Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity

Stockholders' Equity

5. Stockholders’ Equity

On February 9, 2015, our Board of Directors approved a cash dividend of $0.165 per share which was paid on March 10, 2015 to the stockholders of record on February 25, 2015.  Future decisions to pay, increase or decrease dividends are 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 43.6 million shares at a total cost of $1,239.1 million through March 31, 2015, including 1.7 million shares of our common stock at a cost of $80.4 million during the first quarter of fiscal 2015.  The shares repurchased in the first quarter of fiscal 2015 include 1.5 million shares acquired through our ASR program.  Repurchased common stock is reflected as a reduction of stockholders’ equity.

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.  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 under the Securities Exchange Act of 1934, as amended (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.  The timing and number of shares repurchased are also subject to 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.  Our objectives with regards 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.  On July 21, 2014, our Board approved the adoption of a new 10b5-1 Plan, effective from September 5, 2014 through December 31, 2014.  These 10b5-1 Plans terminated on July 1, 2014 and December 31, 2014, respectively, in accordance with their terms.  On October 20, 2014, our Board approved the adoption of another 10b5-1 Plan, which is effective from January 2, 2015 through June 30, 2015.

On February 27, 2014, we entered into a collared 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.

On February 27, 2015, we entered into an ASR program with a financial institution to repurchase $75 million of our common stock.  The number of common shares to be repurchased under the ASR program generally will be based on the volume weighted average share price of our common stock.  The program is subject to collar provisions that establish minimum and maximum number of shares based on the volume weighted average share price over an initial hedge period.  The minimum number of shares to be repurchased, 1.5 million, was delivered during March 2015.  The maximum number of shares that can be received under the program is 1.7 million and will be determined based on the market price of our common stock from March 10, 2015 through the term of the program.  We will receive additional shares, if any, no later than July 30, 2015.