Chili's 2008 Annual Report Download - page 43

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Payments due under our contractual obligations for outstanding indebtedness, purchase obligations as
defined by the Securities and Exchange Commission (‘‘SEC’’), and the expiration of credit facilities as of
June 25, 2008 are as follows:
Payments Due by Period
(in thousands)
Less than 1-3 3-5 More than
Total 1 Year Years Years 5 Years
Long-term debt(a) ...... $960,570 $175,250 $434,500 $ 34,500 $316,320
Capital leases .......... 70,211 4,948 10,174 10,586 44,503
Operating leases ........ 870,645 121,864 220,386 182,809 345,586
Purchase obligations(b) . . . 21,340 6,940 14,400 — —
Amount of Credit Facility Expiration by Period
(in thousands)
Total Less than 1-3 3-5 More than
Commitment 1 year(c) Years Years 5 Years
Credit facilities ......... $550,000 $250,000 $300,000 $ — $ —
(a) Long-term debt consists of amounts owed on the three-year term loan, 5.75% notes, credit
facilities and accrued interest on fixed-rate obligations totaling $103.5 million.
(b) A ‘‘purchase obligation’’ is defined as an agreement to purchase goods or services that is
enforceable and legally binding on us and that specifies all significant terms, including: fixed
or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transaction. Our purchase obligations primarily consist of
long-term obligations for the purchase of telecommunication and health services and exclude
agreements that are cancelable without significant penalty.
(c) $150.0 million relates to an uncommitted obligation giving the lender an option not to extend
funding. $100.0 million relates to a revolving credit facility that expires in September 2008.
In addition to the amounts shown in the table above, $27.1 million of unrecognized tax benefits have
been recorded as liabilities in accordance with Financial Accounting Standards Board (‘‘FASB’’)
Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes’’ (‘‘FIN 48’’). The timing and amounts
of future cash payments related to the FIN 48 liabilities are uncertain.
IMPACT OF INFLATION
We have experienced impact from inflation. Inflation has caused increased food, labor and benefits
costs and has increased our operating expenses. To the extent permitted by competition, increased costs
are recovered through a combination of menu price increases and reviewing, then implementing,
alternative products or processes, or by implementing other cost reduction procedures.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are disclosed in Note 1 to our consolidated financial statements.
The following discussion addresses our most critical accounting estimates, which are those that are most
important to the portrayal of our financial condition and results, and that require significant judgment.
F-9