BRINKER INTERNATIONAL, INCEAT

BRINKER INTERNATIONAL, INC Fair Value Disclosure

10-KFiled Aug 15, 20252 min read
Financial Instruments
The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items.
The carrying amount of long-term debt outstanding related to our revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of our notes are based on observable bid prices and are considered Level 2 fair value measurements, and the carrying amounts and the fair values are as follows:
June 25, 2025June 26, 2024
Carrying AmountFair ValueCarrying AmountFair Value
8.25% notes$346.0 $372.3 $345.2 $367.8 
5.00% notes(1)
— — 349.8 349.6 
(1)On October 1, 2024, the 5.00% notes matured and were repaid in full using borrowings under our revolving credit facility.
Non-Financial Assets
We review the carrying amounts of non-financial assets, primarily long-lived property and equipment, finance lease assets, operating lease assets, reacquired franchise rights, goodwill and transferable liquor licenses annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We determined the fair values of property and equipment, including finance lease assets, operating lease assets and reacquired franchise rights are based on Level 3 fair value measurements. The fair values of transferable liquor licenses are based on prices in the open market for licenses in the same or similar jurisdictions and are categorized as Level 2. We record an impairment charge for the excess of the carrying amount over the fair value.
During fiscal 2025 and fiscal 2024 we impaired certain long-lived assets and operating lease assets primarily related to 13 and 35 underperforming Chili’s restaurants, respectively. The table below presents the carrying values and related charges recorded on these impaired restaurants for the periods presented:
Impairment Charges
Pre-Impairment Carrying ValueFiscal Years Ended
June 25, 2025June 26, 2024June 25, 2025June 26, 2024
Property and equipment$4.9 $10.2 $4.4 $9.3 
Reacquired franchise rights0.1 0.4 0.1 0.4 
Operating lease assets8.4 21.4 — 2.5 
Total$13.4 $32.0 $4.5 $12.2 
During fiscal 2025 and fiscal 2024 we impaired certain transferable liquor licenses with related charges of $0.1 million in each of the respective fiscal years.
All impairment charges were included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income for the periods presented. Refer to Note 13 - Other Gains and Charges for more information.

Historical Timeline

Fiscal YearFiled
2025Aug 15, 2025Showing above
2024Aug 21, 2024
2023Aug 23, 2023
2022Aug 26, 2022
2021Aug 26, 2021
2020Aug 24, 2020
2019Aug 22, 2019
2018Aug 27, 2018
2017Aug 28, 2017
2016Aug 29, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

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