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 23, 2020 and September 25, 2019, the MD&A should be read
in conjunction with the Consolidated Financial Statements (Unaudited) and
related Notes to the Consolidated Financial Statements (Unaudited) included in
this quarterly report. All amounts within the MD&A are presented in millions
unless otherwise specified.
OVERVIEW
We are 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. At September 23, 2020, we owned, operated or
franchised 1,660 restaurants, consisting of 1,116 Company-owned restaurants and
544 franchised restaurants, located in the United States, 28 countries and two
United States territories. Our restaurant brands, Chili's and Maggiano's, are
both operating segments and reporting units. Our Chili's and Maggiano's
locations support our virtual brand offering, It's Just Wings™ through our
partnership with DoorDash.
COVID-19 Pandemic
Impact of COVID-19 Pandemic
The COVID-19 global pandemic caused a significant decrease in sales during the
third and fourth quarters of fiscal 2020, continuing into the first quarter of
fiscal 2021. At the end of the third quarter of fiscal 2020, we temporarily
closed all Company-owned restaurant dining and banquet rooms as we transitioned
to an off-premise business model and temporarily delayed our expansion plans.
During the fourth quarter of fiscal 2020, beginning on April 27, 2020, we began
to reopen certain dining room locations as permitted by state and local
governments. At the end of the first quarter of fiscal 2021, September 23, 2020,
substantially all of our Company-owned restaurant dining and banquet rooms or
patios were open in a limited capacity.
As dining rooms have reopened, we have mandatory table distancing as an added
safety measure for our guests. In addition, we have increased our already strict
sanitation requirements, are conducting daily health and temperature checks for
all employees before they begin their shift and are requiring personal
protective equipment to be worn by all restaurant employees at all times. Our
priority has been protecting the health and safety of team members and guests
while continuing to serve our communities.

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As a result of COVID-19, we have experienced a negative impact on our revenues
and traffic. At this time, the impact of COVID-19, in both the short term and
long term, is difficult to estimate due to the uncertainty about the duration of
the pandemic, the discovery of any effective treatments, cures or vaccines and
the related government restrictions. Additional impacts to the business may
arise that we are not aware of currently. We cannot predict whether, when or the
manner in which COVID-19 may impact our business, including the capacity of our
dining rooms, what operational restrictions may be imposed, and our ability to
fully staff reopened dining rooms. As such, we have taken a number of proactive
measures to adapt our business to lower demand levels during the COVID-19
pandemic including measures to significantly reduce costs, partnering with our
lenders to provide additional liquidity, issuing additional common stock and
negotiating rent concessions with landlords. We continue to closely monitor and
adapt to the evolving situation.
Operations Strategy
We are committed to strategies and a Company culture that we believe are
centered on a guest experience. This includes bringing guests back safely,
growing long-term sales and profit, engaging team members and working to return
our business to pre-pandemic levels. Our strategies and culture are intended to
differentiate our brands from the competition, effectively and efficiently
manage our restaurants and establish a lasting presence for our brands in key
markets around the world.
Our primary strategy remains to make our guests feel special through great food
and quality service so that they return to our restaurants. Our guest survey
scores on food quality and service reached an all-time high last year and
continued to improve during the pandemic as we continued to provide great food
and service. Our enhanced safety training and systems have also created a safer
environment for our team and guests.
Guest Engagement Through Technology - We have invested in our technology and
off-premise options as more guests are opting for to-go and delivery. Our to-go
menu is available through our Chili's mobile app, on our Chili's and Maggiano's
brand websites, our exclusive delivery partner DoorDash, or by calling the
restaurant. Since fiscal 2018, our off-premise business has grown by 177%.
Chili's exclusive partnership with DoorDash is instrumental in connecting with
our guests and providing convenience especially during the COVID-19 pandemic.
DoorDash orders are sent directly into our point of sale system which has
created a streamlined integration to our kitchens. We believe that guests will
continue to prefer more convenience and off-premise options after the pandemic
concerns dissipate. We plan to continue investing in our technology systems to
support our carryout and delivery capabilities.
In dining rooms we use tabletop devices to engage our guests at the table. In
fiscal 2020, we rolled out a new tabletop device to continue to enhance this
experience. These devices provide pay at the table, reordering, digital
entertainment, guest feedback and support our My Chili's Rewards program. My
Chili's Rewards loyalty database includes more than 8 million loyal members who
have interacted with Chili's in the previous six months. We customize offerings
for our guests based on their purchase behavior, and we continue to shift more
of our overall marketing spend to these customized channels and promotions. We
believe this strategy gives us a sustained competitive advantage over
independent restaurants and the majority of our competitors.
Chili's - Chili's continues to outpace the casual dining industry and grow
market share. Part of our strategy is to differentiate Chili's from our
competitors with a flexible platform of value offerings at both lunch and dinner
as well as connecting with our guests through our My Chili's Rewards loyalty
program. Our Cheers to Patron® Margarita of the Month and new offerings on our 3
for $10 meal platform were particularly successful in bringing guests back to
Chili's during fiscal 2020. We are committed to offering consistent, quality
products at a price point that is compelling to our guests. Our "3 for $10"
platform allows guests to combine a starter, a non-alcoholic drink and an entrée
for just $10.00 as part of the every-day base menu. Additionally, we have
continued our Margarita of the Month promotion that features a premium-liquor
margarita every month at an every-day value price of $5.00. Most of our value
propositions are available for guests to enjoy in our dining rooms or
off-premise.
Chili's off-premise dining options including our virtual brand, It's Just Wings
are a critical part of our strategy going forward. Chili's off-premise sales,
including both to-go and delivery, is approximately 48% of sales, with
approximately 61% coming from to-go and 39% from delivery during the first
quarter of fiscal 2021. We regularly evaluate our processes and menu at Chili's
to identify opportunities where we can improve our service quality and

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food. We continue to focus on our core equities and improving guest satisfaction
with our food and service by improving execution of our operations standards.
Maggiano's - At Maggiano's, we believe our focus on operating fundamentals and
technology will provide the foundation for future efficiencies and growth.
Maggiano's also has an exclusive partnership with DoorDash. Our exclusive
partnership creates a more affordable rate structure, making third party
delivery more sustainable and efficient for the brand to operate. Our guests
have the ability to order delivery directly through the Maggiano's website, in
addition to the DoorDash platforms.
Virtual Opportunities - It's Just Wings, a virtual brand offering, launched on
June 23, 2020 and is available only through DoorDash delivery. This platform
allows us to leverage our existing infrastructure, while adding minimal
complexity in the restaurants. It's Just Wings is a no-frills offering that
consists of chicken wings available in 11 different sauces and rubs, curly
fries, ranch dressing and fried Oreos for a value price. We will continue to
identify opportunities to drive restaurant growth by utilizing our existing
restaurant infrastructure and DoorDash partnership.
Franchise Partnerships - Our global franchisees continue to grow the Chili's
brand around the world, opening four restaurants and entering into one new
development agreement in the first quarter of fiscal 2021. We plan to
strategically pursue expansion of Chili's internationally through development
agreements with new and existing franchise partners. We are supporting our
franchise partners with opportunities to expand sales through the It's Just
Wings virtual brand.
Company Development -The following table details the number of restaurant
openings during the thirteen week periods ended September 23, 2020 and September
25, 2019, respectively, total full year projected openings in fiscal 2021, and
the total restaurants open at each period end:
                                                           Openings During the                        Full Year
                                                       Thirteen Week Periods Ended                Projected Openings                   Total Open Restaurants at
                                                                             September 23,
                                                                                 2020             September 25, 2019         Fiscal 2021                 September 23, 2020          September 25, 2019
Company-owned restaurants
Chili's domestic                                                                       3                      1                      8                          1,059                       1,061
Chili's international                                                                  -                      -                      -                              5                           5
Maggiano's domestic                                                                    -                      -                      -                             52                          52
Total Company-owned                                                                    3                      1                      8                          1,116                       1,118
Franchise restaurants
Chili's domestic                                                                       1                      1                      3                            172                         180
Chili's international                                                                  3                     11                         6-9                       371                         373
Maggiano's domestic                                                                    -                      -                      1                              1                           1
Total franchise                                                                        4                     12                       10-13                       544                         554
Total restaurants
Chili's domestic                                                                       4                      2                     11                          1,231                       1,241
Chili's international                                                                  3                     11                         6-9                       376                         378
Maggiano's domestic                                                                    -                      -                      1                             53                          53
Total                                                                                  7                     13                       18-21                     1,660                       1,672


Included in the Total Restaurants Open at September 23, 2020 are locations that
were temporarily closed due to the COVID-19 pandemic which included: four
Company-owned Chili's restaurants, seven domestic Chili's franchise locations,
and 27 Chili's international franchise locations. Additionally, during the first
quarter of fiscal 2021, we resumed construction of new restaurants and opened
three Chili's domestic locations.
Relocations are not included in the table above. During the thirteen week period
ended September 23, 2020 we have relocated one Company-owned restaurant, and we
plan to relocate one Chili's domestic Company-owned restaurant during the
remainder of fiscal 2021.

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At September 23, 2020, we own property for 42 of the 1,116 Company-owned
restaurants. The net book values associated with these restaurants included land
of $33.1 million and buildings of $13.0 million.
RESULTS OF OPERATIONS
The following table sets forth selected operating data as a percentage of Total
revenues (unless otherwise noted) for the periods indicated. All information is
derived from the accompanying Consolidated Statements of Comprehensive Income
(Unaudited):
                                                                         

Thirteen Week Periods Ended

September 23,                 September 25,
                                                                                           2020                          2019
Revenues
Company sales(1)                                                           

                      98.4  %                       97.2  %
Franchise and other revenues(1)                                                                    1.6  %                        2.8  %
Total revenues(1)                                                                                100.0  %                      100.0  %
Operating costs and expenses
Food and beverage costs(2)                                                                        26.6  %                       26.7  %
Restaurant labor(2)                                                                               34.0  %                       35.2  %
Restaurant expenses(2)                                                                            27.8  %                       27.1  %
Depreciation and amortization(1)                                                                   5.1  %                        4.8  %
General and administrative(1)                                                                      4.1  %                        4.8  %
Other (gains) and charges(1)                                                                       0.5  %                       (0.1) %
Total operating costs and expenses(1)                                                             96.7  %                       96.0  %
Operating income(1)                                                                                3.3  %                        4.0  %
Interest expenses(1)                                                                               2.0  %                        1.9  %
Other (income), net(1)                                                                            (0.1) %                        0.0  %
Income before income taxes(1)                                                                      1.4  %                        2.1  %
Provision (benefit) for income taxes(1)                                                            0.0  %                        0.2  %
Net income(1)                                                                                      1.4  %                        1.9  %


(1)As a percentage of Total revenues
(2)As a percentage of Company sales
Revenues
Thirteen Week Period Ended September 23, 2020 compared to September 25, 2019
Revenues are presented in two separate captions in the Consolidated Statements
of Comprehensive Income (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 sales made with gift card redemptions.
•Franchise and other revenues include Royalties and Franchise fees and other
revenues. Franchise fees and other revenues include delivery service income,
gift card breakage, franchise advertising fees, digital entertainment revenues,
franchise and development fees, Maggiano's banquet service charge income, gift
card equalization, merchandise income, and gift card discount costs from
third-party gift card sales.

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The following is a summary of the change in Total revenues:
                                                                Total 

Revenues


                                                 Chili's      Maggiano's       Total Revenues
Thirteen Week Period Ended September 25, 2019   $ 695.6      $      90.4      $        786.0
Change from:
Comparable restaurant sales(1)                    (46.9)           (33.2)              (80.1)
Restaurant openings                                 4.1                -                 4.1
Restaurant relocations                              0.4                -                 0.4
Restaurant closings(2)                             (9.8)               -                (9.8)
Restaurant acquisitions(3)                         49.7                -                49.7

Company sales                                      (2.5)           (33.2)              (35.7)
Royalties(4)                                       (5.2)            (0.1)               (5.3)
Franchise fees and other revenues                  (1.4)            (3.5)               (4.9)
Franchise and other revenues                       (6.6)            (3.6)              (10.2)

Thirteen Week Period Ended September 23, 2020 $ 686.5 $ 53.6

$ 740.1




(1)Comparable restaurant sales decreased due to lower dining room guest traffic
resulting from capacity limitations and personal safety preferences, partially
offset by increased off-premise sales.
(2)Restaurant closings include the impact of permanently closed locations and
temporary COVID-19 closures, that have extended past 14 consecutive days.
(3)We acquired 116 Chili's restaurants from a franchisee effective September 5,
2019. This amount represents the change in Company sales attributed to owning
these restaurants over the entire thirteen week period ended September 23, 2020.
(4)Lower royalties in the thirteen week period ended September 23, 2020 are
primarily due to the adverse impact of the COVID-19 pandemic. Our franchisees
generated sales of approximately $164.0 million for the thirteen week period
ended September 23, 2020 compared to $298.3 million in sales for the thirteen
week period ended September 25, 2019.
The table below presents the percentage change in comparable restaurant sales
and restaurant capacity for the thirteen week period ended September 23, 2020
compared to September 25, 2019:
                                                  Percentage Change in the 

Thirteen Week Period Ended September 23, 2020 versus September 25, 2019


                                 Comparable Restaurant
                                      Sales(1)(2)               Price Impact               Mix-Shift(3)                  Traffic             Restaurant Capacity(4)
Company-owned                                  (10.9) %                  0.4  %                       (6.3) %                  (5.0) %                       7.8  %
Chili's                                         (7.2) %                  0.2  %                       (4.2) %                  (3.2) %                       8.2  %
Maggiano's                                     (38.6) %                  3.0  %                      (12.7) %                 (28.9) %                       0.0  %
Chili's Franchise(5)                           (11.5) %
U.S.                                            (5.6) %
International                                  (21.9) %
Chili's Domestic(6)                             (7.0) %
System-wide(7)                                 (11.0) %


(1)Comparable Restaurant Sales include all restaurants that have been in
operation for more than 18 months except acquired restaurants which are included
after 12 months of ownership. 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)Comparable Restaurant Sales for Chili's and Maggiano's include the results of
It's Just Wings, a virtual brand launched nationally in June 2020.

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(3)Mix-Shift is calculated as the year-over-year percentage change in Company
sales resulting from the change in menu items ordered by guests.
(4)Restaurant Capacity is measured by sales weeks and is calculated based on
comparable periods year-over-year. We believe the COVID-19 related restaurant
closures are temporary and therefore no adjustment has been made to capacity.
(5)Chili's franchise sales generated by franchisees are not included in revenues
in the Consolidated Statements of Comprehensive Income (Unaudited); however, we
generate royalty revenues and advertising fees based on franchisee revenues,
where applicable. We believe including Chili's franchise comparable restaurant
sales provides investors information regarding brand performance that is
relevant to current operations.
(6)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.
(7)System-wide Comparable Restaurant Sales are derived from sales generated by
Company-owned Chili's and Maggiano's restaurants in addition to the sales
generated at franchise-operated Chili's restaurants.
Costs and Expenses
Thirteen Week Periods Ended September 23, 2020 compared to September 25, 2019
The following is a summary of the change in costs and expenses:
                                                           Thirteen Week 

Periods Ended


                                          September 23, 2020                           September 25, 2019                   (Favorable) Unfavorable Variance
                                                         % of Company                               % of Company                                  % of Company
                                    Dollars                 Sales                Dollars               Sales                 Dollars                 Sales
Food and beverage costs         $       193.5                   26.6  %       $    203.8                   26.7  %       $       (10.3)                  (0.1) %
Restaurant labor                        248.0                   34.0  %            268.5                   35.2  %               (20.5)                  (1.2) %
Restaurant expenses                     202.5                   27.8  %            207.3                   27.1  %                (4.8)                   0.7  %
Depreciation and amortization            37.4                                       38.1                                          (0.7)
General and administrative               30.5                                       38.0                                          (7.5)
Other (gains) and charges                 3.8                                       (0.9)                                          4.7
Interest expenses                        14.6                                       14.9                                          (0.3)
Other income, net                        (0.4)                                      (0.5)                                          0.1


Food and beverage costs, as a percentage of Company sales, decreased 0.1%
consisting of 0.2% of favorable menu item mix and 0.2% of favorable commodity
pricing related to produce, partially offset by 0.3% of unfavorable commodity
pricing primarily related to dairy and beef.
Restaurant labor, as a percentage of Company sales, decreased 1.2% consisting of
1.5% of favorable hourly labor expenses due to reduced staffing requirements,
1.0% of lower manager compensation, and 0.3% of lower other net restaurant labor
expenses, partially offset by 1.6% of sales deleverage.
Restaurant expenses, as a percentage of Company sales, increased 0.7% consisting
of 3.4% of higher expenses primarily related to delivery fees and supplies in
connection with the growth in off-premise sales, and 2.2% of sales deleverage,
partially offset by 2.1% of lower advertising expenses, 1.3% of lower repairs
and maintenance expenses, 0.3% of lower utilities expenses, 0.3% of lower credit
card fees, and 0.9% of lower other net restaurant expenses.

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Depreciation and amortization decreased $0.7 million as follows:
                                                                            

Depreciation and

Amortization


Thirteen Week Period Ended September 25, 2019                                  $          38.1
Change from:
Retirements and fully depreciated restaurant assets                                       (6.4)
Additions for existing and new restaurant assets(1)                                        2.1
Acquisition of Chili's restaurants(2)                                                      2.1
Finance leases                                                                             0.8
Corporate assets                                                                           0.4
Other                                                                                      0.3
Thirteen Week Period Ended September 23, 2020

$ 37.4




(1)Additions for existing and new restaurant assets increased primarily related
to capital purchases.
(2)Acquisition of Chili's restaurants represents the depreciation and
amortization of the assets and finance leases of the 116 Chili's restaurants
acquired in the first quarter of fiscal 2020.
General and administrative expenses decreased $7.5 million as follows:
                                                  General and 

Administrative


Thirteen Week Period Ended September 25, 2019    $                      

38.0


Change from:
Stock-based compensation(1)                                             

(3.2)


Defined contribution plan employer expenses(2)                          (2.6)
Professional fees                                                       (1.3)
Payroll-related expenses                                                (1.1)
Travel and entertainment expenses                                       

(0.8)


Performance-based compensation                                           

1.8


Other                                                                   

(0.3)


Thirteen Week Period Ended September 23, 2020    $                      

30.5




(1)Stock-based compensation decreased primarily due to the acceleration of
stock-based compensation expenses in the first quarter of fiscal 2020 for
retirement eligible executives. Prior to fiscal 2021, retirement eligibility
resulted in the compensation being recognized in full upon grant as there was no
substantive vesting period. In fiscal 2021, the retirement eligible executives
received only 20% of their equity as awards with no substantive vesting period.
Their remaining 80% of equity granted in fiscal 2021 will be amortized evenly
over the three year vesting period.
(2)Defined contribution plan employer expenses decreased due to the suspension
of employer matching contributions in May 2020.

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Other (gains) and charges consisted of the following (for further details, refer
to Note 4 - Other Gains and Charges):
                                           Thirteen Week Periods Ended
                                        September 23,              September 25,
                                            2020                        2019
Restaurant closure charges     $         1.5                      $          0.2
COVID-19 related charges                 1.2                                   -
Remodel-related costs                    0.2                                 0.7
Lease modification gain, net            (0.5)                               (3.1)

Other                                    1.4                                 1.3
                               $         3.8                      $         (0.9)


Interest expenses decreased $0.3 million consisting of lower average borrowing
balances on our revolving credit facility in the thirteen week period ended
September 23, 2020, partially offset by higher interest expenses related to the
real estate finance leases acquired from the acquisition of 116 Chili's
restaurants on September 5, 2019.

Segment Results
At the end of the first quarter of fiscal 2021 substantially all our
Company-owned restaurant dining rooms or patios were open in some capacity.
Capacity restrictions related to the ongoing COVID-19 pandemic vary by location
due to state and local mandates. These capacity restrictions and personal safety
preferences have resulted in lower overall guest traffic and many guests have
shifted to our off-premise dining options. This shift has changed the staffing
requirements in the restaurants and other expenses associated with off-premise
which are noted below.
Chili's Segment

                                                      Thirteen Week Periods Ended                           Favorable
                                                         September 23,                 September 25,      (Unfavorable)              Variance as
                                                             2020                          2019              Variance                 percentage
Company sales                                                            $  675.0                      $        677.5             $       (2.5)                  (0.4) %
Royalties                                                                     6.6                                11.8                     (5.2)                 (44.1) %
Franchise fees and other revenues                                             4.9                                 6.3                     (1.4)                 (22.2) %
Franchise and other revenues                                                 11.5                                18.1                     (6.6)                 (36.5) %
Total revenues                                                              686.5                               695.6                     (9.1)                  (1.3) %

Food and beverage costs                                                     180.8                               182.4                      1.6                    0.9  %
Restaurant labor                                                            228.2                               233.1                      4.9                    2.1  %
Restaurant expenses                                                         181.4                               180.8                     (0.6)                  (0.3) %
Depreciation and amortization                                                30.6                                30.7                      0.1                    0.3  %
General and administrative                                                    5.4                                 9.1                      3.7                   40.7  %
Other (gains) and charges                                                     3.6                                (1.6)                    (5.2)                 325.0  %
Total operating costs and expenses                                          630.0                               634.5                      4.5                    0.7  %
Operating income (loss)                                                  $   56.5                      $         61.1             $       (4.6)                  (7.5) %
Operating income as a percentage of
Total revenues                                                                8.2  %                              8.8     %               (0.6)    %             (6.8) %


Thirteen Week Period Ended September 23, 2020 compared to September 25, 2019
Chili's Total revenues decreased by 1.3% primarily due to lower dining room
guest traffic, partially offset by increased off-premise sales including It's
Just Wings and the acquisition of 116 Chili's restaurants in the first quarter
of fiscal 2020 on September 5, 2019. Refer to "Revenues" section above for
further details about Chili's revenues changes.

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Company restaurant expenses for Chili's, as a percentage of Company sales,
decreased 0.5% consisting of 2.3% of lower advertising expenses, 1.5% of lower
manager and hourly labor as a result of reduced staffing during the first
quarter of fiscal 2021, and 1.4% of lower repairs and maintenance expenses.
These decreases were partially offset by 2.4% of sales deleverage and 2.3% of
higher expenses primarily related to delivery fees and supplies in connection
with the growth in off-premise sales.
Depreciation and amortization for Chili's decreased $0.1 million consisting of
$5.2 million related to fully depreciated assets and retirements, partially
offset by $2.1 million of additional depreciation and amortization expenses
related to the 116 Chili's restaurants acquired in the first quarter of fiscal
2020, $1.9 million in existing and new restaurant additions primarily related to
routine capital purchases, $0.9 million in additional amortization expenses
related to finance leases, and $0.2 million in other depreciation and
amortization expenses increases.
General and administrative for Chili's decreased $3.7 million consisting
primarily of a decrease in defined contribution plan employer expenses,
stock-based compensation, payroll-related expenses and professional fees,
partially offset by an increase in performance-based compensation.
Other (gains) and charges for Chili's in the thirteen week period ended
September 23, 2020 consisted primarily of $1.5 million of restaurant closure
charges and $1.1 million of employee assistance payments and other COVID-19
related expenses. Other (gains) and charges in the thirteen week period ended
September 25, 2019 consisted primarily of $3.1 million of lease modification
(gain) and $0.5 million of net gain related to the 116 Chili's restaurants
acquired in the first quarter of fiscal 2020, partially offset by $0.7 million
of Chili's remodel-related costs.
Maggiano's Segment
                                                      Thirteen Week Periods Ended
                                                         September 23,                 September 25,         Favorable               Variance as a
                                                             2020                          2019        (Unfavorable) Variance          percentage
Company sales                                                            $   53.2                      $          86.4              $     (33.2)                 (38.4) %
Royalties                                                                       -                                  0.1                     (0.1)                (100.0) %
Franchise fees and other revenues                                             0.4                                  3.9                     (3.5)                 (89.7) %
Franchise and other revenues                                                  0.4                                  4.0                     (3.6)                 (90.0) %
Total revenues                                                               53.6                                 90.4                    (36.8)                 (40.7) %

Food and beverage costs                                                      12.7                                 21.4                      8.7                   40.7  %
Restaurant labor                                                             19.8                                 35.4                     15.6                   44.1  %
Restaurant expenses                                                          20.8                                 26.3                      5.5                   20.9  %
Depreciation and amortization                                                 3.6                                  4.0                      0.4                   10.0  %
General and administrative                                                    1.3                                  1.7                      0.4                   23.5  %
Other (gains) and charges                                                     0.1                                  0.1                        -                      -  %
Total operating costs and expenses                                           58.3                                 88.9                     30.6                   34.4  %
Operating income (loss)                                                  $   (4.7)                     $           1.5              $      (6.2)                (413.3) %
Operating income as a percentage of
Total revenues                                                               (8.8) %                               1.7      %             (10.5)   %            (617.6) %


Thirteen Week Period Ended September 23, 2020 compared to September 25, 2019
Maggiano's Total revenues decreased 40.7% primarily due to lower dining room
guest traffic including lower banquet volume, partially offset by increased
off-premise sales including It's Just Wings. Refer to "Revenues" section above
for further details about Maggiano's revenues changes.
Company restaurant expenses for Maggiano's, as a percentage of Company sales,
increased 4.0% primarily consisting of 15.6% of sales deleverage and 2.5% of
higher expenses primarily related to delivery fees and supplies in connection
with the growth in off-premise sales. These increases were partially offset by
9.4% of lower manager

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and hourly labor as a result of reduced staffing during the first quarter of
fiscal 2021, 1.7% of lower repairs and maintenance expenses, 0.7% of lower
credit card fees, 0.6% of lower utilities expenses, 0.6% of lower advertising,
0.5% of favorable menu item mix, and 0.4% of favorable menu pricing.
Income Taxes
                                                                Thirteen Week Periods Ended
                                                                              September 23,                 September 25,
                                                                                  2020                          2019                      Change
Effective income tax rate                                                                (4.9) %                       11.3  %                (16.2) %


The federal statutory tax rate was 21.0% for both thirteen week periods ended
September 23, 2020 and September 25, 2019.
The effective income tax rate in the thirteen week period ended September 23,
2020 decreased compared to the thirteen week period ended September 25, 2019
primarily due to the favorable impact from the FICA tax credit and excess tax
windfalls associated with stock-based compensation in the first quarter of
fiscal 2021.
Liquidity and Capital Resources
COVID-19 Impact on Liquidity
Typically, cash flows generated from operating activities are our principal
source of liquidity, which we use to finance capital expenditures, such as
remodels, maintaining existing restaurants and constructing new restaurants, to
pay dividends and to repurchase shares of our common stock. Our strategic
decision to enhance our off-premise business has enabled us to conveniently
serve a significantly higher volume of off-premise guests during this pandemic
compared to other industry competitors. Due to the uncertainty in the economy
and to preserve liquidity, we have taken proactive precautionary measures to
raise additional capital, reduce costs and pause non-critical projects that do
not significantly impact our current operations. These measures during fiscal
2021 included:
•Amended our revolving credit facility to extend the maturity and provide
additional flexibility during this time;
•Reduced capital expenditures, although we have begun to strategically resume
the Chili's remodel program and construction of certain new restaurants;
•Reduced marketing, general and administrative and restaurant expenses;
•Continued the suspension of both the quarterly cash dividend and the share
repurchase program; and
•Amended the fiscal 2018 and fiscal 2019 U.S. Consolidated Income tax returns in
order to claim the increased depreciation deductions for Brinker's qualified
improvement property in accordance with the CARES Act which resulted in an
anticipated refund of $4.6 million.

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Cash Flows
Cash Flows from Operating Activities

                                                            Thirteen Week Periods Ended                    Favorable
                                                       September 23,            September 25,            (Unfavorable)
                                                            2020                    2019                    Variance
Net cash provided by operating activities            $          82.8          $         86.6          $            (3.8)


Net cash provided by operating activities decreased primarily due to lower sales
in the first quarter of fiscal 2021 as a result of the COVID-19 pandemic, the
timing of income tax refunds (net of payments), and the timing of operational
receipts and payments, partially offset by additional deferred payroll taxes as
a result of the CARES Act and a lower profit sharing payment in the current
fiscal year.
Cash Flows from Investing Activities

                                                           Thirteen Week Periods Ended                   Favorable
                                                      September 23,           September 25,            (Unfavorable)
                                                           2020                   2019                    Variance
Cash flows from investing activities
Payments for property and equipment                  $       (13.6)         $        (20.5)         $             6.9
Payments for franchise restaurant acquisitions                   -                   (96.2)                      96.2
Proceeds from sale of assets                                     -                     0.2                       (0.2)
Proceeds from note receivable                                  0.6                     0.7                       (0.1)

Net cash used in investing activities                $       (13.0)         $       (115.8)         $           102.8


Net cash used in investing activities decreased primarily due to $96.2 million
of cash consideration and related transactional charges paid for the purchase of
116 Chili's restaurants from a franchisee in the prior year. Additionally,
capital expenditures decreased in fiscal 2021 primarily due to a reduction in
spend for routine capital purchases in order to prioritize debt repayment, the
timing of spend on new restaurants, and a decline in the pace of the Chili's
remodel initiative.
Cash Flows from Financing Activities

                                                            Thirteen Week Periods Ended                   Favorable
                                                       September 23,           September 25,            (Unfavorable)
                                                           2020                    2019                   Variance
Cash flows from financing activities
Borrowings on revolving credit facility              $         28.4          $        299.0          $         (270.6)
Payments on revolving credit facility                         (75.0)                 (227.0)                    152.0
Purchases of treasury stock                                    (3.9)                  (11.3)                      7.4
Payments of dividends                                          (1.3)                  (14.8)                     13.5
Payments on long-term debt                                     (4.6)                   (2.4)                     (2.2)
Proceeds from issuance of treasury stock                        3.0                     1.3                       1.7
Payments for debt issuance costs                               (1.5)                      -                      (1.5)

Net cash (used in) provided by financing activities $ (54.9)

$ 44.8 $ (99.7)




Net cash used in financing activities increased primarily due to $46.6 million
of net repayment activity in fiscal 2021 compared to $72.0 million of net
borrowing activity in fiscal 2020 on the revolving credit facility, partially
offset by the impact of suspending the payment of dividends and share
repurchases.
Revolving Credit Facility
Net repayments of $46.6 million were made during the thirteen week period ended
September 23, 2020 on the $1.0 billion revolving credit facility primarily from
cash from operations. As of September 23, 2020, $573.7 million of credit was
available under the revolving credit facility.

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In the first quarter of fiscal 2021, we executed the seventh amendment to the
revolving credit facility. This amendment extended the maturity date to December
12, 2022, and contained a required commitment reduction to $900.0 million on
September 12, 2021 from the previous $1.0 billion commitment. Refer to Note 10 -
Debt for more information. Additionally, subsequent to the end of the first
quarter of fiscal 2021, $20.0 million additional net payments were made on the
revolving credit facility as of the date that this Quarterly Report on Form 10-Q
was filed.
As of September 23, 2020, pursuant to the amended revolving credit facility and
under the terms of the indentures governing our 2023 Notes and 2024 Notes, we
are in compliance with our covenants. Refer to Note 10 - Debt for further
information about our notes and revolving credit facility.
Share Repurchase Program
In the fourth quarter of fiscal 2020, our share repurchase program was primarily
suspended in response to the liquidity needs created by the COVID-19 pandemic.
Prior to the suspension, our share repurchase program was used to return capital
to shareholders and to minimize the dilutive impact of stock options and other
share-based awards. In the thirteen week period ended September 23, 2020, we
repurchased 0.1 million shares solely related to shares repurchased to satisfy
team member tax withholding obligations on the vesting of restricted shares.
Before the suspension, in the thirteen week period ended September 25, 2019, we
repurchased 0.3 million shares of our common stock for $11.3 million.
Dividend Program
In the fourth quarter of fiscal 2020, our quarterly cash dividend was suspended
in response to the liquidity needs created by the COVID-19 pandemic. Before this
suspension, our Board of Directors approved quarterly dividends of $0.38 per
share paid quarterly. In the thirteen week period ended September 23, 2020,
dividends paid solely related to the previously accrued dividends for restricted
share awards that vested in the period. Restricted share award dividends are
accrued in Other accrued liabilities for the current portion to vest within 12
months, and Other liabilities for the portion that will vest after one year.
Before the suspension, in the thirteen week period ended September 25, 2019, we
paid dividends of $14.8 million to common stock shareholders.
Cash Flow Outlook
We believe that our various sources of capital, including future cash flow from
operating activities and availability under our existing credit facility are
adequate to finance operations as well as the repayment of current debt
obligations within the next year. We continue to serve customers at
substantially all of our locations through our off-premise offerings and limited
capacity dining rooms. We will continue to monitor the situation and intend to
resume normal business operations on a case by case basis when permitted under
applicable government regulations and when we believe we are able to do so
safely.
We are not aware of any other event or trend that would potentially materially
affect our liquidity. In the event such a trend develops, we believe that there
are sufficient funds available under our credit facility and from our internal
cash generating capabilities to adequately manage our ongoing business.
OFF-BALANCE SHEET ARRANGEMENTS
We have obligations for guarantees on certain lease agreements and letters of
credit as disclosed in Note 14 - Contingencies, in the Consolidated Financial
Statements (Unaudited), and have entered into certain pre-commencement leases as
disclosed in Note 9 - Leases included in the Notes to the Consolidated Financial
Statements (Unaudited) set forth in Part I, Item 1 of this Form 10-Q report.
Other than these items, we do not have any off-balance sheet arrangements.
RECENT ACCOUNTING PRONOUNCEMENTS
The impact of recent accounting pronouncements can be found at Note 2 - Effect
of New Accounting Standards in the Notes to the Consolidated Financial
Statements (Unaudited) set forth in Part I, Item 1 of this Form 10-Q report.

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