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Adoption of ASU 2014-09, "Revenue from Contracts with Customers" (Tables) | 6 Months Ended
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Jul. 01, 2018
Adoption of ASU 2014-09, "Revenue from Contracts with Customers" |
Schedule of impacts of adoption of ASU 2014-09 | The following chart presents the specific line items impacted by the cumulative adjustment.
|  |  |  |  |  |  |  | Adjusted
|  | As Reported |  |  |  |  |  | Balance Sheet
|  | December 31, |  |  | Total |  |  | at January 1,
(In thousands, except per share amounts) |  | 2017 |  |  | Adjustments |  |  | 2018
Assets |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 22,345 |  | $ | 4,279 |  | $ | 26,624
Accounts receivable, net |  |  | 64,644 |  |  | 493 |  |  | 65,137
Notes receivable, net |  |  | 4,333 |  |  | — |  |  | 4,333
Income tax receivable |  |  | 3,903 |  |  | — |  |  | 3,903
Inventories |  |  | 30,620 |  |  | — |  |  | 30,620
Prepaid expenses |  |  | 28,522 |  |  | (4,959) |  |  | 23,563
Other current assets |  |  | 9,494 |  |  | — |  |  | 9,494
Assets held for sale |  |  | 6,133 |  |  | — |  |  | 6,133
Total current assets |  |  | 169,994 |  |  | (187) |  |  | 169,807
Property and equipment, net |  |  | 234,331 |  |  | — |  |  | 234,331
Notes receivable, less current portion, net |  |  | 15,568 |  |  | — |  |  | 15,568
Goodwill |  |  | 86,892 |  |  | — |  |  | 86,892
Deferred income taxes, net |  |  | 585 |  |  | — |  |  | 585
Other assets |  |  | 48,183 |  |  | (907) |  |  | 47,276
Total assets |  | $ | 555,553 |  | $ | (1,094) |  | $ | 554,459
Liabilities and stockholders’ equity (deficit) |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 32,006 |  | $ | (2,161) |  | $ | 29,845
Income and other taxes payable |  |  | 10,561 |  |  | — |  |  | 10,561
Accrued expenses and other current liabilities |  |  | 70,293 |  |  | 15,860 |  |  | 86,153
Deferred revenue current |  |  | — |  |  | 2,400 |  |  | 2,400
Current portion of long-term debt |  |  | 20,000 |  |  | — |  |  | 20,000
Total current liabilities |  |  | 132,860 |  |  | 16,099 |  |  | 148,959
Deferred revenue |  |  | 2,652 |  |  | 10,798 |  |  | 13,450
Long-term debt, less current portion, net |  |  | 446,565 |  |  | — |  |  | 446,565
Deferred income taxes, net |  |  | 12,546 |  |  | (6,464) |  |  | 6,082
Other long-term liabilities |  |  | 60,146 |  |  | — |  |  | 60,146
Total liabilities |  |  | 654,769 |  |  | 20,433 |  |  | 675,202
Redeemable noncontrolling interests |  |  | 6,738 |  |  | — |  |  | 6,738
Stockholders’ equity (deficit): |  |  |  |  |  |  |  |  |
Preferred stock ($0.01 par value per share; no shares issued) |  |  | — |  |  | — |  |  | —
Common stock ($0.01 par value per share; issued 44,221 at December 31, 2017 |  |  | 442 |  |  | — |  |  | 442
Additional paid-in capital |  |  | 184,785 |  |  | — |  |  | 184,785
Accumulated other comprehensive loss |  |  | (2,117) |  |  | — |  |  | (2,117)
Retained earnings |  |  | 292,251 |  |  | (21,527) |  |  | 270,724
Treasury stock (10,290 shares at December 31, 2017, at cost) |  |  | (597,072) |  |  | — |  |  | (597,072)
Total stockholders’ (deficit), net of noncontrolling interests |  |  | (121,711) |  |  | (21,527) |  |  | (143,238)
Noncontrolling interests in subsidiaries |  |  | 15,757 |  |  | — |  |  | 15,757
Total stockholders’ (deficit) |  |  | (105,954) |  |  | (21,527) |  |  | (127,481)
Total liabilities, redeemable noncontrolling interests and stockholders’ (deficit) |  | $ | 555,553 |  | $ | (1,094) |  | $ | 554,459
The impact of adoption for the second quarter of 2018 is as follows:
|  | As Reported |  |  |  |  |  | Balance Sheet
|  | July 1, |  |  | Total |  |  | Without Adoption
(In thousands, except per share amounts) |  | 2018 |  |  | Adjustments |  |  | of Topic 606
Assets |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 25,719 |  | $ | (3,130) |  | $ | 22,589
Accounts receivable, net |  |  | 62,973 |  |  | (359) |  |  | 62,614
Notes receivable, net |  |  | 5,180 |  |  | — |  |  | 5,180
Income tax receivable |  |  | — |  |  | — |  |  | —
Inventories |  |  | 27,109 |  |  | — |  |  | 27,109
Prepaid expenses |  |  | 26,729 |  |  | 4,827 |  |  | 31,556
Other current assets |  |  | 7,223 |  |  | — |  |  | 7,223
Assets held for sale |  |  | 2,786 |  |  | — |  |  | 2,786
Total current assets |  |  | 157,719 |  |  | 1,338 |  |  | 159,057
Property and equipment, net |  |  | 227,722 |  |  | — |  |  | 227,722
Notes receivable, less current portion, net |  |  | 15,648 |  |  | — |  |  | 15,648
Goodwill |  |  | 85,064 |  |  | — |  |  | 85,064
Deferred income taxes, net |  |  | 709 |  |  | — |  |  | 709
Other assets |  |  | 71,309 |  |  | 907 |  |  | 72,216
Total assets |  | $ | 558,171 |  | $ | 2,245 |  | $ | 560,416
Liabilities and stockholders’ equity (deficit) |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 33,307 |  | $ | 1,493 |  | $ | 34,800
Income and other taxes payable |  |  | 8,904 |  |  | — |  |  | 8,904
Accrued expenses and other current liabilities |  |  | 81,197 |  |  | (15,457) |  |  | 65,740
Deferred revenue current |  |  | 2,426 |  |  | (2,426) |  |  | —
Current portion of long-term debt |  |  | 20,000 |  |  | — |  |  | 20,000
Total current liabilities |  |  | 145,834 |  |  | (16,390) |  |  | 129,444
Deferred revenue |  |  | 15,329 |  |  | (11,157) |  |  | 4,172
Long-term debt, less current portion, net |  |  | 556,387 |  |  | — |  |  | 556,387
Deferred income taxes, net |  |  | 5,140 |  |  | 6,682 |  |  | 11,822
Other long-term liabilities |  |  | 78,515 |  |  | — |  |  | 78,515
Total liabilities |  |  | 801,205 |  |  | (20,865) |  |  | 780,340
Redeemable noncontrolling interests |  |  | 7,356 |  |  | — |  |  | 7,356
Stockholders’ equity (deficit): |  |  |  |  |  |  |  |  |
Preferred stock ($0.01 par value per share; no shares issued) |  |  | — |  |  | — |  |  | —
Common stock ($0.01 par value per share; issued 44,280 at July 1, 2018) |  |  | 443 |  |  | — |  |  | 443
Additional paid-in capital |  |  | 188,026 |  |  | — |  |  | 188,026
Accumulated other comprehensive income (loss) |  |  | 2,240 |  |  | — |  |  | 2,240
Retained earnings |  |  | 285,460 |  |  | 23,091 |  |  | 308,551
Treasury stock (12,733 shares at July 1, 2018, at cost) |  |  | (742,695) |  |  | — |  |  | (742,695)
Total stockholders’ (deficit), net of noncontrolling interests |  |  | (266,526) |  |  | 23,091 |  |  | (243,435)
Noncontrolling interests in subsidiaries |  |  | 16,136 |  |  | 19 |  |  | 16,155
Total stockholders’ (deficit) |  |  | (250,390) |  |  | 23,110 |  |  | (227,280)
Total liabilities, redeemable noncontrolling interests and stockholders’ (deficit) |  | $ | 558,171 |  | $ | 2,245 |  | $ | 560,416
|  | As Reported |  |  |  |  |
|  | Three Months Ended |  |  |  |  | Income Statement
|  | July 1, |  | Total |  | Without Adoption of
(In thousands, except per share amounts) |  | 2018 |  | Adjustments |  | Topic 606
Revenues: |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant sales |  | $ | 181,379 |  | $ | 812 |  | $ | 182,191
North America franchise royalties and fees |  |  | 23,912 |  |  | 82 |  |  | 23,994
North America commissary |  |  | 153,455 |  |  | — |  |  | 153,455
International |  |  | 29,069 |  |  | 175 |  |  | 29,244
Other revenues |  |  | 20,144 |  |  | (2,883) |  |  | 17,261
Total revenues |  |  | 407,959 |  |  | (1,814) |  |  | 406,145
Costs and expenses: |  |  |  |  |  |  |  |  |
Operating costs (excluding depreciation and amortization shown separately below): |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant expenses |  |  | 147,781 |  |  | (272) |  |  | 147,509
North America commissary |  |  | 143,300 |  |  | — |  |  | 143,300
International expenses |  |  | 18,248 |  |  | — |  |  | 18,248
Other expenses |  |  | 20,698 |  |  | (2,951) |  |  | 17,747
General and administrative expenses |  |  | 38,712 |  |  | 34 |  |  | 38,746
Depreciation and amortization |  |  | 11,731 |  |  | — |  |  | 11,731
Total costs and expenses |  |  | 380,470 |  |  | (3,189) |  |  | 377,281
Refranchising loss, net |  |  | (2,122) |  |  | — |  |  | (2,122)
Operating income |  |  | 25,367 |  |  | 1,375 |  |  | 26,742
Net Interest expense |  |  | (5,662) |  |  | — |  |  | (5,662)
Income before income taxes |  |  | 19,705 |  |  | 1,375 |  |  | 21,080
Income tax expense |  |  | 7,040 |  |  | 306 |  |  | 7,346
Net income before attribution to noncontrolling interests |  |  | 12,665 |  |  | 1,069 |  |  | 13,734
Income attributable to noncontrolling interests |  |  | (874) |  |  | — |  |  | (874)
Net income attributable to the Company |  | $ | 11,791 |  | $ | 1,069 |  | $ | 12,860
Calculation of income for earnings per share: |  |  |  |  |  |  |  |  |
Net income attributable to the Company |  | $ | 11,791 |  | $ | 1,069 |  | $ | 12,860
Net income attributable to participating securities |  |  | (72) |  |  | — |  |  | (72)
Net income attributable to common shareholders |  | $ | 11,719 |  | $ | 1,069 |  | $ | 12,788
Basic earnings per common share |  | $ | 0.37 |  | $ | 0.03 |  | $ | 0.40
Diluted earnings per common share |  | $ | 0.36 |  | $ | 0.03 |  | $ | 0.40
Basic weighted average common shares outstanding |  |  | 31,941 |  |  | 31,941 |  |  | 31,941
Diluted weighted average common shares outstanding |  |  | 32,175 |  |  | 32,175 |  |  | 32,175
|  | As Reported |  |  |  |  |
|  | Six Months Ended |  |  |  |  | Income Statement
|  | July 1, |  | Total |  | Without Adoption of
(In thousands, except per share amounts) |  | 2018 |  | Adjustments |  | Topic 606
Revenues: |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant sales |  | $ | 371,621 |  | $ | 1,076 |  | $ | 372,697
North America franchise royalties and fees |  |  | 48,718 |  |  | 120 |  |  | 48,838
North America commissary |  |  | 315,168 |  |  | — |  |  | 315,168
International |  |  | 59,183 |  |  | 324 |  |  | 59,507
Other revenues |  |  | 40,638 |  |  | (5,770) |  |  | 34,868
Total revenues |  |  | 835,328 |  |  | (4,250) |  |  | 831,078
Costs and expenses: |  |  |  |  |  |  |  |  |
Operating costs (excluding depreciation and amortization shown separately below): |  |  |  |  |  |  |  |  |
Domestic Company-owned restaurant expenses |  |  | 305,100 |  |  | (338) |  |  | 304,762
North America commissary |  |  | 294,981 |  |  | — |  |  | 294,981
International expenses |  |  | 37,278 |  |  | — |  |  | 37,278
Other expenses |  |  | 41,656 |  |  | (6,310) |  |  | 35,346
General and administrative expenses |  |  | 78,441 |  |  | 538 |  |  | 78,979
Depreciation and amortization |  |  | 23,270 |  |  | — |  |  | 23,270
Total costs and expenses |  |  | 780,726 |  |  | (6,110) |  |  | 774,616
Refranchising loss, net |  |  | (1,918) |  |  | — |  |  | (1,918)
Operating income |  |  | 52,684 |  |  | 1,860 |  |  | 54,544
Net Interest expense |  |  | (10,617) |  |  | — |  |  | (10,617)
Income before income taxes |  |  | 42,067 |  |  | 1,860 |  |  | 43,927
Income tax expense |  |  | 12,022 |  |  | 418 |  |  | 12,440
Net income before attribution to noncontrolling interests |  |  | 30,045 |  |  | 1,442 |  |  | 31,487
Income attributable to noncontrolling interests |  |  | (1,517) |  |  | — |  |  | (1,517)
Net income attributable to the Company |  | $ | 28,528 |  | $ | 1,442 |  | $ | 29,970
Calculation of income for earnings per share: |  |  |  |  |  |  |  |  |
Net income attributable to the Company |  | $ | 28,528 |  | $ | 1,442 |  | $ | 29,970
Net income attributable to participating securities |  |  | (147) |  |  | — |  |  | (147)
Net income attributable to common shareholders |  | $ | 28,381 |  | $ | 1,442 |  | $ | 29,823
Basic earnings per common share |  | $ | 0.87 |  | $ | 0.04 |  | $ | 0.91
Diluted earnings per common share |  | $ | 0.86 |  | $ | 0.04 |  | $ | 0.91
Basic weighted average common shares outstanding |  |  | 32,610 |  |  | 32,610 |  |  | 32,610
Diluted weighted average common shares outstanding |  |  | 32,860 |  |  | 32,860 |  |  | 32,860
Schedule of estimated revenue expected to be recognized in the future | The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period.
|  |  | Performance Obligations by Period
|  | Less than 1 Year |  | 1-2 Years |  | 2-3 Years |  | 3-4 Years |  | 4-5 Years |  | Thereafter |  | Total
Franchise Fees |  | $ | 2,426 |  | $ | 2,179 |  | $ | 1,948 |  | $ | 1,732 |  | $ | 1,503 |  | $ | 3,795 |  | $ | 13,583

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