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Revenue (Tables) | 6 Months Ended
--- | ---
Jun. 27, 2018
Revenues [Abstract] |
Disaggregation of revenue | The following table disaggregates our revenue by sales channels and types of goods or services.
| Quarter Ended | Two Quarters Ended
| June 27, 2018 | June 28, 2017 (1) | June 27, 2018 | June 28, 2017 (1)
| (Dollars in thousands)
Company restaurant sales | $ | 102,741 |  |  | $ | 98,355 |  |  | $ | 203,934 |  |  | $ | 192,134 |
Franchise and license revenue: |  |  |  |  |  |  |
Royalties | 25,192 |  |  | 25,338 |  |  | 50,357 |  |  | 49,882 |
Advertising revenue | 19,530 |  |  | — |  |  | 38,840 |  |  | — |
Initial and other fees | 1,810 |  |  | 588 |  |  | 3,227 |  |  | 1,072 |
Occupancy revenue | 8,061 |  |  | 9,095 |  |  | 16,249 |  |  | 18,198 |
Franchise and license revenue | 54,593 |  |  | 35,021 |  |  | 108,673 |  |  | 69,152 |
Total operating revenue | $ | 157,334 |  |  | $ | 133,376 |  |  | $ | 312,607 |  |  | $ | 261,286 |
(1) | As disclosed in Note 2, prior period amounts have not been adjusted under the modified retrospective method of adoption of Topic 606.
Financial statement impact of adoption | The following tables summarize the impact of adopting Topic 606 on our financial statement line items as of June 27, 2018 and for the quarter and two quarters ended June 27, 2018.
| Quarter ended June 27, 2018
Consolidated Balance Sheet | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606
| (In thousands)
Prepaid and other current assets | $ | 12,040 |  |  | $ | 509 |  |  | $ | 12,549 |
Deferred income taxes | 19,333 |  |  | (5,141 | ) |  | 14,192 |
Other current liabilities | 53,218 |  |  | (1,230 | ) |  | 51,988 |
Other noncurrent liabilities | 47,831 |  |  | (18,138 | ) |  | 29,693 |
Deficit | (328,722 | ) |  | 14,736 |  |  | (313,986 | )
| Quarter ended June 27, 2018 |  | Two quarters ended June 27, 2018
Consolidated Statement of Income | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606 |  | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606
| (In thousands, except per share amounts)
Franchise and license revenue | $ | 54,593 |  |  | $ | (20,949 | ) |  | $ | 33,644 |  |  | $ | 108,673 |  |  | $ | (41,256 | ) |  | $ | 67,417 |
Costs of franchise and license revenue | 29,049 |  |  | (20,535 | ) |  | 8,514 |  |  | 57,605 |  |  | (40,299 | ) |  | 17,306 |
Provision for income taxes | 2,578 |  |  | (107 | ) |  | 2,471 |  |  | 4,407 |  |  | (247 | ) |  | 4,160 |
Net income | 11,626 |  |  | (307 | ) |  | 11,319 |  |  | 21,385 |  |  | (710 | ) |  | 20,675 |
Basic net income per share | $ | 0.18 |  |  | $ | 0.00 |  |  | $ | 0.18 |  |  | $ | 0.33 |  |  | $ | (0.01 | ) |  | $ | 0.32 |
Diluted net income per share | $ | 0.18 |  |  | $ | (0.01 | ) |  | $ | 0.17 |  |  | $ | 0.32 |  |  | $ | (0.01 | ) |  | $ | 0.31 |
| Quarter ended June 27, 2018 |  | Two quarters ended June 27, 2018
Consolidated Statement of Comprehensive Income | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606 |  | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606
| (In thousands)
Net income | $ | 11,626 |  |  | $ | (307 | ) |  | $ | 11,319 |  |  | $ | 21,385 |  |  | $ | (710 | ) |  | $ | 20,675 |
Total comprehensive income | 15,016 |  |  | (307 | ) |  | 14,709 |  |  | 21,684 |  |  | (710 | ) |  | 20,974 |
| Two quarters ended June 27, 2018
Consolidated Statement of Cash Flow | As Reported |  | Adjustments |  | Amounts without adoption of Topic 606
| (In thousands)
Net income | $ | 21,385 |  |  | $ | (710 | ) |  | $ | 20,675 |
Deferred income tax expense | 2,896 |  |  | (247 | ) |  | 2,649 |
Changes in assets and liabilities: |  |  |  |  |
Other current assets | (253 | ) |  | (509 | ) |  | (762 | )
Other accrued liabilities | (6,352 | ) |  | 851 |  |  | (5,501 | )
Other noncurrent liabilities | (1,345 | ) |  | 615 |  |  | (730 | )
Net cash flows provided by operating activities | 26,096 |  |  | — |  |  | 26,096 |
Components of the change in deferred franchise revenue | The components of the change in deferred franchise revenue are as follows:
| (In thousands)
Balance, December 27, 2017 | $ | 1,643 |
Cumulative effect adjustment recognized upon adoption of Topic 606 | 20,976 |
Fees received from franchisees | 521 |
Revenue recognized (1) | (1,710 | )
Balance, June 27, 2018 | 21,430 |
Less current portion included in other current liabilities | 3,292 |
Deferred franchise revenue included in other noncurrent liabilities | $ | 18,138 |
(1) Of this amount $1.7 million was included in either the deferred franchise revenue balance as of December 27, 2017 or the cumulative effect adjustment.
Schedule of deferred franchise revenue recognition | As of June 27, 2018, the deferred franchise revenue expected to be recognized in the future is as follows:
| (In thousands)
Remainder of 2018 | $ | 1,093 |
2019 | 2,107 |
2020 | 1,983 |
2021 | 1,773 |
2022 | 1,665 |
Thereafter | 11,360 |
Development agreements and unopened restaurants | 1,449 |
Deferred franchise revenue | $ | 21,430 |

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