Chili's 2012 Annual Report Download - page 63

A reconciliation of unrecognized tax benefits for the fiscal years ended June 27, 2012 and June 29, 2011 are
as follows (in thousands):
2012 2011
Balance at beginning of year ............................ $9,142 $18,850
Additions based on tax positions related to the current
year .......................................... 927 1,199
Additions based on tax positions related to prior years .... 260 188
Settlements with tax authorities ...................... 0 (5,387)
Expiration of statute of limitations .................... (2,993) (5,708)
Balance at end of year ................................. $7,336 $ 9,142
The total amount of unrecognized tax benefits as of June 27, 2012 was $7.3 million ($5.0 million of which
would favorably affect the effective tax rate if resolved in our favor due to the effect of deferred tax
benefits). During the next twelve months, we anticipate that it is reasonably possible that the amount of
unrecognized tax benefits could be reduced by approximately $0.6 million ($0.4 million of which would affect
the effective tax rate due to the effect of deferred tax benefits) either because our tax position will be sustained
upon audit or as a result of the expiration of the statute of limitations for specific jurisdictions.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax
expense. During 2012 we recognized a benefit of approximately $0.3 million in interest. As of June 27, 2012, we
had $2.9 million ($2.0 million net of a $0.9 million Federal deferred tax benefit) of interest and penalties accrued,
compared to $3.0 million ($2.3 million net of a $0.7 million Federal deferred tax benefit) at June 29, 2011.
8. DEBT
Long-term debt consists of the following (in thousands):
2012 2011
Term loan ..................................... $237,500 $185,000
5.75% notes .................................... 289,709 289,557
Revolving credit facility .......................... 40,000 0
Capital lease obligations (see Note 9) ................ 48,015 50,106
615,224 524,663
Less current installments .......................... (27,334) (22,091)
$587,890 $502,572
In August 2011, we executed a revised unsecured senior credit facility increasing total capacity from $400
million to $500 million. The maturity date of the revised credit facility is August 2016. The revised facility
includes a $250 million revolver and a $250 million term loan. In connection with the revision of the facility, we
increased the term loan borrowings by $70.0 million. During fiscal 2012, we paid our required installments
totaling $17.5 million bringing the outstanding balance to $237.5 million. In April 2012, $40 million was drawn
from the revolver to fund share repurchases, none of which was repaid. As of June 27, 2012, we had $210 million
of credit available under the revolver.
The revised term loan and revolving credit facility bear interest at LIBOR plus an applicable margin, which
is a function of our credit rating and debt to cash flow ratio, but is subject to a maximum of LIBOR plus 2.50%.
Based on our current credit rating, we are paying interest at a rate of LIBOR plus 1.63%. One month LIBOR at
June 27, 2012 was approximately 0.25%.
In May 2004, we issued $300.0 million of 5.75% notes and received proceeds totaling approximately $298.4
million prior to debt issuance costs. The notes require semi-annual interest payments and mature in June 2014.
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