BRINKER INTERNATIONAL, INC
For the period ended Jun 24, 2026. Filed Aug 19, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 19, 2026
EAT$206.57-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-06-25; filed 2025-08-15.
0000703351-25-000035
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-24; filed 2026-08-19.
0000703351-26-000029
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 100 current paragraphs.
52 unchanged; 34 reworded; 14 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
(1)Maggiano's banquet income decreased primarily due to management’s decision to substantially eliminate banquet service charges at the end of the first quarter of fiscal 2026.
Current report
•Food and beverage costs were unfavorable 0.6%, due to 0.9% of unfavorable commodity costs driven by meat and seafood and 0.8% of unfavorable menu item mix, partially offset by 1.1% of favorable menu pricing.
Current report
•Restaurant expenses were favorable 0.2%, due to 1.3% of sales leverage, partially offset by 0.3% of higher advertising, 0.2% of higher delivery fees and to-go supplies, 0.2% of higher rent, 0.1% of higher repairs and maintenance, 0.1% of higher workers' compensation and general liability insurance, and 0.2% of higher other restaurant expenses.
Current report
•Maggiano’s Food and beverage costs were unfavorable 1.6%, due to 1.4% of unfavorable menu item mix and 1.2% of unfavorable commodity costs driven by meat and seafood, partially offset by 1.0% of favorable menu pricing.
Current report
•Maggiano’s Restaurant labor was unfavorable 1.5%, due to 1.7% of sales deleverage, 0.2% of higher health insurance, and 0.3% of higher other labor expenses, partially offset by 0.5% of lower hourly labor and 0.2% of lower manager bonus.
Current report
Maggiano’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges within Part II, Item 8 - Financial Statements and Supplementary Data):
Current report
The outstanding $350.0 million 8.25% notes are due July 15, 2030 (fiscal 2031), with semi-annual interest payments on January 15 and July 15. The notes are callable as of July 15, 2026 at the Company’s option, at a redemption price equal to 100.0% of the principal amount redeemed plus an applicable premium if redeemed prior to July 15, 2028, and accrued and unpaid interest.
Current report
On June 16, 2026, we issued a notice of redemption for all of our outstanding 8.25% notes and subsequent to the end of the fiscal year, on July 15, 2026, the notes were redeemed at a redemption price equal to the sum of 104.125% of the principal amount plus accrued and unpaid interest, for a total cash outflow of $378.9 million. The payoff was funded with borrowings from the revolving credit facility.
Current report
Acquisition
Current report
On June 1, 2026, we executed an asset purchase agreement with a franchisee for the acquisition of 12 Chili’s restaurants located in Alabama and Mississippi, including the real estate for six of the locations. The transaction is expected to close on August 27, 2026 for a purchase price of approximately $27.5 million, and will be funded with availability under our existing revolving credit facility.
Current report
Share Repurchase Program
Current report
During the first quarter of fiscal 2026, our Board of Directors authorized an additional $400.0 million under our existing share repurchase program. Utilizing the increased availability, the Company repurchased 2.9 million shares of our common stock for $400.0 million during fiscal 2026. As of June 24, 2026, we had $107.0 million of authorized repurchases remaining under the share repurchase program.
Current report
Subsequent to end of the fiscal year, we repurchased an additional 0.4 million shares of our common stock for $75.0 million, reducing the amount available for share repurchases to $32.0 million. On August 10, 2026, our Board of Directors approved an increase in authorized share repurchases, bringing the total to $750.0 million.
Current report
Geopolitical tensions and broader macroeconomic pressures have contributed, and may continue to contribute, to wage inflation, labor availability challenges, product cost increases (including the impact of tariffs), and supply chain disruptions. Additionally, adverse weather events, climate change, and other unforeseen circumstances outside of our control may strain our supply chain, potentially limiting our ability to source necessary products and adversely affecting consumer spending patterns. We continually monitor our operating environment and remain prepared to adapt our capital allocation strategy, including share repurchase activity, in response to evolving market conditions. Our ongoing priorities include strong cash flow generation and preserving a sound, flexible financial foundation to support the long-term execution of our business investment strategy.
Removed paragraphs (16)
Previous report
(1)Comparable restaurant sales increased due to higher traffic, favorable menu item mix, and menu price increases.
Previous report
•Food and beverage costs were flat, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix and 0.4% of unfavorable commodity costs driven by poultry, meat, produce, and dairy.
Previous report
•Restaurant expenses were favorable 2.8%, due to 3.8% of sales leverage and 0.1% of lower other restaurant expenses, partially offset by 0.5% of higher repairs and maintenance, 0.4% of higher advertising, and 0.2% of higher rent.
Previous report
(1)Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.
Previous report
(1)Corporate technology initiatives increased primarily due to ERP system subscription costs and amortization of software implementation costs.
Previous report
(1)Litigation & claims, net in the current year primarily relates to legal contingencies, inclusive of certain extraordinary one-time settlements related to employment and intellectual property claims, and alcohol service-related cases.
Previous report
•Chili’s Restaurant labor was favorable 1.5%, due to 4.5% of sales leverage, partially offset by 2.3% of higher hourly labor driven by increased staffing levels and wage rates and 0.4% of higher manager salaries and 0.3% of higher manager bonus.
Previous report
(1)Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.
Previous report
•Maggiano’s Food and beverage costs were favorable 0.1%, due to 1.3% of favorable menu pricing partially offset by 0.8% of unfavorable commodity costs driven by dairy and poultry and 0.4% of unfavorable menu item mix.
Previous report
On May 1, 2025, we amended our $900.0 million revolving credit facility to increase the capacity to $1.0 billion. The Company incurred and capitalized $3.6 million of debt issuance costs associated with the revolving credit facility during fiscal 2025, which are included in Other assets in the Consolidated Balance Sheets.
Previous report
Our $350.0 million 8.25% notes mature July 15, 2030, and require semi-annual interest payments in arrears, on each January 15 and July 15.
Previous report
In October 2024, the $350.0 million of 5.00% senior notes matured and were repaid in full using borrowings under the revolving credit facility.
Previous report
Subsequent to fiscal 2025 year end, our Board of Directors authorized an additional $400.0 million under our share repurchase program, allowing for a total available authority of $507.0 million.
Previous report
In light of an unpredictable macroeconomy, including commodity and labor inflation and supply chain disruptions, we continue to focus on cash flow generation and maintaining a solid and flexible financial position to execute our long-term strategy of investing in our business. We continue to assess the macro environment and will adjust our overall approach to capital allocation, including share repurchases, based on market conditions and trends.
Previous report
(1)Long-term debt consists of principal amounts owed on the 8.25% notes which mature on July 15, 2030. As of June 25, 2025, there was no outstanding balance on the $1.0 billion revolving credit facility.
Previous report
(2)Interest consists of remaining interest payments on the 8.25% fixed rate notes.
Reworded paragraphs (34)
Previous wording
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. Our two restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units. Refer to Part I, Item 1 - Business of this document for additional information about our business and operational strategies.
Current wording
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. Our two restaurant brands, Chili’s and Maggiano’s, are both operating segments. Refer to Part I, Item 1 - Business of this document for additional information about our business and operational strategies.
Previous wording
During the recent years, our operating results were impacted by geopolitical and other macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs. Geopolitical and other macroeconomic events have led, and in the future may lead to, wage inflation, staffing challenges, product cost inflation and/or disruptions in the supply chain that impact our restaurants’ ability to obtain the products needed to support their operation. Such events could also negatively affect consumer spending potentially reducing guest traffic and/or reducing the average amount guests spend in our restaurants.
Current wording
Geopolitical tensions and broader macroeconomic pressures have led, and in the future may lead, to wage inflation, staffing challenges, product cost inflation (inclusive of tariffs), and/or supply chain disruptions. We may also experience supply chain disruptions resulting from adverse weather conditions, climate change, or other catastrophic events beyond our control. These events may impact our ability to obtain the products needed to support our operation and/or negatively affect consumer spending potentially reducing guest traffic and/or reducing the average amount guests spend in our restaurants.
Previous wording
•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, delivery, gift card breakage, digital entertainment revenues, merchandise income and are net of gift card discount costs from third-party gift card sales.
Current wording
•Company sales include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, delivery, gift card breakage, digital entertainment revenues, merchandise income, Maggiano’s banquet service charge income, and are net of gift card discount costs from third-party gift card sales.
Previous wording
(2)Franchise revenues increased primarily due to higher royalties. Our Chili’s and Maggiano’s franchisees generated sales of approximately $967.4 million and $16.9 million respectively in fiscal 2025 compared to $856.2 million and $11.8 million respectively in fiscal 2024.
Current wording
(2)Franchise revenues increased primarily due to higher royalties. Our Chili’s and Maggiano’s franchisees generated sales of approximately $1,118.5 million and $17.1 million respectively in fiscal 2026 compared to $967.4 million and $16.9 million respectively in fiscal 2025.
Previous wording
•Restaurant labor was favorable 1.4%, due to 4.0% of sales leverage and 0.2% of lower other labor expenses, partially offset by 2.1% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager salaries, and 0.3% of higher manager bonus.
Current wording
•Restaurant labor was favorable 0.7%, due to 1.4% of sales leverage and 0.2% lower manager bonus, partially offset by 0.4% of higher hourly labor, 0.3% of higher manager salaries, and 0.2% of higher health insurance.
Previous wording
Depreciation and amortization increased $35.8 million as follows:
Current wording
Depreciation and amortization increased $12.1 million as follows:
Previous wording
(2)Other includes accelerated depreciation of certain equipment over the remaining expected useful life as a result of management’s decision to abandon and replace the equipment.
Current wording
(1)Other decreased primarily due to accelerated depreciation in the prior year as a result of management’s decision to abandon and replace certain equipment.
Previous wording
General and administrative expenses increased $38.3 million as follows:
Current wording
General and administrative expenses increased $13.7 million as follows:
Previous wording
Other (gains) and charges consisted of the following (for further details refer to Note 13 - Other Gains and Charges):
Current wording
Other (gains) and charges consisted of the following (for further details refer to Note 13 - Other Gains and Charges within Part II, Item 8 - Financial Statements and Supplementary Data):
Previous wording
Interest expenses decreased $11.9 million primarily due to lower average outstanding debt balances, partially offset by higher interest on financed leased equipment.
Current wording
Interest expenses decreased $12.6 million primarily due to lower average outstanding debt balances.
Previous wording
The change in the effective income tax rate from fiscal 2024 to fiscal 2025 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tip tax credit. Refer to Note 9 - Income Taxes for more information.
Current wording
The change in the effective income tax rate from fiscal 2025 to fiscal 2026 is primarily due to excess tax benefits from stock based compensation. Refer to Note 9 - Income Taxes within Part II, Item 8 - Financial Statements and Supplementary Data for more information.
Previous wording
H.R. 1., also known as the One Big Beautiful Bill Act (“OBBBA”), was enacted on July 4, 2025. The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions. Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. We are currently evaluating the provisions of the OBBBA to assess their potential impact on our financial position, results of operations and cash flows.
Current wording
H.R. 1., also known as the One Big Beautiful Bill Act (“OBBBA”), was enacted on July 4, 2025. The legislation included several provisions that impact the timing and magnitude of certain tax deductions, including restoring 100% bonus depreciation for qualifying property. The Company has evaluated the impacts of the OBBBA, and the effects of these provisions have been incorporated into the accompanying financial statements.
Previous wording
Chili’s Total revenues increased 24.6% primarily due to favorable comparable restaurant sales driven by higher traffic, favorable menu item mix, and menu pricing. Refer to the “Revenues” section above for further details about Chili’s revenues changes.
Current wording
Chili’s Total revenues increased 9.6% primarily due to favorable comparable restaurant sales driven by menu pricing, higher traffic, and favorable menu item mix. Refer to the Revenues section above for further details about Chili’s revenues changes.
Previous wording
•Chili’s Food and beverage costs were flat, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix, and 0.4% of unfavorable commodity costs driven by higher poultry, meat, produce, and dairy.
Current wording
•Chili’s Food and beverage costs were unfavorable 0.4%, due to 0.9% of unfavorable commodity costs driven by higher meat and seafood and 0.6% of unfavorable menu item mix, partially offset by 1.1% of favorable menu pricing.
Previous wording
•Maggiano’s Restaurant labor was favorable 0.8%, due to 0.5% of lower hourly labor, 0.4% of lower manager bonus, 0.2% of sales leverage, and 0.1% of lower other labor expenses, partially offset by 0.4% of higher manager salaries.
Current wording
•Chili’s Restaurant labor was favorable 0.9%, due to 1.7% of sales leverage, 0.2% of lower manager bonus, and 0.1% of lower other labor expenses, partially offset by 0.5% of higher hourly labor, 0.4% of higher manager salaries, and 0.2% of higher health insurance.
Previous wording
•Chili’s Restaurant expenses were favorable 3.1%, due to 4.2% of sales leverage, partially offset by 0.5% of higher repairs and maintenance, 0.4% of higher advertising, and 0.2% of higher rent.
Current wording
•Chili’s Restaurant expenses were favorable 0.4%, due to 1.7% of sales leverage, partially offset by 0.3% of higher advertising, 0.3% of higher delivery fees and to-go supplies, 0.2% of higher rent, 0.1% of higher repairs and maintenance, 0.1% of higher workers' compensation and general liability insurance, and 0.3% of higher other restaurant expenses.
Previous wording
Chili’s Depreciation and amortization increased $34.8 million as follows:
Current wording
Chili’s Depreciation and amortization increased $7.4 million as follows:
Previous wording
(2)Other includes accelerated depreciation of certain equipment over the remaining expected useful life as a result of management’s decision to abandon and replace the equipment.
Current wording
(1)Other decreased primarily due to accelerated depreciation in the prior year as a result of management’s decision to abandon and replace certain equipment.
Previous wording
Chili’s General and administrative increased $7.6 million as follows:
Current wording
Chili’s General and administrative increased $3.7 million as follows:
Previous wording
Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges):
Current wording
Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges within Part II, Item 8 - Financial Statements and Supplementary Data):
Previous wording
Maggiano’s Total revenues increased 1.1% primarily due to favorable comparable restaurant sales driven by increased menu pricing and favorable menu item mix, partially offset by lower traffic. Refer to the “Revenues” section above for further details about Maggiano’s revenues changes.
Current wording
Maggiano’s Total revenues decreased 9.3% primarily due to unfavorable comparable restaurant sales and unfavorable impact of restaurant closures, including one closure due to relocation. Unfavorable comparable restaurant sales was driven by lower traffic partially offset by menu pricing and favorable menu item mix. Refer to the Revenues section above for further details about Maggiano’s revenues changes.
Previous wording
•Maggiano’s Restaurant expenses were unfavorable 0.9%, due to 0.5% of higher advertising, 0.3% of higher repairs and maintenance, 0.3% higher rent, and 0.1% of higher other restaurant expenses, partially offset by 0.3% of sales leverage.
Current wording
•Maggiano’s Restaurant expenses were unfavorable 3.1%, due to 2.0% of sales deleverage, 0.5% of higher delivery fees and to-go supplies, 0.3% of higher advertising, 0.3% higher pre-opening, 0.2% of higher repairs and maintenance, and 0.1% of higher workers' compensation and general liability insurance, partially offset by 0.3% of lower other restaurant expenses.
Previous wording
Proceeds from the sale of gift cards are recorded as deferred revenues and recognized as revenues when the gift cards are redeemed by the holders. Breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed and is estimated based on our historical gift card redemption patterns and actuarial estimates. Breakage revenues are recognized proportionate to the pattern of related gift card redemptions. We recognize breakage income in Company sales in the Consolidated Statements of Comprehensive Income.
Current wording
Proceeds from the sale of gift cards are recorded as deferred revenues and recognized as revenues when the gift cards are redeemed by the holders. Breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed and is estimated based on our historical gift card redemption patterns and actuarial estimates. Breakage revenues are recognized proportionate to the pattern of related gift card redemptions. We recognize breakage income in Company sales in the Consolidated Statements of Comprehensive Income. We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenues balance accordingly. If actual redemption patterns vary from our estimate, actual gift card breakage income may differ from the amounts recorded.
Previous wording
We review the carrying amount of property, equipment and lease assets on an annual basis or more often if events or circumstances indicate that the carrying amount may not be recoverable. The impairment test is a two-step process. Step one includes comparing the operating cash flows of each restaurant (asset group) over its remaining service life to the carrying value of the asset group. If the cash flows exceed the carrying value, then the asset group is not impaired, and no further evaluation is required. If the carrying value of the asset group exceeds its cash flows, impairment may exist and performing step two is necessary to determine the impairment loss. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value of the asset group. We determine fair value based on discounted projected future operating cash flows of each restaurant over its remaining service life using a risk adjusted discount rate. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment.
Current wording
We evaluate long-lived assets, such as property, equipment, and lease assets for impairment, whenever events or circumstances indicate that the carrying amount of a restaurant may not be recoverable. For purposes of this evaluation, we define the asset group at the individual restaurant level. When we evaluate the restaurants, cash flows are the primary indicator of impairment. Recoverability of assets to be held and used is measured by comparing the operating cash flows of each restaurant (asset group) over its remaining service life to the carrying value of the asset group. If the cash flows exceed the carrying value, then the asset group is not impaired, and no further evaluation is required. If the carrying value of the asset group exceeds its cash flows, impairment may exist. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value of the asset group. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment.
Previous wording
Net cash provided by operating activities increased due to an increase in operating income partially offset by an increase in payments of income taxes and the timing of other operational receipts and payments.
Current wording
Net cash provided by operating activities increased due to an increase in operating income and a decrease in interest paid, partially offset by an increase in payments of performance-based compensation and the timing of other operational receipts and payments.
Previous wording
Net cash used in investing activities increased primarily due to new equipment purchases and increased spend on Chili’s capital maintenance.
Current wording
Net cash used in investing activities decreased primarily due to decreased spend on restaurant and IT equipment and capital maintenance, partially offset by increased spend on both Chili’s and Maggiano’s re-images.
Previous wording
Net cash used in financing activities increased primarily due to the payoff of the $350.0 million 5.00% notes and an increase in share repurchases in fiscal 2025 compared to net repayment activity on the revolving credit facility of $161.3 million in fiscal 2024.
Current wording
Net cash used in financing activities increased slightly due to an increase in share repurchase activity in fiscal 2026 and a decrease in proceeds received from stock option exercises, partially offset by a decrease in net repayments of long-term debt primarily due to the payoff of our $350.0 million 5.00% notes in the prior year.
Previous wording
The $1.0 billion revolving credit facility, as amended, matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio. As of June 25, 2025, our interest rate was 5.82% consisting of SOFR of 4.32% plus the applicable margin and spread adjustment of 1.50%. As of June 25, 2025, there were no amounts outstanding under the revolving credit facility.
Current wording
The $1.0 billion revolving credit facility matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio. As of June 24, 2026, our interest rate was 4.90% consisting of SOFR of 3.65% plus the applicable margin of 1.25%. As of June 24, 2026, the revolving credit facility had $969.9 million available, net of a $30.1 million letter of credit, pledged as collateral on insurance policies.
Previous wording
As of June 25, 2025, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility and under the terms of the indentures governing our 8.25% notes. Refer to Note 7 - Debt within Part II, Item 8 - Financial Statements and Supplementary Data for further information about our notes and revolving credit facility.
Current wording
As of June 24, 2026, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility. Refer to Note 7 - Debt within Part II, Item 8 - Financial Statements and Supplementary Data for further information about our notes and revolving credit facility.
Previous wording
Our Board of Directors approved a $300.0 million share repurchase program in August 2021. 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. As part of our share repurchase program, we repurchased 1.0 million shares of our common stock for $76.0 million in fiscal 2025 and 0.7 million shares of our common stock for $21.0 million in fiscal 2024. As of June 25, 2025, we had $107.0 million of authorized repurchases remaining under the share repurchase program.
Current wording
Our share repurchase program is used to return capital to shareholders and to minimize the dilution to our shares outstanding that results from equity compensation grants. 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.
Previous wording
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, including the repayment of current debt obligations.
Current wording
Given our current level of operations, we believe that existing cash and cash equivalents, together with cash flows from operations and available borrowing capacity under our revolving credit facility, will be sufficient to fund our capital expenditure and working capital requirements for at least the next twelve months, including the settlement of current debt obligations.
Previous wording
Payments due under our contractual obligations for outstanding indebtedness, leases and purchase obligations as of June 25, 2025 are as follows:
Current wording
Payments due under our long-term contractual obligations for finance and operating leases and certain purchase obligations as of June 24, 2026 are as follows:
Previous wording
(3)Finance leases and Operating leases total future lease payments represent the contractual obligations due under the lease agreements, including cancellable option periods where we are reasonably assured to exercise the options.
Current wording
(1)Finance leases and Operating leases total future lease payments represent the contractual obligations due under the lease agreements, including cancellable option periods where we are reasonably assured to exercise the options.
Previous wording
(4)Purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase obligations primarily consist of long-term obligations for software and professional services contracts, as well as non-cancellable insurance premiums, and exclude agreements that are cancellable without significant penalty.
Current wording
(2)Our purchase obligations primarily consist of long-term obligations for media and software contracts, and exclude agreements that are cancellable without significant penalty.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenues balance accordingly. If actual redemption patterns vary from our estimate, actual gift card breakage income may differ from the amounts recorded. Changing our breakage-rate assumption used to record breakage attributable to gift cards sold in fiscal 2025 by 50 basis points would result in an impact to the Consolidated Statements of Comprehensive Income of approximately $0.6 million on the current year.