What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 327 added, 267 removed, 1024 unchanged (37% of the section changed)

28 unchanged sentences

We have audited the accompanying consolidated balance sheets of Portillo's Inc.

and subsidiaries (the "Company") as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, stockholders' and members' equity, and cash flows, for each of the three years in the period ended December 29, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 28, 2025 and December 29, 2024, the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the three years in the period ended December 28, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2025, in conformity with accounting principles generally accepted in the United States of America.

11 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income Taxes – Tax Receivable Agreement—Refer to Note 2 and 14 to the financial statements

7 unchanged sentences

Most of this tax basis is amortizable under requisite sections of the Internal Revenue Code.

The amounts payable, as well as the timing of such payments, under the TRA are dependent upon significant future events and assumptions, including among others:

(i) the amount

Portillo's Inc.

Form 10-K | 37

and timing of exchanges, (ii) the characterization of the tax basis step-up, (iii) the depreciation and amortization periods that apply to the increase in tax basis, (iv) the amount and timing of taxable income the Company generates in the future and (v) the U.S.

The amounts payable, as well as the timing of such payments, under the TRA are dependent upon significant future events and assumptions, including among others:

(i) the amount and timing of exchanges, (ii) the characterization of the tax basis step-up, (iii) the depreciation and amortization periods that apply to the increase in tax basis, (iv) the amount and timing of taxable income the Company generates in the future and (v) the U.S.

federal, state, and local income tax rates then applicable.

5 unchanged sentences

◦ We evaluated the appropriateness of management’s application of the accounting for the TRA liability, and the reasonableness of the methods, inputs, and assumptions used by management to determine the TRA liability.

◦ We evaluated the impact of partnership exchange transactions on the computation of the TRA liability by performing testing, on a sample basis, of exchanges, tax basis amounts and calculations related to the stepup in basis.

◦ For each tax basis step-up captured by the TRA, we evaluated the characterization of the step-up for appropriateness and consistency with the TRA.

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◦ We tested the mathematical accuracy of the TRA liability calculation by recomputing the liability.

Goodwill - Refer to Notes 2 and 6 to the Financial Statements

Critical Audit Matter Description

As discussed in Notes 2 and 6 to the financial statements, the Company has one reporting unit which is evaluated for impairment annually.

The Company's evaluation of its goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value.

The Company engaged an independent valuation specialist to assist in the Company's determination of the estimated fair value of the reporting unit.

This determination includes estimating the fair value of the reporting unit using the income approach, guideline public company method, and comparable transactions method.

The income approach requires management to estimate internally forecasted future cash flows, and to discount the cash flows using a weighted average cost of capital (discount rate).

The guideline public company method is determined by applying market multiples for comparable public companies to the reporting unit’s financial results.

The comparable transaction method utilizes exchange prices in actual transactions and asking prices for controlling interests in public or private companies to apply multiples to the reporting unit’s financial results.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

In addition to the annual evaluation of the reporting unit’s recoverability, when events and circumstances indicate it is more likely than not that the fair value of the reporting unit is less than the carrying value, the Company will perform a quantitative test of impairment.

During the quarter ended September 28, 2025, the Company identified impairment indicators that required a quantitative assessment of goodwill outside of the Company's annual impairment test.

These indicators included the announcement of a strategic reset of the Company’s development and growth plan, which resulted in revised financial targets for fiscal year 2025 and the announced departure of the Company’s President and Chief Executive Officer, effective September 21, 2025.

Based on these factors and information available, the Company determined that an interim quantitative test of goodwill for impairment should be performed as of September 28, 2025.

After completing the evaluation, the Company concluded that no impairment of goodwill existed as of September 28, 2025 as the fair value of the Company’s goodwill balance was greater than its carrying value as of the measurement date.

Portillo's Inc.

Form 10-K | 38

We identified the Company’s impairment evaluation of goodwill as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting unit, specifically in forecasting future revenues and determining the discount rate.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to the selection of the discount rate and forecasts of future revenue growth.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the fair value of the goodwill discussed above included the following, among others:

• We tested the effectiveness of controls over the goodwill impairment valuation, including appropriateness of the valuation methodology, forecasting of revenue growth, and selection of discount rate.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the valuation inputs to that methodology, such as discount rate by:

◦ Testing the mathematical accuracy of the calculations.

◦ Testing the source information underlying the determination of the discount rate and guideline company market multiples.

◦ Developing ranges of independent estimates and comparing those to the rates selected by management.

◦ Performing sensitivity analysis for the discount rate utilized.

• We evaluated the reasonableness of management’s forecast of future revenue growth by:

◦ Comparing the forecasts to historical results, third-party economic research, and industry performance;

◦ Performing sensitivity analyses for the forecasts utilized;

◦ Comparing the forecasts to internal communications to management and the Board of Directors;

◦ Evaluating the impact of changes in the business environment on management’s forecasts;

◦ Conducting inquiries with management;

◦ Evaluating whether the forecasts were consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

12 unchanged sentences

16,502 14,794

Prepaid expenses 7,066 8,565

Prepaid expenses and other

Total current assets 51,516 52,651

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Deferred revenue

Short-term lease liability

Short-term operating lease liabilities

Accrued expenses 32,236 33,072

3 unchanged sentences

Tax Receivable Agreement liability 344,524 316,893

Long-term lease liability

Long-term operating lease liabilities

329,190 278,540

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STOCKHOLDERS' EQUITY:

Preferred stock, $ 0.01 par value per share, 10,000,000 shares authorized, 0.00 issued and outstanding

Preferred stock, $ 0.01 par value per share, 10,000,000 shares authorized, none issued and outstanding

Class A common stock, $ 0.01 par value per share, 380,000,000 shares authorized, and 71,971,736 and 63,674,579 shares issued and outstanding as of December 28, 2025 and December 29, 2024, respectively

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Net income attributable to equity method investment ( 1,275 ) ( 1,229 ) ( 1,401 )

Other income, net ( 312 ) ( 1,035 ) ( 204 )

Other loss (income), net

946 ( 312 ) ( 1,035 )

OPERATING INCOME 43,677 58,033 55,440

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— — — — — 18,424 6,394 24,818

Adoption of Accounting Standards Codification 842 - Leases

— — — — — 287 174 461

Equity-based compensation expense

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— — — — 48,849 — ( 48,849 ) —

Distributions paid to non-controlling interest holders

— — — — — — ( 399 ) ( 399 )

Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis

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— — — — 55,304 — ( 55,304 ) —

Distributions paid to non-controlling interests holders

Distributions paid to non-controlling interest holders

— — — — — — ( 838 ) ( 838 )

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Activity under equity-based compensation plans 1,006,692 10 — — 2,177 — — 2,187

Redemption of LLC Units 6,740,126 67 ( 6,740,126 ) — ( 67 ) — — —

Redemption of LLC interests 7,290,465 73 ( 7,290,465 ) — ( 73 ) — — —

Non-controlling interest adjustment — — — — 60,914 — ( 60,914 ) —

1 unchanged sentence

Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis — — — — ( 21,661 ) — — ( 21,661 )

Contributions from non-controlling interests

— — — — — — 350 350

Balance, as of December 28, 2025

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Purchase of property and equipment ( 90,435 ) ( 88,191 ) ( 87,918 )

Proceeds from the sale of property and equipment 77 81 44

NET CASH USED IN INVESTING ACTIVITIES ( 90,193 ) ( 88,114 ) ( 87,837 )

12 unchanged sentences

Payment of deferred financing costs ( 1,263 ) — ( 3,569 )

Payment of initial public offering issuance costs — — ( 771 )

NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES

Contributions from non-controlling interests 350 — —

NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES

15,369 2,512 ( 16,933 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

( 2,913 ) 12,438 ( 33,989 )

22 unchanged sentences

Portillo’s Inc.

("Inc.") was formed and incorporated as a Delaware corporation on June 8, 2021.

was formed for the purpose of completing an initial public offering ("IPO") and related reorganization transactions in order to carry on the business of PHD Group Holdings LLC and its subsidiaries ("Portillo's OpCo").

(the “Company") was incorporated as a Delaware corporation on June 8, 2021, for the purpose of facilitating an initial public offering ("IPO") and other related transactions in order to carry on the business of PHD Group Holdings LLC and its subsidiaries (“Portillo’s OpCo” .

Portillo's Inc.

is the sole managing member of Portillo’s OpCo, and a s sole managing member, Inc.

operates and controls all of the business and affairs of Portillo's OpCo and reports a non-controlling interest representing the economic interest in Portillo's OpCo held by the other members of Portillo's OpCo (the "pre-IPO LLC Members").

is the sole managing member of Portillo’s OpCo, and a s sole managing member and operates and controls all of the business and affairs of Portillo's OpCo and reports a non-controlling interest representing the economic interest in Portillo's OpCo held by the other members of Portillo's OpCo (the "pre-IPO LLC Members").

Unless the context otherwise requires, references to "we," "us," "our," "Portillo's," and the "Company" refer to Portillo's Inc.

and its subsidiaries, including Portillo's OpCo.

The Company operates restaurants in 10 states that serve Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, fresh chopped salads, crinkle-cut fries, homemade chocolate cake and more, along with two food production commissaries in Illinois.

The Company operates restaurants in 11 states that serve Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut fries, homemade chocolate cake and more, along with two food production commissaries in Illinois.

As of December 28, 2025 and December 29, 2024, the Company had 101 and 93 restaurants in operation, respectively.

The Company also had two non-traditional locations in operation as of December 29, 2024 and December 31, 2023.

These non-traditional locations include a food truck and a ghost kitchen (small kitchen with no store-front presence, used to fill online orders).

Portillo's Inc., additionally has a 50 % interest in a single restaurant owned by C&O Chicago, L.L.C.

The Company also had one non-traditional location in operation, a food truck.

The Company, additionally has a 50 % interest in a single restaurant owned by C&O Chicago, L.L.C.

("C&O"), which is excluded from the Company's restaurant count noted above.

The Company’s principal corporate offices are located in Oak Brook, Illinois.

Secondary Offerings and Redemption of LLC Units

In the fourth quarter of 2024, certain pre-IPO LLC Members redeemed 840,992 LLC Units in the aggregate, together with an equal number of shares of Class B common stock, for newly-issued shares of Class A common stock on a one -for-one basis, in accordance with the terms of the Second Amended and Restated LLC Agreement of Portillo’s OpCo, dated as of October 20, 2021.

In the first quarter of 2024, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $ 14.37 per share ("Q1 2024 Secondary Offering").

The Company granted BofA Securities, Inc., the underwriter (the "Underwriter"), a 30-day option to purchase up to an additional 1,200,000 shares of Class A common stock.

The underwriter did not exercise its overallotment option within the 30-day period.

We used all of the net proceeds from the Q1 2024 Secondary Offering to purchase LLC Units and corresponding shares of Class B common stock from certain pre-IPO LLC Members and to repurchase shares of Class A common stock from the shareholders of the entities treated as corporations for U.S.

tax purposes that held LLC Units prior to the Transactions ("Blocker Companies") at a price per LLC Unit or share of Class A common stock, as applicable, equal to the public offering price per share of Class A common stock, less the underwriting discounts and commissions.

The proceeds from the Q1 2024 Secondary Offering were used to (i) purchase 2,167,629 existing shares of Class A common stock from the shareholders of the Blocker Companies and (ii) redeem 5,832,371 LLC Units held by the pre-IPO LLC Members.

In connection with the redemption, 5,832,371 shares of Class B common stock were surrendered by the pre-IPO LLC Members and canceled and the Company received 5,832,371 newly-issued LLC Units, increasing the Company's total ownership interest in Portillo's OpCo.

As a result, Portillo’s did not receive any proceeds from the offering, and the total number of shares of Class A common stock and Class B common stock did not change;

however, the number of outstanding shares of Class A common stock increased by the same number of the canceled shares of Class B common stock.

In the first quarter of 2023, the Company completed one secondary offering of 8,000,000 shares at an offering price of $ 21.05 per share.

On April 5, 2023, the Underwriter exercised its overallotment option in part, to purchase an additional 620,493 shares of the Company's Class A common stock at an offering price of $ 21.05 per share.

In the third and fourth quarters of 2022, the Company completed two secondary offerings of 8,066,458 shares (including 66,458 shares sold to the underwriters pursuant to their overallotment option) and 8,000,000 shares, respectively, of the Company's Class A common stock at an offering price of $ 23.75 and $ 22.69 , respectively, per share.

The holders of LLC Units (other than the Company) may from time to time require Portillo’s OpCo to redeem all or a portion of their LLC Units (together with an equal number of shares of Class B common stock) for newly-issued shares of Class A common stock on a one -for-one basis.

As of December 29, 2024, the Company owned 85.6 % of Portillo's OpCo and the pre-IPO LLC Members owned the remaining 14.4 % of Portillo's OpCo.

Portillo's Inc.

Form 10-K | 45

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company entered into a joint venture agreement to develop and operate a restaurant at the Dallas-Fort Worth International Airport ("DFW") which is expected to commence operations in 2026.

The Company holds a 65 % ownership interest in AP Dogs, LLC ("AP Dogs") and has day-to-day operational and managerial control over its business and affairs.

Accordingly, the Company consolidates the joint venture and reports a noncontrolling interest representing the economic interest in AP Dogs held by the other partner.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

14 unchanged sentences

Actual results could differ from those estimates.

Portillo's Inc.

Form 10-K | 46

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Cash and Cash Equivalents and Restricted Cash

13 unchanged sentences

These products are held as inventory at distributors on a short-term consignment basis.

Inventories subject to these consignment arrangements are recorded on the Company’s consolidated balance sheet and were $ 0.8 million and $ 0.9 million as of December 29, 2024 and December 31,

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2023, respectively.

Inventories subject to these consignment arrangements are recorded on the Company’s consolidated balance sheet and were $ 0.8 million as of December 28, 2025 and December 29, 2024.

Equity Method Investment

8 unchanged sentences

Leasehold improvements are amortized over the shorter of the lease term, which generally includes option periods that are reasonably certain, or the estimated useful lives of the assets.

Except for leasehold improvements, depreciation is computed over the estimated useful lives of the assets (generally ranging from three to 10 years).

For buildings and equipment, depreciation is computed over the estimated useful lives of the assets (generally ranging from three to 39 years).

Upon disposal of assets, the accounts are relieved of cost and accumulated depreciation and any related gain or loss is reflected in other income, net in the Company's consolidated statements of operations.

Portillo's Inc.

Form 10-K | 47

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company reviews its long-lived assets, including property and equipment and construction-in-progress, definite-lived intangible assets and operating lease assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group might not be recoverable.

3 unchanged sentences

During fiscal 2024, the Company recorded a technology asset impairment charge of $ 0.7 million that was included within other income , net in the Company's consolidated statements of operations.

There were no asset impairment charges recorded in fiscal 2023 and fiscal 2022.

There were no long-lived asset impairment charges recorded in fiscal 2025 and fiscal 2023.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and indefinite-lived intangible assets are assessed for impairment annually in the fourth quarter or more frequently if events and circumstances indicate that it is more likely than not that the fair value of a reporting unit or an intangible asset is less than its carrying value.

The Company has one reporting unit which is evaluated for impairment annually.

Fair value of the reporting unit is estimated using the market capitalization approach that uses publicly available market data, including publicly traded stock prices and total shares outstanding to determine the fair value of the reporting unit.

The Company has one reporting unit and the fair value of the reporting unit was estimated using a weighted combination of the income and market approaches.

Under the income approach, the Company uses a discounted cash flow methodology, which requires management to make significant estimates and assumptions related to forecasted revenues, EBITDA margins, capital expenditures, perpetual growth rates, and long-term discount rates, among others.

The market approach incorporated both the guideline public company method and the guideline transaction method.

The guideline public company method involves analyzing valuation multiples of comparable publicly traded companies with similar operating and investment characteristics, while the guideline transaction method considers transaction multiples observed for comparable businesses.

The Company also reconciles the fair value of its reporting unit to its current market capitalization to assess reasonableness.

If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded for the difference between the fair value of the reporting unit and the carrying value of the reporting unit.

The Company’s indefinite-lived intangible assets consist of trade names and trademarks (collectively “trade names”).

In the third quarter of 2025, management identified impairment indicators that required a quantitative assessment of goodwill outside of the Company's annual impairment test.

Upon completion of the quantitative impairment test and review of the related results, the Company concluded that no impairment of goodwill existed.

The Company's annual impairment test in the fourth quarter of 2025 reaffirmed that goodwill was not impaired.

The Company’s indefinite-lived intangible assets consist of trade names and trademarks (collectively the “trade names”).

The Company estimates the fair value of its trade names using a relief-from-royalty income approach.

If the fair value of the trade name is less than its carrying value, an impairment loss is recorded for the difference between the estimated fair value and carrying value of the intangible assets.

The Company also tested its trade names for impairment in the third quarter of 2025.

As a result, during fiscal 2025, the Company recorded a non-cash impairment charge of $ 2.2 million related to its legacy Barnelli's trade name, a pasta concept available at nine co-branded restaurants.

Significant changes in economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions.

Such changes could result in revisions of our estimates of the fair value of our reporting unit and could result in an impairment of goodwill or intangibles in a future interim period or as of September 28, 2026, our next annual measurement date.

As of December 28, 2025, we had approximately $ 394.3 million of goodwill and $ 221.7 million of indefinite-lived intangible assets.

There were no goodwill nor indefinite-lived intangible asset impairment charges recorded in fiscal 2024 and fiscal 2023.

Fair Value of Financial Instruments

3 unchanged sentences

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities;

Portillo's Inc.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Level 3 - Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

15 unchanged sentences

or (ii) in the event a gift card is not expected to be redeemed, in proportion to the pattern of rights exercised by the customer (gift card breakage).

The Company has determined that 11 % of gift card sales will not be redeemed and will be retained by us based on a portfolio assessment of historical data on gift card redemption patterns.

Gift card breakage is recorded within revenues, net in the consolidated statements of operations.

During the fourth quarter of 2025, the Company completed its annual assessment of expected gift card breakage based on historical redemption patterns to determine the amount of gift card sales that will not be redeemed and will be retained by the Company.

As a result of this analysis, the estimated breakage rate was updated to 12 %, compared to the prior rate of 11 %.

This update represents a change in accounting estimate and has been applied prospectively.

Gift card breakage is recognized within revenues, net in the consolidated statements of operations.

In March 2025, the Company launched Portillo's Perks TM , an app-less loyalty program that lives in guests' digital wallets.

The loyalty program ("Perks") is a visit-based program, and guests earn rewards based on qualified visits.

The Company defers revenue based on the average selling price of food, beverages, or retail merchandise earned through qualifying visits, establishing a corresponding Perks liability within Deferred Revenue.

Currently, the Company does not record breakage due to the short expiration period of 14 to 30 days after the reward is issued.

Upon redemption of Perks, revenue is recognized for redeemed food, beverage, or retail merchandise, and the Perks liability is reduced accordingly.

Refer to Note 3.

Revenue Recognition for additional detail on the Perks liability.

Generally, revenue is recognized as promised goods or services transfer to the guest or customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

2 unchanged sentences

Revenue Recognition for additional detail.

Contingencies

We recognize liabilities for contingencies when we have an exposure that indicates it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates.

When the reasonable estimate is a range, the recorded loss will be the best estimate within the range.

We record legal settlement costs when those costs are probable and reasonably estimable.

Refer to Note 16.

Contingencies for additional detail.

The majority of the food products the Company purchases are subject to changes in price primarily due to the effect of supply and demand of the commodities, in particular, proteins, dairy, produce and grains.

Overall pricing agreements are established in an effort to maintain a more consistent food cost without creating long-term purchase commitments.

Portillo's Inc.

Form 10-K | 49

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Employee Benefits

13 unchanged sentences

Equity awards with performance or market vesting conditions generally vest based on our attainment versus stated targets or criteria over a three-year performance and service period.

Performance goals are determined by the Board and include

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

measures such as revenue and adjusted EBITDA growth.

Performance goals are determined by the Board and include measures such as revenue and adjusted EBITDA growth.

Compensation expense on stock awards subject to performance conditions, which is based on the quantity of awards we have determined are probable of vesting, is recognized over the longer of the estimated performance goal attainment period or time vesting period.

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Eligible employees are able to contribute up to 15 % of their gross base earnings for purchases under the ESPP through regular payroll deductions, subject to an annual maximum dollar amount.

The expense incurred under the ESPP for the years ended December 29, 2024, December 31, 2023 and December 25, 2022, was immaterial.

The expense incurred under the ESPP for the year ended December 28, 2025 was $ 0.1 million, and immaterial for the years ended December 29, 2024 and December 31, 2023.

The expense is included within general and administrative expenses and labor in the consolidated statement of operations.

4 unchanged sentences

and those expenses included in general and administrative expenses in the consolidated statements of operations primarily consist of regional advertising and branding initiatives.

The year-over-year change for 2024 is primarily related to an advertising campaign in the Arizona market in the first quarter of 2024 and in the Chicagoland market in the third and fourth quarters of 2024.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Cloud-Based Software Implementation Costs

3 unchanged sentences

Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of general and administrative expenses, the same line item as the expense for the associated hosting arrangement.

As of December 29, 2024, the Company had $ 3.4 million of capitalized cloud-based software implementation costs made up of $ 0.9 million recorded within prepaid expenses and $ 2.5 million recorded within other assets.

As of December 31, 2023, the Company had $ 2.0 million of capitalized cloud-based software implementation costs made up of $ 0.3 million recorded within prepaid expenses and $ 1.7 million recorded within other assets related to its enterprise resource planning ("ERP") and human capital management ("HCM") systems.

As of December 28, 2025, the Company had $ 3.2 million of capitalized cloud-based software implementation costs made up of $ 1.0 million recorded within prepaid expenses and other and $ 2.2 million recorded within other assets.

As of December 29, 2024, the Company had $ 3.4 million of capitalized cloud-based software implementation costs made up of $ 0.9 million recorded within prepaid expenses and other and $ 2.5 million recorded within other assets .

The capitalized cloud-based costs primarily relate to the Company's enterprise resource planning ("ERP") and human capital management ("HCM") systems.

The Company currently leases land for its retail restaurants and commissaries, and office space under various long-term operating lease agreements that expire on various dates through 2068.

9 unchanged sentences

Generally, the leases for the Company's restaurant locations have an initial term of 10 years to 20 years and typically provide for renewal options in five-year increments, as well as rent escalations.

Renewal options are generally recognized as part of the right-of-use assets and lease liabilities as it is reasonably certain at commencement date that we would

Portillo's Inc.

Form 10-K | 49

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

exercise the options to extend the lease.

Renewal options are generally recognized as part of the right-of-use assets and lease liabilities as it is reasonably certain at commencement date that we would exercise the options to extend the lease.

Some of our real estate leases provide for base rent, plus if applicable, additional rent based on gross sales, as defined in each lease agreement, which is considered to be variable rent.

14 unchanged sentences

We include these amounts in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Pre-Opening Expenses

1 unchanged sentence

These are expensed as incurred prior to the restaurant opening for business.

Self-Insurance Programs

The Company self-insures for health, workers’ compensation, general liability and property damage.

Predetermined loss limits have been arranged with insurance companies to limit the Company’s per occurrence cash outlay.

Estimated costs to settle reported claims and incurred but unreported claims are recorded in in accrued expenses in the consolidated balance sheets.

Income and Other Taxes

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Actual operating results in future years could differ from our current assumptions, judgments and estimates, which could have a material impact on the amount of deferred tax assets we ultimately realize.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act') was signed into law.

The CARES Act intended to provide economic relief to those impacted by the COVID-19 pandemic.

The CARES Act also allowed eligible employers to defer the remittance of employer federal payroll taxes otherwise payable during calendar year 2020 and remit half of such deferred amounts on or before December 31, 2021 and half on or before December 31, 2022.

The Company deferred approximately $ 5.4 million of federal payroll tax remittances under this provision as of December 27, 2020, of which $ 2.7 million was paid during the year ended December 26, 2021 and the remaining deferred balance of $ 2.7 million was paid during the year ended December 25, 2022.

Tax Receivable Agreement

3 unchanged sentences

Amounts payable under the TRA are contingent upon, among other things, (i) generation of future taxable income over the term of the TRA and (ii) future changes in tax laws.

Portillo's Inc.

Form 10-K | 50

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we would not be required to make the related TRA payments.

If we do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we would not be required to make the related TRA payments.

Therefore, we would only recognize a liability for TRA payments if we determine it is probable that we will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits.

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Diluted earnings (loss) per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common units would have an anti-dilutive effect.

Portillo's Inc.

Form 10-K | 52

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Standards

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The Company is currently evaluating the effect of adopting this ASU.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires public entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effect of adopting this ASU.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

In January 2025, the FASB issued ASU 2025-01 "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures-Clarifying the Effective Date", which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect of adopting this ASU.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), which clarifies existing interim reporting guidance under U.S.

The ASU clarifies the scope and application of interim reporting requirements, the form and content of interim financial statements and disclosures, and consolidates required interim disclosures within Topic 270.

The ASU also introduces a principle requiring disclosure of material events occurring after annual reporting period but before the issuance of interim financial statements.

The amendments do not change underlying interim reporting requirements but improve clarity and consistency.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2028, with early adoption permitted.

The Company is currently evaluating the effect of adopting this ASU.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes technical corrections and clarifications for a broad range of topics within the FASB Accounting Standards Codification to improve clarity and consistency in the application of existing guidance.

The improvements are not expected to have a significant effect on current accounting practice or result in significant costs to most entities.

ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the effect of adopting this ASU.

Recently Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022.

FASB has extended the sunset date to December 31, 2024.

The impact of the transition from LIBOR to alternative reference rates was not material to the Company's consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15,

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted this standard during the year ended December 29, 2024.

Segment Information in the accompanying notes to the consolidated financial statements for further detail.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted this standard during the year ended December 28, 2025.

Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to its consolidated financial statements.

Portillo's Inc.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2024, with early adoption permitted.

The Company adopted this standard during the year ended December 29, 2024.

Segment Information in the accompanying notes to the consolidated financial statements for further detail.

REVENUE RECOGNITION

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Summary Of Significant Accounting Policies for additional information regarding gift card sales.

The Company recognized gift card breakage of $ 0.9 million for both the years ended December 29, 2024 and December 31, 2023, and $ 0.8 million for the year ended December 25, 2022.

The Company recognized gift card breakage of $ 0.9 million for the years ended December 28, 2025, December 29, 2024 and December 31, 2023.

The Company’s revenue related to performance obligations not yet satisfied is revenue from gift cards sold but not yet redeemed.

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Revenue recognized from gift card liability balance at the beginning of the year $ 3,980 $ 3,972 $ 3,822

In March 2025, the Company launched Perks, an app-less loyalty program that lives in guests' digital wallets.

Perks is a visit-based program, and guests earn rewards based on qualified visits.

Refer to Note 2.

Summary Of Significant Accounting Policies for additional information.

As of December 28, 2025, the Perks liability was $ 0.2 million .

Inventories consisted of the following (in thousands):

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GOODWILL & INTANGIBLE ASSETS

The Company has one reporting unit for goodwill, which is evaluated for impairment annually in the fourth quarter of each fiscal year.

The Company used the market approach to test goodwill.

The market approach utilized publicly available market data, including publicly traded stock prices and total shares outstanding to determine the fair value of the reporting unit.

For indefinite-lived intangibles, the relief-from-royalty method estimates the fair value of an intangible asset based on what a third-party would pay for the right to use that asset.

The most significant assumptions utilized in the relief-from-royalty method are projected revenues and the royalty rate.

No impairment charges were recognized for goodwill or indefinite-lived intangible assets for the years ended December 29, 2024, December 31, 2023 and December 25, 2022 .

The Company has one reporting unit for goodwill which is evaluated for impairment annually in the fourth quarter of each fiscal year, along with indefinite-lived intangibles, or more frequently when impairment indicators are present.

During the third quarter of 2025, the Company completed a quantitative impairment test of both goodwill and trade names.

After completing the evaluation, the Company concluded that no impairment of goodwill existed as of the end of the third quarter.

The Company's annual impairment test in the fourth quarter of 2025 reaffirmed that goodwill was not impaired.

During the third quarter of 2025, the Company recognized trade name impairment charges of $ 2.2 million, included within other loss (income), net in the consolidated statement of operations.

Refer to Note 2.

Summary Of Significant Accounting Policies for further information.

No impairment charges were recognized for goodwill or indefinite-lived intangible assets for the years ended December 29, 2024 and December 31, 2023 .

Intangibles, net consisted of the following (in thousands):

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These assets are measured at fair value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

During fiscal 2024, the Company recognized an impairment charge of $ 0.7 million related to a technology asset that is included within other income, net in the consolidated statement of operations.

No asset impairment charges were recorded in fiscal 2023 or fiscal 2022.

During fiscal 2025, the Company recognized trade name impairment charges of $ 2.2 million, included within other loss (income), net in the consolidated statement of operations.

During fiscal 2024, the Company recognized an impairment charge of $ 0.7 million related to a technology asset that is included within other loss (income), net in the consolidated statement of operations.

No asset impairment charges were recorded in fiscal 2023.

SUPPLEMENTAL BALANCE SHEET INFORMATION

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$ 16,502 $ 14,794

Prepaid expenses consisted of the following (in thousands):

December 29, 2024 December 31, 2023

Prepaid insurance $ 2,510 $ 3,060

Prepaid occupancy 495 2,314

Other prepaid expenses

$ 7,066 $ 8,565

Accrued expenses consisted of the following (in thousands):

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Rent and real estate taxes

Insurance 3,634 3,310

Interest 5,471 170

Sales and use tax

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December 28, 2025 December 29, 2024

2023 Term Loan

$ 246,875 $ 288,750

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2025 Credit Agreement

On February 2, 2023 (the "Closing Date"), PHD Intermediate LLC (“Holdings”), Portillo’s Holdings LLC (the “Borrower”), the other Guarantors party thereto from time to time, each lender party thereto from time to time and Fifth Third Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender entered into a credit agreement (“2023 Credit Agreement”) which provides for a term A loan (the "2023 Term Loan") in an initial aggregate principal amount of $ 300.0 million and revolving credit commitments in an initial aggregate principal amount of $ 100.0 million (the “2023 Revolver Facility”).

The 2023 Term Loan and 2023 Revolver Facility are scheduled to mature on February 2, 2028.

Subsequent Events for more information about amendments to the 2023 Term Loan and 2023 Revolver Facility entered into on January 27, 2025.

The 2023 Term Loan and the 2023 Revolver Facility will accrue interest at the forward-looking secured overnight financing rate (“SOFR”) plus an applicable rate determined upon the consolidated total net rent adjusted leverage ratio, subject to a floor of 0.00 % (plus a credit spread adjustment of 0.10 % per annum for 1-month interest periods and 0.15 % for 3-month interest periods).

As of December 29, 2024, the interest rates on the 2023 Term Loan and 2023 Revolver Facility were 7.25 % and 7.17 %, respectively.

On January 27, 2025 (the "2025 Credit Agreement Closing Date"), PHD Intermediate LLC ("Holdings"), Portillo's Holdings LLC ("the Borrower"), the other Guarantors party thereto, the Lenders from time to time party thereto and Fifth Third Bank, National Association, as Administrative Agent (in such capacities, the "Administrative Agent"), the L/C Issuer and the Swing Line Lender entered into an amendment (the "Amendment") to the credit agreement, dated as of February 2, 2023 (the "Existing Credit Agreement" and the Existing Credit Agreement as amended by the Amendment and as may be amended, restated, supplemented or otherwise modified from time to time thereafter, the "2025 Credit Agreement"), by and among Holdings, the Borrower, the other Guarantors from time to time party thereto, the Lenders from time to time party thereto and the Administrative Agent.

The arrangement was accounted for as a debt modification .

The Existing Credit Agreement provided for a term A loan (the "2023 Term Loan Facility") in an initial aggregate principal amount of $ 300.0 million and revolving credit commitments in an initial aggregate principal amount of $ 100.0 million (the "2023 Revolver Facility").

The Amendment provides for, among other things, (i) a $ 250.0 million term loan A facility (the "2025 Term Loan Facility") and (ii) revolving credit commitments in an initial aggregate principal amount of $ 150 million (the "2025 Revolver Facility" and, together with the Term Loan Facility, the "2025 Facilities").

The loans under each of the 2025 Facilities mature on January 27, 2030.

The proceeds of the 2025 Term Loan Facility were used to pay off in full amounts outstanding under the 2023 Term Loan Facility outstanding on the 2025 Credit Agreement Closing Date.

The 2023 Term Loan Facility and 2023 Revolver Facility accrued, and the 2025 Term Loan Facility and 2025 Revolver Facility accrue interest at the forward-looking secured overnight financing rate ("SOFR") plus an applicable rate determined upon the consolidated total net rent adjusted leverage ratio, in each case subject to a 0.00 % floor.

As of December 28, 2025, the interest rate on the 2025 Term Loan Facility and 2025 Revolver Facility was 6.50 % and 6.42 %, respectively.

Pursuant to the 2025 Credit Agreement, as of December 28, 2025, the commitment fees to maintain the 2025 Revolver Facility were 0.20 % and letter of credit fees were 2.50 %.

Commitment fees and letter of credit fees are recorded as interest expense in the consolidated statements of operations.

As of December 29, 2024, the effective interest rate for the 2023 Credit Agreement was 7.53 %.

As of December 31, 2023, the interest rates on the 2023 Term Loan and 2023 Revolver Facility were 8.00 % and 8.23 %, respectively.

As of December 28, 2025, the effective interest rate was 6.73 %.

As of December 29, 2024, the interest rate on the 2023 Term Loan Facility and 2023 Revolver Facility was 7.25 % and 7.17 %, respectively.

Pursuant to the 2023 Credit Agreement, as of December 29, 2024, the commitment fees to maintain the 2023 Revolver Facility were 0.20 % and letter of credit fees were 2.50 %.

Commitment fees and letter of credit fees are recorded as interest expense in the consolidated statements of operations.

As of December 31, 2023, the effective interest rate for the 2023 Credit Agreement was 8.36 %.

The 2023 Term Loan will amortize in quarterly installments equaling an aggregate annual amount of $ 7.5 million for the first two (2) years following the Closing Date, (b) $ 15.0 million for the third (3rd) and fourth (4th) years following the Closing Date, and (c) $ 30.0 million for the fifth (5th) year following the Closing Date, commencing on the last day of the first full fiscal quarter ended after the Closing Date, with the balance payable on the final maturity date.

As of December 29, 2024, outstanding borrowings under the 2023 Credit Agreement totaled $ 313.8 million, comprised of $ 288.8 million under the 2023 Term Loan, and $ 25.0 million under the 2023 Revolver Facility.

Letters of credit issued under the 2023 Revolver Facility totaled $ 5.3 million.

As a result, as of December 29, 2024, the Company had $ 69.7 million available under the 2023 Revolver Facility.

As of December 29, 2024, the effective interest rate was 7.53 %.

As of the 2025 Credit Agreement Closing Date, the interest rates and commitment fees applicable to the 2023 Term Loan Facility and 2023 Revolving Facility were subsequently refinanced in accordance with the Amendment and the 2025 Credit Agreement.

The 2025 Term Loan Facility will amortize in quarterly installments, commencing on the last day of the first full fiscal quarter ended after the 2025 Credit Agreement Closing Date, equaling an aggregate amount of $ 6.3 million for the first 2 years following the 2025 Credit Agreement Closing Date, (ii) $ 12.5 million for the third and fourth years following the 2025 Credit Agreement Closing Date, and (iii) $ 25.0 million for the fifth year following the 2025 Credit Agreement Closing Date, with the balance payable on the final maturity date.

As of December 28, 2025, outstanding borrowings under the 2025 Credit Agreement totaled $ 336.9 million, comprised of $ 246.9 million under the 2025 Term Loan, and $ 90.0 million under the 2025 Revolver Facility.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 29, 2024, outstanding borrowings under the Existing Credit Agreement totaled $ 313.8 million, comprised of $ 288.8 million under the 2023 Term Loan, and $ 25.0 million under the 2023 Revolver Facility.

Letters of credit issued under the 2023 Revolver Facility totaled $ 5.3 million.

As a result, as of December 29, 2024, the Company had $ 69.7 million available under the 2023 Revolver Facility.

On the 2025 Credit Agreement Closing Date, outstanding borrowings under the 2023 Term Loan Facility and 2023 Revolving Facility were refinanced and became outstanding under the 2025 Term Loan Facility and 2025 Revolving Facility, as applicable.

2014 Credit Agreement

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Discount and Debt Issuance Costs

Pursuant to the 2023 Credit Agreement, the Company capitalized deferred financing costs and issuance discount of $ 3.6 million which will be amortized over the term of the 2023 Credit Agreement.

Pursuant to the 2025 Credit Agreement, the Company capitalized deferred financing costs and issuance discounts of $ 1.3 million.

The remaining unamortized costs under the 2023 Credit Agreement were $ 2.0 million.

The total deferred financing costs and issuance discounts of $ 3.3 million will be amortized over the term of the 2025 Credit Agreement.

In connection with the repayment of the 2014 Credit Agreement as described above, deferred financing costs and original issuance discount of $ 3.5 million was recorded as a loss on debt extinguishment during the year ended December 31, 2023 in the consolidated statement of operations.

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In addition, the Company also amortized $ 0.6 million, $ 0.7 million and $ 0.6 million in original issue discount related to the long-term debt during the years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively, which was included in interest expense in the consolidated statements of operations.

Total interest costs incurred were $ 25.6 million, $ 27.5 million and $ 27.6 million for the years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively.

Portillo's Inc.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Total interest costs incurred were $ 22.8 million, $ 25.6 million and $ 27.5 million for the years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively.

Fair Value of Debt

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Guarantees and Covenants

The 2023 Credit Agreement is guaranteed by all domestic subsidiaries of the Borrower (subject to customary exceptions) and secured by liens on substantially all of the assets of Holdings, the Borrower and the subsidiary guarantors (subject to customary exceptions).

The 2023 Credit Agreement also includes certain financial covenants with respect to cash interest coverage and total net rent adjusted leverage.

As of December 29, 2024, the Company was in compliance with all covenants in the 2023 Credit Agreement.

The 2025 Credit Agreement contains customary representations and warranties, events of default, reporting and other affirmative covenants and negative covenants, including limitations on indebtedness, liens, investments, negative pledges, dividends, junior financings and other fundamental changes.

The 2025 Facilities are guaranteed, subject to customary exceptions, by all of the Borrower's wholly-owned domestic restricted subsidiaries and Holdings, and are secured by a lien on substantially all of the Borrower's assets, including fixed assets and intangibles, and the assets of the Guarantors, in each case, subject to customary exceptions.

Failure to comply with these covenants and restrictions could result in an event of default under the 2025 Credit Agreement.

In such an event, all amounts outstanding under the 2025 Credit Agreement, together with any accrued interest, could then be declared immediately due and payable.

As of December 28, 2025, the Company was in compliance with the financial covenants in the 2025 Credit Agreement.

A summary of operating lease right-of-use assets and liabilities is as follows (in thousands):

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261,086 222,390

Current lease liabilities Short-term operating lease liability 6,013 5,577

Non-current lease liabilities Long-term operating lease liability 278,540 238,414

Current lease liabilities Short-term operating lease liabilities

Non-current lease liabilities Long-term operating lease liabilities

329,190 278,540

$ 336,068 $ 284,553

The components of lease expense were as follows (in thousands):

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$ 43,548 $ 38,249 $ 33,644

A summary of lease terms and discount rates for operating leases is as follows:

Operating leases December 29, 2024 December 31, 2023

Weighted-average remaining lease term (years):

Weighted-average discount rate:

Portillo's Inc.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A summary of lease terms and discount rates for operating leases is as follows:

Operating leases December 28, 2025 December 29, 2024

Weighted-average remaining lease term (years):

Weighted-average discount rate:

Supplemental cash flow information related to leases is as follows (in thousands):

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Total operating lease liabilities $ 336,068

As of December 29, 2024, operating lease payments include $ 493.9 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $ 100.6 million of legally binding minimum payments for leases signed but not yet commenced.

As of December 28, 2025, operating lease payments exclude $ 86.1 million of legally binding minimum payments for leases signed but not yet commenced.

STOCKHOLDERS' EQUITY

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Holders of our Class B common stock do not have any right to receive dividends.

Amended and Restated LLC Agreement

In connection with the IPO, we amended and restated the limited liability company agreement of Portillo’s OpCo ("LLC Agreement") to, among other things, convert all outstanding equity interests into LLC Units.

The LLC Agreement also provides that holders of LLC Units may, from time to time, redeem all or a portion of their LLC Units for newly-issued shares of Class A common stock on a one -for-one basis.

Upon receipt of a redemption request, we may, instead, elect to effect a direct exchange of LLC Units directly with the holder.

In connection with any redemption or exchange, we will receive a corresponding number of LLC

Portillo's Inc.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Units, increasing our total ownership interest.

Amended and Restated LLC Agreement

The LLC Agreement also provides that holders of LLC Units may, from time to time, redeem all or a portion of their LLC Units for newly-issued shares of Class A common stock on a one -for-one basis.

Upon receipt of a redemption request, we may, instead, elect to effect a direct exchange of LLC Units directly with the holder.

In connection with any redemption or exchange, we will receive a corresponding number of LLC Units, increasing our total ownership interest.

Additionally, an equivalent number of shares of Class B common stock will be surrendered and canceled.

1 unchanged sentence

Redemption of LLC Units

In the fourth quarter of 2024, certain pre-IPO LLC Members redeemed 840,992 LLC Units in the aggregate for newly-issued shares of Class A common stock on a one -for-one basis, in accordance with the terms of the Second Amended and Restated LLC Agreement of Portillo’s OpCo, dated as of October 20, 2021.

In the first quarter of 2024, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $ 14.37 per share.

In the first quarter of 2023, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $ 21.05 per share.

In the second quarter of 2025, certain pre-IPO LLC Members affiliated with Berkshire Partners LLC redeemed 7,290,465 LLC units in the aggregate for newly-issued shares of Class A common stock on a one -for-one basis, in accordance with the terms of the Second Amended and Restated LLC agreement of Portillo's OpCo, dated as of October 20, 2021.

In 2024, certain pre-IPO LLC Members redeemed 840,992 LLC Units in the aggregate for newly-issued shares of Class A common stock on a one -for-one basis, in accordance with the terms of the Second Amended and Restated LLC Agreement of Portillo’s OpCo, dated as of October 20, 2021.

In addition, in 2024, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $ 14.37 per share.

In 2023, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $ 21.05 per share.

On April 5, 2023, the Underwriter exercised its overallotment option in part, to purchase an additional 620,493 shares of the Company's Class A common stock at an offering price of $ 21.05 per share.

Description Of Business for additional information on secondary offerings and redemption of LLC Units.

As of December 28, 2025, the Company owned 95.4 % of Portillo's OpCo and the pre-IPO LLC Members owned the remaining 4.6 % of Portillo's OpCo.

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As such, future redemptions or direct exchanges of LLC Units in Portillo's OpCo by the pre-IPO LLC members will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.

Portillo's Inc.

Form 10-K | 62

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the LLC interest ownership by Portillo's Inc.

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Total 75,414,071 100.0 % 74,407,379 100.0 %

Portillo's Inc.

Form 10-K | 60

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to Portillo's Inc.

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$ 60,702 $ 69,343 $ 54,450

The Company entered into a joint venture agreement to develop and operate a restaurant at DFW airport, which is expected to commence operations in 2026.

The Company holds a 65 % ownership interest in AP Dogs.

In the year ended December 28, 2025, $ 0.4 million of contributions from non-controlling interests were received.

EQUITY-BASED COMPENSATION

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Outstanding time-based RSUs generally vest equally over periods ranging from one to three years on each of the anniversaries of the date of grant subject to continued service on such date.

Portillo's Inc.

Form 10-K | 63

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Activity for the Company's RSUs was as follows:

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Non-vested, December 28, 2025

1,649 $ 10.01

As of December 28, 2025, there was $ 10.8 million of total unrecognized compensation cost related to unvested restricted stock units, which is expected to vest over a weighted-average period of 1.8 years.

Portillo's Inc.

Form 10-K | 61

PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards

On December 23, 2022, the Company granted 57,870 restricted stock awards (“RSAs”) to certain of its executive officers in recognition of their work and accomplishments in 2022.

The RSAs vested immediately upon grant with certain transfer restrictions.

RSAs surrendered to fulfill withholding tax obligations were not subject to any transfer restrictions, and 50 % of the balance of the underlying shares were subject to a one-year holding requirement, and the balance of underlying shares was subject to a two-year holding requirement.

The fair value of the RSAs surrendered was determined using Portillo's closing stock price on the date of grant, which was $ 17.19 .

The fair value of the awards with post-vesting restrictions was determined using the Black-Scholes option pricing model and the weighted average assumptions were as follows:

Fair value $ 14.98

Stock price $ 17.19

Risk-free interest rate 4.45 %

Expected life (years) 1.5

Annualized equity volatility 34.4 %

No RSAs were issued during the years ended December 29, 2024 and December 31, 2023.

Performance Stock Options

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The awards granted are exercisable within a 10-year period from the date of grant.

The first tranche of PSOs was forfeited in fiscal 2024 as the performance condition was not satisfied by the third anniversary of the IPO.

The first and second tranches of PSOs were forfeited in fiscal 2024 and fiscal 2025, respectively, as the performance conditions were not satisfied by the third and fourth anniversary of the IPO, respectively.

The grant date fair value of these awards was determined using a Monte-Carlo simulation model.

The fair value and weighted average assumptions used to estimate the fair value of these PSOs were as follows:

2024 2023 2022

Fair value $ 0.12 $ 2.30

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1,377 $ 17.65

Granted 625 12.17

Exercised — —

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Stock Options

During the year ended December 29, 2024, the Company granted 311,042 stock options under the 2021 Plan, to its President and Chief Executive Officer.

The stock options vest on the four th anniversary of the award and are exercisable within a 10-year period from the date of grant.

Stock options under the 2021 Plan were granted to the Company's former Chief Executive Officer ("CEO"), Mr.

Osanloo, who departed from his role, effective September 21, 2025.

Activity for the Stock Options was as follows:

Stock Options

(in thousands)

Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value

(in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value

Outstanding-December 29, 2024

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Outstanding-December 28, 2025

311 11.94 9.4 —

Exercisable-December 28, 2025

Expected to vest-December 28, 2025

262 $ 11.94 9.4 $ —

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model.

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Fair value of stock option $ 6.50 $ 6.43

Stock Price $ 12.08 $ 11.94

Risk-free interest rate 4.29 % 4.58 %

Expected life (years) 6.3 6.3

As of December 29, 2024, there was $ 1.5 million of total unrecognized compensation cost related to unvested Stock Options, which is expected to be recognized over a weighted average period of 3.3 years.

Volatility 50.0 % 49.4 %

As of December 28, 2025, there was no unrecognized compensation cost related to unvested Stock Options.

Portillo's Inc.

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Performance Stock Units

During the year ended December 29, 2024, the Company granted performance stock units ("PSUs") to its executive officers under the 2021 Plan.

The Company has granted performance stock units ("PSUs") to its executive officers under the 2021 Plan.

The fair value of these awards was determined using the Company's closing stock price on the date of the grants.

These PSUs will vest after the fiscal year ending December 27, 2026 based on continued service and the achievement of performance metrics.

The PSUs will vest after the fiscal year ending December 26, 2027, and December 27, 2026, for PSUs granted during the years ended December 28, 2025 and December 29, 2024, respectively, based on continued service and the achievement of performance metrics.

The amount of awards that can be earned ranges from 0 % to 200 % of the number of performance stock units granted, based on the achievement of approved financial goals tied to the cumulative growth of revenue and Adjusted EBITDA over the fiscal years 2025 to 2027 for PSUs granted during the year ended December 28, 2025 and over the fiscal years 2024 to 2026 for PSUs granted during the year ending December 29, 2024.

Compensation expense related to the performance equity units is recognized using a straight-line method over the vesting period based on the most probable outcome of the performance conditions.

The cumulative effect on current and prior periods of a change in attainment is recognized in general and administrative expenses in the consolidated statements of operations in the period of change.

As of December 29, 2024, management calculated an attainment rate equal to 0 % of the number of target shares granted based on actual attainment of the internal metrics.

As of December 28, 2025, management calculated an attainment rate for both PSUs granted during the year ended December 28, 2025 and December 29, 2024 equal to 0 % of the number of target shares granted based on actual attainment of the internal metrics.

Activity for the Company's PSUs was as follows:

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Granted 301 12.08

( 370 ) 12.01

Non-vested, December 28, 2025

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Total equity-based compensation expense $ 6,493 $ 11,151 $ 15,542

The Company's Chief Operating Officer, Mr.

Derrick Pratt, departed from his role, effective June 30, 2024.

In accordance with the Company’s Senior Executive Severance Plan, Mr.

Pratt’s pre-IPO nonqualified stock options and his RSUs, both of which were scheduled to vest later in 2024, vested in the second quarter of 2024.

The pre-IPO Options will remain exercisable through the 10 th anniversary of the original grant date of September 14, 2020.

The primary modification was to extend the permitted time for which the options could be exercised subsequent to termination, from 90 days post-termination to the 10 th anniversary of the original grant date.

All other equity grants were forfeited.

The Company recorded a $ 0.2 million charge to equity-based compensation expense during the second quarter of 2024, to reflect the incremental value related to the modifications described herein.

In connection with the aforementioned departure of the Company's CEO, Mr.

Osanloo and the Company entered into a Separation Agreement and Release (the “Separation Agreement”).

In accordance with the Separation Agreement, Mr.

Osanloo's outstanding stock option awards granted to him on October 1, 2018 under the 2014 Equity Incentive Plan will remain exercisable through the 10 th anniversary of the original grant date.

The modification was to extend the permitted time for which the options could be exercised subsequent to termination, from 90 days to October 1, 2028.

The Company recorded a $ 2.4 million charge to equity-based compensation expense during fiscal 2025, to reflect the incremental value related to the modification described herein.

The incremental modification expense is included within general and administrative expenses in the consolidated statement of operations.

All other equity grants were forfeited, resulting in a credit of previously-recognized equity-based compensation expense of $ 5.0 million.

Employee Stock Purchase Plan

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As of December 28, 2025, 107,025 shares remained available for issuance under the ESPP.

The expense incurred under the ESPP for the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, was immaterial.

The expense incurred under the ESPP for the fiscal year ended December 28, 2025 was $ 0.1 million, and immaterial for the fiscal years ended December 29, 2024 and December 31, 2023, respectively.

The expense is included within general and administrative expenses and labor in the consolidated statement of operations.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We are the sole managing member of Portillo's OpCo, and consolidate the financial results of Portillo's OpCo.

We are the sole managing member of Portillo's OpCo, and as a result, consolidate the financial results of Portillo's OpCo.

Portillo's OpCo is treated as a partnership for U.S.

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As a partnership, Portillo's OpCo is generally not subject to U.S.

federal and certain state and local income taxes.

federal and state and local income taxes.

Any taxable income or loss generated by Portillo's OpCo is passed through to and included in the taxable income or loss of its members, including us, based upon the respective member's ownership percentage in Portillo's OpCo.

Beginning in Fiscal 2021, we are subject to U.S.

federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Portillo's OpCo subsequent to the IPO and Transactions, as well as any stand-alone income or loss generated by Portillo's Inc.

We are subject to U.S.

federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Portillo's OpCo, as well as any stand-alone income or loss generated by Portillo's Inc.

Income Tax Expense

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Income tax expense $ 2,997 $ 6,799 $ 3,248

$ 6,799 $ 3,248 $ 1,823

Reconciliations of income tax expense computed at the U.S.

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State and local income taxes, net of federal benefit (1)

Non-deductible expenses 657 1.6 % 433 1.5 % ( 369 ) ( 1.9 ) %

1,153 4.8 % 3,026 7.2 % ( 502 ) ( 1.8 ) %

Changes in valuation allowances ( 114 ) ( 0.5 ) % ( 1,478 ) ( 3.5 ) % ( 1,610 ) ( 5.7 ) %

Nontaxable or nondeductible items:

162(m) disallowance 140 0.6 % 919 2.2 % 578 2.1 %

Non-controlling interest ( 371 ) ( 1.6 ) % ( 1,167 ) ( 2.8 ) % ( 1,343 ) ( 4.8 ) %

LLC flow-through structure ( 4,004 ) ( 9.6 ) % 468 1.7 % ( 2,849 ) ( 15.0 ) %

Change in valuation allowance ( 2,050 ) ( 4.9 ) % ( 2,149 ) ( 7.7 ) % ( 1,923 ) ( 10.1 ) %

Other ( 68 ) ( 0.3 ) % ( 262 ) ( 0.6 ) % ( 146 ) ( 0.5 ) %

Other adjustments:

LLC flow-through structure ( 2,802 ) ( 11.6 ) % ( 3,033 ) ( 7.3 ) % 377 1.2 %

Income tax expense $ 2,997 12.4 % $ 6,799 16.2 % $ 3,248 11.5 %

$ 6,799 16.2 % $ 3,248 11.5 % $ 1,823 9.6 %

Our effective income tax rates for the years ended December 29, 2024, December 31, 2023 and December 25, 2022 were 16.2 %, 11.5 % and 9.6 %, respectively.

The change in our effective income tax rate from the year ended December 29, 2024 to the year ended December 31, 2023 was primarily driven by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income (loss) of Portillo's OpCo, partially offset by the decrease in the valuation allowance.

The Company’s annual effective tax rate for the year ended December 29, 2024, December 31, 2023 and December 25, 2022 differs from the statutory rate of 21% primarily because the Company is not liable for income taxes on the portion of OpCo’s earnings that are attributable to non-controlling interests, deferred tax adjustments, impacts from equity-based award activity and the change in valuation allowance.

(1) State taxes in Illinois made up the majority (greater than 50 percent) of the tax effect in this category.

Portillo's Inc.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Our effective income tax rates for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 were 12.4 %, 16.2 % and 11.5 %, respectively.

The decrease in our effective income tax rate from the year ended December 28, 2025 to the year ended December 29, 2024 was primarily driven by a decrease in the valuation allowance related to the separation of Mr.

Osanloo and year-over-year impact of deferred tax asset remeasurement due to effective state tax rate changes, partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income (loss) of Portillo's OpCo.

The Company’s annual effective tax rate for the year ended December 28, 2025, December 29, 2024 and December 31, 2023 differs from the statutory rate of 21% primarily because the Company is not liable for income taxes on the portion of OpCo’s earnings that are attributable to non-controlling interests, deferred tax adjustments, impacts from equity-based award activity and the change in valuation allowance.

Deferred Tax Assets

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Net operating loss carryforwards 74,433 47,005

Interest limitation carryforwards 14,994 14,557

Other assets 682 629

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As described in Note 11.

Description of Business and Note 11.

Stockholders' Equity, we acquired LLC Units in connection with the IPO and Transactions and Secondary Offerings.

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The majority of state losses will begin to expire in 2034 and future periods.

As of December 28, 2025 and December 29, 2024, the Company had interest limitation carry forwards of $ 15.0 million and $ 14.6 million, respectively, as a result of the Company's ownership interest in Portillo's OpCo.

Unrecognized Tax Benefits

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Portillo's has filed all income tax returns for tax years through

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

These returns are subject to examination by taxing authorities for U.S.

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These increases may also decrease gains (or increase losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets.

Also, see Note 19.

Subsequent Events for information about amendments to the Tax Receivable Agreement.

In the fourth quarter of 2024, in connection with the pre-IPO LLC Members unit redemption previously discussed in Note 1.

Description of

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Business, 840,992 LLC Units were redeemed for newly-issued shares of Class A common stock.

In the second quarter of 2025, in connection with the pre-IPO LLC Members unit redemption previously discussed in Note 11.

Stockholders' Equity, 7,290,465 LLC Units were redeemed for newly-issued shares of Class A common stock.

As a result, an increase in the tax basis of net assets of Portillo's OpCo subject to the provisions of the TRA was recorded.

The Company recorded a deferred tax asset of $ 16.8 million and an additional TRA liability of $ 38.5 million.

In the first quarter of 2024, in connection with the Q1 2024 Secondary Offering previously discussed in Note 1.

Description Of Business, 5,832,371 LLC Units were redeemed by the pre-IPO LLC Members for newly-issued shares of Class A common stock.

In 2024, in connection with the pre-IPO LLC Members unit redemption previously discussed in Note 11.

Stockholders' Equity, 840,992 LLC Units were redeemed for newly-issued shares of Class A common stock.

As a result, an increase in the tax basis of net assets of Portillo's OpCo subject to the provisions of the TRA was recorded.

The Company recorded a deferred tax asset of $ 1.7 million and an additional TRA liability of $ 4.3 million.

In the first quarter of 2023, in connection with the secondary offering previously discussed in Note 1.

Description Of Business, 5,893,600 LLC Units were redeemed by the pre-IPO LLC Members for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of net assets of Portillo's OpCo subject to the provisions of the TRA.

In 2024, in connection with the Q1 2024 Secondary Offering previously discussed in Note 11.

Stockholders' Equity, 5,832,371 LLC Units were redeemed by the pre-IPO LLC Members for newly-issued shares of Class A common stock.

As a result, an increase in the tax basis of net assets of Portillo's OpCo subject to the provisions of the TRA was recorded.

The Company recorded a deferred tax asset of $ 17.8 million and an additional TRA liability of $ 33.7 million.

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Summary Of Significant Accounting Policies for additional information on the TRA.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law.

The Act includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027.

We have evaluated the potential effects of the relevant provisions of the Act and do not expect a significant financial statement impact as a result of the Act.

EARNINGS PER SHARE

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The computations of basic and diluted earnings per share for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 are as follows (in thousands):

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Years Ended

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As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following outstanding shares were excluded from the calculation of diluted earnings per share because they would be antidilutive (in thousands) :

The following outstanding shares were excluded from the calculation of diluted earnings per share because they would be antidilutive or subject to performance conditions which have not been satisfied by the end of the reporting period (in thousands) :

Fiscal Years Ended

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1,165 2,120 1,817

(1) Number of securities outstanding excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.

CONTINGENCIES

The Company is party to legal proceedings and potential claims arising in the normal conduct of business, including claims related to employment matters, contractual disputes, customer injuries, and property damage.

We maintain insurance coverage with third-party insurers to limit our total exposure.

The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable.

When probable and reasonably estimable, the losses are accrued.

Although the ultimate outcome of these claims and lawsuits cannot be predicted with certainty, management believes that the resulting liability, if any, will not have a material effect on the Company’s consolidated financial statements.

As of December 29, 2024 and December 31, 2023, the Company recorded no loss contingencies.

During 2024, a former team member from one of the Company's two California restaurants filed a class action lawsuit alleging wage and hour violations and unfair competition, as well as claims under the California Private Attorneys General Act (“PAGA”).

As of December 28, 2025, a $ 0.8 million litigation reserve has been recorded in accounts payable on our consolidated balance sheet.

On August 19, 2025, plaintiffs filed a wrongful death and survival action in Cook County, Illinois, arising out of a vehicle accident that occurred at a Portillo’s location in Oswego, Illinois.

Discovery is expected to continue in the coming months.

At this time a loss is reasonably possible but not estimable, and as a result, no litigation reserve has been recorded on our consolidated balance sheet as of December 28, 2025.

As of December 29, 2024, the Company recorded no loss contingencies.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

The Company owns and operates fast-casual restaurants in the United States, along with two food production commissaries in Illinois.

The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer.

The Company’s chief operating decision maker (the “CODM”) is its Interim Chief Executive Officer.

As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, the Company has one operating segment and one reportable segment.

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Net income was $ 21.1 million, $ 35.1 million, and $ 24.8 million for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively.

In addition to net income (loss), the CODM also reviews operating income (loss), restaurant-level adjusted EBITDA and adjusted EBITDA.

In addition to net income (loss), the CODM also reviews revenue, operating income (loss), restaurant-level adjusted EBITDA and adjusted EBITDA.

The CODM reviews these measures (i) to evaluate the Company's operating results and the effectiveness of business strategies, (ii) internally as benchmarks to compare the Company's performance to its competitors and (iii) as factors in evaluating management’s performance when determining incentive compensation.

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As of both December 28, 2025 and December 29, 2024, the related parties’ receivables balance consisted of $ 0.3 million, due from C&O, which is included in accounts and tenant improvement receivables in the consolidated balance sheet.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Noah Glass, a member of the Company's Board, is the founder and CEO of Olo, Inc.

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$ 2,512 $ 2,473 $ 2,659

As of both December 29, 2024 and December 31, 2023, $ 0.4 million were payable to Olo and were included in accounts payable in the consolidated balance sheets.

As of December 28, 2025 and December 29, 2024, $ 0.3 million and $ 0.4 million, respectively, were payable to Olo and were included in accounts payable in the consolidated balance sheets.

Tax Receivable Agreement

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We expect a payment of $ 7.9 million relating to tax year 2024 to be paid within the next 12 months.

Portillo's Inc.

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PORTILLO'S INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Years Ended

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Tax Receivable Agreement liability 344,524 316,893

Berkshire Partners LLC

In connection with the secondary offering previously discussed in Note 1.

Description Of Business, we purchased LLC Units and shares of Class A common stock using the proceeds of the secondary offering at a price equal to the public offering price less the underwriting discounts and commissions from certain pre-IPO LLC Members and shareholders of the Blocker Companies, including from funds affiliated with Berkshire Partners LLC, which is our controlling shareholder that beneficially owns approximately 18.8 % of the Company as of December 29, 2024.

Redemption of LLC Units

In connection with the redemption of LLC units previously discussed in Note 11.

Stockholders' Equity, Berkshire partners and its affiliates beneficially own approximately 5.2 % of the Company as of December 28, 2025.

Transactions with Non-Controlling Interest Holders

Fiscal Years Ended

(in thousands) December 28, 2025 December 29, 2024

Distributions paid to non-controlling interest holders

$ 1,291 $ 838

Contributions from non-controlling interest holders

SUBSEQUENT EVENTS

Management evaluated events occurring subsequent to December 29, 2024 and other than as noted below determined that no material recognizable subsequent events occurred.

2025 Credit Agreement Closing

On January 27, 2025 (the “2025 Credit Agreement Closing Date”), Holdings, the Borrower, the other Guarantors party thereto, the Lenders from time to time party thereto and Fifth Third Bank, National Association, as Administrative Agent, the L/C Issuer and the Swing Line Lender entered into an amendment (the “Amendment”) to the 2023 Credit Agreement (as amended by the Amendment and as may be amended, restated, supplemented or otherwise modified from time to time thereafter, the “2025 Credit Agreement”).

Capitalized terms used but not defined in this Note 19 have the meaning ascribed to such terms in the Amendment or the 2025 Credit Agreement, as applicable.

The Amendment provides for, among other things, (i) a $ 250 million term loan A facility (the “2025 Term Loan Facility”) and (ii) revolving credit commitments in an initial aggregate principal amount of $ 150 million (the “2025 Revolving Credit Facility” and, together with the Term Loan Facility, the “2025 Facilities”), the proceeds of which will be used to refinance indebtedness under the 2023 Credit Agreement, for general

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

corporate purposes and working capital needs and for other activities permitted under the 2025 Credit Agreement.

The loans under each of the 2025 Facilities mature on January 27, 2030.

The 2025 Facilities are guaranteed, subject to customary exceptions, by all of the Borrower’s wholly-owned domestic restricted subsidiaries and Holdings, and are secured by a lien on substantially all of the Borrower’s assets, including fixed assets and intangibles, and the assets of the Guarantors, in each case, subject to customary exceptions.

The Borrower may, upon notice to the Administrative Agent by the Borrower, at any time or from time to time voluntarily prepay the 2025 Term Loan Facility or the 2025 Revolver Facility in whole or in part without premium or penalty.

The 2025 Term Loan Facility is subject to amortization of principal, payable in quarterly installments on the last day of each fiscal quarter, commencing on the last day of the first full fiscal quarter after the Closing Date (the “Initial Amortization Date”), equal to (i) for the first two years following the 2025 Credit Agreement Closing Date, $ 6.3 million of the original principal amount of the term loans, (ii) for the third and fourth years following the 2025 Credit Agreement Closing Date, $ 12.5 million of the original principal amount of the term loans and (iii) for the fifth year following the 2025 Credit Agreement Closing Date, $ 25.0 million of the original principal amount of the term loans.

The remaining initial aggregate advances under the Term Loan Facility are payable at the maturity of the 2025 Term Loan Facility.

Each Facility bears interest at a rate per annum equal to, (i) in the case of Base Rate Loans, an applicable rate based on a grid ranging from 1.00 % to 1.75 % or, (ii) in the case of Tranche Rate Loans, an applicable rate based on a grid ranging from 2.00 % to 2.75 %, in each case, based on the Consolidated Total Net Rent Adjusted Leverage.

In addition, the Borrower will pay (i) an unused commitment fee of between 0.20 % and 0.25 % on the undrawn commitments under the 2025 Revolving Credit Facility and (ii) Letter of Credit fees of between 2.00 % and 2.75 % on outstanding Letters of Credit, in each case, also based on the Consolidated Total Net Rent Adjusted Leverage.

Failure to comply with these covenants and restrictions could result in an event of default under the 2025 Credit Agreement.

In such an event, all amounts outstanding under the 2025 Credit Agreement, together with any accrued interest, could then be declared immediately due and payable.

2025 Tax Receivable Agreement Amendment

On January 24, 2025, we entered into an Amendment to the Tax Receivable Agreement (the “Amendment") with PHD Group Holdings, LLC and the TRA Party Representative, as defined in the agreement.

The Amendment replaces the LIBOR based interest rate with a Term Secured Overnight Financing Rate (“SOFR”) based rate.

On January 9, 2025, the Board elected Jack Hartung to serve on the Company’s board of directors, ( the “Board”), effective immediately.

In connection with his appointment, Mr.

Hartung was appointed to serve on the Audit Committee of the Board.

On February 11, 2026, we announced that Brett Patterson, 57, who most recently served as Chief Executive Officer of Miller’s Ale House, Inc., will join the Company, serving as the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, effective February 23, 2026, and as principal executive officer, effective February 25, 2026.

Patterson will succeed Mr.

Miles, Jr., who has served as Interim President and Chief Executive Officer since September 21, 2025.

Miles will continue to serve as Chairman of the Board of Directors of the Company (the “Board”).

Upon concluding his tenure as Interim President and Chief Executive Officer, Mr.

Miles is expected to resume his status as an independent director on the Board.

Portillo's Inc.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data