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LEASES (Tables) | 6 Months Ended
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Dec. 25, 2019
Leases [Abstract] |
Financial Statement Impact of ASC 842 Adoption | The table below reflects the balance sheet adoption impact related to ASC 842 as an adjustment at June 27, 2019, the first day of fiscal 2020 (condensed, unaudited):
| Legacy GAAP |  | ASC 842 Cumulative Adjustments |  | ASC 842
| June 26, 2019 |  |  | June 27, 2019
ASSETS |  |  |  |  |
Current assets(1) | $ | 177.0 |  |  | $ | 0.3 |  |  | $ | 177.3 |
Other assets |  |  |  |  |
Operating lease assets(2) | — |  |  | 1,034.3 |  |  | 1,034.3 |
Deferred income taxes, net(3) | 112.0 |  |  | (65.1 | ) |  | 46.9 |
Intangibles, net(1) | 22.3 |  |  | (4.1 | ) |  | 18.2 |
LIABILITIES AND SHAREHOLDERS’ DEFICIT |  |  |  |  |
Current liabilities |  |  |  |  |
Operating lease liabilities(4) | — |  |  | 110.8 |  |  | 110.8 |
Other accrued liabilities(1)(5) | 141.1 |  |  | (38.3 | ) |  | 102.8 |
Long-term operating lease liabilities, less current portion(4) | — |  |  | 1,044.9 |  |  | 1,044.9 |
Deferred gain on sale leaseback transactions(5) | 255.3 |  |  | (255.3 | ) |  | — |
Other liabilities(1) | 153.0 |  |  | (92.6 | ) |  | 60.4 |
Retained earnings | 2,771.2 |  |  | 195.9 |  |  | 2,967.1 |
(1) | The following prior lease balances were reclassified into Operating lease assets upon adoption of ASC 842:
– | Current assets adjustment related to the prepaid rent.
– | Intangibles, net adjustment related to the favorable lease asset position.
– | Other accrued liabilities and Other liabilities balances adjustments related to the current and long-term portions of straight-line rent balances, unfavorable lease liability positions, exit-related lease accruals, and landlord contributions.
Additionally, Other accrued liabilities included $19.3 million of deferred gain on sale leaseback transactions that was eliminated as a cumulative effect adjustment to Retained earnings upon adoption, refer to (5) below for more details. Refer to Note 10 - Accrued and Other Liabilities for June 26, 2019 balance details.
(2) | Operating lease assets represents the capitalization of operating lease assets equal to the amount of recognized operating lease liability as described in (4) below, adjusted by the net carrying amounts described in (1) above, and $15.5 million related to the impairment of certain operating lease assets for restaurant facilities previously fully impaired under our long-lived asset impairment policy that were recorded to Retained earnings.
(3) | Deferred income taxes, net was reduced by $68.6 million related to the elimination of the deferred gain on sale leaseback transactions as described in (5) below, partially offset by $3.5 million related to the impact of adopting ASC 842 and recording the operating lease assets and liabilities.
(4) | Operating lease liabilities, both current and long-term, represents the liabilities based on the present value of the lease payments, consisting of fixed costs and certain rent escalations, using our incremental borrowing rate applicable to the lease term upon date of adoption.
(5) Deferred gain on sale leaseback transactions balance of $255.3 million, the related short-term deferred gain balance recorded within Other accrued liabilities of $19.3 million, and the associated Deferred income taxes, net of $68.6 million as described in (3) above, were eliminated upon ASC 842 adoption into Retained earnings as required by ASC 842 using the alternative transition method. No further gain will be amortized to Other (gains) and charges in the Consolidated Statements of Comprehensive Income effective fiscal 2020.
Consolidated Balance Sheet Disclosure of Lease Amounts | The following table includes a detail of lease asset and liabilities included in the Consolidated Balance Sheets (Unaudited):
| December 25, 2019
| Finance Leases(1) |  | Operating Leases(2) |  | Total Leases
Lease assets | $ | 66.7 |  |  | $ | 1,175.9 |  |  | $ | 1,242.6 |
Current lease liabilities | 10.5 |  |  | 119.9 |  |  | 130.4 |
Long-term lease liabilities | 74.8 |  |  | 1,172.1 |  |  | 1,246.9 |
Total lease liabilities | $ | 85.3 |  |  | $ | 1,292.0 |  |  | $ | 1,377.3 |
(1) | Finance lease assets are recorded in Property and equipment, at cost, and the related current and long-term lease liabilities are recorded within Other accrued liabilities and Long-term debt and finance leases, less current installments, respectively.
(2) Operating lease assets are recorded in Operating lease assets and the related current and long-term lease liabilities are recorded within Operating lease liabilities and Long-term operating lease liabilities, less current portion, respectively.
Consolidated Statement of Comprehensive Income Disclosure of Lease Amounts | The components of lease expense, including variable lease costs primarily consisting of rent based on a percentage of sales, common area maintenance and real estate tax charges, and short-term lease expenses for leases with lease terms less than twelve months are included in the Consolidated Statements of Comprehensive Income (Unaudited) as follows:
| Thirteen Week Period Ended December 25, 2019 |  | Twenty-Six Week Period Ended December 25, 2019
Operating lease cost | $ | 41.9 |  |  | $ | 79.2 |
Finance lease amortization | 3.1 |  |  | 5.7 |
Finance lease interest | 1.1 |  |  | 2.0 |
Short-term lease cost | 0.5 |  |  | 0.7 |
Variable lease cost | 15.1 |  |  | 28.3 |
Sublease (income) | (1.2 | ) |  | (2.3 | )
Total lease costs, net | $ | 60.5 |  |  | $ | 113.6 |
Consolidated Statement of Cash Flows Disclosure of Lease Amounts | Supplemental cash flow information related to leases recorded in the Consolidated Statements of Cash Flows (Unaudited) is as follows:
| Twenty-Six Week Period Ended December 25, 2019
Cash flows from operating activities |
Cash paid related to lease liabilities |
Operating leases | $ | 83.2 |
Finance leases | 2.0 |
Cash flows from financing activities |
Cash paid related to lease liabilities |
Finance leases | 5.0 |
Non-cash lease assets obtained in exchange for lease liabilities |
Operating leases(1) | 203.2 |
Finance leases(1) | 41.9 |
(1) New lease assets obtained, net of lease liabilities primarily related to the new and assumed operating and finance leases from the Chili’s restaurant acquisition. Refer to Note 2 - Chili’s Restaurant Acquisition and “Significant Changes in Leases during the Period” section below for more information.
Weighted Average Lease Term and Discount Rate | Other information related to leases is as follows:
| December 25, 2019
| Finance Leases |  | Operating Leases
Weighted average remaining lease term | 11.3 years |  |  | 11.9 years |
Weighted average discount rate | 5.4 | % |  | 4.3 | %
Lease Maturity Analysis - Fiscal 2020 (ASC 842) | As of December 25, 2019, accounted for and presented under ASC 842 guidance, the discounted future minimum lease payments on finance and operating leases, as well as sublease income were as follows:
| December 25, 2019
Fiscal Year | Finance Leases |  | Operating Leases |  | Sublease Income
Remainder of 2020 | $ | 7.3 |  |  | $ | 86.8 |  |  | $ | (1.6 | )
2021 | 14.0 |  |  | 170.0 |  |  | (3.3 | )
2022 | 12.4 |  |  | 163.5 |  |  | (3.2 | )
2023 | 10.8 |  |  | 152.6 |  |  | (2.5 | )
2024 | 9.7 |  |  | 142.6 |  |  | (1.8 | )
Thereafter | 60.8 |  |  | 978.4 |  |  | (6.3 | )
Total minimum lease payments | 115.0 |  |  | 1,693.9 |  |  | $ | (18.7 | )
Less: Imputed interest | 29.7 |  |  | 401.9 |  |  |
Present value of lease liability | $ | 85.3 |  |  | $ | 1,292.0 |  |  |
Lease Maturity Analysis - Fiscal 2019 (ASC 840) | As of June 26, 2019, as previously disclosed in our fiscal 2019 Form 10-K under Legacy GAAP, undiscounted future minimum lease payments on both capital and operating leases were as follows:
| June 26, 2019
Fiscal Year | Capital Leases |  | Operating Leases(2)
2020 | $ | 12.3 |  |  | $ | 156.8 |
2021 | 10.1 |  |  | 154.5 |
2022 | 8.2 |  |  | 148.6 |
2023 | 6.7 |  |  | 137.7 |
2024 | 6.0 |  |  | 127.6 |
Thereafter | 17.4 |  |  | 771.7 |
Total minimum lease payments(1) | 60.7 |  |  | $ | 1,496.9 |
Imputed interest (average rate of 6.18%) | (12.3 | ) |  |
Present value of minimum lease payments | 48.4 |  |  |
Less current capital lease obligations | (9.7 | ) |  |
Long-term capital lease obligations | $ | 38.7 |  |  |
(1) | Total minimum lease payments were not reduced by minimum sublease rentals to be received in the future under non-cancelable subleases. The total of undiscounted future sublease rentals was approximately $22.0 million and $14.6 million for capital and operating subleases, respectively, as of June 26, 2019.
(2) Operating lease expenses for the fifty-two weeks ended June 26, 2019, recorded under Legacy GAAP, totaled $158.6 million, which included $141.7 million for straight-lined minimum rent, $3.3 million for contingent rent, and $13.6 million of other rent-related expenses.

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