Chili's 2011 Annual Report Download - page 44

Our Board of Directors has authorized a total of $2,885.0 million of share repurchases. As of June 29, 2011,
approximately $445 million was available under our share repurchase authorization. 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. Repurchased common stock is reflected as a reduction of shareholders’ equity.
We have evaluated ways to monetize the value of our owned real estate and determined that the alternatives
considered are more costly than other financing options currently available due to a combination of the income
tax impact and higher effective borrowing rates.
Cash Flow Outlook
We believe that our various sources of capital, including future cash flow from operating activities of
continuing operations and availability under our existing credit facility are adequate to finance operations as well
as the repayment of current debt obligations. We are not aware of any other event or trend that would potentially
affect our liquidity. In the event such a trend develops, we believe that there are sufficient funds available under
our credit facility and from our internal cash generating capabilities to adequately manage our ongoing business.
Payments due under our contractual obligations for outstanding indebtedness, purchase obligations as
defined by the Securities and Exchange Commission (“SEC”), and the expiration of the credit facility as of
June 29, 2011 are as follows:
Payments Due by Period
(in thousands)
Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Long-term debt(a) .............. $524,582 $ 36,675 $362,907 $125,000 $ —
Capital leases .................. 81,318 5,367 11,054 11,498 53,399
Operating leases ............... 541,454 100,441 178,973 132,955 129,085
Purchase obligations(b) .......... 123,779 20,167 25,937 22,037 55,638
Amount of Revolving Credit Facility Expiration by Period
(in thousands)
Total
Commitment
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Revolving credit facility ......... $200,000 $ — $ — $200,000 $ —
(a) Long-term debt consists of amounts owed on the existing five-year term loan and 5.75% notes, as
well as remaining interest payments on the 5.75% notes totaling $50.0 million. No amount was
outstanding under the revolving credit facility as of June 29, 2011.
(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 fountain beverages, procurement outsourcing, and energy and
exclude agreements that are cancelable without significant penalty.
In addition to the amounts shown in the table above, $9.1 million of unrecognized tax benefits have been
recorded as liabilities. The timing and amounts of future cash payments related to these 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.
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