Chili's 2012 Annual Report Download - page 58

(r) Preferred Stock
Our Board of Directors is authorized to provide for the issuance of 1.0 million preferred shares with a par
value of $1.00 per share, in one or more series, and to fix the voting rights, liquidation preferences, dividend
rates, conversion rights, redemption rights, and terms, including sinking fund provisions, and certain other rights
and preferences. As of June 27, 2012, no preferred shares were issued.
(s) Shareholders’ Equity
Our Board of Directors has authorized a total of $2,885.0 million of share repurchases. We repurchased
approximately 11.1 million shares of our common stock for $287.3 million during fiscal 2012. As of June 27,
2012, approximately $160 million was available under our share repurchase authorizations. Our stock repurchase
plan has been and will be used to return capital to shareholders and to minimize the dilutive impact of stock
options and other share-based awards. We evaluate potential share repurchases under our plan based on several
factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and
planned investment and financing needs. Repurchased common stock is reflected as a reduction of shareholders’
equity. During fiscal 2012, approximately 2.0 million stock options were exercised resulting in cash proceeds of
$43.4 million.
We paid dividends of $50.1 million to common stock shareholders during fiscal 2012, compared to
$53.2 million in the prior year. Additionally, we declared a quarterly dividend of $11.9 million, or $0.16 per
share, in June 2012 which was paid on June 28, 2012.
(t) Comprehensive Income
Comprehensive income is defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. Fiscal 2012, 2011 and 2010
comprehensive income consists of net income.
(u) Net Income Per Share
Basic earnings per share is computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue common stock were exercised or
converted into common stock. For the calculation of diluted net income per share, the basic weighted average
number of shares is increased by the dilutive effect of stock options and restricted share awards, determined
using the treasury stock method. We had approximately 287,000 stock options and restricted share awards
outstanding at June 27, 2012, 1.7 million stock options and restricted share awards outstanding at June 29, 2011,
and 6.9 million stock options and restricted share awards outstanding at June 30, 2010 that were not included in
the dilutive earnings per share calculation because the effect would have been antidilutive.
(v) Segment Reporting
Operating segments are components of an enterprise about which separate financial information is available
that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in
assessing performance. Two or more operating segments may be aggregated into a single operating segment if
they have similar economic characteristics and are similar in the following areas:
• The nature of products and services
• Nature of production processes
• Type or class of customer
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