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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 27, 2023
Commission File Number 1-10275
https://cdn.kscope.io/4ce3dded143fefc6f93c2090464734f3-Brinker diamond - Hi Res.jpg
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DE
75-1914582
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3000 Olympus Blvd
Dallas
TX
75019
(Address of principal executive offices)(Zip Code)
(972)
980-9917
(Registrant’s telephone number, including area code)
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common Stock, $0.10 par value
EAT
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No ☒
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of October 27, 2023: 44,203,103 shares



BRINKER INTERNATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page

2

Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In millions, except per share amounts)
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Revenues
Company sales$1,002.0 $946.1 
Franchise revenues10.5 9.4 
Total revenues1,012.5 955.5 
Operating costs and expenses
Food and beverage costs258.8 289.5 
Restaurant labor348.1 330.6 
Restaurant expenses290.8 268.8 
Depreciation and amortization41.9 41.9 
General and administrative42.4 39.5 
Other (gains) and charges6.3 5.0 
Total operating costs and expenses988.3 975.3 
Operating income (loss)24.2 (19.8)
Interest expenses17.0 12.3 
Other income, net (0.4)
Income (loss) before income taxes7.2 (31.7)
Provision (benefit) for income taxes (1.5)
Net income (loss)$7.2 $(30.2)
Basic net income per share$0.16 $(0.69)
Diluted net income per share$0.16 $(0.69)
Basic weighted average shares outstanding44.6 43.9 
Diluted weighted average shares outstanding45.4 43.9 
Other comprehensive loss
Foreign currency translation adjustment$(0.2)$(1.0)
Comprehensive income (loss)$7.0 $(31.2)
See accompanying Notes to Consolidated Financial Statements (Unaudited)
3

Table of Contents

BRINKER INTERNATIONAL, INC.
Consolidated Balance Sheets
(In millions, except per share amounts)
Unaudited
September 27,
2023
June 28,
2023
ASSETS
Current assets
Cash and cash equivalents$14.4 $15.1 
Accounts receivable, net49.2 60.9 
Inventories32.5 34.5 
Restaurant supplies55.1 55.6 
Prepaid expenses24.2 17.2 
Income taxes receivable1.7  
Total current assets177.1 183.3 
Property and equipment, at cost
Land42.4 42.4 
Buildings and leasehold improvements1,649.8 1,635.7 
Furniture and equipment749.1 765.8 
Construction-in-progress35.5 30.1 
2,476.8 2,474.0 
Less accumulated depreciation and amortization(1,660.9)(1,665.7)
Net property and equipment815.9 808.3 
Other assets
Operating lease assets1,115.9 1,134.9 
Goodwill194.8 195.0 
Deferred income taxes, net95.4 93.4 
Intangibles, net23.0 23.9 
Other52.7 48.2 
Total other assets1,481.8 1,495.4 
Total assets$2,474.8 $2,487.0 
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable$141.7 $125.7 
Gift card liability64.9 73.0 
Accrued payroll84.2 106.1 
Operating lease liabilities112.9 112.4 
Other accrued liabilities134.9 116.3 
Income taxes payable3.0 2.4 
Total current liabilities541.6 535.9 
Long-term debt and finance leases, less current installments923.9 912.2 
Long-term operating lease liabilities, less current portion1,104.9 1,125.8 
Other liabilities60.7 57.4 
Commitments and contingencies (Note 7)
Shareholders’ deficit
Common stock (250.0 million authorized shares; $0.10 par value; 60.3 million shares issued; and 44.2 million shares outstanding at September 27, 2023 and 44.6 million shares outstanding at June 28, 2023)
6.0 6.0 
Additional paid-in capital683.8 690.0 
Accumulated other comprehensive loss(6.2)(6.0)
Accumulated deficit(344.7)(351.9)
Treasury stock, at cost (16.1 million shares at September 27, 2023, and 15.7 million shares at June 28, 2023)
(495.2)(482.4)
Total shareholders’ deficit(156.3)(144.3)
Total liabilities and shareholders’ deficit$2,474.8 $2,487.0 
See accompanying Notes to Consolidated Financial Statements (Unaudited)
4

Table of Contents

BRINKER INTERNATIONAL, INC.
Consolidated Statements of Cash Flows (Unaudited)
(In millions)
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Cash flows from operating activities
Net income (loss)$7.2 $(30.2)
Adjustments to reconcile Net income (loss) to Net cash provided by operating activities:
Depreciation and amortization41.9 41.9 
Stock-based compensation5.7 4.7 
Deferred income taxes, net(2.0)(4.1)
Non-cash other (gains) and charges4.3 2.4 
Net loss on disposal of assets1.7 1.5 
Other0.6 0.4 
Changes in assets and liabilities:
Accounts receivable, net9.7 6.1 
Inventories1.9 (1.1)
Restaurant supplies(0.1)0.0 
Prepaid expenses(11.6)(9.7)
Income taxes(1.1)1.4 
Operating lease assets, net of liabilities(1.3)(0.9)
Accounts payable12.8 7.1 
Gift card liability(8.1)(8.9)
Accrued payroll(22.0)(5.0)
Other accrued liabilities17.5 18.7 
Other liabilities2.0 0.3 
Net cash provided by operating activities59.1 24.6 
Cash flows from investing activities
Payments for property and equipment(46.9)(46.7)
Proceeds from note receivable1.3 1.1 
Net cash used in investing activities(45.6)(45.6)
Cash flows from financing activities
Borrowings on revolving credit facility129.0 135.0 
Payments on revolving credit facility(115.0)(100.0)
Purchases of treasury stock(24.7)(2.0)
Payments on long-term debt(2.8)(5.8)
Payments for debt issuance costs(0.7) 
Payments of dividends0.0 (0.2)
Net cash (used in) provided by financing activities(14.2)27.0 
Net change in cash and cash equivalents(0.7)6.0 
Cash and cash equivalents at beginning of period15.1 13.5 
Cash and cash equivalents at end of period$14.4 $19.5 
Supplemental disclosure of cash flow information:
Income taxes paid, net$3.2 $1.1 
Interest paid, net of amounts capitalized5.6 3.9 
Accrued capital expenditures15.1 20.3 
See accompanying Notes to Consolidated Financial Statements (Unaudited)
5

Table of Contents

BRINKER INTERNATIONAL, INC.
Consolidated Statements of Shareholders’ Deficit (Unaudited)
(In millions)
Thirteen Week Period Ended September 27, 2023
Common StockAdditional
Paid-In
Capital
Accumulated DeficitTreasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balances at June 28, 2023$6.0 $690.0 $(351.9)$(482.4)$(6.0)$(144.3)
Net income  7.2   7.2 
Other comprehensive loss    (0.2)(0.2)
Stock-based compensation 5.7    5.7 
Purchases of treasury stock (0.2) (24.5) (24.7)
Issuances of treasury stock (11.7) 11.7   
Balances at September 27, 2023$6.0 $683.8 $(344.7)$(495.2)$(6.2)$(156.3)
Thirteen Week Period Ended September 28, 2022
Common StockAdditional
Paid-In
Capital
Accumulated DeficitTreasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balances at June 29, 2022$7.0 $690.9 $(148.4)$(812.3)$(5.3)$(268.1)
Net loss  (30.2)  (30.2)
Other comprehensive loss    (1.0)(1.0)
Stock-based compensation 4.7    4.7 
Purchases of treasury stock 0.2  (2.2) (2.0)
Issuances of treasury stock (7.8) 7.8   
Retirement of stock(1.0) (306.1)307.1   
Balances at September 28, 2022$6.0 $688.0 $(484.7)$(499.6)$(6.3)$(296.6)
See accompanying Notes to Consolidated Financial Statements (Unaudited)
6

Table of Contents
Footnote Index
BRINKER INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (Unaudited)
Footnote Index
Note #DescriptionPage
Basis of Presentation
Revenue Recognition
Fair Value Measurements
Accrued Liabilities
Leases
Debt
Contingencies
Income Taxes
Shareholders’ Deficit
Net Income Per Share
Other Gains and Charges
Segment Information

7

Table of Contents
Footnote Index
1. BASIS OF PRESENTATION
References to “Brinker,” the “Company,” “we,” “us,” and “our” in this Form 10-Q refer to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our Consolidated Financial Statements (Unaudited) as of September 27, 2023 and June 28, 2023, and for the thirteen week periods ended September 27, 2023 and September 28, 2022, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
The Company is principally engaged in the ownership, operation, development and franchising of the Chili’s® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy® (“Maggiano’s”) restaurant brands. As of September 27, 2023, we owned, operated or franchised 1,651 restaurants, consisting of 1,181 Company-owned restaurants and 470 franchised restaurants, located in the United States, 29 other countries and two United States territories.
Use of Estimates
The preparation of the Consolidated Financial Statements (Unaudited) is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements (Unaudited), and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates.
The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to Consolidated Financial Statements contained in our June 28, 2023 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified.
Foreign Currency Translation
The foreign currency translation adjustment included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income (loss) and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited).
New Accounting Standards Implemented in Fiscal 2024
We reviewed accounting pronouncements that became effective for our fiscal 2024 and determined that either they were not applicable or they did not have a material impact on the Consolidated Financial Statements (Unaudited). We also reviewed recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the Consolidated Financial Statements (Unaudited).
2. REVENUE RECOGNITION
Deferred Franchise and Development Fees
Our deferred franchise and development fees consist of the unrecognized fees received from franchisees. Recognition of these fees in subsequent periods is based on satisfaction of the contractual performance obligations of our active contracts with franchisees. We also expect to earn subsequent period royalties and advertising fees related to our franchise contracts; however, due to the variability and uncertainty of these future revenues based upon a sales-based measure, these future revenues are not yet estimable as the performance obligations remain unsatisfied.

8

Table of Contents
Footnote Index
Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets (Unaudited).
The following table reflects the changes in deferred franchise and development fees between June 28, 2023 and September 27, 2023:
Deferred Franchise and Development Fees
Balance as of June 28, 2023$11.1 
Amount recognized to Franchise revenues(0.4)
Balance as of September 27, 2023$10.7 
The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of September 27, 2023:
Fiscal YearFranchise and Development Fees Revenue Recognition
Remainder of 2024$0.7 
20250.9 
20260.8 
20270.8 
20280.7 
Thereafter6.8 
$10.7 
Deferred Gift Card Revenues
Deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees. The following table reflects the changes in the Gift card liability between June 28, 2023 and September 27, 2023:
Gift Card Liability
Balance as of June 28, 2023$73.0 
Gift card sales18.1 
Gift card redemptions recognized to Company sales(23.8)
Gift card breakage recognized to Company sales(3.0)
Other0.6 
Balance as of September 27, 2023
$64.9 
3. FAIR VALUE MEASUREMENTS
Fair value is the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under market conditions. Fair value measurements are categorized in three levels based on the types of significant inputs used, as follows:
Level 1Quoted prices in active markets for identical assets or liabilities
Level 2Observable inputs other than quoted prices in active markets for identical assets or liabilities
Level 3Unobservable inputs that cannot be corroborated by observable market data

9

Table of Contents
Footnote Index
Financial Instruments
Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items.
The carrying amount of debt outstanding related to our revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 5.000% and 8.250% notes are based on quoted market prices and are considered Level 2 fair value measurements.
The 5.000% notes and 8.250% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows:
September 27, 2023June 28, 2023
Carrying AmountFair ValueCarrying AmountFair Value
5.000% notes
$349.2 $342.0 $349.0 $343.5 
8.250% notes344.5 342.6 344.3 348.3 
Non-Financial Assets
The fair values of transferable liquor licenses are based on prices in the open market for licenses in the same or similar jurisdictions and are categorized as Level 2. The fair values of other non-financial assets are determined based on appraisals, sales prices of comparable assets or estimates of discounted cash flow and are categorized as Level 3.
We review the carrying amounts of non-financial assets, primarily long-lived property and equipment, finance lease assets, operating lease assets, reacquired franchise rights, goodwill and transferable liquor licenses annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. Any impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited). During the thirteen week periods ended September 27, 2023 and September 28, 2022, no indicators of impairment were identified.
Intangibles, net in the Consolidated Balance Sheets (Unaudited) includes both indefinite-lived intangible assets such as transferable liquor licenses and definite-lived intangible assets such as reacquired franchise rights. Accumulated amortization associated with definite-lived intangible assets at September 27, 2023 and June 28, 2023, was $16.0 million and $15.3 million, respectively.
4. ACCRUED LIABILITIES
Other accrued liabilities consist of the following:
September 27,
2023
June 28,
2023
Property tax$29.4 $24.5 
Insurance27.9 29.3 
Interest17.1 6.4 
Sales tax16.6 17.3 
Utilities and services10.7 10.4 
Current installments of finance lease obligations10.2 10.2 
Other23.0 18.2 
$134.9 $116.3 

10

Table of Contents
Footnote Index
5. LEASES
We typically lease our restaurant facilities through ground leases (where we lease land only, but construct the building and improvements) or retail leases (where we lease the land/retail space and building). In addition to our restaurant facilities, we also lease our corporate headquarters location and certain equipment.
The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) were as follows:
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Operating lease cost$45.6 $45.1 
Variable lease cost15.6 15.6 
Finance lease amortization3.2 5.2 
Finance lease interest0.9 1.1 
Short-term lease cost0.1 0.1 
Sublease income(0.4)(0.9)
Total lease costs, net$65.0 $66.2 
Supplemental cash flow information related to leases:
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Operating lease assets obtained in exchange for operating lease liabilities
$9.1 $23.6 
Finance leases assets obtained in exchange for finance lease liabilities
0.1 0.2 
Finance lease assets are recorded in Property and equipment, at cost, and the net balance as of September 27, 2023 and June 28, 2023 was $48.1 million and $51.3 million, respectively.
6. DEBT
Long-term debt consists of the following:
September 27,
2023
June 28,
2023
Revolving credit facility$175.3 $161.3 
5.000% notes350.0 350.0 
8.250% notes350.0 350.0 
Finance lease obligations65.1 67.8 
Total long-term debt940.4 929.1 
Less: unamortized debt issuance costs and discounts(6.3)(6.7)
Total long-term debt, less unamortized debt issuance costs and discounts934.1 922.4 
Less: current installments of long-term debt and finance leases(1)
(10.2)(10.2)
Total long-term debt, less current portion$923.9 $912.2 
(1)Current installments of long-term debt consist of finance leases and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 4 - Accrued Liabilities for further details.

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Revolving Credit Facility
In the thirteen week period ended September 27, 2023, net borrowings of $14.0 million were drawn on our revolving credit facility. As of September 27, 2023, $724.7 million of credit was available under the revolving credit facility.
The $900.0 million revolving credit facility matures on August 18, 2026 and bears interest of SOFR plus an applicable margin of 1.50% to 2.25% and an undrawn commitment fee of 0.25% to 0.35%, both based on a function of our debt-to-cash-flow ratio. As of September 27, 2023, our interest rate was 7.17% consisting of SOFR of 5.32% plus the applicable margin and spread adjustment of 1.85%.
Financial Covenants
Our debt agreements contain various financial covenants that, among other things, require the maintenance of certain leverage ratios. As of September 27, 2023, we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 5.000% and 8.250% notes.
7. CONTINGENCIES
Lease Commitments
We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees for the related restaurants. As of September 27, 2023 and June 28, 2023, we have outstanding lease guarantees or are secondarily liable for an estimated $14.6 million and $16.9 million, respectively. These amounts represent the maximum known potential liability of rent payments under the leases, but outstanding rent payments can exist outside of our knowledge as a result of the landlord and tenant relationship being between two third parties. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2024 through fiscal 2029.
We have received notices of default and have been named a party in lawsuits pertaining to some of these leases in circumstances where the current lessee did not pay its rent obligations. In the event of default under a lease by an owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties. In the thirteen week period ended September 27, 2023 we recorded a $0.5 million charge in Other (gains) and charges in the Consolidated Statements of Comprehensive Income.
Letters of Credit
We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of September 27, 2023, we had $5.8 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable within the next 12 months.
Cyber Security Litigation
In fiscal 2018, we discovered malware at certain Chili’s restaurants that may have resulted in unauthorized access or acquisition of customer payment card data. We settled all claims from payment card companies related to this incident and do not expect material claims from payment card companies in the future. In connection with this event, the Company was also named as a defendant in a putative class action lawsuit in the United States District Court for the Middle District of Florida (the “Litigation”) relating to this incident. In the Litigation, plaintiffs assert various claims at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $5.0 million, injunctive and declaratory relief, and attorney’s fees and costs.
On August 15, 2023, we filed a Petition for Panel or En Banc Rehearing seeking further review by the Eleventh Circuit Court of Appeals of the panel’s July 11, 2023, decision vacating in part the district court’s class certification order. Rehearing was sought to address the panel’s upholding of the plaintiffs’ damages methodology. The Eleventh Circuit denied our petition on September 15, 2023. We are exploring the option of petitioning the United States Supreme Court for further review. All matters at the district court remain stayed. We believe we have defenses and

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intend to continue defending the Litigation. As such, as of September 27, 2023, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation. We will continue to evaluate this matter based on new information as it becomes available.
Legal Proceedings
Evaluating contingencies related to litigation is a process involving judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements.
We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations.
8. INCOME TAXES
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Effective income tax rate %4.7 %
The federal statutory tax rate was 21.0% for the thirteen week periods ended September 27, 2023 and September 28, 2022.
The effective income tax rate in the thirteen week period ended September 27, 2023 decreased compared to the thirteen week period ended September 28, 2022. The decrease is primarily due to a less favorable impact from the FICA tip tax credit against higher Income before income taxes.
9. SHAREHOLDERS’ DEFICIT
Retirement of Common Stock
During the first quarter of fiscal 2023, the Board of Directors approved the retirement of 10.0 million shares of Treasury stock for a weighted average price per share of $30.71. As of September 27, 2023, 16.1 million shares remain in treasury.
Share Repurchases
Our Board of Directors approved a $300.0 million share repurchase program during fiscal 2022. Our share repurchase program is used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs.
In the thirteen week period ended September 27, 2023, we repurchased 0.8 million shares of our common stock for $24.7 million, including 0.7 million shares purchased for $21.0 million as part of our share repurchase program and 0.1 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. As of September 27, 2023, approximately $183.0 million of share repurchase authorization remains under the current share repurchase program.

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Footnote Index
Stock-based Compensation
The following table presents the restricted share awards granted and related weighted average fair value per share amounts.
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Restricted share awards
Restricted share awards granted0.6 0.5 
Weighted average fair value per share$33.12 $28.42 
10. NET INCOME PER SHARE
Basic net income per share is computed by dividing Net income (loss) by the Basic weighted average shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the Diluted net income per share calculation. Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows:
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Basic weighted average shares outstanding44.6 43.9 
Dilutive stock options(1)
0.0  
Dilutive restricted shares(1)
0.8  
Total dilutive impact0.8  
Diluted weighted average shares outstanding45.4 43.9 
Awards excluded due to anti-dilutive effect0.8 2.8 
(1)    Due to the net loss for the thirteen week period ended September 28, 2022, zero incremental shares are included because the effect would be anti-dilutive.
11. OTHER GAINS AND CHARGES
Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) consist of the following:
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Litigation & claims, net$2.2 $0.5 
Enterprise system implementation costs2.0 1.0 
Restaurant closure asset write-offs and charges0.6 1.5 
Lease contingencies0.5  
Remodel-related asset write-offs0.2 0.8 
Other0.8 1.2 
$6.3 $5.0 
Litigation & claims, net primarily relates to legal contingencies and claims on alcohol service cases.

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Enterprise system implementation costs primarily consists of software subscription fees, certain consulting fees, and contract labor associated with the ongoing enterprise system implementation that are not capitalized.
Restaurant closure asset write-offs and charges includes costs associated with the closure of certain Chili’s restaurants in the current year and both Chili’s and Maggiano’s restaurants in the prior year.
Lease contingencies includes expenses related to certain sublease receivables for divested brands when we have determined it is probable that the current lessee will default on the lease obligation. Refer to Note 7 - Contingencies for additional information about our secondarily liable lease guarantees.
Remodel-related asset write-offs relates to assets that are removed or discarded in connection with Maggiano’s and Chili’s remodel projects.
12. SEGMENT INFORMATION
Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company-owned Chili’s restaurants, which are principally located in the United States, within the full-service casual dining segment of the industry. The Chili’s segment also has Company-owned restaurants in Canada, and franchised locations in the United States, 29 other countries and two United States territories. 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. The Corporate segment includes costs related to our restaurant support teams for the Chili’s and Maggiano’s brands, including operations, finance, franchise, marketing, human resources and culinary innovation. The Corporate segment also includes costs related to the common and shared infrastructure, including accounting, information technology, purchasing, guest relations, legal and restaurant development.
Company sales for each segment include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, gift card breakage, delivery, digital entertainment revenues, merchandise income and are net of gift card discounts from third-party gift card sales. Franchise revenues for each operating segment include royalties, franchise advertising fees, franchise and development fees and gift card equalization.
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 located in the United States. There were no material transactions amongst our operating segments.
Our chief operating decision maker uses Operating income (loss) as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Restaurant expenses during the periods presented primarily includes restaurant rent, repairs and maintenance, delivery fees and to-go supplies, supplies, utilities, advertising, credit card processing fees, and workers’ compensation and general liability insurance.

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The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:
Thirteen Week Period Ended September 27, 2023
Chili’sMaggiano'sCorporateConsolidated
Company sales$897.8 $104.2 $ $1,002.0 
Franchise revenues10.3 0.2  10.5 
Total revenues908.1 104.4  1,012.5 
Food and beverage costs233.1 25.7  258.8 
Restaurant labor311.0 37.1  348.1 
Restaurant expenses258.5 32.2 0.1 290.8 
Depreciation and amortization36.2 3.2 2.5 41.9 
General and administrative10.0 2.4 30.0 42.4 
Other (gains) and charges3.7 0.2 2.4 6.3 
Total operating costs and expenses852.5 100.8 35.0 988.3 
Operating income (loss)55.6 3.6 (35.0)24.2 
Interest expenses0.8 0.1 16.1 17.0 
Other income, net    
Income (loss) before income taxes$54.8 $3.5 $(51.1)$7.2 
Segment assets$2,066.7 $245.5 $162.6 $2,474.8 
Payments for property and equipment38.9 5.2 2.8 46.9 
Thirteen Week Period Ended September 28, 2022
Chili’s
Maggiano'sCorporateConsolidated
Company sales
$840.6 $105.5 $ $946.1 
Franchise revenues
9.3 0.1  9.4 
Total revenues849.9 105.6  955.5 
Food and beverage costs260.9 28.6  289.5 
Restaurant labor294.4 36.2  330.6 
Restaurant expenses236.9 31.7 0.2 268.8 
Depreciation and amortization36.0 3.2 2.7 41.9 
General and administrative9.5 2.5 27.5 39.5 
Other (gains) and charges3.0 0.5 1.5 5.0 
Total operating costs and expenses840.7 102.7 31.9 975.3 
Operating income (loss)9.2 2.9 (31.9)(19.8)
Interest expenses1.0 0.1 11.2 12.3 
Other income, net  (0.4)(0.4)
Income (loss) before income taxes$8.2 $2.8 $(42.7)$(31.7)
Payments for property and equipment$42.7 $1.9 $2.1 $46.7 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our Company, our operations and our current operating environment. For an understanding of the significant factors that influenced our performance during the thirteen week periods ended September 27, 2023 and September 28, 2022, the MD&A should be read in conjunction with the Consolidated Financial Statements (Unaudited) and related Notes to Consolidated Financial Statements (Unaudited) included in this quarterly report. All amounts within the MD&A are presented in millions unless otherwise specified.
Overview
The Company is principally engaged in the ownership, operation, development and franchising of the Chili’s® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy® (“Maggiano’s”) restaurant brands. As of September 27, 2023, we owned, operated or franchised 1,651 restaurants, consisting of 1,181 Company-owned restaurants and 470 franchised restaurants, located in the United States, 29 other countries and two United States territories. Our restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units.
External Impacts to Our Operating Environment
Our operating results were impacted by geopolitical and other macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs during fiscal 2023 and to a lesser extent during the first quarter of fiscal 2024.
Operations Strategy
We are committed to strategies and a Company culture that we believe will grow sales, increase profits, bring back guests and engage team members. Our strategies and culture are intended to strengthen our position in casual dining and grow our core business over time. Our primary brand strategy is to make our guests feel special through great food and quality service so that they return to our restaurants.
Chili’s - Our strategy is to make everyone feel special through a fun atmosphere, delicious food and drinks and our Chili’s hospitality. We are making work at Chili’s easier, more fun and more rewarding for our team members so that they are more engaged and provide a better experience for our guests. One way we have done this is by eliminating tasks that were unnecessary and did not add value to our guests. We have also simplified our menu to focus on core equities we believe can help grow sales—burgers, fajitas, Chicken Crispers®, and margaritas, as well as other classic favorites. Our team members can make our core menu items better and more consistently because we have fewer menu items that need to be perfected.
We have a flexible platform of value offerings at both lunch and dinner that we believe is compelling to our guests. Our “3 for Me” platform, a flexible value bundle provides our guests an unbeatable everyday value, while allowing us to be more flexible in terms of pricing, in light of the inflationary challenges. Additionally, we have continued our Margarita of the Month promotion that features a premium-liquor margarita every month at an every-day value price. Most of our value propositions are available for guests to enjoy in our dining rooms or off-premise.
In dining rooms, we use tabletop devices to engage our guests at the table. These devices provide functionality for guests to pay at the table, order or re-order, engage in digital entertainment, to provide guest feedback and interact with our My Chili’s Rewards program. Our My Chili’s Rewards loyalty program offers free chips and salsa or a non-alcoholic beverage to members based on their visit frequency. We customize offerings for these guests based on their purchase behavior. Our servers use handheld tablets to place orders for our guests, increasing the efficiency of our team members and allowing orders to reach our kitchen quicker for better service to our guests. Third-party delivery orders for our restaurants are sent directly into our point of sale system, creating efficiencies and a system that allows us to better serve our guests. The operating results for our virtual brand, It’s Just Wings®, are included in the results of our Chili’s brand, based on the restaurants that prepared and processed the food orders.

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Maggiano’s - At Maggiano’s, we are focused making our guests feel special. This warm and generous hospitality creates an environment where guests come together to celebrate birthdays, weddings and many more special occasions. While our dining rooms support the majority of our business, we have focused on increasing our carry-out and delivery business in recent years, including through partnerships with delivery service providers that have made our restaurants more accessible to guests and helped create an additional significant revenue channel. Our restaurants also have banquet rooms to host large party events and we have a begun to renovate these banquet rooms in certain restaurants to provide a better experience for this profitable revenue channel, particularly during the holiday season in the second and third quarters of the fiscal year.
Franchise Partnerships - Our franchisees continue to grow our brands around the world, opening 3 restaurants for the thirteen week period ended September 27, 2023. We plan to strategically pursue expansion of Chili’s internationally through development agreements with new and existing franchise partners.
Company Development - The following table details the number of restaurant openings during the thirteen week periods ended September 27, 2023 and September 28, 2022, respectively, total full year projected openings in fiscal 2024 and the total restaurants open at each period end:
Openings During theFull Year Projected Openings
Thirteen Week Periods EndedTotal Open Restaurants at
September 27, 2023September 28, 2022Fiscal 2024September 27, 2023September 28, 2022
Company-owned restaurants
Chili’s domestic— — 11 1,126 1,126 
Chili’s international— — — 
Maggiano’s domestic— — — 50 51 
Total Company-owned— — 11 1,181 1,182 
Franchise restaurants
Chili’s domestic— 0-1100 102 
Chili’s international19-24368 359 
Maggiano’s domestic— — — 
Total franchise19-25470 463 
Total restaurants
Chili’s domestic— 11-121,226 1,228 
Chili’s international19-24373 364 
Maggiano’s domestic— — — 52 53 
Total30-361,651 1,645 
At September 27, 2023, we own property for 49 of the 1,181 Company-owned restaurants and one closed restaurant and one future restaurant. The net book values associated with these restaurants included land of $42.4 million and buildings of $12.1 million.
Revenues
Thirteen Week Period Ended September 27, 2023 compared to September 28, 2022
Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) to provide more clarity around Company-owned restaurant revenues and operating expenses trends:
Company sales include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, gift card breakage, delivery, digital entertainment revenues, merchandise income and are net of gift card discounts from third-party gift card sales.

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Franchise revenues include royalties, franchise advertising fees, franchise and development fees and gift card equalization.
The following is a summary of the change in Total revenues:
Total Revenues
Chili’sMaggiano’sTotal Revenues
Thirteen Week Period Ended September 28, 2022$849.9 $105.6 $955.5 
Change from:
Comparable restaurant sales50.7 2.6 53.3 
Restaurant acquisitions
0.6 — 0.6 
Restaurant openings13.1 — 13.1 
Gift card discounts (0.1)— (0.1)
Gift card breakage0.2 — 0.2 
Digital entertainment revenues0.1 — 0.1 
Delivery service fee income(0.3)— (0.3)
Restaurant closures(7.1)(3.9)(11.0)
Company sales57.2 (1.3)55.9 
Franchise revenues(1)
1.0 0.1 1.1 
Thirteen Week Period Ended September 27, 2023$908.1 $104.4 $1,012.5 
(1)Franchise revenues increased in the thirteen week period ended September 27, 2023 compared to September 28, 2022 primarily because of higher franchise advertising fees. Our Chili’s and Maggiano’s franchisees generated sales of approximately $202.8 million and $2.4 million respectively for the thirteen week period ended September 27, 2023 compared to $203.3 million and $2.4 million respectively in sales for the thirteen week period ended September 28, 2022.
The table below presents the percentage change in comparable restaurant sales and restaurant capacity for the thirteen week period ended September 27, 2023 compared to September 28, 2022:
Percentage Change in the Thirteen Week Period Ended September 27, 2023 versus September 28, 2022
Comparable Restaurant Sales(1)
Price Impact
Mix-Shift Impact(2)
Traffic Impact
Restaurant Capacity(3)
Company-owned5.8 %8.9 %2.7 %(5.8)%(0.3)%
Chili’s6.1 %8.8 %3.1 %(5.8)%(0.2)%
Maggiano’s2.6 %9.5 %(1.2)%(5.7)%(3.8)%
Franchise(4)
4.0 %
U.S.5.0 %
International3.4 %
Chili’s domestic(5)
6.0 %
System-wide(6)
5.5 %
(1)Comparable Restaurant Sales include all restaurants that have been in operation for more than 18 full months. Restaurants temporarily closed 14 days or more are excluded from Comparable Restaurant Sales. Percentage amounts are calculated based on the comparable periods year-over-year.
(2)Mix-Shift is calculated as the year-over-year percentage change in Company sales resulting from the change in menu items ordered by guests.
(3)Restaurant Capacity is measured by sales weeks and is calculated based on comparable periods year-over-year.

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(4)Chili’s and Maggiano’s franchise sales generated by franchisees are not included in Total revenues in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited); however, we generate royalty revenues and advertising fees based on franchisee revenues, where applicable. We believe presenting Franchise Comparable Restaurant Sales provides investors relevant information regarding total brand performance.
(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 Chili’s and Maggiano’s Company-owned and franchise-operated restaurants.
Costs and Expenses
Thirteen Week Period Ended September 27, 2023 compared to September 28, 2022
The following is a summary of the changes in Costs and Expenses:
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27, 2023September 28, 2022
Dollars% of Company SalesDollars% of Company SalesDollars% of Company Sales
Food and beverage costs$258.8 25.8 %$289.5 30.7 %$30.7 4.9 %
Restaurant labor348.1 34.8 %330.6 34.9 %(17.5)0.1 %
Restaurant expenses290.8 29.0 %268.8 28.4 %(22.0)(0.6)%
Depreciation and amortization41.9 41.9 — 
General and administrative42.4 39.5 (2.9)
Other (gains) and charges6.3 5.0 (1.3)
Interest expenses17.0 12.3 (4.7)
Other income, net— (0.4)(0.4)
As a percentage of Company sales:
Food and beverage costs were favorable 4.9%, due to 2.5% from increased menu pricing, 1.4% of favorable menu item mix, and 1.0% of favorable commodity costs driven primarily by lower poultry costs, partially offset by higher beverages costs.
Restaurant labor was favorable 0.1%, due to 1.8% of sales leverage and 0.2% of lower manager training, partially offset by 1.2% of higher hourly labor expenses due to increased staffing levels and wage rates, 0.5% of higher manager salaries, and 0.2% of higher manager bonus.
Restaurant expenses were unfavorable 0.6%, due to 2.0% of higher advertising, 0.5% of higher repairs and maintenance, 0.4% of higher workers’ compensation and general liability insurance, and 0.2% of higher other restaurant expenses, partially offset by 1.3% of sales leverage and 1.2% of lower delivery fees and to-go supplies.

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Depreciation and amortization remained unchanged as follows:
Depreciation and Amortization
Thirteen Week Period Ended September 28, 2022$41.9 
Change from:
Additions for new and existing restaurant assets6.5 
Corporate assets0.6 
Finance leases(1.9)
Retirements and fully depreciated restaurant assets(5.1)
Other(0.1)
Thirteen Week Period Ended September 27, 2023$41.9 

General and administrative expenses increased $2.9 million as follows:
General and Administrative
Thirteen Week Period Ended September 28, 2022$39.5 
Change from:
Performance-based compensation1.3
Stock-based compensation0.9 
Defined contribution plan employer expenses and other benefits0.3 
Other0.4 
Thirteen Week Period Ended September 27, 2023$42.4 
Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Litigation & claims, net$2.2 $0.5 
Enterprise system implementation costs2.0 1.0 
Restaurant closure asset write-offs and charges0.6 1.5 
Lease contingencies0.5 — 
Remodel-related asset write-offs0.2 0.8 
Other0.8 1.2 
$6.3 $5.0 
Interest expenses increased $4.7 million due to higher interest rates on the 8.250% notes and revolving credit facility slightly offset by lower long-term debt outstanding.
Income Taxes
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Effective income tax rate— %4.7 %
The federal statutory tax rate was 21.0% for the thirteen week periods ended September 27, 2023 and September 28, 2022.

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The effective income tax rate in the thirteen week period ended September 27, 2023 decreased compared to the thirteen week period ended September 28, 2022. The decrease is primarily due to a less favorable impact from the FICA tip tax credit against higher Income before income taxes.
Segment Results
Chili’s Segment
Thirteen Week Period Ended September 27, 2023 compared to September 28, 2022
Thirteen Week Periods EndedFavorable (Unfavorable) VarianceVariance as percentage
September 27,
2023
September 28,
2022
Company sales$897.8 $840.6 $57.2 6.8 %
Franchise revenues10.3 9.3 1.0 10.8 %
Total revenues$908.1 $849.9 $58.2 6.8 %
Chili’s Total revenues increased by 6.8% primarily due to menu price increases and favorable menu item mix, partially offset by lower traffic. Refer to “Revenues” section above for further details about Chili’s revenues changes.
The following is a summary of the changes in Chili’s operating costs and expenses:
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27, 2023September 28, 2022
Dollars% of Company SalesDollars% of Company SalesDollars% of Company Sales
Food and beverage costs$233.1 26.0 %$260.9 31.0 %$27.8 5.0 %
Restaurant labor311.0 34.6 %294.4 35.0 %(16.6)0.4 %
Restaurant expenses258.5 28.8 %236.9 28.2 %(21.6)(0.6)%
Depreciation and amortization36.2 36.0 (0.2)
General and administrative10.0 9.5 (0.5)
Other (gains) and charges3.7 3.0 (0.7)
As a percentage of Company sales:
Chili’s Food and beverage costs were favorable 5.0%, due to 2.7% from increased menu pricing, 1.3% of favorable menu item mix, and 1.0% of favorable commodity costs driven primarily by lower poultry costs, partially offset by higher beverages costs.
Chili’s Restaurant labor was favorable 0.4%, due to 2.0% of sales leverage and 0.2% of lower manager training, partially offset by 1.3% of higher hourly labor driven by both increased staffing levels and wage rates and 0.5% of increased manager salary.
Chili’s Restaurant expenses were unfavorable 0.6%, due to 2.2% of higher advertising, 0.5% of higher repairs and maintenance, 0.4% of higher workers’ compensation and general liability insurance, 0.3% of higher rent, and 0.1% of higher other restaurant expenses, partially offset by 1.5% of sales leverage and 1.4% lower delivery fees and to-go supplies.

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Chili’s Depreciation and amortization increased $0.2 million as follows:
Depreciation and Amortization
Thirteen Week Period Ended September 28, 2022$36.0 
Change from:
Additions for new and existing restaurant assets5.8 
Finance leases(1.8)
Retirements and fully depreciated restaurant assets(3.9)
Other0.1 
Thirteen Week Period Ended September 27, 2023$36.2 
Chili’s General and administrative increased $0.5 million as follows:
General and Administrative
Thirteen Week Period Ended September 28, 2022$9.5 
Change from:
Defined contribution plan employer expenses and other benefits0.5 
Performance-based compensation0.3 
Recruiting(0.3)
Thirteen Week Period Ended September 27, 2023$10.0 
Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):
Thirteen Week Periods Ended
September 27,
2023
September 28,
2022
Litigation & claims, net$2.2 $0.3 
Restaurant closure asset write-offs and charges0.6 1.1 
Remodel-related asset write-offs— 0.8 
Other0.9 0.8 
$3.7 $3.0 

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Maggiano’s Segment
Thirteen Week Period Ended September 27, 2023 compared to September 28, 2022
Thirteen Week Periods EndedFavorable (Unfavorable) VarianceVariance as a percentage
September 27,
2023
September 28,
2022
Company sales$104.2 $105.5 $(1.3)(1.2)%
Franchise revenues0.2 0.1 0.1 100.0 %
Total revenues$104.4 $105.6 $(1.2)(1.1)%
Maggiano’s Total revenues decreased 1.1% primarily due to restaurant closures in fiscal 2023, offset slightly by favorable comparable restaurant sales due to increased menu pricing, partially offset by lower traffic and unfavorable menu item mix. Refer to “Revenues” section above for further details about Maggiano’s revenues changes.
The following is a summary of the changes in Maggiano’s operating costs and expenses:
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27, 2023September 28, 2022
Dollars% of Company SalesDollars% of Company SalesDollars% of Company Sales
Food and beverage costs$25.7 24.7 %$28.6 27.1 %$2.9 2.4 %
Restaurant labor37.1 35.6 %36.2 34.3 %(0.9)(1.3)%
Restaurant expenses32.2 30.9 %31.7 30.1 %(0.5)(0.8)%
Depreciation and amortization3.2 3.2 — 
General and administrative2.4 2.5 0.1 
Other (gains) and charges0.2 0.5 0.3 
As a percentage of Company sales:
Maggiano’s Food and beverage costs were favorable 2.4%, due to 1.9% from increased menu pricing and 1.1% of favorable commodity costs driven primarily by lower poultry and dairy costs, partially offset by higher bread and beverages costs, and 0.6% of unfavorable menu item mix.
Maggiano’s Restaurant labor was unfavorable 1.3%, due to 0.4% of sales deleverage, 0.4% of higher hourly labor costs, 0.3% of higher manager bonus, and 0.2% of higher manager salaries.
Maggiano’s Restaurant expenses were unfavorable 0.8%, due to 0.7% higher supervision, 0.6% of higher repairs and maintenance, 0.3% of sales deleverage, 0.3% of higher workers’ compensation and general liability insurance, partially offset by 0.3% of lower delivery fees and to-go supplies, 0.3% of lower utilities, and 0.5% of lower other restaurant expenses.

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Liquidity and Capital Resources
Cash Flows
Cash Flows from Operating Activities
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27,
2023
September 28,
2022
Net cash provided by operating activities$59.1 $24.6 $34.5 
Net cash provided by operating activities increased due to an increase in operating income and the timing of operational receipts and payments, partially offset by an increase in payments of performance-based compensation in the current year.
Cash Flows from Investing Activities
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27,
2023
September 28,
2022
Net cash used in investing activities$(45.6)$(45.6)$— 
Net cash used in investing activities was flat compared to the prior year. Increased Chili’s capital maintenance and spend on Maggiano’s remodels were offset by decreased spend on Chili’s remodels and new restaurant construction.
Cash Flows from Financing Activities
Thirteen Week Periods EndedFavorable (Unfavorable) Variance
September 27,
2023
September 28,
2022
Net cash (used in) provided by financing activities$(14.2)$27.0 $(41.2)
Net cash (used in) provided by financing activities increased primarily due to an increase in share repurchases in fiscal 2024 of $22.7 million and a decrease of $21.0 million in net borrowing activity on the revolving credit facility in fiscal 2024 compared to fiscal 2023.
Debt
Net borrowings of $14.0 million were drawn during the thirteen week period ended September 27, 2023 on the revolving credit facility. As of September 27, 2023, $724.7 million of credit was available under the revolving credit facility.
The $900.0 million revolving credit facility matures on August 18, 2026 and bears interest of SOFR plus an applicable margin of 1.50% to 2.25% and an undrawn commitment fee of 0.25% to 0.35%, both based on a function of our debt-to-cash-flow ratio. As of September 27, 2023, our interest rate was 7.17% consisting of SOFR of 5.32% plus the applicable margin and spread adjustment of 1.85%.
As of September 27, 2023, we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 5.000% and 8.250% notes. We expect to remain in compliance with our covenants during the remainder of fiscal 2024.
We intend to refinance our 5.000% notes, which will mature in October 2024, through our existing revolving credit facility.
Refer to Note 6 - Debt for further information about our notes and revolving credit facility.

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Share Repurchase Program
Our Board of Directors approved a $300.0 million share repurchase program during fiscal 2022. Our share repurchase program is used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs.
In the thirteen week period ended September 27, 2023, we repurchased 0.8 million shares of our common stock for $24.7 million, including 0.7 million shares purchased for $21.0 million as part of our share repurchase program and 0.1 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. As of September 27, 2023, approximately $183.0 million of share repurchase authorization remains under the current share repurchase program.
Cash Flow Outlook
Cash flow from operations typically provides the company with a significant source of liquidity. Additionally, during fiscal 2023, we increased the capacity under our revolving credit facility by $100.0 million and issued new $350.0 million senior notes that mature in 2030.
Based on the current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our existing revolving credit facility will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months. We continue to monitor the macro environment and will adjust our overall approach to capital allocation, including share repurchases, as events and macroeconomic trends unfold.
Critical Accounting Estimates
The preparation of the 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. Our critical accounting estimates have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended June 28, 2023.
Recent Accounting Pronouncements
The impact of recent accounting pronouncements can be found at Note 1 - Basis of Presentation in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I, Item 1 of this Form 10-Q report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The terms of our revolving credit facility require us to pay interest on outstanding borrowings at SOFR plus an applicable margin based on a function of our debt-to-cash flow ratio. As of September 27, 2023, $175.3 million was outstanding under the revolving credit facility. For purposes of illustration, a 10% increase in the current interest rate on the outstanding balance of this variable rate financial instrument as of September 27, 2023 would result in an additional $1.3 million of interest expense during fiscal 2024.

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Commodity Price Risk
We purchase food and other commodities for use in our operations based on market prices established with our suppliers. While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease, inclement weather or recent geopolitical unrest, will not cause the prices of the commodities used in our restaurant operations to fluctuate. The aggregate impact of these and other factors have contributed to significant cost inflation. Additionally, if there is a time lag between the increasing commodity prices and our ability to increase menu prices or if we believe the commodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term financial results could be negatively affected.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the thirteen week period ended September 27, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
FORWARD-LOOKING STATEMENTS
Information and statements contained in this Form 10-Q, in our other filings with the SEC or in our written and verbal communications that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are generally accompanied by words like “believes,” “anticipates,” “estimates,” “predicts,” “expects,” “plans,” “intends,” “projects,” “continues” and other similar expressions that convey uncertainty about future events or outcomes. Forward-looking statements are based on our current plans and expectations and involve risks and uncertainties which could cause actual results to differ materially from our historical results or from those projected in forward-looking statements. These risks and uncertainties are, in many instances, beyond our control. We wish to caution you against placing undue reliance on forward-looking statements because of these risks and uncertainties. Except as required by law, we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
The forward-looking statements contained in this Form 10-Q report are subject to the risks and uncertainties described in Part I, Item IA “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 28, 2023, and below in Part II, Item 1A “Risk Factors” in this report on Form 10-Q, as well as the risks and uncertainties that generally apply to all businesses. We further caution that it is not possible to identify all risks and uncertainties, and you should not consider the identified factors as a complete list of all risks and uncertainties. Among the factors that could cause actual results to differ materially are: the impact of general economic conditions, including inflation, on economic activity and on our operations; disruptions on our business including consumer demand, costs, product mix, our strategic initiatives, our partners’ supply chains, operations, technology and assets, and our financial performance; the impact of competition; changes in consumer preferences; consumer perception of food safety; reduced consumer discretionary spending; unfavorable publicity; governmental regulations; the Company's ability to meet its business strategy plan; loss of key management personnel; failure to hire and retain high-quality restaurant management and team members: increasing regulation surrounding wage inflation and competitive labor markets; the impact of social media or other unfavorable publicity; reliance on technology and third party delivery providers; failure to protect the security of data of our guests and team members; product availability and supply chain disruptions; regional business and economic conditions; volatility in consumer, commodity, transportation, labor, currency and capital markets; litigation; franchisee success; technology

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failures; failure to protect our intellectual property; outsourcing; impairment of goodwill or assets; failure to maintain effective internal control over financial reporting; downgrades in credit ratings; changes in estimates regarding our assets; actions of activist shareholders; failure to comply with new environmental, social and governance (“ESG”) requirements; failure to achieve any goals, targets or objectives with respect to ESG matters; adverse weather conditions; terrorist acts; health epidemics or pandemics; tax reform; inadequate insurance coverage and limitations imposed by our credit agreements
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Information regarding legal proceedings is incorporated by reference from Note 7 - Contingencies in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I, Item 1 of this Form 10-Q report.
ITEM 1A. RISK FACTORS
In addition to the other information in this Form 10-Q report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 28, 2023, which could materially affect our business, financial condition or results of operations. It is not possible to predict or identify all risk factors. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business, financial condition or results of operations. Therefore, the risks identified are not intended to be a complete discussion of all potential risks or uncertainties.
There have been no material changes in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 28, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Our Board of Directors approved a $300.0 million share repurchase program during fiscal 2022.
During the thirteen week period ended September 27, 2023, we repurchased shares as follows (in millions, except per share amounts, unless otherwise noted):
Total Number of Shares Purchased(1)
Average Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program
Approximate Dollar Value that May Yet be Purchased Under the Program
June 29, 2023 through August 2, 2023— $— — $204.0 
August 3, 2023 through August 30, 20230.1 33.58 — 204.0 
August 31, 2023 through September 27, 20230.7 31.06 0.7 183.0 
Total0.8 $31.36 0.7 
(1)These amounts include shares purchased as part of our publicly announced programs and shares owned and tendered by team members to satisfy tax withholding obligations on the vesting of restricted share awards, which are not deducted from shares available to be purchased under publicly announced programs. Unless otherwise indicated, shares owned and tendered by team members to satisfy tax withholding obligations were purchased at the average of the high and low prices of the Company’s shares on the date of vesting. During the thirteen week period ended September 27, 2023, 113,118 shares were tendered by team members at an average price of $33.19.
ITEM 5. OTHER INFORMATION
During the thirteen week period ended September 27, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

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ITEM 6. EXHIBITS
ExhibitDescription
Certificate of Incorporation of Registrant, as amended(1)
Bylaws of Registrant(2)
Registrant’s Terms of Fiscal 2024 Retention Restricted Stock Unit Award *
Registrant’s Terms of Fiscal 2024 Restricted Stock Unit Award*
Registrant’s Fiscal 2024 Performance Share Plan*
Certification by Kevin D. Hochman, President and Chief Executive Officer of the Registrant and President of Chili’s Grill & Bar, pursuant to 17 CFR 240.13a – 14(a) or 17 CFR 240.15d – 14(a)*
Certification by Joseph G. Taylor, Executive Vice President and Chief Financial Officer of the Registrant, pursuant to 17 CFR 240.13a – 14(a) or 17 CFR 240.15d – 14(a)*
Certification by Kevin D. Hochman, President and Chief Executive Officer of the Registrant and President of Chili’s Grill & Bar, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
Certification by Joseph G. Taylor, Executive Vice President and Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Schema Document
101.CALXBRL Calculation Linkbase Document
101.DEFXBRL Definition Linkbase Document
101.LABXBRL Label Linkbase Document
101.PREXBRL Presentation Linkbase
104
The cover page from the Registrant's Quarterly Report on Form 10-Q for the thirteen week period ended September 27, 2023 is formatted in Inline XBRL.
*    Filed herewith.
(1)Filed as an exhibit to Annual Report on Form 10-K for fiscal year ended June 28, 1995 and incorporated herein by reference.
(2)Filed as an exhibit to Annual Report on Form 10-K for fiscal year ended June 27, 2018 and incorporated herein by reference.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BRINKER INTERNATIONAL, INC.,
a Delaware corporation
Date: November 1, 2023By:/S/ KEVIN D. HOCHMAN
Kevin D. Hochman,
President and Chief Executive Officer
of Brinker International, Inc.
and President of Chili’s Grill & Bar
(Principal Executive Officer)
Date: November 1, 2023By:/S/ JOSEPH G. TAYLOR
Joseph G. Taylor,
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

30
Document
Exhibit 10(a)
BRINKER INTERNATIONAL, INC.
RESTRICTED STOCK UNIT AWARD TERMS
Brinker International, Inc. (the “Company”), acting pursuant to Section 3 of the Brinker International, Inc. Stock Option and Incentive Plan (the “Plan”), hereby awards to you (the “Participant”) a grant of such number of Restricted Stock Units as specified in your award letter (the “Award”). For purposes of the Award, a “Restricted Stock Unit” means the right to receive a share of Stock, subject to the satisfaction of all applicable terms and conditions. The Award is in all respects subject to the provisions of the Plan (the terms of which are incorporated herein by reference), these Award terms (the “Award Terms”) and your award letter.
1.    Definitions. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used but not defined in the Award or these Award Terms will have the meaning set forth in the Plan. For purposes of the Award and these Award Terms, the terms listed below are defined as follows:
a.    Award Date. The term “Award Date” with respect to each Participant means the date the Company grants Restricted Stock Units as set forth in the Award for such Participant.
b.    Cause. The term “Cause” means one or more of the following as determined by the affirmative vote of at least a majority of the Board or executive committee thereof:
(i)    An act of fraud, misappropriation, embezzlement, theft or falsification of Company records by the Participant in connection with the Company or a Related Company;
(ii)    Gross mismanagement or gross neglect of the Participant’s duties to the Company or a Related Company;
(iii)     A material breach of the Company’s written policies (such as the Company’s code of conduct), including unethical conduct, violation of law, acts of violence or threats of violence or other inappropriate behavior that causes substantial reputational harm to the Company or exposes the Company to substantial legal liability;
(iv)    Commission of an act or omission which causes the Participant or the Company to be in violation of federal or state securities laws, rules or regulations; or
(v)    Conviction of the Participant by a court of competent jurisdiction of a felony.
c.    Change in Control. The term “Change in Control” means:
(i)    a sale, transfer or other conveyance of all or substantially all of the assets of the Company on a consolidated basis; or
(ii)    the acquisition of beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) by any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, directly or indirectly, of securities representing 50% or more of the total number of votes that may be cast for the election of directors of the Company; or
(iii)    the failure at any annual or special meetings of the Company’s shareholders held during the three-year period following a “solicitation in opposition” as defined in Rule 14a-6 promulgated under the Exchange Act, of a majority of the persons nominated by the
1



Company in the proxy material mailed to shareholders by the management of the Company to win election to seats on the Board (such majority calculated based upon the total number of persons nominated by the Company failing to win election to seats on the Board divided by the total number of Board members of the Board as of the beginning of such three-year period), excluding only those who die, retire voluntarily, are disabled or are otherwise disqualified in the interim between their nomination and the date of the meeting.
d.    Code Section 409A. The term “Code Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and all Treasury Regulations and guidance promulgated thereunder.
e.    Disability. Except as otherwise provided by the Committee, the Participant will be considered to have a “Disability” during the period in which the Participant is unable, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition is expected to have a duration of not less than 120 days.
f.    Executive Participant. The term “Executive Participant” means any Participant who is the Chief Executive Officer, an Executive Vice President or a Senior Vice President of the Company.
g.    Good Reason. The term “Good Reason” means the satisfaction of all of the following requirements:
(i)    One or more of the following facts and circumstances exist: (A) a reduction in the Executive Participant’s then current base salary other than a general reduction in base salary that affects all similarly situated executives in substantially the same proportions; (B) a reduction in the Executive Participant’s target annual bonus opportunity; (C) a relocation of the principal location at which the Executive Participant is required to provide services by more than fifty (50) miles; (D) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform the obligations under these Award Terms in the same manner and to the same extent that the Company would be required to perform, except where such assumption occurs by operations of law; (E) a material, adverse change in the Executive Participant’s title, reporting relationship, authority, duties or responsibilities; or (F) in the case of an Executive Participant who is the Chief Executive Officer of the Company only, a failure of any successor to the Company to nominate the Executive Participant for election by shareholders to the successor company’s board of directors; and
(ii)    the Executive Participant shall have provided the Company written notice within thirty (30) days of his or her knowledge or reason to know of the existence of any fact or circumstance constituting Good Reason, the Company shall have failed to cure or eliminate such fact(s) or circumstance(s) within thirty (30) days of its receipt of such notice, and the resulting termination of employment must occur within thirty (30) days following expiration of such cure period.
h.    Rule of 70. The term “Rule of 70” means that the sum of the Participant’s age and the Participant’s years of continuous service with the Company or a Related Company (measured from a Participant’s most recent date of hire or rehire only and taking into account partial years) equals or exceeds 70.
2.    Term of Restricted Stock Units. The “Restricted Period” for the Award is the period beginning on the Award Date and ending on the third anniversary of the Award Date. The Participant will have no voting rights with respect to the Restricted Stock Units or any shares of Stock underlying the Restricted Stock Units until the shares of Stock are issued in settlement of the vested Restricted Stock Units.
2



3.    Vesting.
a.    General Rule. One-third of the Restricted Stock Units will vest on each of the first anniversary, second anniversary and third anniversary of the Award Date, provided that the Participant has remained continuously employed by the Company or a Related Company through the applicable vesting date, except as otherwise specifically provided in these Award Terms. Restricted Stock Units that have already vested on either the first or second anniversary of the Award Date (as applicable) shall not be forfeited if the Participant does not remain employed thereafter through the entire Restricted Period.
b.    Death or Disability. Notwithstanding Section 3(a), if a Participant terminates employment with the Company and the Related Companies prior to the last day of the Restricted Period due to the Participant’s death or Disability, then all of the Restricted Stock Units subject to the Participant’s Award will become fully vested as of the date of such termination.
c.    Retirement Before Age 60. Notwithstanding Section 3(a), if a Participant ceases to be employed with the Company and the Related Companies prior to the last day of the Restricted Period, and as of the date of the termination the Participant (i) has satisfied the Rule of 70, (ii) is at least age 55 but not yet age 60 and (iii) if such Participant is an Executive Participant he or she has remained employed with the Company for at least one year following the Award Date (or an earlier retirement date selected in the Committee’s discretion), then a pro-rata number of the Restricted Stock Units subject to the Participant’s Award will become fully vested on the last day of the Restricted Period to the extent not already vested as of the termination date. Such pro-rata number of Restricted Stock Units shall be calculated based on the number of complete months the Participant was employed by the Company or a Related Company during the Restricted Period, divided by the total number of complete months in the Restricted Period.
d.    Retirement At or After Age 60. Notwithstanding Section 3(a), if a Participant ceases to be employed with the Company and the Related Companies prior to the last day of the Restricted Period, and as of the date of the termination the Participant (i) (A) has satisfied the Rule of 70 and is at least age 60, or (B) is at least age 65 regardless of satisfaction of the Rule of 70, and (ii) if such Participant is an Executive Participant he or she either has remained employed with the Company for at least one year following the Award Date (or an earlier retirement date selected in the Committee’s discretion) or is involuntarily terminated without Cause, then all of the unvested Restricted Stock Units subject to the Participant’s Award will become fully vested (x) as of the date of termination if such Participant is involuntary terminated without Cause, or (y) on the last day of the Restricted Period if such Participant retires at least one year after the Award Date (or such earlier date the Committee selects in its discretion).
e.    Involuntary Termination.
(i)    Involuntary Termination Without Cause Not Following a Change in Control. Notwithstanding the provisions of Section 3(a), if the Participant is involuntarily terminated for a reason other than for Cause prior to the last day of the Restricted Period, the Participant will vest, as of the date of such termination, in a pro-rata number of the Restricted Stock Units subject to the Participant’s Award based on the number of complete months that the Participant was employed by the Company or a Related Company during the Restricted Period, divided by the total number of complete months in the Restricted Period.
(ii)    Involuntary Termination Without Cause or Termination (by Executive Participants only) for Good Reason Following a Change in Control. Notwithstanding the provisions of Sections 3(a) and 3(d)(i), in the event there has been a Change in Control during the Restricted Period and the Awards were not vested in connection with the Change in Control pursuant to Section 3(e), then if a Participant is involuntarily terminated for a reason other than
3



Cause or if an Executive Participant terminates for Good Reason following the Change in Control and prior to the last day of the Restricted Period, all of the Restricted Stock Units subject to the Participant’s Award will become fully vested as of the date of such termination.
f.    Change in Control. Notwithstanding the provisions of Section 3(a), in the event of a Change in Control, if the Awards are not assumed or replaced with awards of substantially equal value by the acquiring entity in such a Change in Control and/or cease to remain outstanding immediately following the Change in Control, all of the Restricted Stock Units subject to a Participant’s Award will become fully vested as of the date immediately preceding such Change in Control, provided the Participant has remained continuously employed by the Company or a Related Company through such date. After a Change in Control, references to the “Company” as they relate to the Award shall refer to the successor entity.
g.    Most Favorable Provision Applies. For the avoidance of doubt, if two or more of Sections 3(a) through 3(f) above apply, then the applicable Section that results in the Participant vesting in the greatest number of Restricted Stock Units shall control.
4.    Forfeiture. Except as otherwise provided in Section 3, if the Participant ceases to be employed prior to the end of the Restricted Period, the Participant will immediately forfeit any Restricted Stock Units remaining unvested as of the date of the Participant’s termination, and the Participant will not be entitled to any payment with respect to such Restricted Stock Units. In addition, notwithstanding Section 3 or any provision of the Plan or these Award Terms to the contrary, the Participant will forfeit any Restricted Stock Units (including any vested portion) immediately and without notice upon (A) the termination of the Participant’s employment for Cause, or (B) the Participant’s breach of any confidentiality agreement or similar agreement pertaining to the confidentiality and nondisclosure of proprietary information, including but not limited to trade secrets, of the Company or any Related Company. Furthermore, and notwithstanding Section 3, if subsequent to the Participant’s retirement or termination of employment with the Company or any Related Company (other than due to a termination following a Change in Control without Cause or for Good Reason, if applicable), and prior to the last day of the Restricted Period the Participant becomes employed by, consults with, and/or participates as an officer, director, employee, independent contractor, adviser, consultant, partner, principal, or shareholder (with more than five percent (5%) equity) with any entity which owns and/or operates (either directly or indirectly) or is engaged, or planning to be engaged (either directly or indirectly) in the ownership and/or operation of any “Competitor Company” as defined below or any successor thereto or any entity under common control with a Competitor Company, then the Participant’s Award (including any vested portion) will be immediately forfeited and, to the extent Stock or other applicable consideration has been issued to the Participant in settlement of the Award, to the extent permissible under applicable law, the Participant shall be required to immediately return such consideration to the Company. A “Competitor Company” shall mean a company that operates any of the following directly or indirectly:

1.    Applebee's
2.    Beef O'Brady's
3.    Bertucci's
4.    BJ's Restaurants
5.    Bravo Italian Kitchen
6.    Brio Tuscan Grille
7.    Bubba’s 33
8.    Buca di Beppo
9.    Buffalo Wild Wings
10.    California Pizza Kitchen
11.    Carino's Italian Grill
12.    Carraba's Italian Grill
13.    Cheddar's Scratch Kitchen
14.    Cheesecake Factory
15.    Chuy's
16.    Hooters
17.    Houlihans
18.    Houston's/Hillstone
19.    Il Fornaio
20.    Lazy Dog
21.    Longhorn Steakhouse
22.    Miller's Ale House
23.    North Italia
24.    O'Charleys
25.    Olive Garden
26.    On The Border
27.    Outback Steakhouse
28.    P.F. Chang’s
29.    Red Robin
30.    Romano's Macaroni Grill
31.    Ruby Tuesday
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