Stockholders' Equity

6 Months Ended

Jul. 01, 2014

Stockholders' Equity

Stockholders' Equity

5. Stockholders’ Equity

During the second quarter of fiscal 2014, our Board of Directors approved a cash dividend of $0.14 per share which was paid on May 20, 2014 to stockholders of record as of the close of business on May 7, 2014.  On July 21, 2014, our Board approved a cash dividend of $0.165 per share to be paid on August 19, 2014 to stockholders of record as of the close of business on August 6, 2014, representing an increase of 18% over our previously declared quarterly dividend.  Future decisions to pay, increase or decrease dividends continue to be at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements and other such factors that the Board considers relevant.

In July 2013, our Board increased the authorization to repurchase our common stock by 7.5 million shares to 48.5 million shares.  Under this and all previous authorizations, we have cumulatively repurchased 41.5 million shares at a total cost of $1,138.7 million through July 1, 2014, including 0.5 million shares of our common stock at a cost of $24.2 million during the second quarter of fiscal 2014.

Our share repurchase authorization does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time.  The timing and number of shares repurchased pursuant to the share repurchase authorization are subject to a number of factors, including legal constraints and financial covenants under our Facility that limit share repurchases based on a defined ratio.  See Note 3 for further discussion of our long-term debt.  Shares may be repurchased in the open market or through privately negotiated transactions at times and prices considered appropriate by us.  Purchases in the open market are made in compliance with Rule 10b-18 of the Securities Exchange Act of 1934 (the “Act”).  We make the determination to repurchase shares based on several factors, including an evaluation of current and future capital needs associated with new restaurant development, current and forecasted cash flows, including dividend payments, a review of our capital structure and cost of capital, our share price and current market conditions.  Our objectives with regard to share repurchases are to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth.

In October 2013, our Board approved the adoption of a prearranged share repurchase plan under Rule 10b5-1 (“10b5-1 Plan”) of the Act, effective from January 2, 2014 through July 1, 2014.  This 10b5-1 Plan terminated on July 1, 2014 in accordance with its terms.  On July 21, 2014, our Board approved the adoption of a new 10b5-1 Plan, which is effective from September 5, 2014 through December 31, 2014.

On July 21, 2014, our Board also approved the terms of a share repurchase plan (“10b-18 Plan”) under which we are authorized to repurchase shares of our common stock in open market transactions in accordance with Rule 10b-18 of the Act, effective from July 28, 2014 through August 12, 2014.

On February 27, 2014, we entered into a collared accelerated stock repurchase (“ASR”) agreement with a financial institution to repurchase $75 million of our common stock.  The minimum number of shares to be repurchased, 1.4 million, was delivered in March  2014.  Upon settlement of the ASR program, we received an additional 0.2 million shares on July 21, 2014.