Business and Basis of Presentation	6 Months Ended
Jun. 25, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Basis of Presentation	Business and Basis of Presentation As of June 25, 2019, Del Frisco’s Restaurant Group, Inc. ("we," "us," "our," “Del Frisco’s” or the “Company”) owned and operated 78 restaurants under the concept names of Del Frisco’s Double Eagle Steakhouse (“Double Eagle”), Barcelona Wine Bar (“Barcelona”), bartaco, and Del Frisco’s Grille (“Grille”). Of the 78 restaurants we operated at the end of the period covered by this report, there were 16 Double Eagle restaurants, 17 Barcelona restaurants, 21 bartaco restaurants, and 24 Grille restaurants in operation in 17 states and the District of Columbia. Recent Developments On June 27, 2018 (“Acquisition Date”), we completed the acquisition of all outstanding interests in Barteca Holdings, LLC ("Barteca Acquisition"), a Delaware limited liability company, and its subsidiaries (“Barteca”) for total cash consideration of $331.2 million, which represents a purchase price of $325 million plus customary adjustments including payments for cash remaining in the business. In connection with the completion of the Barteca Acquisition, we entered into a new credit agreement that provides for (i) senior secured term loans in an aggregate principal amount of $390.0 million (“Term Loan B”) and (ii) senior secured revolving credit commitments in an aggregate principal amount of $50.0 million (“Revolving Loan,” and, collectively with the term loans, the “2018 Credit Facility”). See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements for information regarding our credit facility. On August 1, 2018, we entered into an underwriting agreement with certain underwriters with respect to (i) the sale by the Company of 11,250,000 shares of the Company’s common stock, par value $0.001 per share, to the underwriters and (ii) the grant by the Company to the underwriters of an option (the “Option”) to purchase up to 1,687,500 additional shares of the Company’s common stock (together, the “Shares”). The sale of the Shares, including the exercise in full of the Option, closed on August 6, 2018. The total proceeds of $97.8 million from the public offering of common stock were used to repay a portion of Term Loan B. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements. On August 27, 2018 we amended (the “First Amendment”) Term Loan B (“Amended Term Loan B”). The First Amendment amends the 2018 Credit Facility, to, among other things, provide the Company with additional term loans (“Additional Term Loans”) in an aggregate principal amount of $18.0 million. The First Amendment also amended the 2018 Credit Facility to increase the interest rate applicable to the Additional Term Loans and the existing term loans outstanding under the 2018 Credit Facility to, at our option, a rate per annum equal to either a LIBOR or a base rate, plus an applicable margin, which is equal to 6.00% for LIBOR rate loans and 5.00% for base rate loans. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements for information regarding our amended credit facility. On September 21, 2018, we sold all of the outstanding equity interests in our Sullivan’s Steakhouse business (“Sullivan’s") to Sullivan’s Holding LLC, a Delaware limited liability company and affiliate of Romano’s Macaroni Grill, for the total gross proceeds of approximately $32 million, subject to customary adjustments for inventory and cash. See Note 3, Dispositions in the notes to our condensed consolidated financial statements for information regarding discontinued operations. On February 26, 2019, we entered into a joinder agreement with JPMorgan Chase Bank, N.A., as the incremental term lender and JPMorgan Chase Bank, N.A. as the administrative agent (the “Joinder Agreement”). The Joinder Agreement modifies the 2018 Credit Facility and provides the Company with incremental term loan commitments in a principal amount equal to $25.0 million. The Company drew the full amount of the incremental term loans on the date of the Joinder Agreement and received net proceeds of approximately $23.1 million. The Company used the net proceeds of the incremental term loans to repay a portion of the outstanding amounts under the 2018 Credit Facility. Since the repayment does not reduce the commitments under the 2018 Credit Facility, the transaction expanded the Company’s sources of liquidity without increasing leverage at this time. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements. On June 17, 2019, we entered into an amendment (the “Second Amendment”) to the 2018 Credit Facility to increase the percentage of Projected EBITDAR Margin that may be included when determining Consolidated EBITDAR for purposes of calculating the Financial Covenant (as defined in the 2018 Credit Facility). See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements. On June 23, 2019, we entered into a definitive agreement to be acquired by affiliates of L Catterton, a consumer-focused private equity firm with over $15 billion of equity capital across six fund strategies in 17 offices globally. Under the terms of the agreement, affiliates of L Catterton will acquire all outstanding shares of the Company’s common stock for a total value of approximately $650 million. Company stockholders will receive $8.00 in cash per share. The Agreement and Plan of Merger, dated as of June 23, 2019, by and among the Company, Harlan Parent, Inc. and Harlan Merger Sub, Inc. was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 24, 2019. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. Operating results for the 13 weeks and 26 weeks ended June 25, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2018 filed with the SEC on March 11, 2019 (the “2018 10-K”). The results of Sullivan's operations have been presented as discontinued operations for the 13 weeks and and 26 weeks ended June 26, 2018. See Note 3, Dispositions in the notes to our condensed consolidated financial statements for information regarding discontinued operations. We operate on a 52- or 53-week fiscal year ending the last Tuesday in December. Beginning in fiscal 2018, we changed to a fiscal quarter calendar where each quarter contains 13 weeks, other than in a 53-week year where the last quarter of the year will contain 14 weeks. Fiscal 2019 will be a 53-week fiscal year, fiscal 2018 was a 52-week fiscal year. We believe that a reporting basis comprised of four equal 13-week quarters is a more typical reporting format comparable to most companies in the restaurant industry and is easier to understand for our investors. Accounting Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances at the time. Actual amounts may differ from those estimates. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). which requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will primarily depend on its classification as a finance (formerly capital) or operating lease. However, unlike previous GAAP, which required only capital leases to be recognized on the balance sheet, ASU 2016-02 requires all leases with an initial term greater than one year to be recognized on the balance sheet as a right-of-use ("ROU") asset and a lease liability. We adopted ASU 2016-02 in the first quarter of 2019 by utilizing the modified retrospective transition method through a cumulative-effect adjustment in the beginning of the first quarter of 2019. We elected the package of practical expedients permitted under the transition guidance, which allowed 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 existed prior to the adoption of the new standard. We made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. We have elected the practical expedient the Company will not separate a qualifying contract into its lease and non-lease components. The Company recognizes those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases with original terms over 12 months where the Company is the lessee. As a result of the adoption of the new lease standard we recognized ROU assets of $161.6 million, and lease liabilities of $218.0 million, and recorded a cumulative effect adjustment to increase retained earnings of $8.7 million, due to build-to-suit leases and prior deferred gains on sales leaseback transactions. Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40) ("ASU 2018-15") - Customer's Accounting for Implementation Costs incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 reduces the complexity of accounting for costs of implementing a cloud computing service arrangement and aligns the following requirements to capitalize implementation costs: (i) those incurred in a hosting arrangement that is a service contract, and (ii) those incurred to develop or obtain internal-use software, including hosting arrangements that include an internal software license. This amended guidance is first effective for our fiscal year beginning after December 15, 2019 with early adoption permitted. The guidance may be adopted either using the prospective or retrospective approach. We are currently evaluating the impact of this new guidance on our financial position and results of operations.

Business and Basis of Presentation

As of June 25, 2019, Del Frisco’s Restaurant Group, Inc. ("we," "us," "our," “Del Frisco’s” or the “Company”) owned and operated 78 restaurants under the concept names of Del Frisco’s Double Eagle Steakhouse (“Double Eagle”), Barcelona Wine Bar (“Barcelona”), bartaco, and Del Frisco’s Grille (“Grille”). Of the 78 restaurants we operated at the end of the period covered by this report, there were 16 Double Eagle restaurants, 17 Barcelona restaurants, 21 bartaco restaurants, and 24 Grille restaurants in operation in 17 states and the District of Columbia.

Recent Developments

On June 27, 2018 (“Acquisition Date”), we completed the acquisition of all outstanding interests in Barteca Holdings, LLC ("Barteca Acquisition"), a Delaware limited liability company, and its subsidiaries (“Barteca”) for total cash consideration of $331.2 million, which represents a purchase price of $325 million plus customary adjustments including payments for cash remaining in the business.

In connection with the completion of the Barteca Acquisition, we entered into a new credit agreement that provides for (i) senior secured term loans in an aggregate principal amount of $390.0 million (“Term Loan B”) and (ii) senior secured revolving credit commitments in an aggregate principal amount of $50.0 million (“Revolving Loan,” and, collectively with the term loans, the “2018 Credit Facility”). See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements for information regarding our credit facility.

On August 1, 2018, we entered into an underwriting agreement with certain underwriters with respect to (i) the sale by the Company of 11,250,000 shares of the Company’s common stock, par value $0.001 per share, to the underwriters and (ii) the grant by the Company to the underwriters of an option (the “Option”) to purchase up to 1,687,500 additional shares of the Company’s common stock (together, the “Shares”). The sale of the Shares, including the exercise in full of the Option, closed on August 6, 2018. The total proceeds of $97.8 million from the public offering of common stock were used to repay a portion of Term Loan B. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements.

On August 27, 2018 we amended (the “First Amendment”) Term Loan B (“Amended Term Loan B”). The First Amendment amends the 2018 Credit Facility, to, among other things, provide the Company with additional term loans (“Additional Term Loans”) in an aggregate principal amount of $18.0 million. The First Amendment also amended the 2018 Credit Facility to increase the interest rate applicable to the Additional Term Loans and the existing term loans outstanding under the 2018 Credit Facility to, at our option, a rate per annum equal to either a LIBOR or a base rate, plus an applicable margin, which is equal to 6.00% for LIBOR rate loans and 5.00% for base rate loans. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements for information regarding our amended credit facility.

On September 21, 2018, we sold all of the outstanding equity interests in our Sullivan’s Steakhouse business (“Sullivan’s") to Sullivan’s Holding LLC, a Delaware limited liability company and affiliate of Romano’s Macaroni Grill, for the total gross proceeds of approximately $32 million, subject to customary adjustments for inventory and cash. See Note 3, Dispositions in the notes to our condensed consolidated financial statements for information regarding discontinued operations.

On February 26, 2019, we entered into a joinder agreement with JPMorgan Chase Bank, N.A., as the incremental term lender and JPMorgan Chase Bank, N.A. as the administrative agent (the “Joinder Agreement”). The Joinder Agreement modifies the 2018 Credit Facility and provides the Company with incremental term loan commitments in a principal amount equal to $25.0 million. The Company drew the full amount of the incremental term loans on the date of the Joinder Agreement and received net proceeds of approximately $23.1 million. The Company used the net proceeds of the incremental term loans to repay a portion of the outstanding amounts under the 2018 Credit Facility. Since the repayment does not reduce the commitments under the 2018 Credit Facility, the transaction expanded the Company’s sources of liquidity without increasing leverage at this time. See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements.

On June 17, 2019, we entered into an amendment (the “Second Amendment”) to the 2018 Credit Facility to increase the percentage of Projected EBITDAR Margin that may be included when determining Consolidated EBITDAR for purposes of calculating the Financial Covenant (as defined in the 2018 Credit Facility). See Note 7, Long-Term Debt in the notes to our condensed consolidated financial statements.

On June 23, 2019, we entered into a definitive agreement to be acquired by affiliates of L Catterton, a consumer-focused private equity firm with over $15 billion of equity capital across six fund strategies in 17 offices globally. Under the terms of the agreement, affiliates of L Catterton will acquire all outstanding shares of the Company’s common stock for a total value of approximately $650 million. Company stockholders will receive $8.00 in cash per share. The Agreement and Plan of Merger, dated as of June 23, 2019, by and among the Company, Harlan Parent, Inc. and Harlan Merger Sub, Inc. was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 24, 2019.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. Operating results for the 13 weeks and 26 weeks ended June 25, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2018 filed with the SEC on March 11, 2019 (the “2018 10-K”).

The results of Sullivan's operations have been presented as discontinued operations for the 13 weeks and and 26 weeks ended June 26, 2018. See Note 3, Dispositions in the notes to our condensed consolidated financial statements for information regarding discontinued operations.

We operate on a 52- or 53-week fiscal year ending the last Tuesday in December. Beginning in fiscal 2018, we changed to a fiscal quarter calendar where each quarter contains 13 weeks, other than in a 53-week year where the last quarter of the year will contain 14 weeks. Fiscal 2019 will be a 53-week fiscal year, fiscal 2018 was a 52-week fiscal year. We believe that a reporting basis comprised of four equal 13-week quarters is a more typical reporting format comparable to most companies in the restaurant industry and is easier to understand for our investors.

Accounting Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances at the time. Actual amounts may differ from those estimates.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). which requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will primarily depend on its classification as a finance (formerly capital) or operating lease. However, unlike previous GAAP, which required only capital leases to be recognized on the balance sheet, ASU 2016-02 requires all leases with an initial term greater than one year to be recognized on the balance sheet as a right-of-use ("ROU") asset and a lease liability.

We adopted ASU 2016-02 in the first quarter of 2019 by utilizing the modified retrospective transition method through a cumulative-effect adjustment in the beginning of the first quarter of 2019. We elected the package of practical expedients permitted under the transition guidance, which allowed 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 existed prior to the adoption of the new standard. We made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. We have elected the practical expedient the Company will not separate a qualifying contract into its lease and non-lease components. The Company recognizes those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases with original terms over 12 months where the Company is the lessee. As a result of the adoption of the new lease standard we recognized ROU assets of $161.6 million, and lease liabilities of $218.0 million, and recorded a cumulative effect adjustment to increase retained earnings of $8.7 million, due to build-to-suit leases and prior deferred gains on sales leaseback transactions.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40) ("ASU 2018-15") - Customer's Accounting for Implementation Costs incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 reduces the complexity of accounting for costs of implementing a cloud computing service arrangement and aligns the following requirements to capitalize implementation costs: (i) those incurred in a hosting arrangement that is a service contract, and (ii) those incurred to develop or obtain internal-use software, including hosting arrangements that include an internal software license. This amended guidance is first effective for our fiscal year beginning after December 15, 2019 with early adoption permitted. The guidance may be adopted either using the prospective or retrospective approach. We are currently evaluating the impact of this new guidance on our financial position and results of operations.