Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2017 | Feb. 21, 2018 | Jun. 28, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DENNYS CORP | ||
Entity Central Index Key | 852,772 | ||
Current Fiscal Year End Date | --12-27 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 598.4 | ||
Entity Common Stock, Shares Outstanding | 64,271,405 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 27, 2017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 4,983 | $ 2,592 |
Receivables, net | 21,384 | 19,841 |
Inventories | 3,134 | 3,046 |
Assets held for sale | 0 | 1,020 |
Prepaid and other current assets | 11,788 | 9,408 |
Total current assets | 41,289 | 35,907 |
Property, net | 139,856 | 133,102 |
Goodwill | 38,269 | 35,233 |
Intangible assets, net | 57,109 | 54,493 |
Deferred financing costs, net | 2,942 | 1,936 |
Deferred income taxes | 16,945 | 17,683 |
Other noncurrent assets | 27,372 | 27,797 |
Total assets | 323,782 | 306,151 |
Current liabilities: | ||
Current maturities of capital lease obligations | 3,168 | 3,285 |
Accounts payable | 32,487 | 25,289 |
Other current liabilities | 59,246 | 64,796 |
Total current liabilities | 94,901 | 93,370 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 259,000 | 218,500 |
Capital lease obligations, less current maturities | 27,054 | 23,806 |
Liability for insurance claims, less current portion | 12,236 | 14,853 |
Other noncurrent liabilities | 27,951 | 26,734 |
Total long-term liabilities | 326,241 | 283,893 |
Total liabilities | 421,142 | 377,263 |
Commitments and contingencies | ||
Shareholders' equity (deficit) | ||
Common stock $0.01 par value; shares authorized - 135,000; December 27, 2017: 107,740 shares issued and 64,589 shares outstanding; December 28, 2016: 107,115 shares issued and 71,358 shares outstanding | 1,077 | 1,071 |
Paid-in capital | 594,166 | 577,951 |
Deficit | (334,661) | (382,843) |
Accumulated other comprehensive loss, net of tax | (2,316) | (1,407) |
Shareholders’ equity before treasury stock | 258,266 | 194,772 |
Treasury stock, at cost, 43,151 and 35,757 shares, respectively | (355,626) | (265,884) |
Total shareholders' deficit | (97,360) | (71,112) |
Total liabilities and shareholders' deficit | $ 323,782 | $ 306,151 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 135,000 | 135,000 |
Common stock, issued (in shares) | 107,740 | 107,115 |
Common stock, outstanding (in shares) | 64,589 | 71,358 |
Treasury stock, at cost (in shares) | 43,151 | 35,757 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Revenue: | |||
Company restaurant sales | $ 390,352 | $ 367,310 | $ 353,073 |
Franchise and license revenue | 138,817 | 139,638 | 138,220 |
Total operating revenue | 529,169 | 506,948 | 491,293 |
Costs of company restaurant sales: | |||
Product costs | 97,825 | 90,487 | 89,660 |
Payroll and benefits | 153,037 | 142,823 | 136,626 |
Occupancy | 20,802 | 19,557 | 20,443 |
Other operating expenses | 53,049 | 49,229 | 47,628 |
Total costs of company restaurant sales | 324,713 | 302,096 | 294,357 |
Costs of franchise and license revenue | 39,294 | 40,805 | 43,345 |
General and administrative expenses | 66,415 | 67,960 | 66,602 |
Depreciation and amortization | 23,720 | 22,178 | 21,472 |
Operating (gains), losses and other charges, net | 4,329 | 26,910 | 2,366 |
Total operating costs and expenses, net | 458,471 | 459,949 | 428,142 |
Operating income | 70,698 | 46,999 | 63,151 |
Interest expense, net | 15,640 | 12,232 | 9,283 |
Other nonoperating (income) expense, net | (1,743) | (1,109) | 139 |
Net income before income taxes | 56,801 | 35,876 | 53,729 |
Provision for income taxes | 17,207 | 16,474 | 17,753 |
Net income | $ 39,594 | $ 19,402 | $ 35,976 |
Basic net income per share | $ 0.58 | $ 0.26 | $ 0.44 |
Diluted net income per share | $ 0.56 | $ 0.25 | $ 0.42 |
Basic weighted average shares outstanding | 68,077 | 75,325 | 82,627 |
Diluted weighted average shares outstanding | 70,403 | 77,206 | 84,729 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 39,594 | $ 19,402 | $ 35,976 |
Other comprehensive income (loss), net of tax: | |||
Minimum pension liability adjustment, net of tax of $(22), $2,148 and $1,425 | (37) | 21,819 | 2,230 |
Recognition of unrealized gain (loss) on hedge transactions, net of tax of $(559), $353 and $(898) | (872) | 551 | (1,405) |
Other comprehensive (loss) income | (909) | 22,370 | 825 |
Total comprehensive income | $ 38,685 | $ 41,772 | $ 36,801 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Minimum pension liability adjustment, tax expense (benefit) | $ (22) | $ 2,148 | $ 1,425 |
Recognition of unrealized gain (loss) on hedged transactions, tax expense (benefit) | $ (559) | $ 353 | $ (898) |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Paid-in Capital [Member] | (Deficit) [Member] | Accumulated Other Comprehensive Loss, Net [Member] | November 2015 Accelerated Share Repurchase [Member] | November 2015 Accelerated Share Repurchase [Member]Treasury Stock [Member] | November 2016 Accelerated Share Repurchase [Member]Treasury Stock [Member] |
Balance at Dec. 31, 2014 | $ 1,583 | $ 1,058 | $ (108,326) | $ 571,674 | $ (438,221) | $ (24,602) | |||
Balance, common stock, share issued at Dec. 31, 2014 | 105,818 | ||||||||
Balance, treasury stock, at cost, shares at Dec. 31, 2014 | (21,111) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 35,976 | 35,976 | |||||||
Other comprehensive income (loss) | 825 | 825 | |||||||
Share-based compensation on equity classified awards | 3,428 | 3,428 | |||||||
Purchase of treasury stock | $ (92,676) | $ (92,676) | $ (36,900) | ||||||
Purchase of treasury stock (in shares) | (8,500) | (8,548) | (3,500) | ||||||
Equity forward contract issuance | $ (13,111) | (13,111) | |||||||
Issuance of common stock for share-based compensation | 0 | $ 5 | (5) | ||||||
Issuance of common stock for share-based compensation (in shares) | 503 | ||||||||
Exercise of common stock options | 732 | $ 2 | 730 | ||||||
Exercise of common stock options (shares) | 200 | ||||||||
Tax benefit (expense) from share-based compensation | 2,648 | 2,648 | |||||||
Balance at Dec. 30, 2015 | (60,595) | $ 1,065 | $ (201,002) | 565,364 | (402,245) | (23,777) | |||
Balance, common stock, share issued at Dec. 30, 2015 | 106,521 | ||||||||
Balance, treasury stock, at cost, shares at Dec. 30, 2015 | (29,659) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 19,402 | 19,402 | |||||||
Other comprehensive income (loss) | 22,370 | 22,370 | |||||||
Share-based compensation on equity classified awards | 5,590 | 5,590 | |||||||
Purchase of treasury stock | $ (51,771) | $ (13,100) | |||||||
Purchase of treasury stock (in shares) | (4,580) | (1,500) | (1,518) | ||||||
Equity forward contract settlement | $ 0 | $ (13,111) | 13,111 | ||||||
Equity forward contract issuance | (6,884) | (6,884) | |||||||
Issuance of common stock for share-based compensation | 0 | $ 4 | (4) | ||||||
Issuance of common stock for share-based compensation (in shares) | 383 | ||||||||
Exercise of common stock options | 889 | $ 2 | 887 | ||||||
Exercise of common stock options (shares) | 211 | ||||||||
Tax benefit (expense) from share-based compensation | (113) | (113) | |||||||
Balance at Dec. 28, 2016 | $ (71,112) | $ 1,071 | $ (265,884) | 577,951 | (382,843) | (1,407) | |||
Balance, common stock, share issued at Dec. 28, 2016 | 107,115 | 107,115 | |||||||
Balance, treasury stock, at cost, shares at Dec. 28, 2016 | (35,757) | (35,757) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cumulative effect adjustment | $ 9,139 | 551 | 8,588 | ||||||
Net income | 39,594 | 39,594 | |||||||
Other comprehensive income (loss) | (909) | (909) | |||||||
Share-based compensation on equity classified awards | 8,131 | 8,131 | |||||||
Purchase of treasury stock | $ (82,858) | $ (82,858) | |||||||
Purchase of treasury stock (in shares) | (6,800) | (6,840) | (554) | ||||||
Equity forward contract settlement | $ 0 | $ (6,884) | 6,884 | ||||||
Issuance of common stock for share-based compensation | 0 | $ 4 | (4) | ||||||
Issuance of common stock for share-based compensation (in shares) | 398 | ||||||||
Exercise of common stock options | 655 | $ 2 | 653 | ||||||
Exercise of common stock options (shares) | 227 | ||||||||
Balance at Dec. 27, 2017 | $ (97,360) | $ 1,077 | $ (355,626) | $ 594,166 | $ (334,661) | $ (2,316) | |||
Balance, common stock, share issued at Dec. 27, 2017 | 107,740 | 107,740 | |||||||
Balance, treasury stock, at cost, shares at Dec. 27, 2017 | (43,151) | (43,151) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 39,594 | $ 19,402 | $ 35,976 |
Adjustments to reconcile net income to cash flows provided by operating activities: | |||
Depreciation and amortization | 23,720 | 22,178 | 21,472 |
Operating (gains), losses and other charges, net | 4,329 | 26,910 | 2,366 |
Amortization of deferred financing costs | 596 | 593 | 507 |
(Gain) loss on early extinguishments of debt and leases | 130 | (5) | 225 |
Deferred income tax expense | 10,271 | 8,844 | 14,006 |
Increase (reversal) of tax valuation allowance | 216 | 132 | (130) |
Share-based compensation | 8,541 | 7,610 | 6,635 |
Decrease (increase) in assets: | |||
Receivables | (807) | (2,922) | 1,440 |
Inventories | (192) | 71 | (166) |
Other current assets | (2,380) | 4,622 | (3,818) |
Other assets | (6,327) | (3,582) | (78) |
Increase (decrease) in liabilities: | |||
Accounts payable | 10,025 | 4,770 | 2,345 |
Accrued salaries and vacations | (6,446) | (7,370) | 4,060 |
Accrued taxes | (23) | 96 | 182 |
Other accrued liabilities | 135 | (10,217) | 9,479 |
Other noncurrent liabilities | (3,113) | 30 | (11,216) |
Net cash flows provided by operating activities | 78,269 | 71,162 | 83,285 |
Cash flows from investing activities: | |||
Capital expenditures | (18,811) | (19,749) | (26,977) |
Acquisition of restaurants and real estate | (12,353) | (14,282) | (5,803) |
Proceeds from disposition of property | 2,318 | 1,932 | 95 |
Collections on notes receivable | 4,405 | 1,676 | 1,740 |
Issuance of notes receivable | (2,706) | (2,233) | (1,790) |
Net cash flows used in investing activities | (27,147) | (32,656) | (32,735) |
Cash flows from financing activities: | |||
Revolver borrowings | 391,900 | 79,000 | 231,000 |
Revolver payments | (351,400) | (55,500) | (121,250) |
Long-term debt payments | (3,322) | (3,200) | (58,344) |
Deferred financing costs | (1,602) | 0 | (1,716) |
Purchase of treasury stock | (83,050) | (51,643) | (92,644) |
Purchase of equity forward contract | 0 | (6,884) | (13,111) |
Proceeds from exercise of stock options | 655 | 889 | 732 |
Tax withholding on share-based payments | 0 | 0 | (982) |
Net bank overdrafts | (1,912) | (247) | 4,362 |
Net cash flows used in financing activities | (48,731) | (37,585) | (51,953) |
Increase (decrease) in cash and cash equivalents | 2,391 | 921 | (1,403) |
Cash and cash equivalents at beginning of period | 2,592 | 1,671 | 3,074 |
Cash and cash equivalents at end of period | $ 4,983 | $ 2,592 | $ 1,671 |
Introduction and Basis of Repor
Introduction and Basis of Reporting | 12 Months Ended |
Dec. 27, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction and Basis of Reporting | Introduction and Basis of Reporting Denny’s Corporation, or Denny’s, is one of America’s largest franchised full-service restaurant chains based on number of restaurants. Denny’s restaurants are operated in all 50 states, the District of Columbia, two U.S. territories and 12 foreign countries with principal concentrations in California ( 23% of total restaurants), Texas ( 11% ) and Florida ( 8% ). At December 27, 2017 , the Denny's brand consisted of 1,735 restaurants, 1,557 of which were franchised/licensed restaurants and 178 of which were company operated. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 27, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The following accounting policies significantly affect the preparation of our Consolidated Financial Statements: Use of Estimates . In preparing our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates. Consolidation Policy . Our Consolidated Financial Statements include the financial statements of Denny’s Corporation and its wholly-owned subsidiaries: Denny’s, Inc., DFO, LLC, Denny's Realty, LLC and East Main Insurance Company. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Year . Our fiscal year ends on the last Wednesday in December. As a result, a fifty-third week is added to a fiscal year every five or six years. Fiscal 2017, 2016 and 2015 each included 52 weeks of operations. Cash Equivalents and Short-term Investments. Our policy is to invest cash in excess of operating requirements in short-term highly liquid investments with an original maturity of three months or less, which we consider to be cash equivalents. Cash and cash equivalents include short-term investments of $1.9 million and $0.5 million at December 27, 2017 and December 28, 2016 , respectively. Receivables. Receivables, which are recorded at net realizable value, primarily consist of trade accounts receivables and financing receivables from franchisees, vendor receivables and credit card receivables. Trade accounts receivables from franchisees consist of royalties, advertising and rent. Financing receivables from franchisees primarily consist of notes from franchisees related to the roll-out of equipment. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on pre-defined criteria and management’s judgment of existing receivables. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. Inventories. Inventories consist of food and beverages and are valued primarily at the lower of cost and net realizable value. Property and Depreciation. Owned property is stated at cost. Property under capital leases is stated at the lesser of its fair value or the net present value of the related minimum lease payments at the lease inception. Maintenance and repairs are expensed as incurred. We depreciate owned property over its estimated useful life using the straight-line method. We amortize property held under capital leases (at capitalized value) over the lesser of its estimated useful life or the initial lease term. In certain situations, one or more option periods may be used in determining the depreciable life of certain leasehold improvements under operating lease agreements, if we deem that an economic penalty will be incurred and exercise of such option periods is reasonably assured. In either circumstance, our policy requires lease term consistency when calculating the depreciation period, in classifying the lease and in computing rent expense. Building assets are assigned estimated useful lives that range from five to 30 years. Equipment assets are assigned lives that range from two to ten years. Leasehold improvements are generally assigned lives between five and 15 years limited by the expected lease term. Goodwill. Amounts recorded as goodwill primarily represent excess reorganization value recognized as a result of our 1998 bankruptcy. We also record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurant operations to franchisees, goodwill is decremented. We test goodwill for impairment at each fiscal year end and more frequently if circumstances indicate impairment may exist. Such indicators include, but are not limited to, a significant decline in our expected future cash flows, a significant adverse decline in our stock price, significantly adverse legal developments and a significant change in the business climate. Intangible Assets . Intangible assets consist primarily of trade names, and reacquired franchise rights. Trade names are considered indefinite-lived intangible assets and are not amortized. Reacquired franchise rights are amortized using the straight-line basis over the term of the related agreement. Reacquired franchise rights resulting from acquisitions are accounted for using the purchase method of accounting and are estimated by management based on the fair value of the assets received. We test trade name assets for impairment at each fiscal year end, and more frequently if circumstances indicate impairment may exist. We assess impairment of reacquired franchise rights whenever changes or events indicate that the carrying value may not be recoverable. Costs incurred to renew or extend the term of recognized intangible assets are recorded in general and administrative expenses in our Consolidated Statements of Income. Long-term Investments. Long-term investments include nonqualified deferred compensation plan assets held in a rabbi trust. Each plan participant's account is comprised of their contribution, our matching contribution (made prior to 2016) and each participant's share of earnings or losses in the plan. The investments of the rabbi trust include debt and equity mutual funds. They are considered trading securities and are reported at fair value in other noncurrent assets with an offsetting liability included in other noncurrent liabilities in our Consolidated Balance Sheets. The realized and unrealized holding gains and losses related to the investments are recorded in other income (expense) with an offsetting amount recorded in general and administrative expenses related to the liability in our Consolidated Statements of Income. During 2017 , 2016 and 2015 , we incurred net gains of $1.6 million , $0.9 million and $0.1 million , respectively. The fair value of the deferred compensation plan investments was $12.7 million and $11.2 million at December 27, 2017 and December 28, 2016 , respectively. Deferred Financing Costs. Costs related to the issuance of debt are deferred and amortized as a component of interest expense using the effective interest method over the terms of the respective debt issuances. Cash Overdrafts. Accounts payable in our Consolidated Balance Sheets include cash overdrafts of $2.2 million and $4.1 million at December 27, 2017 and December 28, 2016 , respectively. Changes in such amounts are reflected in cash flows from financing activities in our Consolidated Statements of Cash Flows. Self-insurance Liabilities. We record liabilities for insurance claims during periods in which we have been insured under large deductible programs or have been self-insured for our medical claims and workers’ compensation, general, product and automobile insurance liabilities. The liabilities for prior and current estimated incurred losses are discounted to their present value based on expected loss payment patterns determined by independent actuaries using our actual historical payments. These estimates include assumptions regarding claims frequency and severity as well as changes in our business environment, medical costs and the regulatory environment that could impact our overall self-insurance costs. Total discounted workers’ compensation, general, product and automobile insurance liabilities at December 27, 2017 and December 28, 2016 were $16.9 million , reflecting a 2.0% discount rate, and $19.2 million , reflecting a 1.5% discount rate, respectively. The related undiscounted amounts at such dates were $18.1 million and $20.0 million , respectively. Income Taxes. We account for income taxes 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 and operating loss and tax credit carryforwards. All deferred taxes are reported as noncurrent in our Consolidated Balance Sheets. A valuation allowance reduces our net deferred tax asset to the amount that is more likely than not to be realized. We make certain estimates and judgments in the calculation of our provision for incomes taxes, in the resulting tax liabilities, and in the recoverability of deferred tax assets. We record a liability for unrecognized tax benefits resulting from tax positions taken, or expected to be taken, in an income tax return. We recognize any interest and penalties related to unrecognized tax benefits in income tax expense. Penalties, when incurred, are recognized in general and administrative expense. Assessment of uncertain tax positions requires judgments relating to the amounts, timing and likelihood of resolution. Leases and Subleases. Our policy requires the use of a consistent lease term for calculating the depreciation period for related buildings and leasehold improvements, classifying the lease and computing periodic rent expense increases where the lease terms include escalations in rent over the lease term. The lease term commences on the date we gain access to and control over the leased property. We account for rent escalations in leases on a straight-line basis over the expected lease term. Any rent holidays after lease commencement are recognized on a straight-line basis over the expected lease term, which includes the rent holiday period. Leasehold improvements that have been funded by lessors have historically been insignificant. Any leasehold improvements we make that are funded by lessor incentives or allowances under operating leases are recorded as leasehold improvement assets and amortized over the expected lease term. Such incentives are also recorded as deferred rent and amortized as reductions to lease expense over the expected lease term. We record contingent rent expense based on estimated sales for respective restaurants over the contingency period. Contingent rental income is recognized when earned. Fair Value Measurements. The carrying amounts of cash and cash equivalents, accounts receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The liabilities under our credit facility are carried at historical cost, which approximates fair value. The fair value of our long-term debt is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at market rates. Employee Benefit Plans. Each year we measure and recognize the funded status of our defined benefit plans in our Consolidated Balance Sheets as of December 31. That date represents the month-end that is closest to our fiscal year-end. The funded status is adjusted for any contributions or significant events (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) that occurs between our fiscal year-end and December 31. Derivative Instruments. We use derivative financial instruments to manage our exposure to interest rate risk. We do not enter into derivative instruments for trading or speculative purposes. All derivatives are recognized on our Consolidated Balance Sheets at fair value based upon quoted market prices. Changes in the fair values of derivatives are recorded in earnings or other comprehensive income ( “ OCI ” ), based on whether the instrument is designated as a hedge transaction. Gains or losses on derivative instruments reported in OCI are classified to earnings in the period the hedged item affects earnings. If the underlying hedge transaction ceases to exist, any associated amounts reported in OCI are reclassified to earnings at that time. Any ineffectiveness is recognized in earnings in the current period. By entering into derivative instruments, we are exposed to counterparty credit risk. When the fair value of a derivative instrument is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We manage our exposure to this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. Contingencies and Litigation. We are subject to legal proceedings involving ordinary and routine claims incidental to our business, as well as legal proceedings that are nonroutine and include compensatory or punitive damage claims. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs as other operating expenses in our Consolidated Statements of Income as those costs are incurred. Comprehensive Income. Comprehensive income includes net income and OCI items that are excluded from net income under U.S. generally accepted accounting principles. OCI items include additional minimum pension liability adjustments and the effective unrealized portion of changes in the fair value of cash flow hedges. Segment. Denny’s operates in only one segment. All significant revenues and pre-tax earnings relate to retail sales of food and beverages to the general public through either company or franchised restaurants. Company Restaurant Sales. Company restaurant sales are recognized when food and beverage products are sold at company restaurants. We present company restaurant sales net of sales taxes. Gift cards. We sell gift cards which have no stated expiration dates. We recognize revenue from gift cards when the gift card is redeemed by the customer or when we determine the likelihood of redemption is remote (gift card breakage). Breakage is based on our company-specific historical redemption patterns. We recognized $0.3 million in breakage on gift cards during each of 2017 , 2016 and 2015 . We believe that the amounts recognized for breakage have been and will continue to be insignificant. Franchise and License Revenue. We recognize initial franchise and license fees when all of the material obligations have been performed and conditions have been satisfied, typically when operations of a new franchised restaurant have commenced. Continuing fees, such as royalties and occupancy revenues, are recorded as income. Royalties are recognized in the period in which the sales occurred. At December 27, 2017 and December 28, 2016 , deferred fees related to initial franchise and license fees were $1.6 million and $2.1 million , respectively, and are included in other accrued liabilities in the accompanying Consolidated Balance Sheets. For 2017 , 2016 and 2015 , our ten largest franchisees accounted for 31% , 29% and 29% of our franchise revenues, respectively. Advertising Costs . We expense production costs for radio and television advertising in the year in which the commercials are initially aired. Advertising expense for 2017 , 2016 and 2015 was $14.3 million , $13.1 million and $12.5 million , respectively, net of contributions from franchisees to our advertising programs, including local co-operatives, of $79.7 million , $76.5 million and $72.5 million , respectively. Advertising costs are recorded as a component of other operating expenses in our Consolidated Statements of Income. Restructuring and Exit Costs. Restructuring and exit costs consist primarily of the costs of future obligations related to closed restaurants, severance and other restructuring charges for terminated employees, and are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Discounted liabilities for future lease costs and the fair value of related subleases of closed restaurants are recorded when the restaurants are closed. All other costs related to closed restaurants are expensed as incurred. In assessing the discounted liabilities for future costs of obligations related to closed restaurants, we make assumptions regarding amounts of future assumed subleases. If these assumptions or their related estimates change in the future, we may be required to record additional exit costs or reduce exit costs previously recorded. Exit costs recorded for each of the periods presented include the effect of such changes in estimates. Disposal or Impairment of Long-lived Assets. We evaluate our long-lived assets for impairment at the restaurant level on a quarterly basis, when assets are identified as held for sale or whenever changes or events indicate that the carrying value may not be recoverable. For assets identified as held for sale, we use the market approach and consider proceeds from similar asset sales. We assess impairment of restaurant-level assets based on the operating cash flows of the restaurant, expected proceeds from the sale of assets and our plans for restaurant closings. Generally, all restaurants with negative cash flows from operations for the most recent twelve months at each quarter end are included in our assessment. For underperforming assets, we use the income approach to determine both the recoverability and estimated fair value of the assets. To estimate future cash flows, we make certain assumptions about expected future operating performance, such as revenue growth, operating margins, risk-adjusted discount rates, and future economic and market conditions. If the long-lived assets of a restaurant are not recoverable based upon estimated future, undiscounted cash flows, we write the assets down to their fair value. If these estimates or their related assumptions change in the future, we may be required to record additional impairment charges. These charges are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Assets held for sale consist of real estate properties and/or restaurant operations that we expect to sell within the next year. The assets are reported at the lower of carrying amount or fair value less costs to sell. We cease recording depreciation on assets that are classified as held for sale. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of held for sale. Discontinued Operations. We evaluate restaurant closures and assets reclassified to assets held for sale for potential disclosure as discontinued operations. Only disposals resulting in a strategic shift that will have a major effect on our operations and financial results are reported as discontinued operations. There were no such disposals, nor any disposals of individually significant components. The gains and losses related to restaurant closures and assets reclassified to assets held for sale are included as a component of operating (gain), losses and other charges, net in our Consolidated Statements of Income. Gains/Losses on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets. Generally, gains/losses on sales of restaurant operations to franchisees (which may include real estate), real estate properties and other assets are recognized when the sales are consummated and certain other gain recognition criteria are met. Total gains/losses are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Share-Based Compensation. Share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Starting in fiscal 2017, in accordance with the adoption of Accounting Standards Update ("ASU") 2016-09, we elected to account for forfeitures as they occur. Previously, we estimated potential forfeitures of share-based awards and adjusted the forfeiture rate over the requisite service period to the extent that actual forfeitures differed from such estimates. Share-based compensation expense is included as a component of general and administrative expenses in our Consolidated Statements of Income. Excess tax benefits recognized related to share-based compensation are included as a component of provision for income taxes in our Consolidated Statements of Income and are classified as operating activities in our Consolidated Statements of Cash Flows. See Newly Adopted Accounting Standards below for details on the adoption of ASU 2016-09. Generally, compensation expense related to restricted stock units, performance shares, performance units and board deferred stock units is based on the number of shares and units expected to vest, the period over which they are expected to vest and the fair market value of our common stock on the date of the grant. For restricted stock units and performance shares that contain a market condition, compensation expense is based on the Monte Carlo valuation method, which utilizes multiple input variables to determine the probability of the Company achieving the market condition and the fair value of the award. The key assumptions used include expected volatility and risk-free interest rates over the term of the award. The amount of certain cash-settled awards is determined based on the date of payment. Therefore, compensation expense related to these cash-settled awards is adjusted to fair value at each balance sheet date. Compensation expense for options is recognized on a straight-line basis over the requisite service period for the entire award. Subsequent to the vesting period, earned stock-settled restricted stock units and performance shares (both of which are equity classified) are paid to the holder in shares of our common stock, and the cash-settled restricted stock units and performance units (both of which are liability classified) are paid to the holder in cash, provided the holder was still employed with Denny’s or an affiliate as of the vesting date. Earnings Per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. Newly Adopted Accounting Standards Effective December 29, 2016, we adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. As required by the guidance, excess tax benefits recognized on share-based compensation expense are reflected on a prospective basis in our Consolidated Statements of Income as a component of the provision for income taxes rather than paid-in capital. The cumulative-effect adjustment to retained earnings from previously unrecognized excess tax benefits resulted in an $9.0 million increase in deferred tax assets and a decrease to opening deficit in fiscal 2017. In addition, we have elected to account for forfeitures as they occur. The cumulative-effect adjustment to retained earnings from previously estimated forfeitures resulted in a $0.4 million increase to opening deficit, a $0.2 million increase in deferred tax assets and a $0.6 million increase to additional paid-in capital. As allowed by the update, on a retrospective basis, cash flows related to excess tax benefits recognized on stock-based compensation expense are classified as operating activities in the Consolidated Statements of Cash Flows. There was no material impact on the prior periods retrospectively adjusted. Cash paid on employees’ behalf related to shares withheld for tax purposes continues to be classified as financing activities. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. The new guidance simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step impairment test. Impairment is measured based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment may still be completed first for an entity to determine if a quantitative impairment test is necessary. We early adopted ASU 2017-04 as of March 29, 2017 on a prospective basis. The adoption of this guidance did not have any impact on our Consolidated Financial Statements. Accounting Standards to be Adopted In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new guidance clarifies the principles used to recognize revenue for all entities and requires companies to recognize revenue when it transfers goods or service to a customer in an amount that reflects the consideration to which a company expects to be entitled. The FASB has subsequently amended this guidance by issuing additional ASUs that provide clarification and further guidance around areas identified as potential implementation issues, including principal versus agent considerations, licensing and identifying performance obligations, assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach upon adoption. All of the standards are effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018). The guidance allows for either a retrospective or cumulative effect transition method with early application permitted. We will use the modified retrospective method of adoption. The guidance is not expected to impact the recognition of company restaurant sales or royalties from franchised restaurants. However, the adoption will have an impact on initial franchise fees, advertising arrangements with franchisees, certain other franchise fees and gift card breakage. Upon adoption, initial franchise fees, which are currently recognized upon the opening of a franchise restaurant, will be deferred and recognized over the term of the underlying franchise agreement. The effect of the required deferral of initial franchise fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. Upon adoption, we expect to record approximately $21.0 million as a cumulative effect adjustment increasing opening deficit and deferred revenue as of December 28, 2017 (the first day of fiscal 2018) related to previously recognized initial franchise fees. The deferred revenue resulting from the cumulative effect adjustment will be amortized over the lives of the individual franchise agreements. During 2017 , 2016 and 2015 , we recorded initial and other fees of $2.5 million , $2.7 million and $2.5 million , respectively, as a component of franchise and license revenue in our Consolidated Statements of Income. Currently, we record advertising expense net of contributions from franchisees to our advertising programs, including local co-operatives. Additionally, certain other franchise expenses are also recorded net of the related fees received from franchisees. Under the new guidance, we will include these revenues and expenditures on a gross basis within the Consolidated Statements of Income. While this change will materially impact the gross amount of reported franchise and license revenue and costs of franchise and license revenue, the impact will generally be an offsetting increase to both revenue and expense such that there will not be a significant, if any, impact on operating income and net income. Franchisee contributions to our advertising programs, including local co-operatives, for 2017 , 2016 and 2015 were $79.7 million , $76.5 million and $72.5 million , respectively. Other franchise fees recorded net of expenses for 2017 , 2016 and 2015 were $2.9 million , $3.6 million and $2.9 million , respectively. Currently, we record breakage income as a benefit to our advertising fund or reduction to other operating expenses, depending on where the gift cards were sold, and breakage is recognized when the likelihood of redemption is remote. Upon adoption, gift card breakage income will be presented within revenue and breakage will be recognized proportionately as redemptions occur. We recognized $0.3 million in breakage on gift cards during each of 2017 , 2016 and 2015 . In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. The accounting guidance for lessors is largely unchanged. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 (our fiscal 2019) with early adoption permitted. The guidance will be adopted using a modified retrospective approach. Based on a preliminary assessment, we expect the adoption will result in a significant increase in the assets and liabilities on our Consolidated Balance Sheets, as most of our operating lease commitments will be recognized as operating lease liabilities and right-of-use assets. We are continuing our evaluation, which may identify additional impacts this standard will have on our Consolidated Financial Statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform financial statement users of credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 (our fiscal 2020) with early adoption permitted for annual and interim periods beginning after December 15, 2018 (our fiscal 2019). We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)”. The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effectiv |
Receivables
Receivables | 12 Months Ended |
Dec. 27, 2017 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables, net were comprised of the following: December 27, 2017 December 28, 2016 (In thousands) Current assets: Receivables: Trade accounts receivable from franchisees $ 10,688 $ 10,513 Financing receivables from franchisees 5,084 2,804 Vendor receivables 3,256 3,865 Credit card receivables 1,870 1,678 Other 762 1,261 Allowance for doubtful accounts (276 ) (280 ) Total current receivables, net $ 21,384 $ 19,841 Noncurrent assets (included as a component of other noncurrent assets): Notes receivable from franchisees $ 427 $ 732 During the year ended December 27, 2017 , we wrote-off $0.2 million of financing receivables from a franchisee. Also, during the year ended December 27, 2017 , we recorded $0.4 million of insurance receivables related to hurricane damages incurred during the period, which are included as a component of other receivables in the above table. |
Property
Property | 12 Months Ended |
Dec. 27, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property | Property Property, net consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Land $ 32,506 $ 29,914 Buildings and leasehold improvements 243,872 243,323 Other property and equipment 67,786 79,804 Total property owned 344,164 353,041 Less accumulated depreciation 227,959 241,132 Property owned, net 116,205 111,909 Buildings, vehicles and other equipment held under capital leases 39,017 35,246 Less accumulated amortization 15,366 14,053 Property held under capital leases, net 23,651 21,193 Total property, net $ 139,856 $ 133,102 The following table reflects the property assets, included in the table above, which were leased to franchisees: December 27, 2017 December 28, 2016 (In thousands) Land $ 15,490 $ 16,192 Buildings and leasehold improvements 54,948 59,896 Total property owned, leased to franchisees 70,438 76,088 Less accumulated depreciation 48,225 52,020 Property owned, leased to franchisees, net 22,213 24,068 Buildings held under capital leases, leased to franchisees 6,060 5,656 Less accumulated amortization 3,300 3,408 Property held under capital leases, leased to franchisees, net 2,760 2,248 Total property leased to franchisees, net $ 24,973 $ 26,316 Depreciation expense, including amortization of property under capital leases, for 2017 , 2016 and 2015 was $21.2 million , $20.6 million and $20.0 million , respectively. Substantially all owned property is pledged as collateral for our Credit Facility. See Note 10. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 27, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table reflects the changes in carrying amounts of goodwill: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 35,233 $ 33,454 Additions related to acquisitions 3,021 1,827 Adjustments related to the sale of restaurants 15 (48 ) Balance, end of year $ 38,269 $ 35,233 Intangible assets were comprised of the following: December 27, 2017 December 28, 2016 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,080 $ — $ 44,076 $ — Liquor licenses 166 — 166 — Intangible assets with definite lives: Franchise and license agreements — — 190 186 Reacquired franchise rights 15,252 2,389 11,498 1,251 Intangible assets $ 59,498 $ 2,389 $ 55,930 $ 1,437 During the year ended December 27, 2017 , we acquired ten franchised restaurants and one former franchised restaurant for $8.8 million , of which $4.5 million was allocated to reacquired franchise rights, $1.3 million to property and $3.0 million to goodwill. In addition, we recorded $2.3 million of capital leases in connection with the acquired franchised restaurants. We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on Level 3 fair value estimates. The weighted-average life of the reacquired franchise rights is nine years. The amortization expense for definite-lived intangibles and other assets for 2017 , 2016 and 2015 was $2.5 million , $1.5 million and $1.5 million , respectively. Estimated amortization expense for intangible assets with definite lives in the next five years is as follows: (In thousands) 2018 $ 2,251 2019 1,963 2020 1,783 2021 1,181 2022 1,024 We performed an annual impairment test as of December 27, 2017 and determined that none of the recorded goodwill or other intangible assets with indefinite lives were impaired. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 27, 2017 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Accrued payroll $ 20,998 $ 27,056 Accrued insurance, primarily current portion of liability for insurance claims 6,922 6,651 Accrued taxes 7,384 7,407 Accrued advertising 8,417 8,051 Gift cards 6,480 5,474 Other 9,045 10,157 Other current liabilities 59,246 64,796 |
Operating (Gains), Losses and O
Operating (Gains), Losses and Other Charges, Net | 12 Months Ended |
Dec. 27, 2017 | |
Other Income and Expenses [Abstract] | |
Operating (Gains), Losses and Other Charges, Net | Operating (Gains), Losses and Other Charges, Net Operating (gains), losses and other charges, net were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Pension settlement loss $ — $ 24,297 $ — Software implementation costs 5,247 — — (Gains) losses on sales of assets and other, net (1,729 ) 29 (93 ) Restructuring charges and exit costs 485 1,486 1,524 Impairment charges 326 1,098 935 Operating (gains), losses and other charges, net $ 4,329 $ 26,910 $ 2,366 Software implementation costs of $5.2 million for the year ended December 27, 2017 were the result of our investment in a new cloud-based Enterprise Resource Planning system. Gains on sales of assets and other, net of $1.7 million for the year ended December 27, 2017 primarily related to real estate sold to franchisees. The pre-tax pension settlement loss of $24.3 million related to the completion of the liquidation of the Advantica Pension Plan during the year ended December 28, 2016. See Note 11 for details on the Pension Plan liquidation. Restructuring charges and exit costs were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Exit costs $ 385 $ 591 $ 697 Severance and other restructuring charges 100 895 827 Total restructuring charges and exit costs $ 485 $ 1,486 $ 1,524 The components of the change in accrued exit cost liabilities were as follows: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 1,896 $ 2,043 Exit costs (1) 385 591 Payments, net of sublease receipts (1,189 ) (855 ) Interest accretion 88 117 Balance, end of year 1,180 1,896 Less current portion included in other current liabilities 345 330 Long-term portion included in other noncurrent liabilities $ 835 $ 1,566 (1) Included as a component of operating (gains), losses and other charges, net. As of December 27, 2017 and December 28, 2016 , we had accrued severance and other restructuring charges of less than $0.1 million and $0.4 million , respectively. The balance as of December 27, 2017 is expected to be paid during the next 12 months. Estimated net cash payments related to exit cost liabilities in the next five years are as follows: (In thousands) 2018 $ 414 2019 264 2020 179 2021 180 2022 180 Thereafter 168 Total 1,385 Less imputed interest 205 Present value of exit cost liabilities $ 1,180 The present value of exit cost liabilities is net of $1.4 million of subleases. See Note 8 for a schedule of future minimum lease commitments and amounts to be received as lessor or sub-lessor for both open and closed restaurants. Impairment charges of $0.3 million for the year ended December 27, 2017 related to the relocation of two high-performing company restaurants due to the loss of property control. Impairment charges of $1.1 million for the year ended December 28, 2016 and $0.9 million for the year ended December 30, 2015 resulted primarily from the impairment of restaurants identified as assets held for sale. |
Leases
Leases | 12 Months Ended |
Dec. 27, 2017 | |
Leases [Abstract] | |
Leases | Leases Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 15 years, exclusive of options to renew, which are typically for five year periods. Leases of other equipment consist primarily of restaurant equipment, computer systems and vehicles. Minimum future lease commitments and amounts to be received as lessor or sublessor under non-cancelable leases, including leases for both open and closed restaurants and optional renewal periods that have been included in the lease term, at December 27, 2017 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2018 $ 8,863 $ 26,214 $ 23,681 2019 8,429 23,152 21,029 2020 7,796 19,403 18,355 2021 7,142 16,510 16,394 2022 6,483 13,787 14,669 Thereafter 33,073 54,067 67,606 Total 71,786 $ 153,133 $ 161,734 Less imputed interest 41,564 Present value of capital lease obligations $ 30,222 Rent expense is a component of both occupancy expense and costs of franchise and license revenue in our Consolidated Statements of Income. Lease and sublease rental income is a component of franchise and license revenue in our Consolidated Statements of Income. Rental expense and income were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 9,315 $ 8,602 $ 8,998 Contingent rents 3,168 3,351 3,134 Included as a component of costs of franchise and license revenue: Base rents $ 17,674 $ 19,883 $ 21,751 Contingent rents $ 2,864 $ 3,077 $ 2,897 Total rental expense $ 33,021 $ 34,913 $ 36,780 Rental income: Included as a component of franchise and license revenue: Base rents $ 25,781 $ 28,183 $ 30,166 Contingent rents 5,042 5,337 5,305 Total rental income $ 30,823 $ 33,520 $ 35,471 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 27, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (In thousands ) Fair value measurements as of December 27, 2017: Deferred compensation plan investments (1) $ 12,663 $ 12,663 $ — $ — market approach Interest rate swaps, net (2) (2,187 ) — (2,187 ) — income approach Total $ 10,476 $ 12,663 $ (2,187 ) $ — Fair value measurements as of December 28, 2016: Deferred compensation plan investments (1) $ 11,248 $ 11,248 $ — $ — market approach Interest rate swaps (2) $ (756 ) $ — $ (756 ) $ — income approach Total $ 10,492 $ 11,248 $ (756 ) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 10 for details on the interest rate swaps. See Note 11 for the disclosures related to the fair value of our pension plan assets. Those assets and liabilities measured at fair value on a nonrecurring basis are summarized below: Significant Other Observable Inputs Impairment Charges Valuation Technique Fair value measurements as of December 28, 2016: Assets held for sale (1) $ 1,020 $ 1,098 market approach (1) As of December 28, 2016, assets held for sale were written down to their fair value. The fair value of assets held for sale is based upon Level 2 inputs, which include sales agreements. See Note 5 for the disclosures related to the fair value of acquired franchised restaurants. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 27, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Revolving loans due October 26, 2022 $ 259,000 $ — Revolving loans due March 30, 2020 — $ 218,500 Capital lease obligations 30,222 27,091 Total long-term debt 289,222 245,591 Less current maturities 3,168 3,285 Noncurrent portion of long-term debt $ 286,054 $ 242,306 There are no future maturities of long-term debt due in 2018 through 2021. The $259.0 million of revolving loans are due in 2022. Refinancing of Credit Facility On October 26, 2017, Denny's Corporation and certain of its subsidiaries refinanced our credit facility (the “Old Credit Facility”) and entered into a new five-year $400 million senior secured revolver (with a $30 million letter of credit sublimit) (the “New Credit Facility”). The New Credit Facility includes an accordion feature that would allow us to increase the size of the revolver to $450 million . A commitment fee, initially set at 0.30% , is paid on the unused portion of the revolving credit facility. Borrowings under the credit facility bear a tiered interest rate, which is based on the Company’s consolidated leverage ratio and was initially set at LIBOR plus 200 basis points. The maturity date for the credit facility is October 26, 2022 . The New Credit Facility was used to refinance the Old Credit Facility and will also be available for working capital, capital expenditures and other general corporate purposes. The New Credit Facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company and its subsidiaries, including the stock of the Company's subsidiaries. It includes negative covenants that are usual for facilities and transactions of this type. The New Credit Facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. As of December 27, 2017 , we had outstanding revolver loans of $259.0 million and outstanding letters of credit under the senior secured revolver of $21.5 million . These balances resulted in availability of $119.5 million under the New Credit Facility. Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 3.42% and 2.45% as of December 27, 2017 and December 28, 2016 , respectively. Taking into consideration the interest rate swaps, the weighted-average interest rate of outstanding revolver loans was 3.32% and 2.74% as of December 27, 2017 and December 28, 2016 , respectively. Interest Rate Hedges We have interest rate swaps to hedge a portion of the forecasted cash flows of our floating rate debt. We designated these interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to payments of LIBOR due on specific notional amounts. Based on the interest rate as determined by our consolidated leverage ratio in effect as of December 27, 2017 , under the terms of the swaps, we will pay the following fixed rates on the notional amounts noted: Period Covered Notional Amount Fixed Rate (In thousands) March 31, 2015 - March 29, 2018 $ 120,000 3.13 % March 29, 2018 - March 31, 2025 170,000 4.44 % April 1, 2025 - March 31, 2026 50,000 4.46 % As of December 27, 2017 , the fair value of the interest rate swaps was a net liability of $2.2 million , which is comprised of assets of $0.1 million recorded as a component of other noncurrent assets and liabilities of $2.3 million recorded as a component of other noncurrent liabilities in our Consolidated Balance Sheets. See Note 15 for the amounts recorded in accumulated other comprehensive loss related to the interest rate swaps. Subsequent to the year ended December 27, 2017 , we entered into additional interest rate swaps. See Note 19 to our Consolidated Financial Statements. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 27, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We maintain several defined benefit plans and defined contribution plans which cover a substantial number of employees. Benefits under our defined benefit plans are based upon each employee’s years of service and average salary. Our funding policy for these plans is based on the minimum amount required under the Employee Retirement Income Security Act of 1974. The Advantica Pension Plan (the “Pension Plan”) was closed to new qualifying participants as of December 31, 1999. Benefits ceased to accrue for Pension Plan participants as of December 31, 2004. During 2014, our Board of Directors approved the termination and liquidation of the Pension Plan as of December 31, 2014. During the year ended December 28, 2016, we completed the liquidation of the Pension Plan. Accordingly, we made a final contribution of $9.5 million to the Pension Plan. The resulting $67.7 million in Pension Plan assets were used to make lump sum payments and purchase annuity contracts, which are administered by a third-party provider. In addition, during the year ended December 28, 2016, we recognized a pre-tax settlement loss of $24.3 million related to the liquidation, reflecting the recognition of unamortized actuarial losses that were recorded in accumulated other comprehensive income. See Note 15. Defined Benefit Plans The obligations and funded status for the Pension Plan and other defined benefit plans were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Change in Benefit Obligation: Benefit obligation at beginning of year $ — $ 67,735 $ 2,639 $ 2,669 Service cost — 105 — — Interest cost — — 83 91 Actuarial losses — 945 172 73 Benefits paid — (1,057 ) (195 ) (194 ) Settlements — (67,728 ) (91 ) — Benefit obligation at end of year $ — $ — $ 2,608 $ 2,639 Accumulated benefit obligation $ — $ — $ 2,608 $ 2,639 Change in Plan Assets: Fair value of plan assets at beginning of year $ — $ 58,378 $ — $ — Actual return on plan assets — 861 — — Employer contributions — 9,546 286 194 Benefits paid — (1,057 ) (195 ) (194 ) Settlements — (67,728 ) (91 ) — Fair value of plan assets at end of year $ — $ — $ — $ — Funded status $ — $ — $ (2,608 ) $ (2,639 ) The amounts recognized in our Consolidated Balance Sheets were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Other current liabilities $ — $ — $ (280 ) $ (259 ) Other noncurrent liabilities — — (2,328 ) (2,380 ) Net amount recognized $ — $ — $ (2,608 ) $ (2,639 ) The amounts recognized in accumulated other comprehensive income, that have not yet been recognized as a component of net periodic benefit cost, were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Unamortized actuarial losses, net $ — — (1,092 ) (1,033 ) During fiscal 2018, $0.1 million of accumulated other comprehensive income will be recognized related to our other defined benefit plans. The components of the change in unamortized actuarial losses, net, included in accumulated other comprehensive loss were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 (In thousands) Pension Plan: Balance, beginning of year $ — $ (23,955 ) Benefit obligation actuarial loss — (945 ) Net gain — 603 Settlement loss recognized — 24,297 Balance, end of year $ — $ — Other Defined Benefit Plans: Balance, beginning of year $ (1,033 ) $ (1,045 ) Benefit obligation actuarial loss (172 ) (73 ) Amortization of net loss 92 85 Settlement loss recognized 21 — Balance, end of year $ (1,092 ) $ (1,033 ) Minimum pension liability adjustments, net of tax for 2017 , 2016 and 2015 were an addition of less than $0.1 million, a reduction of $21.8 million and a reduction of $2.2 million , respectively. Total minimum pension liability adjustments of $1.0 million (net of a tax benefit of $0.1 million ) and $0.9 million (net of a tax benefit of $0.1 million ) are included as a component of accumulated other comprehensive loss, net in our Consolidated Statements of Shareholders' Deficit for the years ended December 27, 2017 and December 28, 2016 , respectively. The components of net periodic benefit cost were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Pension Plan: Service cost $ — $ 105 $ 380 Interest cost — — 2,983 Expected return on plan assets — — (3,508 ) Amortization of net loss — — 1,733 Settlement loss recognized — 24,297 — Net periodic benefit cost $ — $ 24,402 $ 1,588 Other comprehensive (income) loss $ — $ (23,955 ) $ (3,619 ) Other Defined Benefit Plans: Interest cost $ 83 $ 91 $ 107 Amortization of net loss 92 85 79 Settlement loss recognized 21 — — Net periodic benefit cost $ 196 $ 176 $ 186 Other comprehensive (income) loss $ 59 $ (12 ) $ (36 ) Net pension and other defined benefit plan costs (including premiums paid to the Pension Benefit Guaranty Corporation) for 2017 , 2016 and 2015 were $0.2 million , $24.6 million and $1.8 million , respectively. Assumptions Because the Pension Plan was closed to new qualifying participants as of December 31, 1999 and benefits ceased to accrue for Pension Plan participants as of December 31, 2004, an assumed rate of increase in compensation levels was not applicable for 2017 , 2016 or 2015 . December 27, 2017 December 28, 2016 December 30, 2015 Assumptions used to determine benefit obligations: Pension Plan: Discount rate N/A N/A Other Defined Benefit Plans: Discount rate 3.08 % 3.31 % Assumptions used to determine net periodic pension cost: Discount rate 3.31 % 3.62 % 4.12 % Rate of increase in compensation levels N/A N/A N/A Expected long-term rate of return on assets N/A N/A 5.75 % In determining the expected long-term rate of return on assets, we evaluated our asset class return expectations, as well as long-term historical asset class returns. Projected returns are based on broad equity and bond indices. Additionally, we considered our historical compounded returns, which have been in excess of our forward-looking return expectations. In determining the discount rate, we have considered long-term bond indices of bonds having similar timing and amounts of cash flows as our estimated defined benefit payments. We use a yield curve based on high quality, long-term corporate bonds to calculate the single equivalent discount rate that results in the same present value as the sum of each of the plan's estimated benefit payments discounted at their respective spot rates. Contributions and Expected Future Benefit Payments Prior to the liquidation of the Pension Plan, during the year ended December 28, 2016 , we made a final contribution of $9.5 million to the Pension Plan. We made contributions of $0.3 million and $0.2 million to our other defined benefit plans during the years ended December 27, 2017 and December 28, 2016 , respectively. We expect to contribute $0.3 million to our other defined benefit plans during 2018 . Benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2023 through 2027 are as follows: Other Defined Benefit Plans (In thousands) 2018 $ 280 2019 564 2020 253 2021 229 2022 296 2023 through 2027 1,027 Defined Contribution Plans Eligible employees can elect to contribute up to 25% of their compensation to our 401(k) plan. Effective January 1, 2016, the plan was amended and restated to incorporate Safe Harbor Plan design features which included changes to participant eligibility, company contribution amounts and vesting. As a result, beginning in 2016, we match up to a maximum of 4% of compensation deferred by the participant. Prior to 2016, we made matching contributions of up to 3% of compensation deferred by the participant. In addition, a non-qualified deferred compensation plan is offered to certain employees. This plan allows participants to defer up to 50% of their annual salary and up to 100% of their bonus, on a pre-tax basis. Prior to 2016, we made matching contributions of up to 3% of compensation deferred by the participant under the non-qualified deferred compensation plan. Beginning in 2016, matching contributions are no longer made under this plan. We made total contributions of $2.0 million , $2.2 million and $1.6 million for 2017 , 2016 and 2015 , respectively, under these plans. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 27, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Compensation Plans We maintain four share-based compensation plans under which stock options and other awards granted to our employees and directors are outstanding. Currently, the Denny's Corporation 2017 Omnibus Incentive Plan (the “2017 Omnibus Plan”) is used to grant share-based compensation to selected employees, officers and directors of Denny’s and its affiliates. However, we reserve the right to pay discretionary bonuses, or other types of compensation, outside of this plan. At December 27, 2017 , there were 4.3 million shares available for grant under the 2017 Omnibus Plan. In addition, we have 0.7 million shares available to be issued outside of the 2017 Omnibus Plan pursuant to the grant or exercise of employment inducement awards of stock options and restricted stock units in accordance with NASDAQ Listing Rule 5635(c)(4). Share-Based Compensation Expense Total share-based compensation expense included as a component of net income was as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Performance share awards 7,838 7,236 5,821 Restricted stock units for board members 703 374 814 Total share-based compensation $ 8,541 $ 7,610 $ 6,635 The income tax benefits recognized as a component of the provision for income taxes in our Consolidated Statements of Income related to share-based compensation expense were approximately $3.3 million , $3.0 million and $2.6 million during the years ended December 27, 2017 , December 28, 2016 and December 30, 2015 , respectively. Stock Options Prior to 2012, stock options were granted that vest evenly over 3 years, have a 10 -year contractual life and are issued at the market value at the date of grant. There were no options granted in 2017 , 2016 or 2015 . The following table summarizes information about stock options outstanding and exercisable at December 27, 2017 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (In thousands, except per share amounts) Outstanding, beginning of year 1,127 $ 3.01 Exercised (227 ) $ 2.88 Outstanding, end of year 900 $ 3.04 2.30 $ 9,320 Exercisable, end of year 900 $ 3.04 2.30 $ 9,320 The total intrinsic value of the options exercised was $2.3 million , $1.4 million and $1.4 million during the years ended December 27, 2017 , December 28, 2016 and December 30, 2015 , respectively. Restricted Stock Units We primarily grant restricted stock units containing a market condition based on the total shareholder return of our stock compared with the returns of a group of peer companies and restricted stock units containing a performance condition based on the Company's achievement of certain operating metrics. The number of shares that are ultimately issued is dependent upon the level of obtainment of the market and performance conditions. The following table summarizes the restricted stock units activity during the year ended December 27, 2017 : Units Weighted Average Grant Date Fair Value (In thousands) Outstanding, beginning of year 1,366 $ 9.84 Granted 606 $ 12.59 Converted (235 ) $ 7.55 Outstanding, end of year 1,737 $ 11.11 Convertible, end of year 488 $ 11.43 During the year ended December 27, 2017 , and included in the restricted stock units activity table above, we granted certain employees approximately 0.3 million performance shares that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and 0.3 million performance shares that vest based on our Adjusted EBITDA growth rate, as defined under the terms of the award. As the TSR based performance shares contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value of $13.05 per share. The performance shares based on the Adjusted EBITDA growth rate have a grant date fair value of $12.17 per share, the market value of our stock on the date of grant. The awards granted to our named executive officers also contain a performance condition based on the attainment of an operating measure for the fiscal year ended December 27, 2017 . The performance period for these performance shares is the three year fiscal period beginning December 29, 2016 and ending December 25, 2019. The performance shares will vest and be earned (from 0% to 150% of the target award for each such increment) at the end of the performance period. For 2017 , 2016 and 2015 , the weighted average grant date fair value of awards granted was $12.59 , $9.47 and $11.43 , respectively. We made payments of $3.9 million , $2.5 million and $3.4 million in cash during 2017 , 2016 and 2015 , respectively, related to converted restricted stock units. The intrinsic value of shares converted was $5.0 million , $3.5 million and $4.9 million , during 2017 , 2016 and 2015 , respectively. As of December 27, 2017 and December 28, 2016 , we had accrued compensation of $0.4 million and $3.9 million , respectively, included as a component of other current liabilities and $0.4 million and $0.3 million , respectively, included as a component of other noncurrent liabilities in our Consolidated Balance Sheets, which represents future estimated payroll taxes. The 2016 current liability represented the fair value of the related shares for the liability classified units as of the balance sheet date. As of December 27, 2017 , we had $8.0 million of unrecognized compensation cost related to unvested restricted stock unit awards granted, which is expected to be recognized over a weighted average of 1.7 years . Board Deferred Stock Units During the year ended December 27, 2017 , we granted approximately 0.1 million deferred stock units (which are equity classified) with a weighted average grant date fair value of $12.04 per unit to non-employee members of our Board of Directors. The deferred stock units vest after a one year service period. A director may elect to convert these awards into shares of common stock on a specific date in the future (while still serving as a member of our Board of Directors), upon termination as a member of our Board of Directors, or in three equal annual installments commencing after termination of service as a member of the Board of Directors. Also during the year ended December 27, 2017 , we made cash payments of $0.5 million related to the replacement cash awards issued in 2016. There were 0.9 million deferred stock units outstanding as of both December 27, 2017 and December 28, 2016 . As of December 27, 2017 , we had approximately $0.5 million of unrecognized compensation cost related to all unvested deferred stock unit awards outstanding, which is expected to be recognized over a weighted average of 0.7 years . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 27, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provisions for income taxes were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Current: Federal $ 3,688 $ 4,270 $ 1,622 State and local 2,071 2,316 1,382 Foreign 961 912 873 Deferred: Federal 10,075 8,225 12,264 State and local 196 619 1,742 Increase (release) of valuation allowance 216 132 (130 ) Total provision for income taxes $ 17,207 $ 16,474 $ 17,753 The reconciliation of income taxes at the U.S. federal statutory tax rate to our effective tax rate was as follows: December 27, 2017 December 28, 2016 December 30, 2015 Statutory provision rate 35 % 35 % 35 % State and local taxes, net of federal income tax benefit 5 9 6 Wage addback on income tax credits earned 2 3 2 General business credits generated (5 ) (9 ) (6 ) Foreign tax credits generated (2 ) (12 ) (2 ) Pension plan liquidation — 18 — Share-based compensation (3 ) — — Impact of tax reform (3 ) — — Other 1 2 (2 ) Effective tax rate 30 % 46 % 33 % On December 22, 2017, The Tax Cut and Jobs Act of 2017 (the “Tax Act”) was signed into law. The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, we have revalued our deferred taxes as of December 27, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are realized. The net tax benefit recognized in 2017 related to the Tax Act was $1.6 million . For the 2017 period, the difference in the overall effective rate from the U.S. statutory rate was primarily due to state taxes and the generation of employment and foreign tax credits. The 2017 rates also benefited $1.7 million from share-based compensation and $1.6 million from the revaluing of deferred tax assets and liabilities required under the Tax Act. For the 2016 period, the difference in the overall effective rate from the U.S. statutory rate was primarily due to state taxes, the generation of employment tax credits, the Pension Plan liquidation, and foreign tax credits generated with the filings of federal amended tax returns. The 2016 rates were impacted by the recognition of a $2.1 million tax benefit related to the $24.3 million pre-tax settlement loss on the Pension Plan liquidation. This benefit was at a rate lower than the effective tax rate due to the previous recognition of an approximate $7.2 million tax benefit recognized with the reversal of our valuation allowance in 2011. In addition, we amended prior years’ U.S. tax returns in order to maximize a foreign tax credit in lieu of a foreign tax deduction, resulting in a net tax benefit of approximately $3.7 million during the year. The following table represents the approximate tax effect of each significant type of temporary difference that resulted in deferred income tax assets or liabilities. December 27, 2017 December 28, 2016 (In thousands) Deferred tax assets: Self-insurance accruals $ 4,364 $ 7,791 Capitalized leases 1,718 2,298 Accrued exit cost 487 1,074 Interest rate swaps 566 294 Pension, other retirement and compensation plans 10,328 12,378 Other accruals 443 386 Alternative minimum tax credit carryforwards 3,534 3,534 General business credit carryforwards - state and federal 13,355 13,541 Net operating loss carryforwards - state 14,096 11,753 Total deferred tax assets before valuation allowance 48,891 53,049 Less: valuation allowance (13,078 ) (12,567 ) Total deferred tax assets 35,813 40,482 Deferred tax liabilities: Intangible assets (14,578 ) (22,073 ) Deferred finance costs (111 ) (125 ) Fixed assets (4,179 ) (601 ) Total deferred tax liabilities (18,868 ) (22,799 ) Net deferred tax asset $ 16,945 $ 17,683 At December 27, 2017 , we had available, on a consolidated basis, federal general business credit carryforwards of approximately $9.6 million , most of which expire between 2034 and 2037. We also had available alternative minimum tax (“AMT”) credit carryforwards of approximately $3.5 million , which under the Tax Act are now considered refundable credits estimated to be fully received by 2019. We will continue to include the AMT credits in our deferred tax assets until they are fully refunded or utilized. It is more likely than not that we will be able to utilize our credit carryforwards prior to expiration. In addition, it is more likely than not we will be able to utilize all of our existing temporary differences and a portion of our state tax net operating losses and state tax credit carryforwards prior to their expiration. Of the $13.1 million of remaining valuation allowance, approximately $11.8 million represents South Carolina net operating loss carryforwards that will never be utilized. Prior to 2005, Denny’s had ownership changes within the meaning of Section 382 of the Internal Revenue Code. In general, Section 382 places annual limitations on the use of certain tax attributes, such as AMT tax credit carryforwards, in existence at the ownership change date. It is our position that any pre-2005 AMT tax credits can be utilized as of December 27, 2017 . The occurrence of an additional ownership change could limit our ability to utilize our current income tax credits generated after 2004. The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 1,180 $ — Increases related to prior-year tax positions 289 1,180 Balance, end of year $ 1,469 $ 1,180 There was less than $0.1 million interest expense associated with unrecognized tax benefits for the year ended December 27, 2017 and no additional interest expense for the year ended December 28, 2016 . We file income tax returns in the U.S. federal jurisdictions and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013. We remain subject to examination for U.S. federal taxes for 2014-2017 and in the following major state jurisdictions: California (2013-2017), Florida (2014-2017) and Texas (2014-2017). |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 27, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The amounts used for the basic and diluted net income per share calculations are summarized below: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands, except per share amounts) Net income $ 39,594 $ 19,402 $ 35,976 Weighted average shares outstanding - basic 68,077 75,325 82,627 Effect of dilutive share-based compensation awards 2,326 1,881 2,102 Weighted average shares outstanding - diluted 70,403 77,206 84,729 Basic net income per share $ 0.58 $ 0.26 $ 0.44 Diluted net income per share $ 0.56 $ 0.25 $ 0.42 Anti-dilutive share-based compensation awards 606 — — |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 27, 2017 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Repurchases Our credit facility permits the purchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Over the past several years, our Board of Directors has approved share repurchase programs authorizing us to repurchase up to a set amount of shares or dollar amount of our common stock. Under the programs, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. During 2017, 2016 and 2015, the Board approved share repurchase programs for $200 million , $100 million and, $100 million of our common stock, respectively. In November 2015, as part of our previously authorized share repurchase programs, we entered into a variable term, capped accelerated share repurchase (the “2015 ASR”) agreement with Wells Fargo Bank, National Association (“Wells Fargo”), to repurchase an aggregate of $50 million of our common stock. During 2015, pursuant to the terms of the 2015 ASR agreement, we paid $50 million in cash, received approximately 3.5 million shares of our common stock (which represents the minimum shares to be delivered based on the cap price) and recorded $36.9 million of treasury stock related to these shares. The remaining balance of $13.1 million was included as additional paid-in capital in shareholders' equity as of December 30, 2015 as an equity forward contract. During 2016, we settled the 2015 ASR agreement, recording $13.1 million of treasury stock related to the final delivery of an additional 1.5 million shares of our common stock. The total number of shares repurchased was based on a combined discounted volume-weighted average price (“VWAP”) of $9.90 per share, which was determined based on the average of the daily VWAP of our common stock, less a fixed discount, over the term of the 2015 ASR agreement. In November 2016, as part of our previously authorized share repurchase programs, we entered into a variable term, capped accelerated share repurchase (the “2016 ASR”) agreement with MUFG Securities EMEA plc (“MUFG”), to repurchase an aggregate of $25 million of our common stock. Pursuant to the terms of the 2016 ASR agreement, we paid $25 million in cash and received approximately 1.5 million shares of our common stock (which represents the minimum shares to be delivered based on the cap price) and recorded $18.1 million of treasury stock related to these shares. The remaining balance of $6.9 million was recorded as additional paid-in capital in shareholders' equity as of December 28, 2016 as an equity forward contract. During 2017 , we settled the 2016 ASR agreement, recording $6.9 million of treasury stock related to the final delivery of an additional 0.5 million shares of our common stock. The total number of shares repurchased was based on a combined discounted VWAP of $12.36 per share, which was determined based on the average of the daily VWAP of our common stock, less a fixed discount, over the term of the 2016 ASR agreement. In addition to the settlement of the 2016 ASR agreement, during 2017 , we repurchased a total of 6.8 million shares of our common stock for $82.9 million , thus completing the 2016 repurchase program. In addition to the settlement of the 2015 ASR agreement, during 2016 , we repurchased a total of 4.6 million shares for $51.8 million , thus completing the 2015 repurchase program. During 2015 , we repurchased 8.5 million shares for $92.7 million , thus completing the 2013 repurchase program. As of December 27, 2017 , there was $196.3 million remaining under the 2017 repurchase program. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statements of Shareholders' Deficit. Accumulated Other Comprehensive Loss The components of the change in accumulated other comprehensive loss were as follows: Pensions Derivatives Accumulated Other Comprehensive Loss (In thousands) Balance as of December 31, 2014 $ (24,994 ) $ 392 $ (24,602 ) Benefit obligation actuarial gain 5,737 — 5,737 Net loss (3,894 ) — (3,894 ) Amortization of net loss (1) 1,812 — 1,812 Net change in fair value of derivatives — (1,444 ) (1,444 ) Reclassification of derivatives to interest expense (2) — (859 ) (859 ) Income tax (expense) benefit (1,425 ) 898 (527 ) Balance as of December 30, 2015 $ (22,764 ) $ (1,013 ) $ (23,777 ) Benefit obligation actuarial loss (1,018 ) — (1,018 ) Net gain 603 — 603 Amortization of net loss (1) 85 — 85 Settlement loss recognized 24,297 — 24,297 Net change in fair value of derivatives — 1,693 1,693 Reclassification of derivatives to interest expense (2) — (789 ) (789 ) Income tax expense (2,148 ) (353 ) (2,501 ) Balance as of December 28, 2016 $ (945 ) $ (462 ) $ (1,407 ) Benefit obligation actuarial loss (172 ) — (172 ) Amortization of net loss (1) 92 — 92 Settlement loss recognized 21 — 21 Net change in fair value of derivatives — (1,359 ) (1,359 ) Reclassification of derivatives to interest expense (2) — (72 ) (72 ) Income tax benefit 22 559 581 Balance as of December 27, 2017 $ (982 ) $ (1,334 ) $ (2,316 ) (1) Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Income. See Note 11 for additional details. (2) Amounts reclassified from accumulated other comprehensive loss into income, represent payments made to the counterparty for the effective portions of the interest rate swaps. These amounts are included as a component of interest expense in our Consolidated Statements of Income. We expect to reclassify approximately $1.3 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 10 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 27, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have guarantees related to certain franchisee loans with terms extending from one to four years. Payments under these guarantees would result from the inability of a franchisee to fund required payments when due. Through December 27, 2017 , no events had occurred that caused us to make payments under the guarantees. There were $5.1 million and $7.9 million of loans outstanding under these programs as of December 27, 2017 and December 28, 2016 , respectively. As of December 27, 2017 , the maximum amounts payable under the loan guarantees was $1.1 million . As a result of these guarantees, we have recorded liabilities of less than $0.1 million as of December 27, 2017 and December 28, 2016 , which are included as a component of other noncurrent liabilities in our Consolidated Balance Sheets and other nonoperating expense in our Consolidated Statements of Income. There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect the Company's consolidated results of operations or financial position. We have amounts payable under purchase contracts for food and non-food products. Many of these agreements do not obligate us to purchase any specific volumes and include provisions that would allow us to cancel such agreements with appropriate notice. Our future purchase obligation payments due by period for both company and franchised restaurants at December 27, 2017 consist of the following: (In thousands) Less than 1 year $ 194,446 1-2 years — 3-4 years — 5 years and thereafter — Total $ 194,446 For agreements with cancellation provisions, amounts included in the table above represent our estimate of purchase obligations during the periods presented if we were to cancel these contracts with appropriate notice. We would likely take delivery of goods under such circumstances. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 27, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Income taxes paid, net $ 6,367 $ 3,012 $ 5,364 Interest paid $ 14,636 $ 11,288 $ 8,141 Noncash investing and financing activities: Notes received in connection with disposition of property $ 1,750 $ — $ — Property acquisition payable $ 500 $ — $ 573 Accrued purchase of property $ 531 $ 1,445 $ 1,781 Insurance proceeds receivable $ 364 $ — $ — Issuance of common stock, pursuant to share-based compensation plans $ 4,961 $ 3,597 $ 4,551 Execution of capital leases $ 6,573 $ 9,597 $ 5,556 Treasury stock payable $ 120 $ 313 $ 185 |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 27, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data (Unaudited) | Quarterly Data (Unaudited) The results for each quarter include all adjustments which, in our opinion, are necessary for a fair presentation of the results for interim periods. All adjustments are of a normal and recurring nature. Selected consolidated financial data for each quarter of fiscal 2017 and 2016 are set forth below: Fiscal Year Ended December 27, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 93,779 $ 98,355 $ 97,915 $ 100,303 Franchise and licensing revenue 34,131 35,021 34,469 35,196 Total operating revenue 127,910 133,376 132,384 135,499 Total operating costs and expenses 111,609 116,367 113,849 116,646 Operating income $ 16,301 $ 17,009 $ 18,535 $ 18,853 Net income $ 8,373 $ 8,749 $ 9,325 $ 13,147 Basic net income per share (1) $ 0.12 $ 0.13 $ 0.14 $ 0.20 Diluted net income per share (1) $ 0.11 $ 0.12 $ 0.13 $ 0.19 (1) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. Fiscal Year Ended December 28, 2016 First Quarter Second Quarter (1) Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 90,386 $ 89,210 $ 93,122 $ 94,592 Franchise and licensing revenue 34,256 35,105 35,264 35,013 Total operating revenue 124,642 124,315 128,386 129,605 Total operating costs and expenses 106,409 129,148 110,809 113,583 Operating income $ 18,233 $ (4,833 ) $ 17,577 $ 16,022 Net income $ 9,954 $ (11,552 ) $ 9,726 $ 11,274 Basic net income per share (2) $ 0.13 $ (0.15 ) $ 0.13 $ 0.16 Diluted net income per share (2) $ 0.13 $ (0.15 ) $ 0.13 $ 0.15 (1) The results for the second quarter of 2016 include the recognition of a pre-tax settlement loss of $24.3 million related to the Pension Plan liquidation, reflecting the recognition of unamortized actuarial losses that were recorded in accumulated other comprehensive income. In addition, we recognized a $2.1 million tax benefit related to the $24.3 million pre-tax settlement loss. (2) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 27, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 15, 2018, we entered into additional interest rate swaps to hedge a portion of the forecasted cash flows of our floating rate debt. We designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to payments of LIBOR due on a related $80 million notional debt obligation beginning March 31, 2020 increasing over time to $425 million through December 30, 2033. Based on the interest rate as determined by our consolidated leverage ratio in effect as of February 15, 2018, under the terms of these swaps, we will pay a fixed rate of 5.19% on the notional amount from March 27, 2020 through November 30, 2033 and receive payments during these periods from a counterparty based on the 30-day LIBOR rate. These swaps overlap with and are in addition to our current interest rate swaps. See Note 10. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 27, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates . In preparing our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates. |
Consolidation Policy | Consolidation Policy . Our Consolidated Financial Statements include the financial statements of Denny’s Corporation and its wholly-owned subsidiaries: Denny’s, Inc., DFO, LLC, Denny's Realty, LLC and East Main Insurance Company. All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year . Our fiscal year ends on the last Wednesday in December. As a result, a fifty-third week is added to a fiscal year every five or six years. Fiscal 2017, 2016 and 2015 each included 52 weeks of operations. |
Cash Equivalents and Short-term Investments and Cash Overdrafts | Cash Overdrafts. Accounts payable in our Consolidated Balance Sheets include cash overdrafts of $2.2 million and $4.1 million at December 27, 2017 and December 28, 2016 , respectively. Changes in such amounts are reflected in cash flows from financing activities in our Consolidated Statements of Cash Flows. Cash Equivalents and Short-term Investments. Our policy is to invest cash in excess of operating requirements in short-term highly liquid investments with an original maturity of three months or less, which we consider to be cash equivalents. |
Receivables | Receivables. Receivables, which are recorded at net realizable value, primarily consist of trade accounts receivables and financing receivables from franchisees, vendor receivables and credit card receivables. Trade accounts receivables from franchisees consist of royalties, advertising and rent. Financing receivables from franchisees primarily consist of notes from franchisees related to the roll-out of equipment. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on pre-defined criteria and management’s judgment of existing receivables. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. |
Inventories | Inventories. Inventories consist of food and beverages and are valued primarily at the lower of cost and net realizable value. |
Property and Depreciation | Property and Depreciation. Owned property is stated at cost. Property under capital leases is stated at the lesser of its fair value or the net present value of the related minimum lease payments at the lease inception. Maintenance and repairs are expensed as incurred. We depreciate owned property over its estimated useful life using the straight-line method. We amortize property held under capital leases (at capitalized value) over the lesser of its estimated useful life or the initial lease term. In certain situations, one or more option periods may be used in determining the depreciable life of certain leasehold improvements under operating lease agreements, if we deem that an economic penalty will be incurred and exercise of such option periods is reasonably assured. In either circumstance, our policy requires lease term consistency when calculating the depreciation period, in classifying the lease and in computing rent expense. Building assets are assigned estimated useful lives that range from five to 30 years. Equipment assets are assigned lives that range from two to ten years. Leasehold improvements are generally assigned lives between five and 15 years limited by the expected lease term. |
Goodwill | Goodwill. Amounts recorded as goodwill primarily represent excess reorganization value recognized as a result of our 1998 bankruptcy. We also record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurant operations to franchisees, goodwill is decremented. We test goodwill for impairment at each fiscal year end and more frequently if circumstances indicate impairment may exist. Such indicators include, but are not limited to, a significant decline in our expected future cash flows, a significant adverse decline in our stock price, significantly adverse legal developments and a significant change in the business climate. |
Intangible Assets | Intangible Assets . Intangible assets consist primarily of trade names, and reacquired franchise rights. Trade names are considered indefinite-lived intangible assets and are not amortized. Reacquired franchise rights are amortized using the straight-line basis over the term of the related agreement. Reacquired franchise rights resulting from acquisitions are accounted for using the purchase method of accounting and are estimated by management based on the fair value of the assets received. We test trade name assets for impairment at each fiscal year end, and more frequently if circumstances indicate impairment may exist. We assess impairment of reacquired franchise rights whenever changes or events indicate that the carrying value may not be recoverable. Costs incurred to renew or extend the term of recognized intangible assets are recorded in general and administrative expenses in our Consolidated Statements of Income. |
Long-term Investments | Long-term Investments. Long-term investments include nonqualified deferred compensation plan assets held in a rabbi trust. Each plan participant's account is comprised of their contribution, our matching contribution (made prior to 2016) and each participant's share of earnings or losses in the plan. The investments of the rabbi trust include debt and equity mutual funds. They are considered trading securities and are reported at fair value in other noncurrent assets with an offsetting liability included in other noncurrent liabilities in our Consolidated Balance Sheets. The realized and unrealized holding gains and losses related to the investments are recorded in other income (expense) with an offsetting amount recorded in general and administrative expenses related to the liability in our Consolidated Statements of Income. |
Deferred Financing Costs | Deferred Financing Costs. Costs related to the issuance of debt are deferred and amortized as a component of interest expense using the effective interest method over the terms of the respective debt issuances. |
Self-Insurance Liabilities | Self-insurance Liabilities. We record liabilities for insurance claims during periods in which we have been insured under large deductible programs or have been self-insured for our medical claims and workers’ compensation, general, product and automobile insurance liabilities. The liabilities for prior and current estimated incurred losses are discounted to their present value based on expected loss payment patterns determined by independent actuaries using our actual historical payments. These estimates include assumptions regarding claims frequency and severity as well as changes in our business environment, medical costs and the regulatory environment that could impact our overall self-insurance costs. |
Income Taxes | Income Taxes. We account for income taxes 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 and operating loss and tax credit carryforwards. All deferred taxes are reported as noncurrent in our Consolidated Balance Sheets. A valuation allowance reduces our net deferred tax asset to the amount that is more likely than not to be realized. We make certain estimates and judgments in the calculation of our provision for incomes taxes, in the resulting tax liabilities, and in the recoverability of deferred tax assets. We record a liability for unrecognized tax benefits resulting from tax positions taken, or expected to be taken, in an income tax return. We recognize any interest and penalties related to unrecognized tax benefits in income tax expense. Penalties, when incurred, are recognized in general and administrative expense. Assessment of uncertain tax positions requires judgments relating to the amounts, timing and likelihood of resolution. |
Leases and Subleases | Leases and Subleases. Our policy requires the use of a consistent lease term for calculating the depreciation period for related buildings and leasehold improvements, classifying the lease and computing periodic rent expense increases where the lease terms include escalations in rent over the lease term. The lease term commences on the date we gain access to and control over the leased property. We account for rent escalations in leases on a straight-line basis over the expected lease term. Any rent holidays after lease commencement are recognized on a straight-line basis over the expected lease term, which includes the rent holiday period. Leasehold improvements that have been funded by lessors have historically been insignificant. Any leasehold improvements we make that are funded by lessor incentives or allowances under operating leases are recorded as leasehold improvement assets and amortized over the expected lease term. Such incentives are also recorded as deferred rent and amortized as reductions to lease expense over the expected lease term. We record contingent rent expense based on estimated sales for respective restaurants over the contingency period. Contingent rental income is recognized when earned. |
Fair Value Measurements | Fair Value Measurements. The carrying amounts of cash and cash equivalents, accounts receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The liabilities under our credit facility are carried at historical cost, which approximates fair value. The fair value of our long-term debt is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at market rates. |
Employee Benefit Plans | Employee Benefit Plans. Each year we measure and recognize the funded status of our defined benefit plans in our Consolidated Balance Sheets as of December 31. That date represents the month-end that is closest to our fiscal year-end. The funded status is adjusted for any contributions or significant events (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) that occurs between our fiscal year-end and December 31. |
Derivative Instruments | Derivative Instruments. We use derivative financial instruments to manage our exposure to interest rate risk. We do not enter into derivative instruments for trading or speculative purposes. All derivatives are recognized on our Consolidated Balance Sheets at fair value based upon quoted market prices. Changes in the fair values of derivatives are recorded in earnings or other comprehensive income ( “ OCI ” ), based on whether the instrument is designated as a hedge transaction. Gains or losses on derivative instruments reported in OCI are classified to earnings in the period the hedged item affects earnings. If the underlying hedge transaction ceases to exist, any associated amounts reported in OCI are reclassified to earnings at that time. Any ineffectiveness is recognized in earnings in the current period. By entering into derivative instruments, we are exposed to counterparty credit risk. When the fair value of a derivative instrument is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We manage our exposure to this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. |
Contingencies and Litigation | Contingencies and Litigation. We are subject to legal proceedings involving ordinary and routine claims incidental to our business, as well as legal proceedings that are nonroutine and include compensatory or punitive damage claims. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs as other operating expenses in our Consolidated Statements of Income as those costs are incurred. |
Comprehensive Income | Comprehensive Income. Comprehensive income includes net income and OCI items that are excluded from net income under U.S. generally accepted accounting principles. OCI items include additional minimum pension liability adjustments and the effective unrealized portion of changes in the fair value of cash flow hedges. |
Segment | Segment. Denny’s operates in only one segment. All significant revenues and pre-tax earnings relate to retail sales of food and beverages to the general public through either company or franchised restaurants. |
Company Restaurant Sales | Company Restaurant Sales. Company restaurant sales are recognized when food and beverage products are sold at company restaurants. We present company restaurant sales net of sales taxes. |
Gift Cards | Gift cards. We sell gift cards which have no stated expiration dates. We recognize revenue from gift cards when the gift card is redeemed by the customer or when we determine the likelihood of redemption is remote (gift card breakage). Breakage is based on our company-specific historical redemption patterns. |
Franchise and License Revenue | Franchise and License Revenue. We recognize initial franchise and license fees when all of the material obligations have been performed and conditions have been satisfied, typically when operations of a new franchised restaurant have commenced. Continuing fees, such as royalties and occupancy revenues, are recorded as income. Royalties are recognized in the period in which the sales occurred. |
Advertising Costs | Advertising Costs . We expense production costs for radio and television advertising in the year in which the commercials are initially aired. |
Restructuring and Exit Costs | Restructuring and Exit Costs. Restructuring and exit costs consist primarily of the costs of future obligations related to closed restaurants, severance and other restructuring charges for terminated employees, and are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Discounted liabilities for future lease costs and the fair value of related subleases of closed restaurants are recorded when the restaurants are closed. All other costs related to closed restaurants are expensed as incurred. In assessing the discounted liabilities for future costs of obligations related to closed restaurants, we make assumptions regarding amounts of future assumed subleases. If these assumptions or their related estimates change in the future, we may be required to record additional exit costs or reduce exit costs previously recorded. Exit costs recorded for each of the periods presented include the effect of such changes in estimates. |
Disposal or Impairment of Long-lived Assets | Disposal or Impairment of Long-lived Assets. We evaluate our long-lived assets for impairment at the restaurant level on a quarterly basis, when assets are identified as held for sale or whenever changes or events indicate that the carrying value may not be recoverable. For assets identified as held for sale, we use the market approach and consider proceeds from similar asset sales. We assess impairment of restaurant-level assets based on the operating cash flows of the restaurant, expected proceeds from the sale of assets and our plans for restaurant closings. Generally, all restaurants with negative cash flows from operations for the most recent twelve months at each quarter end are included in our assessment. For underperforming assets, we use the income approach to determine both the recoverability and estimated fair value of the assets. To estimate future cash flows, we make certain assumptions about expected future operating performance, such as revenue growth, operating margins, risk-adjusted discount rates, and future economic and market conditions. If the long-lived assets of a restaurant are not recoverable based upon estimated future, undiscounted cash flows, we write the assets down to their fair value. If these estimates or their related assumptions change in the future, we may be required to record additional impairment charges. These charges are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Assets held for sale consist of real estate properties and/or restaurant operations that we expect to sell within the next year. The assets are reported at the lower of carrying amount or fair value less costs to sell. We cease recording depreciation on assets that are classified as held for sale. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of held for sale. |
Discontinued Operations | Discontinued Operations. We evaluate restaurant closures and assets reclassified to assets held for sale for potential disclosure as discontinued operations. Only disposals resulting in a strategic shift that will have a major effect on our operations and financial results are reported as discontinued operations. There were no such disposals, nor any disposals of individually significant components. The gains and losses related to restaurant closures and assets reclassified to assets held for sale are included as a component of operating (gain), losses and other charges, net in our Consolidated Statements of Income. |
Gains on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets | Gains/Losses on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets. Generally, gains/losses on sales of restaurant operations to franchisees (which may include real estate), real estate properties and other assets are recognized when the sales are consummated and certain other gain recognition criteria are met. Total gains/losses are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. |
Share-based Compensation | Share-Based Compensation. Share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Starting in fiscal 2017, in accordance with the adoption of Accounting Standards Update ("ASU") 2016-09, we elected to account for forfeitures as they occur. Previously, we estimated potential forfeitures of share-based awards and adjusted the forfeiture rate over the requisite service period to the extent that actual forfeitures differed from such estimates. Share-based compensation expense is included as a component of general and administrative expenses in our Consolidated Statements of Income. Excess tax benefits recognized related to share-based compensation are included as a component of provision for income taxes in our Consolidated Statements of Income and are classified as operating activities in our Consolidated Statements of Cash Flows. See Newly Adopted Accounting Standards below for details on the adoption of ASU 2016-09. Generally, compensation expense related to restricted stock units, performance shares, performance units and board deferred stock units is based on the number of shares and units expected to vest, the period over which they are expected to vest and the fair market value of our common stock on the date of the grant. For restricted stock units and performance shares that contain a market condition, compensation expense is based on the Monte Carlo valuation method, which utilizes multiple input variables to determine the probability of the Company achieving the market condition and the fair value of the award. The key assumptions used include expected volatility and risk-free interest rates over the term of the award. The amount of certain cash-settled awards is determined based on the date of payment. Therefore, compensation expense related to these cash-settled awards is adjusted to fair value at each balance sheet date. Compensation expense for options is recognized on a straight-line basis over the requisite service period for the entire award. Subsequent to the vesting period, earned stock-settled restricted stock units and performance shares (both of which are equity classified) are paid to the holder in shares of our common stock, and the cash-settled restricted stock units and performance units (both of which are liability classified) are paid to the holder in cash, provided the holder was still employed with Denny’s or an affiliate as of the vesting date. |
Earnings Per Share | Earnings Per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. |
Newly Adopted Accounting Standards and Accounting Standards to be Adopted | Newly Adopted Accounting Standards Effective December 29, 2016, we adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. As required by the guidance, excess tax benefits recognized on share-based compensation expense are reflected on a prospective basis in our Consolidated Statements of Income as a component of the provision for income taxes rather than paid-in capital. The cumulative-effect adjustment to retained earnings from previously unrecognized excess tax benefits resulted in an $9.0 million increase in deferred tax assets and a decrease to opening deficit in fiscal 2017. In addition, we have elected to account for forfeitures as they occur. The cumulative-effect adjustment to retained earnings from previously estimated forfeitures resulted in a $0.4 million increase to opening deficit, a $0.2 million increase in deferred tax assets and a $0.6 million increase to additional paid-in capital. As allowed by the update, on a retrospective basis, cash flows related to excess tax benefits recognized on stock-based compensation expense are classified as operating activities in the Consolidated Statements of Cash Flows. There was no material impact on the prior periods retrospectively adjusted. Cash paid on employees’ behalf related to shares withheld for tax purposes continues to be classified as financing activities. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. The new guidance simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step impairment test. Impairment is measured based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment may still be completed first for an entity to determine if a quantitative impairment test is necessary. We early adopted ASU 2017-04 as of March 29, 2017 on a prospective basis. The adoption of this guidance did not have any impact on our Consolidated Financial Statements. Accounting Standards to be Adopted In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new guidance clarifies the principles used to recognize revenue for all entities and requires companies to recognize revenue when it transfers goods or service to a customer in an amount that reflects the consideration to which a company expects to be entitled. The FASB has subsequently amended this guidance by issuing additional ASUs that provide clarification and further guidance around areas identified as potential implementation issues, including principal versus agent considerations, licensing and identifying performance obligations, assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach upon adoption. All of the standards are effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018). The guidance allows for either a retrospective or cumulative effect transition method with early application permitted. We will use the modified retrospective method of adoption. The guidance is not expected to impact the recognition of company restaurant sales or royalties from franchised restaurants. However, the adoption will have an impact on initial franchise fees, advertising arrangements with franchisees, certain other franchise fees and gift card breakage. Upon adoption, initial franchise fees, which are currently recognized upon the opening of a franchise restaurant, will be deferred and recognized over the term of the underlying franchise agreement. The effect of the required deferral of initial franchise fees received in a given year will be mitigated by the recognition of revenue from fees retrospectively deferred from prior years. Upon adoption, we expect to record approximately $21.0 million as a cumulative effect adjustment increasing opening deficit and deferred revenue as of December 28, 2017 (the first day of fiscal 2018) related to previously recognized initial franchise fees. The deferred revenue resulting from the cumulative effect adjustment will be amortized over the lives of the individual franchise agreements. During 2017 , 2016 and 2015 , we recorded initial and other fees of $2.5 million , $2.7 million and $2.5 million , respectively, as a component of franchise and license revenue in our Consolidated Statements of Income. Currently, we record advertising expense net of contributions from franchisees to our advertising programs, including local co-operatives. Additionally, certain other franchise expenses are also recorded net of the related fees received from franchisees. Under the new guidance, we will include these revenues and expenditures on a gross basis within the Consolidated Statements of Income. While this change will materially impact the gross amount of reported franchise and license revenue and costs of franchise and license revenue, the impact will generally be an offsetting increase to both revenue and expense such that there will not be a significant, if any, impact on operating income and net income. Franchisee contributions to our advertising programs, including local co-operatives, for 2017 , 2016 and 2015 were $79.7 million , $76.5 million and $72.5 million , respectively. Other franchise fees recorded net of expenses for 2017 , 2016 and 2015 were $2.9 million , $3.6 million and $2.9 million , respectively. Currently, we record breakage income as a benefit to our advertising fund or reduction to other operating expenses, depending on where the gift cards were sold, and breakage is recognized when the likelihood of redemption is remote. Upon adoption, gift card breakage income will be presented within revenue and breakage will be recognized proportionately as redemptions occur. We recognized $0.3 million in breakage on gift cards during each of 2017 , 2016 and 2015 . In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. The accounting guidance for lessors is largely unchanged. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 (our fiscal 2019) with early adoption permitted. The guidance will be adopted using a modified retrospective approach. Based on a preliminary assessment, we expect the adoption will result in a significant increase in the assets and liabilities on our Consolidated Balance Sheets, as most of our operating lease commitments will be recognized as operating lease liabilities and right-of-use assets. We are continuing our evaluation, which may identify additional impacts this standard will have on our Consolidated Financial Statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform financial statement users of credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 (our fiscal 2020) with early adoption permitted for annual and interim periods beginning after December 15, 2018 (our fiscal 2019). We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)”. The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be applied using a retrospective transition method to each period presented. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The new guidance clarifies the definition of a business. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be applied prospectively. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The new guidance requires an entity to report the service cost component in the same line on the income statement as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside the subtotal of income from operations, if one is presented. If a separate line item is not used, the line item used in the income statement must be disclosed. ASU 2017-07 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be applied prospectively. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”. The new update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. ASU 2017-09 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be applied prospectively. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. The new update better aligns an entity’s risk management activities and financial reporting for hedging relationships, simplifies the hedge accounting requirements, and improves the disclosures of hedging arrangements. ASU 2017-12 is effective for annual and interim periods beginning after December 15, 2018 (our fiscal 2019) with early adoption permitted. The amended presentation and disclosure guidance is to be applied on a prospective basis. Adjustments to the measurement of ineffectiveness should be recorded through a cumulative effect adjustment as of the beginning of the adoption period. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our financial statements as a result of future adoption. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net were comprised of the following: December 27, 2017 December 28, 2016 (In thousands) Current assets: Receivables: Trade accounts receivable from franchisees $ 10,688 $ 10,513 Financing receivables from franchisees 5,084 2,804 Vendor receivables 3,256 3,865 Credit card receivables 1,870 1,678 Other 762 1,261 Allowance for doubtful accounts (276 ) (280 ) Total current receivables, net $ 21,384 $ 19,841 Noncurrent assets (included as a component of other noncurrent assets): Notes receivable from franchisees $ 427 $ 732 |
Property (Tables)
Property (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property, Net | Property, net consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Land $ 32,506 $ 29,914 Buildings and leasehold improvements 243,872 243,323 Other property and equipment 67,786 79,804 Total property owned 344,164 353,041 Less accumulated depreciation 227,959 241,132 Property owned, net 116,205 111,909 Buildings, vehicles and other equipment held under capital leases 39,017 35,246 Less accumulated amortization 15,366 14,053 Property held under capital leases, net 23,651 21,193 Total property, net $ 139,856 $ 133,102 |
Franchised Units [Member] | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property, Net | The following table reflects the property assets, included in the table above, which were leased to franchisees: December 27, 2017 December 28, 2016 (In thousands) Land $ 15,490 $ 16,192 Buildings and leasehold improvements 54,948 59,896 Total property owned, leased to franchisees 70,438 76,088 Less accumulated depreciation 48,225 52,020 Property owned, leased to franchisees, net 22,213 24,068 Buildings held under capital leases, leased to franchisees 6,060 5,656 Less accumulated amortization 3,300 3,408 Property held under capital leases, leased to franchisees, net 2,760 2,248 Total property leased to franchisees, net $ 24,973 $ 26,316 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amounts of goodwill | The following table reflects the changes in carrying amounts of goodwill: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 35,233 $ 33,454 Additions related to acquisitions 3,021 1,827 Adjustments related to the sale of restaurants 15 (48 ) Balance, end of year $ 38,269 $ 35,233 |
Indefinite-lived intangible assets | ntangible assets were comprised of the following: December 27, 2017 December 28, 2016 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,080 $ — $ 44,076 $ — Liquor licenses 166 — 166 — Intangible assets with definite lives: Franchise and license agreements — — 190 186 Reacquired franchise rights 15,252 2,389 11,498 1,251 Intangible assets $ 59,498 $ 2,389 $ 55,930 $ 1,437 |
Finite-lived intangible assets | ntangible assets were comprised of the following: December 27, 2017 December 28, 2016 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,080 $ — $ 44,076 $ — Liquor licenses 166 — 166 — Intangible assets with definite lives: Franchise and license agreements — — 190 186 Reacquired franchise rights 15,252 2,389 11,498 1,251 Intangible assets $ 59,498 $ 2,389 $ 55,930 $ 1,437 |
Estimated amortization expense for intangible assets with definite lives | Estimated amortization expense for intangible assets with definite lives in the next five years is as follows: (In thousands) 2018 $ 2,251 2019 1,963 2020 1,783 2021 1,181 2022 1,024 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other current liabilities consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Accrued payroll $ 20,998 $ 27,056 Accrued insurance, primarily current portion of liability for insurance claims 6,922 6,651 Accrued taxes 7,384 7,407 Accrued advertising 8,417 8,051 Gift cards 6,480 5,474 Other 9,045 10,157 Other current liabilities 59,246 64,796 |
Operating (Gains), Losses and33
Operating (Gains), Losses and Other Charges, Net (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Other Income and Expenses [Abstract] | |
Operating (gains) losses and other charges net | Operating (gains), losses and other charges, net were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Pension settlement loss $ — $ 24,297 $ — Software implementation costs 5,247 — — (Gains) losses on sales of assets and other, net (1,729 ) 29 (93 ) Restructuring charges and exit costs 485 1,486 1,524 Impairment charges 326 1,098 935 Operating (gains), losses and other charges, net $ 4,329 $ 26,910 $ 2,366 |
Schedule of restructuring charges and exit costs | Restructuring charges and exit costs were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Exit costs $ 385 $ 591 $ 697 Severance and other restructuring charges 100 895 827 Total restructuring charges and exit costs $ 485 $ 1,486 $ 1,524 |
Components of change in accrued exit cost liabilities | The components of the change in accrued exit cost liabilities were as follows: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 1,896 $ 2,043 Exit costs (1) 385 591 Payments, net of sublease receipts (1,189 ) (855 ) Interest accretion 88 117 Balance, end of year 1,180 1,896 Less current portion included in other current liabilities 345 330 Long-term portion included in other noncurrent liabilities $ 835 $ 1,566 (1) Included as a component of operating (gains), losses and other charges, net. |
Estimated net cash payments related to exit cost liabilities | Estimated net cash payments related to exit cost liabilities in the next five years are as follows: (In thousands) 2018 $ 414 2019 264 2020 179 2021 180 2022 180 Thereafter 168 Total 1,385 Less imputed interest 205 Present value of exit cost liabilities $ 1,180 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Leases [Abstract] | |
Schedule of minimum future lease commitments and amounts to be received as lessor or sublessor | Minimum future lease commitments and amounts to be received as lessor or sublessor under non-cancelable leases, including leases for both open and closed restaurants and optional renewal periods that have been included in the lease term, at December 27, 2017 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2018 $ 8,863 $ 26,214 $ 23,681 2019 8,429 23,152 21,029 2020 7,796 19,403 18,355 2021 7,142 16,510 16,394 2022 6,483 13,787 14,669 Thereafter 33,073 54,067 67,606 Total 71,786 $ 153,133 $ 161,734 Less imputed interest 41,564 Present value of capital lease obligations $ 30,222 |
Schedule of rental expense and income | Rental expense and income were comprised of the following: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 9,315 $ 8,602 $ 8,998 Contingent rents 3,168 3,351 3,134 Included as a component of costs of franchise and license revenue: Base rents $ 17,674 $ 19,883 $ 21,751 Contingent rents $ 2,864 $ 3,077 $ 2,897 Total rental expense $ 33,021 $ 34,913 $ 36,780 Rental income: Included as a component of franchise and license revenue: Base rents $ 25,781 $ 28,183 $ 30,166 Contingent rents 5,042 5,337 5,305 Total rental income $ 30,823 $ 33,520 $ 35,471 |
Fair Value of Financial Instr35
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value on a recurring basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (In thousands ) Fair value measurements as of December 27, 2017: Deferred compensation plan investments (1) $ 12,663 $ 12,663 $ — $ — market approach Interest rate swaps, net (2) (2,187 ) — (2,187 ) — income approach Total $ 10,476 $ 12,663 $ (2,187 ) $ — Fair value measurements as of December 28, 2016: Deferred compensation plan investments (1) $ 11,248 $ 11,248 $ — $ — market approach Interest rate swaps (2) $ (756 ) $ — $ (756 ) $ — income approach Total $ 10,492 $ 11,248 $ (756 ) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 10 for details on the interest rate swaps. |
Assets and liabilities measured at fair value on a nonrecurring basis | Those assets and liabilities measured at fair value on a nonrecurring basis are summarized below: Significant Other Observable Inputs Impairment Charges Valuation Technique Fair value measurements as of December 28, 2016: Assets held for sale (1) $ 1,020 $ 1,098 market approach (1) As of December 28, 2016, assets held for sale were written down to their fair value. The fair value of assets held for sale is based upon Level 2 inputs, which include sales agreements. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consisted of the following: December 27, 2017 December 28, 2016 (In thousands) Revolving loans due October 26, 2022 $ 259,000 $ — Revolving loans due March 30, 2020 — $ 218,500 Capital lease obligations 30,222 27,091 Total long-term debt 289,222 245,591 Less current maturities 3,168 3,285 Noncurrent portion of long-term debt $ 286,054 $ 242,306 |
Interest rate swaps | Based on the interest rate as determined by our consolidated leverage ratio in effect as of December 27, 2017 , under the terms of the swaps, we will pay the following fixed rates on the notional amounts noted: Period Covered Notional Amount Fixed Rate (In thousands) March 31, 2015 - March 29, 2018 $ 120,000 3.13 % March 29, 2018 - March 31, 2025 170,000 4.44 % April 1, 2025 - March 31, 2026 50,000 4.46 % |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of pension and other defined benefit plan obligations and funded status | The obligations and funded status for the Pension Plan and other defined benefit plans were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Change in Benefit Obligation: Benefit obligation at beginning of year $ — $ 67,735 $ 2,639 $ 2,669 Service cost — 105 — — Interest cost — — 83 91 Actuarial losses — 945 172 73 Benefits paid — (1,057 ) (195 ) (194 ) Settlements — (67,728 ) (91 ) — Benefit obligation at end of year $ — $ — $ 2,608 $ 2,639 Accumulated benefit obligation $ — $ — $ 2,608 $ 2,639 Change in Plan Assets: Fair value of plan assets at beginning of year $ — $ 58,378 $ — $ — Actual return on plan assets — 861 — — Employer contributions — 9,546 286 194 Benefits paid — (1,057 ) (195 ) (194 ) Settlements — (67,728 ) (91 ) — Fair value of plan assets at end of year $ — $ — $ — $ — Funded status $ — $ — $ (2,608 ) $ (2,639 ) |
Schedule of amounts recognized in the Consolidated Balance Sheets | The amounts recognized in our Consolidated Balance Sheets were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Other current liabilities $ — $ — $ (280 ) $ (259 ) Other noncurrent liabilities — — (2,328 ) (2,380 ) Net amount recognized $ — $ — $ (2,608 ) $ (2,639 ) |
Schedule of net periodic benefit cost not yet recognized | The amounts recognized in accumulated other comprehensive income, that have not yet been recognized as a component of net periodic benefit cost, were as follows: Pension Plan Other Defined Benefit Plans December 27, 2017 December 28, 2016 December 27, 2017 December 28, 2016 (In thousands) Unamortized actuarial losses, net $ — — (1,092 ) (1,033 ) |
Components of the change in accumulated other comprehensive loss | The components of the change in unamortized actuarial losses, net, included in accumulated other comprehensive loss were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 (In thousands) Pension Plan: Balance, beginning of year $ — $ (23,955 ) Benefit obligation actuarial loss — (945 ) Net gain — 603 Settlement loss recognized — 24,297 Balance, end of year $ — $ — Other Defined Benefit Plans: Balance, beginning of year $ (1,033 ) $ (1,045 ) Benefit obligation actuarial loss (172 ) (73 ) Amortization of net loss 92 85 Settlement loss recognized 21 — Balance, end of year $ (1,092 ) $ (1,033 ) |
Components of net periodic benefit cost | The components of net periodic benefit cost were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Pension Plan: Service cost $ — $ 105 $ 380 Interest cost — — 2,983 Expected return on plan assets — — (3,508 ) Amortization of net loss — — 1,733 Settlement loss recognized — 24,297 — Net periodic benefit cost $ — $ 24,402 $ 1,588 Other comprehensive (income) loss $ — $ (23,955 ) $ (3,619 ) Other Defined Benefit Plans: Interest cost $ 83 $ 91 $ 107 Amortization of net loss 92 85 79 Settlement loss recognized 21 — — Net periodic benefit cost $ 196 $ 176 $ 186 Other comprehensive (income) loss $ 59 $ (12 ) $ (36 ) |
Schedule of assumptions used to determine benefit obligations | December 27, 2017 December 28, 2016 December 30, 2015 Assumptions used to determine benefit obligations: Pension Plan: Discount rate N/A N/A Other Defined Benefit Plans: Discount rate 3.08 % 3.31 % Assumptions used to determine net periodic pension cost: Discount rate 3.31 % 3.62 % 4.12 % Rate of increase in compensation levels N/A N/A N/A Expected long-term rate of return on assets N/A N/A 5.75 % |
Schedule of expected benefit payments | Benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2023 through 2027 are as follows: Other Defined Benefit Plans (In thousands) 2018 $ 280 2019 564 2020 253 2021 229 2022 296 2023 through 2027 1,027 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total share-based compensation | Total share-based compensation expense included as a component of net income was as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Performance share awards 7,838 7,236 5,821 Restricted stock units for board members 703 374 814 Total share-based compensation $ 8,541 $ 7,610 $ 6,635 |
Stock options activity | The following table summarizes information about stock options outstanding and exercisable at December 27, 2017 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (In thousands, except per share amounts) Outstanding, beginning of year 1,127 $ 3.01 Exercised (227 ) $ 2.88 Outstanding, end of year 900 $ 3.04 2.30 $ 9,320 Exercisable, end of year 900 $ 3.04 2.30 $ 9,320 |
Restricted stock units activity | The following table summarizes the restricted stock units activity during the year ended December 27, 2017 : Units Weighted Average Grant Date Fair Value (In thousands) Outstanding, beginning of year 1,366 $ 9.84 Granted 606 $ 12.59 Converted (235 ) $ 7.55 Outstanding, end of year 1,737 $ 11.11 Convertible, end of year 488 $ 11.43 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provisions for income taxes were as follows: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Current: Federal $ 3,688 $ 4,270 $ 1,622 State and local 2,071 2,316 1,382 Foreign 961 912 873 Deferred: Federal 10,075 8,225 12,264 State and local 196 619 1,742 Increase (release) of valuation allowance 216 132 (130 ) Total provision for income taxes $ 17,207 $ 16,474 $ 17,753 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income taxes at the U.S. federal statutory tax rate to our effective tax rate was as follows: December 27, 2017 December 28, 2016 December 30, 2015 Statutory provision rate 35 % 35 % 35 % State and local taxes, net of federal income tax benefit 5 9 6 Wage addback on income tax credits earned 2 3 2 General business credits generated (5 ) (9 ) (6 ) Foreign tax credits generated (2 ) (12 ) (2 ) Pension plan liquidation — 18 — Share-based compensation (3 ) — — Impact of tax reform (3 ) — — Other 1 2 (2 ) Effective tax rate 30 % 46 % 33 % |
Schedule of Deferred Tax Assets and Liabilities | The following table represents the approximate tax effect of each significant type of temporary difference that resulted in deferred income tax assets or liabilities. December 27, 2017 December 28, 2016 (In thousands) Deferred tax assets: Self-insurance accruals $ 4,364 $ 7,791 Capitalized leases 1,718 2,298 Accrued exit cost 487 1,074 Interest rate swaps 566 294 Pension, other retirement and compensation plans 10,328 12,378 Other accruals 443 386 Alternative minimum tax credit carryforwards 3,534 3,534 General business credit carryforwards - state and federal 13,355 13,541 Net operating loss carryforwards - state 14,096 11,753 Total deferred tax assets before valuation allowance 48,891 53,049 Less: valuation allowance (13,078 ) (12,567 ) Total deferred tax assets 35,813 40,482 Deferred tax liabilities: Intangible assets (14,578 ) (22,073 ) Deferred finance costs (111 ) (125 ) Fixed assets (4,179 ) (601 ) Total deferred tax liabilities (18,868 ) (22,799 ) Net deferred tax asset $ 16,945 $ 17,683 |
Summary of Income Tax Contingencies | The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits: December 27, 2017 December 28, 2016 (In thousands) Balance, beginning of year $ 1,180 $ — Increases related to prior-year tax positions 289 1,180 Balance, end of year $ 1,469 $ 1,180 |
Net Income Per Share Net Income
Net Income Per Share Net Income Per Share (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | The amounts used for the basic and diluted net income per share calculations are summarized below: Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands, except per share amounts) Net income $ 39,594 $ 19,402 $ 35,976 Weighted average shares outstanding - basic 68,077 75,325 82,627 Effect of dilutive share-based compensation awards 2,326 1,881 2,102 Weighted average shares outstanding - diluted 70,403 77,206 84,729 Basic net income per share $ 0.58 $ 0.26 $ 0.44 Diluted net income per share $ 0.56 $ 0.25 $ 0.42 Anti-dilutive share-based compensation awards 606 — — |
Shareholders' Equity Shareholde
Shareholders' Equity Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Statement of Comprehensive Income [Abstract] | |
Components of accumulated other comprehensive loss | The components of the change in accumulated other comprehensive loss were as follows: Pensions Derivatives Accumulated Other Comprehensive Loss (In thousands) Balance as of December 31, 2014 $ (24,994 ) $ 392 $ (24,602 ) Benefit obligation actuarial gain 5,737 — 5,737 Net loss (3,894 ) — (3,894 ) Amortization of net loss (1) 1,812 — 1,812 Net change in fair value of derivatives — (1,444 ) (1,444 ) Reclassification of derivatives to interest expense (2) — (859 ) (859 ) Income tax (expense) benefit (1,425 ) 898 (527 ) Balance as of December 30, 2015 $ (22,764 ) $ (1,013 ) $ (23,777 ) Benefit obligation actuarial loss (1,018 ) — (1,018 ) Net gain 603 — 603 Amortization of net loss (1) 85 — 85 Settlement loss recognized 24,297 — 24,297 Net change in fair value of derivatives — 1,693 1,693 Reclassification of derivatives to interest expense (2) — (789 ) (789 ) Income tax expense (2,148 ) (353 ) (2,501 ) Balance as of December 28, 2016 $ (945 ) $ (462 ) $ (1,407 ) Benefit obligation actuarial loss (172 ) — (172 ) Amortization of net loss (1) 92 — 92 Settlement loss recognized 21 — 21 Net change in fair value of derivatives — (1,359 ) (1,359 ) Reclassification of derivatives to interest expense (2) — (72 ) (72 ) Income tax benefit 22 559 581 Balance as of December 27, 2017 $ (982 ) $ (1,334 ) $ (2,316 ) (1) Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Income. See Note 11 for additional details. (2) Amounts reclassified from accumulated other comprehensive loss into income, represent payments made to the counterparty for the effective portions of the interest rate swaps. These amounts are included as a component of interest expense in our Consolidated Statements of Income. We expect to reclassify approximately $1.3 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 10 for additional details. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future commitments under contracts for food and non-food products | Our future purchase obligation payments due by period for both company and franchised restaurants at December 27, 2017 consist of the following: (In thousands) Less than 1 year $ 194,446 1-2 years — 3-4 years — 5 years and thereafter — Total $ 194,446 |
Supplemental Cash Flow Inform43
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Fiscal Year Ended December 27, 2017 December 28, 2016 December 30, 2015 (In thousands) Income taxes paid, net $ 6,367 $ 3,012 $ 5,364 Interest paid $ 14,636 $ 11,288 $ 8,141 Noncash investing and financing activities: Notes received in connection with disposition of property $ 1,750 $ — $ — Property acquisition payable $ 500 $ — $ 573 Accrued purchase of property $ 531 $ 1,445 $ 1,781 Insurance proceeds receivable $ 364 $ — $ — Issuance of common stock, pursuant to share-based compensation plans $ 4,961 $ 3,597 $ 4,551 Execution of capital leases $ 6,573 $ 9,597 $ 5,556 Treasury stock payable $ 120 $ 313 $ 185 |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 27, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Selected consolidated financial data for each quarter of fiscal 2017 and 2016 are set forth below: Fiscal Year Ended December 27, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 93,779 $ 98,355 $ 97,915 $ 100,303 Franchise and licensing revenue 34,131 35,021 34,469 35,196 Total operating revenue 127,910 133,376 132,384 135,499 Total operating costs and expenses 111,609 116,367 113,849 116,646 Operating income $ 16,301 $ 17,009 $ 18,535 $ 18,853 Net income $ 8,373 $ 8,749 $ 9,325 $ 13,147 Basic net income per share (1) $ 0.12 $ 0.13 $ 0.14 $ 0.20 Diluted net income per share (1) $ 0.11 $ 0.12 $ 0.13 $ 0.19 (1) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. Fiscal Year Ended December 28, 2016 First Quarter Second Quarter (1) Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 90,386 $ 89,210 $ 93,122 $ 94,592 Franchise and licensing revenue 34,256 35,105 35,264 35,013 Total operating revenue 124,642 124,315 128,386 129,605 Total operating costs and expenses 106,409 129,148 110,809 113,583 Operating income $ 18,233 $ (4,833 ) $ 17,577 $ 16,022 Net income $ 9,954 $ (11,552 ) $ 9,726 $ 11,274 Basic net income per share (2) $ 0.13 $ (0.15 ) $ 0.13 $ 0.16 Diluted net income per share (2) $ 0.13 $ (0.15 ) $ 0.13 $ 0.15 (1) The results for the second quarter of 2016 include the recognition of a pre-tax settlement loss of $24.3 million related to the Pension Plan liquidation, reflecting the recognition of unamortized actuarial losses that were recorded in accumulated other comprehensive income. In addition, we recognized a $2.1 million tax benefit related to the $24.3 million pre-tax settlement loss. (2) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Introduction and Basis of Rep45
Introduction and Basis of Reporting (Details) | 12 Months Ended |
Dec. 27, 2017CountriesrestaurantStatesTerritories | |
Franchisor Disclosure [Line Items] | |
Number of states in which entity operates | States | 50 |
Number of territories in which entity operates | Territories | 2 |
Number of foreign countries in which entity operates | Countries | 12 |
Number of restaurants | 1,735 |
Franchised and licensed restaurants [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,557 |
Company-owned restaurants [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 178 |
California [Member] | |
Franchisor Disclosure [Line Items] | |
Percentage of restaurants operated by geographic region | 23.00% |
Texas [Member] | |
Franchisor Disclosure [Line Items] | |
Percentage of restaurants operated by geographic region | 11.00% |
Florida [Member] | |
Franchisor Disclosure [Line Items] | |
Percentage of restaurants operated by geographic region | 8.00% |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | Dec. 28, 2017 | |
Accounting Policies [Abstract] | ||||
Short-term investments | $ 1,900 | $ 500 | ||
Net gain on investments | 1,600 | 900 | $ 100 | |
Deferred compensation plan investments | 12,700 | 11,200 | ||
Cash overdrafts | 2,200 | 4,100 | ||
Discounted insurance liabilities | $ 16,900 | $ 19,200 | ||
Self insurance liabilities, discount rate | 2.00% | 1.50% | ||
Undiscounted insurance liabilities | $ 18,100 | $ 20,000 | ||
Revenue recognized in breakage on gift cards | 300 | 300 | 300 | |
Deferred fees | 1,600 | 2,100 | ||
Advertising expense | 14,300 | 13,100 | 12,500 | |
Advertising contributions from franchisees | 79,700 | 76,500 | 72,500 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | 9,139 | $ (21,000) | ||
Initial and other franchise fees | 2,500 | 2,700 | 2,500 | |
Other franchise fees | $ 2,900 | 3,600 | $ 2,900 | |
Other Noncurrent Assets [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | (200) | |||
Excess Tax Benefits [Member] | Retained Earnings [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | 9,000 | |||
Estimated Forfeitures [Member] | Retained Earnings [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | (400) | |||
Paid-in Capital [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment | $ 551 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Property and Depreciation) (Details) | 12 Months Ended |
Dec. 27, 2017 | |
Building Assets [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Building Assets [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 30 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Summary of Significant Accoun48
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Concentration Risk) (Details) | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Revenue from franchises and licenses risk [Member] | |||
Concentration Risk [Line Items] | |||
Franchise revenue, percentage | 31.00% | 29.00% | 29.00% |
Receivables (Details)
Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2017 | Dec. 28, 2016 | |
Receivables: | ||
Trade accounts receivable from franchisees | $ 10,688 | $ 10,513 |
Financing receivables from franchisees | 5,084 | 2,804 |
Allowance for doubtful accounts | (276) | (280) |
Total current receivables, net | 21,384 | 19,841 |
Noncurrent assets (included as a component of other noncurrent assets): | ||
Notes receivable from franchisees | 427 | 732 |
Write-off of financing receivables from a franchisee | 200 | |
Vendor receivables [Member] | ||
Receivables: | ||
Other receivable, gross, current | 3,256 | 3,865 |
Credit card receivables [Member] | ||
Receivables: | ||
Other receivable, gross, current | 1,870 | 1,678 |
Other [Member] | ||
Receivables: | ||
Other receivable, gross, current | 762 | $ 1,261 |
Insurance receivable, current | $ 400 |
Property (Details)
Property (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Property Owned [Abstract] | |||
Total property owned | $ 344,164 | $ 353,041 | |
Less accumulated depreciation | 227,959 | 241,132 | |
Property owned, net | 116,205 | 111,909 | |
Property Held Under Capital Leases [Abstract] | |||
Buildings, vehicles and other equipment held under capital leases | 39,017 | 35,246 | |
Less accumulated amortization | 15,366 | 14,053 | |
Property held under capital leases, net | 23,651 | 21,193 | |
Total property, net | 139,856 | 133,102 | |
Depreciation expense, including amortization of property under capital leases | 21,200 | 20,600 | $ 20,000 |
Franchised Units [Member] | |||
Property Owned [Abstract] | |||
Total property owned | 70,438 | 76,088 | |
Less accumulated depreciation | 48,225 | 52,020 | |
Property owned, net | 22,213 | 24,068 | |
Property Held Under Capital Leases [Abstract] | |||
Buildings, vehicles and other equipment held under capital leases | 6,060 | 5,656 | |
Less accumulated amortization | 3,300 | 3,408 | |
Property held under capital leases, net | 2,760 | 2,248 | |
Total property, net | 24,973 | 26,316 | |
Land [Member] | |||
Property Owned [Abstract] | |||
Total property owned | 32,506 | 29,914 | |
Land [Member] | Franchised Units [Member] | |||
Property Owned [Abstract] | |||
Total property owned | 15,490 | 16,192 | |
Building and leasehold improvements [Member] | |||
Property Owned [Abstract] | |||
Total property owned | 243,872 | 243,323 | |
Building and leasehold improvements [Member] | Franchised Units [Member] | |||
Property Owned [Abstract] | |||
Total property owned | 54,948 | 59,896 | |
Other property and equipment [Member] | |||
Property Owned [Abstract] | |||
Total property owned | $ 67,786 | $ 79,804 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets (Details) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017USD ($)restaurants | Dec. 28, 2016USD ($) | Dec. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |||
Balance, beginning of year | $ 35,233 | $ 33,454 | |
Additions related to acquisitions | 3,021 | 1,827 | |
Adjustments related to the sale of restaurants | 15 | (48) | |
Balance, end of year | 38,269 | 35,233 | $ 33,454 |
Intangible Assets [Line Items] | |||
Gross carrying amount - Trade names | 44,080 | 44,076 | |
Gross carrying amount - Liquor licenses | 166 | 166 | |
Accumulated amortization - Intangible assets with definite lives | 2,389 | 1,437 | |
Intangible assets | 59,498 | 55,930 | |
Amortization expense of definite-lived intangible assets and other assets | $ 2,500 | 1,500 | $ 1,500 |
Restaurants reacquired from franchisees | restaurants | 10 | ||
Restaurants reacquired from former franchisees | restaurants | 1 | ||
Purchase price to reacquire franchised restaurants | $ 8,800 | ||
Purchase price allocated to property | 1,300 | ||
Purchase price allocated to goodwill | 3,021 | 1,827 | |
Capital leases recorded related to acquired franchise restaurants | 2,300 | ||
Franchise and License Agreements [Member] | |||
Intangible Assets [Line Items] | |||
Gross carrying amount - Intangible assets with definite lives | 0 | 190 | |
Accumulated amortization - Intangible assets with definite lives | 0 | 186 | |
Reacquired Franchise Rights [Member] | |||
Intangible Assets [Line Items] | |||
Gross carrying amount - Intangible assets with definite lives | 15,252 | 11,498 | |
Accumulated amortization - Intangible assets with definite lives | 2,389 | $ 1,251 | |
Purchase price allocation to reacquired franchise rights | $ 4,500 | ||
Weighted-average life of reacquired franchise rights | 9 years |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets (Estimated Amortization Expense) (Details) $ in Thousands | Dec. 27, 2017USD ($) |
Estimated amortization expense for intangible assets with definite lives in the next five years: | |
2,018 | $ 2,251 |
2,019 | 1,963 |
2,020 | 1,783 |
2,021 | 1,181 |
2,022 | $ 1,024 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Other Liabilities, Current [Abstract] | ||
Accrued payroll | $ 20,998 | $ 27,056 |
Accrued insurance, primarily current portion of liability for insurance claims | 6,922 | 6,651 |
Accrued taxes | 7,384 | 7,407 |
Accrued advertising | 8,417 | 8,051 |
Gift cards | 6,480 | 5,474 |
Other | 9,045 | 10,157 |
Other current liabilities | $ 59,246 | $ 64,796 |
Operating (Gains), Losses and54
Operating (Gains), Losses and Other Charges, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |||
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension settlement loss | $ 21 | $ 24,297 | |||
Software implementation costs | 5,247 | 0 | $ 0 | ||
(Gains) losses on sales of assets and other, net | (1,729) | 29 | (93) | ||
Restructuring charges and exit costs | 485 | 1,486 | 1,524 | ||
Impairment charges | 326 | 1,098 | 935 | ||
Operating (gains), losses and other charges, net | 4,329 | 26,910 | 2,366 | ||
Restructuring charges and exit costs [Abstract] | |||||
Exit costs | 385 | [1] | 591 | [1] | 697 |
Severance and other restructuring charges | 100 | 895 | 827 | ||
Total restructuring charges and exit costs | 485 | 1,486 | 1,524 | ||
Components of change in accrued exit cost liabilities [Roll Forward] | |||||
Balance, beginning of year | 1,896 | 2,043 | |||
Exit costs | 385 | [1] | 591 | [1] | 697 |
Payments, net of sublease receipts | (1,189) | (855) | |||
Interest accretion | 88 | 117 | |||
Balance, end of year | 1,180 | 1,896 | 2,043 | ||
Less current portion included in other current liabilities | 345 | 330 | |||
Long-term portion included in other noncurrent liabilities | 835 | 1,566 | |||
Accrued severance and other restructuring charges | 100 | 400 | |||
Estimated net cash payments related to exit cost liabilities [Abstract] | |||||
2,018 | 414 | ||||
2,019 | 264 | ||||
2,020 | 179 | ||||
2,021 | 180 | ||||
2,022 | 180 | ||||
Thereafter | 168 | ||||
Total | 1,385 | ||||
Less imputed interest | 205 | ||||
Present value of exit cost liabilities | 1,180 | ||||
Existing sublease arrangements | 1,400 | ||||
Impairment charges | 326 | 1,098 | 935 | ||
Pension Plan [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension settlement loss | $ 0 | $ 24,297 | $ 0 | ||
[1] | Included as a component of operating (gains), losses and other charges, net. |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 27, 2017USD ($) | |
Operating Leased Assets [Line Items] | |
Term of typical renewal options on land and building leases | 5 years |
Capital Lease Commitments: | |
2,018 | $ 8,863 |
2,019 | 8,429 |
2,020 | 7,796 |
2,021 | 7,142 |
2,022 | 6,483 |
Thereafter | 33,073 |
Total | 71,786 |
Less imputed interest | 41,564 |
Present value of capital lease obligations | 30,222 |
Operating Lease Commitments: | |
2,018 | 26,214 |
2,019 | 23,152 |
2,020 | 19,403 |
2,021 | 16,510 |
2,022 | 13,787 |
Thereafter | 54,067 |
Total | 153,133 |
Operating Lease Receipts: | |
2,018 | 23,681 |
2,019 | 21,029 |
2,020 | 18,355 |
2,021 | 16,394 |
2,022 | 14,669 |
Thereafter | 67,606 |
Total | $ 161,734 |
Minimum [Member] | |
Operating Leased Assets [Line Items] | |
Initial terms of land and building leases | 10 years |
Maximum [Member] | |
Operating Leased Assets [Line Items] | |
Initial terms of land and building leases | 15 years |
Leases (Net Rental Expense) (De
Leases (Net Rental Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Rental Expense: | |||
Total rental expense | $ 33,021 | $ 34,913 | $ 36,780 |
Rental income: | |||
Base rents | 25,781 | 28,183 | 30,166 |
Contingent rents | 5,042 | 5,337 | 5,305 |
Total rental income | 30,823 | 33,520 | 35,471 |
Company-owned restaurants [Member] | |||
Rental Expense: | |||
Base rents | 9,315 | 8,602 | 8,998 |
Contingent rents | 3,168 | 3,351 | 3,134 |
Franchised and licensed restaurants [Member] | |||
Rental Expense: | |||
Base rents | 17,674 | 19,883 | 21,751 |
Contingent rents | $ 2,864 | $ 3,077 | $ 2,897 |
Fair Value of Financial Instr57
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps, net | $ 2,200 | ||
Interest rate swaps | (2,300) | ||
Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total, assets | 10,476 | $ 10,492 | |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total, assets | 12,663 | 11,248 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total, liabilities | (2,187) | (756) | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total, assets | 0 | 0 | |
Recurring [Member] | Deferred Compensation Plan Investments [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan investments | [1] | $ 12,663 | $ 11,248 |
Valuation technique | market approach | market approach | |
Recurring [Member] | Deferred Compensation Plan Investments [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan investments | $ 12,663 | $ 11,248 | |
Recurring [Member] | Deferred Compensation Plan Investments [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan investments | 0 | 0 | |
Recurring [Member] | Deferred Compensation Plan Investments [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan investments | 0 | 0 | |
Recurring [Member] | Interest Rate Swap [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps, net | [2] | $ (2,187) | |
Interest rate swaps | [2] | $ (756) | |
Valuation technique | income approach | income approach | |
Recurring [Member] | Interest Rate Swap [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps, net | $ 0 | ||
Interest rate swaps | $ 0 | ||
Recurring [Member] | Interest Rate Swap [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps, net | (2,187) | ||
Interest rate swaps | (756) | ||
Recurring [Member] | Interest Rate Swap [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps, net | $ 0 | ||
Interest rate swaps | $ 0 | ||
Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Valuation technique | market approach | ||
Impairment of assets identified as assets held for sale | $ 1,098 | ||
Nonrecurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets held for sale | [3] | $ 1,020 | |
[1] | The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments. | ||
[2] | The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 10 for details on the interest rate swaps. | ||
[3] | As of December 28, 2016, assets held for sale were written down to their fair value. The fair value of assets held for sale is based upon Level 2 inputs, which include sales agreements. |
Long-term Debt (Schedule of Lon
Long-term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Debt Instrument [Line Items] | ||
Capital lease obligations | $ 30,222 | $ 27,091 |
Total long-term debt | 289,222 | 245,591 |
Less current maturities | 3,168 | 3,285 |
Noncurrent portion of long-term debt | 286,054 | 242,306 |
Revolving credit facility, due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Revolving loans due | 259,000 | 0 |
Revolving credit facility, due 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Revolving loans due | $ 0 | $ 218,500 |
Long-Term Debt Long-Term Debt (
Long-Term Debt Long-Term Debt (Aggregate Annual Maturities of Long-Term Debt, Excluding Capital Lease Obligations) (Details) $ in Millions | Dec. 27, 2017USD ($) |
Aggregate annual maturities of long-term debt, excluding capital lease obligations [Abstract] | |
Long-term debt due in 2022 | $ 259 |
Long-Term Debt Long-Term Debt60
Long-Term Debt Long-Term Debt (Schedule of Interest Rate Swaps) (Details) $ in Thousands | Dec. 27, 2017USD ($) |
Derivative [Line Items] | |
Interest rate swaps, net | $ 2,200 |
Interest rate swaps, assets | 100 |
Interest rate swaps, liability | 2,300 |
Interest Rate Swaps 2015-2018 [Member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 120,000 |
Average fixed interest rate on interest rate swap | 3.13% |
Interest Rate Swaps 2018-2025 [Member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 170,000 |
Average fixed interest rate on interest rate swap | 4.44% |
Interest Rate Swaps 2018-2026 [Member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 50,000 |
Average fixed interest rate on interest rate swap | 4.46% |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 27, 2017 | Dec. 28, 2016 | |
Line of Credit Facility [Line Items] | ||
Maturity date | Oct. 26, 2022 | |
Senior secured revolver [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, current borrowing capacity | $ 400 | |
Accordian feature that allows increase in size of facility | $ 450 | |
Commitment fee for unused portion of revolving credit facility (in hundredths) | 0.30% | |
Basis spread on variable rate (in hundredths) | 2.00% | |
Outstanding amount under credit facility | $ 259 | |
Availability under the revolving facility | $ 119.5 | |
Weighted-average interest rate (in hundredths) | 3.42% | 2.45% |
Senior secured revolver [Member] | Interest Rate Swap [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted-average interest rate (in hundredths) | 3.32% | 2.74% |
Letter of credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, current borrowing capacity | $ 30 | |
Outstanding amount under letter of credit | $ 21.5 |
Employee Benefit Plans Employe
Employee Benefit Plans Employe Benefit Plans (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Settlement loss recognized | $ (21) | $ (24,297) | |
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 0 | 9,546 | |
Assets used for settlements | 0 | 67,728 | |
Settlement loss recognized | $ 0 | $ (24,297) | $ 0 |
Employee Benefit Plans (Change
Employee Benefit Plans (Change in Benefit Obligation and Plan Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Pension Plan [Member] | |||
Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | $ 0 | $ 67,735 | |
Service cost | 0 | 105 | $ 380 |
Interest cost | 0 | 0 | 2,983 |
Actuarial (gains) losses | 0 | 945 | |
Benefits paid | 0 | (1,057) | |
Settlements | 0 | (67,728) | |
Benefit obligation at end of year | 0 | 0 | 67,735 |
Accumulated benefit obligation | 0 | 0 | |
Change in Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 0 | 58,378 | |
Actual return on plan assets | 0 | 861 | |
Employer contributions | 0 | 9,546 | |
Benefits paid | 0 | (1,057) | |
Settlements | 0 | (67,728) | |
Fair value of plan assets at end of year | 0 | 0 | 58,378 |
Funded status | 0 | 0 | |
Other Defined Benefit Plans [Member] | |||
Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 2,639 | 2,669 | |
Service cost | 0 | 0 | |
Interest cost | 83 | 91 | 107 |
Actuarial (gains) losses | 172 | 73 | |
Benefits paid | (195) | (194) | |
Settlements | (91) | 0 | |
Benefit obligation at end of year | 2,608 | 2,639 | 2,669 |
Accumulated benefit obligation | 2,608 | 2,639 | |
Change in Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 286 | 194 | |
Benefits paid | (195) | (194) | |
Settlements | (91) | 0 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status | $ (2,608) | $ (2,639) |
Employee Benefit Plans (Amounts
Employee Benefit Plans (Amounts Recognized in the Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other current liabilities | $ 0 | $ 0 |
Other noncurrent liabilities | 0 | 0 |
Net amount recognized | 0 | 0 |
Other Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other current liabilities | (280) | (259) |
Other noncurrent liabilities | (2,328) | (2,380) |
Net amount recognized | $ (2,608) | $ (2,639) |
Employee Benefit Plans (Amoun65
Employee Benefit Plans (Amounts Recognized in Accumulated Other Comprehensive Income, Not Yet Recognized as a Component of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Unamortized actuarial losses, net | $ 0 | $ 0 |
Other Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Unamortized actuarial losses, net | (1,092) | $ (1,033) |
Maximum [Member] | Other Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated other comprehensive income to be recognized in 2018 | $ 100 |
Employee Benefit Plans (Compone
Employee Benefit Plans (Components Of The Change In Unamortized Actuarial Losses, Net, Included In Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Net gain | $ 603 | $ (3,894) | |
Settlement loss recognized | $ 21 | 24,297 | |
Minimum pension liability adjustment | 37 | (21,819) | (2,230) |
Total minimum pension liability adjustments included as a component of accumulated other comprehensive loss, net of tax | (1,000) | (900) | |
Total minimum pension liability adjustments included as a component of accumulated other comprehensive loss, tax benefit | 100 | 100 | |
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Balance, beginning of year | 0 | (23,955) | |
Benefit obligation actuarial loss | 0 | (945) | |
Amortization of net loss | 0 | 0 | 1,733 |
Net gain | 0 | 603 | |
Settlement loss recognized | 0 | 24,297 | 0 |
Balance, end of year | 0 | 0 | (23,955) |
Other Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Balance, beginning of year | (1,033) | (1,045) | |
Benefit obligation actuarial loss | (172) | (73) | |
Amortization of net loss | 92 | 85 | 79 |
Settlement loss recognized | 21 | 0 | 0 |
Balance, end of year | $ (1,092) | $ (1,033) | $ (1,045) |
Employee Benefit Plans (Compo67
Employee Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum pension liability adjustment | $ 37 | $ (21,819) | $ (2,230) |
Components of net periodic benefit cost [Abstract] | |||
Settlement loss recognized | 21 | 24,297 | |
Net periodic benefit cost | 200 | 24,600 | 1,800 |
Pension Plan [Member] | |||
Components of net periodic benefit cost [Abstract] | |||
Service cost | 0 | 105 | 380 |
Interest cost | 0 | 0 | 2,983 |
Expected return on plan assets | 0 | 0 | (3,508) |
Amortization of net loss | 0 | 0 | 1,733 |
Settlement loss recognized | 0 | 24,297 | 0 |
Net periodic benefit cost | 0 | 24,402 | 1,588 |
Other comprehensive (income) loss | 0 | (23,955) | (3,619) |
Other Defined Benefit Plans [Member] | |||
Components of net periodic benefit cost [Abstract] | |||
Service cost | 0 | 0 | |
Interest cost | 83 | 91 | 107 |
Amortization of net loss | 92 | 85 | 79 |
Settlement loss recognized | 21 | 0 | 0 |
Net periodic benefit cost | 196 | 176 | 186 |
Other comprehensive (income) loss | $ 59 | $ (12) | $ (36) |
Employee Benefit Plans (Assumpt
Employee Benefit Plans (Assumptions) (Details) | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Weighted-average assumptions used to determine net perioidic pension cost | |||
Discount rate | 3.31% | 3.62% | 4.12% |
Expected long-term rate of return on assets | 5.75% | ||
Other Defined Benefit Plans [Member] | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 3.08% | 3.31% |
Employee Benefit Plans (Benefit
Employee Benefit Plans (Benefits Expected to be Paid in Future Years) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2017 | Dec. 28, 2016 | |
Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions | $ 0 | $ 9,546 |
Other Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions | 286 | $ 194 |
Estimated employer contributions during 2018 | 300 | |
Benefits expected to be paid: | ||
2,018 | 280 | |
2,019 | 564 | |
2,020 | 253 | |
2,021 | 229 | |
2,022 | 296 | |
2023 through 2027 | $ 1,027 |
Employee Benefit Plans (Defined
Employee Benefit Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions | $ 2 | $ 2.2 | $ 1.6 |
Defined contribution 401(k) plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee | 25.00% | ||
Employer matching contribution | 4.00% | 3.00% | |
Non-qualified deferred compensation plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee | 50.00% | ||
Maximum incentive compensation deferral | 100.00% | ||
Employer matching contribution | 3.00% |
Share-Based Compensation (Compo
Share-Based Compensation (Component of Net Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | $ 8,541 | $ 7,610 | $ 6,635 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | 7,838 | 7,236 | 5,821 |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | $ 703 | $ 374 | $ 814 |
Share-Based Compensation (Stock
Share-Based Compensation (Stock Options) (Details) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 27, 2017USD ($)$ / sharesshares | |
Options [Roll Forward]: | |
Outstanding, beginning of year | shares | 1,127 |
Exercised | shares | (227) |
Outstanding, end of year | shares | 900 |
Exercisable, end of year | shares | 900 |
Weighted-Average Exercise Price [Roll Forward]: | |
Outstanding, beginning of year | $ / shares | $ 3.01 |
Exercised | $ / shares | 2.88 |
Outstanding, end of year | $ / shares | 3.04 |
Exercisable, end of year | $ / shares | $ 3.04 |
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value: | |
Outstanding, end of year, weighted-average remaining contractual life | 2 years 3 months 20 days |
Exercisable, end of year, weighted-average remaining contractual life | 2 years 3 months 20 days |
Outstanding, end of year, aggregate intrinsic value | $ | $ 9,320 |
Exercisable, end of year, aggregate intrinsic value | $ | $ 9,320 |
Share-Based Compensation (Restr
Share-Based Compensation (Restricted Stock Units) (Details) - Performance Shares [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Units [Roll Forward]: | |||
Outstanding, beginning of year (shares) | 1,366 | ||
Granted (shares) | 606 | ||
Converted (shares) | (235) | ||
Outstanding, end of year (shares) | 1,737 | 1,366 | |
Weighted-Average Grant Date Fair Value [Roll Forward]: | |||
Outstanding, beginning of year (US$ per share) | $ 9.84 | ||
Granted (US$ per share) | 12.59 | $ 9.47 | $ 11.43 |
Converted (US$ per share) | 7.55 | ||
Outstanding, end of year (US$ per share) | $ 11.11 | $ 9.84 | |
Convertible, end of year (shares) | 488 | ||
Convertible, end of year, weighted-average grant date fair value (US$ per share) | $ 11.43 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 27, 2017USD ($)plans$ / sharesshares | Dec. 28, 2016USD ($)$ / sharesshares | Dec. 30, 2015USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of share-based compensation plans | plans | 4 | ||
Shares available for grant | shares | 700 | ||
Income tax benefits recognized related to share-based compensation | $ 3.3 | $ 3 | $ 2.6 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Contractual life | P10Y | ||
Intrinsic value of the options exercised | $ 2.3 | $ 1.4 | $ 1.4 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 12.59 | $ 9.47 | $ 11.43 |
Performance period | 3 years | ||
Cash payments | $ 3.9 | $ 2.5 | $ 3.4 |
Intrinsic value of shares converted | 5 | 3.5 | $ 4.9 |
Accrued compensation included as a component of other current liabilities | 0.4 | 3.9 | |
Accrued compensation included as a component of other noncurrent liabilities | 0.4 | $ 0.3 | |
Unrecognized compensation cost related to unvested performance share awards outstanding | $ 8 | ||
Unrecognized compensation cost, expected weighted average period | 1 year 8 months 10 days | ||
Stock units outstanding | shares | 1,737 | 1,366 | |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted | shares | 100 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 12.04 | ||
Performance period | 1 year | ||
Unrecognized compensation cost related to unvested performance share awards outstanding | $ 0.5 | ||
Unrecognized compensation cost, expected weighted average period | 8 months 18 days | ||
Cash payments | $ 0.5 | ||
Stock units outstanding | shares | 900 | 900 | |
Minimum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target award to be earned (in hundredths) | 0.00% | ||
Maximum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target award to be earned (in hundredths) | 150.00% | ||
Performance shares that vest based on TSR [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted | shares | 300 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 13.05 | ||
Performance shares that vest based on EBITDA growth [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted | shares | 300 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 12.17 | ||
2017 Omnibus Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant | shares | 4,300 |
Income Taxes (Provisions) (Deta
Income Taxes (Provisions) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | Dec. 28, 2011 | |
Current: | ||||
Federal | $ 3,688 | $ 4,270 | $ 1,622 | |
State and local | 2,071 | 2,316 | 1,382 | |
Foreign | 961 | 912 | 873 | |
Deferred: | ||||
Federal | 10,075 | 8,225 | 12,264 | |
State and local | 196 | 619 | 1,742 | |
Increase (release) of valuation allowance | 216 | 132 | (130) | $ (7,200) |
Total provisions for income taxes | $ 17,207 | $ 16,474 | $ 17,753 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | Dec. 28, 2011 | |
Effective tax rate reconciliation [Line Items] | ||||
U.S. statutory tax rate | 35.00% | 35.00% | 35.00% | |
Reconciliation of income taxes at the U.S. federal statutory tax rate to effective tax rate: | ||||
U.S. statutory tax rate | 35.00% | 35.00% | 35.00% | |
State and local taxes, net of federal income tax benefit | 5.00% | 9.00% | 6.00% | |
Wage addback on income tax credits earned | 2.00% | 3.00% | 2.00% | |
General business credits generated | (5.00%) | (9.00%) | (6.00%) | |
Foreign tax credits generated | (2.00%) | (12.00%) | (2.00%) | |
Pension plan liquidation | 0.00% | 18.00% | 0.00% | |
Share-based compensation | (3.00%) | (0.00%) | (0.00%) | |
Impact of tax reform | (3.00%) | (0.00%) | (0.00%) | |
Other | 1.00% | 2.00% | (2.00%) | |
Effective tax rate | 30.00% | 46.00% | 33.00% | |
Net tax benefit recognized related to the Tax Act | $ 1,600 | |||
Tax benefit recognized related to share-based compensation | 1,700 | |||
Tax benefit recognized with pension plan liquidation | $ 2,100 | |||
Pension settlement loss | (21) | (24,297) | ||
Tax benefit recognized with reversal of the valuation allowance | $ (216) | (132) | $ 130 | $ 7,200 |
Tax benefit recognized with foreign tax credits | $ 3,700 | |||
Tax Year 2018 [Member] | ||||
Effective tax rate reconciliation [Line Items] | ||||
U.S. statutory tax rate | 21.00% | |||
Reconciliation of income taxes at the U.S. federal statutory tax rate to effective tax rate: | ||||
U.S. statutory tax rate | 21.00% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Deferred tax assets: | ||
Self-insurance accruals | $ 4,364 | $ 7,791 |
Capitalized leases | 1,718 | 2,298 |
Accrued exit cost | 487 | 1,074 |
Interest rate swaps | 566 | 294 |
Pension, other retirement and compensation plans | 10,328 | 12,378 |
Other accruals | 443 | 386 |
Alternative minimum tax credit carryforwards | 3,534 | 3,534 |
General business credit carryforwards - state and federal | 13,355 | 13,541 |
Net operating loss carryforwards - state | 14,096 | 11,753 |
Total deferred tax assets before valuation allowance | 48,891 | 53,049 |
Less: valuation allowance | (13,078) | (12,567) |
Total deferred tax assets | 35,813 | 40,482 |
Deferred tax liabilities: | ||
Intangible assets | (14,578) | (22,073) |
Deferred finance costs | (111) | (125) |
Fixed assets | (4,179) | (601) |
Total deferred tax liabilities | (18,868) | (22,799) |
Net deferred tax asset | $ 16,945 | $ 17,683 |
Income Taxes Income Taxes (Unre
Income Taxes Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2017 | Dec. 28, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 1,180 | $ 0 |
Increases related to prior-year tax positions | 289 | 1,180 |
Balance, end of year | 1,469 | 1,180 |
Interest and penalties recognized on unrecognized tax benefits | $ 100 | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 28, 2016 |
Valuation Allowance [Line Items] | ||
Tax credit carryforward | $ 13,355 | $ 13,541 |
Alternative minimum tax credit carryforwards | 3,534 | 3,534 |
Valuation allowance | 13,078 | $ 12,567 |
General Business Tax Credit Carryforward [Member] | ||
Valuation Allowance [Line Items] | ||
Tax credit carryforward | 9,600 | |
Alternative Minimum Tax Credit Carryforward [Member] | ||
Valuation Allowance [Line Items] | ||
Alternative minimum tax credit carryforwards | 3,500 | |
South Carolina NOL Carryforwards [Member] | ||
Valuation Allowance [Line Items] | ||
Valuation allowance | $ 11,800 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 27, 2017 | Sep. 27, 2017 | Jun. 28, 2017 | Mar. 29, 2017 | Dec. 28, 2016 | Sep. 28, 2016 | Jun. 29, 2016 | Mar. 30, 2016 | Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||
Net income | $ 13,147 | $ 9,325 | $ 8,749 | $ 8,373 | $ 11,274 | $ 9,726 | $ (11,552) | $ 9,954 | $ 39,594 | $ 19,402 | $ 35,976 | ||||||||
Weighted average shares outstanding - basic (in shares) | 68,077 | 75,325 | 82,627 | ||||||||||||||||
Effect of dilutive share-based compensation awards | 2,326 | 1,881 | 2,102 | ||||||||||||||||
Weighted average shares outstanding - diluted (in shares) | 70,403 | 77,206 | 84,729 | ||||||||||||||||
Basic net income per share | $ 0.20 | [1] | $ 0.14 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.16 | [2] | $ 0.13 | [2] | $ (0.15) | [2] | $ 0.13 | [2] | $ 0.58 | $ 0.26 | $ 0.44 |
Diluted net income per share | $ 0.19 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.11 | [1] | $ 0.15 | [2] | $ 0.13 | [2] | $ (0.15) | [2] | $ 0.13 | [2] | $ 0.56 | $ 0.25 | $ 0.42 |
Anti-dilutive share-based compensation awards (in shares) | 606 | 0 | 0 | ||||||||||||||||
[1] | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding | ||||||||||||||||||
[2] | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Shareholders' Equity (Share Rep
Shareholders' Equity (Share Repurchases) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock shares repurchased during the period (shares) | 6,800 | 4,580 | 8,500 |
Common stock shares repurchased during the period (value in US$) | $ 82,858 | $ 51,771 | $ 92,676 |
Share Repurchase Program 2017 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount (dollars) | 200,000 | ||
Remaining shares to be repurchased (value in US$) | 196,300 | ||
Share Repurchase Program 2016 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount (dollars) | 100,000 | ||
Share Repurchase Program 2015 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount (dollars) | $ 100,000 | ||
November 2015 Accelerated Share Repurchase [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount (dollars) | $ 50,000 | ||
Common stock shares repurchased during the period (shares) | 1,500 | 3,500 | |
Volume-weighted average price | $ 9.90 | ||
Common stock shares repurchased during the period (value in US$) | $ 13,100 | $ 36,900 | |
Remaining shares to be repurchased (value in US$) | $ 13,100 | ||
November 2016 Accelerated Share Repurchase [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount (dollars) | $ 25,000 | ||
Common stock shares repurchased during the period (shares) | 500 | 1,500 | |
Volume-weighted average price | $ 12.36 | ||
Common stock shares repurchased during the period (value in US$) | $ 6,900 | $ 18,100 | |
Remaining shares to be repurchased (value in US$) | $ 6,900 |
Shareholders' Equity Sharehol82
Shareholders' Equity Shareholders' Equity (Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | ||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | ||||
Accumulated other comprehensive loss, net of tax, beginning balance | $ (1,407) | $ (23,777) | $ (24,602) | |
Benefit obligation actuarial gain (loss) | (172) | (1,018) | 5,737 | |
Net gain (loss) | 603 | (3,894) | ||
Amortization of net loss | [1] | 92 | 85 | 1,812 |
Settlement loss recognized | 21 | 24,297 | ||
Net change in fair value of derivatives | (1,359) | 1,693 | (1,444) | |
Reclassification of derivatives to interest expense | [2] | (72) | (789) | (859) |
Income tax benefit (expense) | 581 | (2,501) | (527) | |
Accumulated other comprehensive loss, net of tax, ending balance | (2,316) | (1,407) | (23,777) | |
Estimated reclassification from other comprehensive income to interest expense related to the interest rate swaps over the next 12 months | 1,300 | |||
Pensions [Member] | ||||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | ||||
Accumulated other comprehensive loss, net of tax, beginning balance | (945) | (22,764) | (24,994) | |
Benefit obligation actuarial gain (loss) | (172) | (1,018) | 5,737 | |
Net gain (loss) | 603 | (3,894) | ||
Amortization of net loss | [1] | 92 | 85 | 1,812 |
Settlement loss recognized | 21 | 24,297 | ||
Income tax benefit (expense) | 22 | (2,148) | (1,425) | |
Accumulated other comprehensive loss, net of tax, ending balance | (982) | (945) | (22,764) | |
Derivatives [Member] | ||||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | ||||
Accumulated other comprehensive loss, net of tax, beginning balance | (462) | (1,013) | 392 | |
Net change in fair value of derivatives | (1,359) | 1,693 | (1,444) | |
Reclassification of derivatives to interest expense | [2] | (72) | (789) | (859) |
Income tax benefit (expense) | 559 | (353) | 898 | |
Accumulated other comprehensive loss, net of tax, ending balance | $ (1,334) | $ (462) | $ (1,013) | |
[1] | Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Income. See Note 11 for additional details. | |||
[2] | Amounts reclassified from accumulated other comprehensive loss into income, represent payments made to the counterparty for the effective portions of the interest rate swaps. These amounts are included as a component of interest expense in our Consolidated Statements of Income. We expect to reclassify approximately $1.3 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 10 for additional details. |
Commitments and Contingencies83
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 27, 2017 | Dec. 28, 2016 | |
Guarantor Obligations [Line Items] | ||
Loan amounts outstanding under the loan pools | $ 5.1 | $ 7.9 |
Maximum payments guaranteed | 1.1 | |
Liabilities included as a component of other noncurrent liabilities and deferred credits | $ 0.1 | $ 0.1 |
Minimum [Member] | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations, term | 1 | |
Maximum [Member] | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations, term | 4 |
Commitments and Contingencies84
Commitments and Contingencies (Future Commitments) (Details) $ in Thousands | Dec. 27, 2017USD ($) |
Payments due by period: | |
Less than 1 year | $ 194,446 |
1-2 years | 0 |
3-4 years | 0 |
5 years and thereafter | 0 |
Total | $ 194,446 |
Supplemental Cash Flow Inform85
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |||
Income taxes paid, net | $ 6,367 | $ 3,012 | $ 5,364 |
Interest paid | 14,636 | 11,288 | 8,141 |
Noncash investing and financing activities: | |||
Notes received in connection with disposition of property | 1,750 | 0 | 0 |
Property acquisition payable | 500 | 0 | 573 |
Accrued purchase of property | 531 | 1,445 | 1,781 |
Insurance proceeds receivable | 364 | 0 | 0 |
Issuance of common stock, pursuant to share-based compensation plans | 4,961 | 3,597 | 4,551 |
Execution of capital leases | 6,573 | 9,597 | 5,556 |
Treasury stock payable | $ 120 | $ 313 | $ 185 |
Quarterly Data (Unaudited) (Det
Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 27, 2017 | Sep. 27, 2017 | Jun. 28, 2017 | Mar. 29, 2017 | Dec. 28, 2016 | Sep. 28, 2016 | Jun. 29, 2016 | Mar. 30, 2016 | Dec. 27, 2017 | Dec. 28, 2016 | Dec. 30, 2015 | |||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||
Company restaurant sales | $ 100,303 | $ 97,915 | $ 98,355 | $ 93,779 | $ 94,592 | $ 93,122 | $ 89,210 | $ 90,386 | $ 390,352 | $ 367,310 | $ 353,073 | ||||||||
Franchise and licensing revenue | 35,196 | 34,469 | 35,021 | 34,131 | 35,013 | 35,264 | 35,105 | 34,256 | 138,817 | 139,638 | 138,220 | ||||||||
Total operating revenue | 135,499 | 132,384 | 133,376 | 127,910 | 129,605 | 128,386 | 124,315 | 124,642 | 529,169 | 506,948 | 491,293 | ||||||||
Total operating costs and expenses | 116,646 | 113,849 | 116,367 | 111,609 | 113,583 | 110,809 | 129,148 | 106,409 | 458,471 | 459,949 | 428,142 | ||||||||
Operating income | 18,853 | 18,535 | 17,009 | 16,301 | 16,022 | 17,577 | (4,833) | 18,233 | 70,698 | 46,999 | 63,151 | ||||||||
Net income | $ 13,147 | $ 9,325 | $ 8,749 | $ 8,373 | $ 11,274 | $ 9,726 | $ (11,552) | $ 9,954 | $ 39,594 | $ 19,402 | $ 35,976 | ||||||||
Basic net income per share | $ 0.20 | [1] | $ 0.14 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.16 | [2] | $ 0.13 | [2] | $ (0.15) | [2] | $ 0.13 | [2] | $ 0.58 | $ 0.26 | $ 0.44 |
Diluted net income per share | $ 0.19 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.11 | [1] | $ 0.15 | [2] | $ 0.13 | [2] | $ (0.15) | [2] | $ 0.13 | [2] | $ 0.56 | $ 0.25 | $ 0.42 |
[1] | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding | ||||||||||||||||||
[2] | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Event (Details) - Interest Rate Swaps 2020-2033 [Member] - Subsequent Event [Member] $ in Millions | Feb. 15, 2018USD ($) |
Subsequent Event [Line Items] | |
Average fixed interest rate on interest rate swap | 5.19% |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Derivative, notional amount | $ 80 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Derivative, notional amount | $ 425 |