0000703351-16-000091.txt : 20160811 0000703351-16-000091.hdr.sgml : 20160811 20160811072645 ACCESSION NUMBER: 0000703351-16-000091 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20160811 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160811 DATE AS OF CHANGE: 20160811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRINKER INTERNATIONAL INC CENTRAL INDEX KEY: 0000703351 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 751914582 STATE OF INCORPORATION: DE FISCAL YEAR END: 0625 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10275 FILM NUMBER: 161823003 BUSINESS ADDRESS: STREET 1: 6820 LBJ FREEWAY CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9729809917 MAIL ADDRESS: STREET 1: 6820 LBJ FREEWAY CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: CHILIS INC DATE OF NAME CHANGE: 19910528 8-K 1 eat201606298k.htm 8-K Document


_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
______________________________________
FORM 8-K
 
_____________________________________
 
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 11, 2016
 
_____________________________________
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 
 _____________________________________
 
 
 
 
 
 
Delaware
 
1-10275
 
75-1914582
(State of
Incorporation)
 
(Commission
File Number)
 
(IRS Employment
Identification No.)
6820 LBJ Freeway
Dallas, Texas 75240
(Address of principal executive offices)
Registrant’s telephone number, including area code 972-980-9917

_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________







Section 2 – Financial Information.
Item 2.02. Results of Operations and Financial Conditions.
The information contained in this Current Report on Form 8-K, including the Exhibit attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
On August 11, 2016, Brinker International, Inc. ("Company") issued a Press Release announcing its fourth quarter fiscal 2016 results. A copy of this Press Release is attached hereto as Exhibit 99.1.
Section 8 - Other Events.
Item 8.01. Other Events
Also, in the Press Release, Company announced that the Board of Directors increased Company's share repurchase authorization by $150M.
Section 9 – Financial Statements and Exhibits.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated August 11, 2016.


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
BRINKER INTERNATIONAL, INC.
 
 
 
Dated: August 11, 2016
By:
 
/s/ Wyman T. Roberts
 
 
 
Wyman T. Roberts,
 
 
 
President and Chief Executive Officer



 EX-99.1 2 q4f16pressrelease.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1



BRINKER INTERNATIONAL REPORTS YEAR-OVER-YEAR INCREASES IN FOURTH QUARTER
AND FULL FISCAL YEAR EPS
DALLAS (Aug. 11, 2016) – Brinker International, Inc. (NYSE: EAT) today announced results for the fiscal fourth quarter ended June 29, 2016.
Highlights include the following:

•
In 2016, the fourth quarter and fiscal year included an additional operating week (53rd week) compared to fiscal 2015

•
On a GAAP basis, earnings per diluted share increased 20.7 percent to $1.11 compared to $0.92 for the fourth quarter of fiscal 2015. On a GAAP basis, earnings per diluted share increased 12.1 percent to $3.42 compared to $3.05 for the full year fiscal 2015

•
Earnings per diluted share, excluding special items, increased 31.9 percent to $1.24 compared to $0.94 for the fourth quarter of fiscal 2015. Earnings per diluted share, excluding special items, increased 14.9 percent to $3.55 compared to $3.09 for the full year fiscal 2015. (see non-GAAP reconciliation below)

•
Brinker International total fourth quarter revenues increased 15.4 percent to $881.7 million compared to the fourth quarter of fiscal 2015 and company sales increased 15.8 percent to $855.4 million compared to the fourth quarter of fiscal 2015, primarily attributable to the 103 restaurants acquired with the Pepper Dining transaction in the first quarter of fiscal 2016 as well as the additional operating week in the fourth quarter of fiscal 2016

•
Chili’s fourth quarter company-owned comparable restaurant sales1 decreased 1.8 percent

•
Maggiano’s fourth quarter comparable restaurant sales1 decreased 1.7 percent

•
Chili's franchise fourth quarter comparable restaurant sales1 decreased 3.4 percent, which includes a 2.1 percent and 5.5 percent decrease for U.S. and international franchise restaurants, respectively

•
Restaurant operating margin,2 as a percent of company sales, declined approximately 20 basis points to 18.3 percent compared to 18.5 percent for the fourth quarter of fiscal 2015

•
For fiscal 2016, cash flows provided by operating activities were $394.7 million and capital expenditures totaled $112.8 million. Free cash flow3 was approximately $281.9 million (see non-GAAP reconciliation below)

•
The company repurchased approximately 0.4 million shares of its common stock for $18.7 million in the fourth quarter and a total of approximately 5.8 million shares for $284.9 million year-to-date

•
The company declared a dividend of 32 cents per share which was paid on June 30, 2016, representing a 14.3 percent increase over the prior year

•
The company plans to increase leverage in the range of $250 to $300 million in the near term subject to market conditions and use the proceeds to return capital to shareholders in the form of share repurchases

•
The company's Board of Directors authorized an additional $150 million in share repurchases which brings the total available authority to $455 million

“We ended the fiscal year with improving trends and have returned to gaining share in the industry,” said Wyman Roberts, chief executive officer and president. “We are also encouraged by the early results of our fiscal year 2017 initiatives. The strong cash flow generation of our business model gives us confidence to increase our leverage and return additional capital to shareholders.”

1
Exhibit 99.1

1 Amounts are calculated based on comparable 13 weeks in each fiscal quarter.

2 Restaurant operating margin is defined as Company sales less Cost of sales, Restaurant Labor and Restaurant expenses and excludes depreciation and amortization expenses. Restaurant operating margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. Restaurant operating margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to operating income or other similarly titled measures of other companies.

3 Free cash flow is defined as cash flows provided by operating activities less capital expenditures. Free cash flow is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to operating cash flow or other similarly titled measures of other companies.

Table 1: Q4 and FY comparable restaurant sales1 
Company-owned, reported brands and franchise; percentage
 
 
Q4 16
 
Q4 15
 
FY 16
 
FY 15
Brinker International
 
(1.8
)
 
(0.7
)
 
(2.4
)
 
1.7

  Chili’s Company-Owned2
 
 
 
 
 
 
 
 
     Comparable Restaurant Sales
 
(1.8
)
 
(0.8
)
 
(2.6
)
 
1.9

     Pricing Impact3
 
1.0

 
1.7

 
1.0

 
1.7

     Mix-Shift3
 
1.3

 
(1.8
)
 
0.1

 
0.2

     Traffic3
 
(4.1
)
 
(0.7
)
 
(3.7
)
 
0.0

  Maggiano’s
 
 
 
 
 
 
 
 
     Comparable Restaurant Sales
 
(1.7
)
 
(0.1
)
 
(1.3
)
 
0.8

     Pricing Impact3
 
1.8

 
2.7

 
1.9

 
2.5

     Mix-Shift3
 
(2.5
)
 
(1.0
)
 
(1.6
)
 
(1.5
)
     Traffic3
 
(1.0
)
 
(1.8
)
 
(1.6
)
 
(0.2
)
 
 
 
 
 
 
 
 
 
Chili's Franchise4
 
(3.4
)
 
1.9

 
(0.7
)
 
2.2

  U.S. Comparable Restaurant Sales
 
(2.1
)
 
2.1

 
(1.2
)
 
2.9

  International Comparable Restaurant Sales
 
(5.5
)
 
1.2

 
0.2

 
0.4

 
 
 
 
 
 
 
 
 
Chili's Domestic5
 
(1.8
)
 
0.1

 
(2.2
)
 
2.2

System-wide6
 
(2.2
)
 
0.2

 
(1.9
)
 
1.9

1

Amounts are calculated based on comparable 13 weeks in each fiscal quarter.
2

Chili's company-owned comparable restaurant sales includes 103 Chili's restaurants acquired from a franchisee in the first quarter of fiscal 2016.
3

Reclassifications have been made between pricing impact, mix-shift and traffic in the prior year to conform with current year classification.
4

Revenues generated by franchisees are not included in revenues on the consolidated statements of comprehensive income; however, we generate royalty revenue and advertising fees based on franchisee revenues, where applicable. We believe including franchise comparable restaurant sales provides investors information regarding brand performance that is relevant to current operations and may impact future restaurant development.
5

Chili's Domestic comparable restaurant sales percentages are derived from sales generated by company-owned and franchise operated Chili's restaurants in the United States.
6

System-wide comparable restaurant sales are derived from sales generated by company-owned Chili’s and Maggiano’s restaurants in addition to the sales generated at franchise operated restaurants.
Quarterly Operating Performance
CHILI’S fourth quarter company sales increased 17.1 percent to $747.3 million from $638.2 million in the prior year primarily due to an increase in restaurant capacity resulting from the acquisition of 103 Chili's restaurants on June 25, 2015 as well as the additional operating week, partially offset by a decline in comparable restaurant sales. As compared to the prior year, Chili's restaurant operating margin1 declined primarily due to the impact of the acquired restaurants. Restaurant labor, as a percent of company sales, increased compared to the prior year due to higher wage rates. Cost of sales, as a percent of company sales, increased due to unfavorable menu item mix and commodity pricing primarily related to steak, partially offset by increased menu pricing and favorable commodity pricing related to burger meat. Restaurant expenses, as a percent of company sales, decreased due to leverage related to the additional operating week, lower workers' compensation insurance expenses and decreased advertising.

2

MAGGIANO’S fourth quarter company sales increased 7.9 percent to $108.1 million from $100.2 million in the prior year primarily due to an increase in restaurant capacity as well as the additional operating week, partially offset by a decline in comparable restaurant sales. As compared to the prior year, Maggiano's restaurant operating margin1 improved. Restaurant expenses, as a percent of company sales, decreased compared to prior year due to leverage related to the additional operating week as well as lower advertising and workers' compensation insurance expenses. Cost of sales, as a percent of company sales, was positively impacted by increased menu pricing and favorable commodity pricing, partially offset by menu item changes. Restaurant labor, as a percent of company sales, increased compared to prior year due to higher wage rates, partially offset by lower incentive bonus.
1 Restaurant operating margin is defined as Company sales less Cost of sales, Restaurant labor and Restaurant expenses and excludes depreciation and amortization expenses. Restaurant operating margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. Restaurant operating margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to operating income or other similarly titled measures of other companies.
FRANCHISE AND OTHER revenues increased 2.1 percent to $26.3 million for the fourth quarter compared to $25.8 million in the prior year driven primarily by higher royalty revenues related to Chili's retail food products and revenues associated with tabletop devices, partially offset by a decrease in royalty revenues resulting from the acquisition of 103 Chili's restaurants from a former franchisee. Brinker franchisees generated approximately $341 million in sales2 for the fourth quarter of fiscal 2016.

2Royalty revenues are recognized based on the sales generated and reported to the company by franchisees.
Other
Depreciation and amortization expense increased $2.0 million for the quarter primarily due to depreciation on acquired restaurants, asset replacements and new restaurant openings, partially offset by an increase in fully depreciated assets.
General and administrative expense decreased approximately $0.6 million primarily due to lower performance-based compensation, partially offset by payroll expenses related to the additional operating week.
On a GAAP basis, the effective income tax rate increased to 31.7 percent in the current quarter from 29.7 percent in the prior year quarter primarily due to higher profits, partially offset by the impact of tax benefits primarily related to restaurant impairment and restaurant closure charges in the current quarter. Excluding the impact of special items, the effective income tax rate increased to 32.2 percent in the current quarter compared to 31.2 percent in the prior year quarter primarily due to higher profits.

Non-GAAP Reconciliation
Brinker believes excluding special items from its financial results provides investors with a clearer perspective of the company’s ongoing operating performance and a more relevant comparison to prior period results. Special items in the fourth quarter of fiscal
2016 consist primarily of the impairment of restaurants, restaurant closures and severance charges.

Table 2: Reconciliation of net income excluding special items
Q4 16 and Q4 15; $ millions and $ per diluted share after-tax
 
 
Q4 16
 
EPS Q4 16
 
Q4 15
 
EPS Q4 15
Net Income
 
62.3

 
1.11

 
57.2

 
0.92

   Special items1
 
11.7

 
 
 
4.0

 
 
        Income tax effect related to special items
 
(4.4
)
 
 
 
(1.3
)
 
 
     Special items, net of taxes
 
7.3

 
0.13

 
2.7

 
0.04

     Adjustment for tax items2
 
0.2

 
0.00

 
(1.1
)
 
(0.02
)
Net Income excluding Special Items
 
69.8

 
1.24

 
58.8

 
0.94


3

Table 3: Reconciliation of net income excluding special items
FY 16 and FY 15; $ millions and $ per diluted share after-tax
 
 
FY 16
 
EPS FY 16
 
FY 15
 
EPS FY 15
Net Income
 
200.7

 
3.42

 
196.7

 
3.05

   Special items1
 
17.2

 
 
 
4.8

 
 
        Income tax effect related to special items
 
(6.5
)
 
 
 
(1.7
)
 
 
     Special items, net of taxes
 
10.7

 
0.18

 
3.1

 
0.05

Adjustment for tax items2
 
(3.2
)
 
(0.05
)
 
(1.1
)
 
(0.01
)
Net Income excluding Special Items
 
208.2

 
3.55

 
198.7

 
3.09


1

See footnote "b" to the consolidated statements of comprehensive income for additional details on the composition of these amounts.
2

Adjustments for tax items result from the benefit associated with the release of the valuation allowance for state net operating losses as well as the resolution of certain tax positions which directly impacts tax expense.
Table 4: Reconciliation of free cash flow
FY 16; $ millions

Brinker believes presenting free cash flow provides a useful measure to evaluate the cash flow available for reinvestment after considering the capital requirements of our business operations.
 
 
FY 16
 
Cash flows provided by operating activities
 
394.7

 
Capital expenditures
 
(112.8
)
 
Free cash flow
 
281.9

 

Fiscal 2017 Outlook

Fiscal 2017 contains 52 weeks versus 53 weeks in fiscal 2016. The company anticipates earnings per diluted share, excluding special items, in the range of $3.40 to $3.50. We are unable to reliably forecast special items such as restaurant impairments, restaurant closures, reorganization charges and legal settlements without unreasonable effort. As such we do not present a reconciliation of forecasted adjusted earnings per diluted share, excluding special items, to US GAAP earnings per diluted share or forecasted adjusted free cash flow to US GAAP cash flows provided by operating activities.

Earnings are based on the following expectations:
•
Revenues are expected to be down approximately one half percent to up one percent (an increase of 1.0 to 2.5 percent excluding the 53rd week in fiscal 2016)
•
Comparable restaurant sales are expected to increase one half to two percent
•
Company-owned new restaurant development is expected to add year-over-year capacity growth of about one half percent (excluding the 53rd week in fiscal 2016)
•
Restaurant operating margin is expected to be down approximately 50 basis points year-over-year
•
Depreciation expense is expected to increase $3 to $5 million, assuming capital expenditures of $110 to $120 million
•
General and administrative expense is expected to be $16 to $18 million higher on a dollar basis due to planning incentive compensation at target as well as information technology expenses related to sales driving initiatives, partially offset by the lack of the 53rd week
•
Interest expense is expected to increase $15 million to $22 million due to a higher debt balance and a higher anticipated average interest rate in fiscal 2017
•
Excluding the impact of special items, the effective income tax rate is projected to be approximately 29 to 31 percent
•
Free cash flow is expected to be $230 to $240 million
•
Diluted weighted average shares outstanding is expected to be 50 to 53 million

4

The company believes providing fiscal 2017 earnings per diluted share guidance provides investors the appropriate insight into the company's ongoing operating performance.

Guidance Policy
Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, excluding special items, and other key line items in the statement of comprehensive income and will only provide updates if there is a material change versus the original guidance. Consistent with prior practice, management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.
 
Webcast Information
Investors and interested parties are invited to listen to today’s conference call, as management will provide further details of the quarter. The call will broadcast live on the Brinker website (www.brinker.com) at 9 a.m. CDT today (Aug. 11). For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on the Brinker website until the end of the day Sept. 8, 2016.
Additional financial information, including statements of income which detail operations excluding special items, franchise and other revenues, and comparable restaurant sales trends by brand, is also available on the Brinker website under the Financial Information section of the Investor tab.
Forward Calendar
- SEC Form 10-K for fiscal 2016 filing on or before Aug. 29, 2016; and
- First quarter earnings release, before market opens, Oct. 25, 2016.
About Brinker
Brinker International, Inc. is one of the world’s leading casual dining restaurant companies. Founded in 1975 and based in Dallas, Texas, as of June 29, 2016, Brinker owned, operated, or franchised 1,660 restaurants under the names Chili’s® Grill & Bar (1,609 restaurants) and Maggiano’s Little Italy® (51 restaurants).
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements, including the Fiscal 2017 outlook. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by general business and economic conditions, financial and credit market conditions, credit availability, reduced disposable income, the impact of competition, the impact of mergers, acquisitions, divestitures and other strategic transactions, franchisee success, the seasonality of the company’s business, increased minimum wages, increased health care costs, adverse weather conditions, future commodity prices, product availability, fuel and utility costs and availability, terrorist acts, consumer perception of food safety, changes in consumer taste, health epidemics or pandemics, changes in demographic trends, availability of employees, unfavorable publicity, the company’s ability to meet its business strategy plan, acts of God, governmental regulations, inflation, technology failures, and failure to protect the security of data of our guests and teammates, as well as the risks described under the caption "Risk Factors" in our Annual Report on Form 10-K and future filings with the Securities and Exchange Commission.

5

BRINKER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
 
 
 
Fourteen Week Period Ended
 
Thirteen Week Period Ended
 
Fifty-Three Week Period Ended
 
Fifty-Two Week Period Ended
 
 
June 29, 2016
 
June 24, 2015
 
June 29, 2016
 
June 24, 2015
Revenues:
 
 
 
 
 
 
 
 
Company sales
 
$
855,361

 
$
738,378

 
$
3,166,659

 
$
2,904,746

Franchise and other revenues (a)
 
26,320

 
25,769

 
90,830

 
97,532

Total revenues
 
881,681

 
764,147

 
3,257,489

 
3,002,278

Operating costs and expenses:
 
 
 
 
 
 
 
 
Company restaurants (excluding depreciation and amortization)
 
 
 
 
 
 
 
 
Cost of sales
 
224,440

 
192,556

 
840,204

 
775,063

Restaurant labor
 
279,131

 
234,092

 
1,036,005

 
929,206

Restaurant expenses
 
195,614

 
175,287

 
762,663

 
703,334

Company restaurant expenses
 
699,185

 
601,935

 
2,638,872

 
2,407,603

Depreciation and amortization
 
39,033

 
37,029

 
156,368

 
145,242

General and administrative
 
32,403

 
32,979

 
127,593

 
133,467

Other gains and charges (b)
 
11,726

 
4,017

 
17,180

 
4,764

Total operating costs and expenses
 
782,347

 
675,960

 
2,940,013

 
2,691,076

Operating income
 
99,334

 
88,187

 
317,476

 
311,202

Interest expense
 
8,497

 
7,297

 
32,574

 
29,006

Other, net
 
(375
)
 
(513
)
 
(1,485
)
 
(2,081
)
Income before provision for income taxes
 
91,212

 
81,403

 
286,387

 
284,277

Provision for income taxes
 
28,870

 
24,180

 
85,642

 
87,583

Net income
 
$
62,342

 
$
57,223

 
$
200,745

 
$
196,694

 
 
 
 
 
 
 
 
 
Basic net income per share
 
$
1.12

 
$
0.94

 
$
3.47

 
$
3.12

 
 
 
 
 
 
 
 
 
Diluted net income per share
 
$
1.11

 
$
0.92

 
$
3.42

 
$
3.05

 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
 
55,657

 
61,132

 
57,895

 
63,072

 
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
 
56,394

 
62,294

 
58,684

 
64,404

 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Foreign currency translation adjustment (c)
 
$
330

 
$
(507
)
 
$
(2,964
)
 
$
(7,690
)
Other comprehensive income (loss)
 
330

 
(507
)
 
(2,964
)
 
(7,690
)
Comprehensive income
 
$
62,672

 
$
56,716

 
$
197,781

 
$
189,004

 
 
 
 
 
 
 
 
 
 
(a)
Franchise and other revenues primarily includes royalties, development fees, franchise fees, banquet service charge income, gift card activity (breakage and discounts), tabletop device revenue, Chili's retail food product royalties and delivery fee income.









6

(b)
Other gains and charges include:
 
 
Fourteen Week Period Ended
 
Thirteen Week Period Ended
 
Fifty-Three Week Period Ended
 
Fifty-Two Week Period Ended
 
 
June 29, 2016
 
June 24, 2015
 
June 29, 2016
 
June 24, 2015
Restaurant impairment charges
 
$
6,714

 
$
1,508

 
$
10,651

 
$
2,255

Restaurant closure charges
 
3,691

 
279

 
3,780

 
1,736

Severance
 
936

 
894

 
3,304

 
1,182

Impairment of intangible assets
 
392

 
470

 
392

 
645

Litigation
 
(1,159
)
 
—

 
(3,191
)
 
(2,753
)
Acquisition costs
 
—

 
1,100

 
700

 
1,100

(Gain) Loss on the sale of assets, net
 
—

 
—

 
(2,858
)
 
1,093

Impairment of investment
 
—

 
—

 
1,000

 
—

Other
 
1,152

 
(234
)
 
3,402

 
(494
)
 
 
$
11,726

 
$
4,017

 
$
17,180

 
$
4,764



(c)
The foreign currency translation adjustment included in comprehensive income on the consolidated statements of comprehensive income represents the unrealized impact of translating the financial statements of the Canadian restaurants and the Mexican joint venture from their respective functional currencies to U.S. dollars. This amount is not included in net income and would only be realized upon disposition of the businesses.


7


BRINKER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
June 29, 2016
 
June 24, 2015
 
 
 
 
 
ASSETS
 
 
 
 
Current assets
 
$
176,774

 
$
187,224

Net property and equipment (a)
 
1,043,152

 
1,032,044

Total other assets
 
252,790

 
216,605

Total assets
 
$
1,472,716

 
$
1,435,873

LIABILITIES AND SHAREHOLDERS’ DEFICIT
 
 
 
 
Current installments of long-term debt
 
$
3,563

 
$
3,439

Other current liabilities
 
428,880

 
415,036

Long-term debt, less current installments
 
1,113,949

 
970,825

Other liabilities
 
139,423

 
125,033

Total shareholders’ deficit
 
(213,099
)
 
(78,460
)
Total liabilities and shareholders’ deficit
 
$
1,472,716

 
$
1,435,873


(a)
At June 29, 2016, the company owned the land and buildings for 190 of the 1,001 company-owned restaurants. The net book value of the land totaled $141.7 million and the buildings totaled $105.6 million associated with these restaurants.


8

BRINKER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
 
Fifty-Three Week Period Ended
 
Fifty-Two Week Period Ended
 
 
June 29, 2016
 
June 24, 2015
Cash Flows From Operating Activities:
 
 
 
 
Net income
 
$
200,745

 
$
196,694

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
156,368

 
145,242

Stock-based compensation
 
15,159

 
14,802

Restructure charges and other impairments
 
17,445

 
5,636

Net loss on disposal of assets
 
87

 
4,523

Changes in assets and liabilities
 
4,896

 
1,714

Net cash provided by operating activities
 
394,700

 
368,611

Cash Flows from Investing Activities:
 
 
 
 
Payments for property and equipment
 
(112,788
)
 
(140,262
)
Payment for purchase of restaurants
 
(105,577
)
 
—

Proceeds from sale of assets
 
4,256

 
1,950

Net cash used in investing activities
 
(214,109
)
 
(138,312
)
Cash Flows from Financing Activities:
 
 
 
 
Purchases of treasury stock
 
(284,905
)
 
(306,255
)
Borrowings on revolving credit facility
 
256,500

 
480,750

Payments of dividends
 
(74,066
)
 
(70,832
)
Payments on revolving credit facility
 
(110,000
)
 
(177,000
)
Excess tax benefits from stock-based compensation
 
5,460

 
15,893

Payments on long-term debt
 
(3,402
)
 
(189,177
)
Proceeds from issuances of treasury stock
 
6,147

 
16,259

Payments for deferred financing costs
 
—

 
(2,501
)
Net cash used in financing activities
 
(204,266
)
 
(232,863
)
Net change in cash and cash equivalents
 
(23,675
)
 
(2,564
)
Cash and cash equivalents at beginning of period
 
55,121

 
57,685

Cash and cash equivalents at end of period
 
$
31,446

 
$
55,121


9

BRINKER INTERNATIONAL, INC.
RESTAURANT SUMMARY
 
 
 
Fourth Quarter
Openings
Fiscal 2016 (a)
 
Total Restaurants
June 29, 2016
 
Openings Fiscal 2016 (a)
 
Projected Openings Fiscal 2017
Company-Owned Restaurants:
 
 
 
 
 
 
 
 
Chili’s Domestic
 
4

 
937

 
12

 
5-6

Chili’s International
 
—

 
13

 
—

 
1

Maggiano’s
 
—

 
51

 
2

 
2

 
 
4

 
1,001

 
14

 
8-9

Franchise Restaurants:
 
 
 
 
 
 
 
 
Chili’s Domestic
 
1

 
322

 
7

 
5-8

Chili's International
 
12

 
337

 
36

 
35-40

 
 
13

 
659

 
43

 
40-48

Total Restaurants:
 
 
 
 
 
 
 
 
Chili’s Domestic
 
5

 
1,259

 
19

 
10-14

Chili's International 
 
12

 
350

 
36

 
36-41

Maggiano’s
 
—

 
51

 
2

 
2

 
 
17

 
1,660

 
57

 
48-57


(a)
Fourth quarter and fiscal 2016 restaurant openings excludes relocated restaurants.



FOR ADDITIONAL INFORMATION, CONTACT:
JOE TAYLOR
INVESTOR RELATIONS
(972) 770-9040

AISHA FLETCHER
MEDIA RELATIONS
media.requests@brinker.com
(800) 775-7290

6820 LBJ FREEWAY
DALLAS, TEXAS 75240





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