Chili's 2015 Annual Report Download - page 44

costs associated with closed restaurants. We also incurred $2.1 million in severance and other benefits related to
organizational changes made during the fiscal year. The severance charges include expenses related to the
accelerated vesting of stock-based compensation awards. Furthermore, a $0.6 million gain was recorded
primarily related to land sales.
Other gains and charges in fiscal 2013 primarily included a charge of $15.8 million representing the
remaining interest payments and unamortized debt issuance costs and discount resulting from the redemption of
the 5.75% notes. Additionally, other gains and charges included $5.3 million of charges related to the impairment
of the company-owned restaurant in Brazil and certain underperforming restaurants, $2.3 million of lease
termination charges related to previously closed restaurants, and $2.2 million in severance and other benefits.
These charges were partially offset by net gains of $11.2 million on the sale of assets, including an $8.3 million
gain on the sale of our remaining 16.6% interest in Macaroni Grill and net gains of $2.9 million related to land
sales.
Interest expense increased $0.9 million in fiscal 2015 resulting from higher borrowing balances, partially
offset by lower interest rates. Interest expense decreased $1.0 million in fiscal 2014 resulting from lower interest
rates partially offset by higher borrowing balances.
Other, net in fiscal 2015, 2014, and 2013 includes $1.8 million, $1.9 million and $2.3 million, respectively,
of sublease income primarily from franchisees as part of the respective sale agreements, as well as other
subtenants.
INCOME TAXES
The effective income tax rate for fiscal 2015 increased to 30.8% compared to 28.8% in the prior year
primarily due to the impact of tax benefits related to litigation charges in the prior year.
The effective income tax rate for fiscal 2014 decreased to 28.8% compared to 29.1% in the prior year
primarily due to the increased tax benefit resulting from litigation charges of $39.5 million in fiscal 2014 as well
as reserve adjustments related to resolved tax positions.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Cash Flow Provided By Operating Activities
During fiscal 2015, net cash flow provided by operating activities was $368.6 million compared to $359.8
million in the prior year. The increase was driven by an increase in current year earnings, partially offset by
unfavorable changes in working capital. Cash flow provided by operating activities was negatively impacted by
the payment of the Hohnbaum legal settlement net of taxes and the timing of operational payments.
During fiscal 2014, net cash flow provided by operating activities was $359.8 million compared to $290.7
million in the prior year. The increase was driven by an increase in fiscal 2014 earnings excluding non-cash
charges primarily related to litigation reserves and favorable changes in working capital.
Cash Flow Used In Investing Activities
2015 2014 2013
Net cash used in investing activities (in thousands):
Payments for property and equipment ......... $(140,262) $(161,066) $(131,531)
Proceeds from sale of assets ................ 1,950 888 17,157
Payments for purchase of restaurants ......... 0 0 (24,622)
Insurance recoveries ...................... 0 0 1,152
$(138,312) $(160,178) $(137,844)
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