | $ (7.4) | $ 0 | 0 | (7.4) | 0 | 0 | |
Balance, shares at Jun. 26, 2019 | 37.5 | 37.5 | |||||
Balance at Jun. 26, 2019 | $ (778.2) | $ 17.6 | $ 522 | $ 2,771.2 | $ (4,083.4) | $ (5.6) | |
[1] | (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . | ||||||
[2] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||
Jun. 26, 2019 | Sep. 26, 2018 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Dividends per share | $ 0.38 | $ 0.38 | $ 1.52 | $ 1.52 | $ 1.36 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 26, 2019 | |
Disclosure Nature Of Operations And Summary Of Significant Accounting Policies Narrative [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Nature of Operations We are principally engaged in the ownership, operation, development, and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. At June 26, 2019 , we owned, operated, or franchised 1,665 restaurants, consisting of 1,001 Company-owned restaurants and 664 franchised restaurants, located in the United States , 29 countries and two United States territories. Basis of Presentation The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and include the accounts of Brinker International, Inc. and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We have a 52/53 week fiscal year ending on the last Wednesday in June. Fiscal years 2019 , 2018 and 2017 , which ended on June 26, 2019 , June 27, 2018 and June 28, 2017 , respectively, each contained 52 weeks . All amounts within the Notes to the Consolidated Financial Statements are presented in millions unless otherwise specified. Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income to provide more clarity around Company-owned restaurant revenues and operating expenses trends: Company sales and Franchise and other revenues . We report certain labor and related expenses in a separate caption on the Consolidated Statements of Comprehensive Income titled Restaurant labor . Restaurant labor includes all compensation-related expenses, including benefits and incentive compensation, for restaurant team members at the general manager level and below. Labor-related expenses attributable to multi-restaurant (or above-restaurant) supervision is included in Restaurant expenses . New Accounting Standards Implemented ASU 2014-09, Revenue from Contracts with Customers (Topic 606) - In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, and subsequently amended this update by issuing additional ASU’s that provide clarification and further guidance around areas identified as potential implementation issues. These updates provide a comprehensive new revenue recognition model that requires a company to recognize revenues to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. These updates also require additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts. These updates are effective for annual and interim periods for fiscal years beginning after December 15, 2017, which required us to adopt these provisions in the first quarter of fiscal 2019 . Refer to the Revenue significant accounting policy below, Note 2 - Revenue Recognition , and Note 16 - Segment Information for our adoption disclosures. ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) - In August 2016, the FASB issued ASU 2016-15, this update provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2017, which required us to adopt these provisions in the first quarter of fiscal 2019 . The update was applied on a retrospective basis. The adoption of this guidance did not have an impact on the Consolidated Financial Statements or debt covenants. ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment - In January 2017, the FASB issued ASU 2017-04, this update eliminates step two of the goodwill impairment analysis. Companies will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, they will measure impairment as the difference between the carrying amount and the fair value of the reporting unit. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performed with measurement dates after January 1, 2017. We elected to early adopt this guidance as of fiscal 2019 . The guidance was adopted prospectively. The adoption of this guidance did not have an impact on the Consolidated Financial Statements . Refer to Note 6 - Goodwill and Intangibles for disclosure about goodwill. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract - In August 2018, the FASB issued ASU 2018-15, this update aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update is effective for annual and interim periods in fiscal years beginning after December 15, 2019, and early adoption is permitted. We elected to early adopt this guidance during fiscal 2019 , using a prospective approach. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements . Use of Estimates The preparation of the Consolidated Financial Statements is in conformity with generally accepted accounting principles in the United States and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements , and the reported amounts of revenues and costs and expenses during the reporting period. Actual results could differ from those estimates. Revenue Effective fiscal 2019, we adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), from the previous guidance ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, “Legacy GAAP”). Our transition to ASC 606 represents a change in accounting principle. The Consolidated Financial Statements for fiscal 2019 reflect the application of ASC 606 guidance using the modified retrospective transition method, while the Consolidated Financial Statements for prior periods were prepared under Legacy GAAP. Revenues are presented in Company sales and Franchise and other revenues captions in the Consolidated Statements of Comprehensive Income . Refer below for our significant revenue accounting policies, to Note 2 - Revenue Recognition for deferred revenues and new standard transition disclosures, and to Note 16 - Segment Information for disaggregation of revenues detail. Company Sales Company sales include revenues generated by the operation of Company-owned restaurants including gift card redemptions. The adoption of ASC 606 did not impact revenue recognition related to Company sales . We will continue to record the revenues from the sale of food, beverages and alcohol as products are sold. Franchise and Other Revenues Franchise and other revenues include royalties, advertising fees (effective fiscal 2019), Maggiano’s banquet service charge income, gift card breakage, digital entertainment revenues, gift card equalization, delivery fee income, franchise and development fees, retail royalty revenues, merchandise income, and gift card discount costs from third-party gift card sales . Royalties - Franchise royalties are based on a percentage of the sales generated by our franchised restaurants. The provisions of ASC 606 did not impact the recognition of these royalties, as the performance obligation related to franchise sales is considered complete upon the sale of food, beverages and alcohol. Royalty revenues attributable to franchise restaurants will continue to be recognized in the same period the sales are generated at the franchise restaurants. Advertising Fees - Domestic franchisees are contractually obligated to contribute into certain advertising and marketing funds. The adoption of ASC 606 did not impact the timing of revenue recognition of the advertising fees received; however, effective fiscal 2019, advertising fees are now presented on a gross basis within Franchise and other revenues . Under Legacy GAAP, the advertising funds received from franchisees were considered a reimbursement of advertising expenses and were presented on a net basis as a reduction to advertising expenses in Restaurant expenses in the Consolidated Statements of Comprehensive Income . Initial Development and Franchise Fees - We receive development fees from franchisees for territory development arrangements and franchise fees for new restaurant openings. Under ASC 606, the performance obligation related to these arrangements will be collectively deferred as a contract liability and recognized on a straight-line basis into Franchise and other revenues in the Consolidated Statements of Comprehensive Income over the term of the underlying agreements. Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets . Under Legacy GAAP, development fees were recognized as income upon the execution of the agreement, when development rights were conveyed to the franchisee. Franchise fees were recognized as income when the obligations under the franchise agreement were satisfied, generally upon the opening of the new franchise restaurant. Gift Card Breakage Income - Breakage revenues represent the monetary value associated with outstanding gift card balances for which redemption is considered remote. We estimate this amount based on our historical gift card redemption patterns and update the breakage rate estimate periodically and if necessary, adjust the deferred revenues balance within the Gift card liability account in the Consolidated Balance Sheets accordingly. In accordance with ASC 606, breakage revenues will be recognized proportionate to the pattern of related gift card redemptions. Under Legacy GAAP, breakage revenues were recognized when redemption was considered remote. We do not charge dormancy or any other fees related to monitoring or administering the gift card program to cardholders. Additionally, proceeds from the sale of gift cards will continue to be recorded as deferred revenues in the Gift card liability in the Consolidated Balance Sheets and recognized as Company sales when the gift card is redeemed by the holder. Gift Card Discount Costs - Our gift cards are sold through various outlets such as in-store, Chili’s and Maggiano’s websites, directly to other businesses, and through third-party distributors that sell our gift cards at various retail locations. We incur incremental direct costs related to gift card sales, such as commissions and activation fees, for gift cards sold by third-party businesses and distributors. These initial direct costs are deferred and amortized against revenues proportionate to the pattern of related gift card redemption. Other Revenues - Other revenues not described above, such as Maggiano’s banquet service charge income, digital entertainment revenues, retail royalty revenues and delivery fee income had no change in recognition from the adoption of ASC 606. Fair Value Measurements Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value, as follows: • Level 1 - inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 - inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities. • Level 3 - inputs are unobservable and reflect our own assumptions. Cash and Cash Equivalents Our policy is to invest cash in excess of operating requirements in income-producing investments. Income-producing investments with original maturities of three months or less are reflected as cash equivalents. Accounts Receivable Accounts receivable, net of the allowance for doubtful accounts, represents the estimated net realizable value. Our primary account receivables are due from franchisees, gift card sales, store purchases made on credit cards, and from time-to-time, insurance recoveries, vendor rebates and landlord related receivables. Provisions for doubtful accounts are recorded based on management’s judgment regarding our ability to collect as well as the age of the receivables. Accounts receivable are written off when they are deemed uncollectible. Inventories Inventories consist of food, beverages and supplies and are valued at the lower of cost or net realizable value, using the first-in, first-out or “FIFO” method. Property and Equipment Property and equipment is stated at cost. Buildings and leasehold improvements are depreciated using the straight-line method over the lesser of the term of the lease, including certain renewal options, or the estimated useful lives of the assets, which range from 5 to 20 years . Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years . Depreciation expenses related to property and equipment for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 of $146.5 million , $150.1 million , and $155.0 million , respectively, was recorded in Depreciation and amortization in the Consolidated Statements of Comprehensive Income . Routine repair and maintenance costs are expensed when incurred. Major replacements and improvements are capitalized. We review the carrying amount of property and equipment semi-annually or when events or circumstances indicate that the carrying amount may not be recoverable. We have determined the restaurant level is the lowest level of identifiable cash flows. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on discounted projected future operating cash flows of the restaurants over their remaining service life using a risk adjusted discount rate that is commensurate with the inherent risk. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Definite-lived Intangible Assets Definite-lived intangible assets primarily include reacquired franchise rights resulting from our acquisitions and are amortized using the straight-line method over the estimated useful lives of the assets. We determine the fair value of reacquired franchise rights based on discounted projected future operating cash flows of the restaurants associated with these franchise rights. We review the carrying amount semi-annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Operating Leases Rent expenses for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that the renewal appears reasonably assured. The straight-line rent calculation and rent expenses includes any rent holiday period, which is the period of time between taking control of a leased site and the rent commencement date. Contingent rents are generally amounts due as a result of sales in excess of amounts stipulated in certain restaurant leases and are included in rent expenses at the point in time we determine that it is probable that such sales levels will be achieved. Landlord contributions are recorded when received as a deferred rent liability in Other accrued liabilities and/or Other liabilities in the Consolidated Balance Sheets , depending on the current or long-term nature, and amortized as a reduction of rent expenses on a straight-line basis over the lease term. The majority of our restaurant facilities with operating leases have terms expiring at various dates through fiscal 2035. The restaurant leases have cumulative renewal clauses of 1 to 34 years at our option and, in some cases, have provisions for contingent rent based upon a percentage of sales in excess of specified levels, as defined in the leases. We include other rent-related costs in rent expenses, such as common area maintenance, taxes and amortization of landlord contributions. Rent expenses related to restaurants is included in Restaurant expenses , and office space rent is included in General and administrative in the Consolidated Statements of Comprehensive Income . Refer to Note 7 - Accrued and Other Liabilities for further details on accrued straight-line rent and landlord contributions. Effective fiscal 2020 , we will adopt the new lease accounting standard that will impact the recording of operating leases. Refer to Note 18 - Effect of New Accounting Standards for more details about this adoption. Advertising Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. Effective fiscal 2019 , we adopted the ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , that reclassified the presentation of advertising contributions in the Consolidated Statements of Comprehensive Income . Refer to the “ Revenue - Advertising Fees” significant accounting policy above for further details on this adoption. In the fiscal year ended June 26, 2019 , advertising costs of $88.5 million are included in Restaurant expenses , and advertising contributions from franchisees of $20.3 million are recorded in Franchise and other revenues in the Consolidated Statements of Comprehensive Income . Advertising costs, net of advertising contributions from franchisees, were $75.7 million and $79.7 million in fiscal years ended June 27, 2018 and June 28, 2017 , respectively, and were included in Restaurant expenses in the Consolidated Statements of Comprehensive Income . Goodwill Goodwill is not subject to amortization, but is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill has been assigned to reporting units for purposes of impairment testing. Our two restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units. Goodwill impairment tests consist of a comparison of each reporting unit’s fair value with its carrying value. We determine fair value based on a combination of market-based values and discounted projected future operating cash flows of the restaurant brands using a risk adjusted discount rate that is commensurate with the risk inherent in our current business model. If the carrying value of a reporting unit exceeds its fair value, goodwill is written down to its implied fair value. We determined that there was no goodwill impairment during our annual tests as the fair value of our reporting units was substantially in excess of the carrying values. No indicators of impairment were identified through the end of fiscal 2019 . Refer to Note 6 - Goodwill and Intangibles for additional disclosures. We occasionally acquire restaurants from our franchisees. Goodwill from these acquisitions represents the excess of the cost of the business acquired over the net amounts assigned to assets acquired, including identifiable intangible assets, primarily reacquired franchise rights. In connection with the sale of restaurants, we will allocate goodwill from the reporting unit, or restaurant brand, to the disposal group in the determination of the gain or loss on the disposition. The allocation is based on the relative fair values of the disposal group and the portion of the reporting unit that was retained. Additionally, if we sell restaurants with reacquired franchise rights, we will include those assets in the gain or loss on the disposition. Liquor Licenses The costs of obtaining non-transferable liquor licenses from local government agencies are expensed over the specified term of the license. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets and included in Intangibles, net in the Consolidated Balance Sheets . Transferable liquor licenses are tested for impairment semi-annually or more frequently if events or circumstances indicate that the asset might be impaired. Impairment charges are recognized based on the excess of carrying value over fair value. We determine fair value based on prices in the open market for licenses in same or similar jurisdictions. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 6 - Goodwill and Intangibles and Note 11 - Fair Value Measurements for additional disclosures. Sales Taxes Taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue transactions and collected from a customer have been excluded from revenues under both Legacy GAAP and ASC 606. The obligation is included in Other accrued liabilities in the Consolidated Balance Sheets until the taxes are remitted to the appropriate taxing authorities. Self-Insurance Program We are self-insured for certain losses related to health, general liability and workers’ compensation. We maintain stop loss coverage with third party insurers to limit our total exposure. The self-insurance liability represents an estimate of the ultimate cost of claims incurred and unpaid as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and actuarial estimates, and is reviewed on a quarterly basis to ensure that the liability is appropriate. If actual trends, including the severity or frequency of claims, differ from our estimates, our financial results could be impacted. The estimated incurred but unreported costs to settle unpaid claims are included in Other accrued liabilities and Other liabilities , depending on the current or long-term nature, in the Consolidated Balance Sheets . Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record a liability for unrecognized tax benefits resulting from tax positions taken, or expected to be taken, in an income tax return that is not more-likely-than-not to be realized. We recognize any interest and penalties related to unrecognized tax benefits in Provision for income taxes in the Consolidated Statements of Comprehensive Income . We reinvest foreign earnings, therefore, United States deferred income taxes have not been provided on foreign earnings. Additionally, Income taxes are computed on a consolidated legal jurisdiction basis with no regard to brand. Refer to Note 8 - Income Taxes for additional disclosures. Stock-Based Compensation We measure and recognize compensation cost at fair value for all share-based payments. We record compensation expenses using a graded-vesting schedule or on a straight-line basis, as applicable, over the vesting period, or to the date on which retirement eligibility is achieved, if shorter. We recognize compensation expenses for only the portion of share-based awards that are expected to vest. Therefore, we apply estimated forfeiture rates that are derived from our historical forfeitures of similar awards. Certain employees are eligible to receive stock options, performance stock options, performance shares, restricted stock, and restricted stock units, while non-employee members of the Board of Directors (the “Board”) are eligible to receive stock options, restricted stock and restricted stock units. Awards granted to the Board are non-forfeitable and are fully expensed upon grant. Awards to eligible employees may vest over a specified period of time, or service period, only or may also contain performance-based conditions. The fair value of restricted stock and restricted stock units that do not contain a performance condition are based on our closing stock price on the date of grant, while the fair value of stock options is estimated using the Black-Scholes option-pricing model on the date of grant. Performance shares represent a right to receive shares of common stock upon satisfaction of Company performance goals at the end of a three-fiscal-year cycle. Vesting of performance shares granted are contingent upon meeting Company performance goals based on a specified rate of earnings growth at the end of the three-fiscal-year period. Compensation expenses for the performance shares is recorded based on management’s periodic estimates of the number of shares that will ultimately be issued and the fair value of the shares as determined by our closing stock price on the date of grant. A cumulative expenses adjustment is recognized when that estimate changes. Stock-based compensation expenses totaled approximately $16.4 million , $14.2 million and $14.5 million for fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , respectively. The total income tax benefit recognized in the Consolidated Statements of Comprehensive Income related to stock-based compensation expenses was approximately $3.0 million , $4.3 million and $5.7 million during the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , respectively. The weighted average fair values of option grants were $8.25 , $4.51 and $9.30 during fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , respectively. The fair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Expected volatility 27.2 % 25.2 % 25.5 % Risk-free interest rate 2.9 % 1.9 % 1.3 % Expected lives 5 years 6 years 5 years Dividend yield 3.5 % 4.4 % 2.6 % Expected volatility and the expected life of stock options are based on historical experience. The risk-free rate is based on the yield of a United States Treasury Note with a term equal to the expected life of the stock options. The dividend yield is based on the most recent quarterly dividend per share declared and the closing stock price on the declaration date. Refer to Note 12 - Stock-based Compensation for additional disclosures. Preferred Stock Our Board of Directors is authorized to provide for the issuance of 1.0 million preferred shares with a par value of $1.00 per share, in one or more series, and to fix the voting rights, liquidation preferences, dividend rates, conversion rights, redemption rights, and terms, including sinking fund provisions, and certain other rights and preferences. As of June 26, 2019 , no preferred shares were issued. Shareholders’ Deficit In fiscal 2019 , our Board of Directors authorized a $300.0 million increase to our existing share repurchase program resulting in total authorizations of $4.9 billion . We repurchased approximately 3.6 million shares of our common stock for $167.7 million during fiscal 2019 . The repurchased shares included shares purchased as part of our share repurchase program and shares repurchased to satisfy team member tax withholding obligations on the vesting of restricted shares. As of June 26, 2019 , approximately $197.8 million was available under our share repurchase authorizations. Our stock repurchase plan has been and will be used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings, and planned investment and financing needs. Additionally, during fiscal 2019 , approximately 0.1 million stock options were exercised resulting in cash proceeds of approximately $3.0 million . During the fiscal year ended June 26, 2019 , we paid dividends of $60.3 million to common stock shareholders, compared to $70.0 million in the fiscal year ended June 27, 2018 . Our Board of Directors approved quarterly dividends of $0.38 per share paid each quarter during fiscal 2019 . We also declared a quarterly dividend of $0.38 per share in April 2019 which was paid subsequent to the end of fiscal 2019 year in the amount of $14.2 million . The dividend accrual was included in Other accrued liabilities in the Consolidated Balance Sheets as of June 26, 2019 . Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , Comprehensive income consists of Net income and Foreign currency translation adjustment . The Foreign currency translation adjustment for the three fiscal years included the unrealized impact of translating the financial statements from Canadian dollars to United States dollars of the Canadian restaurants. For the fiscal years ended June 27, 2018 and June 28, 2017 , foreign currency translation adjustment also included the impact of translating the Mexico joint venture with CMR, S.A.B. de C.V. from Mexican pesos to United States dollars. The Accumulated other comprehensive loss (“AOCL”) is presented in the Consolidated Balance Sheets . During fiscal 2018 , the Mexico joint venture was sold to CMR. Refer to Note 4 - Equity Method Investment for further details on the transaction including the note receivable. Net Income Per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the dilutive earnings per share calculation. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows: June 26, 2019 June 27, 2018 June 28, 2017 Basic weighted average shares outstanding 38.3 45.7 50.6 Dilutive stock options 0.2 0.1 0.2 Dilutive restricted shares 0.6 0.5 0.4 0.8 0.6 0.6 Diluted weighted average shares outstanding 39.1 46.3 51.2 Awards excluded due to anti-dilutive effect on earnings per share 0.9 1.1 1.0 Segment Reporting Operating segments are components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. We manage our business on the basis of two operating segments, Chili’s and Maggiano’s. The brands operate Company-owned restaurants principally in the United States , within the full-service casual dining segment of the industry. The Chili’s |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jun. 26, 2019 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | Deferred Development and Franchise Fees We receive development fees for territory development arrangements and franchise fees for new restaurant openings from our franchisees that are deferred as a contract liability and recognized on a straight-line basis into Franchise and other revenues in the Consolidated Statements of Comprehensive Income over the term of the underlying agreements. The unrecognized fees received from franchisees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets . A summary of significant changes to the related deferred balance during the fiscal year ended June 26, 2019 is presented below, along with the revenues expected to be recognized in the subsequent periods. Deferred Development and Franchise Fees Balance at June 27, 2018 $ — Cumulative effect adjustment from adoption of ASC 606 18.1 Additions 0.9 Amount recognized to Franchise and other revenues (2.8 ) Balance at June 26, 2019 $ 16.2 Fiscal Year Development and Franchise Fees Revenue Recognition 2020 $ 1.4 2021 1.4 2022 1.3 2023 1.3 2024 1.3 Thereafter 9.5 $ 16.2 The development and franchise fees that will be recognized in future years are based on contracts with franchisees. These amounts represent the amount that will be recognized pursuant to the satisfaction of the contractual performance obligations of the current agreements. These amounts are based on active contracts and any modifications or terminations of these contracts may affect the timing of the recognition. We also expect to have future year royalties and advertising fees related to our franchise contracts, however under ASC 606, these future year revenues are not yet determinable due to unsatisfied performance obligations based upon a sales-based royalty. Financial Statement Impact of Transition to ASC 606 ASC 606 was applied to all contracts with customers as of the first day of fiscal 2019 , June 28, 2018 . The cumulative effect was applied using the modified retrospective approach. The Consolidated Balance Sheets reflect the transition to ASC 606 as an adjustment at June 28, 2018 as follows: June 27, ASC 606 Cumulative Effect Adjustments June 28, ASSETS Other assets Deferred income taxes, net (1) $ 33.6 $ 2.5 $ 36.1 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities Gift card liability (2) 119.1 (8.2 ) 110.9 Other accrued liabilities (3) 127.2 1.5 128.7 Other liabilities (3) 131.7 16.6 148.3 Shareholders’ deficit (2) (3) (718.3 ) (7.4 ) (725.7 ) (1) Deferred income taxes, net adjustment relates to the net change in liabilities and equity as a result of the adoption of ASC 606 described in notes (2) and (3) below. (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . Comparison of Fiscal 2019 Periods if Legacy GAAP Had Been in Effect The following tables reflect the impact to the Consolidated Statement of Income for the fiscal year ended June 26, 2019 , Cash flows from operating activities for the fiscal year ended June 26, 2019 , and Consolidated Balance Sheet at June 26, 2019 as if the Legacy GAAP was still in effect. The adjustments presented below in the Consolidated Statement of Income include under ASC 606, advertising fees now presented on a gross basis as a component of Franchise and other revenues . Under Legacy GAAP, the advertising fees were recorded as a reduction to advertising expenses within Restaurant expenses in the Consolidated Statements of Comprehensive Income . Additionally, the recognition timing change for franchise related fees and gift card breakage is included within Franchise and other revenues . The adjustments presented below in the Consolidated Balance Sheet relate to the cumulative effect impact described above in the “Financial Statement Impact of Transition to ASC 606” section, as well as the impact from the change in the gift card breakage, deferred development and franchise fees, and corresponding deferred tax and retained earnings balances as of June 26, 2019 . Consolidated Statement of Income Fiscal Year Ended June 26, 2019 As Reported Adjustments Legacy GAAP Amounts Revenues Company sales $ 3,106.2 $ — $ 3,106.2 Franchise and other revenues 111.7 (24.6 ) 87.1 Total revenues 3,217.9 (24.6 ) 3,193.3 Operating costs and expenses Company restaurants (excluding depreciation and amortization) Cost of sales 823.0 — 823.0 Restaurant labor 1,059.7 — 1,059.7 Restaurant expenses 812.3 (20.3 ) 792.0 Company restaurant expenses 2,695.0 (20.3 ) 2,674.7 Depreciation and amortization 147.6 — 147.6 General and administrative 149.1 — 149.1 Other (gains) and charges (4.5 ) — (4.5 ) Total operating costs and expenses 2,987.2 (20.3 ) 2,966.9 Operating income 230.7 (4.3 ) 226.4 Interest expense 61.6 — 61.6 Other (income), net (2.7 ) — (2.7 ) Income before provision for income taxes 171.8 (4.3 ) 167.5 Provision for income taxes 16.9 (1.1 ) 15.8 Net income $ 154.9 $ (3.2 ) $ 151.7 Basic net income per share $ 4.04 $ (0.08 ) $ 3.96 Diluted net income per share $ 3.96 $ (0.08 ) $ 3.88 Consolidated Balance Sheet June 26, 2019 As Reported Adjustments Legacy GAAP Amounts ASSETS Current assets Total current assets $ 177.0 $ — $ 177.0 Property and equipment, at cost Net property and equipment 755.1 — 755.1 Other assets Goodwill 165.5 — 165.5 Deferred income taxes, net 112.0 (1.3 ) 110.7 Intangibles, net 22.3 — 22.3 Other 26.4 — 26.4 Total other assets 326.2 (1.3 ) 324.9 Total assets $ 1,258.3 $ (1.3 ) $ 1,257.0 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities Current installments of long-term debt $ 9.7 $ — $ 9.7 Accounts payable 97.5 — 97.5 Gift card liability 100.9 10.6 111.5 Accrued payroll 82.1 — 82.1 Other accrued liabilities 131.4 (1.2 ) 130.2 Total current liabilities 421.6 9.4 431.0 Long-term debt, less current installments 1,206.6 — 1,206.6 Deferred gain on sale leaseback transactions 255.3 — 255.3 Other liabilities 153.0 (14.7 ) 138.3 Shareholders’ deficit Common stock 17.6 — 17.6 Additional paid-in capital 522.0 — 522.0 Accumulated other comprehensive loss (5.6 ) — (5.6 ) Retained earnings 2,771.2 4.0 2,775.2 Less treasury stock, at cost (4,083.4 ) — (4,083.4 ) Total shareholders’ deficit (778.2 ) 4.0 (774.2 ) Total liabilities and shareholders’ deficit $ 1,258.3 $ (1.3 ) $ 1,257.0 Cash flows from operating activities Fiscal Year Ended June 26, 2019 As Reported Adjustments Legacy GAAP Amounts Net income $ 154.9 $ (3.2 ) $ 151.7 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 147.6 — 147.6 Stock-based compensation 16.4 — 16.4 Restructure charges and other impairments 26.5 — 26.5 Net (gain) loss on disposal of assets (33.1 ) — (33.1 ) Other 3.0 — 3.0 Changes in assets and liabilities: Accounts receivable, net (3.0 ) — (3.0 ) Inventories 1.0 — 1.0 Restaurant supplies (0.6 ) — (0.6 ) Prepaid expenses (3.0 ) — (3.0 ) Deferred income taxes, net (75.8 ) (1.1 ) (76.9 ) Other assets 0.9 — 0.9 Accounts payable (4.1 ) — (4.1 ) Gift card liability (10.1 ) 2.3 (7.8 ) Accrued payroll 6.8 — 6.8 Other accrued liabilities (7.7 ) 0.2 (7.5 ) Current income taxes (12.7 ) — (12.7 ) Other liabilities 5.7 1.8 7.5 Net cash provided by operating activities $ 212.7 $ — $ 212.7 |
SALE LEASEBACK TRANSACTIONS SAL
SALE LEASEBACK TRANSACTIONS SALE LEASEBACK TRANSACTIONS | 12 Months Ended |
Jun. 26, 2019 | |
Sale Leaseback [Abstract] | |
SALE LEASEBACK TRANSACTIONS | Restaurant Properties Sale Leaseback Transactions During the fiscal year ended June 26, 2019 , we completed sale leaseback transactions of 152 restaurant properties in the United States sold for aggregate consideration of $495.0 million . Of the transactions completed, 151 were Chili’s properties, and one was a Maggiano’s property. The balances attributable to the restaurant assets sold include Land of $114.4 million , Buildings and leasehold improvements of $240.5 million , certain fixtures included in Furniture and equipment of $10.2 million , and Accumulated Depreciation of $179.8 million . The total gain was $309.7 million and the net proceeds from these sale leaseback transactions have been used to repay borrowings on our revolving credit facility. Lease Details The initial terms of all leases are for 15 years, plus renewal options at our discretion, which contain scheduled rent increases . All of the leases were determined to be operating leases . Rent expenses associated with these operating leases are being recognized on a straight-line basis over the lease terms. As of June 26, 2019 , $2.8 million of straight-line rent accrual has been recorded for these operating leases in Other liabilities in the Consolidated Balance Sheets . Gain and Deferred Gain Recognition We recognized the portion of the gross gain in excess of the present value of the future minimum lease payments, and deferred the remainder of the gain to be recognized straight-line in proportion to the operating lease terms. During the fiscal year ended June 26, 2019 , $35.2 million of the gain was recognized to Other (gains) and charges in the Consolidated Statements of Comprehensive Income . The remaining balance of the deferred gain of $274.6 million as of June 26, 2019 was recorded in Other accrued liabilities (current portion) and Deferred gain on sale leaseback transactions (long-term portion) in the Consolidated Balance Sheets . Effective fiscal 2020 , upon adoption of the new lease accounting standard, the remaining deferred gain will be recorded as a cumulative transition adjustment to equity. Refer to Note 18 - Effect of New Accounting Standards for more details about this adoption. Corporate Headquarters Relocation During fiscal 2018 , we sold the owned portion of our corporate headquarters property for net proceeds of $13.7 million which was deferred in Other accrued liabilities in the Consolidated Balance Sheets until fiscal 2019 when we moved to our new corporate headquarters location, and fully relinquished possession of the sold property and terminated our involvement. As such, during fiscal 2019 , we recognized the sale, removed the balances attributable to the previous corporate headquarters assets sold that included Land of $5.9 million , Buildings and leasehold improvements of $10.6 million , Furniture and equipment of $0.7 million , and Accumulated Depreciation of $9.3 million , and recorded the related net gain of $5.8 million to Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 5 - Other Gains and Charges for further details, including accelerated depreciation recorded to Other (gains) and charges in the Consolidated Statements of Comprehensive Income related to the sold property. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 12 Months Ended |
Jun. 26, 2019 | |
Disclosure Investments And Other Dispositions Narrative [Abstract] | |
EQUITY METHOD INVESTMENT | We had a joint venture agreement with CMR, S.A.B. de C.V. to develop 50 Chili’s restaurants in Mexico, with a total of 45 Chili’s restaurants operating in the joint venture as of June 28, 2017. We accounted for the joint venture investment under the equity method of accounting. During fiscal 2018 , we sold our Dutch subsidiary that held the equity interest in the joint venture to CMR, S.A.B. de C.V. for $18.0 million . During fiscal 2018 , we recorded a gain of $0.2 million to Other (gains) and charges in the Consolidated Statements of Comprehensive Income which included the recognition of $5.4 million of foreign currency translation losses reclassified from AOCL consisting of $5.9 million of foreign currency translation losses from previous years, partially offset by $0.5 million of fiscal 2018 foreign currency translation gains. We received a note as consideration for the sale to be paid in 72 equal installments, with one installment payment made at closing and the other payments to be made over 71 months pursuant to the note. The note is denominated in Mexican pesos and is re-measured to United States dollars at the end of each period resulting in a gain or loss from foreign currency exchange rate changes included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income for the periods presented, refer to Note 5 - Other Gains and Charges for more information. The current portion of the note, which represents the cash payments to be received over the next 12 months, is included within Accounts receivable, net while the long-term portion of the note is included within Other assets in the Consolidated Balance Sheets . Refer to Note 11 - Fair Value Measurements for the fair value and carrying value of the note receivable as of June 26, 2019 . Before the sale of the joint venture during fiscal 2018 , we recorded our share of the Mexico joint venture net income or loss of the investee within Operating income since their operations were similar to our ongoing operations. These amounts were included in Restaurant expenses in the Consolidated Statements of Comprehensive Income due to their immaterial nature. The investment in the joint venture was included in Other assets in the Consolidated Balance Sheets . |
OTHER GAINS AND CHARGES
OTHER GAINS AND CHARGES | 12 Months Ended |
Jun. 26, 2019 | |
Other Gains and Charges [Abstract] | |
OTHER GAINS AND CHARGES | Other (gains) and charges in the Consolidated Statements of Comprehensive Income consist of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Sale leaseback (gain), net of transaction charges $ (27.3 ) $ 2.0 $ — (Gain) on sale of assets, net (6.9 ) (0.3 ) (2.7 ) Foreign currency transaction (gain) loss (0.7 ) 1.2 — Property damages, net of (insurance recoveries) (0.7 ) 5.1 — Lease guarantee charges (credits) (0.4 ) 1.9 1.1 Restaurant impairment charges 10.8 10.9 5.2 Remodel-related costs 7.7 1.5 — Corporate headquarters relocation charges 5.3 — — Restaurant closure charges 4.3 7.5 4.1 Accelerated depreciation 1.0 1.9 2.0 Severance and other benefit charges 0.9 0.3 6.6 Cyber security incident charges 0.4 2.0 — Information technology restructuring — — 2.7 Other 1.1 0.5 3.7 $ (4.5 ) $ 34.5 $ 22.7 Fiscal 2019 • Sale leaseback (gain), net of transaction charges during the fiscal year ended June 26, 2019 included gains of $35.2 million , less transaction costs of $7.9 million related to professional services, legal and accounting fees. Refer to Note 3 - Sale Leaseback Transactions for further details on this transaction. • (Gain) on sale of assets, net during the fiscal year ended June 26, 2019 primarily included $5.8 million for the net gain recognized on the sale of the owned-portion of our previous corporate headquarters building, and $0.8 million of gain recognized on the sale of land in Scottsdale, AZ and Pensacola, FL. • Foreign currency transaction (gain) loss during the fiscal year ended June 26, 2019 included a gain of $0.7 million , resulting from the change in value of the Mexican peso as compared to that of the United States dollar on our Mexican peso denominated note receivable that we received as consideration from the sale of our equity interest in our Mexico joint venture during fiscal 2018. Refer to Note 4 - Equity Method Investment for further details. • Property damages, net of (insurance recoveries) during the fiscal year ended June 26, 2019 included $0.7 million of insurance proceeds received related to a previously filed fire claim and final proceeds received from the Hurricane Harvey claim, partially offset by expenses associated with storm damages at certain restaurant locations. • Lease guarantee charges (credits) during the fiscal year ended June 26, 2019 of a $0.4 million credit were recorded from releasing the remaining lease reserves related to leases that we were secondarily liable for Macaroni Grill, a divested brand, that were reserved during their fiscal 2018 bankruptcy proceedings that have since concluded. Refer to Note 15 - Commitments and Contingencies for further details. • Restaurant impairment charges during the fiscal year ended June 26, 2019 included $10.8 million primarily related to the long-lived assets and reacquired franchise rights of 11 underperforming Chili’s restaurants. • Remodel-related costs during the fiscal year ended June 26, 2019 totaled $7.7 million and were related to write-offs associated with the Chili’s remodel project. • Corporate headquarters relocation charges during the fiscal year ended June 26, 2019 of $5.3 million included lease reserve and other closure costs associated with the leased portion of our previous corporate headquarters location, in addition to moving and certain readiness costs of transition to the new corporate headquarters location during fiscal 2019. • Restaurant closure charges during the fiscal year ended June 26, 2019 totaling $4.3 million primarily related to Chili’s lease termination charges and certain Chili’s restaurant closure costs. • Accelerated depreciation during the fiscal year ended June 26, 2019 included $1.0 million of depreciation on certain leasehold improvements associated with the leased portion of our previous corporate headquarters property which closed during fiscal 2019. • Severance and other benefit charges during the fiscal year ended June 26, 2019 of $0.9 million primarily related to the restructuring of certain Maggiano’s back-office positions. • Cyber security incident charges during the fiscal year ended June 26, 2019 of $0.4 million was recorded related to professional services associated with our response to the incident that are not believed to be covered by our insurance. Refer to Note 15 - Commitments and Contingencies for further details. Fiscal 2018 • Restaurant impairment charges during the fiscal year ended June 27, 2018 totaling $10.9 million primarily includes charges of $7.2 million recorded in the first quarter of fiscal 2018 associated with nine Alberta, Canada Chili’s restaurants closed in the second quarter of fiscal 2018 . Alberta has an oil dependent economy and has experienced an economic recession in recent years related to lower oil production. The slower economy has negatively affected traffic at the restaurants. The decision to close these restaurants was driven by management’s belief that the long-term profitability of these restaurants would not meet our required level of return. Additionally, during fiscal 2018 , we recorded Restaurant impairment charges of $3.7 million primarily related to the long-lived assets and reacquired franchise rights of certain underperforming Maggiano’s and Chili’s restaurants that will continue to operate. Refer to Note 11 - Fair Value Measurements for further details. • Restaurant closure charges during the fiscal year ended June 27, 2018 totaling $7.5 million primarily includes expenses of $4.6 million associated with the Canada closures and related lease termination charges. We also recorded $1.8 million in lease termination expenses related to locations where we are the primary lessee of leases that were sublet to the Macaroni Grill, a divested brand, currently in bankruptcy proceedings, that discontinued sublease rental payments and closed the restaurants. Additionally, we recorded Restaurant closure charges of $1.1 million primarily related to lease termination charges and closure costs associated with Chili’s restaurants closed during fiscal 2018 . • Property damages, net of (insurance recoveries) include incurred expenses associated with Hurricanes Harvey and Irma primarily related to employee relief payments and inventory spoilage. Our restaurants were closed in the areas affected by these disasters and our team members were unable to work. Payments were made to assist our team members during these crises and to promote retention. We carry insurance coverage for these types of natural disasters. It was determined that Hurricane Irma damage was below insurance claim deductible limits, and we did not have any insurance proceeds related to this storm. During fiscal 2018 , we received insurance proceeds related to certain Hurricane Harvey property damage of $1.0 million that was mostly offset by the long-lived asset write-off, of which the net amount of $0.1 million was included within Other (gains) and charges in the Consolidated Statements of Comprehensive Income . In the fourth quarter of fiscal 2018 , the Hurricane Harvey insurance claim was substantially finalized. We recorded an insurance receivable within Accounts receivable, net in the Consolidated Balance Sheets for $1.0 million which includes $0.6 million of business interruption funds recorded within Restaurant expenses in the Consolidated Statements of Comprehensive Income and $0.4 million for property damages recorded within Other (gains) and charges in the Consolidated Statements of Comprehensive Income . During the fiscal year ended June 27, 2018 , we received property damage insurance proceeds of $0.5 million related to natural flooding in Louisiana that were recorded within Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Additionally, we received business interruption funds of $0.4 million related to the Louisiana flooding from insurers that are recorded within Restaurant expenses in the Consolidated Statements of Comprehensive Income . • Cyber security incident charges during the fiscal year ended June 27, 2018 totaling $2.0 million were recorded related to professional services due to legal and other costs associated with our response to the incident. We first reported the incident in the fourth quarter of fiscal 2018, refer to Note 15 - Commitments and Contingencies for further details. • Sale leaseback (gain), net of transaction charges during the fiscal year ended June 27, 2018 totaling $2.0 million includes professional service fees for brokers, legal, due diligence and other professional services firms in connection with the sale-leaseback transaction that marketed certain Company-owned restaurant properties. These transactions closed during fiscal 2019, refer to Note 3 - Sale Leaseback Transactions for further details. • Lease guarantee charges (credits) during the fiscal year ended June 27, 2018 totaling $1.9 million were recorded during fiscal 2018 related to the Macaroni Grill, a divested brand, which was in bankruptcy proceedings, for certain leases under which we were secondarily liable. Refer to Note 15 - Commitments and Contingencies for further details. • Accelerated depreciation during the fiscal year ended June 27, 2018 totaling $1.9 million was recorded primarily related to depreciation on certain leasehold improvements at the corporate headquarters property pursuant to the corporate relocation. We completed the relocation in fiscal 2019, refer to Note 3 - Sale Leaseback Transactions for further details. • Remodel-related costs during the fiscal year ended June 27, 2018 totaling $1.5 million were recorded related to existing fixed asset write-offs associated with the Chili’s remodel project. • Foreign currency transaction (gain) loss during the fiscal year ended June 27, 2018 relates to our sold equity interest in our Mexico joint venture that we received a note as consideration denominated in Mexican pesos which is re-measured to United States dollars at the end of each period resulting in a gain or loss from foreign currency exchange rate changes. For fiscal 2018 a net loss of $1.2 million was recorded because the value of the Mexican peso decreased as compared to the United States dollar during the fiscal year. The sale of our equity interest resulted in a gain of $0.2 million which was recorded within (Gain) on sale of assets, net and included the recognition of prior period foreign currency translation losses reclassified from AOCL. Refer to Note 4 - Equity Method Investment for further details. Fiscal 2017 • During fiscal 2017 , we completed a reorganization of the Chili’s restaurant operations team and certain departments at the corporate headquarters to better align our staffing with the current management strategy and resource needs. This employee separation action resulted in severance charges and accelerated stock-based compensation expenses of $6.6 million . All of the severance amounts were paid by the end of fiscal 2017 . • We recorded restaurant impairment charges of $5.2 million primarily related to the long-lived assets and reacquired franchise rights of ten underperforming Chili’s restaurants which will continue to operate. Refer to Note 11 - Fair Value Measurements for additional information. Additionally, we recorded restaurant closure charges of $4.1 million primarily related to lease charges and other costs associated with closed restaurants. • We incurred $2.7 million of professional fees and severance associated with our information technology restructuring offset by a $2.7 million gain on the sale of property. We also recorded accelerated depreciation charges of $2.0 million related to long-lived assets to be disposed of and lease guarantee charges of $1.1 million related to leases that were assigned to a divested brand. For additional lease guarantee disclosures, refer to Note 15 - Commitments and Contingencies . • Other charges primarily include $2.4 million of expenses for consulting fees related to a special project. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 12 Months Ended |
Jun. 26, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | The changes in the carrying amount of Goodwill by segment are as follows: June 26, 2019 June 27, 2018 Chili’s Maggiano’s Consolidated Chili’s Maggiano’s Consolidated Balance at beginning of year $ 125.4 $ 38.4 $ 163.8 $ 125.6 $ 38.4 $ 164.0 Changes in goodwill: Additions (1) 1.6 — 1.6 — — — Foreign currency translation adjustment 0.1 — 0.1 (0.2 ) — (0.2 ) Balance at end of year $ 127.1 $ 38.4 $ 165.5 $ 125.4 $ 38.4 $ 163.8 (1) During the fiscal year ended June 26, 2019 , we acquired 3 domestic Chili’s restaurants previously owned by franchise partners. Intangible assets, net are as follows: June 26, 2019 June 27, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets Chili’s reacquired franchise rights (1) $ 13.3 $ (5.5 ) $ 7.8 $ 13.6 $ (4.4 ) $ 9.2 Chili’s other 5.6 (1.5 ) 4.1 5.6 (1.3 ) 4.3 $ 18.9 $ (7.0 ) $ 11.9 $ 19.2 $ (5.7 ) $ 13.5 Indefinite-lived intangible assets Chili’s liquor licenses $ 9.5 $ 9.6 Maggiano’s liquor licenses 0.9 0.9 $ 10.4 $ 10.5 (1) We recorded an impairment charge of $0.5 million during fiscal 2019 , and $1.5 million during fiscal 2018 , in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 5 - Other Gains and Charges and Note 11 - Fair Value Measurements and for additional disclosures. Additions of $0.1 million during the fiscal year ended June 26, 2019 were recorded related to the reacquired franchise rights associated with the 3 acquired Chili’s restaurants previously owned by franchise partners. Foreign currency translation impact is included in the gross carrying amount and accumulated amortization, and was $0.1 million and $0.1 million for fiscal 2019 and fiscal 2018 , respectively. Amortization expenses for all definite-lived intangible assets was $1.2 million , $1.3 million and $1.4 million in the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , respectively, recorded in Depreciation and amortization in the Consolidated Statements of Comprehensive Income . Annual amortization expenses for definite-lived intangible assets will approximate $0.9 million for each of the next five fiscal years. |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 12 Months Ended |
Jun. 26, 2019 | |
ACCRUED AND OTHER LIABILITIES [Abstract] | |
ACCRUED AND OTHER LIABILITIES | Other accrued liabilities consist of the following: June 26, 2019 June 27, 2018 Deferred liabilities and sale leaseback gains (1) $ 19.3 $ 15.5 Insurance 17.9 17.8 Property tax 17.3 17.4 Dividends 14.9 16.3 Sales tax 14.6 14.2 Interest 7.5 7.8 Straight-line rent (2) 5.1 5.2 Landlord contributions 2.7 2.7 Deferred franchise and development fees (3) 1.4 — Cyber security incident (4) 0.8 1.4 Other (5) 29.9 28.9 $ 131.4 $ 127.2 (1) Deferred liabilities and sale leaseback gains at June 26, 2019 relates to $19.3 million for the current portion of the deferred gain related to the sale leaseback transactions executed during the fiscal year ended June 26, 2019 . As of June 27, 2018 , Deferred liabilities and sale leaseback gains primarily includes $13.7 million related to the sale of our previous corporate headquarters location that was recognized during fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 5 - Other Gains and Charges for further details. (2) Straight-line rent includes the current portion of the straight-line rent of operating leases. During the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , $1.0 million of expenses, $0.9 million of credit and $0.5 million of credit, re lated to straight-line rent were recognized into Restaurant expenses in the Consolidated Statements of Comprehensive Income , respectively. (3) Deferred franchise and development fees relates to the current portion of upfront initial franchise and development fees recorded as part of adopting ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other liabilities table below for the long-term portion of the deferred revenues. (4) Cyber security incident accrual relates to the fiscal 2018 event, refer to Note 15 - Commitments and Contingencies for further details. (5) Other primarily consists of accruals for certain lease reserves, utilities, banquet deposits for Maggiano’s events, rent-related expenses and other various accruals. Other liabilities consist of the following: June 26, 2019 June 27, 2018 Straight-line rent (1) $ 57.2 $ 55.6 Insurance 36.8 40.1 Landlord contributions (2) 32.9 23.3 Deferred franchise and development fees (3) 14.8 — Unfavorable leases 2.8 3.8 Unrecognized tax benefits 2.1 2.9 Other 6.4 6.0 $ 153.0 $ 131.7 (1) Straight-line rent is the long-term portion of the straight-line rent of operating leases. The June 26, 2019 balance includes $2.8 million for the straight-line rent accrued for 152 restaurants sold as part of the sale leaseback transactions. Refer to Note 3 - Sale Leaseback Transactions for more details, and the above Other accrued liabilities table for the current portion of straight-line rent recorded . (2) Landlord contributions as of June 26, 2019 includes $10.0 million related to the construction allowance associated with the new corporate headquarters location. (3) Deferred franchise and development fees relates to the long-term portion of upfront initial franchise and development fees recorded as part of adopting of ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other accrued liabilities table above for the current portion of the deferred revenues. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 26, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Income before provision for income taxes consists of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Domestic $ 168.1 $ 182.1 $ 186.7 Foreign 3.7 (11.9 ) 21.8 Income before provision for income taxes $ 171.8 $ 170.2 $ 208.5 The provision for income taxes and effective tax rate consists of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Current income tax expenses: Federal $ 63.3 $ 28.7 $ 64.4 State 28.8 12.2 13.4 Foreign 0.6 0.0 2.5 Total current income tax expenses 92.7 40.9 80.3 Deferred income tax (benefits) expenses: Federal (58.5 ) 6.6 (19.6 ) State (18.0 ) 0.1 (3.1 ) Foreign 0.7 (3.3 ) 0.1 Total deferred income tax (benefits) expenses (75.8 ) 3.4 (22.6 ) Provision for income taxes $ 16.9 $ 44.3 $ 57.7 Effective tax rate 9.8 % 26.0 % 27.7 % A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory Federal income tax rate to Provision for income taxes is as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Income tax expense at statutory rate $ 36.1 $ 47.8 $ 73.0 FICA tax credit (28.2 ) (22.6 ) (20.7 ) State income taxes, net of Federal benefit 8.5 8.7 5.9 Tax reform impact — 8.2 — Stock based compensation tax shortfall 0.5 1.1 — Other 0.0 1.1 (0.5 ) Provision for income taxes $ 16.9 $ 44.3 $ 57.7 The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows: June 26, 2019 June 27, 2018 Deferred income tax assets: Leasing transactions $ 25.3 $ 22.7 Stock-based compensation 9.9 9.1 Restructure charges and impairments 3.0 2.4 Insurance reserves 11.5 12.1 Employee benefit plans 0.0 0.1 Gift cards 12.3 15.1 Net operating losses 3.7 6.1 Federal credit carryover 9.0 10.7 State credit carryover 2.6 3.5 Deferred gain on sale leaseback transactions 68.6 — Other, net 11.2 3.8 Less: Valuation allowance (5.5 ) (6.1 ) Total deferred income tax assets 151.6 79.5 Deferred income tax liabilities: Prepaid expenses 13.6 13.5 Goodwill and other amortization 20.6 20.3 Depreciation and capitalized interest on property and equipment 4.3 11.1 Other, net 1.1 1.0 Total deferred income tax liabilities 39.6 45.9 Deferred income taxes, net $ 112.0 $ 33.6 As of June 26, 2019 , we have deferred tax assets of $4.6 million reflecting the benefit of state loss carryforwards, before federal benefit and valuation allowance, which expire at various dates between fiscal 2020 and fiscal 2038. We have deferred tax assets of $9.0 million of federal and $3.3 million of state tax credits, before federal benefit and valuation allowance, which expire at various dates between fiscal 2024 and fiscal 2035. The recognized deferred tax asset for the state loss carryforwards is $0.2 million and the federal tax credits is $9.0 million . The federal credit carryover is limited by Section 382 of the Internal Revenue Code. The valuation allowance decreased by $0.6 million in fiscal 2019 to recognize certain state net operating loss benefits and state tax credits management believes are not more-likely-than-not to be realized. In assessing whether a deferred tax asset will be realized, we consider the likelihood of the realization, and the reversal of existing taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income, as of June 26, 2019 , we believe it is more-likely-than-not that we will realize the benefits of the deferred tax assets, net of the existing valuation allowances. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted on December 22, 2017 with an effective date of January 1, 2018. The enactment date occurred prior to the end of the second quarter of fiscal 2018 and therefore the federal statutory tax rate changes stipulated by the Tax Act were reflected in the second quarter of fiscal 2018 . The Tax Act lowered the federal statutory tax rate from 35.0% to 21.0% effective January 1, 2018. For the fiscal year ended June 26, 2019 , our federal statutory tax rate was 21.0% . Our federal statutory tax rate for fiscal 2018 was 28.1% , representing a blended tax rate for the number of days in fiscal 2018 before and after the effective date. For the fiscal year ended June 28, 2017 , our federal statutory tax rate was 35.0% . During the fiscal year ended June 27, 2018 , in accordance with ASC 740, we re-measured our deferred tax accounts as of the enactment date using the new federal statutory tax rate and recognized the change as a discrete item in the Provision for income taxes, the adjustment was $8.2 million . A reconciliation of unrecognized tax benefits are as follows: June 26, 2019 June 27, 2018 Balance at beginning of year $ 3.9 $ 4.1 Additions based on tax positions related to the current year 0.4 0.5 Additions based on tax positions related to prior years — — Settlements with tax authorities (0.1 ) 0.0 Expiration of statute of limitations (0.7 ) (0.7 ) Balance at end of year $ 3.5 $ 3.9 The total amount of unrecognized tax benefits, excluding interest and penalties, that would affect income tax expenses if resolved in our favor was $2.7 million and $3.1 million as of June 26, 2019 and June 27, 2018 , respectively. We do not expect any material changes to our liability for uncertain tax positions during the next 12 months. We recognize accrued interest and penalties related to unrecognized tax benefits in Provision for income taxes in the Consolidated Statements of Comprehensive Income . As of June 26, 2019 , we had $0.3 million ( $0.2 million net of a $0.1 million Federal deferred tax benefit) of interest and penalties accrued, compared to $0.5 million ( $0.4 million net of a $0.1 million Federal deferred tax benefit) at June 27, 2018 . Our income tax returns are subject to examination by taxing authorities in the jurisdictions in which we operate. The periods subject to examination for our federal return are fiscal 2019 to fiscal 2020 and fiscal 2016 to fiscal 2019 for our Canadian returns. State income tax returns are generally subject to examination for a period of three to five years after filing. We have various state income tax returns in the process of examination or settlements. Our federal returns for fiscal 2019 and 2020 are currently under examination through the Internal Revenue Service: Compliance Assurance Process (CAP) program. There are no unrecorded liabilities associated with these examinations. |
DEBT
DEBT | 12 Months Ended |
Jun. 26, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | Long-term debt consists of the following: June 26, 2019 June 27, 2018 Revolving credit facility $ 523.3 $ 820.3 5.00% notes 350.0 350.0 3.875% notes 300.0 300.0 Capital lease obligations (refer to Note 10 - Leases) 48.4 43.0 Total long-term debt 1,221.7 1,513.3 Less unamortized debt issuance costs and discounts (5.4 ) (6.6 ) Total long-term debt less unamortized debt issuance costs and discounts 1,216.3 1,506.7 Less current installment portion of long-term debt (9.7 ) (7.1 ) Long-term debt, less current installments $ 1,206.6 $ 1,499.6 Excluding capital lease obligations (refer to Note 10 - Leases ) and interest, our long-term debt maturities for the five fiscal years following June 26, 2019 and thereafter are as follows: Long-Term Debt 2020 $ — 2021 — 2022 523.3 2023 300.0 2024 — Thereafter 350.0 $ 1,173.3 Revolving Credit Facility During fiscal 2019 , net repayments of $297.0 million were made on the revolving credit facility primarily from the sale leaseback transactions, partially offset by share repurchases. As of June 26, 2019 , $476.7 million of credit was available under the revolving credit facility. During fiscal 2018 , $428.0 million was drawn on the revolving credit facility, which included the $250.0 million utilized to repay the principal balance of the 2.60% notes that came due in May 2018. In fiscal 2017 , we amended the revolving credit facility to increase the borrowing capacity from $750.0 million to $1.0 billion . We capitalized debt issuance costs of $4.0 million associated with the amendment of the revolving credit facility, which are included in Other assets in the Consolidated Balance Sheets as of June 26, 2019 . Additionally, in fiscal 2018, an amendment to the revolving credit facility was executed to provide the ability to execute certain sale-leaseback transactions and to increase the restricted payment capacity. The related debt issuance costs of $1.6 million are also included in Other assets in the Consolidated Balance Sheets as of June 26, 2019 . Under the amended $1.0 billion revolving credit facility, the maturity date for $890.0 million of the facility was extended from March 12, 2020 to September 12, 2021 and the remaining $110.0 million remains due on March 12, 2020 . The amended revolving credit facility generally bears interest of LIBOR plus an applicable margin, which is a function of our credit rating and debt to cash flow ratio, but is subject to a maximum of LIBOR plus 2.00% . For a period of 180 days following the fiscal 2018 amendment to the revolving credit facility that occurred in May 2018, we paid interest at a rate of LIBOR plus 1.70% . Effective October 2018, we resumed paying interest at a rate of LIBOR plus 1.38% for a total of 3.78% at June 26, 2019 . One month LIBOR at June 26, 2019 was approximately 2.40% . LIBOR is set to terminate in December 2021, however our revolver will expire before this date and we anticipate any new financings will be at the applicable interest rates. 5.00% Notes In fiscal 2017 , we completed the private offering of $350.0 million of our 5.00% senior notes due October 2024 (the “2024 Notes”). We received proceeds of $350.0 million and utilized the proceeds to fund a $300.0 million accelerated share repurchase agreement and to repay $50.0 million on the amended $1.0 billion revolving credit facility. The notes require semi-annual interest payments which began on April 1, 2017. The indenture for the 2024 Notes contains certain covenants, including, but not limited to, limitations and restrictions on the ability of the Company and its Restricted Subsidiaries (as defined in the indenture) to (i) create liens on Principal Property (as defined in the Indenture) and (ii) merge, consolidate or amalgamate with or into any other person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of their property. These covenants are subject to a number of important conditions, qualifications, exceptions and limitations. 3.875% Notes In fiscal 2013 , we issued $300.0 million of 3.875% notes due in May 2023. The notes require semi-annual interest payments which began in the second quarter of fiscal 2014. Financial Covenants Our debt agreements contain various financial covenants that, among other things, require the maintenance of certain leverage and fixed charge coverage ratios. The financial covenants were not significantly changed as a result of the new and amended debt agreements. We are currently in compliance with all financial covenants. |
LEASES
LEASES | 12 Months Ended |
Jun. 26, 2019 | |
Leases [Abstract] | |
LEASES | Capital Leases We lease certain buildings and equipment under capital leases. The building asset value of $38.8 million and $38.8 million and the related accumulated amortization of $29.5 million and $27.8 million at June 26, 2019 and June 27, 2018 , respectively, are included in Buildings and leasehold improvements and Accumulated depreciation and amortization in the Consolidated Balance Sheets , respectively. The technology and other restaurant equipment capital leases asset value of $44.2 million and $20.3 million , and the related accumulated amortization of $21.8 million and $5.1 million at June 26, 2019 and June 27, 2018 , respectively, are included in Furniture and equipment and Accumulated depreciation and amortization in the Consolidated Balance Sheets , respectively. Amortization expenses related to all assets under capital leases of $8.7 million , $5.6 million , and $1.9 million for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , respectively, was recorded in Depreciation and amortization in the Consolidated Statements of Comprehensive Income . Operating Leases We typically lease restaurant facilities and office space under operating leases. Rent expenses consists of the following: June 26, 2019 June 27, 2018 June 28, 2017 Straight-lined minimum rent $ 141.7 $ 111.1 $ 109.8 Contingent rent 3.3 3.2 3.8 Other 13.6 11.6 11.7 Total rent expenses $ 158.6 $ 125.9 $ 125.3 Effective fiscal 2020 , we will adopt the new lease accounting standard that will bring right-of-use assets and related lease liabilities for operating leases onto the Consolidated Balance Sheets , among other adoption considerations. Refer to Note 18 - Effect of New Accounting Standards for further details on adoption. Commitments As of June 26, 2019 , future minimum lease payments on both capital and operating leases were as follows: Fiscal Year Capital Leases Operating Leases 2020 $ 12.3 $ 156.8 2021 10.1 154.5 2022 8.2 148.6 2023 6.7 137.7 2024 6.0 127.6 Thereafter 17.4 771.7 Total minimum lease payments (1) 60.7 $ 1,496.9 Imputed interest (average rate of 6.18%) (12.3 ) Present value of minimum lease payments 48.4 Less current installments (9.7 ) $ 38.7 (1) Future minimum lease payments have not been reduced by minimum sublease rentals to be received in the future under non-cancelable subleases. The total of undiscounted future sublease rentals are approximately $22.0 million and $14.6 million for capital and operating subleases, respectively, as of June 26, 2019 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 26, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Non-Financial Assets Measured on a Non-Recurring Basis We review the carrying amounts of property and equipment, reacquired franchise rights and transferable liquor licenses semi-annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. All impairment charges were included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income for the periods presented, refer to Note 5 - Other Gains and Charges for more information. We determine the fair value of property and equipment and reacquired franchise rights based on discounted projected future cash flows of the restaurants over their remaining service life using a risk adjusted discount rate that is commensurate with the inherent risk that is considered Level 3. Refer to Note 1 - Nature of Operations and Summary of Significant Accounting Policies for definition of fair value levels. Based on our fiscal 2019 semi-annual reviews, we impaired long-lived assets and reacquired franchise rights with carrying values of $10.3 million and $0.5 million , respectively, primarily related to eleven underperforming Chili’s restaurants. We determined the leasehold improvements and other assets associated with the impaired restaurants had no fair value, based on Level 3 fair value measurements. Based on our fiscal 2018 semi-annual reviews, long-lived assets and reacquired franchise rights with carrying values of $3.7 million and $0.3 million , respectively, primarily related to five underperforming restaurants, were determined to have a total fair value of $0.3 million resulting in an impairment charge of $3.7 million . Additionally during fiscal 2018, we impaired long-lived assets and reacquired franchise rights with carrying values of $6.0 million and $1.2 million , respectively, primarily related to nine underperforming Chili’s restaurants located in Alberta, Canada which were identified for closure by management. We determined the leasehold improvements and other assets associated with these Canada restaurants had no fair value, based on Level 3 fair value measurements, as the decision to close the restaurants in the second quarter of fiscal 2018 resulted in substantially all of the assets reverting to the landlords. This resulted in an impairment charge of $7.2 million during fiscal 2018 . We determine the fair value of transferable liquor licenses based on prices in the open market for licenses in the same or similar jurisdictions that is considered Level 2. Based on our semi-annual review, during fiscal 2019 and fiscal 2018 , we determined there was no impairment. Other Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items. The carrying amount of debt outstanding related to the amended revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 3.875% and 5.00% notes are based on quoted market prices and are considered Level 2 fair value measurements. The 3.875% notes and 5.00% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows, refer to Note 9 - Debt for further details: June 26, 2019 June 27, 2018 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 298.6 $ 296.3 $ 298.2 $ 285.3 5.00% notes $ 345.9 $ 356.2 $ 345.2 $ 342.3 During fiscal 2018 , we received an $18.0 million long-term note receivable as consideration related to the sale of our equity interest in the Chili’s joint venture in Mexico. We determined the fair value of this note based on an internally developed analysis relying on Level 3 inputs at inception. This analysis was based on a credit rating we assigned to the counterparty and comparable interest rates associated with similar debt instruments observed in the market. As a result of this analysis, we determined the fair value of this note was approximately $16.0 million and recorded this fair value as its initial carrying value. We believe the fair value continues to approximate the note receivable carrying value, which as of June 26, 2019 was $11.1 million . The current portion of the note represents cash payments to be received over the next 12 months and is included within Accounts receivable, net while the long-term portion of the note is included within Other assets in the Consolidated Balance Sheets . Refer to Note 4 - Equity Method Investment for further details about this note receivable. Additionally, we have recorded certain lease obligations related to the previously divested Romano’s Macaroni Grill restaurants. These lease obligations are based on Level 3 fair value measurements based on an estimate of the obligation associated with the lease locations, stated rent and other factors such as ability and probability of the landlord to mitigate damages by leasing to new tenants. Refer to Note 15 - Commitments and Contingencies for further details. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jun. 26, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | Our shareholders approved stock-based compensation plans including the Stock Option and Incentive Plan for employees (“Employee Plan”) and the Stock Option and Incentive Plan for Non-Employee Directors and Consultants (collectively, and as may be amended, the “Plans”). The Plans provide for grants of options to purchase our common stock, restricted stock, restricted stock units, and stock appreciation rights. Additionally, grants to eligible employees may vest over a specified period of time or service period, or may contain performance-based conditions. In fiscal 2019 , our shareholders approved and we registered an additional 1.4 million shares of common stock of Brinker International, Inc. available for issuance under the Employee Plan. The total number of shares authorized for issuance to employees and non-employee directors and consultants under the Plans is currently 38.7 million . Stock Options In fiscal 2019 and fiscal 2018 , certain eligible employees under the Plans were granted performance stock options whose vesting is contingent upon meeting Company performance goals based on our annual earnings at the end of fiscal 2021 and 2022. Expenses for performance stock options are recognized using a graded-vesting schedule over the vesting period based upon management’s periodic estimates of the number of stock options that ultimately will vest. The options vest over a period of 4 to 5 years and have a contractual term to exercise of 8 years. During fiscal 2019 , we modified certain fiscal 2018 performance-based stock option awards and 0.2 million options were canceled. We subsequently granted fiscal 2019 performance-based stock option awards of 0.4 million options with a grant date fair value equivalent to the fair value of the canceled fiscal 2018 options as of the modification date. Vesting of the fiscal 2019 performance-based options is conditioned on achievement of the same performance targets and vest on the same schedule as the fiscal 2018 performance-based stock options. There is no incremental compen sation cost as a result of this modification. Stock options that do not contain a performance condition were also granted to eligible employees in fiscal 2019 and fiscal 2018 , consistent with prior year grants. Expenses related to these stock options are recognized using a graded-vesting schedule over the vesting period or to the date on which retirement eligibility is achieved, if shorter. Stock options generally vest over a period of 1 to 4 years and have contractual terms to exercise of 8 years. Full or partial vesting of awards may occur upon a change in control (as defined in the Plans), or upon an employee’s death, disability or involuntary termination. Stock option transactions during fiscal 2019 were as follows (in millions, except option prices): Number of Weighted Weighted Aggregate Options outstanding at June 27, 2018 2.4 $ 38.87 Granted (1) 0.7 43.57 Exercised (0.1 ) 29.89 Forfeited or canceled (0.5 ) 35.17 Options outstanding at June 26, 2019 2.5 $ 41.33 5.3 $ 6.6 Options exercisable at June 26, 2019 0.8 $ 45.07 3.5 $ 1.7 (1) There were 0.4 million performance stock options granted in fiscal 2019 , all of which were outstanding at June 26, 2019 . At June 26, 2019 , unrecognized compensation expenses related to stock options totaled approximately $2.6 million and will be recognized over a weighted average period of 2.3 years. The intrinsic value of options exercised totaled approximately $1.8 million , $2.5 million and $5.6 million for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , respectively. The tax benefit realized on options exercised totaled approximately $0.4 million , $0.6 million and $1.6 million for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , respectively. Restricted Share Awards Restricted share awards consist of performance shares, restricted stock and restricted stock units. Eligible employees under the Plans were granted performance shares whose vesting is contingent upon meeting Company performance goals based on our rate of earnings growth at the end of a three-fiscal-year period. Expenses are recognized ratably over the vesting period, or to the date on which retirement eligibility is achieved, if shorter, based upon management’s periodic estimates of the number of shares that ultimately will be issued. Restricted stock units granted to eligible employees under the Plans generally vest in full on the third anniversary of the date of grant. Restricted stock units issued to eligible employees under our career equity plan generally vest upon each employee’s retirement from the Company. Expenses are recognized ratably over the vesting period, or to the date on which retirement eligibility is achieved, if shorter. Full or partial vesting of awards may occur upon a change in control (as defined in the Plans), or upon an employee’s death, disability or involuntary termination. Restricted share awards and restricted stock units granted to non-employee directors under the Plans generally vest in full on the fourth anniversary of the date of grant or upon each director’s retirement from the Board. The non-employee directors’ awards are non-forfeitable and are expensed upon grant. Restricted share awards during fiscal 2019 were as follows (in millions, except fair values): Number of Weighted Restricted share awards outstanding at June 27, 2018 1.0 $ 39.80 Granted 0.3 43.51 Vested (0.2 ) 46.53 Forfeited (0.1 ) 38.08 Restricted share awards outstanding at June 26, 2019 1.0 $ 39.48 At June 26, 2019 , unrecognized compensation expenses related to restricted share awards totaled approximately $8.6 million and will be recognized over a weighted average period of 1.8 years. The fair value of shares that vested totaled approximately $8.6 million , $4.3 million and $12.8 million , for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , respectively. |
SAVINGS PLANS
SAVINGS PLANS | 12 Months Ended |
Jun. 26, 2019 | |
Retirement Benefits [Abstract] | |
SAVINGS PLANS | We sponsor a qualified defined contribution retirement plan covering all employees who have attained the age of 21 , and have completed 1 year and 1,000 hours of service. Eligible employees are allowed to contribute, subject to IRS limitations on total annual contributions, up to 50% of their base compensation and 100% of their eligible bonuses, as defined in the plan, to various investment funds. We match in cash what an employee contributes at a rate of 100% of the first 3% and 50% of the next 2% with immediate vesting. For the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 , we contributed approximately $9.6 million , $9.2 million and $8.9 million , respectively, to the defined contribution plan. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Jun. 26, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | Cash paid for income taxes and interest is as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Income taxes, net of refunds (1) $ 106.2 $ 56.0 $ 89.0 Interest, net of amounts capitalized 55.5 53.1 39.8 (1) Income taxes, net of refunds for the fiscal year ended June 26, 2019 included payments made for income tax liabilities resulting from the sale leaseback transactions completed in fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 8 - Income Taxes for further details. Non-cash investing and financing activities are as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Retirement of fully depreciated assets $ 28.9 $ 32.9 $ 21.2 Dividends declared but not paid 15.6 17.0 17.3 Accrued capital expenditures 9.3 11.3 12.7 Capital lease additions 15.1 7.9 11.7 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 26, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Lease Commitments and Guarantees We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees or lease liability for the related restaurants. As of June 26, 2019 and June 27, 2018 , we have outstanding lease guarantees or are secondarily liable for $55.3 million and $58.2 million , respectively. These amounts represent the maximum potential liability of future payments under the leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2020 through fiscal 2028 . In the event of default under a lease by a franchisee or owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties. During fiscal 2018 , Mac Acquisition LLC, the owner of Romano’s Macaroni Grill restaurants, filed for Chapter 11 bankruptcy protection that was concluded during fiscal 2019 . We had outstanding lease guarantees or are secondarily liable for certain of its leases rejected in bankruptcy. As of June 27, 2018 , $1.4 million was recorded in Other accrued liabilities in the Consolidated Balance Sheets based on our analysis of the potential obligations. Refer to Note 5 - Other Gains and Charges for more details. We paid $0.9 million during the fiscal year ended June 26, 2019 to settle the obligations of two of the leases rejected in the Mac Acquisition, LLC bankruptcy proceeding. We do not expect additional leases to be rejected because the period for doing so in the bankruptcy period concluded and Mac Acquisition, LLC’s plan for reorganization in the bankruptcy proceeding was confirmed. As such, as of June 26, 2019 no amount was recorded in Other accrued liabilities in the Consolidated Balance Sheets based on our analysis of the potential obligations. We will continue to monitor leases for which we have outstanding guarantees or are secondarily liable to assess the likelihood of any incremental losses. No other liabilities related to this matter have been recorded as of June 26, 2019 . Letters of Credit We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of June 26, 2019 , we had $29.0 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable within the next 3 to 12 months. Cyber Security Incident On May 12, 2018, we issued a public statement that malware had been discovered at certain Chili’s restaurants that resulted in unauthorized access or acquisition of customer payment card data. We engaged third-party forensic firms and cooperated with law enforcement to investigate the matter. Based on the investigation of our third-party forensic experts, we believe most Company-owned Chili’s restaurants were impacted by the malware during time frames that vary by restaurant, but we believe in each case began no earlier than March 21, 2018 and ended no later than April 22, 2018. We expect to incur significant legal and professional services expenses associated with the cyber security incident in future periods, which could be material. We will recognize these expenses as services are received. Related to this incident, payment card companies and associations may request us to reimburse them for unauthorized card charges and costs to replace cards and may also impose fines or penalties in connection with the cyber security incident, and regulatory authorities may also impose fines or other remedies against us. While we do not acknowledge responsibility to pay any such amounts imposed by any third parties, we may become obligated to pay such amounts or incur significant related settlement costs. We will record an estimate for losses at the time when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. To limit our exposure to cyber security events, we maintain cyber liability insurance coverage. This coverage and certain other insurance coverage may reduce our exposure for this incident. Our cyber liability insurance policy contains a $2.0 million retention that was fully accrued during fiscal 2018 . Since the incident, through June 26, 2019 , we have incurred costs of $4.2 million related to the cyber security incident. This includes the $2.0 million retention recorded in fiscal 2018 , an additional $0.4 million for expenses not believed to be covered by our insurance coverage recorded to Other (gains) and charges in the Consolidated Statements of Comprehensive Income during the fiscal year ended June 26, 2019 , and $1.8 million of receivable for costs incurred that we believe are reimbursable and probable of recovery under our insurance coverage. The Company was named as a defendant in putative class action lawsuits in the United States District Court for the Middle District of Florida, the United States District Court for the District of Nevada, and two in the United States District Court for the Central District of California, filed on May 24, 2018 , May 30, 2018 , June 14, 2018 , and June 28, 2018 , respectively (collectively, the “Litigation”) relating to the cyber security incident described above. In the Litigation, plaintiffs assert various claims stemming from the cyber security incident at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $5.0 million , injunctive and declaratory relief and attorney’s fees and costs. Since the initial filing of these cases, the Nevada plaintiff voluntarily dismissed this case and joined the Florida lawsuit. Counsel for all parties subsequently agreed to the transfer of the California cases to Florida, and they have been consolidated into a single matter with the case already pending there. On January 4, 2019, we filed a motion to dismiss all of plaintiffs’ claims asserting that plaintiffs do not have standing to bring the lawsuit and that plaintiffs have failed to state a claim on which relief can be granted. Following completion of briefing by the parties, the court conducted a hearing on our motion on June 24, 2019. On August 1, 2019, the court granted our motion to dismiss for lack of standing as to two plaintiffs and denied the motion as to the remaining plaintiffs. The court deferred its ruling on our argument that plaintiffs failed to state a claim on which relief could be granted pending further briefing. In the meantime, the parties are engaging in written discovery and the exchange of documents. We believe we have defenses and intend to defend the Litigation. As such, as of June 26, 2019, we have concluded that a loss from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation. We will continue to evaluate this matter based on new information as it becomes available. Legal Proceedings Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jun. 26, 2019 | |
Segment Information [Abstract] | |
SEGMENT INFORMATION | Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company-owned Chili’s restaurants in the United States and Canada as well as the results from our domestic and international franchise business. The Maggiano’s segment includes the results of our Company-owned Maggiano’s restaurants, and the first franchise location opened during fiscal 2019 , all located in the United States . We do not rely on any major customers as a source of sales , and the customers and long-lived assets of our operating segments are predominantly in the United States . There were no material transactions amongst our operating segments. Presented in the below fiscal 2019 table, we have disaggregated revenues by operating segment and major source. Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income to provide more clarity around Company-owned restaurant revenues and operating expenses trends: Company sales and Franchise and other revenues . Company sales include revenues generated by the operation of Company-owned restaurants including gift card redemptions. Franchise and other revenues include: • Royalties from franchises • Franchise fees and other revenues include royalties, advertising fees (effective fiscal 2019), Maggiano’s banquet service charge income, gift card breakage, digital entertainment revenues, gift card equalization, delivery fee income, franchise and development fees, retail royalty revenues, merchandise income, and gift card discount costs from third-party gift card sales Our chief operating decision maker uses operating income as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Company restaurant expenses include food and beverage costs, restaurant labor costs and restaurant expenses, including advertising expenses. The following tables reconcile our segment results to the consolidated results reported in accordance with GAAP: Fiscal Year Ended June 26, 2019 ASC 606 Chili’s Maggiano’s Other Consolidated Company sales $ 2,692.6 $ 413.6 $ — $ 3,106.2 Royalties 52.8 0.3 — 53.1 Franchise fees and other revenues (1) 36.8 21.8 — 58.6 Franchise and other revenues 89.6 22.1 — 111.7 Total revenues 2,782.2 435.7 — 3,217.9 Company restaurant expenses (1) 2,329.6 364.8 0.6 2,695.0 Depreciation and amortization 120.1 16.2 11.3 147.6 General and administrative 38.7 6.1 104.3 149.1 Other gains and charges (2) (6.4 ) 1.0 0.9 (4.5 ) Total operating costs and expenses 2,482.0 388.1 117.1 2,987.2 Operating income (loss) 300.2 47.6 (117.1 ) 230.7 Interest expense 3.2 0.3 58.1 61.6 Other, net — — (2.7 ) (2.7 ) Income (loss) before provision for income taxes $ 297.0 $ 47.3 $ (172.5 ) $ 171.8 Segment assets (2) $ 1,002.8 $ 163.9 $ 91.6 $ 1,258.3 Payments for property and equipment 129.1 10.8 27.7 167.6 Fiscal Year Ended June 27, 2018 Legacy GAAP Chili’s Maggiano’s Other Consolidated Company sales $ 2,628.3 $ 413.2 $ — $ 3,041.5 Franchise and other revenues 71.9 22.0 — 93.9 Total revenues 2,700.2 435.2 — 3,135.4 Company restaurant expenses (1) 2,224.0 362.8 0.6 2,587.4 Depreciation and amortization 125.0 15.9 10.5 151.4 General and administrative 39.6 5.5 90.9 136.0 Other gains and charges 24.5 1.1 8.9 34.5 Total operating costs and expenses 2,413.1 385.3 110.9 2,909.3 Operating income (loss) 287.1 49.9 (110.9 ) 226.1 Interest expense — — 59.0 59.0 Other, net — — (3.1 ) (3.1 ) Income (loss) before provision for income taxes $ 287.1 $ 49.9 $ (166.8 ) $ 170.2 Segment assets $ 1,122.2 $ 151.0 $ 74.1 $ 1,347.3 Payments for property and equipment 85.3 7.6 8.4 101.3 Fiscal Year Ended June 28, 2017 Legacy GAAP Chili’s Maggiano’s Other Consolidated Company sales $ 2,653.3 $ 409.2 $ — $ 3,062.5 Franchise and other revenues 66.7 21.6 — 88.3 Total revenues 2,720.0 430.8 — 3,150.8 Company restaurant expenses (1) 2,220.6 361.7 0.4 2,582.7 Depreciation and amortization 129.3 16.2 10.9 156.4 General and administrative 37.0 6.2 89.6 132.8 Other gains and charges 13.2 0.8 8.7 22.7 Total operating costs and expenses 2,400.1 384.9 109.6 2,894.6 Operating income (loss) 319.9 45.9 (109.6 ) 256.2 Interest expense — — 49.6 49.6 Other, net — — (1.9 ) (1.9 ) Income (loss) before provision for income taxes $ 319.9 $ 45.9 $ (157.3 ) $ 208.5 Payments for property and equipment $ 76.0 $ 13.3 $ 13.3 $ 102.6 (1) Company restaurant expenses includes Cost of sales , Restaurant labor and Restaurant expenses , including advertising. With the adoption of ASC 606, for the fiscal year ended June 26, 2019 , advertising contributions received from Chili’s franchisees are recorded as Franchise fees and other revenues within Total revenues , which differs from the fiscal years ended June 27, 2018 and June 28, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses. (2) During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Jun. 26, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | The following tables summarize the unaudited consolidated quarterly results of operations for fiscal 2019 and fiscal 2018 (in millions, except per share amounts): Fiscal Year Ended June 26, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 753.8 $ 790.7 $ 839.3 $ 834.1 Income before provision for income taxes $ 32.1 $ 35.0 $ 55.5 $ 49.2 Net income $ 26.4 $ 32.0 $ 49.8 $ 46.7 Basic net income per share $ 0.65 $ 0.84 $ 1.33 $ 1.25 Diluted net income per share $ 0.64 $ 0.83 $ 1.31 $ 1.22 Basic weighted average shares outstanding 40.4 38.1 37.5 37.5 Diluted weighted average shares outstanding 41.1 38.8 38.1 38.3 Fiscal Year Ended June 27, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 739.4 $ 766.4 $ 812.5 $ 817.1 Income before provision for income taxes $ 15.2 $ 41.1 $ 58.9 $ 55.0 Net income $ 9.9 $ 25.3 $ 46.9 $ 43.8 Basic net income per share $ 0.20 $ 0.55 $ 1.03 $ 1.03 Diluted net income per share $ 0.20 $ 0.54 $ 1.02 $ 1.01 Basic weighted average shares outstanding 48.3 46.4 45.4 42.6 Diluted weighted average shares outstanding 48.7 46.9 46.0 43.5 Fiscal 2019 Net income for fiscal 2019 included: • Sale leaseback transactions gains of $20.1 million , $4.6 million , $4.7 million , and $5.8 million were recognized in the first, second, third, and fourth quarters of fiscal 2019 , respectively. The related sale leaseback transaction charges of $6.8 million , $0.2 million , $0.4 million , and $0.5 million were recorded in the first, second, third, and fourth quarters of fiscal 2019 , respectively, related to legal, accounting, and other consulting fees. • Gains on the sale of property of $0.8 million , $6.0 million , and $0.1 million were recorded in the second, third, and fourth quarters of fiscal 2019 , respectively. • Foreign currency transaction gains of $0.8 million , $0.5 million , and $0.2 million were recorded in the first, third, and fourth quarters of fiscal 2019 , respectively, and foreign currency transaction losses of $0.7 million were recorded in the second quarter of fiscal 2019 . • Insurance recoveries, net of property damages of $0.8 million and $0.2 million were recorded in the first and fourth quarters of fiscal 2019 , respectively, and net property damages of $0.2 million and $0.1 million were recorded in the second and third quarters of fiscal 2019 , respectively. • Lease guarantee credits of $0.4 million were recorded in the fourth quarter of fiscal 2019 . • Restaurant impairment charges of $1.0 million , and $9.8 million were recorded in the second, and fourth quarters of fiscal 2019 , respectively. • Remodel-related costs of $0.5 million , $2.6 million , $1.7 million , and $2.9 million were recorded in the first, second, third, and fourth quarters of fiscal 2019 , respectively. • Corporate headquarter relocation charges of $5.2 million and $0.1 million were recorded in the third and fourth quarters of fiscal 2019 . • Restaurant closure charges related to additional lease and other costs were recorded of $1.7 million , $2.1 million , $0.2 million , and $0.3 million in the first, second, third, and fourth quarters of fiscal 2019 , respectively. • Accelerated depreciation related to long-lived assets to be disposed of $0.5 million was recorded in both the first and second quarters of fiscal 2019 , respectively. • Severance charges of $0.1 million , $0.1 million and $0.7 million were recorded in the first, second and fourth quarter of fiscal 2019 , respectively. • Cyber security incident charges of $0.4 million were recorded in the first quarter of fiscal 2019 . Fiscal 2018 Net income for fiscal 2018 included: • Restaurant impairment charges of $7.2 million , $2.0 million , and $1.8 million in the first, second, and fourth quarters of fiscal 2018 , respectively. • Closed restaurant lease and other costs associated with closed restaurants of $0.2 million , $4.3 million , $2.8 million , and $0.2 million in the first, second, third, and fourth quarters of fiscal 2018 , respectively. • Hurricane related costs, net of recoveries of $4.6 million , $0.6 million and $0.2 million , and net recoveries of $0.4 million were recorded in the first, second, third, and fourth quarters of fiscal 2018 , respectively. • Cyber security incident charges related to professional services of $2.0 million were recorded in the fourth quarter of fiscal 2018. • Sale leaseback transaction charges of $2.0 million were recorded in the fourth quarter of fiscal 2018 related to legal, accounting, and other consulting fees. • Lease guarantee charges of $1.4 million and $0.5 million were recorded in the second and third quarters of fiscal 2018 , respectively. • Accelerated depreciation related to long-lived assets to be disposed of $0.5 million was recorded in each quarter of fiscal 2018 . • Remodel-related costs of $1.4 million were recorded in the fourth quarter of fiscal 2018 . • Foreign currency transaction losses of $0.9 million and $1.2 million were recorded in the second and fourth quarters of fiscal 2018 , respectively, and foreign currency transaction gains of $0.9 million were recorded in the third quarter of fiscal 2018 . • Gains on the sale of property of $0.3 million were recorded in the second quarter of fiscal 2018 . • Severance charges of $0.3 million in the fourth quarter of fiscal 2018 . |
EFFECT OF NEW ACCOUNTING STANDA
EFFECT OF NEW ACCOUNTING STANDARDS | 12 Months Ended |
Jun. 26, 2019 | |
Effect of New Accounting Standards [Abstract] | |
EFFECT OF NEW ACCOUNTING STANDARDS | ASU No. 2018-13, Fair Value Measurement (Topic 820) : Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments under ASU 2018-13 add an incremental requirement, among others, for entities to disclose (1) the range and weighted average used to develop significant unobservable inputs and (2) how the weighted average was calculated for fair value measurements categorized within Level 3 of the fair value hierarchy. Entities may disclose other quantitative information in lieu of the weighted average if they determine that such information embodies a more reasonable and rational method of reflecting the distribution of significant unobservable inputs used to develop Level 3 fair value measurements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, which will require us to adopt these provisions in the first quarter of fiscal 2021. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on the consolidated financial statements. ASU 2016-02, Leases (Topic 842) - In February 2016, the FASB issued ASU 2016-02, and has subsequently amended this update by issuing additional ASU’s that provide clarification and further guidance around areas identified as potential implementation issues. These updates require a lessee to recognize in the balance sheet a liability to make lease payments and a corresponding right-of-use asset for virtually all leases, other than leases with a term of 12 months or less if the short-term lease exclusion expedient is elected. The update also requires additional disclosures about the amount, timing, and uncertainty of cash flows arising from leases. The updates are effective for annual and interim periods for fiscal years beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of fiscal 2020. Early adoption is permitted for financial statements that have not been previously issued. The guidance provides an option upon adoption of either a modified retrospective transition approach with application in all comparative periods presented, or an alternative transition method, which permits a company to use its effective date as the date of initial application without restating comparative period financial statements (effective date transition method). We expect to implement the standard using the effective date transition method and elect the package of practical expedients under which we will not reassess the classification of our existing leases, whether any expired or existing contracts are or contain leases or whether any previously capitalized initial direct costs would qualify for capitalization under the new guidance. Additionally, we expect to elect lessee and lessor practical expedients to not separate non-lease components, such as common area maintenance and property taxes, from lease components. We also anticipate electing the short-term lease exemption from balance sheet recognition for all leases that qualify, and the land easement practical expedient that allows entities to elect not to assess whether existing land easements are, or contain, leases in accordance with ASC 842 when transitioning to the new leasing standard. We do not expect to elect the hindsight practical expedient that permits a reassessment of lease terms for existing leases. We have completed the final phase of a comprehensive plan for our implementation of the new guidance, including scoping analysis, data gathering, and implementation of a new lease accounting system. Upon transition to the new guidance, based on our current volume of leases, we expect this adoption to have a material increase in Total assets and Total liabilities due to the recognition of right-of-use assets and related lease liabilities in the Consolidated Balance Sheets for operating leases where we are the lessee. We do not expect adoption will have a significant impact on the Consolidated Statements of Comprehensive Income or Consolidated Statements of Cash Flows. We have existing capital leases that will be treated as finance leases upon adoption. Additionally, as disclosed in Note 10 - Leases , the Company has approximately $1,496.9 million in undiscounted future minimum operating lease commitments as of June 26, 2019 . Upon adoption, the Company’s lease liability will generally be based on the present value of the operating lease payments and the related right-of-use asset will generally be based on the lease liability, adjusted for amounts reclassified from other lease-related assets and liabilities, as specified by the new lease guidance, and impairment of certain right-of-use assets recognized in retained earnings. We anticipate recognizing additional lease liabilities of approximately $1.2 billion and corresponding right-of-use assets of approximately $1.0 billion . The amounts of right-of-use assets and lease liabilities we ultimately recognize may differ from these estimates as we finalize the calculations upon adoption. Additionally upon adoption, we will record an initial adjustment to retained earnings to derecognize the deferred gain from the sale leaseback transactions using the cumulative effect transition method, and will no longer recognize the amortization of this gain to Other gains and charges in the Consolidated Statements of Comprehensive Income starting in fiscal 2020. For any future sale leaseback transactions, the gain (adjusted for any off-market terms) will be recognized immediately in most cases. As of June 26, 2019, we had $274.6 million recorded in Other accrued liabilities (current portion) and Deferred gain on sale leaseback transactions (long-term portion), and the related $68.6 million in Deferred income taxes, net in the Consolidated Balance Sheets , refer to Note 3 - Sale Leaseback Transactions for further details. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 26, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Dividend Declaration On August 12, 2019 , our Board of Directors declared a quarterly dividend of $0.38 per share to be paid on September 26, 2019 to shareholders of record as of September 6, 2019 . Share Repurchases We repurchased approximately 0.3 million shares of our common stock for $10.0 million subsequent to the end of the fiscal year. Revolver Net Payments Additionally, net borrowings of $8.0 million were drawn on the revolving credit facility subsequent to the end of the fiscal year. Chili’s Restaurant Acquisition In the fourth quarter of fiscal 2019 , we executed a letter of intent to acquire 116 Chili’s restaurants owned by ERJ Dining, a franchisee, located in the Midwest United States. The closing of this transaction is expected to occur in the first quarter of fiscal 2020. We plan to integrate the acquired restaurants into our Chili’s operations structure. The purchase price will be funded with availability under our existing revolving credit facility. The results of operations of these restaurants are expected to be included in the consolidated financial statements from the date of acquisition beginning in fiscal 2020. We will evaluate the fair value of the assets and liabilities of the acquired restaurants through internal studies and third-party valuations and upon transaction completion, we expect to complete a preliminary purchase price allocation in the first quarter of fiscal 2020 . |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 26, 2019 | |
Disclosure Nature Of Operations And Summary Of Significant Accounting Policies Narrative [Abstract] | |
Nature Of Operations | Nature of Operations We are principally engaged in the ownership, operation, development, and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. At June 26, 2019 , we owned, operated, or franchised 1,665 restaurants, consisting of 1,001 Company-owned restaurants and 664 franchised restaurants, located in the United States , 29 countries and two United States territories. |
Basis Of Presentation | Basis of Presentation The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and include the accounts of Brinker International, Inc. and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We have a 52/53 week fiscal year ending on the last Wednesday in June. Fiscal years 2019 , 2018 and 2017 , which ended on June 26, 2019 , June 27, 2018 and June 28, 2017 , respectively, each contained 52 weeks . All amounts within the Notes to the Consolidated Financial Statements are presented in millions unless otherwise specified. Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income to provide more clarity around Company-owned restaurant revenues and operating expenses trends: Company sales and Franchise and other revenues . We report certain labor and related expenses in a separate caption on the Consolidated Statements of Comprehensive Income titled Restaurant labor . Restaurant labor includes all compensation-related expenses, including benefits and incentive compensation, for restaurant team members at the general manager level and below. Labor-related expenses attributable to multi-restaurant (or above-restaurant) supervision is included in Restaurant expenses . |
New Accounting Standards Implemented | New Accounting Standards Implemented ASU 2014-09, Revenue from Contracts with Customers (Topic 606) - In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, and subsequently amended this update by issuing additional ASU’s that provide clarification and further guidance around areas identified as potential implementation issues. These updates provide a comprehensive new revenue recognition model that requires a company to recognize revenues to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. These updates also require additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts. These updates are effective for annual and interim periods for fiscal years beginning after December 15, 2017, which required us to adopt these provisions in the first quarter of fiscal 2019 . Refer to the Revenue significant accounting policy below, Note 2 - Revenue Recognition , and Note 16 - Segment Information for our adoption disclosures. ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) - In August 2016, the FASB issued ASU 2016-15, this update provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2017, which required us to adopt these provisions in the first quarter of fiscal 2019 . The update was applied on a retrospective basis. The adoption of this guidance did not have an impact on the Consolidated Financial Statements or debt covenants. ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment - In January 2017, the FASB issued ASU 2017-04, this update eliminates step two of the goodwill impairment analysis. Companies will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, they will measure impairment as the difference between the carrying amount and the fair value of the reporting unit. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performed with measurement dates after January 1, 2017. We elected to early adopt this guidance as of fiscal 2019 . The guidance was adopted prospectively. The adoption of this guidance did not have an impact on the Consolidated Financial Statements . Refer to Note 6 - Goodwill and Intangibles for disclosure about goodwill. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract - In August 2018, the FASB issued ASU 2018-15, this update aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update is effective for annual and interim periods in fiscal years beginning after December 15, 2019, and early adoption is permitted. We elected to early adopt this guidance during fiscal 2019 , using a prospective approach. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements . |
Use Of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements is in conformity with generally accepted accounting principles in the United States and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements , and the reported amounts of revenues and costs and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue | Revenue Effective fiscal 2019, we adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), from the previous guidance ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, “Legacy GAAP”). Our transition to ASC 606 represents a change in accounting principle. The Consolidated Financial Statements for fiscal 2019 reflect the application of ASC 606 guidance using the modified retrospective transition method, while the Consolidated Financial Statements for prior periods were prepared under Legacy GAAP. Revenues are presented in Company sales and Franchise and other revenues captions in the Consolidated Statements of Comprehensive Income . Refer below for our significant revenue accounting policies, to Note 2 - Revenue Recognition for deferred revenues and new standard transition disclosures, and to Note 16 - Segment Information for disaggregation of revenues detail. Company Sales Company sales include revenues generated by the operation of Company-owned restaurants including gift card redemptions. The adoption of ASC 606 did not impact revenue recognition related to Company sales . We will continue to record the revenues from the sale of food, beverages and alcohol as products are sold. Franchise and Other Revenues Franchise and other revenues include royalties, advertising fees (effective fiscal 2019), Maggiano’s banquet service charge income, gift card breakage, digital entertainment revenues, gift card equalization, delivery fee income, franchise and development fees, retail royalty revenues, merchandise income, and gift card discount costs from third-party gift card sales . Royalties - Franchise royalties are based on a percentage of the sales generated by our franchised restaurants. The provisions of ASC 606 did not impact the recognition of these royalties, as the performance obligation related to franchise sales is considered complete upon the sale of food, beverages and alcohol. Royalty revenues attributable to franchise restaurants will continue to be recognized in the same period the sales are generated at the franchise restaurants. Advertising Fees - Domestic franchisees are contractually obligated to contribute into certain advertising and marketing funds. The adoption of ASC 606 did not impact the timing of revenue recognition of the advertising fees received; however, effective fiscal 2019, advertising fees are now presented on a gross basis within Franchise and other revenues . Under Legacy GAAP, the advertising funds received from franchisees were considered a reimbursement of advertising expenses and were presented on a net basis as a reduction to advertising expenses in Restaurant expenses in the Consolidated Statements of Comprehensive Income . Initial Development and Franchise Fees - We receive development fees from franchisees for territory development arrangements and franchise fees for new restaurant openings. Under ASC 606, the performance obligation related to these arrangements will be collectively deferred as a contract liability and recognized on a straight-line basis into Franchise and other revenues in the Consolidated Statements of Comprehensive Income over the term of the underlying agreements. Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets . Under Legacy GAAP, development fees were recognized as income upon the execution of the agreement, when development rights were conveyed to the franchisee. Franchise fees were recognized as income when the obligations under the franchise agreement were satisfied, generally upon the opening of the new franchise restaurant. Gift Card Breakage Income - Breakage revenues represent the monetary value associated with outstanding gift card balances for which redemption is considered remote. We estimate this amount based on our historical gift card redemption patterns and update the breakage rate estimate periodically and if necessary, adjust the deferred revenues balance within the Gift card liability account in the Consolidated Balance Sheets accordingly. In accordance with ASC 606, breakage revenues will be recognized proportionate to the pattern of related gift card redemptions. Under Legacy GAAP, breakage revenues were recognized when redemption was considered remote. We do not charge dormancy or any other fees related to monitoring or administering the gift card program to cardholders. Additionally, proceeds from the sale of gift cards will continue to be recorded as deferred revenues in the Gift card liability in the Consolidated Balance Sheets and recognized as Company sales when the gift card is redeemed by the holder. Gift Card Discount Costs - Our gift cards are sold through various outlets such as in-store, Chili’s and Maggiano’s websites, directly to other businesses, and through third-party distributors that sell our gift cards at various retail locations. We incur incremental direct costs related to gift card sales, such as commissions and activation fees, for gift cards sold by third-party businesses and distributors. These initial direct costs are deferred and amortized against revenues proportionate to the pattern of related gift card redemption. Other Revenues - Other revenues not described above, such as Maggiano’s banquet service charge income, digital entertainment revenues, retail royalty revenues and delivery fee income had no change in recognition from the adoption of ASC 606. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value, as follows: • Level 1 - inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 - inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities. • Level 3 - inputs are unobservable and reflect our own assumptions. |
Cash And Cash Equivalents | Cash and Cash Equivalents Our policy is to invest cash in excess of operating requirements in income-producing investments. Income-producing investments with original maturities of three months or less are reflected as cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable, net of the allowance for doubtful accounts, represents the estimated net realizable value. Our primary account receivables are due from franchisees, gift card sales, store purchases made on credit cards, and from time-to-time, insurance recoveries, vendor rebates and landlord related receivables. Provisions for doubtful accounts are recorded based on management’s judgment regarding our ability to collect as well as the age of the receivables. Accounts receivable are written off when they are deemed uncollectible. |
Inventories | Inventories Inventories consist of food, beverages and supplies and are valued at the lower of cost or net realizable value, using the first-in, first-out or “FIFO” method. |
Property And Equipment | Property and Equipment Property and equipment is stated at cost. Buildings and leasehold improvements are depreciated using the straight-line method over the lesser of the term of the lease, including certain renewal options, or the estimated useful lives of the assets, which range from 5 to 20 years . Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years . Depreciation expenses related to property and equipment for the fiscal years ended June 26, 2019 , June 27, 2018 , and June 28, 2017 of $146.5 million , $150.1 million , and $155.0 million , respectively, was recorded in Depreciation and amortization in the Consolidated Statements of Comprehensive Income . Routine repair and maintenance costs are expensed when incurred. Major replacements and improvements are capitalized. We review the carrying amount of property and equipment semi-annually or when events or circumstances indicate that the carrying amount may not be recoverable. We have determined the restaurant level is the lowest level of identifiable cash flows. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on discounted projected future operating cash flows of the restaurants over their remaining service life using a risk adjusted discount rate that is commensurate with the inherent risk. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . |
Definite-lived Intangible Assets | Definite-lived Intangible Assets Definite-lived intangible assets primarily include reacquired franchise rights resulting from our acquisitions and are amortized using the straight-line method over the estimated useful lives of the assets. We determine the fair value of reacquired franchise rights based on discounted projected future operating cash flows of the restaurants associated with these franchise rights. We review the carrying amount semi-annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . |
Operating Leases | Operating Leases Rent expenses for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that the renewal appears reasonably assured. The straight-line rent calculation and rent expenses includes any rent holiday period, which is the period of time between taking control of a leased site and the rent commencement date. Contingent rents are generally amounts due as a result of sales in excess of amounts stipulated in certain restaurant leases and are included in rent expenses at the point in time we determine that it is probable that such sales levels will be achieved. Landlord contributions are recorded when received as a deferred rent liability in Other accrued liabilities and/or Other liabilities in the Consolidated Balance Sheets , depending on the current or long-term nature, and amortized as a reduction of rent expenses on a straight-line basis over the lease term. The majority of our restaurant facilities with operating leases have terms expiring at various dates through fiscal 2035. The restaurant leases have cumulative renewal clauses of 1 to 34 years at our option and, in some cases, have provisions for contingent rent based upon a percentage of sales in excess of specified levels, as defined in the leases. We include other rent-related costs in rent expenses, such as common area maintenance, taxes and amortization of landlord contributions. Rent expenses related to restaurants is included in Restaurant expenses , and office space rent is included in General and administrative in the Consolidated Statements of Comprehensive Income . Refer to Note 7 - Accrued and Other Liabilities for further details on accrued straight-line rent and landlord contributions. Effective fiscal 2020 , we will adopt the new lease accounting standard that will impact the recording of operating leases. Refer to Note 18 - Effect of New Accounting Standards for more details about this adoption. |
Advertising | Advertising Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. Effective fiscal 2019 , we adopted the ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , that reclassified the presentation of advertising contributions in the Consolidated Statements of Comprehensive Income . Refer to the “ Revenue - Advertising Fees” significant accounting policy above for further details on this adoption. In the fiscal year ended June 26, 2019 , advertising costs of $88.5 million are included in Restaurant expenses , and advertising contributions from franchisees of $20.3 million are recorded in Franchise and other revenues in the Consolidated Statements of Comprehensive Income . Advertising costs, net of advertising contributions from franchisees, were $75.7 million and $79.7 million in fiscal years ended June 27, 2018 and June 28, 2017 , respectively, and were included in Restaurant expenses in the Consolidated Statements of Comprehensive Income . |
Goodwill | Goodwill Goodwill is not subject to amortization, but is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill has been assigned to reporting units for purposes of impairment testing. Our two restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units. Goodwill impairment tests consist of a comparison of each reporting unit’s fair value with its carrying value. We determine fair value based on a combination of market-based values and discounted projected future operating cash flows of the restaurant brands using a risk adjusted discount rate that is commensurate with the risk inherent in our current business model. If the carrying value of a reporting unit exceeds its fair value, goodwill is written down to its implied fair value. We determined that there was no goodwill impairment during our annual tests as the fair value of our reporting units was substantially in excess of the carrying values. No indicators of impairment were identified through the end of fiscal 2019 . Refer to Note 6 - Goodwill and Intangibles for additional disclosures. We occasionally acquire restaurants from our franchisees. Goodwill from these acquisitions represents the excess of the cost of the business acquired over the net amounts assigned to assets acquired, including identifiable intangible assets, primarily reacquired franchise rights. In connection with the sale of restaurants, we will allocate goodwill from the reporting unit, or restaurant brand, to the disposal group in the determination of the gain or loss on the disposition. The allocation is based on the relative fair values of the disposal group and the portion of the reporting unit that was retained. Additionally, if we sell restaurants with reacquired franchise rights, we will include those assets in the gain or loss on the disposition. |
Liquor Licenses | Liquor Licenses The costs of obtaining non-transferable liquor licenses from local government agencies are expensed over the specified term of the license. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets and included in Intangibles, net in the Consolidated Balance Sheets . Transferable liquor licenses are tested for impairment semi-annually or more frequently if events or circumstances indicate that the asset might be impaired. Impairment charges are recognized based on the excess of carrying value over fair value. We determine fair value based on prices in the open market for licenses in same or similar jurisdictions. Impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 6 - Goodwill and Intangibles and Note 11 - Fair Value Measurements for additional disclosures. |
Sales Taxes | Sales Taxes Taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue transactions and collected from a customer have been excluded from revenues under both Legacy GAAP and ASC 606. The obligation is included in Other accrued liabilities in the Consolidated Balance Sheets |
Self-Insurance Program | Self-Insurance Program We are self-insured for certain losses related to health, general liability and workers’ compensation. We maintain stop loss coverage with third party insurers to limit our total exposure. The self-insurance liability represents an estimate of the ultimate cost of claims incurred and unpaid as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and actuarial estimates, and is reviewed on a quarterly basis to ensure that the liability is appropriate. If actual trends, including the severity or frequency of claims, differ from our estimates, our financial results could be impacted. The estimated incurred but unreported costs to settle unpaid claims are included in Other accrued liabilities and Other liabilities , depending on the current or long-term nature, in the Consolidated Balance Sheets . |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record a liability for unrecognized tax benefits resulting from tax positions taken, or expected to be taken, in an income tax return that is not more-likely-than-not to be realized. We recognize any interest and penalties related to unrecognized tax benefits in Provision for income taxes in the Consolidated Statements of Comprehensive Income . We reinvest foreign earnings, therefore, United States deferred income taxes have not been provided on foreign earnings. Additionally, Income taxes are computed on a consolidated legal jurisdiction basis with no regard to brand. Refer to Note 8 - Income Taxes for additional disclosures. |
Stock-Based Compensation | Stock-Based Compensation We measure and recognize compensation cost at fair value for all share-based payments. We record compensation expenses using a graded-vesting schedule or on a straight-line basis, as applicable, over the vesting period, or to the date on which retirement eligibility is achieved, if shorter. We recognize compensation expenses for only the portion of share-based awards that are expected to vest. Therefore, we apply estimated forfeiture rates that are derived from our historical forfeitures of similar awards. Certain employees are eligible to receive stock options, performance stock options, performance shares, restricted stock, and restricted stock units, while non-employee members of the Board of Directors (the “Board”) are eligible to receive stock options, restricted stock and restricted stock units. Awards granted to the Board are non-forfeitable and are fully expensed upon grant. Awards to eligible employees may vest over a specified period of time, or service period, only or may also contain performance-based conditions. The fair value of restricted stock and restricted stock units that do not contain a performance condition are based on our closing stock price on the date of grant, while the fair value of stock options is estimated using the Black-Scholes option-pricing model on the date of grant. Performance shares represent a right to receive shares of common stock upon satisfaction of Company performance goals at the end of a three-fiscal-year cycle. Vesting of performance shares granted are contingent upon meeting Company performance goals based on a specified rate of earnings growth at the end of the three-fiscal-year period. Compensation expenses for the performance shares is recorded based on management’s periodic estimates of the number of shares that will ultimately be issued and the fair value of the shares as determined by our closing stock price on the date of grant. A cumulative expenses adjustment is recognized when that estimate changes. |
Preferred Stock | Preferred Stock Our Board of Directors is authorized to provide for the issuance of 1.0 million preferred shares with a par value of $1.00 per share, in one or more series, and to fix the voting rights, liquidation preferences, dividend rates, conversion rights, redemption rights, and terms, including sinking fund provisions, and certain other rights and preferences. As of June 26, 2019 , no preferred shares were issued. |
Shareholders' Deficit | Shareholders’ Deficit In fiscal 2019 , our Board of Directors authorized a $300.0 million increase to our existing share repurchase program resulting in total authorizations of $4.9 billion . We repurchased approximately 3.6 million shares of our common stock for $167.7 million during fiscal 2019 . The repurchased shares included shares purchased as part of our share repurchase program and shares repurchased to satisfy team member tax withholding obligations on the vesting of restricted shares. As of June 26, 2019 , approximately $197.8 million was available under our share repurchase authorizations. Our stock repurchase plan has been and will be used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings, and planned investment and financing needs. Additionally, during fiscal 2019 , approximately 0.1 million stock options were exercised resulting in cash proceeds of approximately $3.0 million . During the fiscal year ended June 26, 2019 , we paid dividends of $60.3 million to common stock shareholders, compared to $70.0 million in the fiscal year ended June 27, 2018 . Our Board of Directors approved quarterly dividends of $0.38 per share paid each quarter during fiscal 2019 . We also declared a quarterly dividend of $0.38 per share in April 2019 which was paid subsequent to the end of fiscal 2019 year in the amount of $14.2 million . The dividend accrual was included in Other accrued liabilities in the Consolidated Balance Sheets as of June 26, 2019 . |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , Comprehensive income consists of Net income and Foreign currency translation adjustment . The Foreign currency translation adjustment for the three fiscal years included the unrealized impact of translating the financial statements from Canadian dollars to United States dollars of the Canadian restaurants. For the fiscal years ended June 27, 2018 and June 28, 2017 , foreign currency translation adjustment also included the impact of translating the Mexico joint venture with CMR, S.A.B. de C.V. from Mexican pesos to United States dollars. The Accumulated other comprehensive loss (“AOCL”) is presented in the Consolidated Balance Sheets . During fiscal 2018 , the Mexico joint venture was sold to CMR. Refer to Note 4 - Equity Method Investment for further details on the transaction including the note receivable. |
Net Income Per Share | Net Income Per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the dilutive earnings per share calculation. |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. We manage our business on the basis of two operating segments, Chili’s and Maggiano’s. The brands operate Company-owned restaurants principally in the United States , within the full-service casual dining segment of the industry. The Chili’s segment also has Company-owned restaurants in Canada and franchised locations in the United States , 29 countries and two United States territories. Maggiano’s segment has Company-owned restaurants and opened its first franchise location in the United States during fiscal 2019 . Refer to Note 16 - Segment Information for additional segment disclosures. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Disclosure Nature Of Operations And Summary Of Significant Accounting Policies Narrative [Abstract] | |
Fair Value Assumptions Using The Black-Scholes Option-Pricing Model | The fair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Expected volatility 27.2 % 25.2 % 25.5 % Risk-free interest rate 2.9 % 1.9 % 1.3 % Expected lives 5 years 6 years 5 years Dividend yield 3.5 % 4.4 % 2.6 % Expected volatility and the expected life of stock options are based on historical experience. The risk-free rate is based on the yield of a United States |
Schedule of Weighted Average Number of Shares | Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows: June 26, 2019 June 27, 2018 June 28, 2017 Basic weighted average shares outstanding 38.3 45.7 50.6 Dilutive stock options 0.2 0.1 0.2 Dilutive restricted shares 0.6 0.5 0.4 0.8 0.6 0.6 Diluted weighted average shares outstanding 39.1 46.3 51.2 Awards excluded due to anti-dilutive effect on earnings per share 0.9 1.1 1.0 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Revenue Recognition [Abstract] | |
Changes in deferred development and franchise fees | We receive development fees for territory development arrangements and franchise fees for new restaurant openings from our franchisees that are deferred as a contract liability and recognized on a straight-line basis into Franchise and other revenues in the Consolidated Statements of Comprehensive Income over the term of the underlying agreements. The unrecognized fees received from franchisees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets . A summary of significant changes to the related deferred balance during the fiscal year ended June 26, 2019 is presented below, along with the revenues expected to be recognized in the subsequent periods. Deferred Development and Franchise Fees Balance at June 27, 2018 $ — Cumulative effect adjustment from adoption of ASC 606 18.1 Additions 0.9 Amount recognized to Franchise and other revenues (2.8 ) Balance at June 26, 2019 $ 16.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | Fiscal Year Development and Franchise Fees Revenue Recognition 2020 $ 1.4 2021 1.4 2022 1.3 2023 1.3 2024 1.3 Thereafter 9.5 $ 16.2 |
Financial Statement Impact of Transition to ASC 606 | ASC 606 was applied to all contracts with customers as of the first day of fiscal 2019 , June 28, 2018 . The cumulative effect was applied using the modified retrospective approach. The Consolidated Balance Sheets reflect the transition to ASC 606 as an adjustment at June 28, 2018 as follows: June 27, ASC 606 Cumulative Effect Adjustments June 28, ASSETS Other assets Deferred income taxes, net (1) $ 33.6 $ 2.5 $ 36.1 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities Gift card liability (2) 119.1 (8.2 ) 110.9 Other accrued liabilities (3) 127.2 1.5 128.7 Other liabilities (3) 131.7 16.6 148.3 Shareholders’ deficit (2) (3) (718.3 ) (7.4 ) (725.7 ) (1) Deferred income taxes, net adjustment relates to the net change in liabilities and equity as a result of the adoption of ASC 606 described in notes (2) and (3) below. (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
Condensed Income Statement | Consolidated Statement of Income Fiscal Year Ended June 26, 2019 As Reported Adjustments Legacy GAAP Amounts Revenues Company sales $ 3,106.2 $ — $ 3,106.2 Franchise and other revenues 111.7 (24.6 ) 87.1 Total revenues 3,217.9 (24.6 ) 3,193.3 Operating costs and expenses Company restaurants (excluding depreciation and amortization) Cost of sales 823.0 — 823.0 Restaurant labor 1,059.7 — 1,059.7 Restaurant expenses 812.3 (20.3 ) 792.0 Company restaurant expenses 2,695.0 (20.3 ) 2,674.7 Depreciation and amortization 147.6 — 147.6 General and administrative 149.1 — 149.1 Other (gains) and charges (4.5 ) — (4.5 ) Total operating costs and expenses 2,987.2 (20.3 ) 2,966.9 Operating income 230.7 (4.3 ) 226.4 Interest expense 61.6 — 61.6 Other (income), net (2.7 ) — (2.7 ) Income before provision for income taxes 171.8 (4.3 ) 167.5 Provision for income taxes 16.9 (1.1 ) 15.8 Net income $ 154.9 $ (3.2 ) $ 151.7 Basic net income per share $ 4.04 $ (0.08 ) $ 3.96 Diluted net income per share $ 3.96 $ (0.08 ) $ 3.88 |
Condensed Balance Sheet | Consolidated Balance Sheet June 26, 2019 As Reported Adjustments Legacy GAAP Amounts ASSETS Current assets Total current assets $ 177.0 $ — $ 177.0 Property and equipment, at cost Net property and equipment 755.1 — 755.1 Other assets Goodwill 165.5 — 165.5 Deferred income taxes, net 112.0 (1.3 ) 110.7 Intangibles, net 22.3 — 22.3 Other 26.4 — 26.4 Total other assets 326.2 (1.3 ) 324.9 Total assets $ 1,258.3 $ (1.3 ) $ 1,257.0 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities Current installments of long-term debt $ 9.7 $ — $ 9.7 Accounts payable 97.5 — 97.5 Gift card liability 100.9 10.6 111.5 Accrued payroll 82.1 — 82.1 Other accrued liabilities 131.4 (1.2 ) 130.2 Total current liabilities 421.6 9.4 431.0 Long-term debt, less current installments 1,206.6 — 1,206.6 Deferred gain on sale leaseback transactions 255.3 — 255.3 Other liabilities 153.0 (14.7 ) 138.3 Shareholders’ deficit Common stock 17.6 — 17.6 Additional paid-in capital 522.0 — 522.0 Accumulated other comprehensive loss (5.6 ) — (5.6 ) Retained earnings 2,771.2 4.0 2,775.2 Less treasury stock, at cost (4,083.4 ) — (4,083.4 ) Total shareholders’ deficit (778.2 ) 4.0 (774.2 ) Total liabilities and shareholders’ deficit $ 1,258.3 $ (1.3 ) $ 1,257.0 |
Condensed Cash Flow Statement | Cash flows from operating activities Fiscal Year Ended June 26, 2019 As Reported Adjustments Legacy GAAP Amounts Net income $ 154.9 $ (3.2 ) $ 151.7 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 147.6 — 147.6 Stock-based compensation 16.4 — 16.4 Restructure charges and other impairments 26.5 — 26.5 Net (gain) loss on disposal of assets (33.1 ) — (33.1 ) Other 3.0 — 3.0 Changes in assets and liabilities: Accounts receivable, net (3.0 ) — (3.0 ) Inventories 1.0 — 1.0 Restaurant supplies (0.6 ) — (0.6 ) Prepaid expenses (3.0 ) — (3.0 ) Deferred income taxes, net (75.8 ) (1.1 ) (76.9 ) Other assets 0.9 — 0.9 Accounts payable (4.1 ) — (4.1 ) Gift card liability (10.1 ) 2.3 (7.8 ) Accrued payroll 6.8 — 6.8 Other accrued liabilities (7.7 ) 0.2 (7.5 ) Current income taxes (12.7 ) — (12.7 ) Other liabilities 5.7 1.8 7.5 Net cash provided by operating activities $ 212.7 $ — $ 212.7 |
OTHER GAINS AND CHARGES (Tables
OTHER GAINS AND CHARGES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Other Gains and Charges [Abstract] | |
Other Gains And Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income consist of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Sale leaseback (gain), net of transaction charges $ (27.3 ) $ 2.0 $ — (Gain) on sale of assets, net (6.9 ) (0.3 ) (2.7 ) Foreign currency transaction (gain) loss (0.7 ) 1.2 — Property damages, net of (insurance recoveries) (0.7 ) 5.1 — Lease guarantee charges (credits) (0.4 ) 1.9 1.1 Restaurant impairment charges 10.8 10.9 5.2 Remodel-related costs 7.7 1.5 — Corporate headquarters relocation charges 5.3 — — Restaurant closure charges 4.3 7.5 4.1 Accelerated depreciation 1.0 1.9 2.0 Severance and other benefit charges 0.9 0.3 6.6 Cyber security incident charges 0.4 2.0 — Information technology restructuring — — 2.7 Other 1.1 0.5 3.7 $ (4.5 ) $ 34.5 $ 22.7 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Carrying Amount Of Goodwill | There have been no impairments of Goodwill for the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 . The changes in the carrying amount of Goodwill by segment are as follows: June 26, 2019 June 27, 2018 Chili’s Maggiano’s Consolidated Chili’s Maggiano’s Consolidated Balance at beginning of year $ 125.4 $ 38.4 $ 163.8 $ 125.6 $ 38.4 $ 164.0 Changes in goodwill: Additions (1) 1.6 — 1.6 — — — Foreign currency translation adjustment 0.1 — 0.1 (0.2 ) — (0.2 ) Balance at end of year $ 127.1 $ 38.4 $ 165.5 $ 125.4 $ 38.4 $ 163.8 (1) During the fiscal year ended June 26, 2019 , we acquired 3 domestic Chili’s restaurants previously owned by franchise partners. |
Schedule of Intangible Assets | Intangible assets, net are as follows: June 26, 2019 June 27, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets Chili’s reacquired franchise rights (1) $ 13.3 $ (5.5 ) $ 7.8 $ 13.6 $ (4.4 ) $ 9.2 Chili’s other 5.6 (1.5 ) 4.1 5.6 (1.3 ) 4.3 $ 18.9 $ (7.0 ) $ 11.9 $ 19.2 $ (5.7 ) $ 13.5 Indefinite-lived intangible assets Chili’s liquor licenses $ 9.5 $ 9.6 Maggiano’s liquor licenses 0.9 0.9 $ 10.4 $ 10.5 (1) We recorded an impairment charge of $0.5 million during fiscal 2019 , and $1.5 million during fiscal 2018 , in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 5 - Other Gains and Charges and Note 11 - Fair Value Measurements and for additional disclosures. Additions of $0.1 million during the fiscal year ended June 26, 2019 were recorded related to the reacquired franchise rights associated with the 3 acquired Chili’s restaurants previously owned by franchise partners. Foreign currency translation impact is included in the gross carrying amount and accumulated amortization, and was $0.1 million and $0.1 million for fiscal 2019 and fiscal 2018 , respectively. |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
ACCRUED AND OTHER LIABILITIES [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of the following: June 26, 2019 June 27, 2018 Deferred liabilities and sale leaseback gains (1) $ 19.3 $ 15.5 Insurance 17.9 17.8 Property tax 17.3 17.4 Dividends 14.9 16.3 Sales tax 14.6 14.2 Interest 7.5 7.8 Straight-line rent (2) 5.1 5.2 Landlord contributions 2.7 2.7 Deferred franchise and development fees (3) 1.4 — Cyber security incident (4) 0.8 1.4 Other (5) 29.9 28.9 $ 131.4 $ 127.2 (1) Deferred liabilities and sale leaseback gains at June 26, 2019 relates to $19.3 million for the current portion of the deferred gain related to the sale leaseback transactions executed during the fiscal year ended June 26, 2019 . As of June 27, 2018 , Deferred liabilities and sale leaseback gains primarily includes $13.7 million related to the sale of our previous corporate headquarters location that was recognized during fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 5 - Other Gains and Charges for further details. (2) Straight-line rent includes the current portion of the straight-line rent of operating leases. During the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , $1.0 million of expenses, $0.9 million of credit and $0.5 million of credit, re lated to straight-line rent were recognized into Restaurant expenses in the Consolidated Statements of Comprehensive Income , respectively. (3) Deferred franchise and development fees relates to the current portion of upfront initial franchise and development fees recorded as part of adopting ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other liabilities table below for the long-term portion of the deferred revenues. (4) Cyber security incident accrual relates to the fiscal 2018 event, refer to Note 15 - Commitments and Contingencies for further details. (5) Other primarily consists of accruals for certain lease reserves, utilities, banquet deposits for Maggiano’s events, rent-related expenses and other various accruals. |
Other Liabilities | Other liabilities consist of the following: June 26, 2019 June 27, 2018 Straight-line rent (1) $ 57.2 $ 55.6 Insurance 36.8 40.1 Landlord contributions (2) 32.9 23.3 Deferred franchise and development fees (3) 14.8 — Unfavorable leases 2.8 3.8 Unrecognized tax benefits 2.1 2.9 Other 6.4 6.0 $ 153.0 $ 131.7 (1) Straight-line rent is the long-term portion of the straight-line rent of operating leases. The June 26, 2019 balance includes $2.8 million for the straight-line rent accrued for 152 restaurants sold as part of the sale leaseback transactions. Refer to Note 3 - Sale Leaseback Transactions for more details, and the above Other accrued liabilities table for the current portion of straight-line rent recorded . (2) Landlord contributions as of June 26, 2019 includes $10.0 million related to the construction allowance associated with the new corporate headquarters location. (3) Deferred franchise and development fees relates to the long-term portion of upfront initial franchise and development fees recorded as part of adopting of ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other accrued liabilities table above for the current portion of the deferred revenues. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income before provision for income taxes consists of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Domestic $ 168.1 $ 182.1 $ 186.7 Foreign 3.7 (11.9 ) 21.8 Income before provision for income taxes $ 171.8 $ 170.2 $ 208.5 |
Provision For Income Taxes and Effective Tax Rate | The provision for income taxes and effective tax rate consists of the following: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Current income tax expenses: Federal $ 63.3 $ 28.7 $ 64.4 State 28.8 12.2 13.4 Foreign 0.6 0.0 2.5 Total current income tax expenses 92.7 40.9 80.3 Deferred income tax (benefits) expenses: Federal (58.5 ) 6.6 (19.6 ) State (18.0 ) 0.1 (3.1 ) Foreign 0.7 (3.3 ) 0.1 Total deferred income tax (benefits) expenses (75.8 ) 3.4 (22.6 ) Provision for income taxes $ 16.9 $ 44.3 $ 57.7 Effective tax rate 9.8 % 26.0 % 27.7 % |
Reconciliation Between Reported Provision for Income Taxes And Amount Computed By Statutory Federal Income Tax Rate | A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory Federal income tax rate to Provision for income taxes is as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Income tax expense at statutory rate $ 36.1 $ 47.8 $ 73.0 FICA tax credit (28.2 ) (22.6 ) (20.7 ) State income taxes, net of Federal benefit 8.5 8.7 5.9 Tax reform impact — 8.2 — Stock based compensation tax shortfall 0.5 1.1 — Other 0.0 1.1 (0.5 ) Provision for income taxes $ 16.9 $ 44.3 $ 57.7 |
Deferred Income Tax Assets And Liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows: June 26, 2019 June 27, 2018 Deferred income tax assets: Leasing transactions $ 25.3 $ 22.7 Stock-based compensation 9.9 9.1 Restructure charges and impairments 3.0 2.4 Insurance reserves 11.5 12.1 Employee benefit plans 0.0 0.1 Gift cards 12.3 15.1 Net operating losses 3.7 6.1 Federal credit carryover 9.0 10.7 State credit carryover 2.6 3.5 Deferred gain on sale leaseback transactions 68.6 — Other, net 11.2 3.8 Less: Valuation allowance (5.5 ) (6.1 ) Total deferred income tax assets 151.6 79.5 Deferred income tax liabilities: Prepaid expenses 13.6 13.5 Goodwill and other amortization 20.6 20.3 Depreciation and capitalized interest on property and equipment 4.3 11.1 Other, net 1.1 1.0 Total deferred income tax liabilities 39.6 45.9 Deferred income taxes, net $ 112.0 $ 33.6 |
Reconciliation Of Unrecognized Tax Benefits | A reconciliation of unrecognized tax benefits are as follows: June 26, 2019 June 27, 2018 Balance at beginning of year $ 3.9 $ 4.1 Additions based on tax positions related to the current year 0.4 0.5 Additions based on tax positions related to prior years — — Settlements with tax authorities (0.1 ) 0.0 Expiration of statute of limitations (0.7 ) (0.7 ) Balance at end of year $ 3.5 $ 3.9 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt consists of the following: June 26, 2019 June 27, 2018 Revolving credit facility $ 523.3 $ 820.3 5.00% notes 350.0 350.0 3.875% notes 300.0 300.0 Capital lease obligations (refer to Note 10 - Leases) 48.4 43.0 Total long-term debt 1,221.7 1,513.3 Less unamortized debt issuance costs and discounts (5.4 ) (6.6 ) Total long-term debt less unamortized debt issuance costs and discounts 1,216.3 1,506.7 Less current installment portion of long-term debt (9.7 ) (7.1 ) Long-term debt, less current installments $ 1,206.6 $ 1,499.6 |
Long-Term Debt Maturities Excluding Capital Lease Obligations | Excluding capital lease obligations (refer to Note 10 - Leases ) and interest, our long-term debt maturities for the five fiscal years following June 26, 2019 and thereafter are as follows: Long-Term Debt 2020 $ — 2021 — 2022 523.3 2023 300.0 2024 — Thereafter 350.0 $ 1,173.3 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Leases [Abstract] | |
Schedule of Rent Expense | Rent expenses consists of the following: June 26, 2019 June 27, 2018 June 28, 2017 Straight-lined minimum rent $ 141.7 $ 111.1 $ 109.8 Contingent rent 3.3 3.2 3.8 Other 13.6 11.6 11.7 Total rent expenses $ 158.6 $ 125.9 $ 125.3 |
Future Minimum Lease Payments | As of June 26, 2019 , future minimum lease payments on both capital and operating leases were as follows: Fiscal Year Capital Leases Operating Leases 2020 $ 12.3 $ 156.8 2021 10.1 154.5 2022 8.2 148.6 2023 6.7 137.7 2024 6.0 127.6 Thereafter 17.4 771.7 Total minimum lease payments (1) 60.7 $ 1,496.9 Imputed interest (average rate of 6.18%) (12.3 ) Present value of minimum lease payments 48.4 Less current installments (9.7 ) $ 38.7 (1) Future minimum lease payments have not been reduced by minimum sublease rentals to be received in the future under non-cancelable subleases. The total of undiscounted future sublease rentals are approximately $22.0 million and $14.6 million for capital and operating subleases, respectively, as of June 26, 2019 . |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | June 26, 2019 June 27, 2018 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 298.6 $ 296.3 $ 298.2 $ 285.3 5.00% notes $ 345.9 $ 356.2 $ 345.2 $ 342.3 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Stock Options [Member] | |
Transactions during fiscal 2019 | Stock option transactions during fiscal 2019 were as follows (in millions, except option prices): Number of Weighted Weighted Aggregate Options outstanding at June 27, 2018 2.4 $ 38.87 Granted (1) 0.7 43.57 Exercised (0.1 ) 29.89 Forfeited or canceled (0.5 ) 35.17 Options outstanding at June 26, 2019 2.5 $ 41.33 5.3 $ 6.6 Options exercisable at June 26, 2019 0.8 $ 45.07 3.5 $ 1.7 (1) There were 0.4 million performance stock options granted in fiscal 2019 , all of which were outstanding at June 26, 2019 . |
Restricted Share Award [Member] | |
Transactions during fiscal 2019 | Restricted share awards during fiscal 2019 were as follows (in millions, except fair values): Number of Weighted Restricted share awards outstanding at June 27, 2018 1.0 $ 39.80 Granted 0.3 43.51 Vested (0.2 ) 46.53 Forfeited (0.1 ) 38.08 Restricted share awards outstanding at June 26, 2019 1.0 $ 39.48 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Paid For Interest And Income Taxes | Cash paid for income taxes and interest is as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Income taxes, net of refunds (1) $ 106.2 $ 56.0 $ 89.0 Interest, net of amounts capitalized 55.5 53.1 39.8 (1) Income taxes, net of refunds for the fiscal year ended June 26, 2019 included payments made for income tax liabilities resulting from the sale leaseback transactions completed in fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 8 - Income Taxes for further details. |
Non-Cash Investing And Financing Activities | Non-cash investing and financing activities are as follows: Fiscal Years Ended June 26, 2019 June 27, 2018 June 28, 2017 Retirement of fully depreciated assets $ 28.9 $ 32.9 $ 21.2 Dividends declared but not paid 15.6 17.0 17.3 Accrued capital expenditures 9.3 11.3 12.7 Capital lease additions 15.1 7.9 11.7 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Segment Information [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile our segment results to the consolidated results reported in accordance with GAAP: Fiscal Year Ended June 26, 2019 ASC 606 Chili’s Maggiano’s Other Consolidated Company sales $ 2,692.6 $ 413.6 $ — $ 3,106.2 Royalties 52.8 0.3 — 53.1 Franchise fees and other revenues (1) 36.8 21.8 — 58.6 Franchise and other revenues 89.6 22.1 — 111.7 Total revenues 2,782.2 435.7 — 3,217.9 Company restaurant expenses (1) 2,329.6 364.8 0.6 2,695.0 Depreciation and amortization 120.1 16.2 11.3 147.6 General and administrative 38.7 6.1 104.3 149.1 Other gains and charges (2) (6.4 ) 1.0 0.9 (4.5 ) Total operating costs and expenses 2,482.0 388.1 117.1 2,987.2 Operating income (loss) 300.2 47.6 (117.1 ) 230.7 Interest expense 3.2 0.3 58.1 61.6 Other, net — — (2.7 ) (2.7 ) Income (loss) before provision for income taxes $ 297.0 $ 47.3 $ (172.5 ) $ 171.8 Segment assets (2) $ 1,002.8 $ 163.9 $ 91.6 $ 1,258.3 Payments for property and equipment 129.1 10.8 27.7 167.6 Fiscal Year Ended June 27, 2018 Legacy GAAP Chili’s Maggiano’s Other Consolidated Company sales $ 2,628.3 $ 413.2 $ — $ 3,041.5 Franchise and other revenues 71.9 22.0 — 93.9 Total revenues 2,700.2 435.2 — 3,135.4 Company restaurant expenses (1) 2,224.0 362.8 0.6 2,587.4 Depreciation and amortization 125.0 15.9 10.5 151.4 General and administrative 39.6 5.5 90.9 136.0 Other gains and charges 24.5 1.1 8.9 34.5 Total operating costs and expenses 2,413.1 385.3 110.9 2,909.3 Operating income (loss) 287.1 49.9 (110.9 ) 226.1 Interest expense — — 59.0 59.0 Other, net — — (3.1 ) (3.1 ) Income (loss) before provision for income taxes $ 287.1 $ 49.9 $ (166.8 ) $ 170.2 Segment assets $ 1,122.2 $ 151.0 $ 74.1 $ 1,347.3 Payments for property and equipment 85.3 7.6 8.4 101.3 Fiscal Year Ended June 28, 2017 Legacy GAAP Chili’s Maggiano’s Other Consolidated Company sales $ 2,653.3 $ 409.2 $ — $ 3,062.5 Franchise and other revenues 66.7 21.6 — 88.3 Total revenues 2,720.0 430.8 — 3,150.8 Company restaurant expenses (1) 2,220.6 361.7 0.4 2,582.7 Depreciation and amortization 129.3 16.2 10.9 156.4 General and administrative 37.0 6.2 89.6 132.8 Other gains and charges 13.2 0.8 8.7 22.7 Total operating costs and expenses 2,400.1 384.9 109.6 2,894.6 Operating income (loss) 319.9 45.9 (109.6 ) 256.2 Interest expense — — 49.6 49.6 Other, net — — (1.9 ) (1.9 ) Income (loss) before provision for income taxes $ 319.9 $ 45.9 $ (157.3 ) $ 208.5 Payments for property and equipment $ 76.0 $ 13.3 $ 13.3 $ 102.6 (1) Company restaurant expenses includes Cost of sales , Restaurant labor and Restaurant expenses , including advertising. With the adoption of ASC 606, for the fiscal year ended June 26, 2019 , advertising contributions received from Chili’s franchisees are recorded as Franchise fees and other revenues within Total revenues , which differs from the fiscal years ended June 27, 2018 and June 28, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses. (2) During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 26, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Consolidated Quarterly Results Of Operations | The following tables summarize the unaudited consolidated quarterly results of operations for fiscal 2019 and fiscal 2018 (in millions, except per share amounts): Fiscal Year Ended June 26, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 753.8 $ 790.7 $ 839.3 $ 834.1 Income before provision for income taxes $ 32.1 $ 35.0 $ 55.5 $ 49.2 Net income $ 26.4 $ 32.0 $ 49.8 $ 46.7 Basic net income per share $ 0.65 $ 0.84 $ 1.33 $ 1.25 Diluted net income per share $ 0.64 $ 0.83 $ 1.31 $ 1.22 Basic weighted average shares outstanding 40.4 38.1 37.5 37.5 Diluted weighted average shares outstanding 41.1 38.8 38.1 38.3 Fiscal Year Ended June 27, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 739.4 $ 766.4 $ 812.5 $ 817.1 Income before provision for income taxes $ 15.2 $ 41.1 $ 58.9 $ 55.0 Net income $ 9.9 $ 25.3 $ 46.9 $ 43.8 Basic net income per share $ 0.20 $ 0.55 $ 1.03 $ 1.03 Diluted net income per share $ 0.20 $ 0.54 $ 1.02 $ 1.01 Basic weighted average shares outstanding 48.3 46.4 45.4 42.6 Diluted weighted average shares outstanding 48.7 46.9 46.0 43.5 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) $ / shares in Units, $ in Millions | Aug. 12, 2019$ / shares | Aug. 21, 2019USD ($)shares | Jun. 26, 2019USD ($)LocationrestaurantCountry$ / sharesshares | Sep. 26, 2018$ / shares | Jun. 26, 2019USD ($)LocationsegmentrestaurantCountry$ / sharesshares | Jun. 27, 2018USD ($)$ / shares | Jun. 28, 2017USD ($)$ / shares | Jun. 27, 2019USD ($) |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Number of restaurants | restaurant | 1,665 | 1,665 | ||||||
Number of foreign countries in which entity operates | Country | 29 | 29 | ||||||
Number of U.S. territories in which entity operates | Location | 2 | 2 | ||||||
Depreciation | $ 146.5 | $ 150.1 | $ 155 | |||||
Lease renewable period minimum | 1 year | |||||||
Lease renewable period maximum | 34 years | |||||||
Advertising expense, net of franchisee contribution | $ 88.5 | 75.7 | 79.7 | |||||
Advertising contributions from franchisees | $ 20.3 | |||||||
Number of reportable segments | segment | 2 | |||||||
Stock-based compensation expense from continuing operations | $ 16.4 | 14.2 | 14.5 | |||||
Tax benefit related to stock-based compensation expense | $ 3 | $ 4.3 | $ 5.7 | |||||
Weighted average fair values of option grants | $ / shares | $ 8.25 | $ 4.51 | $ 9.30 | |||||
Number of preferred stock the Board of Directors is authorized to issue | shares | 1,000,000 | 1,000,000 | ||||||
Preferred stock, par value | $ / shares | $ 1 | $ 1 | ||||||
Preferred stock, shares issued | shares | 0 | 0 | ||||||
Increase in share repurchase program | $ 300 | |||||||
Stock repurchase program, total authorization of shares to be repurchased | $ 4,900 | $ 4,900 | ||||||
Stock repurchase during period, shares | shares | 3,600,000 | |||||||
Payments for repurchase of common stock | $ 167.7 | $ 303.2 | $ 370.9 | |||||
Remaining authorized share purchases, amount | $ 197.8 | 197.8 | ||||||
Proceeds from issuances of treasury stock | 3 | 2.3 | 5.6 | |||||
Payments of dividends | $ 60.3 | $ 70 | $ 70.8 | |||||
Dividends per share | $ / shares | $ 0.38 | $ 0.38 | $ 1.52 | $ 1.52 | $ 1.36 | |||
Dividends payable, current | $ 14.9 | $ 14.9 | $ 16.3 | |||||
Minimum [Member] | Buildings And Leasehold Improvements [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Estimated useful lives | 5 years | |||||||
Minimum [Member] | Furniture and Fixtures [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Estimated useful lives | 3 years | |||||||
Maximum [Member] | Buildings And Leasehold Improvements [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Estimated useful lives | 20 years | |||||||
Maximum [Member] | Furniture and Fixtures [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Estimated useful lives | 7 years | |||||||
Stock Options [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Exercised, number of options | shares | (100,000) | |||||||
Chili's Restaurants [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Number of foreign countries in which entity operates | Country | 29 | 29 | ||||||
Number of U.S. territories in which entity operates | Location | 2 | 2 | ||||||
Subsequent Event [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Stock repurchase during period, shares | shares | 300,000 | |||||||
Payments for repurchase of common stock | $ 10 | |||||||
Dividends per share | $ / shares | $ 0.38 | |||||||
Dividends payable, current | $ 14.2 | |||||||
Entity Operated Units [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Number of restaurants | restaurant | 1,001 | 1,001 | ||||||
Franchised Units [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||||
Number of restaurants | restaurant | 664 | 664 |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fair Value Assumptions Using Black-Scholes Option-Pricing Model) (Details) | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Disclosure Nature Of Operations And Summary Of Significant Accounting Policies Narrative [Abstract] | |||
Expected volatility | 27.20% | 25.20% | 25.50% |
Risk-free interest rate | 2.90% | 1.90% | 1.30% |
Expected lives | 5 years | 6 years | 5 years |
Dividend yield | 3.50% | 4.40% | 2.60% |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Schedule of Weighted Average Number of Shares (Details) - shares shares in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||||||||||
Basic weighted average shares outstanding | 37.5 | 37.5 | 38.1 | 40.4 | 42.6 | 45.4 | 46.4 | 48.3 | 38.3 | 45.7 | 50.6 |
Weighted average number diluted shares outstanding adjustment | 0.8 | 0.6 | 0.6 | ||||||||
Diluted weighted average shares outstanding | 38.3 | 38.1 | 38.8 | 41.1 | 43.5 | 46 | 46.9 | 48.7 | 39.1 | 46.3 | 51.2 |
Stock options and restricted share awards outstanding excluded from dilutive earnings per share | 0.9 | 1.1 | 1 | ||||||||
Stock Options [Member] | |||||||||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0.2 | 0.1 | 0.2 | ||||||||
Restricted Share Award [Member] | |||||||||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0.6 | 0.5 | 0.4 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Development and Franchise Fees (Details) $ in Millions | 12 Months Ended |
Jun. 26, 2019USD ($) | |
Changes in deferred development and franchise fees [Line Items] | |
Balance | $ 0 |
Cumulative effect adjustment from adoption of ASC 606 | 18.1 |
Additions | 0.9 |
Amount recognized to Franchise and other revenues | (2.8) |
Balance | $ 16.2 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation, Expected Timing of Satisfaction (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total remaining performance obligation | $ 16.2 | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-06-27 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | 1.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-25 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | 1.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | 1.3 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-06-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | 1.3 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-06-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | 1.3 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-27 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation | $ 9.5 |
Revenue Recognition - Financial
Revenue Recognition - Financial Statement Impact of Transition to ASC 606 (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 28, 2018 | Jun. 27, 2018 | Jun. 28, 2017 | Jun. 29, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred income taxes, net | $ 112 | $ 36.1 | $ 33.6 | [1] | ||
Gift card liability (2) | 100.9 | 110.9 | 119.1 | [2] | ||
Other accrued liabilities (3) | 131.4 | 128.7 | 127.2 | [3] | ||
Other liabilities (3) | 153 | 148.3 | 131.7 | [3] | ||
Shareholders' deficit | (778.2) | (725.7) | (718.3) | [2],[3] | $ (493.6) | $ (225.5) |
Cumulative effect of adoption of ASC 606 | (7.4) | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred income taxes, net | 2.5 | |||||
Other accrued liabilities (3) | 1.5 | |||||
Gift card liability [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred income taxes, net | (2) | |||||
Gift card liability (2) | (8.2) | |||||
Shareholders' deficit | 6.2 | |||||
Deferred development and franchise fees [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred income taxes, net | 4.5 | |||||
Other liabilities (3) | 16.6 | |||||
Shareholders' deficit | $ (13.6) | |||||
Retained Earnings | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Shareholders' deficit | $ 2,771.2 | $ 2,683 | $ 2,627.1 | $ 2,545.8 | ||
[1] | (1) Deferred income taxes, net adjustment relates to the net change in liabilities and equity as a result of the adoption of ASC 606 described in notes (2) and (3) below. | |||||
[2] | (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . | |||||
[3] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
Revenue Recognition - Pro Forma
Revenue Recognition - Pro Forma Adjustments to Condensed Consolidated Statement Statement of Income (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues | $ 834.1 | $ 839.3 | $ 790.7 | $ 753.8 | $ 817.1 | $ 812.5 | $ 766.4 | $ 739.4 | $ 3,217.9 | $ 3,135.4 | $ 3,150.8 | ||
Cost of sales | 823 | 796 | 791.3 | ||||||||||
Restaurant labor | 1,059.7 | 1,033.9 | 1,017.9 | ||||||||||
Restaurant expenses | 812.3 | 757.5 | 773.5 | ||||||||||
Company restaurant expenses | [1] | 2,695 | 2,587.4 | 2,582.7 | |||||||||
Depreciation and amortization | 147.6 | 151.4 | 156.4 | ||||||||||
General and administrative | 149.1 | 136 | 132.8 | ||||||||||
Other (gains) and charges | (4.5) | [2] | 34.5 | 22.7 | |||||||||
Total operating costs and expenses | 2,987.2 | 2,909.3 | 2,894.6 | ||||||||||
Operating income | 230.7 | 226.1 | 256.2 | ||||||||||
Interest expense | 61.6 | 59 | 49.6 | ||||||||||
Other (income), net | (2.7) | (3.1) | (1.9) | ||||||||||
Income before provision for income taxes | 49.2 | 55.5 | 35 | 32.1 | 55 | 58.9 | 41.1 | 15.2 | 171.8 | 170.2 | 208.5 | ||
Provision for income taxes | 16.9 | 44.3 | 57.7 | ||||||||||
Net income | $ 46.7 | $ 49.8 | $ 32 | $ 26.4 | $ 43.8 | $ 46.9 | $ 25.3 | $ 9.9 | $ 154.9 | $ 125.9 | $ 150.8 | ||
Basic net income per share | $ 1.25 | $ 1.33 | $ 0.84 | $ 0.65 | $ 1.03 | $ 1.03 | $ 0.55 | $ 0.20 | $ 4.04 | $ 2.75 | $ 2.98 | ||
Diluted net income per share | $ 1.22 | $ 1.31 | $ 0.83 | $ 0.64 | $ 1.01 | $ 1.02 | $ 0.54 | $ 0.20 | $ 3.96 | $ 2.72 | $ 2.94 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues | $ (24.6) | ||||||||||||
Cost of sales | 0 | ||||||||||||
Restaurant labor | 0 | ||||||||||||
Restaurant expenses | (20.3) | ||||||||||||
Company restaurant expenses | (20.3) | ||||||||||||
Depreciation and amortization | 0 | ||||||||||||
General and administrative | 0 | ||||||||||||
Other (gains) and charges | 0 | ||||||||||||
Total operating costs and expenses | (20.3) | ||||||||||||
Operating income | (4.3) | ||||||||||||
Interest expense | 0 | ||||||||||||
Other (income), net | 0 | ||||||||||||
Income before provision for income taxes | (4.3) | ||||||||||||
Provision for income taxes | (1.1) | ||||||||||||
Net income | $ (3.2) | ||||||||||||
Basic net income per share | $ (0.08) | ||||||||||||
Diluted net income per share | $ (0.08) | ||||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues | $ 3,193.3 | ||||||||||||
Cost of sales | 823 | ||||||||||||
Restaurant labor | 1,059.7 | ||||||||||||
Restaurant expenses | 792 | ||||||||||||
Company restaurant expenses | 2,674.7 | ||||||||||||
Depreciation and amortization | 147.6 | ||||||||||||
General and administrative | 149.1 | ||||||||||||
Other (gains) and charges | (4.5) | ||||||||||||
Total operating costs and expenses | 2,966.9 | ||||||||||||
Operating income | 226.4 | ||||||||||||
Interest expense | 61.6 | ||||||||||||
Other (income), net | (2.7) | ||||||||||||
Income before provision for income taxes | 167.5 | ||||||||||||
Provision for income taxes | 15.8 | ||||||||||||
Net income | $ 151.7 | ||||||||||||
Basic net income per share | $ 3.96 | ||||||||||||
Diluted net income per share | $ 3.88 | ||||||||||||
Company sales [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues, from contract with customer, excluding assessed tax | $ 3,106.2 | ||||||||||||
Revenues | $ 3,041.5 | $ 3,062.5 | |||||||||||
Company sales [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues, from contract with customer, excluding assessed tax | 0 | ||||||||||||
Company sales [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues | 3,106.2 | ||||||||||||
Franchise and other revenues [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues, from contract with customer, excluding assessed tax | 111.7 | ||||||||||||
Revenues | $ 93.9 | $ 88.3 | |||||||||||
Franchise and other revenues [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues, from contract with customer, excluding assessed tax | (24.6) | ||||||||||||
Franchise and other revenues [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Revenues | $ 87.1 | ||||||||||||
[1] | Company restaurant expenses includes Cost of sales , Restaurant labor and Restaurant expenses , including advertising. With the adoption of ASC 606, for the fiscal year ended June 26, 2019 , advertising contributions received from Chili’s franchisees are recorded as Franchise fees and other revenues within Total revenues , which differs from the fiscal years ended June 27, 2018 and June 28, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses. | ||||||||||||
[2] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
Revenue Recognition - Pro For_2
Revenue Recognition - Pro Forma Adjustment to Condensed Consildated Balance Sheet (Unaudited) (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 28, 2018 | Jun. 27, 2018 | Jun. 28, 2017 | Jun. 29, 2016 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Total current assets | $ 177 | $ 156.3 | |||||
Net property and equipment | 755.1 | 938.9 | |||||
Goodwill | 165.5 | 163.8 | $ 164 | ||||
Deferred income taxes, net | 112 | $ 36.1 | 33.6 | [1] | |||
Intangibles, net | 22.3 | 24 | |||||
Other | 26.4 | 30.7 | |||||
Total other assets | 326.2 | 252.1 | |||||
Total assets | 1,258.3 | [2] | 1,347.3 | ||||
Current installments of long-term debt | 9.7 | 7.1 | |||||
Accounts payable | 97.5 | 104.7 | |||||
Gift card liability | 100.9 | 110.9 | 119.1 | [3] | |||
Accrued payroll | 82.1 | 74.5 | |||||
Other accrued liabilities | 131.4 | 128.7 | 127.2 | [4] | |||
Total current liabilities | 421.6 | 434.3 | |||||
Long-term debt, less current installments | 1,206.6 | 1,499.6 | |||||
Deferred sale leaseback gain, long-term portion | 255.3 | 0 | |||||
Other liabilities | 153 | 148.3 | 131.7 | [4] | |||
Common stock (250.0 million authorized shares; $0.10 par value; 176.2 million shares issued and 37.5 million shares outstanding at June 26, 2019, and 176.2 million shares issued and 40.8 million shares outstanding at June 27, 2018) | 17.6 | 17.6 | |||||
Additional paid-in capital | 522 | 511.6 | |||||
Accumulated other comprehensive loss | (5.6) | (5.8) | |||||
Retained earnings | 2,771.2 | 2,683 | |||||
Less treasury stock, at cost (138.7 million shares at June 26, 2019, and 135.4 million shares at June 27, 2018) | (4,083.4) | (3,924.7) | |||||
Shareholders' deficit | (778.2) | (725.7) | (718.3) | [3],[4] | $ (493.6) | $ (225.5) | |
Total liabilities and shareholders’ deficit | 1,258.3 | $ 1,347.3 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Deferred income taxes, net | 2.5 | ||||||
Other accrued liabilities | $ 1.5 | ||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Total current assets | 0 | ||||||
Net property and equipment | 0 | ||||||
Goodwill | 0 | ||||||
Deferred income taxes, net | (1.3) | ||||||
Intangibles, net | 0 | ||||||
Other | 0 | ||||||
Total other assets | (1.3) | ||||||
Total assets | (1.3) | ||||||
Current installments of long-term debt | 0 | ||||||
Accounts payable | 0 | ||||||
Gift card liability | 10.6 | ||||||
Accrued payroll | 0 | ||||||
Other accrued liabilities | (1.2) | ||||||
Total current liabilities | 9.4 | ||||||
Long-term debt, less current installments | 0 | ||||||
Deferred sale leaseback gain, long-term portion | 0 | ||||||
Other liabilities | (14.7) | ||||||
Common stock (250.0 million authorized shares; $0.10 par value; 176.2 million shares issued and 37.5 million shares outstanding at June 26, 2019, and 176.2 million shares issued and 40.8 million shares outstanding at June 27, 2018) | 0 | ||||||
Additional paid-in capital | 0 | ||||||
Accumulated other comprehensive loss | 0 | ||||||
Retained earnings | 4 | ||||||
Less treasury stock, at cost (138.7 million shares at June 26, 2019, and 135.4 million shares at June 27, 2018) | 0 | ||||||
Shareholders' deficit | 4 | ||||||
Total liabilities and shareholders’ deficit | (1.3) | ||||||
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Total current assets | 177 | ||||||
Net property and equipment | 755.1 | ||||||
Goodwill | 165.5 | ||||||
Deferred income taxes, net | 110.7 | ||||||
Intangibles, net | 22.3 | ||||||
Other | 26.4 | ||||||
Total other assets | 324.9 | ||||||
Total assets | 1,257 | ||||||
Current installments of long-term debt | 9.7 | ||||||
Accounts payable | 97.5 | ||||||
Gift card liability | 111.5 | ||||||
Accrued payroll | 82.1 | ||||||
Other accrued liabilities | 130.2 | ||||||
Total current liabilities | 431 | ||||||
Long-term debt, less current installments | 1,206.6 | ||||||
Deferred sale leaseback gain, long-term portion | 255.3 | ||||||
Other liabilities | 138.3 | ||||||
Common stock (250.0 million authorized shares; $0.10 par value; 176.2 million shares issued and 37.5 million shares outstanding at June 26, 2019, and 176.2 million shares issued and 40.8 million shares outstanding at June 27, 2018) | 17.6 | ||||||
Additional paid-in capital | 522 | ||||||
Accumulated other comprehensive loss | (5.6) | ||||||
Retained earnings | 2,775.2 | ||||||
Less treasury stock, at cost (138.7 million shares at June 26, 2019, and 135.4 million shares at June 27, 2018) | (4,083.4) | ||||||
Shareholders' deficit | (774.2) | ||||||
Total liabilities and shareholders’ deficit | $ 1,257 | ||||||
[1] | (1) Deferred income taxes, net adjustment relates to the net change in liabilities and equity as a result of the adoption of ASC 606 described in notes (2) and (3) below. | ||||||
[2] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. | ||||||
[3] | (2) Gift card liability is adjusted for the ASC 606 adoption impact of the change to recognize gift card breakage proportionate to the pattern of related gift card redemption. Under Legacy GAAP, gift card breakage was recognized when the likelihood of redemption was deemed remote. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at June 28, 2018 resulted in an $8.2 million decrease in Gift card liability due to the change in timing of recognition between ASC 606 and Legacy GAAP, and a corresponding $2.0 million decrease in Deferred income taxes, net , and a $6.2 million decrease in Shareholders’ deficit . | ||||||
[4] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
Revenue Recognition - Pro For_3
Revenue Recognition - Pro Forma Adjustments to Cash flows from Operating Activities (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | $ 46.7 | $ 49.8 | $ 32 | $ 26.4 | $ 43.8 | $ 46.9 | $ 25.3 | $ 9.9 | $ 154.9 | $ 125.9 | $ 150.8 |
Depreciation and amortization | 147.6 | 151.4 | 156.4 | ||||||||
Stock-based compensation | 16.4 | 14.2 | 14.5 | ||||||||
Restructure charges and other impairments | 26.5 | 21.7 | 14.4 | ||||||||
Net (gain) loss on disposal of assets | (33.1) | 1.6 | (0.4) | ||||||||
Other | 3 | 3.1 | 3 | ||||||||
Accounts receivable, net | (3) | (3.3) | 3.5 | ||||||||
Inventories | 1 | 0 | 0 | ||||||||
Restaurant supplies | (0.6) | (1.2) | (1.5) | ||||||||
Prepaid expenses | (3) | (1.7) | (0.7) | ||||||||
Deferred income taxes, net | (75.8) | 3.4 | (22.7) | ||||||||
Other assets | 0.9 | 0.3 | 0.3 | ||||||||
Accounts payable | (4.1) | 1.6 | 3 | ||||||||
Gift card liability | (10.1) | (7.3) | 4.2 | ||||||||
Accrued payroll | 6.8 | 4.2 | (0.7) | ||||||||
Other accrued liabilities | (7.7) | (6.8) | (5.8) | ||||||||
Current income taxes | (12.7) | (14.9) | (7.7) | ||||||||
Other liabilities | 5.7 | (8) | 4.5 | ||||||||
Net cash provided by operating activities | 212.7 | $ 284.5 | $ 315.1 | ||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | 151.7 | ||||||||||
Depreciation and amortization | 147.6 | ||||||||||
Stock-based compensation | 16.4 | ||||||||||
Restructure charges and other impairments | 26.5 | ||||||||||
Net (gain) loss on disposal of assets | (33.1) | ||||||||||
Other | 3 | ||||||||||
Accounts receivable, net | (3) | ||||||||||
Inventories | 1 | ||||||||||
Restaurant supplies | (0.6) | ||||||||||
Prepaid expenses | (3) | ||||||||||
Deferred income taxes, net | (76.9) | ||||||||||
Other assets | 0.9 | ||||||||||
Accounts payable | (4.1) | ||||||||||
Gift card liability | (7.8) | ||||||||||
Accrued payroll | 6.8 | ||||||||||
Other accrued liabilities | (7.5) | ||||||||||
Current income taxes | (12.7) | ||||||||||
Other liabilities | 7.5 | ||||||||||
Net cash provided by operating activities | 212.7 | ||||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | (3.2) | ||||||||||
Depreciation and amortization | 0 | ||||||||||
Stock-based compensation | 0 | ||||||||||
Restructure charges and other impairments | 0 | ||||||||||
Net (gain) loss on disposal of assets | 0 | ||||||||||
Other | 0 | ||||||||||
Accounts receivable, net | 0 | ||||||||||
Inventories | 0 | ||||||||||
Restaurant supplies | 0 | ||||||||||
Prepaid expenses | 0 | ||||||||||
Deferred income taxes, net | (1.1) | ||||||||||
Other assets | 0 | ||||||||||
Accounts payable | 0 | ||||||||||
Gift card liability | 2.3 | ||||||||||
Accrued payroll | 0 | ||||||||||
Other accrued liabilities | 0.2 | ||||||||||
Current income taxes | 0 | ||||||||||
Other liabilities | 1.8 | ||||||||||
Net cash provided by operating activities | $ 0 |
SALE LEASEBACK TRANSACTIONS S_2
SALE LEASEBACK TRANSACTIONS Sale Leaseback Transactions - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Jun. 26, 2019USD ($)Location | Mar. 27, 2019USD ($) | Dec. 26, 2018USD ($) | Sep. 26, 2018USD ($) | Dec. 27, 2017USD ($) | Jun. 26, 2019USD ($)Location | Jun. 27, 2018USD ($) | Jun. 28, 2017USD ($) | ||
Sale Leaseback Transaction [Line Items] | |||||||||
Number of properties sold and leased back under operating leases | Location | 152 | 152 | |||||||
Sale leaseback transaction, gross proceeds | $ 495 | ||||||||
Sale leaseback transaction, accumulated depreciation | $ (179.8) | (179.8) | |||||||
Sale leaseback transaction, gross gain on sale | (5.8) | $ (4.7) | $ (4.6) | $ (20.1) | $ 309.7 | ||||
Sale leaseback transaction, lease terms | The initial terms of all leases are for 15 years, plus renewal options at our discretion, which contain scheduled rent increases | ||||||||
Sale leaseback transaction, description of accounting for leaseback | All of the leases were determined to be operating leases | ||||||||
Straight-line rent | [1] | 57.2 | $ 57.2 | $ 55.6 | |||||
Recognized gain from sale leaseback transaction | (35.2) | ||||||||
Sale leaseback transaction, deferred gain | 274.6 | 274.6 | |||||||
(Gain) on sale of assets, net | $ (0.1) | $ (6) | $ (0.8) | $ (0.3) | $ (6.9) | (0.3) | $ (2.7) | ||
Chili's Restaurants [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Number of properties sold and leased back under operating leases | Location | 151 | 151 | |||||||
Recognized gain from sale leaseback transaction | $ (26.8) | ||||||||
Maggiano's Restaurants [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Number of properties sold and leased back under operating leases | Location | 1 | 1 | |||||||
Recognized gain from sale leaseback transaction | $ (0.5) | ||||||||
CorporateHeadquarters [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Deferred sales proceeds | $ 13.7 | ||||||||
Accumulated depreciation and amortization, assets sold | 9.3 | ||||||||
(Gain) on sale of assets, net | (5.8) | ||||||||
Land [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Sale leaseback transaction, historical cost of assets sold | $ 114.4 | 114.4 | |||||||
(Gain) on sale of assets, net | (0.8) | ||||||||
Land [Member] | CorporateHeadquarters [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Historical cost of assets sold | 5.9 | ||||||||
Building and Building Improvements [Member] | CorporateHeadquarters [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Historical cost of assets sold | 10.6 | ||||||||
Buildings And Leasehold Improvements [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Sale leaseback transaction, historical cost of assets sold | 240.5 | 240.5 | |||||||
Furniture And Equipment [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Sale leaseback transaction, historical cost of assets sold | 10.2 | 10.2 | |||||||
Furniture And Equipment [Member] | CorporateHeadquarters [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Historical cost of assets sold | 0.7 | ||||||||
Sale Leaseback [Member] | |||||||||
Sale Leaseback Transaction [Line Items] | |||||||||
Straight-line rent | $ 2.8 | $ 2.8 | |||||||
[1] | (1) Straight-line rent is the long-term portion of the straight-line rent of operating leases. The June 26, 2019 balance includes $2.8 million for the straight-line rent accrued for 152 restaurants sold as part of the sale leaseback transactions. Refer to Note 3 - Sale Leaseback Transactions for more details, and the above Other accrued liabilities table for the current portion of straight-line rent recorded . |
EQUITY METHOD INVESTMENT (Narra
EQUITY METHOD INVESTMENT (Narrative) (Details) $ in Millions | 12 Months Ended | |
Jun. 27, 2018USD ($) | Jun. 28, 2017restaurant | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Note receivable from sale of Mexico JV, gross | $ 18 | |
(Gain) on sale of JV | 0.2 | |
Reclassification from AOCL, current period, due to disposition of Mexico JV | 5.4 | |
Reclassification from AOCL, current year, attributable to prior years foreign currency translation losses | 5.9 | |
Reclassification from AOCL, current period, attributable to current year foreign currency translation gains | $ 0.5 | |
Investment in Mexico JV [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of restaurants to develop | restaurant | 50 | |
Number of restaurants operating in joint venture | restaurant | 45 |
OTHER GAINS AND CHARGES - Sched
OTHER GAINS AND CHARGES - Schedule Of Other Gains And Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | ||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Sale leaseback (gain), net of transaction charges | $ (27.3) | $ 2 | $ 0 | |||||||||
(Gain) on sale of assets, net | $ (0.1) | $ (6) | $ (0.8) | $ (0.3) | (6.9) | (0.3) | (2.7) | |||||
Foreign currency transaction (gain) loss | (0.2) | (0.5) | 0.7 | $ (0.8) | $ 1.2 | $ (0.9) | 0.9 | (0.7) | 1.2 | 0 | ||
Property damages, net of (insurance recoveries) | (0.2) | 0.1 | 0.2 | (0.8) | (0.7) | 5.1 | 0 | |||||
Lease guarantee charges (credits) | (0.4) | 0.5 | 1.4 | (0.4) | 1.9 | 1.1 | ||||||
Restaurant impairment charges | 9.8 | 1 | 1.8 | 2 | $ 7.2 | 10.8 | 10.9 | 5.2 | ||||
Remodel-related costs | 2.9 | 1.7 | 2.6 | 0.5 | 1.4 | 7.7 | 1.5 | 0 | ||||
Corporate headquarters relocation charges | 0.1 | 5.2 | 5.3 | 0 | 0 | |||||||
Restaurant closure charges | 0.3 | $ 0.2 | 2.1 | 1.7 | 0.2 | 2.8 | 4.3 | 0.2 | 4.3 | 7.5 | 4.1 | |
Accelerated depreciation | 0.5 | 0.5 | 0.5 | $ 0.5 | $ 0.5 | $ 0.5 | 1 | 1.9 | 2 | |||
Severance and other benefit charges | $ 0.7 | $ 0.1 | 0.1 | 0.3 | 0.9 | 0.3 | 6.6 | |||||
Cyber security incident charges | $ 0.4 | $ 2 | 0.4 | 2 | 0 | |||||||
Information technology restructuring | 0 | 0 | 2.7 | |||||||||
Other | 1.1 | 0.5 | 3.7 | |||||||||
Other gains and charges | $ (4.5) | [1] | $ 34.5 | $ 22.7 | ||||||||
[1] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
Other Gains and Charges - Addit
Other Gains and Charges - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019USD ($) | Mar. 27, 2019USD ($) | Dec. 26, 2018USD ($) | Sep. 26, 2018USD ($) | Jun. 27, 2018USD ($) | Mar. 28, 2018USD ($) | Dec. 27, 2017USD ($) | Sep. 27, 2017USD ($)Restaurant | Jun. 26, 2019USD ($)restaurant | Jun. 27, 2018USD ($)restaurant | Jun. 28, 2017USD ($)restaurant | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Gain from sale leaseback transaction | $ (35.2) | ||||||||||
Sale leaseback transaction charges | $ 0.5 | $ 0.4 | $ 0.2 | $ 6.8 | $ 2 | 7.9 | |||||
(Gain) on sale of assets, net | (0.1) | (6) | (0.8) | $ (0.3) | (6.9) | $ (0.3) | $ (2.7) | ||||
Foreign currency transaction (gain) loss | (0.2) | (0.5) | 0.7 | (0.8) | 1.2 | $ (0.9) | 0.9 | (0.7) | 1.2 | 0 | |
Property damages, net of (insurance recoveries) | (0.2) | 0.1 | 0.2 | (0.8) | (0.7) | 5.1 | 0 | ||||
Lease guarantee charges (credits) | (0.4) | 0.5 | 1.4 | (0.4) | 1.9 | 1.1 | |||||
Restaurant impairment charges | 9.8 | 1 | 1.8 | 2 | $ 7.2 | 10.8 | $ 10.9 | 5.2 | |||
Number of underperforming restaurants | restaurant | 5 | ||||||||||
Remodel-related costs | 2.9 | 1.7 | 2.6 | 0.5 | 1.4 | 7.7 | $ 1.5 | 0 | |||
Corporate headquarters relocation charges | 0.1 | 5.2 | 5.3 | 0 | 0 | ||||||
Restaurant closure charges | 0.3 | $ 0.2 | 2.1 | 1.7 | 0.2 | 2.8 | 4.3 | 0.2 | 4.3 | 7.5 | 4.1 |
Accelerated depreciation | 0.5 | 0.5 | 0.5 | $ 0.5 | $ 0.5 | 0.5 | 1 | 1.9 | 2 | ||
Severance and other benefits | $ 0.7 | $ 0.1 | 0.1 | 0.3 | 0.9 | 0.3 | 6.6 | ||||
Cyber security incident charges | $ 0.4 | 2 | 0.4 | 2 | 0 | ||||||
Impairment charges on restaurants continuing to operate | 3.7 | ||||||||||
Insurance recoveries | 1.7 | 1.7 | 0 | ||||||||
Sale leaseback (gain), net of transaction charges | (27.3) | 2 | 0 | ||||||||
(Gain) on sale of JV | (0.2) | ||||||||||
Information technology restructuring | 0 | 0 | 2.7 | ||||||||
Professional fees | $ 2.4 | ||||||||||
Other Restructuring [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restaurant closure charges | 1.8 | ||||||||||
Hurricane [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Property damages, net of (insurance recoveries) | (0.4) | (0.1) | |||||||||
Insurance recoveries | 1 | ||||||||||
Insurance settlements receivable, current | 1 | 1 | |||||||||
Business interruption insurance recoveries | $ 0.6 | ||||||||||
Flood [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Insurance recoveries | 0.5 | ||||||||||
Business interruption insurance recoveries | 0.4 | ||||||||||
CorporateHeadquarters [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
(Gain) on sale of assets, net | (5.8) | ||||||||||
Chili's Canada Restaurants [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restaurant impairment charges | $ 7.2 | ||||||||||
Number of underperforming restaurants | Restaurant | 9 | ||||||||||
Restaurant closure charges | 4.6 | ||||||||||
Chili's Restaurants [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Gain from sale leaseback transaction | $ (26.8) | ||||||||||
Number of underperforming restaurants | restaurant | 11 | 10 | |||||||||
Restaurant closure charges | $ 1.1 | ||||||||||
Land [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
(Gain) on sale of assets, net | $ (0.8) |
GOODWILL (Changes In Carrying A
GOODWILL (Changes In Carrying Amount Of Goodwill) (Details) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019USD ($)restaurant | Jun. 27, 2018USD ($) | ||
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 163.8 | $ 164 | |
Goodwill, Acquired During Period | 1.6 | [1] | 0 |
Foreign currency translation adjustment | 0.1 | (0.2) | |
Balance at end of year | $ 165.5 | 163.8 | |
Chili's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of Businesses Acquired | restaurant | 3 | ||
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 125.4 | 125.6 | |
Goodwill, Acquired During Period | 1.6 | [1] | 0 |
Foreign currency translation adjustment | 0.1 | (0.2) | |
Balance at end of year | 127.1 | 125.4 | |
Maggiano's Restaurants [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 38.4 | 38.4 | |
Goodwill, Acquired During Period | 0 | 0 | |
Foreign currency translation adjustment | 0 | 0 | |
Balance at end of year | $ 38.4 | $ 38.4 | |
[1] | (1) During the fiscal year ended June 26, 2019 , we acquired 3 domestic Chili’s restaurants previously owned by franchise partners. |
GOODWILL AND INTANGIBLES Schedu
GOODWILL AND INTANGIBLES Schedule of Intangibles (Details) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019USD ($)restaurant | Jun. 27, 2018USD ($) | ||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 18.9 | $ 19.2 | |
Accumulated Amortization | (7) | (5.7) | |
Net Carrying Amount | 11.9 | 13.5 | |
Indefinite-lived Intangible Assets [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 10.4 | 10.5 | |
Chili's Restaurants [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Number of Businesses Acquired | restaurant | 3 | ||
Chili's Restaurants [Member] | Franchise Rights [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | $ 13.3 | 13.6 |
Accumulated Amortization | [1] | (5.5) | (4.4) |
Net Carrying Amount | 7.8 | 9.2 | |
Impairment of intangible assets | 0.5 | 1.5 | |
Finite-lived Intangible Assets Acquired | 0.1 | ||
Foreign currency translation adjustment | (0.1) | (0.1) | |
Chili's Restaurants [Member] | Other Intangible Assets [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | 5.6 | 5.6 | |
Accumulated Amortization | (1.5) | (1.3) | |
Net Carrying Amount | 4.1 | 4.3 | |
Chili's Restaurants [Member] | Indefinite-lived Intangible Assets [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | 9.5 | 9.6 | |
Maggiano's Restaurants [Member] | Indefinite-lived Intangible Assets [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 0.9 | $ 0.9 | |
[1] | (1) We recorded an impairment charge of $0.5 million during fiscal 2019 , and $1.5 million during fiscal 2018 , in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 5 - Other Gains and Charges and Note 11 - Fair Value Measurements and for additional disclosures. Additions of $0.1 million during the fiscal year ended June 26, 2019 were recorded related to the reacquired franchise rights associated with the 3 acquired Chili’s restaurants previously owned by franchise partners. Foreign currency translation impact is included in the gross carrying amount and accumulated amortization, and was $0.1 million and $0.1 million for fiscal 2019 and fiscal 2018 , respectively. |
GOODWILL AND INTANGIBLES Sche_2
GOODWILL AND INTANGIBLES Schedule of Intangibles (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ (900,000) | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | (900,000) | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | (900,000) | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | (900,000) | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | (900,000) | ||
Goodwill, Impairment Loss | 0 | ||
Chili's Restaurants [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 1,200,000 | $ 1,300,000 | $ 1,400,000 |
ACCRUED AND OTHER LIABILITIES -
ACCRUED AND OTHER LIABILITIES - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | Jun. 28, 2018 | ||||
Accrued and other liabilities [Line Items] | |||||||
Deferred liabilities and sale leaseback gains(1) | [1] | $ 19.3 | $ 15.5 | ||||
Insurance | 17.9 | 17.8 | |||||
Property tax | 17.3 | 17.4 | |||||
Dividends | 14.9 | 16.3 | |||||
Sales tax | 14.6 | 14.2 | |||||
Interest | 7.5 | 7.8 | |||||
Straight-line rent(2) | [2] | 5.1 | 5.2 | ||||
Landlord contributions | 2.7 | 2.7 | |||||
Deferred franchise and development fees(3) | 1.4 | [3] | 0 | ||||
Cyber security incident(4) | [4] | 0.8 | 1.4 | ||||
Other(5) | [5] | 29.9 | 28.9 | ||||
Other Accrued Liabilities, Current | 131.4 | 127.2 | [6] | $ 128.7 | |||
Straight Line Rent Adjustments | 1 | (0.9) | $ (0.5) | ||||
Deferred sale leaseback gain, current portion [Member] | |||||||
Accrued and other liabilities [Line Items] | |||||||
Deferred liabilities and sale leaseback gains(1) | $ 19.3 | ||||||
CorporateHeadquarters [Member] | |||||||
Accrued and other liabilities [Line Items] | |||||||
Deferred sales proceeds | $ 13.7 | ||||||
[1] | (1) Deferred liabilities and sale leaseback gains at June 26, 2019 relates to $19.3 million for the current portion of the deferred gain related to the sale leaseback transactions executed during the fiscal year ended June 26, 2019 . As of June 27, 2018 , Deferred liabilities and sale leaseback gains primarily includes $13.7 million related to the sale of our previous corporate headquarters location that was recognized during fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 5 - Other Gains and Charges for further details. | ||||||
[2] | (2) Straight-line rent includes the current portion of the straight-line rent of operating leases. During the fiscal years ended June 26, 2019 , June 27, 2018 and June 28, 2017 , $1.0 million of expenses, $0.9 million of credit and $0.5 million of credit, re lated to straight-line rent were recognized into Restaurant expenses in the Consolidated Statements of Comprehensive Income , respectively. | ||||||
[3] | (3) Deferred franchise and development fees relates to the current portion of upfront initial franchise and development fees recorded as part of adopting ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other liabilities table below for the long-term portion of the deferred revenues. | ||||||
[4] | (4) Cyber security incident accrual relates to the fiscal 2018 event, refer to Note 15 - Commitments and Contingencies for further details. | ||||||
[5] | (5) Other primarily consists of accruals for certain lease reserves, utilities, banquet deposits for Maggiano’s events, rent-related expenses and other various accruals. | ||||||
[6] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
ACCRUED AND OTHER LIABILITIES_2
ACCRUED AND OTHER LIABILITIES (Other Liabilities) (Details) $ in Millions | Jun. 26, 2019USD ($)Location | Jun. 28, 2018USD ($) | Jun. 27, 2018USD ($) | |||
Accrued and other liabilities [Line Items] | ||||||
Straight-line rent(1) | [1] | $ 57.2 | $ 55.6 | |||
Insurance | 36.8 | 40.1 | ||||
Landlord contributions(2) | 32.9 | [2] | 23.3 | |||
Deferred franchise and development fees(3) | 14.8 | [3] | 0 | |||
Unfavorable leases | 2.8 | 3.8 | ||||
Unrecognized tax benefits | 2.1 | 2.9 | ||||
Other | 6.4 | 6 | ||||
Other liabilities | $ 153 | $ 148.3 | $ 131.7 | [4] | ||
Number of properties sold and leased back under operating leases | Location | 152 | |||||
New corporate headquarters [Member] | ||||||
Accrued and other liabilities [Line Items] | ||||||
Landlord contributions(2) | $ 10 | |||||
Sale Leaseback [Member] | ||||||
Accrued and other liabilities [Line Items] | ||||||
Straight-line rent(1) | $ 2.8 | |||||
[1] | (1) Straight-line rent is the long-term portion of the straight-line rent of operating leases. The June 26, 2019 balance includes $2.8 million for the straight-line rent accrued for 152 restaurants sold as part of the sale leaseback transactions. Refer to Note 3 - Sale Leaseback Transactions for more details, and the above Other accrued liabilities table for the current portion of straight-line rent recorded . | |||||
[2] | (2) Landlord contributions as of June 26, 2019 includes $10.0 million related to the construction allowance associated with the new corporate headquarters location. | |||||
[3] | (3) Deferred franchise and development fees relates to the long-term portion of upfront initial franchise and development fees recorded as part of adopting of ASC 606. Refer to Note 2 - Revenue Recognition for further details, and the Other accrued liabilities table above for the current portion of the deferred revenues. | |||||
[4] | (3) Other liabilities $16.6 million and Other accrued liabilities $1.5 million adjustments relate to the deferral of previously recognized franchise and development fees received from franchisees, with a corresponding $4.5 million increase in Deferred income taxes, net , and a $13.6 million increase to Shareholders’ deficit at June 28, 2018 . |
INCOME TAXES (Income Before Pro
INCOME TAXES (Income Before Provision For Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ 168.1 | $ 182.1 | $ 186.7 | ||||||||
Foreign | 3.7 | (11.9) | 21.8 | ||||||||
Income before provision for income taxes | $ 49.2 | $ 55.5 | $ 35 | $ 32.1 | $ 55 | $ 58.9 | $ 41.1 | $ 15.2 | $ 171.8 | $ 170.2 | $ 208.5 |
INCOME TAXES (Provision For Inc
INCOME TAXES (Provision For Income Taxes From Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Current income tax expenses: | |||
Federal | $ 63.3 | $ 28.7 | $ 64.4 |
State | 28.8 | 12.2 | 13.4 |
Foreign | 0.6 | 0 | 2.5 |
Total current income tax expenses | 92.7 | 40.9 | 80.3 |
Deferred income tax (benefits) expenses: | |||
Federal | (58.5) | 6.6 | (19.6) |
State | (18) | 0.1 | (3.1) |
Foreign | 0.7 | (3.3) | 0.1 |
Total deferred income tax (benefits) expenses | (75.8) | 3.4 | (22.6) |
Provision for income taxes | $ 16.9 | $ 44.3 | $ 57.7 |
Effective tax rate | 9.80% | 26.00% | 27.70% |
INCOME TAXES (Reconciliation Be
INCOME TAXES (Reconciliation Between Reported Provision For Income Taxes And Amount Computed By Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at statutory rate | $ 36.1 | $ 47.8 | $ 73 |
FICA tax credit | (28.2) | (22.6) | (20.7) |
State income taxes, net of Federal benefit | 8.5 | 8.7 | 5.9 |
Tax reform impact | 0 | 8.2 | 0 |
Stock based compensation tax shortfall | 0.5 | 1.1 | 0 |
Other | 0 | 1.1 | (0.5) |
Provision for income taxes | $ 16.9 | $ 44.3 | $ 57.7 |
INCOME TAXES (Deferred Income T
INCOME TAXES (Deferred Income Tax Assets And Liabilities) (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 |
Deferred income tax assets: | ||
Leasing transactions | $ 25.3 | $ 22.7 |
Stock-based compensation | 9.9 | 9.1 |
Restructure charges and impairments | 3 | 2.4 |
Insurance reserves | 11.5 | 12.1 |
Employee benefits plans | 0 | 0.1 |
Gift cards | 12.3 | 15.1 |
Net operating losses | 3.7 | 6.1 |
Federal credit carryover | 9 | 10.7 |
State credit carryover | 2.6 | 3.5 |
Deferred gain on sale leaseback transactions | 68.6 | 0 |
Other, net | 11.2 | 3.8 |
Less: Valuation allowance | (5.5) | (6.1) |
Total deferred income tax assets | 151.6 | 79.5 |
Deferred income tax liabilities: | ||
Prepaid expenses | 13.6 | 13.5 |
Goodwill and other amortization | 20.6 | 20.3 |
Depreciation and capitalized interest on property and equipment | 4.3 | 11.1 |
Other, net | 1.1 | 1 |
Total deferred income tax liabilities | 39.6 | 45.9 |
Deferred income taxes, net | $ 112 | $ 33.6 |
INCOME TAXES (Narrative for Def
INCOME TAXES (Narrative for Deferred Income Taxes and Tax Reform) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Income Tax Disclosure [Abstract] | |||
State net operating losses | $ 4.6 | ||
Federal credit carryover | 9 | $ 10.7 | |
State credit carryover | 3.3 | ||
Deferred Tax Assets, State Credit Carryover, Recognized | 0.2 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (0.6) | ||
Statutory Federal income tax rate | 21.00% | 28.10% | 35.00% |
Tax reform impact | $ 0 | $ 8.2 | $ 0 |
INCOME TAXES (Reconciliation Of
INCOME TAXES (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 26, 2019 | Jun. 27, 2018 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 3.9 | $ 4.1 |
Additions based on tax position related to the current year | 0.4 | 0.5 |
Additions based on tax positions related to prior years | 0 | 0 |
Settlements with tax authorities | (0.1) | 0 |
Expiration of statute of limitations | (0.7) | (0.7) |
Balance at end of year | $ 3.5 | $ 3.9 |
INCOME TAXES INCOME TAXES (Narr
INCOME TAXES INCOME TAXES (Narrative Details for Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 26, 2019 | Jun. 27, 2018 | |
Income Tax Disclosure [Abstract] | ||
Amount that would affect the effective tax rate if recognized | $ 2.7 | $ 3.1 |
Income tax penalties and interest accrued | 0.3 | 0.5 |
Income tax penalties and interest accrued, net of deferred tax benefits | 0.2 | 0.4 |
Federal deferred tax benefit | $ 0.1 | $ 0.1 |
DEBT (Long-Term Debt) (Details)
DEBT (Long-Term Debt) (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 |
Debt [Line Items] | ||
Capital lease obligations (refer to Note 10 - Leases) | $ 48.4 | $ 43 |
Total long-term debt | 1,221.7 | 1,513.3 |
Less unamortized debt issuance costs and discounts | (5.4) | (6.6) |
Total long-term debt less unamortized debt issuance costs and discounts | 1,216.3 | 1,506.7 |
Less current installment portion of long-term debt | (9.7) | (7.1) |
Long-term debt, less current installments | 1,206.6 | 1,499.6 |
5.00% notes | ||
Debt [Line Items] | ||
Senior notes | 350 | 350 |
3.88% notes | ||
Debt [Line Items] | ||
Senior notes | 300 | 300 |
$1B Revolving Credit Facility [Member] | ||
Debt [Line Items] | ||
Revolving credit facility | $ 523.3 | $ 820.3 |
DEBT (Long-Term Debt Maturities
DEBT (Long-Term Debt Maturities Excluding Capital Lease Obligations) (Details) $ in Millions | Jun. 26, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 0 |
2021 | 0 |
2022 | 523.3 |
2023 | 300 |
2024 | 0 |
Thereafter | 350 |
Total long-term debt maturities | $ 1,173.3 |
DEBT (Narrative) (Details)
DEBT (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 26, 2018 | Sep. 28, 2016 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | Jun. 26, 2013 | |
Debt [Line Items] | ||||||
Payments on long-term debt | $ 9.5 | $ 260.3 | $ 3.8 | |||
Proceeds from issuance of long-term debt | 0 | 0 | 350 | |||
Payments for repurchase of common stock | $ 167.7 | 303.2 | 370.9 | |||
Revolving credit facility, covenant compliance | We are currently in compliance with all financial covenants. | |||||
2.60% Notes | ||||||
Debt [Line Items] | ||||||
Payments on long-term debt | 250 | |||||
3.88% notes | ||||||
Debt [Line Items] | ||||||
Stated interest rate | 3.875% | |||||
Senior notes | $ 300 | 300 | ||||
Debt instrument, face amount | $ 300 | |||||
5.00% notes | ||||||
Debt [Line Items] | ||||||
Stated interest rate | 5.00% | |||||
Senior notes | 350 | 350 | ||||
Proceeds from issuance of long-term debt | $ 350 | |||||
$750M Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 750 | |||||
$1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Net borrowings drawn (payments made) on revolving credit facility | (297) | $ 428 | ||||
Debt available under revolving credit facility | 476.7 | |||||
Line of credit facility, maximum borrowing capacity | $ 1,000 | $ 1,000 | ||||
Revolving credit facility interest rate during period | 3.78% | |||||
Revolving credit facility, variable rate basis | One month LIBOR | |||||
Repayments on revolving credit facility | 50 | |||||
$1B Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Debt [Line Items] | ||||||
Basis spread on variable rate | 2.00% | |||||
$1B Revolving Credit Facility [Member] | Minimum [Member] | ||||||
Debt [Line Items] | ||||||
Basis spread on variable rate | 1.70% | 1.38% | ||||
$890M of the $1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Revolving credit facility expiration date | Sep. 12, 2021 | |||||
$110M of the $1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Revolving credit facility expiration date | Mar. 12, 2020 | |||||
London Interbank Offered Rate (LIBOR) [Member] | $1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Basis spread on variable rate | 2.40% | |||||
2017 Amendment to revolving credit facility [Member] | $1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Debt issuance costs capitalized | $ 4 | |||||
2018 Amendment to revolving credit facility [Member] | $1B Revolving Credit Facility [Member] | ||||||
Debt [Line Items] | ||||||
Debt issuance costs capitalized | $ 1.6 | |||||
Accelerated Share Repurchase Agreement [Member] | ||||||
Debt [Line Items] | ||||||
Payments for repurchase of common stock | $ 300 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Capital Leased Assets [Line Items] | |||
Amortization expense for capital lease assets | $ 8.7 | $ 5.6 | $ 1.9 |
Building [Member] | |||
Capital Leased Assets [Line Items] | |||
Gross value of assets under capital leases | 38.8 | 38.8 | |
Accumulated amortization of capital lease assets | 29.5 | 27.8 | |
Equipment [Member] | |||
Capital Leased Assets [Line Items] | |||
Gross value of assets under capital leases | 44.2 | 20.3 | |
Accumulated amortization of capital lease assets | $ 21.8 | $ 5.1 |
LEASES (Rent Expense Detail) (D
LEASES (Rent Expense Detail) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Leases [Abstract] | |||
Straight-lined minimum rent | $ 141.7 | $ 111.1 | $ 109.8 |
Contingent rent | 3.3 | 3.2 | 3.8 |
Other | 13.6 | 11.6 | 11.7 |
Total rent expenses | $ 158.6 | $ 125.9 | $ 125.3 |
LEASES (Future Minimum Lease Pa
LEASES (Future Minimum Lease Payments) (Details) $ in Millions | Jun. 26, 2019USD ($) | |
Leases [Abstract] | ||
Capital Leases, 2020 | $ 12.3 | |
Capital Leases, 2021 | 10.1 | |
Capital Leases, 2022 | 8.2 | |
Capital Leases, 2023 | 6.7 | |
Capital Leases, 2024 | 6 | |
Capital Leases, Thereafter | 17.4 | |
Capital Leases, Total minimum lease payments | 60.7 | [1] |
Imputed interest (average rate of 6.18%) | (12.3) | |
Present value of minimum lease payments | 48.4 | |
Less current installments | (9.7) | |
Capital Leases, Net minimum payments | 38.7 | |
Operating Leases, 2020 | 156.8 | |
Operating Leases, 2021 | 154.5 | |
Operating Leases, 2022 | 148.6 | |
Operating Leases, 2023 | 137.7 | |
Operating Leases, 2024 | 127.6 | |
Operating Leases, Thereafter | 771.7 | |
Operating leases, Total minimum lease payments | 1,496.9 | [1] |
Capital Leases, Minimum sublease rentals | 22 | |
Operating Leases, Minimum sublease rentals | $ 14.6 | |
[1] | Future minimum lease payments have not been reduced by minimum sublease rentals to be received in the future under non-cancelable subleases. The total of undiscounted future sublease rentals are approximately $22.0 million and $14.6 million for capital and operating subleases, respectively, as of June 26, 2019 . |
LEASES Leases - Phantom (Detail
LEASES Leases - Phantom (Details) | 12 Months Ended |
Jun. 26, 2019 | |
Leases (Parenthetical) [Abstract] | |
Capital leases, imputed rate of interest | 6.18% |
FAIR VALUE MEASUREMENTS (Assets
FAIR VALUE MEASUREMENTS (Assets Measured At Fair Value On Non-Recurring Basis) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 27, 2017USD ($)Restaurant | Jun. 26, 2019USD ($)restaurant | Jun. 27, 2018USD ($)restaurant | Jun. 28, 2017restaurant | |
Fair Value Disclosures [Line Items] | ||||
Carrying value of impaired long lived assets | $ 10.3 | $ 3.7 | ||
Carrying value of reacquired franchise rights | 0.5 | $ 0.3 | ||
Number of underperforming restaurants | restaurant | 5 | |||
Fair value of impaired long lived asset | $ 0 | $ 0.3 | ||
Impairment charges on restaurants continuing to operate | 3.7 | |||
Chili's Canada Restaurants [Member] | ||||
Fair Value Disclosures [Line Items] | ||||
Carrying value of impaired long lived assets | 6 | |||
Carrying value of reacquired franchise rights | 1.2 | |||
Number of underperforming restaurants | Restaurant | 9 | |||
Impairment of long lived assets to be disposed of | $ 7.2 | |||
Fair value of impaired long lived asset | $ 0 | |||
Chili's Restaurants [Member] | ||||
Fair Value Disclosures [Line Items] | ||||
Number of underperforming restaurants | restaurant | 11 | 10 | ||
Liquor Licenses [Member] | ||||
Fair Value Disclosures [Line Items] | ||||
Impairment of liquor licenses | $ 0 |
FAIR VALUE MEASUREMENTS (Other
FAIR VALUE MEASUREMENTS (Other Financial Instruments) (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 | Dec. 27, 2017 | Sep. 28, 2016 | Jun. 26, 2013 |
Debt Instrument [Line Items] | |||||
Note receivable from sale of Mexico JV, gross | $ 18 | ||||
Note receivable from sale of Mexico JV, fair value | $ 11.1 | $ 16 | |||
3.88% notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.875% | ||||
Long-term debt | 298.6 | 298.2 | |||
Long-term debt, fair value | 296.3 | 285.3 | |||
5.00% notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.00% | ||||
Long-term debt | 345.9 | 345.2 | |||
Long-term debt, fair value | $ 356.2 | $ 342.3 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) shares in Millions | 12 Months Ended | |
Jun. 26, 2019USD ($)shares | ||
Stock Options With a Performance Condition [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual term of stock options, in years | 8 years | |
Stock Options With a Performance Condition [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Stock Options With a Performance Condition [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 5 years | |
Stock Options Without a Performance Condition [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual term of stock options, in years | 8 years | |
Stock Options Without a Performance Condition [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Stock Options Without a Performance Condition [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, number of options | 0.7 | [1] |
Employee Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase in number of shares authorized for issuance | 1.4 | |
Employees and non-employee Directors and consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized for issuance | 38.7 | |
Modification of stock-based compensation award [Member] | Stock Options With a Performance Condition [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Plan modification, incremental cost | $ | $ 0 | |
Fiscal 2018 [Member] | Modification of stock-based compensation award [Member] | Stock Options With a Performance Condition [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance stock options canceled, shares | 0.2 | |
Fiscal 2019 [Member] | Modification of stock-based compensation award [Member] | Stock Options With a Performance Condition [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, number of options | 0.4 | |
[1] | (1) There were 0.4 million performance stock options granted in fiscal 2019 , all of which were outstanding at June 26, 2019 . |
STOCK-BASED COMPENSATION (Trans
STOCK-BASED COMPENSATION (Transactions During Fiscal 2019-Stock Options) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||
Tax benefit from exercise of stock options | $ 0.4 | $ 0.6 | $ 1.6 | ||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options outstanding at June 27, 2018, number of options | 2.4 | ||||
Granted, number of options | [1] | 0.7 | |||
Exercised, number of options | (0.1) | ||||
Forfeited or canceled, number of options | (0.5) | ||||
Options outstanding at June 26, 2019, number of options | 2.5 | [1] | 2.4 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||
Options outstanding at June 27, 2018, weighted average exercise price | $ 38.87 | ||||
Granted, weighted average exercise price | 43.57 | ||||
Exercised, weighted average exercise price | 29.89 | ||||
Forfeited or canceled, weighted average exercise price | 35.17 | ||||
Options outstanding at June 26, 2019, weighted average exercise price | $ 41.33 | $ 38.87 | |||
Options, outstanding, weighted average remaining contractual term | 5 years 3 months 18 days | ||||
Options, outstanding, intrinsic value | $ 6.6 | ||||
Options, exercisable, number | 0.8 | ||||
Options, exercisable, weighted average exercise price | $ 45.07 | ||||
Options, exercisable, weighted average remaining contractual term | 3 years 6 months | ||||
Options, exercisable, intrinsic value | $ 1.7 | ||||
Unrecognized compensation expense | $ 2.6 | ||||
Period of recognition for unrecognized stock-based compensation costs, in years | 2 years 3 months 18 days | ||||
Total intrinsic value of options exercised | $ 1.8 | $ 2.5 | $ 5.6 | ||
Fiscal 2019 [Member] | Modification of stock-based compensation award [Member] | Stock Options With a Performance Condition [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Granted, number of options | 0.4 | ||||
[1] | (1) There were 0.4 million performance stock options granted in fiscal 2019 , all of which were outstanding at June 26, 2019 . |
STOCK-BASED COMPENSATION (Tra_2
STOCK-BASED COMPENSATION (Transactions During Fiscal 2019-Restricted Share Awards) (Details) - Restricted Share Award [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Restricted share awards outstanding at June 27, 2018, number of restricted share awards | 1 | ||
Granted, number of restricted share awards | 0.3 | ||
Vested, number of restricted share awards | (0.2) | ||
Forfeited, number of restricted share awards | (0.1) | ||
Restricted share awards outstanding at June 26, 2019, number of restricted share awards | 1 | 1 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Restricted share awards outstanding at June 27, 2018, weighted average fair value per award | $ 39.80 | ||
Granted, weighted average fair value per award | 43.51 | ||
Vested, weighted average fair value per award | 46.53 | ||
Forfeited, weighted average fair value per award | 38.08 | ||
Restricted share awards outstanding at June 26, 2019, weighted average fair value per award | $ 39.48 | $ 39.80 | |
Unrecognized compensation expense | $ 8.6 | ||
Period of recognition for unrecognized stock-based compensation costs, in years | 1 year 9 months 18 days | ||
Fair value of shares that vested during period | $ 8.6 | $ 4.3 | $ 12.8 |
SAVINGS PLANS (Narrative) (Deta
SAVINGS PLANS (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Defined Contribution Plan [Abstract] | |||
Eligibility age for savings plan | 21 years | ||
Number of years of service necessary for savings plan eligibility | 1 year | ||
Hours of service necessary for eligibility in employee savings plan | 1000 hours | ||
Percentage of base salary allowed for savings plan contribution | 50.00% | ||
Percentage of bonus allowed for contribution to savings plan | 100.00% | ||
Employer matching contribution percentage for first three percent contributed to savings plan | 100.00% | ||
Percentage of compensation contributed to savings plan matched by employer at 100% | 3.00% | ||
Employer matching contribution percentage for subsequent two percent contributed to savings plan | 50.00% | ||
Percentage over 3% for which employer will match 50% of employee contributions to savings plan | 2.00% | ||
Employer contributions to savings plan | $ 9.6 | $ 9.2 | $ 8.9 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Cash Paid For Interest And Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | ||
Income taxes, net of refunds(1) | $ 106.2 | [1] | $ 56 | $ 89 |
Interest, net of amounts capitalized | $ 55.5 | $ 53.1 | $ 39.8 | |
[1] | (1) Income taxes, net of refunds for the fiscal year ended June 26, 2019 included payments made for income tax liabilities resulting from the sale leaseback transactions completed in fiscal 2019 . Refer to Note 3 - Sale Leaseback Transactions and Note 8 - Income Taxes for further details. |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION (Non-Cash Investing and Financing Activities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Retirement of fully depreciated assets | $ 28.9 | $ 32.9 | $ 21.2 |
Accrued capital expenditures | 9.3 | 11.3 | 12.7 |
Capital lease additions | 15.1 | 7.9 | 11.7 |
Dividend Declared [Member] | |||
Dividends declared but not paid | $ 15.6 | $ 17 | $ 17.3 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES Commitments and Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 26, 2019 | Jun. 27, 2018 | |
Guarantor Obligations [Line Items] | ||
Amount of undrawn standby letters of credit outstanding | $ 29 | |
Lease Guarantees And Secondary Obligations [Member] | ||
Guarantor Obligations [Line Items] | ||
Accrued liability for loss contingency | 0 | $ 1.4 |
Payments for legal settlements | $ 0.9 | |
Description of other material contingencies | No other liabilities related to this matter have been recorded | |
Maximum [Member] | Lease Guarantees And Secondary Obligations [Member] | ||
Guarantor Obligations [Line Items] | ||
Loss contingency, estimate of possible loss | $ 55.3 | $ 58.2 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES Loss Contingencies (Details) $ in Millions | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||
Sep. 26, 2018USD ($) | Jun. 27, 2018USD ($) | Jun. 26, 2019USD ($)LegalMatter | Jun. 27, 2018USD ($) | Jun. 28, 2017USD ($) | Jun. 26, 2019USD ($)LegalMatter | |
Loss Contingencies [Line Items] | ||||||
Cyber security incident charges | $ 0.4 | $ 2 | $ 0.4 | $ 2 | $ 0 | |
Number of matters pending or threatened which are expected to have a material adverse effect | LegalMatter | 0 | 0 | ||||
Cyber security incident [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Cyber insurance coverage deductible | $ 2 | |||||
Cyber security incident charges | $ 4.2 | |||||
Receivable due from insurance | 1.8 | 1.8 | ||||
Loss contingency, estimate of possible loss | $ 5 | $ 5 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES Phantom Information (Details) - Cyber security incident [Member] $ in Millions | Jun. 26, 2019USD ($)LegalMatter |
Loss Contingencies [Line Items] | |
Number of putative class actions filed | LegalMatter | 4 |
Accrued liability for loss contingency | $ | $ 0 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting Information, by Segment) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Jun. 26, 2019USD ($)Location | Mar. 27, 2019USD ($) | Dec. 26, 2018USD ($) | Sep. 26, 2018USD ($) | Jun. 27, 2018USD ($) | Mar. 28, 2018USD ($) | Dec. 27, 2017USD ($) | Sep. 27, 2017USD ($) | Jun. 26, 2019USD ($)Location | Jun. 27, 2018USD ($) | Jun. 28, 2017USD ($) | ||||
Segment Information [Abstract] | ||||||||||||||
Segment Information, disclosure of major customers | We do not rely on any major customers as a source of sales | |||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | $ 834.1 | $ 839.3 | $ 790.7 | $ 753.8 | $ 817.1 | $ 812.5 | $ 766.4 | $ 739.4 | $ 3,217.9 | $ 3,135.4 | $ 3,150.8 | |||
Company restaurant expenses | [1] | 2,695 | 2,587.4 | 2,582.7 | ||||||||||
Depreciation and amortization | 147.6 | 151.4 | 156.4 | |||||||||||
General and administrative | 149.1 | 136 | 132.8 | |||||||||||
Other (gains) and charges | (4.5) | [2] | 34.5 | 22.7 | ||||||||||
Total operating costs and expenses | 2,987.2 | 2,909.3 | 2,894.6 | |||||||||||
Operating income | 230.7 | 226.1 | 256.2 | |||||||||||
Interest expense | 61.6 | 59 | 49.6 | |||||||||||
Other (income), net | (2.7) | (3.1) | (1.9) | |||||||||||
Income before provision for income taxes | 49.2 | $ 55.5 | $ 35 | $ 32.1 | 55 | $ 58.9 | $ 41.1 | $ 15.2 | 171.8 | 170.2 | 208.5 | |||
Segment assets(2) | $ 1,258.3 | [2] | 1,347.3 | 1,258.3 | [2] | 1,347.3 | ||||||||
Payments for property and equipment | $ 167.6 | 101.3 | 102.6 | |||||||||||
Number of properties sold and leased back under operating leases | Location | 152 | 152 | ||||||||||||
Gain from sale leaseback transaction | $ (35.2) | |||||||||||||
Chili's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 2,782.2 | 2,700.2 | 2,720 | |||||||||||
Company restaurant expenses | [1] | 2,329.6 | 2,224 | 2,220.6 | ||||||||||
Depreciation and amortization | 120.1 | 125 | 129.3 | |||||||||||
General and administrative | 38.7 | 39.6 | 37 | |||||||||||
Other (gains) and charges | (6.4) | [2] | 24.5 | 13.2 | ||||||||||
Total operating costs and expenses | 2,482 | 2,413.1 | 2,400.1 | |||||||||||
Operating income | 300.2 | 287.1 | 319.9 | |||||||||||
Interest expense | 3.2 | 0 | 0 | |||||||||||
Other (income), net | 0 | 0 | 0 | |||||||||||
Income before provision for income taxes | 297 | 287.1 | 319.9 | |||||||||||
Segment assets(2) | $ 1,002.8 | [2] | 1,122.2 | 1,002.8 | [2] | 1,122.2 | ||||||||
Payments for property and equipment | $ 129.1 | 85.3 | 76 | |||||||||||
Number of properties sold and leased back under operating leases | Location | 151 | 151 | ||||||||||||
Gain from sale leaseback transaction | $ (26.8) | |||||||||||||
Maggiano's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 435.7 | 435.2 | 430.8 | |||||||||||
Company restaurant expenses | [1] | 364.8 | 362.8 | 361.7 | ||||||||||
Depreciation and amortization | 16.2 | 15.9 | 16.2 | |||||||||||
General and administrative | 6.1 | 5.5 | 6.2 | |||||||||||
Other (gains) and charges | 1 | [2] | 1.1 | 0.8 | ||||||||||
Total operating costs and expenses | 388.1 | 385.3 | 384.9 | |||||||||||
Operating income | 47.6 | 49.9 | 45.9 | |||||||||||
Interest expense | 0.3 | 0 | 0 | |||||||||||
Other (income), net | 0 | 0 | 0 | |||||||||||
Income before provision for income taxes | 47.3 | 49.9 | 45.9 | |||||||||||
Segment assets(2) | $ 163.9 | [2] | 151 | 163.9 | [2] | 151 | ||||||||
Payments for property and equipment | $ 10.8 | 7.6 | 13.3 | |||||||||||
Number of properties sold and leased back under operating leases | Location | 1 | 1 | ||||||||||||
Gain from sale leaseback transaction | $ (0.5) | |||||||||||||
Corporate and Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||
Company restaurant expenses | [1] | 0.6 | 0.6 | 0.4 | ||||||||||
Depreciation and amortization | 11.3 | 10.5 | 10.9 | |||||||||||
General and administrative | 104.3 | 90.9 | 89.6 | |||||||||||
Other (gains) and charges | 0.9 | [2] | 8.9 | 8.7 | ||||||||||
Total operating costs and expenses | 117.1 | 110.9 | 109.6 | |||||||||||
Operating income | (117.1) | (110.9) | (109.6) | |||||||||||
Interest expense | 58.1 | 59 | 49.6 | |||||||||||
Other (income), net | (2.7) | (3.1) | (1.9) | |||||||||||
Income before provision for income taxes | (172.5) | (166.8) | (157.3) | |||||||||||
Segment assets(2) | $ 91.6 | [2] | $ 74.1 | 91.6 | [2] | 74.1 | ||||||||
Payments for property and equipment | 27.7 | 8.4 | 13.3 | |||||||||||
Franchise fees and other revenues [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | [1] | 58.6 | ||||||||||||
Franchise fees and other revenues [Member] | Chili's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | [1] | 36.8 | ||||||||||||
Franchise fees and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | [1] | 21.8 | ||||||||||||
Franchise fees and other revenues [Member] | Corporate and Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | [1] | 0 | ||||||||||||
Franchise and other revenues [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 111.7 | |||||||||||||
Revenues | 93.9 | 88.3 | ||||||||||||
Franchise and other revenues [Member] | Chili's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 89.6 | |||||||||||||
Revenues | 71.9 | 66.7 | ||||||||||||
Franchise and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 22.1 | |||||||||||||
Revenues | 22 | 21.6 | ||||||||||||
Franchise and other revenues [Member] | Corporate and Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 0 | |||||||||||||
Revenues | 0 | 0 | ||||||||||||
Royalty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 53.1 | |||||||||||||
Royalty [Member] | Chili's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 52.8 | |||||||||||||
Royalty [Member] | Maggiano's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 0.3 | |||||||||||||
Royalty [Member] | Corporate and Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 0 | |||||||||||||
Company sales [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 3,106.2 | |||||||||||||
Revenues | 3,041.5 | 3,062.5 | ||||||||||||
Company sales [Member] | Chili's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 2,692.6 | |||||||||||||
Revenues | 2,628.3 | 2,653.3 | ||||||||||||
Company sales [Member] | Maggiano's Restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 413.6 | |||||||||||||
Revenues | 413.2 | 409.2 | ||||||||||||
Company sales [Member] | Corporate and Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues, from contract with customer, excluding assessed tax | 0 | |||||||||||||
Revenues | $ 0 | $ 0 | ||||||||||||
Land, Buildings and Improvements [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sale leaseback transaction, net book value | $ 185.3 | $ 185.3 | ||||||||||||
[1] | Company restaurant expenses includes Cost of sales , Restaurant labor and Restaurant expenses , including advertising. With the adoption of ASC 606, for the fiscal year ended June 26, 2019 , advertising contributions received from Chili’s franchisees are recorded as Franchise fees and other revenues within Total revenues , which differs from the fiscal years ended June 27, 2018 and June 28, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses. | |||||||||||||
[2] | During the fiscal year ended June 26, 2019 we completed sale leaseback transactions of 151 Chili’s restaurant properties, and one Maggiano’s property. As part of this transaction, we sold the related restaurant fixed assets, net of accumulated depreciation, totaling $185.3 million . Additionally, Chili’s recognized $26.8 million , and Maggiano’s recognized $0.5 million of net gain on the sale, that consists of the immediate gain recognized upon sale, a certain portion of the deferred gain, partially offset by related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income . Refer to Note 3 - Sale Leaseback Transactions for further details. |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Unaudited Consolidated Quarterly Results Of Operations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 834.1 | $ 839.3 | $ 790.7 | $ 753.8 | $ 817.1 | $ 812.5 | $ 766.4 | $ 739.4 | $ 3,217.9 | $ 3,135.4 | $ 3,150.8 |
Income before provision for income taxes | 49.2 | 55.5 | 35 | 32.1 | 55 | 58.9 | 41.1 | 15.2 | 171.8 | 170.2 | 208.5 |
Net income | $ 46.7 | $ 49.8 | $ 32 | $ 26.4 | $ 43.8 | $ 46.9 | $ 25.3 | $ 9.9 | $ 154.9 | $ 125.9 | $ 150.8 |
Basic net income per share | $ 1.25 | $ 1.33 | $ 0.84 | $ 0.65 | $ 1.03 | $ 1.03 | $ 0.55 | $ 0.20 | $ 4.04 | $ 2.75 | $ 2.98 |
Diluted net income per share | $ 1.22 | $ 1.31 | $ 0.83 | $ 0.64 | $ 1.01 | $ 1.02 | $ 0.54 | $ 0.20 | $ 3.96 | $ 2.72 | $ 2.94 |
Basic weighted average shares outstanding | 37.5 | 37.5 | 38.1 | 40.4 | 42.6 | 45.4 | 46.4 | 48.3 | 38.3 | 45.7 | 50.6 |
Diluted weighted average shares outstanding | 38.3 | 38.1 | 38.8 | 41.1 | 43.5 | 46 | 46.9 | 48.7 | 39.1 | 46.3 | 51.2 |
QUARTERLY RESULTS OF OPERATIO_4
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | Jun. 28, 2017 | |
Quarterly Financial Data [Line Items] | |||||||||||
Sale leaseback transaction, gross gain on sale | $ (5.8) | $ (4.7) | $ (4.6) | $ (20.1) | $ 309.7 | ||||||
Sale leaseback transaction charges | 0.5 | 0.4 | 0.2 | 6.8 | $ 2 | 7.9 | |||||
(Gain) on sale of assets, net | (0.1) | (6) | (0.8) | $ (0.3) | (6.9) | $ (0.3) | $ (2.7) | ||||
Foreign currency transaction (gain) loss | (0.2) | (0.5) | 0.7 | (0.8) | 1.2 | $ (0.9) | 0.9 | (0.7) | 1.2 | 0 | |
Property damages, net of (insurance recoveries) | (0.2) | 0.1 | 0.2 | (0.8) | (0.7) | 5.1 | 0 | ||||
Lease guarantee charges (credits) | (0.4) | 0.5 | 1.4 | (0.4) | 1.9 | 1.1 | |||||
Restaurant impairment charges | 9.8 | 1 | 1.8 | 2 | $ 7.2 | 10.8 | 10.9 | 5.2 | |||
Remodel-related costs | 2.9 | 1.7 | 2.6 | 0.5 | 1.4 | 7.7 | 1.5 | 0 | |||
Corporate headquarters relocation charges | 0.1 | 5.2 | 5.3 | 0 | 0 | ||||||
Restaurant closure charges | 0.3 | $ 0.2 | 2.1 | 1.7 | 0.2 | 2.8 | 4.3 | 0.2 | 4.3 | 7.5 | 4.1 |
Accelerated depreciation | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 1 | 1.9 | 2 | ||
Severance and other benefit charges | $ 0.7 | $ 0.1 | 0.1 | 0.3 | 0.9 | 0.3 | 6.6 | ||||
Cyber security incident charges | $ 0.4 | 2 | $ 0.4 | $ 2 | $ 0 | ||||||
Hurricane-related costs, net of recoveries | $ (0.4) | $ 0.2 | $ 0.6 | $ 4.6 |
EFFECT OF NEW ACCOUNTING STAN_2
EFFECT OF NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | Jun. 26, 2019 | Jun. 27, 2018 | |
Effect of new accounting pronouncements [Line Items] | |||
Operating leases, Total minimum lease payments | [1] | $ 1,496.9 | |
Sale leaseback transaction, deferred gain | 274.6 | ||
Deferred tax assets, deferred gain on sale leaseback transaction | 68.6 | $ 0 | |
Accounting Standards Update 2016-02 [Member] | Liability [Member] | |||
Effect of new accounting pronouncements [Line Items] | |||
Operating Lease, Liability | 1,200 | ||
Accounting Standards Update 2016-02 [Member] | Assets [Member] | |||
Effect of new accounting pronouncements [Line Items] | |||
Operating Lease, Right-of-Use Asset | $ 1,000 | ||
[1] | Future minimum lease payments have not been reduced by minimum sublease rentals to be received in the future under non-cancelable subleases. The total of undiscounted future sublease rentals are approximately $22.0 million and $14.6 million for capital and operating subleases, respectively, as of June 26, 2019 . |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, shares in Millions, $ in Millions | Aug. 12, 2019$ / shares | Aug. 21, 2019USD ($)shares | Jun. 26, 2019$ / shares | Sep. 26, 2018$ / shares | Jun. 26, 2019USD ($)$ / sharesshares | Jun. 27, 2018USD ($)$ / shares | Jun. 28, 2017USD ($)$ / shares | Sep. 25, 2019restaurant |
Subsequent Event [Line Items] | ||||||||
Dividends per share | $ / shares | $ 0.38 | $ 0.38 | $ 1.52 | $ 1.52 | $ 1.36 | |||
Stock repurchase during period, shares | shares | 3.6 | |||||||
Payments for repurchase of common stock | $ 167.7 | $ 303.2 | $ 370.9 | |||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends payable, date declared | Aug. 12, 2019 | |||||||
Dividends per share | $ / shares | $ 0.38 | |||||||
Dividends payable, date to be paid | Sep. 26, 2019 | |||||||
Dividends payable, date of record | Sep. 6, 2019 | |||||||
Stock repurchase during period, shares | shares | 0.3 | |||||||
Payments for repurchase of common stock | $ 10 | |||||||
$1B Revolving Credit Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Net borrowings drawn (payments made) on revolving credit facility | $ (297) | $ 428 | ||||||
$1B Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Net borrowings drawn (payments made) on revolving credit facility | $ 8 | |||||||
Chili's Restaurants [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of restaurants acquired from franchisee | restaurant | 116 |