Stockholders' Equity

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Preferred Stock

At March 31, 2016 and December 31, 2015, the Company was authorized to issue 25,000,000 shares of $0.0001 par value per share of preferred stock. There were no shares issued and outstanding at March 31, 2016 or December 31, 2015.

Common Stock

At March 31, 2016, the Company was authorized to issue 500,000,000 shares, $0.0001 par value per share of common stock.

On March 2, 2016, we paid a $347.0 million dividend in cash and shares of common stock (the “Pre-Spin Dividend”), or $8.12 per share based on approximately 42.7 million shares outstanding as of January 7, 2016, representing our estimated share of earning and profits that are required to be distributed for the operating period prior to November 9, 2015. An aggregate of 17,085,566 additional shares of common stock were issued in connection with the Pre-Spin Dividend, and cash dividends related to the Pre-Spin Dividend totaled $69.5 million. In addition, on January 29, 2016, we paid a cash dividend of $8.5 million, representing our estimated earnings and profits that are required to be distributed for the period from November 10, 2015 to December 31, 2015.

As of March 31, 2016, there were 59,881,270 shares of the Company's common stock issued and outstanding.

Earnings Per Share

The following table presents the computation of basic and diluted net earnings per common share for the three months ended March 31, 2016.

(In thousands except for per share data)	Three Months Ended March 31, 2016
Average common shares outstanding – basic	59,828
Net effect of dilutive equity awards	36
Average common shares outstanding –diluted	59,864
Net income	$	94,283
Basic net earnings per share	$	1.58
Diluted net earnings per share	$	1.57

For the three months ended March 31, 2016, the number of outstanding equity awards that were anti-dilutive totaled 139,571. Earnings per share is not applicable for the three months ended March 31, 2015, as all income or loss was contributed to the Predecessor.

Spin-Off

On November 9, 2015, in connection with the separation and spin-off of Four Corners from Darden, Darden contributed to us 100% of the equity interest in entities that held the Four Corners Properties and the Kerrow Restaurant Operating Business and the underlying properties or interests therein associated with the Kerrow Restaurant Operating Business. In exchange, we issued to Darden 42,741,995 shares of our common stock, par value $0.0001 per share and paid to Darden $315.0 million in cash, which we funded from the proceeds of our term loan borrowings under the Loan Agreement. Subsequently, Darden distributed the 42,741,995 shares of our common stock pro rata to holders of Darden common stock whereby each Darden shareholder received one share of Four Corners common stock for every three shares of Darden common stock held at the close of business on the record date, which was November 2, 2015, as well as cash in lieu of any fractional shares of our common stock which they would have otherwise received. The Spin-Off is intended to qualify as tax-free to Darden shareholders for U.S. federal income tax purposes, except for cash paid in lieu of fractional shares.

Darden obtained a private letter ruling from the IRS regarding the tax-free treatment of the Spin-Off. To preserve that tax-free treatment to Darden, for the two year period following the Spin-Off, we may be prohibited, except in specific circumstances, from taking certain actions, including: (1) entering into any transaction pursuant to which all or a portion of our stock would be acquired, whether by merger or otherwise, (2) issuing equity securities beyond certain thresholds, or (3) repurchasing our common stock. In addition, we will be prohibited from taking or failing to take any other action that prevents the Spin-Off and related transactions from being tax-free. These restrictions may limit our ability to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. However, these restrictions are inapplicable in the event that the IRS has granted a favorable ruling to Darden or Four Corners or in the event that Darden or Four Corners has received an opinion from counsel that Four Corners can take such actions under certain safe harbor exceptions without adversely affecting the tax-free status of the Spin-Off and related transactions.