Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 01, 2019 | Feb. 21, 2019 | Jul. 03, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | CHEESECAKE FACTORY INC | ||
Entity Central Index Key | 887,596 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 1, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-01 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,399,934,969 | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 45,124,393 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 26,578 | $ 6,008 |
Accounts receivable | 20,928 | 19,865 |
Income taxes receivable | 15,016 | |
Other receivables | 68,193 | 67,518 |
Inventories | 38,886 | 42,560 |
Prepaid expenses | 40,645 | 57,666 |
Total current assets | 195,230 | 208,633 |
Property and equipment, net | 913,275 | 935,045 |
Other assets: | ||
Intangible assets, net | 26,209 | 24,065 |
Prepaid rent | 34,961 | 39,399 |
Investments in unconsolidated affiliates | 79,767 | 59,521 |
Other | 64,691 | 66,397 |
Total other assets | 205,628 | 189,382 |
Total assets | 1,314,133 | 1,333,060 |
Current liabilities: | ||
Accounts payable | 49,071 | 50,984 |
Income taxes payable | 712 | |
Gift card liability | 172,336 | 163,951 |
Other accrued expenses | 194,381 | 183,016 |
Total current liabilities | 416,500 | 397,951 |
Deferred income taxes | 52,123 | 57,216 |
Deferred rent liabilities | 79,697 | 74,761 |
Deemed landlord financing liability | 113,095 | 108,627 |
Long-term debt | 10,000 | 10,000 |
Other noncurrent liabilities | 71,659 | 70,975 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued | ||
Common stock, $.01 par value, 250,000,000 shares authorized; 96,621,990 and 95,412,030 shares issued at January 1, 2019 and January 2, 2018, respectively | 967 | 954 |
Additional paid-in capital | 828,676 | 799,862 |
Retained earnings | 1,384,494 | 1,345,666 |
Treasury stock, 51,791,941 and 49,534,212 shares at cost at January 1, 2019 and January 2, 2018, respectively | (1,642,140) | (1,532,864) |
Accumulated other comprehensive loss | (938) | (88) |
Total stockholders' equity | 571,059 | 613,530 |
Total liabilities and stockholders' equity | $ 1,314,133 | $ 1,333,060 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 01, 2019 | Jan. 02, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 96,621,990 | 95,412,030 |
Treasury stock, shares | 51,791,941 | 49,534,212 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 2,332,331 | $ 2,260,502 | $ 2,275,719 |
Costs and expenses: | |||
Cost of sales | 532,880 | 519,388 | 526,628 |
Labor expenses | 834,134 | 777,595 | 759,998 |
Other operating costs and expenses | 566,825 | 552,791 | 540,365 |
General and administrative expenses | 154,770 | 141,533 | 146,042 |
Depreciation and amortization expenses | 95,976 | 92,729 | 88,010 |
Impairment of assets and lease terminations | 17,861 | 10,343 | 114 |
Preopening costs | 10,937 | 13,278 | 13,569 |
Total costs and expenses | 2,213,383 | 2,107,657 | 2,074,726 |
Income from operations | 118,948 | 152,845 | 200,993 |
Loss on investments in unconsolidated affiliates | (4,754) | (479) | |
Interest and other expense, net | (6,783) | (5,900) | (9,225) |
Income before income taxes | 107,411 | 146,466 | 191,768 |
Income tax provision/(benefit) | 8,376 | (10,926) | 52,274 |
Net income | $ 99,035 | $ 157,392 | $ 139,494 |
Net income per share: | |||
Basic (in dollars per share) | $ 2.19 | $ 3.35 | $ 2.91 |
Diluted (in dollars per share) | $ 2.14 | $ 3.27 | $ 2.83 |
Weighted average shares outstanding: | |||
Basic (in shares) | 45,263 | 46,930 | 47,981 |
Diluted (in shares) | 46,215 | 48,152 | 49,372 |
Cash dividends declared per common share (in dollars per share) | $ 1.24 | $ 1.06 | $ 0.88 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 99,035 | $ 157,392 | $ 139,494 |
Other comprehensive loss: | |||
Foreign currency translation adjustment | (850) | (88) | |
Other comprehensive loss | (850) | (88) | |
Total comprehensive income | $ 98,185 | $ 157,304 | $ 139,494 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 29, 2015 | $ 931 | $ 710,242 | $ 1,140,788 | $ (1,263,422) | $ 588,539 | |
Balance (in shares) at Dec. 29, 2015 | 93,127 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 139,494 | 139,494 | ||||
Cash dividends declared | (42,270) | (42,270) | ||||
Tax impact of stock options exercised, net of cancellations | 13,722 | 13,722 | ||||
Stock-based compensation | 21,811 | 21,811 | ||||
Common stock issued under stock-based compensation plans | $ 16 | 28,362 | 28,378 | |||
Common stock issued under stock-based compensation plans (in shares) | 1,545 | |||||
Treasury stock purchases | (146,467) | (146,467) | ||||
Balance at Jan. 03, 2017 | $ 947 | 774,137 | 1,238,012 | (1,409,889) | 603,207 | |
Balance (in shares) at Jan. 03, 2017 | 94,672 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 157,392 | 157,392 | ||||
Foreign currency translation adjustment | $ (88) | (88) | ||||
Cash dividends declared | (49,738) | (49,738) | ||||
Stock-based compensation | 16,696 | 16,696 | ||||
Common stock issued under stock-based compensation plans | $ 7 | 9,029 | 9,036 | |||
Common stock issued under stock-based compensation plans (in shares) | 740 | |||||
Treasury stock purchases | (122,975) | (122,975) | ||||
Balance at Jan. 02, 2018 | $ 954 | 799,862 | 1,345,666 | (1,532,864) | (88) | 613,530 |
Balance (in shares) at Jan. 02, 2018 | 95,412 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect of adopting the pronouncement related to revenue recognition | Accounting Standards Update 2014-09 | (3,560) | (3,560) | ||||
Balance (as adjusted) | $ 954 | 799,862 | 1,342,106 | (1,532,864) | (88) | 609,970 |
Net income | 99,035 | 99,035 | ||||
Foreign currency translation adjustment | (850) | (850) | ||||
Cash dividends declared | (56,647) | (56,647) | ||||
Stock-based compensation | $ 6 | 20,245 | 20,251 | |||
Stock-based compensation (in shares) | 554 | |||||
Common stock issued under stock-based compensation plans | $ 7 | 8,569 | 8,576 | |||
Common stock issued under stock-based compensation plans (in shares) | 656 | |||||
Treasury stock purchases | (109,276) | (109,276) | ||||
Balance at Jan. 01, 2019 | $ 967 | $ 828,676 | $ 1,384,494 | $ (1,642,140) | $ (938) | $ 571,059 |
Balance (in shares) at Jan. 01, 2019 | 96,622 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 99,035 | $ 157,392 | $ 139,494 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization expenses | 95,976 | 92,729 | 88,010 |
Deferred income taxes | (5,510) | (25,180) | (1,005) |
Impairment of assets and lease terminations | 16,411 | 10,586 | 114 |
Stock-based compensation | 19,988 | 16,457 | 21,473 |
Tax impact of stock options exercised, net of cancellations | 13,722 | ||
Loss from investments in unconsolidated affiliates | 4,754 | 479 | |
Other | 3,592 | ||
Changes in assets and liabilities: | |||
Accounts receivable | (1,018) | (4,233) | (1,473) |
Other receivables | 4,698 | (2,955) | 8,066 |
Inventories | 3,667 | (7,634) | (916) |
Prepaid expenses | 6,262 | (5,227) | (10,462) |
Other assets | 7,406 | (9,034) | (2,818) |
Accounts payable | 5,601 | 3,771 | 752 |
Income taxes receivable/payable | 15,729 | (17,315) | 21,837 |
Other accrued expenses | 18,316 | 28,960 | 35,995 |
Cash provided by operating activities | 291,315 | 238,796 | 316,381 |
Cash flows from investing activities: | |||
Additions to property and equipment | (102,909) | (120,779) | (115,821) |
Additions to intangible assets | (3,020) | (1,654) | (1,640) |
Investments in unconsolidated affiliates | (25,000) | (18,000) | (42,000) |
Proceeds from variable life insurance contract | 540 | ||
Cash used in investing activities | (130,389) | (140,433) | (159,461) |
Cash flows from financing activities: | |||
Deemed landlord financing proceeds | 21,788 | 12,128 | 17,246 |
Deemed landlord financing payments | (5,128) | (4,391) | (3,721) |
Borrowings on credit facility | 70,000 | 85,000 | 35,000 |
Repayments on credit facility | (70,000) | (75,000) | (35,000) |
Proceeds from exercise of stock options | 8,576 | 9,036 | 28,378 |
Cash dividends paid | (56,251) | (49,889) | (42,371) |
Treasury stock purchases | (109,276) | (122,975) | (146,467) |
Cash used in financing activities | (140,291) | (146,091) | (146,935) |
Foreign currency translation adjustment | (65) | (103) | |
Net change in cash and cash equivalents | 20,570 | (47,831) | 9,985 |
Cash and cash equivalents at beginning of period | 6,008 | 53,839 | 43,854 |
Cash and cash equivalents at end of period | 26,578 | 6,008 | 53,839 |
Supplemental disclosures: | |||
Interest paid | 8,156 | 7,128 | 6,038 |
Income taxes paid | 10,149 | 31,582 | 17,932 |
Construction payable | 4,585 | $ 12,145 | $ 6,541 |
Non-cash operating: | |||
Settlement of sale-leaseback accounting | 11,863 | ||
Non-cash investing: | |||
Settlement of landlord sale-leaseback accounting | 6,824 | ||
Non-cash financing: | |||
Settlement of landlord financing obligation for sale-leaseback leases | (18,687) | ||
Deemed landlord financing proceeds | $ 13,748 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 01, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business As of March 4, 2019, The Cheesecake Factory Incorporated operated 218 Company-owned restaurants under The Cheesecake Factory®, Grand Lux Cafe®, RockSugar Southeast Asian Kitchen® marks and one under the Social Monk Asian KitchenTM mark. In addition, 21 The Cheesecake Factory branded restaurants in the Middle East, Mexico, the Chinese Mainland and Special Administrative Region of Hong Kong were operated by third parties under licensing agreements. We also operated two bakery production facilities that produce desserts for our restaurants, international licensees and third-party bakery customers. We are selectively pursuing other means to leverage our competitive strengths, including investing in or acquiring new restaurant concepts (such as North Italia (R) and Flower Child®), expanding The Cheesecake Factory ® brand to other retail opportunities through The Cheesecake Factory At Home ® consumer packaged goods, and evaluating the future potential of Social Monk Asian Kitchen, our new fast casual concept. Basis of Presentation The accompanying consolidated financial statements include the accounts of The Cheesecake Factory Incorporated and its wholly owned subsidiaries (referred to herein as the “Company,” “we,” “us” and “our”) prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany accounts and transactions for the periods presented have been eliminated in consolidation. We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2018 and 2017 each consisted of 52 weeks, while fiscal year 2016 consisted of 53 weeks . In fiscal 2018, we separately disclosed our investments in unconsolidated affiliates on the consolidated balance sheet and our related share of losses on the consolidated statement of income and statement of cash flow. Corresponding prior year balances were reclassified to conform to the current year presentation. In the fourth quarter of fiscal 2018, it was determined that complimentary meals had not been appropriately presented in our consolidated statements of income, resulting in an overstatement of our revenue and operating expenses. The Company corrected the error related to prior interim periods during 2018 by reclassifying complimentary meals out of revenue and other operating expenses in the amount of $23.3 million for fiscal 2018. Further, the associated cost of complimentary meals was reclassified as other operating expenses versus cost of sales and labor in the amount of $5.8 million and $4.4 million, respectively. The reclassifications had no impact on previously reported income from operations, net income, or net income per share. The Company did not correct the 2017 and 2016 annual financial statements as the Company does not consider the impact of the prior period error to be material to the 2017 and 2016 consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ from these estimates. Cash and Cash Equivalents Amounts receivable from credit card processors, totaling $17.3 million and $13.8 million at January 1, 2019 and January 2, 2018, respectively, are considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates book overdrafts. Book overdrafts are presented as a current liability in other accrued expenses on our consolidated balance sheet. Accounts and Other Receivables Our accounts receivable principally result from credit sales to bakery customers. Other receivables consist primarily of amounts due from our gift card distributors and landlords. Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are cash and cash equivalents and receivables. We maintain our day-to-day operating cash balances in non-interest-bearing transaction accounts, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. We invest our excess cash in a money market deposit account, which is insured by the FDIC up to $250,000. Although we maintain balances that exceed the federally insured limit, we have not experienced any losses related to this balance, and we believe credit risk to be minimal. We consider the concentration of credit risk for accounts receivable to be minimal due to the payment histories and general financial condition of our larger bakery customers. Concentration of credit risk related to other receivables is limited as this balance is comprised primarily of amounts due from our gift card distributors and landlords. Fair Value of Financial Instruments For cash equivalents, the carrying amount approximates fair value because of the short maturity of these instruments. The fair value of deemed landlord financing liabilities is determined using current applicable rates for similar instruments as of the balance sheet date in accordance with Level 2 of a three-level hierarchy established by accounting standards. Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities. At January 1, 2019, the fair value of our deemed landlord financing liabilities was $117.0 million versus a carrying value of $118.6 million. Inventories Inventories consist of restaurant food and other supplies, bakery raw materials, and bakery finished goods and are stated at the lower of cost or net realizable value on an average cost basis at the restaurants and on a first-in, first-out basis at the bakeries. Property and Equipment We record property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of our internal development and construction department. Depreciation and amortization periods are as follows: Buildings and land improvements 25 to 30 years Leasehold improvements 10 to 30 years Furnishings, fixtures and equipment 3 to 15 years Computer software and equipment 5 years Gains and losses related to property and equipment disposals are recorded in depreciation and amortization expenses. Intangible assets, net Our leasehold acquisition assets and non-transferable alcoholic beverage licenses are amortized over the associated lease term and are tested for impairment using the methodology discussed in impairment of long-lived assets and lease terminations. At January 1, 2019 and January 2, 2018, the amounts included in intangibles, net for these items were $9.1 million and $8.9 million, respectively. Amortization expenses related to these assets was $0.6 million for fiscal 2018, 2017 and 2016. Our trademarks and transferable alcoholic beverage licenses have indefinite lives and, therefore, are not subject to amortization. At January 1, 2019 and January 2, 2018, the amounts included in intangibles, net for these items were $17.1 million and $15.2 million, respectively. We test these assets for impairment at least annually by comparing the fair value of each asset with its carrying amount. Impairment of Long-Lived Assets and Lease Terminations We assess the potential impairment of our long-lived assets on an annual basis or whenever events or changes in circumstances indicate the carrying value of the assets or asset group may not be recoverable. Factors considered include, but are not limited to, negative cash flow, significant underperformance relative to historical or projected future operating results, significant changes in the manner in which an asset is being used, an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life and significant negative industry or economic trends. At any given time, we may be monitoring a small number of locations, and future impairment charges could be required if individual restaurant performance does not improve or we make the decision to close or relocate a restaurant. We have determined that our asset group for impairment testing is comprised of the assets and liabilities of each of our individual restaurants, as this is the lowest level of identifiable cash flows. We have identified leasehold improvements as the primary asset because it is the most significant component of our restaurant assets, it is the principal asset from which our restaurants derive their cash flow generating capacity and it has the longest remaining useful life. The recoverability is assessed by comparing the carrying value of the assets to the undiscounted cash flows expected to be generated by these assets. Impairment losses are measured as the amount by which the carrying values of the assets exceed their fair values. In fiscal 2018, we recorded $17.9 million of lease termination costs and impairment expense in fiscal 2018 related to three The Cheesecake Factory restaurants, including two closures, one Grand Lux Cafe and one RockSugar Southeast Asian Kitchen. In fiscal 2017, we recorded $10.3 million of accelerated depreciation and impairment expense related to three The Cheesecake Factory restaurants, including one relocation and one lease expiration, and one Grand Lux Cafe. In fiscal 2016, we recorded $0.1 million of accelerated depreciation expense related to the planned relocation of one The Cheesecake Factory restaurant, which subsequently took place in fiscal 2017. Investments in Unconsolidated Affiliates During fiscal years 2018, 2017 and 2016, we made minority equity investments in two restaurant concepts, North Italia and Flower Child, bringing our percentage of ownership to 49% and 46%, respectively, at January 1, 2019. Since we hold a number of rights with regard to participation in policy-making processes, but do not control these entities, we account for these investments under the equity method. Accordingly, we recognize our proportionate share of the reported earnings or losses of these entities on the consolidated statements of income and as an adjustment to our investments on the consolidated balance sheets. We assess the potential impairment of our equity investments whenever events or changes in circumstances indicate that a decrease in value of the investment has occurred that is other than temporary, in which case we would recognize the decrease even though it is in excess of what would otherwise be recognized by application of the equity method. Revenue Recognition Our revenues consist of sales at our Company-owned restaurants, sales from our bakery operations to our licensees and other third-party customers, royalties from our licensees’ restaurant sales and from consumer packaged goods sales, and licensee development and site fees. Revenues are presented net of sales taxes. Sales tax collected is included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. Revenues from bakery sales are recognized upon transfer of title and risk to customers. Royalty revenues are recognized in the period the related sales occur, utilizing the sale-based royalty exception available under current accounting guidance. Our consumer packaged goods minimum guarantees do not require distinct performance obligations. Therefore, related revenue is recognized on a straight-line basis over the life of the applicable agreements, ranging from one to three years. As our development and site fee agreements do not contain distinct performance obligations, related revenue is recognized on a straight-line basis over the life of the applicable agreements, ranging from eight to 30 years. In fiscal 2018, we deferred revenue of $0.9 million for new minimum guarantees for consumer packaged goods and recognized minimum guarantee revenue of $0.8 million. In fiscal 2018, we deferred revenue of $0.2 million for new site and development agreements and recognized revenue of $0.4 million. Prior to the adoption of the new revenue recognition standard, we recognized revenue for development fees upon execution of new development agreements and for site fees upon our approval of new restaurant sites. Under previous guidance, we would have recognized site and development fee revenue of $0.2 million during fiscal 2018. We recognize a liability upon the sale of our gift cards and recognize revenue when these gift cards are redeemed in our restaurants. Based on our historical redemption patterns, we can reasonably estimate the amount of gift cards for which redemption is remote, which is referred to as “breakage.” Breakage is recognized over a three-year period in proportion to historical redemption trends and is classified as revenues in our consolidated statements of income. We recognized $8.0 million, $7.9 million and $7.6 million of gift card breakage in fiscal years 2018, 2017 and 2016, respectively. Incremental direct costs related to gift card sales, including commissions and credit card fees, are deferred and recognized in earnings in the same pattern as the related gift card revenue. There were no changes to our accounting for gift card revenue and related costs upon adoption of the new revenue recognition standard. Certain of our promotional programs include multiple element arrangements that incorporate various performance obligations. We allocate revenue using the relative selling price of each performance obligation considering the likelihood of redemption and recognize revenue upon satisfaction of each performance obligation. During fiscal 2018, we deferred revenue of $7.0 million related to promotional programs and recognized $5.9 million of previously deferred revenue related to promotional programs. (See Recent Accounting Pronouncements for further discussion of our adoption of the new revenue recognition accounting guidance.) Leases We currently lease all of our restaurant locations. We evaluate each lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. All of our restaurant leases are classified as operating leases. Minimum base rent, which generally escalates over the term of the lease, is recorded on a straight-line basis over the lease term. The lease term includes the build-out period for our leases, where no rent payments are typically due under the terms of the lease. Contingent rent expense, which is based on a percentage of revenues, is recorded as incurred to the extent it exceeds minimum base rent per the lease agreement. We expend cash for leasehold improvements and furnishings, fixtures and equipment to build out and equip our leased premises. We may also expend cash for structural additions that we make to leased premises. Generally a portion of the leasehold improvements and building costs are reimbursed to us by our landlords as construction contributions. If obtained, landlord construction contributions usually take the form of up-front cash, full or partial credits against our future minimum or percentage rents, or a combination thereof. Depending on the specifics of the leased space and the lease agreement, amounts paid for structural components are recorded during the construction period as either prepaid rent or property and equipment and the landlord construction contributions are recorded as either an offset to prepaid rent or as a deemed landlord financing liability. For those leases for which we are deemed the owner of the property during construction, upon completion, we perform an analysis to determine if they qualify for sale-leaseback treatment. For those qualifying leases, the deemed landlord financing liability and the associated property and equipment are removed and the difference is reclassified to either prepaid or deferred rent and amortized over the lease term as an increase or decrease to rent expense. If the lease does not qualify for sale-leaseback treatment, the deemed landlord financing liability is amortized over the lease term based on the rent payments designated in the lease agreement. Self-Insurance Liabilities We retain the financial responsibility for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, staff member health benefits, employment practices and other insurable risks. The accrued liabilities associated with our self-insured programs are based on our estimate of the ultimate costs to settle known claims, as well as claims incurred but not yet reported to us (“IBNR”) as of the balance sheet date and are recorded in other accrued expenses. Our estimated liabilities, which are not discounted, are based on information provided by our insurance brokers and insurers, combined with our judgment regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation and our claims settlement practices. Stock-Based Compensation We maintain stock-based incentive plans under which equity awards may be granted to staff members and consultants. We account for the awards based on fair value measurement guidance and amortize to expense over the vesting period using a straight-line or graded-vesting schedule, as applicable. (See Note 13 for further discussion of our stock-based compensation.) Advertising Costs We expense advertising production costs at the time the advertising first takes place. All other advertising costs are expensed as incurred. Most of our advertising costs are included in other operating costs and expenses and were $6.1 million, $6.1 million and $7.4 million in fiscal 2018, 2017 and 2016, respectively. Preopening Costs Preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Also included are expenses for maintaining a roster of trained managers for pending openings, the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs, and corporate travel and support activities. We expense preopening costs as incurred. Income Taxes We provide for federal, state and foreign income taxes currently payable and for deferred taxes that result from differences between financial accounting rules and tax laws governing the timing of recognition of various income and expense items. We recognize deferred income tax assets and liabilities for the future tax effects of such temporary differences based on the difference between the financial statement and tax bases of existing assets and liabilities using the statutory rates expected in the years in which the differences are expected to reverse. The effect on deferred taxes of any enacted change in tax rates is recognized in income in the period that includes the enactment date. Income tax credits are recorded as a reduction of tax expense. We account for uncertain tax positions under Financial Accounting Standards Board (“FASB”) guidance, which requires that a position taken or expected to be taken in a tax return be recognized (or derecognized) in the financial statements when it is more likely than not (i.e., a likelihood of more than 50%) that the position would be sustained on its technical merits upon examination by tax authorities, taking into account available administrative remedies and litigation. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution. We recognize interest related to uncertain tax positions in income tax expense. Penalties related to uncertain tax positions are recorded in general and administrative expenses. Net Income per Share Basic net income per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, reduced by unvested restricted stock awards. At January 1, 2019, January 2, 2018 and January 3, 2017, 1.7 million, 1.7 million and 1.9 million shares, respectively, of restricted stock issued to staff members were unvested and, therefore, excluded from the calculation of basic earnings per share for the fiscal years ended on those dates. Diluted net income per share includes the dilutive effect of outstanding equity awards, calculated using the treasury stock method. Shares of common stock equivalents of 1.5 million, 1.6 million and 1.4 million for fiscal 2018, 2017 and 2016, respectively, were excluded from the diluted calculation due to their anti-dilutive effect. Fiscal Year 2018 2017 2016 (In thousands, except per share data) Net income $ 99,035 $ 157,392 $ 139,494 Basic weighted average shares outstanding 45,263 46,930 47,981 Dilutive effect of equity awards 952 1,222 1,391 Diluted weighted average shares outstanding 46,215 48,152 49,372 Basic net income per share $ 2.19 $ 3.35 $ 2.91 Diluted net income per share $ 2.14 $ 3.27 $ 2.83 Comprehensive Income Comprehensive income includes all changes in equity during a period except those resulting from investment by and distribution to owners. For fiscal year 2016, our comprehensive income consisted solely of net income. In fiscal years 2018 and 2017, comprehensive income also included translation gains and losses related to our Canadian restaurant operations. Foreign Currency The Canadian dollar is the functional currency for our Canadian restaurant operations. Revenue and expense accounts are translated into U.S. dollars using the average exchange rates during the reporting period. Assets and liabilities are translated using the exchange rates in effect at the reporting period end date. Equity accounts are translated at historical rates, except for the change in retained earnings which is the result of the income statement translation process. Translation gains and losses are reported as a separate component in our consolidated statements of comprehensive income and would only be realized upon the sale or upon complete or substantially complete liquidation of the business. Gains and losses from foreign currency transactions are recognized in our consolidated statements of income in interest and other expense, net. Recent Accounting Pronouncements Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard on the recognition and measurement of leases, which requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for most leases. The guidance does not make significant changes to the recognition, measurement, and presentation of expenses and cash flows by a lessee. The standard requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases and is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. We will adopt the standard in the first quarter of fiscal 2019 and plan to utilize the alternative transition method, whereby an entity records a cumulative effect adjustment to opening retained earnings in the year of adoption without restating prior periods. We plan to elect the package of practical expedients which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease and our initial direct costs for any leases that exist prior to adoption of the new standard, as well as the practical expedient which allows the use of hindsight in determining our lease terms. We expect the adoption will result in the recognition of right-of-use assets and lease liabilities of approximately $1 billion on our consolidated balance sheet. We also expect approximately $4 million of additional expense on our fiscal 2019 statement of operations due primarily to our election of the hindsight practical expedient. Recently Adopted Accounting Standards In August 2018, the FASB issued accounting guidance that requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement if those costs would be capitalized by the customer in a software licensing arrangement under the current internal-use software standard. This guidance is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. We implemented this guidance on a prospective basis in the third quarter of fiscal 2018 and, as a result, capitalized $0.6 million of implementation costs during fiscal 2018. In May 2014, the FASB issued accounting guidance that provides a comprehensive new revenue recognition model that supersedes most of the existing revenue recognition requirements and requires entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. We implemented this standard as of the first day of fiscal 2018. Utilizing the cumulative-effect method of adoption, we recorded a $4.8 million increase to deferred revenue and a corresponding reduction of $3.6 million, net of tax, to retained earnings to reverse a portion of the previously-recognized development and site fees from our international licensees. Whereas previously we recognized income and received payment upon execution of the agreements and approval of new restaurant sites, respectively, future revenue for these items will be recorded on a straight-line basis over the life of the applicable license agreements as the agreements do not contain distinct performance obligations. Comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of adopting this standard as compared to the previous revenue recognition guidance was not material to our consolidated balance sheet and consolidated statements of income and comprehensive income. |
Other Receivables
Other Receivables | 12 Months Ended |
Jan. 01, 2019 | |
Other Receivables | |
Other Receivables | 2. Other Receivables Other receivables consisted of (in thousands): January 1, 2019 January 2, 2018 Gift card distributors $ 41,996 $ 40,973 Insurance providers 9,020 5,177 Landlord construction contributions 4,976 9,053 Other 12,201 12,315 Total $ 68,193 $ 67,518 |
Inventories
Inventories | 12 Months Ended |
Jan. 01, 2019 | |
Inventories | |
Inventories | 3. Inventories Inventories consisted of (in thousands): January 1, 2019 January 2, 2018 Restaurant food and supplies $ 18,362 $ 18,407 Bakery finished goods and work in progress (1) 13,845 18,423 Bakery raw materials and supplies 6,679 5,730 Total $ 38,886 $ 42,560 (1) Our California bakery was closed from February 2018 to June 2018 while we upgraded the facility. In preparation for lost production capacity, we produced additional inventories during the fourth quarter of fiscal 2017. The additional inventory was utilized during fiscal 2018. |
Prepaid Expenses
Prepaid Expenses | 12 Months Ended |
Jan. 01, 2019 | |
Prepaid Expenses | |
Prepaid Expenses | 4. Prepaid Expenses Prepaid expenses consisted of (in thousands): January 1, 2019 January 2, 2018 Gift card contract assets $ 23,388 $ 23,814 Rent 4,939 12,300 Other 12,318 21,552 Total $ 40,645 $ 57,666 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 01, 2019 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment consisted of (in thousands): January 1, 2019 January 2, 2018 Land and related improvements $ 15,852 $ 15,852 Buildings 44,036 37,633 Leasehold improvements 1,283,233 1,258,132 Furnishings, fixtures and equipment 467,051 456,056 Computer software and equipment 55,434 52,165 Restaurant smallwares 30,268 29,579 Construction in progress 27,975 23,453 Property and equipment, total 1,923,849 1,872,870 Less: Accumulated depreciation (1,010,574) (937,825) Property and equipment, net $ 913,275 $ 935,045 Depreciation expenses related to property and equipment for fiscal 2018, 2017 and 2016 were $93.3 million, $89.6 million and $88.0 million, respectively. Repair and maintenance expenses for fiscal 2018, 2017 and 2016 were $55.2 million, $54.1 million and $50.1 million, respectively. Net expense for property and equipment disposals was $2.1 million, $2.5 million and $3.6 million in fiscal 2018, 2017 and 2016, respectively. |
Other Assets
Other Assets | 12 Months Ended |
Jan. 01, 2019 | |
Other Assets | |
Other Assets | 6. Other Assets Other assets consisted of (in thousands): January 1, 2019 January 2, 2018 Executive Savings Plan trust assets $ 57,605 $ 60,901 Deposits 5,489 5,496 Deferred income taxes 1,597 — Total $ 64,691 $ 66,397 |
Gift Cards
Gift Cards | 12 Months Ended |
Jan. 01, 2019 | |
Gift Cards | |
Gift Cards | 7. Gift Cards The following tables present information related to gift cards (in thousands): Gift card liabilities: January 1, 2019 January 2, 2018 Beginning balance $ 163,951 $ 153,629 Activations 151,084 155,422 Redemptions and breakage (142,699) (145,100) Ending balanace $ 172,336 $ 163,951 Gift card contract assets (1) : January 1, 2019 January 2, 2018 Beginning balance $ 23,814 $ 23,786 Deferrals 18,669 19,217 Amortization (19,095) (19,189) Ending balance $ 23,388 $ 23,814 (1) Included in prepaid expenses on the consolidated balance sheets. |
Other Accrued Expenses
Other Accrued Expenses | 12 Months Ended |
Jan. 01, 2019 | |
Other Accrued Expenses | |
Other Accrued Expenses | 8. Other Accrued Expenses Other accrued expenses consisted of (in thousands): January 1, 2019 January 2, 2018 Self-insurance $ 72,631 $ 66,354 Salaries and wages 39,102 33,398 Staff member benefits 22,946 21,498 Payroll and sales taxes 15,684 16,359 Other 44,018 45,407 Total $ 194,381 $ 183,016 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 01, 2019 | |
Long-Term Debt | |
Long-Term Debt | 9. Long-Term Debt We maintain a $200 million unsecured revolving credit facility (the "Facility"), $50 million of which may be used for issuances of letters of credit. Availability under the Facility is reduced by outstanding letters of credit, which are used to support our self-insurance programs. The Facility, which matures on December 22, 2020, contains a commitment increase feature that could provide for an additional $100 million in available credit upon our request and subject to the participating lenders electing to increase their commitments or new lenders being added to the Facility. Certain of our significant subsidiaries guarantee our obligations under the Facility. During fiscal years 2018, 2017 and 2016, we utilized the Facility to fund a portion of our stock repurchases. At January 1, 2019, we had net availability for borrowings of $169.3 million, based on a $10.0 million outstanding debt balance and $20.7 million in standby letters of credit. We are subject to certain financial covenants under the Facility requiring us to maintain (i) a maximum “Net Adjusted Leverage Ratio” of 4.0 and (ii) a minimum EBITDAR (earnings before interest, taxes, depreciation and amortization, and rent) to interest and rental expense ratio (“EBITDAR Ratio”) of 1.9, with each of the capitalized terms in this Note 8 having the same meaning as defined in the Facility. The Facility limits cash distributions with respect to our equity interests, such as cash dividends and share repurchases, based on a defined ratio, and also sets forth negative covenants that restrict indebtedness, liens, investments, sales of assets, fundamental changes and other matters. Our Net Adjusted Leverage and EBITDAR Ratios were 2.9 and 2.6, respectively, at January 1, 2019, and we were in compliance with all covenants in effect at that date. Borrowings under the Facility bear interest, at our option, at a rate per annum equal to either (i) the Adjusted LIBO Rate plus a margin ranging from 1.00% to 1.75% based on our Net Adjusted Leverage Ratio or (ii) the sum of (a) the highest of (1) the rate of interest publicly announced by JPMorgan Chase Bank as its prime rate in effect, (2) the greater of the Federal Funds Effective Rate or the Overnight Bank Funding Rate, in either case plus 0.5%, and (3) the one-month Adjusted LIBO Rate plus 1.0%, plus (b) a margin ranging from 0.00% to 0.75% based on our Net Adjusted Leverage Ratio. We also pay customary fees on the unused portion of the Facility and on our outstanding letters of credit. We capitalized interest expense related to new restaurant openings and major remodels totaling $0.4 million, $0.7 million and $0.6 million in fiscal 2018, 2017 and 2016, respectively. |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 12 Months Ended |
Jan. 01, 2019 | |
Other Noncurrent Liabilities | |
Other Noncurrent Liabilities | 10. Other Noncurrent Liabilities Other noncurrent liabilities consisted of (in thousands): January 1, 2019 January 2, 2018 Executive Savings Plan $ 57,551 $ 61,096 Other 14,108 9,879 Total $ 71,659 $ 70,975 (See Note 14 for further discussion of our Executive Savings Plan.) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 01, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies We currently lease all of our restaurant locations under operating leases, with remaining terms ranging from one year to 23 years, excluding unexercised renewal options. Our restaurant leases typically include land and building shells, require contingent rent above the minimum base rent payments based on a percentage of revenues ranging from 2.5% to 10%, have escalating minimum rent requirements over the term of the lease and require various expenses incidental to the use of the property. A majority of our leases provide for a reduced level of overall rent obligation should specified co-tenancy requirements not be satisfied. Most leases have renewal options. Many of our leases also provide early termination rights permitting us to terminate the lease prior to expiration in the event our revenues are below a stated level for a period of time, generally conditioned upon repayment of the unamortized allowances contributed by landlords to the build-out of the leased premises. We also lease automobiles and certain equipment under operating lease agreements. Rent expense is included in other operating costs and expenses in the consolidated statements of income. As of January 1, 2019, the aggregate minimum annual lease payments under operating leases, including amounts characterized as deemed landlord financing payments, are as follows (in thousands): 2019 $ 93,792 2020 91,808 2021 88,829 2022 86,925 2023 81,929 Thereafter 495,091 Total $ 938,374 Rent expense on all operating leases was as follows (in thousands): Fiscal Year 2018 2017 2016 Straight-lined minimum base rent $ 83,999 $ 83,387 $ 80,276 Contingent rent 20,147 19,559 22,408 Common area maintenance and taxes 39,961 38,103 36,252 Total $ 144,107 $ 141,049 $ 138,936 We enter into various obligations for the purchase of goods and for the construction of restaurants. At January 1, 2019, these obligations approximated $154.1 million, $118.2 million of which is due in fiscal 2019. Based on North Italia’s current performance, we are likely to acquire the remaining interest in the concept at the end of the third quarter of 2019 for an estimated $150 million. However, we could be obligated to do so if certain financial, legal and operational conditions are met and Fox Restaurant Concepts LLC (“FRC”) elects to exercise its put option prior to this date. As of January 1, 2019, we were obligated to provide up to an additional $3 million in growth capital to Flower Child. We have the right to acquire the remaining interest in Flower Child in fiscal 2021. However, we could be obligated to do so if certain financial, legal and operational conditions are met and FRC elects to exercise its put option prior to this date. As credit guarantees to insurers, we have $20.7 million in standby letters of credit related to our self-insurance liabilities. All standby letters of credit are renewable annually. We retain the financial responsibility for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, staff member health benefits, employment practices and other insurable risks. The accrued liabilities associated with these programs are based on our estimate of the ultimate costs to settle known claims, as well as claims incurred but not yet reported to us (“IBNR”) as of the balance sheet date. Our estimated liabilities are based on information provided by our insurance brokers and insurers, combined with our judgment regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation and our claims settlement practices. At January 1, 2019, the total accrued liability for our self-insured plans was $72.2 million. On November 26, 2014, a former hourly restaurant employee filed a class action lawsuit in the San Diego County Superior Court, alleging that the Company violated the California Labor Code and California Business and Professions Code, by failing to pay overtime, to permit required rest breaks and to provide accurate wage statements, among other claims (Masters v. The Cheesecake Factory Restaurants, Inc., et al.; Case No 37-2014-00040278). The lawsuit seeks unspecified penalties under California Private Attorneys' General Act ("PAGA") in addition to other monetary payments. By stipulation, the parties agreed to transfer Case No. 37-2014-00040278 to the Orange County Superior Court. On March 2, 2015, Case No. 37-2014-00040278 was officially transferred and assigned a new Case No. 30-2015-00775529 in the Orange County Superior Court. On June 27, 2016, we gave notice to the court that Case Nos. CIV1504091 and BC603620 described below may be related. On February 13, 2018, the parties reached a settlement in Case No. 30-2015-00775529. On October 5, 2018, the judge signed the order granting preliminary approval of the class action settlement. Based upon the current status of this matter, we have reserved an immaterial amount. On May 21, 2018, a lawsuit was filed in the Los Angeles County Superior Court, alleging similar claims to Case No. 30-2015-00775529 (Silva v. The Cheesecake Factory Restaurants, Inc., et al.; Case No. BC706365). On July 5, 2018, we notified the court that Case No. BC706365 and Case No. 30-2015-00775529 may be related. The plaintiff in Case No. BC70365 seeks unspecified penalties under PAGA in addition to other monetary payments. We intend to vigorously defend this action. However, it is not possible at this time to reasonably estimate the outcome of or any potential liability from this matter and, accordingly, we have not reserved for any potential future payments. On May 28, 2015, a group of current and former hourly restaurant employees filed a class action lawsuit in the U.S. District Court for the Eastern District of New York, alleging that the Company violated the Fair Labor Standards Act and New York Labor Code, by requiring employees to purchase uniforms for work and violated the State of New York’s minimum wage and overtime provisions (Guglielmo v. The Cheesecake Factory Restaurants, Inc., et al; Case No. 2:15-CV-03117). On September 8, 2015, we filed a response to the complaint, requesting the court to compel arbitration against opt-in plaintiffs with valid arbitration agreements. On July 21, 2016, the court issued an order confirming the agreement of the parties to dismiss all class claims with prejudice and to allow the case to proceed as a collective action covering a limited number of our restaurants in the State of New York. On February 21, 2018, the parties reached a tentative settlement subject to documentation and court approval. Based upon the current status of this matter, we have reserved an immaterial amount. On December 10, 2015, a former restaurant management employee filed a class action lawsuit in the Los Angeles County Superior Court, alleging that the Company improperly classified its managerial employees, failed to pay overtime, and failed to provide accurate wage statements, in addition to other claims. The lawsuit seeks unspecified penalties under PAGA in addition to other monetary payments (Tagalogon v. The Cheesecake Factory Restaurants, Inc.; Case No. BC603620). On March 23, 2016, the parties issued their joint status conference statement at which time we gave notice to the court that Case Nos. 30-2015-00775529 and CIV1504091 may be related. On April 29, 2016, we filed a response to the complaint. We intend to vigorously defend this action. However, it is not possible at this time to reasonably estimate the outcome of or any potential liability from this matter and, accordingly, we have not reserved for any potential future payments. On July 12, 2017, a lawsuit was filed in the Los Angeles County Superior Court alleging that the Company violated California's unfair business practices statute by improperly calculating suggested gratuity amounts on split payment transactions (Goldman v. The Cheesecake Factory Incorporated; Case No. BC668334). On December 1, 2017, we filed a demurrer to the plaintiff's complaint. The plaintiff filed his opposition on December 26, 2017. On March 27, 2018, the Court sustained the demurrer without leave to amend as to six of the seven causes of action in the complaint. On January 25, 2019, the parties reached a tentative settlement for an immaterial amount covering all claims. On June 22, 2018,the Internal Revenue Service issued a Notice of Deficiency in which they disallowed $8.0 million of our §199 Domestic Production Activities Deduction for tax years 2010, 2011 and 2012. On September 11, 2018 we petitioned the United States Tax Court for a redetermination of the deficiency. The tax court has assigned docket number 18150-18 to our case. We intend to vigorously defend our position in litigation and based on our analysis of the law, regulations and relevant facts, we have not reserved for any potential future payments. On February 3, 2017, a class action lawsuit was filed in the U.S. District Court for the Southern District of Florida, alleging that the Company violated the Fair and Accurate Credit Transaction Act, by failing to properly censor consumer credit or debit card information (Muransky v. The Cheesecake Factory Incorporated; Case No. 0:17-cv-60229-JEM). On February 21, 2017 and February 28, 2017, two additional lawsuits were filed in California and New York, respectively, alleging similar claims to Case No. 0:17-cv-60229-JEM (Tibbits v. The Cheesecake Factory Incorporated; Case No. 1:17-cv-00968 ( E.D.N.Y.); Zhang v. The Cheesecake Factory Incorporated; Case No 8:17-cv-00357 (C.D. Cal.)). We filed a motion to transfer and dismiss Case No. 0:17-cv-60229-JEM on March 24, 2017 and similarly filed a motion to transfer and dismiss Case No. 1:17-cv-00968 on April 7, 2017. On October 16, 2017, the Florida court granted our motion to transfer Case No. 0:17-cv-60229JEM to California to be consolidated with Case No. 8:17-cv-00357. The plaintiff in Case No. 1:17-cv-00968 agreed to transfer its case to California and such matter was subsequently consolidated with Case No 8:17-cv-00357. On May 25, 2018, the parties reached a tentative settlement which covers the three consolidated cases. The final settlement agreement is subject to documentation and court approval and will be covered by our insurance provider. On February 3, 2017, five present and former hourly restaurant employees filed a class action lawsuit in the San Diego County Superior Court, alleging that the Company violated the California Labor Code and California Business and Professions Code, by failing to permit required meal and rest breaks, and failing to provide accurate wage statements, among other claims (Abdelaziz v. The Cheesecake Factory Restaurants, Inc., et al.; Case No 37-2016-00039775-CU-OE-CTL). On February 22, 2017, a lawsuit was filed in the San Diego County Superior Court, alleging similar claims to Case No. 37-2016-00039775-CU-OE-CTL (Rodriguez v. The Cheesecake Factory Restaurants, Inc., et al.; Case No. 37-2017-00006571-CU-OE-CTL). The San Diego County Superior Court consolidated Case Nos. 37-2016-00039775-CU-OR-CTL and 37-2017-00006571-CU-OE-CTL. The lawsuits seek unspecified penalties under PAGA in addition to other monetary payments. On July 24, 2018, the parties reached a tentative settlement which covers the consolidated cases. On October 5, 2018, the court signed an order approving the settlement agreement. We have reserved an immaterial amount. On June 1, 2018, a former hourly restaurant employee filed a class action lawsuit in the U.S. District Court for the Eastern District of New York, alleging that the Company violated minimum wage and overtime provisions of the Fair Labor Standards Act and New York Labor Code (Orellana v. Grand Lux Cafe, LLC, et al; Case No. 18-cv-02739). The plaintiff seeks unspecified amounts of fees, penalties and other monetary payments on behalf of the plaintiff and other purported class members. On August 31, 2018, the court signed an order staying Case No. 18-cv-02739 in favor of individual arbitration of plaintiff's claims. We intend to vigorously defend this action. However, it is not possible at this time to reasonably estimate the outcome of or any potential liability from this matter and, accordingly, we have not reserved for any potential future payments. On June 7, 2018, the California Department of Industrial Relations issued a $4.2 million wage citation jointly against the Company and its vendor that provides janitorial services to eight of our Southern California restaurants, alleging that the janitorial vendor or its subcontractor failed to comply with various provisions of the California Labor Code (Wage Citation Case No. 35-CM-188798-16). The wage citation seeks to recover penalties and other monetary payments on behalf of the employees that worked for this vendor or its subcontractor. On June 28, 2018, we filed an appeal of the wage citation. We intend to vigorously defend this action. However, it is not possible at this time to reasonably estimate the outcome of or any potential liability from this matter and, accordingly, we have not reserved for any potential future payments. Within the ordinary course of our business, we are subject to private lawsuits, government audits, administrative proceedings and other claims. These matters typically involve claims from customers, staff members and others related to operational and employment issues common to the foodservice industry. A number of these claims may exist at any given time, and some of the claims may be pled as class actions. From time to time, we are also involved in lawsuits with respect to infringements of, or challenges to, our registered trademarks and other intellectual property, both domestically and abroad. We could be affected by adverse publicity and litigation costs resulting from such allegations, regardless of whether they are valid or whether we are legally determined to be liable. At this time, we believe that the amount of reasonably possible losses resulting from final disposition of any pending lawsuits, audits, proceedings and claims will not have a material adverse effect individually or in the aggregate on our financial position, results of operations or liquidity. It is possible, however, that our future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, audits, proceedings or claims. Legal costs related to such claims are expensed as incurred. We have employment agreements with certain of our executive officers that provide for payments to those officers in the event of an actual or constructive termination of their employment, including in the event of a termination without cause, an acquirer failure to assume or continue equity awards following a change in control of the Company or, otherwise, in the event of death or disability as defined in those agreements. Aggregate payments totaling approximately $1.8 million, excluding accrued potential bonuses of $1.8 million, which are subject to approval by the Compensation Committee, would have been required by those agreements had all such officers terminated their employment for reasons requiring such payments as of January 1, 2019. In addition, the employment agreement with our Chief Executive Officer specifies an annual founder’s retirement benefit of $650,000 for ten years, commencing six months after termination of his full-time employment. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 01, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 12. Stockholders’ Equity Cash dividends of $1.24, $1.06 and $0.88 were declared during fiscal 2018, 2017 and 2016, respectively. Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of our Facility and applicable law, and such other factors that the Board considers relevant. (See Note 9 for further discussion of our Facility.) On July 21, 2016, our Board increased the authorization to repurchase our common stock by 7.5 million shares to 56.0 million shares. Under this and all previous authorizations, we have cumulatively repurchased 51.8 million shares at a total cost of $1,642.1 million through January 1, 2019. During fiscal 2018, 2017 and 2016, we repurchased 2.3 million, 2.6 million and 2.9 million shares of our common stock at a cost of $109.3 million, $123.0 million and $146.5 million, respectively. Repurchased common stock is reflected as a reduction of stockholders’ equity in treasury stock. Share repurchases have been executed under stock repurchase plans adopted from time to time by our Board in furtherance of its repurchase authorization and are intended to qualify for safe harbor protection in accordance with Rule 10b5-1 and Rule 10b-18 of the Securities Act of 1934. Repurchases made during fiscal 2018 were made pursuant to the following stock repurchase plans adopted by our Board: Adoption Date Effective Dates October 26, 2017 December 1, 2017 through April 30, 2018 February 15, 2018 May 1, 2018 through July 31, 2018 July 26, 2018 August 3, 2018 through August 17, 2018 July 26, 2018 August 31, 2018 through February 1, 2019 Our share repurchase authorization does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. Shares may be repurchased in the open market or through privately negotiated transactions at times and prices considered appropriate by us. All purchases in the open market are made in compliance with Rule 10b-18. We make the determination to repurchase shares based on several factors, including an evaluation of current and future capital needs associated with new restaurant development, current and forecasted cash flows, including dividend payments and growth capital contributions to North Italia and Flower Child, a review of our capital structure and cost of capital, our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and financial covenants under our Facility that limit share repurchases based on a defined ratio. (See Note 9 for further discussion of our long-term debt.) Our objectives with regard to share repurchases are to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 01, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation We maintain stock-based incentive plans under which incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units may be granted to staff members and consultants. Our current practice is to issue new shares, rather than treasury shares, upon stock option exercises, for restricted share grants and upon vesting of restricted share units. To date, we have only granted non-qualified stock options, restricted shares and restricted share units of common stock under these plans. Non-employee directors have received only non-qualified stock options under a non-employee director equity plan, which expired in May 2007. Currently, we do not have a plan under which non-employee directors may be granted stock options or other equity interests in the Company. On April 5, 2017, our Board approved an amendment to our 2010 Stock Incentive Plan to increase the number of shares of common stock reserved for grant under the plan to 12.7 million shares from 9.2 million shares. This amendment was approved by our stockholders at our annual meeting held on June 8, 2017. This is our only active stock-based incentive plan, and approximately 2.9 million of these shares were available for grant as of January 1, 2019. Stock options generally vest at 20% per year and expire eight years from the date of grant. Restricted shares and restricted share units generally vest between three to five years from the date of grant and require that the staff member remains employed in good standing with the Company as of the vesting date. Certain restricted share units granted to executive officers contain performance-based vesting conditions. Performance goals are determined by the Board of Directors. The quantity of units that will vest ranges from 0% to 150% based on the level of achievement of the performance conditions. Equity awards for certain executive officers may vest earlier in the event of a change of control in which the acquirer fails to assume or continue such awards, as defined in the plan, or under certain circumstances described in such executive officers’ respective employment agreements. Compensation expense is recognized only for those options, restricted shares and restricted share units expected to vest, with forfeitures estimated based on our historical experience and future expectations. The following table presents information related to stock-based compensation, net of forfeitures (in thousands): Fiscal Year 2018 2017 (2) 2016 Labor expenses $ 5,681 $ 5,236 $ 6,023 Other operating costs and expenses 287 243 251 General and administrative expenses 14,020 10,978 15,199 Total stock-based compensation 19,988 16,457 21,473 Income tax benefit 4,987 6,295 8,213 Total stock-based compensation, net of taxes $ 15,001 $ 10,162 $ 13,260 Capitalized stock-based compensation (1) $ 262 $ 239 $ 338 (1) It is our policy to capitalize the portion of stock-based compensation costs for our internal development and legal departments that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property and liquor license acquisition activities and equipment installation. Capitalized stock-based compensation is included in property and equipment, net and other assets on the consolidated balance sheets. (2) Fiscal 2017 stock-based compensation expense includes a $3.9 million benefit for an out-of-period adjustment related to a correction in stock-based compensation valuation and forfeitures. We believe this adjustment is immaterial to the applicable prior periods. Stock Options The weighted average fair value at the grant date for options issued during fiscal 2018, 2017 and 2016 was $11.62, $14.83 and $12.10 per share, respectively. The fair value of options was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for fiscal 2018, 2017 and 2016, respectively: (a) an expected option term of 6.9 years, 6.9 years and 6.8 years, (b) expected stock price volatility of 27.8%, 24.4% and 26.3%, (c) a risk-free interest rate of 2.8%, 2.3% and 1.6%, and (d) a dividend yield on our stock of 2.5%, 1.6% and 1.6%. The expected option term represents the estimated period of time until exercise and is based on historical experience of similar options, giving consideration to the contractual terms, vesting schedules and expectations of future staff member behavior. Expected stock price volatility is based on a combination of the historical volatility of our stock and the implied volatility of actively traded options on our common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with an equivalent remaining term. The dividend yield is based on anticipated cash dividend payouts. Stock option activity during fiscal 2018 was as follows: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (1) (In thousands) (Per share) (In years) (In thousands) Outstanding at beginning of year 1,741 $ 42.25 $ 14,766 Granted 381 $ 47.22 Exercised (286) $ 30.00 Forfeited or cancelled (37) $ 50.33 Outstanding at end of year 1,799 $ 45.03 $ 5,606 Exercisable at end of year 1,010 $ 40.89 $ 5,606 (1) Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal year -end date. The total intrinsic value of options exercised during fiscal 2018, 2017 and 2016 was $6.2 million, $11.2 million and $40.4 million, respectively. As of January 1, 2019, total unrecognized stock-based compensation expense related to unvested stock options was $6.9 million, which we expect to recognize over a weighted average period of approximately 3.0 years. Restricted Shares and Restricted Share Units Restricted share and restricted share unit activity during fiscal 2018 was as follows: Weighted Average Fair Shares Value (In thousands) (Per share) Outstanding at beginning of year 1,694 $ 46.38 Granted 576 $ 48.22 Vested (424) $ 41.94 Forfeited (144) $ 46.53 Outstanding at end of year 1,702 $ 48.08 Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant. The weighted average fair value for restricted shares and restricted share units issued during fiscal 2018, 2017 and 2016 was $48.22, $54.29 and $50.89, respectively. The fair value of shares that vested during fiscal 2018, 2017 and 2016 was $17.8 million, $18.4 million and $12.2 million, respectively. As of January 1, 2019, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $35.8 million, which we expect to recognize over a weighted average period of approximately 2.9 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jan. 01, 2019 | |
Employee Benefit Plans | |
Employee Benefit Plans | 14. Employee Benefit Plans We have a defined contribution benefit plan in accordance with section 401(k) of the Internal Revenue Code (“401(k) Plan”) that is open to our staff members who meet certain compensation and eligibility requirements. Participation in the 401(k) Plan is currently open to staff members from our restaurant concepts, bakery facilities and corporate offices. The 401(k) Plan allows participating staff members to defer the receipt of a portion of their compensation and contribute such amount to one or more investment options. Our executive officers and a select group of management and/or highly compensated staff members are not eligible to participate in the 401(k) Plan. We currently match in cash a certain percentage of the staff member contributions to the 401(k) Plan and also pay a portion of the administrative costs. Expense recognized in fiscal 2018, 2017 and 2016 was $1.0 million, $1.0 million and $0.9 million, respectively. We have also established The Cheesecake Factory Incorporated Executive Savings Plan (“ESP”), a non-qualified deferred compensation plan for our executive officers and a select group of management and/or highly compensated staff members as defined in the plan document. The ESP allows participating staff members to defer the receipt of a portion of their base compensation and up to 100% of their eligible bonuses. Non-employee directors may also participate in the ESP and defer the receipt of their earned director fees. We currently match in cash a certain percentage of the staff member contributions to the ESP and also pay for the administrative costs. We do not match any contributions made by non-employee directors. Expense recognized in fiscal 2018, 2017 and 2016 was $1.3 million, $1.0 million and $1.0 million, respectively. ESP deferrals and matching funds are deposited into a rabbi trust, and are generally invested in individual variable life insurance contracts owned by us that are specifically designed to informally fund savings plans of this nature. These contracts are recorded at their cash surrender value as determined by the insurance carrier. The measurement of these contracts is considered a Level 2 measurement within the fair value hierarchy. Our consolidated balance sheets reflect our investment in variable life insurance contracts in other assets and our obligation to participants in the ESP in other noncurrent liabilities. All income and expenses related to the rabbi trust are reflected in our consolidated statements of income. We maintain self-insured medical and dental benefit plans for our staff members. The accrued liabilities associated with these programs are based on our estimate of the ultimate costs to settle known claims as well as claims incurred but not yet reported to us as of the balance sheet date. The accrued liability for our self-insured benefit plans, which is included in other accrued expenses, was $10.4 million and $8.8 million as of January 1, 2019 and January 2, 2018, respectively. (See Note 1 for further discussion of accounting for our self-insurance liabilities.) |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 01, 2019 | |
Income Taxes | |
Income Taxes | 15. Income Taxes The provision for income taxes consisted of the following (in thousands): Fiscal Year 2018 2017 (1) 2016 Income before income taxes $ 107,411 $ 146,466 $ 191,768 Income tax provision/(benefit): Current: Federal $ 5,082 $ 7,148 $ 42,665 State 8,804 7,106 10,614 Total current 13,886 14,254 53,279 Deferred: Federal (4,549) (24,570) (564) State (961) (610) (441) Total deferred (5,510) (25,180) (1,005) Total provision/(benefit) $ 8,376 $ (10,926) $ 52,274 (1) The Tax Act, which was enacted on December 22, 2017, made significant changes to how corporations are taxed in the U.S., the most prominent of which affecting us was to lower the U.S. corporate tax rate from 35% to 21%. In addition to the benefit of a lower rate in future years, the enactment of the Tax Act caused us to revalue our deferred tax assets and liabilities to reflect the new rate, resulting in a benefit to our fiscal 2017 income tax provision of $38.5 million. The following reconciles the U.S. federal statutory rate to the effective tax rate: Fiscal Year 2018 2017 2016 U.S. federal statutory rate 21.0 % 35.0 % 35.0 % State and district income taxes, net of federal benefit 6.1 3.3 3.5 Credit for FICA taxes paid on tips (16.5) (9.4) (7.0) Other credits and incentives (2.5) (1.9) (1.3) Manufacturing deduction — (2.3) (2.5) Deferred compensation 0.8 (1.5) (0.5) Equity compensation (1.5) (4.5) — Impact of statutory rate change on deferred taxes — (26.3) — Other 0.4 0.1 0.1 Effective tax rate 7.8 % (7.5) % 27.3 % Following are the temporary differences that created our deferred tax assets and liabilities (in thousands): January 1, 2019 January 2, 2018 Deferred tax assets: Staff member benefits $ 22,925 $ 22,626 Insurance reserves 15,165 14,027 Accrued rent 10,870 12,523 Deferred income 17,288 11,607 Stock-based compensation 8,628 8,710 Tax credit carryforwards 1,880 2,308 Other 1,265 738 Subtotal 78,021 72,539 Less: Valuation allowance (792) (455) Total $ 77,229 $ 72,084 Deferred tax liabilities: Property and equipment $ (107,513) $ (111,324) Prepaid expenses (7,929) (9,120) Inventory (6,893) (6,724) Other (5,420) (2,132) Total $ (127,755) $ (129,300) Net deferred tax liability $ (50,526) $ (57,216) At January 1, 2019 and January 2, 2018, we had $2.4 million and $2.9 million, respectively, of state tax credit carryforwards, consisting of hiring and investment credits, which began to expire in 2013, and $0.7 million of foreign net operating losses which begin to expire in 2038. We assess the available evidence to estimate if sufficient future taxable income will be generated to use these carryforwards. Based on this evaluation, we recorded a valuation allowance of $0.8 million and $0.5 million at January 1, 2019 and January 2, 2018, retrospectively, to reflect the amount that we will likely not realize. This assessment could change if estimates of future taxable income during the carryforward period are revised. The earliest tax year still subject to examination by a significant taxing jurisdiction is 2010. At January 1, 2019, we had a reserve of $0.8 million for uncertain tax positions. If recognized, this amount would impact our effective income tax rate. A reconciliation of the beginning and ending amount of our uncertain tax positions is as follows (in thousands): Fiscal Year 2018 2017 2016 Balance at beginning of year $ 843 $ 829 $ 1,067 Additions related to current period tax positions 104 168 139 Reductions related to settlements with taxing authorities and lapses of statutes of limitations (117) (154) (377) Balance at end of year $ 830 $ 843 $ 829 At January 1, 2019 and January 2, 2018, we had $0.2 million and $0.1 million, respectively, of accrued interest and penalties related to uncertain tax positions. None of the balance of uncertain tax positions at January 1, 2019 relates to tax positions for which it is reasonably possible that the total amount could decrease during the next twelve months based on the lapses of statutes of limitations. We have completed our analysis of the Tax Cuts and Jobs Act, including related subsequent guidance, and have recorded its effects in the financial statements. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 01, 2019 | |
Segment Information | |
Segment Information | 16. Segment Information For decision-making purposes, our management reviews discrete financial information for The Cheesecake Factory, Grand Lux Cafe and RockSugar Southeast Asian Kitchen restaurants, our bakery division, consumer packaged goods and our international licensing operations. Based on quantitative thresholds set forth in ASC 280, “Segment Reporting,” The Cheesecake Factory is our only business that meets the criteria of a reportable operating segment. Grand Lux Cafe, RockSugar Southeast Asian Kitchen, bakery, consumer packaged goods, and international licensing are combined in Other. Unallocated corporate expenses, assets and capital expenditures are presented below as reconciling items to the amounts presented in the consolidated financial statements. Segment information is presented below (in thousands): Fiscal Year 2018 2017 2016 Revenues: The Cheesecake Factory restaurants $ 2,127,347 $ 2,057,816 $ 2,078,083 Other 204,984 202,686 197,636 Total $ 2,332,331 $ 2,260,502 $ 2,275,719 Income/(loss) from operations: The Cheesecake Factory restaurants (1) $ 252,210 $ 263,581 $ 308,058 Other (2) 8,993 17,547 27,623 Corporate (142,255) (128,283) (134,688) Total $ 118,948 $ 152,845 $ 200,993 Depreciation and amortization: The Cheesecake Factory restaurants $ 80,646 $ 76,186 $ 74,861 Other 10,438 11,717 8,469 Corporate 4,892 4,826 4,680 Total $ 95,976 $ 92,729 $ 88,010 Capital expenditures: The Cheesecake Factory restaurants $ 71,880 $ 101,142 $ 99,817 Other 28,324 16,885 13,783 Corporate 2,705 2,752 2,221 Total $ 102,909 $ 120,779 $ 115,821 Total assets: The Cheesecake Factory restaurants $ 928,345 $ 937,512 $ 950,372 Other 164,972 167,096 157,842 Corporate 220,816 228,452 185,105 Total $ 1,314,133 $ 1,333,060 $ 1,293,319 (1) Fiscal 2018 includes $6.6 million of lease termination and impairment expense, fiscal 2017 includes $2.5 million of accelerated depreciation and impairment expense, and fiscal 2016 includes $0.1 million of accelerated depreciation expense. (See Note 1 for further discussion of these charges.) (2) Fiscal 2018 and fiscal 2017 include impairment expense of $11.3 million and $7.8 million, respectively. (See Note 1 for further discussion of these charges.) |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Jan. 01, 2019 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | 17. Quarterly Financial Data (unaudited) Summarized unaudited quarterly financial data for fiscal 2018 and 2017 is as follows (in thousands, except per share data): Quarter Ended: April 3, 2018 July 3, 2018 October 2, 2018 January 1, 2019 Revenues (1) $ 584,697 $ 587,319 $ 575,160 $ 585,155 Income from operations (2) $ 31,551 $ 34,543 $ 33,495 $ 19,359 Net income (2) $ 26,029 $ 28,353 $ 28,475 $ 16,178 Basic net income per share (4) $ 0.57 $ 0.62 $ 0.63 $ 0.36 Diluted net income per share (4) $ 0.56 $ 0.61 $ 0.61 $ 0.35 Cash dividends declared per common share $ 0.29 $ 0.29 $ 0.33 $ 0.33 Quarter Ended: April 4, 2017 July 4, 2017 October 3, 2017 January 2, 2018 Revenues $ 563,426 $ 569,869 $ 555,392 $ 571,815 Income from operations (2) $ 43,563 $ 50,218 $ 34,317 $ 22,747 Net income (2)(3) $ 35,043 $ 38,166 $ 26,445 $ 57,738 Basic net income per share (4) $ 0.74 $ 0.80 $ 0.57 $ 1.26 Diluted net income per share (4) $ 0.71 $ 0.78 $ 0.56 $ 1.24 Cash dividends declared per common share $ 0.24 $ 0.24 $ 0.29 $ 0.29 (1) In the fourth quarter of fiscal 2018, we corrected an error related to the presentation of complimentary meals. Corresponding amounts for the first three quarters of fiscal 2018 of $6.0 million, $5.9 million, and $5.7 million, respectively, were reclassified out of revenue and other operating expenses. Further, the associated cost of complimentary meals was reclassified to other operating expenses out of cost of sales in the amounts of $1.5 million, $1.5 million, and $1.4 million, respectively as well as $1.1 million out of labor in each quarter. The Company did not correct the 2017 quarterly financial data as the Company does not consider the impact of the prior period error to be material to those periods. (2) In fiscal 2018, income from operations included $2.6 million, $0.3 million and $15.0 million of lease termination and impairment expense in the second, third and fourth quarters, respectively, with an corresponding impact to net income of $1.9 million, $0.2 million and $11.1 million, respectively. In fiscal 2017, income from operations included $0.8 million, $0.4 million and $9.1 million of accelerated depreciation and impairment expense in the first, second and fourth quarters, respectively, with a corresponding impact to net income of $0.4 million, $0.3 million, $5.5 million, respectively. These amounts were recorded in impairment of assets and lease terminations in the consolidated statements of income. (See Note 1 for further discussion of these charges.) (3) The fourth quarter of fiscal 2017 includes a $38.5 million benefit to our income tax provision related to the Tax Act. (See Note 15 for further discussion of income taxes.) (4) Net income per share calculations for each quarter are based on the weighted average diluted shares outstanding for that quarter and may not total to the full year amount. While seasonal fluctuations generally do not have a material impact on our quarterly results, the year-over-year comparison of our quarterly results can be significantly impacted by the number and timing of new restaurant openings and associated preopening costs, the calendar days of the week on which holidays occur, the impact from inclement weather and other climatic conditions, the additional week in a 53-week fiscal year and other variations in revenues and expenses. As a result of these factors, our financial results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 01, 2019 | |
Subsequent Events | |
Subsequent Events | 18. Subsequent Events On February 13, 2019, our Board of Directors approved a quarterly cash dividend of $0.33 per share to be paid on March 19, 2019 to the stockholders of record on March 4, 2019. On February 13, 2019, our Board of Directors approved the adoption of a 10b5-1 Plan, which will be effective from March 25, 2019 through July 31, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 01, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of The Cheesecake Factory Incorporated and its wholly owned subsidiaries (referred to herein as the “Company,” “we,” “us” and “our”) prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany accounts and transactions for the periods presented have been eliminated in consolidation. We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2018 and 2017 each consisted of 52 weeks, while fiscal year 2016 consisted of 53 weeks . In fiscal 2018, we separately disclosed our investments in unconsolidated affiliates on the consolidated balance sheet and our related share of losses on the consolidated statement of income and statement of cash flow. Corresponding prior year balances were reclassified to conform to the current year presentation. In the fourth quarter of fiscal 2018, it was determined that complimentary meals had not been appropriately presented in our consolidated statements of income, resulting in an overstatement of our revenue and operating expenses. The Company corrected the error related to prior interim periods during 2018 by reclassifying complimentary meals out of revenue and other operating expenses in the amount of $23.3 million for fiscal 2018. Further, the associated cost of complimentary meals was reclassified as other operating expenses versus cost of sales and labor in the amount of $5.8 million and $4.4 million, respectively. The reclassifications had no impact on previously reported income from operations, net income, or net income per share. The Company did not correct the 2017 and 2016 annual financial statements as the Company does not consider the impact of the prior period error to be material to the 2017 and 2016 consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Amounts receivable from credit card processors, totaling $17.3 million and $13.8 million at January 1, 2019 and January 2, 2018, respectively, are considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates book overdrafts. Book overdrafts are presented as a current liability in other accrued expenses on our consolidated balance sheet. |
Accounts and Other Receivables | Accounts and Other Receivables Our accounts receivable principally result from credit sales to bakery customers. Other receivables consist primarily of amounts due from our gift card distributors and landlords. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are cash and cash equivalents and receivables. We maintain our day-to-day operating cash balances in non-interest-bearing transaction accounts, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. We invest our excess cash in a money market deposit account, which is insured by the FDIC up to $250,000. Although we maintain balances that exceed the federally insured limit, we have not experienced any losses related to this balance, and we believe credit risk to be minimal. We consider the concentration of credit risk for accounts receivable to be minimal due to the payment histories and general financial condition of our larger bakery customers. Concentration of credit risk related to other receivables is limited as this balance is comprised primarily of amounts due from our gift card distributors and landlords. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For cash equivalents, the carrying amount approximates fair value because of the short maturity of these instruments. The fair value of deemed landlord financing liabilities is determined using current applicable rates for similar instruments as of the balance sheet date in accordance with Level 2 of a three-level hierarchy established by accounting standards. Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities. At January 1, 2019, the fair value of our deemed landlord financing liabilities was $117.0 million versus a carrying value of $118.6 million. |
Inventories | Inventories Inventories consist of restaurant food and other supplies, bakery raw materials, and bakery finished goods and are stated at the lower of cost or net realizable value on an average cost basis at the restaurants and on a first-in, first-out basis at the bakeries. |
Property and Equipment | Property and Equipment We record property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of our internal development and construction department. Depreciation and amortization periods are as follows: Buildings and land improvements 25 to 30 years Leasehold improvements 10 to 30 years Furnishings, fixtures and equipment 3 to 15 years Computer software and equipment 5 years Gains and losses related to property and equipment disposals are recorded in depreciation and amortization expenses. |
Intangible assets, net | Intangible assets, net Our leasehold acquisition assets and non-transferable alcoholic beverage licenses are amortized over the associated lease term and are tested for impairment using the methodology discussed in impairment of long-lived assets and lease terminations. At January 1, 2019 and January 2, 2018, the amounts included in intangibles, net for these items were $9.1 million and $8.9 million, respectively. Amortization expenses related to these assets was $0.6 million for fiscal 2018, 2017 and 2016. Our trademarks and transferable alcoholic beverage licenses have indefinite lives and, therefore, are not subject to amortization. At January 1, 2019 and January 2, 2018, the amounts included in intangibles, net for these items were $17.1 million and $15.2 million, respectively. We test these assets for impairment at least annually by comparing the fair value of each asset with its carrying amount. |
Impairment of Long-Lived Assets and Lease Terminations | Impairment of Long-Lived Assets and Lease Terminations We assess the potential impairment of our long-lived assets on an annual basis or whenever events or changes in circumstances indicate the carrying value of the assets or asset group may not be recoverable. Factors considered include, but are not limited to, negative cash flow, significant underperformance relative to historical or projected future operating results, significant changes in the manner in which an asset is being used, an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life and significant negative industry or economic trends. At any given time, we may be monitoring a small number of locations, and future impairment charges could be required if individual restaurant performance does not improve or we make the decision to close or relocate a restaurant. We have determined that our asset group for impairment testing is comprised of the assets and liabilities of each of our individual restaurants, as this is the lowest level of identifiable cash flows. We have identified leasehold improvements as the primary asset because it is the most significant component of our restaurant assets, it is the principal asset from which our restaurants derive their cash flow generating capacity and it has the longest remaining useful life. The recoverability is assessed by comparing the carrying value of the assets to the undiscounted cash flows expected to be generated by these assets. Impairment losses are measured as the amount by which the carrying values of the assets exceed their fair values. In fiscal 2018, we recorded $17.9 million of lease termination costs and impairment expense in fiscal 2018 related to three The Cheesecake Factory restaurants, including two closures, one Grand Lux Cafe and one RockSugar Southeast Asian Kitchen. In fiscal 2017, we recorded $10.3 million of accelerated depreciation and impairment expense related to three The Cheesecake Factory restaurants, including one relocation and one lease expiration, and one Grand Lux Cafe. In fiscal 2016, we recorded $0.1 million of accelerated depreciation expense related to the planned relocation of one The Cheesecake Factory restaurant, which subsequently took place in fiscal 2017. |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates During fiscal years 2018, 2017 and 2016, we made minority equity investments in two restaurant concepts, North Italia and Flower Child, bringing our percentage of ownership to 49% and 46%, respectively, at January 1, 2019. Since we hold a number of rights with regard to participation in policy-making processes, but do not control these entities, we account for these investments under the equity method. Accordingly, we recognize our proportionate share of the reported earnings or losses of these entities on the consolidated statements of income and as an adjustment to our investments on the consolidated balance sheets. We assess the potential impairment of our equity investments whenever events or changes in circumstances indicate that a decrease in value of the investment has occurred that is other than temporary, in which case we would recognize the decrease even though it is in excess of what would otherwise be recognized by application of the equity method. |
Revenue Recognition | Revenue Recognition Our revenues consist of sales at our Company-owned restaurants, sales from our bakery operations to our licensees and other third-party customers, royalties from our licensees’ restaurant sales and from consumer packaged goods sales, and licensee development and site fees. Revenues are presented net of sales taxes. Sales tax collected is included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. Revenues from bakery sales are recognized upon transfer of title and risk to customers. Royalty revenues are recognized in the period the related sales occur, utilizing the sale-based royalty exception available under current accounting guidance. Our consumer packaged goods minimum guarantees do not require distinct performance obligations. Therefore, related revenue is recognized on a straight-line basis over the life of the applicable agreements, ranging from one to three years. As our development and site fee agreements do not contain distinct performance obligations, related revenue is recognized on a straight-line basis over the life of the applicable agreements, ranging from eight to 30 years. In fiscal 2018, we deferred revenue of $0.9 million for new minimum guarantees for consumer packaged goods and recognized minimum guarantee revenue of $0.8 million. In fiscal 2018, we deferred revenue of $0.2 million for new site and development agreements and recognized revenue of $0.4 million. Prior to the adoption of the new revenue recognition standard, we recognized revenue for development fees upon execution of new development agreements and for site fees upon our approval of new restaurant sites. Under previous guidance, we would have recognized site and development fee revenue of $0.2 million during fiscal 2018. We recognize a liability upon the sale of our gift cards and recognize revenue when these gift cards are redeemed in our restaurants. Based on our historical redemption patterns, we can reasonably estimate the amount of gift cards for which redemption is remote, which is referred to as “breakage.” Breakage is recognized over a three-year period in proportion to historical redemption trends and is classified as revenues in our consolidated statements of income. We recognized $8.0 million, $7.9 million and $7.6 million of gift card breakage in fiscal years 2018, 2017 and 2016, respectively. Incremental direct costs related to gift card sales, including commissions and credit card fees, are deferred and recognized in earnings in the same pattern as the related gift card revenue. There were no changes to our accounting for gift card revenue and related costs upon adoption of the new revenue recognition standard. Certain of our promotional programs include multiple element arrangements that incorporate various performance obligations. We allocate revenue using the relative selling price of each performance obligation considering the likelihood of redemption and recognize revenue upon satisfaction of each performance obligation. During fiscal 2018, we deferred revenue of $7.0 million related to promotional programs and recognized $5.9 million of previously deferred revenue related to promotional programs. (See Recent Accounting Pronouncements for further discussion of our adoption of the new revenue recognition accounting guidance.) |
Leases | Leases We currently lease all of our restaurant locations. We evaluate each lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. All of our restaurant leases are classified as operating leases. Minimum base rent, which generally escalates over the term of the lease, is recorded on a straight-line basis over the lease term. The lease term includes the build-out period for our leases, where no rent payments are typically due under the terms of the lease. Contingent rent expense, which is based on a percentage of revenues, is recorded as incurred to the extent it exceeds minimum base rent per the lease agreement. We expend cash for leasehold improvements and furnishings, fixtures and equipment to build out and equip our leased premises. We may also expend cash for structural additions that we make to leased premises. Generally a portion of the leasehold improvements and building costs are reimbursed to us by our landlords as construction contributions. If obtained, landlord construction contributions usually take the form of up-front cash, full or partial credits against our future minimum or percentage rents, or a combination thereof. Depending on the specifics of the leased space and the lease agreement, amounts paid for structural components are recorded during the construction period as either prepaid rent or property and equipment and the landlord construction contributions are recorded as either an offset to prepaid rent or as a deemed landlord financing liability. For those leases for which we are deemed the owner of the property during construction, upon completion, we perform an analysis to determine if they qualify for sale-leaseback treatment. For those qualifying leases, the deemed landlord financing liability and the associated property and equipment are removed and the difference is reclassified to either prepaid or deferred rent and amortized over the lease term as an increase or decrease to rent expense. If the lease does not qualify for sale-leaseback treatment, the deemed landlord financing liability is amortized over the lease term based on the rent payments designated in the lease agreement. |
Self-Insurance Liabilities | Self-Insurance Liabilities We retain the financial responsibility for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, staff member health benefits, employment practices and other insurable risks. The accrued liabilities associated with our self-insured programs are based on our estimate of the ultimate costs to settle known claims, as well as claims incurred but not yet reported to us (“IBNR”) as of the balance sheet date and are recorded in other accrued expenses. Our estimated liabilities, which are not discounted, are based on information provided by our insurance brokers and insurers, combined with our judgment regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation and our claims settlement practices. |
Stock-Based Compensation | Stock-Based Compensation We maintain stock-based incentive plans under which equity awards may be granted to staff members and consultants. We account for the awards based on fair value measurement guidance and amortize to expense over the vesting period using a straight-line or graded-vesting schedule, as applicable. (See Note 13 for further discussion of our stock-based compensation.) |
Advertising Costs | Advertising Costs We expense advertising production costs at the time the advertising first takes place. All other advertising costs are expensed as incurred. Most of our advertising costs are included in other operating costs and expenses and were $6.1 million, $6.1 million and $7.4 million in fiscal 2018, 2017 and 2016, respectively. |
Preopening Costs | Preopening Costs Preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Also included are expenses for maintaining a roster of trained managers for pending openings, the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs, and corporate travel and support activities. We expense preopening costs as incurred. |
Income Taxes | Income Taxes We provide for federal, state and foreign income taxes currently payable and for deferred taxes that result from differences between financial accounting rules and tax laws governing the timing of recognition of various income and expense items. We recognize deferred income tax assets and liabilities for the future tax effects of such temporary differences based on the difference between the financial statement and tax bases of existing assets and liabilities using the statutory rates expected in the years in which the differences are expected to reverse. The effect on deferred taxes of any enacted change in tax rates is recognized in income in the period that includes the enactment date. Income tax credits are recorded as a reduction of tax expense. We account for uncertain tax positions under Financial Accounting Standards Board (“FASB”) guidance, which requires that a position taken or expected to be taken in a tax return be recognized (or derecognized) in the financial statements when it is more likely than not (i.e., a likelihood of more than 50%) that the position would be sustained on its technical merits upon examination by tax authorities, taking into account available administrative remedies and litigation. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution. We recognize interest related to uncertain tax positions in income tax expense. Penalties related to uncertain tax positions are recorded in general and administrative expenses. |
Net Income per Share | Net Income per Share Basic net income per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, reduced by unvested restricted stock awards. At January 1, 2019, January 2, 2018 and January 3, 2017, 1.7 million, 1.7 million and 1.9 million shares, respectively, of restricted stock issued to staff members were unvested and, therefore, excluded from the calculation of basic earnings per share for the fiscal years ended on those dates. Diluted net income per share includes the dilutive effect of outstanding equity awards, calculated using the treasury stock method. Shares of common stock equivalents of 1.5 million, 1.6 million and 1.4 million for fiscal 2018, 2017 and 2016, respectively, were excluded from the diluted calculation due to their anti-dilutive effect. Fiscal Year 2018 2017 2016 (In thousands, except per share data) Net income $ 99,035 $ 157,392 $ 139,494 Basic weighted average shares outstanding 45,263 46,930 47,981 Dilutive effect of equity awards 952 1,222 1,391 Diluted weighted average shares outstanding 46,215 48,152 49,372 Basic net income per share $ 2.19 $ 3.35 $ 2.91 Diluted net income per share $ 2.14 $ 3.27 $ 2.83 |
Comprehensive Income | Comprehensive Income Comprehensive income includes all changes in equity during a period except those resulting from investment by and distribution to owners. For fiscal year 2016, our comprehensive income consisted solely of net income. In fiscal years 2018 and 2017, comprehensive income also included translation gains and losses related to our Canadian restaurant operations. |
Foreign Currency | Foreign Currency The Canadian dollar is the functional currency for our Canadian restaurant operations. Revenue and expense accounts are translated into U.S. dollars using the average exchange rates during the reporting period. Assets and liabilities are translated using the exchange rates in effect at the reporting period end date. Equity accounts are translated at historical rates, except for the change in retained earnings which is the result of the income statement translation process. Translation gains and losses are reported as a separate component in our consolidated statements of comprehensive income and would only be realized upon the sale or upon complete or substantially complete liquidation of the business. Gains and losses from foreign currency transactions are recognized in our consolidated statements of income in interest and other expense, net. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard on the recognition and measurement of leases, which requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for most leases. The guidance does not make significant changes to the recognition, measurement, and presentation of expenses and cash flows by a lessee. The standard requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases and is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. We will adopt the standard in the first quarter of fiscal 2019 and plan to utilize the alternative transition method, whereby an entity records a cumulative effect adjustment to opening retained earnings in the year of adoption without restating prior periods. We plan to elect the package of practical expedients which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease and our initial direct costs for any leases that exist prior to adoption of the new standard, as well as the practical expedient which allows the use of hindsight in determining our lease terms. We expect the adoption will result in the recognition of right-of-use assets and lease liabilities of approximately $1 billion on our consolidated balance sheet. We also expect approximately $4 million of additional expense on our fiscal 2019 statement of operations due primarily to our election of the hindsight practical expedient. Recently Adopted Accounting Standards In August 2018, the FASB issued accounting guidance that requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement if those costs would be capitalized by the customer in a software licensing arrangement under the current internal-use software standard. This guidance is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. We implemented this guidance on a prospective basis in the third quarter of fiscal 2018 and, as a result, capitalized $0.6 million of implementation costs during fiscal 2018. In May 2014, the FASB issued accounting guidance that provides a comprehensive new revenue recognition model that supersedes most of the existing revenue recognition requirements and requires entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. We implemented this standard as of the first day of fiscal 2018. Utilizing the cumulative-effect method of adoption, we recorded a $4.8 million increase to deferred revenue and a corresponding reduction of $3.6 million, net of tax, to retained earnings to reverse a portion of the previously-recognized development and site fees from our international licensees. Whereas previously we recognized income and received payment upon execution of the agreements and approval of new restaurant sites, respectively, future revenue for these items will be recorded on a straight-line basis over the life of the applicable license agreements as the agreements do not contain distinct performance obligations. Comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of adopting this standard as compared to the previous revenue recognition guidance was not material to our consolidated balance sheet and consolidated statements of income and comprehensive income. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of depreciation and amortization periods | Buildings and land improvements 25 to 30 years Leasehold improvements 10 to 30 years Furnishings, fixtures and equipment 3 to 15 years Computer software and equipment 5 years |
Schedule of basic and diluted income per share | Fiscal Year 2018 2017 2016 (In thousands, except per share data) Net income $ 99,035 $ 157,392 $ 139,494 Basic weighted average shares outstanding 45,263 46,930 47,981 Dilutive effect of equity awards 952 1,222 1,391 Diluted weighted average shares outstanding 46,215 48,152 49,372 Basic net income per share $ 2.19 $ 3.35 $ 2.91 Diluted net income per share $ 2.14 $ 3.27 $ 2.83 |
Other Receivables (Tables)
Other Receivables (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Other Receivables | |
Schedule of other receivables | Other receivables consisted of (in thousands): January 1, 2019 January 2, 2018 Gift card distributors $ 41,996 $ 40,973 Insurance providers 9,020 5,177 Landlord construction contributions 4,976 9,053 Other 12,201 12,315 Total $ 68,193 $ 67,518 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Inventories | |
Schedule of inventories | Inventories consisted of (in thousands): January 1, 2019 January 2, 2018 Restaurant food and supplies $ 18,362 $ 18,407 Bakery finished goods and work in progress (1) 13,845 18,423 Bakery raw materials and supplies 6,679 5,730 Total $ 38,886 $ 42,560 (1) Our California bakery was closed from February 2018 to June 2018 while we upgraded the facility. In preparation for lost production capacity, we produced additional inventories during the fourth quarter of fiscal 2017. The additional inventory was utilized during fiscal 2018. |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Prepaid Expenses | |
Schedule of prepaid expenses | Prepaid expenses consisted of (in thousands): January 1, 2019 January 2, 2018 Gift card contract assets $ 23,388 $ 23,814 Rent 4,939 12,300 Other 12,318 21,552 Total $ 40,645 $ 57,666 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of (in thousands): January 1, 2019 January 2, 2018 Land and related improvements $ 15,852 $ 15,852 Buildings 44,036 37,633 Leasehold improvements 1,283,233 1,258,132 Furnishings, fixtures and equipment 467,051 456,056 Computer software and equipment 55,434 52,165 Restaurant smallwares 30,268 29,579 Construction in progress 27,975 23,453 Property and equipment, total 1,923,849 1,872,870 Less: Accumulated depreciation (1,010,574) (937,825) Property and equipment, net $ 913,275 $ 935,045 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Other Assets | |
Schedule of other assets | Other assets consisted of (in thousands): January 1, 2019 January 2, 2018 Executive Savings Plan trust assets $ 57,605 $ 60,901 Deposits 5,489 5,496 Deferred income taxes 1,597 — Total $ 64,691 $ 66,397 |
Gift Cards (Tables)
Gift Cards (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Gift Cards | |
Schedule of gift card liabilities | The following tables present information related to gift cards (in thousands): Gift card liabilities: January 1, 2019 January 2, 2018 Beginning balance $ 163,951 $ 153,629 Activations 151,084 155,422 Redemptions and breakage (142,699) (145,100) Ending balanace $ 172,336 $ 163,951 |
Schedule of gift card contract assets | The following tables present information related to gift cards (in thousands): Gift card contract assets (1) : January 1, 2019 January 2, 2018 Beginning balance $ 23,814 $ 23,786 Deferrals 18,669 19,217 Amortization (19,095) (19,189) Ending balance $ 23,388 $ 23,814 (1) Included in prepaid expenses on the consolidated balance sheets. |
Other Accrued Expenses (Tables)
Other Accrued Expenses (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Other Accrued Expenses | |
Schedule of other accrued expenses | Other accrued expenses consisted of (in thousands): January 1, 2019 January 2, 2018 Self-insurance $ 72,631 $ 66,354 Salaries and wages 39,102 33,398 Staff member benefits 22,946 21,498 Payroll and sales taxes 15,684 16,359 Other 44,018 45,407 Total $ 194,381 $ 183,016 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Other Noncurrent Liabilities | |
Schedule of other noncurrent liabilities | Other noncurrent liabilities consisted of (in thousands): January 1, 2019 January 2, 2018 Executive Savings Plan $ 57,551 $ 61,096 Other 14,108 9,879 Total $ 71,659 $ 70,975 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Commitments and Contingencies | |
Schedule of aggregate minimum annual lease payments under operating leases | As of January 1, 2019, the aggregate minimum annual lease payments under operating leases, including amounts characterized as deemed landlord financing payments, are as follows (in thousands): 2019 $ 93,792 2020 91,808 2021 88,829 2022 86,925 2023 81,929 Thereafter 495,091 Total $ 938,374 |
Schedule of rent expense on all operating leases | Rent expense on all operating leases was as follows (in thousands): Fiscal Year 2018 2017 2016 Straight-lined minimum base rent $ 83,999 $ 83,387 $ 80,276 Contingent rent 20,147 19,559 22,408 Common area maintenance and taxes 39,961 38,103 36,252 Total $ 144,107 $ 141,049 $ 138,936 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Stock-Based Compensation | |
Schedule of information related to stock-based compensation, net of forfeitures | The following table presents information related to stock-based compensation, net of forfeitures (in thousands): Fiscal Year 2018 2017 (2) 2016 Labor expenses $ 5,681 $ 5,236 $ 6,023 Other operating costs and expenses 287 243 251 General and administrative expenses 14,020 10,978 15,199 Total stock-based compensation 19,988 16,457 21,473 Income tax benefit 4,987 6,295 8,213 Total stock-based compensation, net of taxes $ 15,001 $ 10,162 $ 13,260 Capitalized stock-based compensation (1) $ 262 $ 239 $ 338 (1) It is our policy to capitalize the portion of stock-based compensation costs for our internal development and legal departments that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property and liquor license acquisition activities and equipment installation. Capitalized stock-based compensation is included in property and equipment, net and other assets on the consolidated balance sheets. (2) Fiscal 2017 stock-based compensation expense includes a $3.9 million benefit for an out-of-period adjustment related to a correction in stock-based compensation valuation and forfeitures. We believe this adjustment is immaterial to the applicable prior periods. |
Schedule of stock option activity | Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (1) (In thousands) (Per share) (In years) (In thousands) Outstanding at beginning of year 1,741 $ 42.25 $ 14,766 Granted 381 $ 47.22 Exercised (286) $ 30.00 Forfeited or cancelled (37) $ 50.33 Outstanding at end of year 1,799 $ 45.03 $ 5,606 Exercisable at end of year 1,010 $ 40.89 $ 5,606 (1) Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal year -end date. |
Schedule of restricted share and restricted share unit activity | Restricted share and restricted share unit activity during fiscal 2018 was as follows: Weighted Average Fair Shares Value (In thousands) (Per share) Outstanding at beginning of year 1,694 $ 46.38 Granted 576 $ 48.22 Vested (424) $ 41.94 Forfeited (144) $ 46.53 Outstanding at end of year 1,702 $ 48.08 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Income Taxes | |
Schedule of provision for income taxes | The provision for income taxes consisted of the following (in thousands): Fiscal Year 2018 2017 (1) 2016 Income before income taxes $ 107,411 $ 146,466 $ 191,768 Income tax provision/(benefit): Current: Federal $ 5,082 $ 7,148 $ 42,665 State 8,804 7,106 10,614 Total current 13,886 14,254 53,279 Deferred: Federal (4,549) (24,570) (564) State (961) (610) (441) Total deferred (5,510) (25,180) (1,005) Total provision/(benefit) $ 8,376 $ (10,926) $ 52,274 (1) The Tax Act, which was enacted on December 22, 2017, made significant changes to how corporations are taxed in the U.S., the most prominent of which affecting us was to lower the U.S. corporate tax rate from 35% to 21%. In addition to the benefit of a lower rate in future years, the enactment of the Tax Act caused us to revalue our deferred tax assets and liabilities to reflect the new rate, resulting in a benefit to our fiscal 2017 income tax provision of $38.5 million. |
Schedule of reconciliation between U.S. federal statutory rate and effective tax rate | Fiscal Year 2018 2017 2016 U.S. federal statutory rate 21.0 % 35.0 % 35.0 % State and district income taxes, net of federal benefit 6.1 3.3 3.5 Credit for FICA taxes paid on tips (16.5) (9.4) (7.0) Other credits and incentives (2.5) (1.9) (1.3) Manufacturing deduction — (2.3) (2.5) Deferred compensation 0.8 (1.5) (0.5) Equity compensation (1.5) (4.5) — Impact of statutory rate change on deferred taxes — (26.3) — Other 0.4 0.1 0.1 Effective tax rate 7.8 % (7.5) % 27.3 % |
Schedule of deferred tax assets and liabilities | Following are the temporary differences that created our deferred tax assets and liabilities (in thousands): January 1, 2019 January 2, 2018 Deferred tax assets: Staff member benefits $ 22,925 $ 22,626 Insurance reserves 15,165 14,027 Accrued rent 10,870 12,523 Deferred income 17,288 11,607 Stock-based compensation 8,628 8,710 Tax credit carryforwards 1,880 2,308 Other 1,265 738 Subtotal 78,021 72,539 Less: Valuation allowance (792) (455) Total $ 77,229 $ 72,084 Deferred tax liabilities: Property and equipment $ (107,513) $ (111,324) Prepaid expenses (7,929) (9,120) Inventory (6,893) (6,724) Other (5,420) (2,132) Total $ (127,755) $ (129,300) Net deferred tax liability $ (50,526) $ (57,216) |
Schedule of reconciliation of our uncertain tax positions | A reconciliation of the beginning and ending amount of our uncertain tax positions is as follows (in thousands): Fiscal Year 2018 2017 2016 Balance at beginning of year $ 843 $ 829 $ 1,067 Additions related to current period tax positions 104 168 139 Reductions related to settlements with taxing authorities and lapses of statutes of limitations (117) (154) (377) Balance at end of year $ 830 $ 843 $ 829 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Segment Information | |
Schedule of segment information | Segment information is presented below (in thousands): Fiscal Year 2018 2017 2016 Revenues: The Cheesecake Factory restaurants $ 2,127,347 $ 2,057,816 $ 2,078,083 Other 204,984 202,686 197,636 Total $ 2,332,331 $ 2,260,502 $ 2,275,719 Income/(loss) from operations: The Cheesecake Factory restaurants (1) $ 252,210 $ 263,581 $ 308,058 Other (2) 8,993 17,547 27,623 Corporate (142,255) (128,283) (134,688) Total $ 118,948 $ 152,845 $ 200,993 Depreciation and amortization: The Cheesecake Factory restaurants $ 80,646 $ 76,186 $ 74,861 Other 10,438 11,717 8,469 Corporate 4,892 4,826 4,680 Total $ 95,976 $ 92,729 $ 88,010 Capital expenditures: The Cheesecake Factory restaurants $ 71,880 $ 101,142 $ 99,817 Other 28,324 16,885 13,783 Corporate 2,705 2,752 2,221 Total $ 102,909 $ 120,779 $ 115,821 Total assets: The Cheesecake Factory restaurants $ 928,345 $ 937,512 $ 950,372 Other 164,972 167,096 157,842 Corporate 220,816 228,452 185,105 Total $ 1,314,133 $ 1,333,060 $ 1,293,319 (1) Fiscal 2018 includes $6.6 million of lease termination and impairment expense, fiscal 2017 includes $2.5 million of accelerated depreciation and impairment expense, and fiscal 2016 includes $0.1 million of accelerated depreciation expense. (See Note 1 for further discussion of these charges.) (2) Fiscal 2018 and fiscal 2017 include impairment expense of $11.3 million and $7.8 million, respectively. (See Note 1 for further discussion of these charges.) |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Jan. 01, 2019 | |
Quarterly Financial Data (unaudited) | |
Summary of quarterly financial data | Summarized unaudited quarterly financial data for fiscal 2018 and 2017 is as follows (in thousands, except per share data): Quarter Ended: April 3, 2018 July 3, 2018 October 2, 2018 January 1, 2019 Revenues (1) $ 584,697 $ 587,319 $ 575,160 $ 585,155 Income from operations (2) $ 31,551 $ 34,543 $ 33,495 $ 19,359 Net income (2) $ 26,029 $ 28,353 $ 28,475 $ 16,178 Basic net income per share (4) $ 0.57 $ 0.62 $ 0.63 $ 0.36 Diluted net income per share (4) $ 0.56 $ 0.61 $ 0.61 $ 0.35 Cash dividends declared per common share $ 0.29 $ 0.29 $ 0.33 $ 0.33 Quarter Ended: April 4, 2017 July 4, 2017 October 3, 2017 January 2, 2018 Revenues $ 563,426 $ 569,869 $ 555,392 $ 571,815 Income from operations (2) $ 43,563 $ 50,218 $ 34,317 $ 22,747 Net income (2)(3) $ 35,043 $ 38,166 $ 26,445 $ 57,738 Basic net income per share (4) $ 0.74 $ 0.80 $ 0.57 $ 1.26 Diluted net income per share (4) $ 0.71 $ 0.78 $ 0.56 $ 1.24 Cash dividends declared per common share $ 0.24 $ 0.24 $ 0.29 $ 0.29 (1) In the fourth quarter of fiscal 2018, we corrected an error related to the presentation of complimentary meals. Corresponding amounts for the first three quarters of fiscal 2018 of $6.0 million, $5.9 million, and $5.7 million, respectively, were reclassified out of revenue and other operating expenses. Further, the associated cost of complimentary meals was reclassified to other operating expenses out of cost of sales in the amounts of $1.5 million, $1.5 million, and $1.4 million, respectively as well as $1.1 million out of labor in each quarter. The Company did not correct the 2017 quarterly financial data as the Company does not consider the impact of the prior period error to be material to those periods. (2) In fiscal 2018, income from operations included $2.6 million, $0.3 million and $15.0 million of lease termination and impairment expense in the second, third and fourth quarters, respectively, with an corresponding impact to net income of $1.9 million, $0.2 million and $11.1 million, respectively. In fiscal 2017, income from operations included $0.8 million, $0.4 million and $9.1 million of accelerated depreciation and impairment expense in the first, second and fourth quarters, respectively, with a corresponding impact to net income of $0.4 million, $0.3 million, $5.5 million, respectively. These amounts were recorded in impairment of assets and lease terminations in the consolidated statements of income. (See Note 1 for further discussion of these charges.) (3) The fourth quarter of fiscal 2017 includes a $38.5 million benefit to our income tax provision related to the Tax Act. (See Note 15 for further discussion of income taxes.) (4) Net income per share calculations for each quarter are based on the weighted average diluted shares outstanding for that quarter and may not total to the full year amount. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | Mar. 01, 2019item | Jan. 01, 2019USD ($) | Oct. 02, 2018USD ($) | Jul. 03, 2018USD ($) | Apr. 03, 2018USD ($) | Jan. 02, 2018USD ($) | Oct. 03, 2017USD ($) | Jul. 04, 2017USD ($) | Apr. 04, 2017USD ($) | Jan. 01, 2019USD ($) | Jan. 02, 2018USD ($) | Jan. 03, 2017USD ($) |
Description of Business | ||||||||||||
Number of company-owned upscale, casual, full-service dining restaurants | item | 218 | |||||||||||
Number of International locations operating under licensing agreements | item | 21 | |||||||||||
Number of bakery production facilities | item | 2 | |||||||||||
Basis of Presentation | ||||||||||||
Length of fiscal year | P364D | P364D | P371D | |||||||||
Contra revenue | $ 585,155,000 | $ 575,160,000 | $ 587,319,000 | $ 584,697,000 | $ 571,815,000 | $ 555,392,000 | $ 569,869,000 | $ 563,426,000 | $ 2,332,331,000 | $ 2,260,502,000 | $ 2,275,719,000 | |
Cash and Cash Equivalents | ||||||||||||
Amounts receivable from credit card processors | 17,300,000 | $ 13,800,000 | $ 17,300,000 | $ 13,800,000 | ||||||||
Conversion period, credit card sales | P3D | P3D | ||||||||||
Concentration of Credit Risk | ||||||||||||
Maximum amount of money market deposit insured by FDIC | 250,000 | $ 250,000 | ||||||||||
Fair Value of Financial Instruments | ||||||||||||
Fair value of deemed landlord financing liabilities | 117,000,000 | 117,000,000 | ||||||||||
Carrying value of deemed landlord financing liabilities | $ 118,600,000 | $ 118,600,000 | ||||||||||
Buildings and land improvements | Minimum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 25 years | |||||||||||
Buildings and land improvements | Maximum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 30 years | |||||||||||
Leasehold improvements | Minimum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 10 years | |||||||||||
Leasehold improvements | Maximum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 30 years | |||||||||||
Furnishings, fixtures and equipment | Minimum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 3 years | |||||||||||
Furnishings, fixtures and equipment | Maximum | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 15 years | |||||||||||
Computer software and equipment | ||||||||||||
Property and equipment | ||||||||||||
Useful life | 5 years | |||||||||||
Classifying complimentary meals as contra revenue versus other operating expense | ||||||||||||
Basis of Presentation | ||||||||||||
Contra revenue | 5,700,000 | 5,900,000 | 6,000,000 | $ 23,300,000 | ||||||||
Classifying complimentary meals as contra from from cost of sales to operating expenses | ||||||||||||
Basis of Presentation | ||||||||||||
Other operating expense | 1,400,000 | 1,500,000 | 1,500,000 | 5,800,000 | ||||||||
Classifying complimentary meals from labor to operating expenses | ||||||||||||
Basis of Presentation | ||||||||||||
Other operating expense | $ 1,100,000 | $ 1,100,000 | $ 1,100,000 | $ 4,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Intangible assets, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Intangible assets, net | |||
Amortization expenses | $ 0.6 | $ 0.6 | $ 0.6 |
Leasehold improvements | |||
Intangible assets, net | |||
Intangible assets, net | 9.1 | ||
Trademarks | |||
Intangible assets, net | |||
Intangible assets, net | $ 17.1 | ||
Non-transferable alcoholic beverage licenses | |||
Intangible assets, net | |||
Intangible assets, net | 8.9 | ||
Transferable alcoholic beverage licenses | |||
Intangible assets, net | |||
Intangible assets, net | $ 15.2 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Impairment of Long-Lived Assets and Lease Terminations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Jan. 01, 2019USD ($)item | Oct. 02, 2018USD ($) | Jul. 03, 2018USD ($) | Jan. 02, 2018USD ($)item | Jul. 04, 2017USD ($) | Apr. 04, 2017USD ($) | Jan. 01, 2019USD ($)item | Jan. 02, 2018USD ($)item | Jan. 03, 2017USD ($)item | |
Impairment of long-lived assets and lease terminations | |||||||||
Impairment of assets and lease terminations | $ | $ 17,861 | $ 10,343 | $ 114 | ||||||
Investments in unconsolidated affiliates | |||||||||
Equity investments in number of restaurants | 2 | 2 | 2 | 2 | 2 | ||||
North Italia | |||||||||
Investments in unconsolidated affiliates | |||||||||
Ownership percentage | 49.00% | 49.00% | |||||||
Flower Child | |||||||||
Investments in unconsolidated affiliates | |||||||||
Ownership percentage | 46.00% | 46.00% | |||||||
The Cheesecake Factory restaurants | |||||||||
Impairment of long-lived assets and lease terminations | |||||||||
Impairment of assets and lease terminations | $ | $ 15,000 | $ 300 | $ 2,600 | $ 9,100 | $ 400 | $ 800 | $ 6,600 | $ 2,500 | $ 100 |
Number of restaurants for which impairment and lease termination expenses were recorded | 3 | 3 | |||||||
Number of restaurants relating to closure | 2 | ||||||||
Number of restaurants related to relocation | 1 | ||||||||
Number of restaurants related to planned relocation | 1 | ||||||||
Number of restaurants related to lease expiration | 1 | ||||||||
Three, The Cheesecake Factory restaurants | |||||||||
Impairment of long-lived assets and lease terminations | |||||||||
Impairment of assets and lease terminations | $ | $ 17,900 | $ 10,300 | |||||||
Grand Lux Cafe | |||||||||
Impairment of long-lived assets and lease terminations | |||||||||
Number of restaurants for which impairment and lease termination expenses were recorded | 1 | 1 | |||||||
RockSugar Southeast Asian Kitchen | |||||||||
Impairment of long-lived assets and lease terminations | |||||||||
Number of restaurants for which impairment and lease termination expenses were recorded | 1 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Revenue Recognition | |||
Gift card breakage period | 3 years | ||
Revenue recognized | $ 8 | $ 7.9 | $ 7.6 |
New site agreements | |||
Revenue Recognition | |||
Deferred revenue | 0.2 | ||
Revenue recognized | 0.4 | ||
Consumer packaged goods | |||
Revenue Recognition | |||
Deferred revenue | 0.9 | ||
Revenue recognized | 0.8 | ||
Development and site fee | |||
Revenue Recognition | |||
Revenue recognized | 0.2 | ||
Promotional programs | |||
Revenue Recognition | |||
Deferred revenue | 7 | ||
Revenue recognized | $ 5.9 | ||
Minimum | |||
Revenue Recognition | |||
Revenue recognition agreement term | 1 year | ||
Revenue recognition for development and site fees over the life of the applicable licensee agreements (in years) | 8 years | ||
Maximum | |||
Revenue Recognition | |||
Revenue recognition agreement term | 3 years | ||
Revenue recognition for development and site fees over the life of the applicable licensee agreements (in years) | 30 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Advertising Costs | |||||||||||
Advertising costs | $ 6,100 | $ 6,100 | $ 7,400 | ||||||||
Net income per share, basic and diluted | |||||||||||
Net income | $ 16,178 | $ 28,475 | $ 28,353 | $ 26,029 | $ 57,738 | $ 26,445 | $ 38,166 | $ 35,043 | $ 99,035 | $ 157,392 | $ 139,494 |
Basic weighted average shares outstanding (in shares) | 45,263 | 46,930 | 47,981 | ||||||||
Dilutive effect of equity awards (in shares) | 952 | 1,222 | 1,391 | ||||||||
Diluted weighted average shares outstanding (in shares) | 46,215 | 48,152 | 49,372 | ||||||||
Basic net income per share (in dollars per share) | $ 0.36 | $ 0.63 | $ 0.62 | $ 0.57 | $ 1.26 | $ 0.57 | $ 0.80 | $ 0.74 | $ 2.19 | $ 3.35 | $ 2.91 |
Diluted net income per share (in dollars per share) | $ 0.35 | $ 0.61 | $ 0.61 | $ 0.56 | $ 1.24 | $ 0.56 | $ 0.78 | $ 0.71 | $ 2.14 | $ 3.27 | $ 2.83 |
Antidilutive securities excluded from calculation of basic earnings per share (in shares) | 1,500 | 1,600 | 1,400 | ||||||||
Restricted Shares and Restricted Share Units | |||||||||||
Net income per share, basic and diluted | |||||||||||
Antidilutive securities excluded from calculation of basic earnings per share (in shares) | 1,700 | 1,700 | 1,900 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Oct. 02, 2018 | Jan. 01, 2019 | |
Accounting Standards Update 2016-02 | ||
Recent Accounting Pronouncements | ||
Lease practical expedient, use of hindsight | true | |
Right-of-use assets | $ 1,000 | |
Operating lease liabilities | 1,000 | |
Additional expense | 4 | |
Accounting Standards Update 2014-09 | ||
Recent Accounting Pronouncements | ||
Increase to deferred revenue | 4.8 | |
Reduction of retained earnings | $ 3.6 | |
Early adoption | Accounting Standards Update 2018-15 | ||
Recent Accounting Pronouncements | ||
Capitalized implementation costs | $ 0.6 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Other Receivables | ||
Gift card distributors | $ 41,996 | $ 40,973 |
Insurance providers | 9,020 | 5,177 |
Landlord construction contributions | 4,976 | 9,053 |
Other | 12,201 | 12,315 |
Total | $ 68,193 | $ 67,518 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Inventories | ||
Restaurant food and supplies | $ 18,362 | $ 18,407 |
Bakery finished goods and work in progress | 13,845 | 18,423 |
Bakery raw materials and supplies | 6,679 | 5,730 |
Total | $ 38,886 | $ 42,560 |
Prepaid Expenses (Details)
Prepaid Expenses (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Prepaid Expenses | ||
Gift card contract assets | $ 23,388 | $ 23,814 |
Rent | 4,939 | 12,300 |
Other | 12,318 | 21,552 |
Total | $ 40,645 | $ 57,666 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Property and equipment | |||
Property and equipment, total | $ 1,923,849 | $ 1,872,870 | |
Less: Accumulated depreciation | (1,010,574) | (937,825) | |
Property and equipment, net | 913,275 | 935,045 | |
Depreciation expenses | 93,300 | 89,600 | $ 88,000 |
Repair and maintenance expenses | 55,200 | 54,100 | 50,100 |
Net expense on property and equipment disposals | 2,100 | 2,500 | $ 3,600 |
Land and related improvements | |||
Property and equipment | |||
Property and equipment, total | 15,852 | 15,852 | |
Buildings | |||
Property and equipment | |||
Property and equipment, total | 44,036 | 37,633 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, total | 1,283,233 | 1,258,132 | |
Furnishings, fixtures and equipment | |||
Property and equipment | |||
Property and equipment, total | 467,051 | 456,056 | |
Computer software and equipment | |||
Property and equipment | |||
Property and equipment, total | 55,434 | 52,165 | |
Restaurant smallwares | |||
Property and equipment | |||
Property and equipment, total | 30,268 | 29,579 | |
Construction in progress | |||
Property and equipment | |||
Property and equipment, total | $ 27,975 | $ 23,453 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Other Assets | ||
Executive Savings Plan trust assets | $ 57,605 | $ 60,901 |
Deposits | 5,489 | 5,496 |
Deferred income taxes | 1,597 | |
Total | $ 64,691 | $ 66,397 |
Gift Cards (Details)
Gift Cards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2019 | Jan. 02, 2018 | |
Gift card liabilities: | ||
Beginning balance | $ 163,951 | $ 153,629 |
Activations | 151,084 | 155,422 |
Redemptions and breakage | (142,699) | (145,100) |
Ending balance | 172,336 | 163,951 |
Gift card contract assets: | ||
Beginning balance | 23,814 | 23,786 |
Deferrals | 18,669 | 19,217 |
Amortization | (19,095) | (19,189) |
Ending balance | $ 23,388 | $ 23,814 |
Other Accrued Expenses (Details
Other Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Other Accrued Expenses | ||
Self-insurance | $ 72,631 | $ 66,354 |
Salaries and wages | 39,102 | 33,398 |
Staff member benefits | 22,946 | 21,498 |
Payroll and sales taxes | 15,684 | 16,359 |
Other | 44,018 | 45,407 |
Total | $ 194,381 | $ 183,016 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Millions | 12 Months Ended | |||
Jan. 01, 2019USD ($) | Jan. 02, 2018USD ($) | Jan. 03, 2017USD ($) | Dec. 29, 2015USD ($) | |
Long-Term Debt | ||||
Maximum commitments | $ 200 | |||
Maximum commitments, letter of credit sub-facility | 50 | |||
Additional available credit | 100 | |||
Available borrowings | 169.3 | |||
Outstanding borrowings | 10 | |||
Outstanding letters of credit | $ 20.7 | |||
Net Adjusted Leverage Ratio | 2.9 | |||
EBITDAR Ratio | 2.6 | |||
Capitalized interest expense | $ 0.4 | $ 0.7 | $ 0.6 | |
Minimum | ||||
Long-Term Debt | ||||
Financial covenant, EBITDAR Ratio | 1.9 | |||
Maximum | ||||
Long-Term Debt | ||||
Financial covenant, Net Adjusted Leverage Ratio | 4 | |||
Adjusted LIBO Rate | ||||
Long-Term Debt | ||||
Credit facility, floating interest rate basis | Adjusted LIBO Rate | |||
Adjusted LIBO Rate | Minimum | ||||
Long-Term Debt | ||||
Credit facility, basis spread on variable rate, (as a percent) | 1.00% | |||
Adjusted LIBO Rate | Maximum | ||||
Long-Term Debt | ||||
Credit facility, basis spread on variable rate, (as a percent) | 1.75% | |||
Federal Funds Effective Rate | ||||
Long-Term Debt | ||||
Credit facility, floating interest rate basis | Federal Funds Effective Rate | |||
Credit facility, basis spread on variable rate, (as a percent) | 0.50% | |||
One-month Adjusted LIBO Rate | ||||
Long-Term Debt | ||||
Credit facility, floating interest rate basis | one-month Adjusted LIBO Rate | |||
Fixed percentage added to variable rate | 1.00% | |||
One-month Adjusted LIBO Rate | Minimum | ||||
Long-Term Debt | ||||
Credit facility, basis spread on variable rate, (as a percent) | 0.00% | |||
One-month Adjusted LIBO Rate | Maximum | ||||
Long-Term Debt | ||||
Credit facility, basis spread on variable rate, (as a percent) | 0.75% |
Other Noncurrent Liabilities (D
Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 02, 2018 |
Other Noncurrent Liabilities | ||
Executive Savings Plan | $ 57,551 | $ 61,096 |
Other | 14,108 | 9,879 |
Total | $ 71,659 | $ 70,975 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jun. 22, 2018USD ($) | Feb. 28, 2017item | Feb. 03, 2017item | Oct. 03, 2019USD ($) | Jan. 01, 2019USD ($) | Jan. 02, 2018USD ($) | Jan. 03, 2017USD ($) |
Commitments and Contingencies | |||||||
Purchase obligations | $ 154,100,000 | ||||||
Purchase obligations due in fiscal 2019 | 118,200,000 | ||||||
Outstanding standby letters of credit | 20,700,000 | ||||||
Total accrued liability for self-insured plans | 72,200,000 | ||||||
Number of additional lawsuits filed | item | 2 | ||||||
Number of present and former restaurant hourly employees filed a class action lawsuit | item | 5 | ||||||
Payments required under event of an actual or constructive termination of employment | 1,800,000 | ||||||
Accrued potential bonuses | 1,800,000 | ||||||
Annual founder's retirement benefit for ten years after termination of full time employment | $ 650,000 | ||||||
Number of years annual founder's retirement benefit after termination of full time employment | 10 years | ||||||
Number of months annual founder's retirement benefit after termination of full time employment | 6 months | ||||||
Aggregate minimum annual lease payments under operating leases | |||||||
2,019 | $ 93,792,000 | ||||||
2,020 | 91,808,000 | ||||||
2,021 | 88,829,000 | ||||||
2,022 | 86,925,000 | ||||||
2,023 | 81,929,000 | ||||||
Thereafter | 495,091,000 | ||||||
Total | 938,374,000 | ||||||
Rent expense | |||||||
Straight-lined minimum base rent | 83,999,000 | $ 83,387,000 | $ 80,276,000 | ||||
Contingent rent | 20,147,000 | 19,559,000 | 22,408,000 | ||||
Common area maintenance and taxes | 39,961,000 | 38,103,000 | 36,252,000 | ||||
Total | $ 144,107,000 | $ 141,049,000 | $ 138,936,000 | ||||
Forecast | |||||||
Commitments and Contingencies | |||||||
Remaining interest | $ 150,000,000 | ||||||
Internal Revenue Service | |||||||
Commitments and Contingencies | |||||||
Tax disallowance | $ 8,000,000 | ||||||
Minimum | |||||||
Commitments and Contingencies | |||||||
Operating lease remaining terms, excluding unexercised renewal options | 1 year | ||||||
Contingent rent as a percentage of revenues | 2.50% | ||||||
Maximum | |||||||
Commitments and Contingencies | |||||||
Operating lease remaining terms, excluding unexercised renewal options | 23 years | ||||||
Contingent rent as a percentage of revenues | 10.00% | ||||||
Maximum | North Italia and Flower Child | |||||||
Commitments and Contingencies | |||||||
Obligations | $ 3,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | Jul. 21, 2016 | Jul. 20, 2016 | |
Stockholders Equity | |||||||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.24 | $ 0.24 | $ 1.24 | $ 1.06 | $ 0.88 | ||
Repurchased shares since program inception | 51,791,941 | 49,534,212 | 51,791,941 | 49,534,212 | |||||||||
Value of shares repurchased since program inception | $ 1,642,140 | $ 1,532,864 | $ 1,642,140 | $ 1,532,864 | |||||||||
Treasury stock repurchased during period | $ 109,276 | $ 122,975 | $ 146,467 | ||||||||||
Treasury Stock | |||||||||||||
Stockholders Equity | |||||||||||||
Number of shares authorized to be repurchased | 56,000,000 | 7,500,000 | |||||||||||
Repurchased shares since program inception | 51,800,000 | 51,800,000 | |||||||||||
Value of shares repurchased since program inception | $ 1,642,100 | $ 1,642,100 | |||||||||||
Shares repurchased during period | 2,300,000 | 2,600,000 | 2,900,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares shares in Millions | 12 Months Ended | ||
Jan. 01, 2019 | Apr. 05, 2017 | Apr. 04, 2017 | |
Stock-Based Compensation | |||
Shares authorized for issuance under share-based compensation plan | 12.7 | 9.2 | |
Shares available for grant | 2.9 | ||
Stock Options | |||
Stock-Based Compensation | |||
Annual vesting rights (as a percent) | 20.00% | ||
Stock Options | Minimum | |||
Stock-Based Compensation | |||
Option expiration period (in years) | 8 years | ||
Restricted Shares and Restricted Share Units | Minimum | |||
Stock-Based Compensation | |||
Annual vesting rights (as a percent) | 0.00% | ||
Vesting period (in years) | 3 years | ||
Restricted Shares and Restricted Share Units | Maximum | |||
Stock-Based Compensation | |||
Annual vesting rights (as a percent) | 150.00% | ||
Vesting period (in years) | 5 years |
Stock-Based Compensation - Net
Stock-Based Compensation - Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Stock-Based Compensation | |||
Total stock-based compensation | $ 19,988 | $ 16,457 | $ 21,473 |
Income tax benefit | 4,987 | 6,295 | 8,213 |
Total stock-based compensation, net of taxes | 15,001 | 10,162 | 13,260 |
Capitalized stock-based compensation | 262 | 239 | 338 |
Benefit in share-based compensation expense, out-of-period adjustment related to correction in stock-based compensation valuation and forfeitures | 3,900 | ||
Labor expenses | |||
Stock-Based Compensation | |||
Total stock-based compensation | 5,681 | 5,236 | 6,023 |
Other operating costs and expenses | |||
Stock-Based Compensation | |||
Total stock-based compensation | 287 | 243 | 251 |
General and administrative expenses | |||
Stock-Based Compensation | |||
Total stock-based compensation | $ 14,020 | $ 10,978 | $ 15,199 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Fair Value (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Stock Options | |||
Stock-Based Compensation | |||
Weighted average fair value at the grant date for options issued (in dollars per share) | $ 11.62 | $ 14.83 | $ 12.10 |
Weighted average assumptions under Black-Scholes valuation model | |||
Expected option term | 6 years 10 months 24 days | 6 years 10 months 24 days | 6 years 9 months 18 days |
Expected stock price volatility (as a percent) | 27.80% | 24.40% | 26.30% |
Risk-free interest rate (as a percent) | 2.80% | 2.30% | 1.60% |
Dividend yield (as a percent) | 2.50% | 1.60% | 1.60% |
Stock option activity, Shares | |||
Outstanding at beginning of year (in shares) | 1,741 | ||
Granted (in shares) | 381 | ||
Exercised (in shares) | (286) | ||
Forfeited or cancelled (in shares) | (37) | ||
Outstanding at end of year (in shares) | 1,799 | 1,741 | |
Exercisable at end of year (in shares) | 1,010 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of year (in dollars per share) | $ 42.25 | ||
Granted (in dollars per share) | 47.22 | ||
Exercised (in dollars per share) | 30 | ||
Forfeited or cancelled (in dollars per share) | 50.33 | ||
Outstanding at end of year (in dollars per share) | 45.03 | $ 42.25 | |
Exercisable at end of year (in dollars per share) | $ 40.89 | ||
Weighted Average Remaining Contractual Term (In years) | |||
Weighted Average Remaining Contractual Term (In years) | 4 years 1 month 6 days | 4 years | |
Exercisable at end of year (In years) | 2 years 7 months 6 days | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of year | $ 14,766 | ||
Outstanding at end of year | 5,606 | $ 14,766 | |
Exercisable at end of year | 5,606 | ||
Total intrinsic value of options exercised | 6,200 | $ 11,200 | $ 40,400 |
Unrecognized Stock-based Compensation Expense | |||
Total unrecognized stock-based compensation expenses related to unvested stock options, restricted shares and restricted share units | $ 6,900 | ||
Expected weighted average period for recognition of compensation expense related to unvested stock option | 3 years | ||
Restricted Shares and Restricted Share Units | |||
Restricted Shares and Restricted Share Units, Shares | |||
Outstanding at beginning of year (in shares) | 1,694 | ||
Granted (in shares) | 576 | ||
Vested (in shares) | (424) | ||
Forfeited (in shares) | (144) | ||
Outstanding at end of year (in shares) | 1,702 | 1,694 | |
Fair value of shares vested | $ 17,800 | $ 18,400 | $ 12,200 |
Weighted Average Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 46.38 | ||
Granted (in dollars per share) | 48.22 | $ 54.29 | $ 50.89 |
Vested (in dollars per share) | 41.94 | ||
Forfeited (in dollars per share) | 46.53 | ||
Outstanding at end of year (in dollars per share) | $ 48.08 | $ 46.38 | |
Unrecognized Stock-based Compensation Expense | |||
Total unrecognized stock-based compensation expenses related to unvested stock options, restricted shares and restricted share units | $ 35,800 | ||
Expected weighted average period for recognition of compensation expense related to unvested stock option | 2 years 10 months 24 days |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Jan. 01, 2019USD ($)item | Jan. 02, 2018USD ($) | Jan. 03, 2017USD ($) | |
Employee Benefit Plans | |||
Minimum number of investment options available to participating plan members | item | 1 | ||
Maximum amount of eligible bonuses that may be deferred by participating staff members under the ESP (as a percent) | 100.00% | ||
Accrued liability for self-insured benefit plans | $ 10.4 | $ 8.8 | |
401(k) Plan | |||
Employee Benefit Plans | |||
Expense recognized | 1 | 1 | $ 0.9 |
ESP | |||
Employee Benefit Plans | |||
Expense recognized | $ 1.3 | $ 1 | $ 1 |
Income Taxes - Provision & Reco
Income Taxes - Provision & Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 02, 2018 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Income Taxes | ||||
Income before income taxes | $ 107,411 | $ 146,466 | $ 191,768 | |
Current: | ||||
Federal | 5,082 | 7,148 | 42,665 | |
State | 8,804 | 7,106 | 10,614 | |
Total current | 13,886 | 14,254 | 53,279 | |
Deferred: | ||||
Federal | (4,549) | (24,570) | (564) | |
State | (961) | (610) | (441) | |
Total deferred | (5,510) | (25,180) | (1,005) | |
Total provision/(benefit) | $ 8,376 | $ (10,926) | $ 52,274 | |
U.S. statutory corporate tax rate (as a percent) | 21.00% | 35.00% | 35.00% | |
Income tax benefit due to revalue of deferred tax assets and liabilities | $ 38,500 | $ 38,500 | ||
Income Taxes Rate Reconciliation | ||||
U.S. federal statutory rate (as a percent) | 21.00% | 35.00% | 35.00% | |
State and district income taxes, net of federal benefit (as a percent) | 6.10% | 3.30% | 3.50% | |
Credit for FICA taxes paid on tips (as a percent) | (16.50%) | (9.40%) | (7.00%) | |
Other credits and incentives (as a percent) | (2.50%) | (1.90%) | (1.30%) | |
Manufacturing deduction (as a percent) | (2.30%) | (2.50%) | ||
Deferred compensation (as a percent) | 0.80% | (1.50%) | (0.50%) | |
Equity compensation (as a percent) | (1.50%) | (4.50%) | ||
Impact of statutory rate change on deferred taxes (as a percent) | (26.30%) | |||
Other (as a percent) | 0.40% | 0.10% | 0.10% | |
Effective tax rate (as a percent) | 7.80% | (7.50%) | 27.30% |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Deferred tax assets: | |||
Staff member benefits | $ 22,925 | $ 22,626 | |
Insurance reserves | 15,165 | 14,027 | |
Accrued rent | 10,870 | 12,523 | |
Deferred income | 17,288 | 11,607 | |
Stock-based compensation | 8,628 | 8,710 | |
Tax credit carryforwards | 1,880 | 2,308 | |
Other | 1,265 | 738 | |
Subtotal | 78,021 | 72,539 | |
Less: Valuation allowance | (792) | (455) | |
Total | 77,229 | 72,084 | |
Deferred tax liabilities: | |||
Property and equipment | (107,513) | (111,324) | |
Prepaid expenses | (7,929) | (9,120) | |
Inventory | (6,893) | (6,724) | |
Other | (5,420) | (2,132) | |
Total | (127,755) | (129,300) | |
Net deferred tax liability | (50,526) | (57,216) | |
Reconciliation of beginning and ending amount of our uncertain tax positions | |||
Balance at beginning of year | 843 | 829 | $ 1,067 |
Additions related to current period tax positions | 104 | 168 | 139 |
Reductions related to settlements with taxing authorities and lapses of statutes of limitations | (117) | (154) | (377) |
Balance at end of year | 830 | 843 | $ 829 |
Accrued interest and penalties related with uncertain tax positions | 200 | 100 | |
Decrease in uncertain tax positions during the next twelve months based on the lapses of statutes of limitations for certain jurisdictions | 0 | ||
State | |||
Reconciliation of beginning and ending amount of our uncertain tax positions | |||
Tax credit carryforwards | 2,400 | 2,900 | |
Tax credit carryforward valuation allowance | 800 | $ 500 | |
Foreign Tax Authority [Member] | |||
Reconciliation of beginning and ending amount of our uncertain tax positions | |||
Tax credit carryforwards | $ 700 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Segment Information | |||||||||||
Revenues | $ 585,155 | $ 575,160 | $ 587,319 | $ 584,697 | $ 571,815 | $ 555,392 | $ 569,869 | $ 563,426 | $ 2,332,331 | $ 2,260,502 | $ 2,275,719 |
Income/(loss) from operations | 19,359 | 33,495 | 34,543 | $ 31,551 | 22,747 | $ 34,317 | 50,218 | 43,563 | 118,948 | 152,845 | 200,993 |
Depreciation and amortization | 95,976 | 92,729 | 88,010 | ||||||||
Capital expenditures | 102,909 | 120,779 | 115,821 | ||||||||
Total assets | 1,314,133 | 1,333,060 | 1,314,133 | 1,333,060 | 1,293,319 | ||||||
Impairment of assets and lease terminations | 17,861 | 10,343 | 114 | ||||||||
The Cheesecake Factory restaurants | |||||||||||
Segment Information | |||||||||||
Revenues | 2,127,347 | 2,057,816 | 2,078,083 | ||||||||
Income/(loss) from operations | 252,210 | 263,581 | 308,058 | ||||||||
Depreciation and amortization | 80,646 | 76,186 | 74,861 | ||||||||
Capital expenditures | 71,880 | 101,142 | 99,817 | ||||||||
Total assets | 928,345 | 937,512 | 928,345 | 937,512 | 950,372 | ||||||
Impairment of assets and lease terminations | 15,000 | $ 300 | $ 2,600 | 9,100 | $ 400 | $ 800 | 6,600 | 2,500 | 100 | ||
Other | |||||||||||
Segment Information | |||||||||||
Revenues | 204,984 | 202,686 | 197,636 | ||||||||
Income/(loss) from operations | 8,993 | 17,547 | 27,623 | ||||||||
Depreciation and amortization | 10,438 | 11,717 | 8,469 | ||||||||
Capital expenditures | 28,324 | 16,885 | 13,783 | ||||||||
Total assets | 164,972 | 167,096 | 164,972 | 167,096 | 157,842 | ||||||
Impairment of assets and lease terminations | 11,300 | 7,800 | |||||||||
Corporate | |||||||||||
Segment Information | |||||||||||
Income/(loss) from operations | (142,255) | (128,283) | (134,688) | ||||||||
Depreciation and amortization | 4,892 | 4,826 | 4,680 | ||||||||
Capital expenditures | 2,705 | 2,752 | 2,221 | ||||||||
Total assets | $ 220,816 | $ 228,452 | $ 220,816 | $ 228,452 | $ 185,105 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Quarterly Financial Data (unaudited) | |||||||||||
Revenues | $ 585,155 | $ 575,160 | $ 587,319 | $ 584,697 | $ 571,815 | $ 555,392 | $ 569,869 | $ 563,426 | $ 2,332,331 | $ 2,260,502 | $ 2,275,719 |
Income from operations | 19,359 | 33,495 | 34,543 | 31,551 | 22,747 | 34,317 | 50,218 | 43,563 | 118,948 | 152,845 | 200,993 |
Net income | $ 16,178 | $ 28,475 | $ 28,353 | $ 26,029 | $ 57,738 | $ 26,445 | $ 38,166 | $ 35,043 | $ 99,035 | $ 157,392 | $ 139,494 |
Basic net income per share (in dollars per share) | $ 0.36 | $ 0.63 | $ 0.62 | $ 0.57 | $ 1.26 | $ 0.57 | $ 0.80 | $ 0.74 | $ 2.19 | $ 3.35 | $ 2.91 |
Diluted net income per share (in dollars per share) | 0.35 | 0.61 | 0.61 | 0.56 | 1.24 | 0.56 | 0.78 | 0.71 | 2.14 | 3.27 | 2.83 |
Cash dividends declared per common share (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.24 | $ 0.24 | $ 1.24 | $ 1.06 | $ 0.88 |
Quarterly Financial Data - Asse
Quarterly Financial Data - Asset impairment (unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 | |
Asset impairment | |||||||||||
Contra revenue | $ 585,155 | $ 575,160 | $ 587,319 | $ 584,697 | $ 571,815 | $ 555,392 | $ 569,869 | $ 563,426 | $ 2,332,331 | $ 2,260,502 | $ 2,275,719 |
Impairment of assets and lease terminations | 17,861 | 10,343 | 114 | ||||||||
Income tax benefit due to revalue of deferred tax assets and liabilities | 38,500 | 38,500 | |||||||||
The Cheesecake Factory restaurants | |||||||||||
Asset impairment | |||||||||||
Contra revenue | 2,127,347 | 2,057,816 | 2,078,083 | ||||||||
Impairment of assets and lease terminations | 15,000 | 300 | 2,600 | 9,100 | 400 | 800 | 6,600 | $ 2,500 | $ 100 | ||
Impact of impairment and lease termination expenses on net income | $ 11,100 | 200 | 1,900 | $ 5,500 | $ 300 | $ 400 | |||||
Classifying complimentary meals as contra revenue versus other operating expense | |||||||||||
Asset impairment | |||||||||||
Contra revenue | 5,700 | 5,900 | 6,000 | 23,300 | |||||||
Classifying complimentary meals as contra from from cost of sales to operating expenses | |||||||||||
Asset impairment | |||||||||||
Other operating expense | 1,400 | 1,500 | 1,500 | 5,800 | |||||||
Classifying complimentary meals from labor to operating expenses | |||||||||||
Asset impairment | |||||||||||
Other operating expense | $ 1,100 | $ 1,100 | $ 1,100 | $ 4,400 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Feb. 13, 2019 | Jan. 01, 2019 | Oct. 02, 2018 | Jul. 03, 2018 | Apr. 03, 2018 | Jan. 02, 2018 | Oct. 03, 2017 | Jul. 04, 2017 | Apr. 04, 2017 | Jan. 01, 2019 | Jan. 02, 2018 | Jan. 03, 2017 |
Subsequent Events | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.24 | $ 0.24 | $ 1.24 | $ 1.06 | $ 0.88 | |
Subsequent Events | ||||||||||||
Subsequent Events | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.33 |