Chili's 2015 Annual Report Download - page 46

the term loan and entered into a new $750 million revolving credit facility. Approximately $345.8 million was
drawn from the new revolver and the proceeds were used to pay off the outstanding balances of the term loan and
$250 million revolver in the amount of $168.8 million and $177.0 million, respectively. During the fourth quarter
of fiscal 2015, an additional $38.0 million was drawn from the new revolver primarily to fund share repurchases.
Subsequent to the end of the fiscal year, an additional $135.5 million was borrowed from the $750 million
revolving credit facility primarily to fund the acquisition of a franchisee which owns 103 Chili’s restaurants.
The maturity date of the $750 million revolving credit facility is March 12, 2020. The revolving credit
facility bears interest of 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 2.00%. Based on our current credit rating, we are
paying interest at a rate of LIBOR plus 1.38%. One month LIBOR at June 24, 2015 was approximately 0.19%.
As of June 24, 2015, $366.2 million of credit is available under the revolving credit facility. As of June 24, 2015,
we were in compliance with all financial debt covenants.
As of June 24, 2015, our credit rating by both Standard and Poor’s (“S&P”) and Fitch Ratings (“Fitch”) was
BBB- (investment grade) with a stable outlook. Our corporate family rating by Moody’s was Ba1 (non-
investment grade) and our senior unsecured rating was Ba2 (non-investment grade) with a stable outlook. Our
goal is to retain our investment grade rating from S&P and Fitch and ultimately regain our investment grade
rating from Moody’s.
We paid dividends of $70.8 million to common stock shareholders in fiscal 2015 compared to $63.4 million
in dividends paid in fiscal 2014. Our Board of Directors approved a 17% increase in the quarterly dividend from
$0.24 to $0.28 per share effective with the September 2014 dividend. Additionally, we declared a quarterly
dividend late in fiscal 2015 which was paid early in fiscal 2016 on June 25, 2015. Subsequent to the end of the
fiscal year, our Board of Directors approved a 14% increase in the quarterly dividend from $0.28 to $0.32 per
share effective with the September 2015 dividend which was declared in August 2015. We will continue to target
a 40 percent dividend payout ratio to provide additional return to shareholders.
In August 2014, our Board of Directors authorized a $350.0 million increase to our existing share
repurchase program resulting in total authorizations of $3,935.0 million. As of June 24, 2015, approximately
$361 million was available under our share repurchase authorizations. Subsequent to the end of the fiscal year,
our Board of Directors authorized an additional $250 million in share repurchases, bringing the total
authorization to $4,185.0 million. 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. During fiscal 2015, approximately 765,000
stock options were exercised resulting in cash proceeds of $16.3 million.
Net cash used in financing activities for fiscal 2014 increased to $201.3 million compared to $152.6 million
in the prior year primarily due to the net cash inflow related to the debt offering in the prior year, partially offset
by decreased spend on share repurchases.
We repurchased approximately 5.1 million shares of our common stock for $239.6 million during fiscal
2014 including shares purchased as part of our share repurchase program and to satisfy team member tax
withholding obligations on the vesting of restricted shares.
In May 2013, we issued $550.0 million of notes consisting of two tranches—$250.0 million of 2.60% notes
due in May 2018 and $300.0 million of 3.88% notes due in May 2023. We received proceeds totaling
approximately $549.5 million prior to debt issuance costs and utilized the proceeds to redeem the 5.75% notes
due in June 2014, pay down the revolver and fund share repurchases. The new notes required semi-annual
interest payments which began in the second quarter of fiscal 2014.
In fiscal 2014, our credit facility included a $250 million revolver and a $250 million term loan which were
scheduled to mature in August 2016. During fiscal 2014, $120.0 million was drawn from the revolver to fund
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