SEGMENT INFORMATION

6 Months Ended

Dec. 25, 2019

Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company-owned Chili’s restaurants in the United States and Canada as well as the results from our domestic and international franchise businesses. The Maggiano’s segment includes the results of our Company-owned Maggiano’s restaurants in the United States as well as the results from our domestic franchise business.

Company sales include revenues generated by the operation of Company-owned restaurants including gift card redemptions. Franchise and other revenues include Royalties and Franchise fees and other revenues. Franchise fees and other revenues include Maggiano’s banquet service charge income, advertising fees, gift card breakage, gift card equalization, gift card discount costs from third-party gift card sales, digital entertainment revenues, delivery fee income, franchise and development fees, retail royalty revenues, and merchandise income. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly in the United States. There were no material transactions amongst our operating segments.

Our chief operating decision maker uses Operating income as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Company restaurant expenses include food and beverage costs of sales, restaurant labor costs and restaurant expenses,

including advertising expenses. The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:



	Thirteen Week Period Ended December 25, 2019
	Chili’s⁽¹⁾			Maggiano’s		Other			Consolidated
Company sales	$	728.4		$	119.1	$	—		$	847.5
Royalties	9.9			—		—			9.9
Franchise fees and other revenues	4.8			7.1		—			11.9
Franchise and other revenues	14.7			7.1		—			21.8
Total revenues	743.1			126.2		—			869.3

Company restaurant expenses	640.3			99.2		0.1			739.6
Depreciation and amortization	32.1			4.0		3.2			39.3
General and administrative	8.5			1.5		24.6			34.6
Other (gains) and charges	10.6			—		1.7			12.3
Total operating costs and expenses	691.5			104.7		29.6			825.8
Operating income (loss)	51.6			21.5		(29.6		)	43.5
Interest expenses	1.1			—		13.9			15.0
Other (income), net	(0.1		)	—		(0.4		)	(0.5		)
Income (loss) before provision for income taxes	$	50.6		$	21.5	$	(43.1	)	$	29.0



	Thirteen Week Period Ended December 26, 2018
	Chili’s		Maggiano’s		Other			Consolidated
Company sales	$	640.6	$	120.9	$	—		$	761.5
Royalties	13.2		—		—			13.2
Franchise fees and other revenues	8.5		7.5		—			16.0
Franchise and other revenues	21.7		7.5		—			29.2
Total revenues	662.3		128.4		—			790.7

Company restaurant expenses	567.1		100.1		0.2			667.4
Depreciation and amortization	29.5		3.9		2.7			36.1
General and administrative	9.1		1.5		24.8			35.4
Other (gains) and charges	1.4		—		0.8			2.2
Total operating costs and expenses	607.1		105.5		28.5			741.1
Operating income (loss)	55.2		22.9		(28.5		)	49.6
Interest expenses	0.7		0.1		14.6			15.4
Other (income), net	—		—		(0.8		)	(0.8		)
Income (loss) before provision for income taxes	$	54.5	$	22.8	$	(42.3	)	$	35.0



	Twenty-Six Week Period Ended December 25, 2019
	Chili’s⁽¹⁾			Maggiano’s		Other			Consolidated
Company sales	$	1,405.9		$	205.5	$	—		$	1,611.4
Royalties	21.7			0.1		—			21.8
Franchise fees and other revenues	11.1			11.0		—			22.1
Franchise and other revenues	32.8			11.1		—			43.9
Total revenues	1,438.7			216.6		—			1,655.3

Company restaurant expenses	1,236.6			182.3		0.3			1,419.2
Depreciation and amortization	62.8			8.0		6.6			77.4
General and administrative	17.6			3.2		51.8			72.6
Other (gains) and charges	9.0			0.1		2.3			11.4
Total operating costs and expenses	1,326.0			193.6		61.0			1,580.6
Operating income (loss)	112.7			23.0		(61.0		)	74.7
Interest expenses	2.0			—		27.9			29.9
Other (income), net	(0.3		)	—		(0.7		)	(1.0		)
Income (loss) before provision for income taxes	$	111.0		$	23.0	$	(88.2	)	$	45.8

Segment assets⁽²⁾	$	2,114.1		$	255.9	$	133.7		$	2,503.7
Segment goodwill	151.2			38.4		—			189.6
Payments for property and equipment	42.4			4.2		4.8			51.4



	Twenty-Six Week Period Ended December 26, 2018
	Chili’s			Maggiano’s		Other			Consolidated
Company sales	$	1,280.9		$	208.9	$	—		$	1,489.8
Royalties	26.1			—		—			26.1
Franchise fees and other revenues	17.1			11.5		—			28.6
Franchise and other revenues	43.2			11.5		—			54.7
Total revenues	1,324.1			220.4		—			1,544.5

Company restaurant expenses	1,130.2			184.0		0.4			1,314.6
Depreciation and amortization	60.0			7.9		5.2			73.1
General and administrative	17.9			3.2		48.1			69.2
Other (gains) and charges⁽³⁾	(10.9		)	—		2.0			(8.9		)
Total operating costs and expenses	1,197.2			195.1		55.7			1,448.0
Operating income (loss)	126.9			25.3		(55.7		)	96.5
Interest expenses	1.7			0.2		29.1			31.0
Other (income), net	—			—		(1.6		)	(1.6		)
Income (loss) before provision for income taxes	$	125.2		$	25.1	$	(83.2	)	$	67.1

Payments for property and equipment	$	58.8		$	6.4	$	13.5		$	78.7


⁽¹⁾	Chili’s segment information for fiscal 2020 includes the results of operations and preliminary fair value of assets related to the 116 restaurants since the September 5, 2019 acquisition date. Refer to Note 2 - Chili’s Restaurant Acquisition for further details.


⁽²⁾	Segment assets for fiscal 2020 are presented in accordance with the newly adopted ASC 842 that now include Operating lease assets, refer to Note 3 - Leases for further details.

⁽³⁾

During the twenty-six week period ended December 26, 2018, we completed sale leaseback transactions of 145 Company-owned Chili’s restaurant properties. Chili’s recognized a $17.7 million gain on the sale, including a certain portion of the deferred gain, net of related transaction costs incurred in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited). Refer to Note 3 - Leases for further details.