Prompt:
Human: Joining me on the call today are Gene Lee, Darden's CEO; and Rick Cardenas, CFO.
We plan to release fiscal 2021 first quarter earnings on September 24 before the market opens, followed by a conference call.
It has been 14 weeks since our last earnings call.
I don't know about all of you, but it's felt more like 14 months.
So much has happened.
Over the past three months, our businesses -- our business changed in ways we never imagined.
Then Rick will share some of our fourth quarter and year-end results and provide our outlook for the first quarter.
When I look back on all that has transpired, one thing that stands out is the resiliency of the full-service dining industry.
Prior to the pandemic, total annual sales for the casual dining industry was approximately $108 billion.
And while I do not know how long it will take the industry to recover from the significant impact it experienced, I am confident that this category will get back to the size it once was.
Our industry plays a vital role in our communities, and that was evident in how the consumer relied on restaurants over the last several months, even in a To Go only environment.
And while on-premise will continue to play an important role as we recover, we know that the consumer still wants to enjoy and in-restaurant experience.
In fact, going out to a restaurant with friends and family is the number one activity consumers say they look forward to doing as the economy opens back up.
And we've seen that as our dining rooms reopen across the country.
As this vital industry continues to rebuild, there's tremendous opportunity to increase market share through increased on-premise demand and incremental off-premise sales.
Those executing at the highest level are going to continue to win, and Darden is well positioned to take advantage of the opportunity.
When we last spoke in March, we knew the pandemic was going to have a significant impact on our business.
Our ability to manage through this crisis has been driven by our commitment to prioritize guest and team member safety, invest in our team members, provide frequent and transparent communication, leverage our digital platform, and be brilliant with the basics.
The health and safety of our guest and team members has always been our top priority, and we have taken a number of steps to create a safe environment in our restaurants.
From sourcing mask and other personal protective equipment for our team members, to developing a contactless curbside pickup process, our brands -- at our brands while dining rooms were closed.
We are mindful of the trust our guest and team members place in us.
Today, our health and safety commitments are focused on team member health checks, personal protective equipment, enhanced sanitation processes, social distancing and frequent hand-washing.
We also provide paid sick leave for all our team members so they can stay at home if they are real [Phonetic].
But we can't do it alone, and that's why we encourage our guests to join the online wait list or make reservations, not enter our restaurants if they are symptomatic, wear a mask and utilize contactless or mobile payment options where available.
We continued to invest in our team members as our dining rooms closed.
In addition to rolling out permanent paid sick leave, we introduced a three-week emergency pay program that provided nearly $75 million of pay during the fourth quarter for our hourly team members who could not work.
When emergency pay ended, we covered insurance payments and benefit deductions for hourly team members who were furloughed.
As we brought hourly team members back to work to support increased To Go volume, we introduced an additional payment to help cover unexpected costs such as transportation and child care incurred as a result of the pandemic.
And to recognize the unbelievable work our managers did during the quarter, we paid their target bonus for the fourth quarter.
We know our people are our greatest competitive advantage.
Not only were these investments the right thing to do to take care of our team members, they've also created a deeper loyalty and strengthened engagement, while we've seen this pay off as we bring our people back to work.
Communication is the most important aspect of leadership during a crisis.
We knew frequent and transparent communication with our team members and investors was important.
Beyond daily meetings with all of our brand Presidents, who in turn met with their operational leaders on a daily basis, we have maintained a consistent communication cadence with our team members.
Since this crisis began, I've provided regular business updates to our people and had been open and honest about the impacts to our business and consequently the impacts to them.
We took the same approach with our shareholders and the analysts by providing four business updates during the quarter.
The pandemic accelerate the consumers' desire for convenience, and we saw a significant increase in digital engagement.
The work we have done over the past few years, investing in our digital platform to reduce friction, prepared us to quickly adapt to consumer behavior and deliver on their expectations of convenience in a To Go only environment.
During this time, we have strengthened our digital platform and made meaningful progress against our digital strategy.
In addition to improving the guest experience across our digital channels, our strategy is focused on using technology to help our guest easily order outside and inside the restaurant, improve the wait to be seated, streamline the order pick-up process and speed up how they pay.
We've been building on our digital platform to support increased demand, and we certainly tested like never before.
During the quarter, online ordering at Olive Garden grew by more than 300% over prior year and accounted for 58% of To Go sales.
At LongHorn, online ordering grew by 400% and accounted for 49% of the gross sales.
Additionally, we accelerated our timeline and rolled out online ordering at our brands that had not yet deployed it.
We also added the ability to order alcohol online for all of our brands and markets where that was allowed.
Our commitment to being brilliant with the basics allowed us to remain focused on operational execution, even as the environment forced us to radically change how we serve our guest.
Each one of our brands did a phenomenal job delivering a new guest experience by collaborating and sharing best practices.
This involved creating contactless curbside pickup that included designing what was essentially a drive-through in our parking lots.
Flawless [Phonetic] execution in this environment meant enabling our guests to order and pay online and have our team members seamlessly place their sealed orders in their vehicles.
Our operators displayed tremendous innovation, flexibility and passion as they continued to serve our guests.
And to ensure we consistently executed at the highest level, we took the opportunity to streamline our menus and improve our processes and procedures.
With these changes, we are seeing improvements in execution and direct labor productivity.
So, what have we learned from all this?
We've learned a lot, but most importantly, this situation has reinforced that our strategy that we developed five years ago, grounded in our back to basics operating philosophy, leveraging our four competitive advantages and cultivating a portfolio of iconic brands, is still the right one today.
Strong brands with loyal guests have fared better, and the trust we have earned from our guest is critical.
Being brilliant with the basics by consistently delivering exceptional food, service and atmosphere is imperative.
However, we know how important safety and cleanliness are to our guests right now, and we must continue to earn their trust every day.
And throughout this unprecedented time, we have benefited greatly from our four competitive advantages: our significant scale, our extensive data and insights, our regular strategic planning, and our culture.
Whether sourcing PPE for our team members, ensuring we're not impacted by supply chain issues or sharing best practices across eight brands, the ability to leverage our scale has allowed us to quickly react to constant change.
Finally, as I said earlier, we know our people are our greatest competitive advantage, and I'm impressed by how our team members responded and continue to respond to take care of our guests and each other.
Having a strong culture has been part of our DNA since we were founded.
We were able to keep the majority of our managers employed, and we stay connected with our furloughed hourly team members.
This allowed us to bring our people back quickly and get our dining rooms open safely without any delays.
We have also brought 60,000 furloughed restaurant team members back to work, and we expect to bring at least another 40,000 back as business continues to improve.
I'm incredibly proud that our culture has actually strengthened during this most difficult period in our company's history.
This, above all else, is what gives me confidence in Darden's future.
Fiscal 2020 was on track for a solid year of performance, and the beginning of Q4 was no different.
The first few weeks of sales were strong.
And then, nearly overnight, the impact of COVID-19 required us to pivot toward a To Go only format.
This posed unprecedented challenges for our restaurant and support center teams, and I am proud of how everyone moved quickly to increase To Go sales, reduce costs, manage working capital and improve efficiency.
The simplifications Gene referenced helped reduce key variable expenses in our restaurants, especially direct labor.
The teams also worked to reduce or eliminate other fixed costs in our restaurants and restaurant support center, as well as eliminate non-essential capital spending.
Given the significant reduction in cash flow, we also had to work quickly to ensure we had enough cash for whatever might occur.
During the quarter, we suspended the dividend and share repurchases, fully drew down our $750 million credit facility, took out a $270 million term loan and raised over $500 million in a follow-on equity offering.
All these efforts and the strong loyalty of our guests resulted in us tripling our prior To Go sales run rate averages and materially reducing our cash burn as we disclosed to you through our periodic business updates.
Given the confidence in our cash flow trends and the ability to access it in the future, we fully repaid our credit facility in early May.
Now turning to the results, the total sales were $1.3 billion, a decrease of 43%.
Same restaurant sales decreased 47.7%, and adjusted diluted net loss per share was $1.24.
Because of the significant reduction in total sales compared to last year, all of the expense lines experienced sales deleverage.
So, I'll just touch on a few highlights.
First, food and beverage costs were higher as a percent of sales, given menu mix related to both To Go mix and simplified menus, as well as increased packaging expense and elevated beef costs.
As we look at the labor line, there was significant deleverage in management labor, including approximately $25 million in manager bonuses.
However, we saw an improvement in hourly labor as a percent of sales of over 150 basis points, even with a substantial reduction in sales.
Restaurant expenses per operating week decreased over 20%, given our focus on cost management, even as we incurred over $5 million in incremental cleaning supplies and PPE related to COVID-19.
For marketing and G&A expense, we were able to reduce the absolute spend by $37 million and $17 million respectively versus last year.
Included in our restaurant labor and to a small extent G&A is approximately $50 million of investments net of retention credits.
This was related to emergency and furlough pay for our team members while they were not working.
This negatively impacted our earnings per share by $0.30, which was not adjusted out of reported earnings.
During the quarter, we impaired $390 million of assets as a result of lower sales, reduced profitability and lower market capitalization.
The impairments related to $314 million of Cheddar's goodwill and trademark assets, $47 million of restaurant level assets and $29 million of other assets.
We permanently closed 11 restaurants in the quarter, six of which were already impaired.
The entire $300 million -- $390 million of impairment charges were adjusted out of our reported earnings.
We ended the quarter with $763 million in cash and another $750 million available in our credit facility.
This gives us over $1.5 billion of liquidity available to weather the crisis and make appropriate investments to grow profitably.
Our adjusted debt to adjusted capital at the end of the quarter was 61%, well within our debt covenant of 75%.
As we shifted to an off-premise only model, we took a disciplined approach to pursue sales opportunities with an eye toward incremental profitability and cash flow, by focusing on cost management and the guest experience, while ensuring our team members were taken care of.
This approach resulted in a better finish to Q4 than anticipated and is the underpinning for the strength of our business model that is reflected in our first quarter financial outlook.
Now, turning to fiscal 2021 performance, in today's release, we provided quarter-to-date same restaurant sales and the performance of our restaurants with dining rooms at least partially open.
These results are encouraging.
With last week's blended same restaurant sales down 30%, we are operating cash flow positive at these levels.
Our To Go sales remain elevated in restaurants with dining rooms at least partially reopened.
Olive Garden To Go sales are approximately double their pre-COVID averages and LongHorn has more than tripled their pre-COVID averages in these restaurants.
While it is our normal practice to provide an annual financial outlook, due to the uncertainty in business performance moving forward, we are only providing an outlook for the first quarter.
We expect to achieve approximately 70% of prior year sales levels, total EBITDA of at least $75 million and diluted net earnings per share of greater than or equal to zero on a diluted share base of 131 million shares.
At this point, we don't intend to further share intra-quarter business updates since we have provided our first quarter outlook.
For the full year, we intend to open between 35 and 40 net new restaurants.
Our first opening of the year is expected to be in early July with a few others likely to be opened by the end of the first quarter.
In total, we expect between $250 million and $350 million of capital spending for fiscal '21.
Turning to other aspects of capital allocation, as you recall, we suspended our dividend last quarter due to the level of cash flow uncertainty and the need to preserve as much cash as possible.
We have been consistent in our commitment to returning cash to shareholders, and our dividend is a big part of that.
As soon as we see the business begin to generate the sustainable cash flows to support a dividend and repay our term loan, we will have discussions with our Board on our dividend policy.
Dave will celebrate his 65th birthday later this year, and we've been discussing this transition for some time.
Dave and I have been partners on this journey for 23 years.
He was a joint venture partner for LongHorn when I joined [Indecipherable] in 1997.
I still remember the first time I met him.
We were going to visit his restaurants, so he picked me up at the airport in his Volvo with no air conditioning in the North Carolina heat.
I knew at the end of the day that Dave was a special operator.
I wasted no time.
We bought out his interest in this joint venture and brought him into the Company.
Over the last 23 years, Dave has been successful in every one of his leadership positions.
He has led three of Darden's iconic brands: The Capital Grille, LongHorn Steakhouse and Olive Garden.
And most recently, he served as our Chief Operating Officer.
He built great teams and became a mentor to many operators and executives.
His can-do approach and attitude permeates throughout Darden and each of our brands today.
For many of the last 23 years, Dave and I have had lunched together on Monday to discuss what happened in the previous week and talk about what needed to get done going forward.
Not much has changed over those 23 years, except today, we order salads instead of two or three entrees each.
I'll miss seeing him when I walk into the room on these days.
Unfortunately, because of COVID-19, our conference has been postponed until next year.
We will however be inviting Dave to our conference in 2021, and he has committed to come so we can celebrate all he has done for Darden and for many of you.
And as I've said to you repeatedly, your ability to adapt, innovate and collaborate during this time has truly been inspiring.
 Assistant:

Chosen response:
q4 sales $1.27 billion versus refinitiv ibes estimate of $1.24 billion.
q4 adjusted non-gaap loss per share $1.24 excluding items.
darden restaurant - expects to open 35-40 net new restaurants and have total capital spending of $250 to $300 million in 2021.
sees q1 total sales of approximately 70% of prior year sales.
darden restaurant - qtrly negative blended same-restaurant sales of 47.7%.
darden restaurants - with over $750 million of cash on hand as of june 22 & access to $750 million credit facility, has access to over $1.5 billion of liquidity.


Prompt:
Human: I have a lot of positive updates to share with you today.
I'll be giving you an update on our 2021 performance and an overview of our long-term plan.
Dave will then provide details on our financials.
So, let's start on slide 4.
On the second quarter call, I said that we were having a strong start to the year.
And with three quarters of 2021 behind us, that description is still on the mark as we continue to deliver for our team, customers, communities and investors.
This progress in 2021 positions us well for our future growth.
DTE continues to be recognized for our engagement by Gallup with our ninth consecutive Great Workplace Award.
In addition, we remain committed to our focus on diversity, equity, and inclusion.
Switching over to our customers, as you know, our service territory experienced some major storms.
This summer, we had 12 storms, with five having over 100,000 outages.
It is something we have never seen at DTE's history.
Our crews worked countless hours to restore power to our customers and for that, I am very grateful.
We understand how important it is to provide reliable power and are committed to making continuous improvements as part of our service excellence efforts for our customers now and into the future.
We have accelerated our efforts in the most impacted communities, including Wayne, Oakland, and the Washtenaw counties.
In an effort to accelerate our preventative maintenance, we are increasing our tree trimming workforce from 1,200 to almost 1,500 people, and our overhead line workforce from 850 to over 1,000 people.
We made the decision to invest an additional $70 million in our tree trimming program from 2021 to 2023 as over two-thirds of our outages are tree-related.
Additionally, we have been making significant investments and increasing our focus on grid reliability.
We are advancing our efforts to get trees off the wires and deliver clean, safe, and reliable energy, all while focusing on service excellence for our customers.
We filed the distribution grid plan with the Michigan Public Service Commission in September.
The plan addresses the long-term investment strategy that prepares our grid for the eventual electrification of transportation and addresses the increasingly severe weather patterns that we have seen in our service territory.
Moving on to our communities, we are continuing our commitment to provide cleaner, more reliable energy.
We have partnered with Washtenaw County to build our first MIGreenPower community solar project.
The 20-megawatt facility will be the largest of its kind in the area.
On the investor front, we continue to have a strong financial year and are well-positioned to deliver growth.
As you'll see in our 2022 outlook and our five-year plan, we are on track to deliver 5% to 7% earnings per share growth through 2026 and dividend growth in line with our earnings per share growth.
2021 is shaping up to be a very successful year.
We are raising the midpoint of our operating earnings per share guidance from $5.77 to $5.84 per share.
This is 14% growth in earnings per share from our original 2020 guidance.
And I feel very confident that you'll see a final 2021 number that is at the higher end of our new operating earnings per share guidance range.
I am proud that we're able to deliver these results while we continue to keep our electric base rates flat throughout most of 2022.
We have not increased our electric base rates since May of 2020, and we don't plan to file our next electric rate case until early next year.
For 2022, we are providing an operating earnings per share early outlook range of $5.70 to $5.97 per share.
Even with the area -- earnings rolling off at the end of this year, we continue to deliver 6% growth from the 2021 original guidance midpoint.
We will work toward hitting the higher end of that range as we have done in the past.
Today, we are also announcing a 7% increase for our 2022 annualized dividend, in line with the top end of our operating earnings per share growth target.
As I mentioned on the last quarter call, we retired the River Rouge power plant this year and plan to retire Trenton Channel and the St. Clair power plants in 2022.
This is nearly 2,000 megawatts of coal retirements or 30% of our coal generation fleet.
And in this quarter, we made another significant step toward our goal of reducing carbon emissions.
We announced that we'll be ceasing coal use at Belle River by 2028, two years earlier than originally planned, and preparing also to file an updated integrated resource plan in the fall of 2022, almost one year earlier than planned.
We look forward to working with all stakeholders to address ways to further accelerate decarbonization, while always maintaining affordability and reliability for our customers.
Now, moving over to non-utility side, we are renaming our Power and Industrial segment to DTE Vantage.
Through our unique vantage point, we are helping customers transform the way their energy is produced and manage to be substantially cleaner and more efficient.
The name DTE Vantage better reflects our position in bringing an innovative cleaner energy solutions to our customers.
Over the five-year plan, our utilities continue to focus on our infrastructure investment agenda, especially investments in cleaner generation and investments to improve reliability and the customer experience.
Our updated five-year utility plan is $18 billion, which is $1 billion higher than the prior plan.
Over 90% of our five-year investment plan will be at our two utilities.
Investments in our non-utility business are strategically focused on our customers' needs and aligns with our aggressive ESG initiatives.
Overall, we have a robust total investment agenda of $19.5 billion over the next five years.
And as always, we continue to look for ways to bring more capital into the plan to advance our Clean Vision Plan and further improve reliability for our customers while maintaining affordability.
At DTE Electric, we announced our plan to accelerate decarbonization by ceasing coal use at the Belle River Power Plant by 2028, reducing carbon emissions by 50% two years earlier than originally planned.
This is another step toward our goal of net zero carbon emissions.
Additionally, we expect to file our integrated resource plan in the fall of 2022, one year earlier than planned.
By making this important generation decision now DTE continues to accelerate our journey toward cleaner energy generation that is affordable and reliable for the customers and communities we serve.
The $1 billion increase in our DTE Electric five-year plan is driven by distribution infrastructure investments, preparing our grid for electrification, and hardening initiatives, an increased cleaner energy investment due to our voluntary renewable program, which is still exceeding our high expectations.
This quarter, we have partnered with Washtenaw County to build our first MIGreenPower solar project.
Overall, the MIGreenPower program, which is one of the largest in the nation, continues to grow at an impressive rate.
So far, we have reached over 950 megawatts of voluntary renewable commitments with large business customers and over 40,000 residential customers.
We have an additional 400 megawatts in advanced stages of discussion with future customers.
For our distribution infrastructure renewal, we are supporting electrification and a load growth with infrastructure redesign, improving circuit reliability and reducing restoration times with system hardening and enabling a smarter grid with advanced technology and automation.
This $15 billion investment over the next five years supports our long-term operating earnings growth of 7% to 8% at the electric company.
And, now, let's discuss the opportunity at our gas utility on slide 8.
At DTE Gas, we are on track to achieve net zero greenhouse gas emissions by 2050.
Earlier this year we announced our new Natural Gas Balance program.
This program provides the opportunity for customers to purchase both carbon offsets and renewable natural gas to enable them to offset up to 100% of the carbon from their natural gas usage.
We are proud of how fast this program is growing.
Earlier we have over 4,000 customers subscribed, and we look forward to seeing it become as successful as our voluntary renewable program at DTE Electric.
Overall, at DTE Gas, we are planning on investing $3 billion over the next five years to upgrade and replace aging infrastructure with potential upside to the plan of $500 million.
Along with our pipeline integrity and main replacement investments, we are investing an innovative technology and products that will reduce methane emissions and the carbon footprint for our company.
Overall, we expect our long-term operating earnings growth to be 9% at DTE Gas.
As I mentioned earlier, we renamed our P&I business to DTE Vantage.
We are planning on investing between $1 billion to $1.5 billion at this segment over the next five years.
We are targeting operating earnings of $85 million to $95 million in 2022, growing to $160 million to $170 million in 2026 with approximately 80% of the operating earnings in this business coming from decarbonization-related projects.
As the REF business sunsets at the end of this year, we continue to see additional opportunities in renewable natural gas and industrial energy services.
Earlier this year, we told you about a new RNG project in South Dakota, which is now under construction and is slated to start up in the second quarter of next year.
We commenced construction on another Wisconsin RNG project in the third quarter and entered into an agreement for an additional RNG project, which will be our first project in New York.
In aggregate, these three projects will serve the vehicle fuel market, producing over 500,000 million Btus of RNG per year, with 100% of the production offtake contracted long-term.
There has been strong RNG market growth supported by the Federal Renewable Fuel Standard and California's Low-Carbon Fuel Standard.
We are uniquely positioned to capitalize on a growing preference for efficient energy, with the opportunity to implement coal generation systems, especially as manufacturing plants continue to open up nationwide.
This also puts us in a very good position to explore additional decarbonization opportunities, including carbon capture and storage.
Dave, over to you.
Let me start on slide 10 to review our third quarter financial results.
Total operating earnings for the quarter were $334 million.
This translates into a $1.72 per share.
You can find a detailed breakdown on our earnings per share by segment including a reconciliation to GAAP reported earnings in the Appendix.
I'll start the review at the top of the page with our Utilities.
DTE Electric earnings were $342 million for the quarter.
This was lower than the third quarter of 2020 primarily due to cooler weather in 2021 and higher storm cost, partially offset by higher commercial sales.
Moving on to DTE Gas, operating earnings were $10 million lower than the third quarter last year.
The earnings decrease was driven primarily by higher O&M expenses and rate-based growth costs, partially offset by the rate implementation.
Let's keep moving down the page to DTE Vantage on the third row.
Operating earnings were $73 million.
This is $26 million higher than the third quarter of 2020 driven primarily by REF earnings and new RNG projects.
On the next row, you can see energy trading had another solid quarter with operating earnings relatively flat quarter-over-quarter.
Finally, Corporate & Other was unfavorable $39 million quarter-over-quarter.
There are a couple of main drivers for this variance.
The largest driver is the timing of taxes, which will reverse in the fourth quarter.
We also had a onetime tax item true-up subsequent to the spin of DTE Midstream.
As we look forward to the balance of the year, the tax timing adjustments for the first three quarters will result approximately a $50 million favorable reversal in the fourth quarter, so our full-year 2021 results at Corporate & Others is expected to fall within our guidance for that segment.
Overall, DTE earned $1.72 per share from continuing operations in the third quarter of 2021.
This represents a very strong third quarter, and our year-to-date results put us in a great position for the year.
As Jerry mentioned, we are raising the midpoint of our 2021 operating earnings per share guidance from $5.77 to $5.84 per share.
Our revised operating earnings per share guidance range for 2021 is $5.70 to $5.98 per share.
And with strong year-to-date performance, we expect our full-year operating earnings per share to be biased toward the higher end of this range.
This bias to the higher end also reflects the additional investment in reliability as we are investing $70 million to combat extreme weather-related power outages with no impact to our customer bills.
Additionally, we've contemplated some further investment opportunities in our businesses during 2021, which positions DTE well for success in future years.
Let's move on to slide 12 to discuss our 2022 outlook.
We are continuing strong 5% to 7% long-term operating earnings per share growth through some significant milestones.
We are converting $1.3 billion of mandatory equity in '22, and the REF business will sunset at the end of 2021.
Through this, we'll achieve 6% growth from 2021 original guidance.
Our 2022 operating earnings per share early outlook midpoint is $5.84 per share, and we will work toward hitting the higher end of our range of $5.70 to $5.97 per share.
In 2022, at DTE Electric Group growth will be driven by distribution and cleaner generation investments.
DTE Gas will see continued customer-focused investments in main renewable and other infrastructure improvements to support our capital plan.
As we discussed, 2021 is the final year of earnings for our reduced emissions fuels business at DTE Vantage.
Approximately $90 million of REF earnings net of associated costs rolls off at the end of the year.
This is offset by new project earnings in 2022.
2022 earnings at this segment are largely driven by continued RNG and industrial energy services projects that will serve as a base for growth going forward.
At Corporate & Other, the biggest driver in our year-over-year improvement is lower interest expense.
This is a result of leveraging the earnings and cash strength in 2021 to opportunistically remarket some higher priced debt.
This will provide interest savings in 2022 and future years.
We continue to focus on maintaining solid balance sheet metrics.
Due to our strong cash flows, DTE has minimal equity issuances in our plan beyond the convertible equity units in 2022, while also increasing our five-year capital investment plan by $1 billion.
We have a strong investment-grade credit rating and target an FFO to debt of 16%.
Additionally, we are increasing our 2022 dividend by 7% to $3.54 per share.
In the third quarter, we completed our liability management plan following the spin of our Midstream business.
Using the funds raised from DTM's debt issuance, we repurchased a little over $2.6 billion of corporate debt and incurred approximately $400 million of debt breakage fees associated with the early retirement of this debt.
And since this debt was allocated to the Midstream Business in our previous financial statements, you won't see a large decrease in the debt level at Corporate & Other.
This liability management plan is NPV-positive, EPS-accretive, and further supports our long-term growth.
So, in summary, we feel great about our success so far this year and are confident in achieving our increased 2021 guidance.
2022 is looking good with a 6% earnings per share growth from 2021 original guidance and our increased five-year capital plan supports our 5% to 7% long-term growth, while delivering cleaner generation and increased reliability for our customers.
DTE continues to be well-positioned to deliver the premium total shareholder returns that our investors have come to expect over the past decade with strong utility growth and a dividend growing in line with EPS.
 Assistant:

Chosen response:
compname reports quarterly operating earnings per share of $1.72.
dte energy qtrly operating earnings per share $1.72.
revised its 2021 operating earnings per share guidance range from $5.62 - $5.92 to $5.70 - $5.98.
compname says provided a 2022 operating earnings per share early outlook guidance range of $5.70 - $5.97.


Prompt:
Human: Joining me on the call is Byron Boston, Chief Executive Officer, and Co-Chief Investment Officer; Smriti Popenoe, President and Co-Chief Investment Officer; and Steve Benedetti, Executive Vice President, Chief Financial Officer, and Chief Operating Officer.
I'm extremely pleased with our first-quarter results, which Steve and Smriti will review in more detail in a minute.
Our current total economic return for the quarter was 7.2% on a quarterly basis, and we have generated a total economic return of 34.8% over the last four quarters, averaging 8% per quarter.
We achieved this during an unprecedented time in the markets.
Most importantly, since this new era in history began in January 2020, we have outperformed our industry and other income-oriented vehicles with a 27.1% total shareholder return as noted on Slide five.
Our performance during the first quarter continues to demonstrate that Dynex has the skills and experience necessary to navigate the current environment.
The Dynex team relied heavily on our deep experience in managing the embedded extension risk in a mortgage-backed security, and we use this tactical expertise to take advantage of the environment.
We created value during the first quarter in four ways.
We've managed the existing portfolio, optimized our capital structure, raised equity, and invested capital to generate an excellent return for the quarter.
We have been strategically focused on our investment strategy at capital allocation as well as simplifying and enhancing our capital structure.
We have been executing the strategy to grow the company to drive operating leverage and to improve our common stock's liquidity while balancing our equity capital.
This quarter was unique in providing us the opportunity to raise $128 million in new common equity and invest that capital accretive.
We also called our higher coupon preferred Series B, further optimizing the right side of the balance sheet.
Both decisions added to earnings and book value in the first quarter and our view -- and in our view, will strengthen our performance over the long term.
Now from a macro perspective, we're at a critical inflection point in the global economy as the pandemic evolves in a disparate fashion and the impact of government responses and the vaccine takes hold.
We are preparing in our usual disciplined manner for multiple scenarios.
And as we have said before, surprises are still highly probable given the geopolitical backdrop.
We firmly believe that we can deliver value to our shareholders across multiple market scenarios, as Smriti will elaborate in her comments.
This remains a very favorable return environment with funding costs anchored and the curve steeper.
We believe the liquidity and flexibility inherent in our agency-focused strategy are essential for a highly uncertain global environment with many complex and interrelated risks.
The first quarter continued the excellent performance for the company.
For the quarter, we recorded a comprehensive income of $1.76 per common share, a total economic return of $1.38 per common share or 7.2%, and a core net operating income of $0.46 per common share.
Overall, total shareholders' capital grew approximately $100 million or 15% during the quarter as we raised $128 million in net common equity through two public offerings, as Byron noted, redeemed $70 million in higher-cost preferred equity and added approximately $36 million in capital from excess economic return over dividends paid.
The excess economic return was largely driven by our hedging strategy as we actively managed our position and timed our hedging adjustments as the curve steepened during the quarter, resulting in gains of $166 million, more than offsetting the impact of higher rates in our investment portfolio.
Book value per common share during the quarter rose $0.99 or 5.2%.
Absent the cost of the equity raises, book value grew approximately 7.5% during the quarter.
Core net operating income to common shareholders sequentially improved this quarter to $0.46 from $0.45 in Q4, principally resulting from lower G&A expenses and the reduction in the preferred stock dividend with the redemption of the remaining $70 million in Series B preferred stock outstanding mid-quarter.
Average earning assets marginally increased to $4.3 billion as we opportunistically deployed the capital raise throughout the quarter.
At quarter-end, leverage was 6.9 times shareholders' equity, and earning assets were $5.2 billion.
With the growth in the investment portfolio and the continued favorable conditions for the TBA dollar roll market, we expect sequential core net operating income growth for the second quarter versus the first quarter.
Adjusted net interest income was essentially flat as declines in RMBS pool balances were offset by an increase in TBA investments.
The adjusted net interest spread was slightly lower at 187 basis points versus 198 basis points last quarter.
On the balance sheet, portfolio asset yields and TBA specialness were 12 basis points lower during the quarter, which was partially offset by the benefit from lower borrowing costs, which declined five basis points.
TBA drop income increased 33% during the quarter as we more heavily invested in TBAs, but at slightly lower net interest spreads as TBA specialness was lower in the quarter.
TBAs continue to offer superior returns versus repo borrowings.
And today, our expectations are that adjusted net interest spread will be flat to modestly higher for the second quarter depending on prepayment speeds.
With respect to prepayment speeds, the increase was well within the expected ranges during the quarter.
Agency RMBS prepayments speeds were 18.4 CPR for the quarter versus 17.1 CPR for Q4, while overall portfolio CPRs, including the CMBS portfolio, were approximately 14 CPR.
I will begin with a review of the markets, our performance and then cover our current macroeconomic view and the outlook.
And I'm going to bring your attention to the line at the top of the panel that says 10-year treasuries.
We've now completed an incredible round-trip in the 10-year treasury yield.
As of December 31, 2019, you can see that was at 1.92%.
That yield touched something like 50 basis points in the first quarter of 2020, and we've come all the way back to 1.74% at the end of the first quarter.
So it's been an incredible round-trip.
I just wanted to point that out.
The other thing to note here is just the incredible decline in repo rates.
Again, on December 31, 2019, repo rates stood at 2%.
And now -- one-month repo rate now is sitting in the mid-teens, 14 basis points.
So it's -- the curve is steeper, and it's been quite a ride in the markets.
For the quarter, two-year treasury rates were up to four basis points, while ten- and thirty-year rates rose eighty-two and seventy-six basis points, respectively.
Implied volatility on swaptions broke out of the tight range of sixty to sixty-five where it traded in the second half of last year.
It increased to an elevated seventy-five to eighty basis points per day range where it remains today.
Shorter tenors were even more elevated during the quarter, which prompted us to rebalance our hedges.
As you can see on this chart, MBS OASs were within a range of about fifteen to twenty basis points with even wider ranges when you include intraday volatility.
Agency repo rates on the quarter declined seven basis points, and this reflects significant liquidity in the front end, some technical factors that have kept favorable financing costs at record low levels.
We had an excellent quarter in which the cost of our two equity raises was more than offset with active management of the balance sheet.
As Steve mentioned, book value increased to $1.44 or 7.5% on a gross basis, less $0.45 cost of the capital raises, we get to the net of $0.99 or 5.2% increase reported for the quarter.
Roughly 65% of the $1.44 or $0.90 of the book value increase was due to the portfolio positioning from the existing portfolio.
MBS performed very well, and our hedges were positioned appropriately for the most.
As we explained on last quarter's call, we came into this quarter with a view that a steeper curve was highly probable given vaccine development and deployment, fiscal stimulus, treasury supply, and inflation dynamics.
Hedging positions in the long end and options reflected this view, and this view largely played out over the quarter.
The other 35% of the book value increase came from the timely deployment of capital from the two raises.
As we mentioned last quarter, we expected curve volatility to create opportunities to add assets at attractive returns, and we were able to capitalize on the spread widening that accompanied large moves in interest rates.
We're ending the quarter with leverage at 6.9 times, up about 0.5 times from year-end.
It's important to understand the numbers behind the leverage.
Earning assets actually ended up quarter-over-quarter, almost $1.1 billion higher, including TBAs.
The decline in leverage also includes the fact that book value increased and the equity raise also reduced leverage.
Peak month-end leverage during the quarter was 7.7 times.
So the balance sheet is actually larger, even though the leverage doesn't seem to have been affected as much.
So this last quarter, we were active in managing all aspects of our balance sheet, both the left and right-hand side, as Byron mentioned.
Our options-based hedges on the long end of the yield curve performed very well, and we actually booked gains and rebalanced into more future-based hedges to navigate the coming quarters.
You can see that on Page 11.
In terms of repo management, our focus on the technicals was essential this quarter to position our book to be more short-term to take advantage of falling repo rates, and we're now locking in much lower rates into the second and third quarters.
Post-quarter-end, we took some profits on our 30- and 15-year MBS TBA positions.
We're expecting to reinvest at wider levels.
Leverage is about 6.1 times and book value is flat versus quarter-end.
Turning now to our near-term macroeconomic view and outlook.
We expect a range-bound environment to support MBS valuations with the ability to invest during bulks or volatility.
Specifically, declining pay-ups on specified pools, historically low repo rates, and unprecedented dollar roll specialness are unique potential opportunities in our focus.
In terms of rates in the curve, the front end is still anchored.
The Fed has defined itself as being very patient, having an outcome-based response function versus projection-based.
In our view, this means preparing for a more volatile set of outcomes in the longer end of the yield curve as the data begins to flow.
And the environment has shifted from rates just moving steeper and higher to more range-bound with possible surprises in both directions.
While we think the market eventually evolved into a steeper curve and higher rates, we think it will chop through some range-bound action in the interim.
And the implications for Dynex, a range-bound environment is really a great environment to earn carry.
And so we spend time on disciplined preparation for more volatility and surprises, we focus on the data, and we believe we'll have chances to add assets at low double-digit returns just as we did last quarter.
And eventually, the steeper curve will lead to a higher return environment and wider net interest spreads.
In terms of mortgage spreads and returns, Agency RMBS has been very well supported by both bank demand and Fed demand coming into this quarter.
We've also had lower net supply, slower prepayment speeds and now we have slightly higher mortgage rates.
We expect strong MBS performance to continue, supported by these technical factors.
And the implication for Dynex is that book values will be supported by this performance.
Any discussion of the taper or technicals where demand starts to fall away from mortgages, we believe, creates investment opportunity and we're well-positioned to take advantage of that.
In terms of prepayments, they remain a driver of returns, particularly in higher coupons and in specified pools.
The winter seasonal slowdown that typically comes was actually very modest.
Interest rates, mortgage rates specifically were lower during the season and the responsiveness of borrowers to low rates now appears to be really strong.
So the implication for Dynex here is that our coupon selection and flexibility from moving between TBA and pools will still be a major differentiating factor in creating returns, and we believe, again, provides the opportunity to add assets accretive.
Turning to specified pools.
On-Page 19, we have a pricing matrix that just goes through by coupon, what happened to various types of specified pools over the quarter.
And the first quarter unequivocally was a bad quarter for specified pool pay-ups as interest rates rose.
You can see there's been a dramatic decline in pay-ups since year-end, particularly on the higher coupons.
And in our opinion, this offers the opportunity to be very strategic and shift between TBA and pools, which is also supported by low repo rates at this point.
And finally, just a comment on dollar roll specialness.
We expect to see continued specialness in the two and 2.5 coupons well into the third quarter.
And the decline in repo rates that we've recently seen has actually made pools more attractive than they were before compared to TBAs.
And so we continue to look at that trade-off and invest selectively in spec pools.
Over the next few quarters -- last quarter, flexibility and nimbleness were really important, and I think they both remain very key to our success in managing the portfolio.
At the current leverage, which I mentioned, we had delivered post-quarter-end and balance sheet size, which is about $1 billion higher versus quarter-end -- versus year-end, we still expect core net operating income to continue to exceed the level of the dividend.
And as Steve mentioned, the second quarter will include some accretive benefits of really good dollar roll levels that we have locked in through June.
We are looking ahead in the next few quarters the actual data, the potential for a Fed discussion of tapering, possible technical reduction in demand away from the Fed, so perhaps banks stepping away; and overall volatility in the long end of the yield curve to offer opportunities to add assets.
We're also watching carefully the evolution of credit markets, particularly the transition from -- for banks to foreclosure in residential and commercial sectors.
And we think that there might be some opportunity there, but believe that develops closer to the second half of the year.
In terms of leverage, I mentioned we'll continue to manage the portfolio composition and size based on the opportunities in the market.
At this point, we're estimating, again, another two to three turns of capacity that offers additional total economic return power of anywhere between 1% to 3%.
And just as an example, one turn of leverage invested at 10% economic return is $0.24, which represents a meaningful upside to returns from today.
First, let me finish with a couple of thoughts.
Our team has always operated with great integrity and unwavering commitment to our values and a focus on supporting our community.
Given our fiduciary responsibilities, our highest priorities are to be a reliable steward of capital, transparent in our actions, and good corporate citizens.
Dynex is a strong diverse organization, building on a thirty-year vision to create a multi-generational organization that continues to stand the test of time.
In our annual report this year, please take a look, we shared our purpose, core values, and vision.
We live and breathe these elements in our daily work and believe this is a distinguishing factor for our company.
This is reflected in our long-term industry-leading performance as shown on Slides five and six.
Dynex has the highest three- and five-year returns, along with the best Sharpe ratio among fifteen peers, comprising agency and hybrid mortgage REITs.
Our management team, our Board of Directors, and I are personally committed to investing alongside our shareholders.
As we disclosed in the proxy, together, we are among the top five shareholders on a percentage basis in our common stock.
Let me leave you with this thought.
This continues to be a great environment to generate a strong economic return.
We remain optimistic about our future and our prospects for 2021 and beyond.
 Assistant:

Chosen response: q1 non-gaap core operating earnings per share $0.46.


Prompt:
Human: Going to Slide 2.
Today, we have on the call, Drew DeFerrari, our Chief Financial Officer; and Ryan Urness, our General Counsel.
Now moving to Slide 4 and a review of our third quarter results.
As we review our results, please note that in our comments today and in the accompanying slides, we referenced certain non-GAAP measures.
We refer you to the quarterly report section of our website for a reconciliation of these non-GAAP measures to their corresponding GAAP measures.
We are living in truly unprecedented and trying times for our country.
I could not be prouder of our employees as they continue to serve our customers with real fortitude in difficult times.
Now for the quarter, revenue was $810.3 million, a decrease of 8.4%.
Organic revenue excluding $8.9 million of storm restoration services in the quarter declined 9.4%.
As we deployed 1 gigabit wireline networks, wireless/wireline converged networks and wireless networks, this quarter reflected an increase in demand from one of our top five customers.
Gross margins were 18.7% of revenue, reflecting solid overall performance, offset in part by the continued impacts of the complexity of a large customer program.
General and administrative expenses were 7.7% reflecting tight cost controls and all of these factors produced adjusted EBITDA of $92.8 million, or 11.5% of revenue and adjusted diluted earnings per share of $1.06 compared to $0.88 in the year ago quarter.
Liquidity was strong as cash and availability under our credit facility was $587.1 million, this amount represents our highest level of liquidity ever.
Finally, we made significant progress in reducing net leverage as notional net debt declined $110 million during the quarter to $558.7 million, a reduction of over $467 million in just the last four quarters.
Now going to Slide 5.
Today, major industry participants are constructing or upgrading significant wireline networks across broad sections of the country.
These wireline networks are generally designed to provision 1 gigabit network speeds to individual consumers and businesses, either directly or wirelessly using 5G technologies.
Additional industry participants have recently stated their belief that a single high-capacity fiber network can most cost-effectively deliver services to both consumers and businesses, enabling multiple revenue streams from a single investment.
This view appears to be increasing the appetite for fiber deployments and we believe that the industry effort to deploy high capacity fiber networks continues to meaningfully broaden our set of opportunities as we look forward to calendar 2021.
Access to high capacity telecommunications has become increasingly crucial to society in the time of the COVID-19 pandemic, especially in rural America.
The FCC RDOF auction currently under way reflects the view of some that the needs of work from home, telemedicine, distance learning and other newly essential applications require dramatically increased rural network investment.
We are providing program management, planning, engineering and design, aerial, underground and wireless construction and fulfillment services for 1 gigabit deployments.
These services are being provided across the country in dozens of metropolitan areas to several customers, including customers with stated aspirations to initiate broad fiber deployments, as well as customers who appear to be contemplating the resumption of broad deployments and with whom current activity is increasing.
These deployments include networks consisting entirely of wired network elements as well as converged wireless/wireline multiuse networks.
Potential fiber network deployment opportunities are increasing in rural America as new industry participants respond to emerging societal incentives.
Our ability to provide integrated planning, engineering and design, procurement and construction and maintenance services is of particular value to several industry participants.
Near-term macroeconomic effects and uncertainty may influence some customer plans.
Customers continue to be focused on the possible macroeconomic effects of the pandemic on their business, with particular focus on small and medium business dislocations and overall consumer confidence and creditworthiness.
We see some uncertainty in the overall municipal environment as authorities continue to manage the general effects of the pandemic on permitting and inspection processes, and the impact of potential business limitations due to the recent nationwide increase in COVID-19 infections.
Overall, we remain confident that our scale and our financial strength position us well to deliver valuable service to our customers.
Moving to Slide 6.
Despite the effects of the COVID-19 pandemic on the overall economy, we performed well.
During the quarter, we experienced increased demand from one of our top five customers.
Organic revenue decreased 9.4%.
Our top five customers combined produced 71.6% of revenue, decreasing 15.4% organically, while all other customers increased 11.1% organically.
Verizon was our largest customer at 17.9% of total revenue or $144.8 million.
Revenue from Comcast was $143.6 million, or 17.7% of revenue.
Comcast was Dycom's second largest customer and grew 9% organically.
Lumen, formerly known as CenturyLink was our third largest customer at 16.6% of revenue or $134.4 million.
AT&T was our fourth largest customer at $118.9 million or 14.7% of revenue.
And finally, revenue from Windstream was $38.9 million or 4.8% of revenue.
Windstream was our fifth largest customer.
This is the seventh consecutive quarter where all of our other customers in aggregate, excluding the top five customers have grown organically.
Of note, fiber construction revenue from electric utilities exceeded $31 million in the quarter, approaching just less than 4% of total revenue.
We have extended our geographic reach and expanded our program management and network planning services.
In fact, over the last several years, we have meaningfully increased a long-term value of our maintenance and operations business, a trend which we believe will parallel our deployment of 1 gigabit wireline, direct and wireless/wireline converged networks as those deployments dramatically increase the amount of outside plant network that must be extended and maintained.
Now going to Slide 7.
Backlog at the end of the third quarter was $5.412 billion versus $6.441 billion at the end of the July 2020 quarter, declining approximately $1 billion.
Of this backlog, approximately $2.339 billion is expected to be completed in the next 12 months.
The decline in backlog largely reflects further communications during this quarter, regarding the reprioritization and rescoping of the components of a large program and our assessment of the expected pace of another component of the same program.
For AT&T, we were awarded maintenance service agreements in Indiana, Ohio, Kentucky, Tennessee, Alabama, Georgia and Florida.
Also from AT&T allocating services agreement for Georgia for Frontier Engineering and Construction Services project in New York and Rural Fiber Services agreements in Minnesota, Oklahoma, Tennessee and Mississippi.
Headcount increased during the quarter to 14,154.
In addition, subsequent to the end of the third quarter, we executed contracts that resulted in our booking in excess of $740 million of backlog.
These bookings will be incorporated in our fourth quarter calculation.
Going to Slide 8.
Contract revenues for Q3 were $810.3 million and organic revenue declined 9.4% for the quarter.
Storm work performed in Q3 '21 was $8.9 million compared to none in Q3 '20.
Adjusted EBITDA was $92.8 million, or 11.5% of revenue, reflecting 108 basis point improvement over Q3 '20.
Gross margins were at 18.7% in Q3 and increased 68 basis points from Q3 '20.
Compared to our expectations for the quarter, gross margins were approximately 100 basis points below the midpoint, this variance reflected impacts from customers whose capital expenditures were weighted toward the front half of the calendar year, including a large customer program, offset in part by improvements across the services performed for several of our top customers.
G&A expense improved 17 basis points compared to Q3 '20.
Non-GAAP adjusted earnings per share was $1.06 in Q3 '21, compared to $0.88 in Q3 '20.
The increase resulted from higher adjusted EBITDA, lower depreciation and interest expense, and higher other income from asset sales, offset in part by higher income tax expense.
Now going to Slide 9.
Our balance sheet and financial position remains solid.
Over the past four quarters, we have reduced notional net debt by $467.4 million, included in this decline was a $110.1 million reduction in Q3 from solid free cash flow.
We ended the quarter with $12 million of cash and equivalents, $85 million of revolver borrowings, $427.5 million of term loans, and $58.3 million principal amount of convertible notes outstanding.
As of Q3, our liquidity was strong at $587.1 million.
Cash flows from operations were robust at $111.9 million, bringing our year-to-date operating cash flow to $279.4 million from prudent working capital management.
The combined DSOs of accounts receivable and net contract assets was at 127 days, which was in line with Q3 '20.
Capital expenditures were $3.5 million during Q3, net of disposal proceeds and gross capex was $9.4 million.
For the full fiscal year 2021, we expect net capex to range from $45 million to $55 million, which is a $15 million reduction from our prior outlook.
In summary, we continue to maintain a strong balance sheet and strong liquidity.
Going to Slide 10.
For Q4 2021, which includes an additional week of operations due to the company's 52 to 53-week fiscal year, the company expects modestly lower contract revenues with margins that range from in-line to modestly higher as compared to Q4 2020.
The company believes the impact of the COVID-19 pandemic on it's operating results, cash flows and financial condition is uncertain, unpredictable and could affect it's ability to achieve these expected financial results.
Moving to Slide 11.
Within a challenged economy, we experienced solid end market activity and capitalized on our significant strengths.
First and foremost, we maintained strong customer presence throughout our markets.
Our extensive market presence has allowed us to be at the forefront of evolving industry opportunities.
Fiber deployments enabling new wireless technologies are under way in many regions of the country.
Telephone companies are deploying fiber to the home to enable 1 gigabit high-speed connections.
Cable operators are deploying fiber to small and medium businesses and enterprises.
A portion of these deployments are in anticipation of the customer sales process.
Deployments to expand capacity as well as new build opportunities are under way.
Dramatically increased speeds to consumers are being provisioned and consumer data usage is growing, particularly upstream.
Customers are consolidating supply chains, creating opportunities for market share growth and increasing the long-term value of our maintenance and operations business.
In addition, we are increasingly providing integrated planning, engineering and design, procurement and construction and maintenance services for wired and converged wireless/wireline networks.
As our nation and industry continue to contend with the COVID-19 pandemic, we remain encouraged that our major customers are committed to multiyear capital spending initiatives.
We are confident in our strategies, the prospects for our company, the capabilities of our dedicated employees and the experience of our management team as we navigate challenging times.
 Assistant:

Chosen response:
q3 adjusted non-gaap earnings per share $1.06.
qtrly contract revenue $810.3 million versus$884.1 million.
dycom industries - for quarter ending jan 30,2021 expects modestly lower contract revenues with margins that range from in-line to modestly higher.


Prompt:
Human: During our call, management may discuss certain items, which are not based entirely on historical facts.
And of course, on the call, we may refer to certain non-GAAP financial measures that management uses in its review of the business and believes will provide insight into the company's ongoing operations.
Brinker's fourth quarter was one of our more profitable quarters in recent history, marking a solid finish to a successful, albeit unusual year.
Underpinning our fiscal '21 results is a consistent strategy that differentiates us in the marketplace and an exceptional team that executes every day in our restaurants.
We were already growing sales and taking share before the pandemic hit, and we made the decision to lean further into our strategy of providing convenience, value, and a great guest experience by doubling down on third-party delivery and improving our take-out systems.
In a year of social distancing, our teams came together safely to lead the industry on traffic and regained positive sales momentum.
In a year of closures and shutdowns, we opened our first virtual brand in over 1,000 restaurants by leveraging our technological infrastructure, It's Just Wings surpassed our $150 million target in our company-owned restaurants.
And along with the support of our franchise partners, It's Just Wings became more than $170 million business in the U.S., with many of our international franchisees also now operating the brand.
In a year that started with unemployment near record highs, we kept all our management teams employed and paid them solid bonuses.
We put a retention plan in place for our strongest team members to encourage them to stay with us as the staffing environment continued to change through the spring and summer.
In a year where gatherings and special occasions at Maggiano's were restricted, Steve and the team restructured the value proposition, the takeout proposition, and reengineered the Heart of House.
The brand is already delivering much more profitable sales as volumes come back and guests have responded very positively to the changes.
In a year, we thought we might have to borrow money more to survive the pandemic, we paid down our debt by over $300 million and we're committed to continuing that trend this year.
And in a year where we worried we wouldn't be able to support our charitable partners at levels we're used to, our team set a record, raising more than $10 million for St. Jude during an exceptionally critical time for their patients and families.
Our teams have raised nearly $90 million for St. Jude's patients during our partnership.
In fact, we've positioned ourselves to invest aggressively to grow this business during fiscal '22 and beyond and to keep our balance sheet strong.
The ability to make these kinds of investments starts with owning our restaurants; having the opportunity to leverage our fleet and realize the full potential -- the full profitability of our efforts.
The pandemic solidified our commitment to corporate ownership.
Despite the challenges of owning restaurants like dealing with labor issues and commodity cycles because ownership gives us the scale to effectively manage the issues, it allows us to steward our brands consistently and have control over the investments we make to grow the business.
This year, our investments will target more ways to offer convenience, value, and a great guest experience.
By doubling our pipeline of new restaurant openings, reimagining to keep our assets strong and vibrant, accelerating our technology advantages, and expanding our portfolio of brands.
Currently, we're in the middle of rolling out our second virtual brand, Maggiano's Italian Classics.
It's now in over 250 restaurants today and doing very well.
This one will be a slower roll for a couple of reasons.
It's a little more complex.
And since we're back to fully operational dining rooms, we're being very intentional about the experience for our operators and our guests.
We're excited about it.
We're getting great guest feedback, and we're anticipating being in restaurants 900 restaurants by the end of the fiscal year.
We're also investing in both takeout and delivery by pursuing opportunities to increase visibility and drive awareness of these channels across all four of our brands.
We recently implemented technology enhancements to our curbside takeout system, which is already simplifying the operational side of the business and improving guest metrics.
It's Just Wings has gone live with a website that offers online ordering for takeout as well as delivery, and we're excited about the growth potential for the brand.
These technology investments are helping us do a better job handling the increased mix of off-premise business from pre-pandemic mid-teens to what's now more than 30%, and as well as leveraging the full capacity of our assets with very little incremental capital.
It isn't every day you more than double your off-premise business and add a couple of brands to your base.
It only happens well with best-in-class systems to enable it and a strong team to execute it.
Our team is critical to our success, and we take the current staffing environment very seriously.
We've executed a full-court press to hire, train and retain our talent.
While the challenges came fast and furious for all of us in March, I'm pleased with the progress we've made.
There are still opportunities, but isolated to specific trade areas, and we're confident we'll get these staffing challenges resolved in the near future.
To further support our operators, we're rolling out a new service system with handheld devices that we've worked on for three years to perfect.
It isn't as easy as some might claim it.
To implement a system that operators can execute during high volume that saves labor and still delivers a great guest experience.
Ours is also putting more money in our team members' pockets, so they're staying with us longer, which is crucial in this environment.
It's in more than 250 restaurants now, and we anticipate full implementation by November.
And finally, because we chose not to take price at Chili's during fiscal '21, we have room to take some price this year as consumers return to work and income levels return to normal.
We're evaluating how we'll address those opportunities, especially in channels like delivery while all while protecting our industry-leading value proposition.
We spent last year learning to run a much more efficient and robust revenue-generating model.
We're spending this year and beyond capitalizing on the opportunities for growth that are not just available, but achievable for Brinker.
There's nobody who's doing this better than this team, and I'm honored to be part of their story.
As Wyman indicated, the fourth quarter was a strong finish to our fiscal-year 2021.
For the fourth quarter, Brinker reported total revenues of $1.009 billion, with a consolidated comp sales of 65%.
In keeping with our ongoing strategy, the majority of these sales were driven by traffic, up 53% for the quarter, a 10% beat versus the industry on a two-year basis.
These sales translated into solid earnings per share with fourth-quarter adjusted earnings of $1.68.
At the brand level, Chili's comparable restaurant sales were positive 8.5% versus the fourth quarter of fiscal-year '19, which we believe is the more appropriate comparison for the quarter.
Additionally, on an absolute dollar basis, the fourth quarter was Chili's largest sales quarter on record, topping $900 million in total revenue.
Maggiano's, while down 18% compared to fourth quarter of fiscal '19, made very solid progress with its recovery curve and built positive momentum to carry into the current fiscal year.
Moving down the P&L.
Our fourth-quarter restaurant operating margin was 16.9%.
Adjusting this performance for the impact of the 53rd week, the resulting 16% operating margin still represents a material year-over-year improvement and more importantly was a 110-basis-point margin improvement versus the pre-COVID fourth quarter of fiscal '19.
Food and beverage expense for the fourth quarter as a percent of company sales was 20 basis points unfavorable as compared to prior year.
This variance was driven -- primarily driven by increased commodity costs, particularly for chicken and pork products.
Labor expense for the quarter, again, as a percent of company sales was favorable 240 basis points versus prior year, primarily driven by the extra week sales leverage versus fixed labor expenses and the slower reopening pace in a couple of high wage states such as California.
During the quarter, our managers focused considerable efforts toward staffing our restaurants to support the solid demand for our brands.
Scale clearly matters in this area, as they were effectively supported by our experienced HR teams who help deploy hiring tools and events to assist in the process.
Given the more challenging hiring environment, the dynamic of hiring, training, and retaining team members resulted in an increase in labor inflation in the mid-single-digit range, a dynamic we expect to continue in the near term.
To reward our operator's strong performance throughout the fiscal year, we also chose to further invest in our hourly team members and managers through a variety of incremental bonus structures, totaling approximately $4 million for the quarter beyond our normal payout formulas.
This incremental investment impacted quarterly earnings per share by approximately $0.06 and increased labor expense margin by roughly 40 basis points, well worth the benefits it will accrue.
Restaurant expense was 830 basis points favorable year over year as we fully leveraged many of our fixed costs, particularly from the benefit of the additional week in the quarter.
The continued positive operating performance did result in a meaningful increase in our quarterly tax rate, 15% for the quarter, which includes a catch-up adjustment to increase the annual income tax accrual.
This increase negatively impacted fourth-quarter earnings per share approximately $0.06.
Our operating cash flow for the fourth quarter and fiscal year remained strong with $101 million and $370 million for those time frames, respectively.
EBITDA for the quarter totaled $144 million, bringing the fiscal-year EBITDA total to $368 million.
During the fourth quarter, we continued to use a significant portion of our cash flow to further reduce revolver borrowings.
By year-end, our revolver balance was reduced to $171 million.
This decreased our total funded debt leverage to 2.5 times and our lease-adjusted leverage to 3.6 times at year end.
Speaking of the revolver, we have reached agreement on terms and conditions for a new revolving credit facility with our bank group.
The new $800 million five-year revolver includes improved pricing allows the return of restricted payments and provides ample liquidity and flexibility to support our growth strategies.
Our board of directors has also reinstated the share repurchase authorization that was suspended in the early days of the pandemic with an authorization amount of $300 million.
Now turning to our outlook for fiscal-year '22.
At this point, with the volatility and unknowns of the current operating environment, we can only share some high-level thoughts for certain annual metrics.
For example, we expect commodity and labor inflation percentages each in the mid-single digits with commodity inflation toward the lower end of the range.
Capex of $155 million to $165 million, an annual effective tax rate of 14% to 15%, and weighted annual share count of 45 million to 47 million shares.
As we now move ahead with fiscal 2022, the reality of the pandemic with all its uncertainties is still part of our everyday operations.
That being said, all now four of our brands are well prepared and positioned to perform in whatever environment they face throughout the year.
We are very proud of their efforts during the past fiscal year and are confident of the experiences, the growth, and the strength of their business models will continue to deliver quality results as we move forward from here.
 Assistant:

Chosen response:
qtrly net income per diluted share, excluding special items, increased to $1.68.
sees fy 2022 commodity and labor inflation to be in mid-single digits.