LIQUIDITY AND CAPITAL RESOURCES for Brinker

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Brinker International (EAT)

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EAT » Topics » LIQUIDITY AND CAPITAL RESOURCES

This excerpt taken from the EAT 10-Q filed May 4, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. Net cash provided by operating activities for the first three quarters of fiscal 2009 decreased to approximately $184.5 million compared to $296.8 million for the first three quarters in the prior year primarily due to a decline in operating profitability as well as the timing of operational payments which was primarily due to the sale of Macaroni Grill, restaurant closures and the reduction of company-owned new restaurant development in the current year. This decrease was partially offset by the cash impact of recognizing the loss on the sale of Macaroni Grill in fiscal 2009 for tax purposes.

Capital expenditures consist of ongoing remodel investments, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, investments in information technology infrastructure, and purchases of land for future restaurant sites. Capital expenditures were $74.6 million for the first three quarters of fiscal 2009 compared to $223.1 million for the same period of fiscal 2008. The reduction in capital expenditures is primarily due to a decrease in

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company-owned restaurants developed in the first three quarters of fiscal 2009 compared to the same period of prior year. We estimate that our capital expenditures during fiscal 2009, excluding Macaroni Grill, will be in the range of $110 million to $115 million and will be funded entirely by cash from operations.

Excluding the impact of assets held for sale, the working capital deficit decreased to $125.9 million at March 25, 2009 from $188.2 million at June 25, 2008 primarily due to a decrease in operational payments related to the sale of Macaroni Grill, a decrease in deferred tax assets resulting from the tax effects of the loss on the sale of Macaroni Grill in the second quarter, reduced income taxes payable and the retention of cash to fund operational needs.

We paid dividends of $11.2 million, or $0.11 per share, to common stock shareholders in March 2009 and a total of $34.1 million, or $0.33 per share, to common stock shareholders year-to-date. We currently plan to keep future quarterly dividend payouts stable at $0.11 per share.

The Board of Directors has authorized a total of $2,060.0 million in share repurchases, which 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. As of March 25, 2009, approximately $60 million was available under our share repurchase authorizations. We did not repurchase any common shares under our share repurchase plan during the first three quarters of fiscal 2009. We have currently placed a moratorium on share repurchases but, in the future, we may consider additional share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. During the first three quarters of fiscal 2009, approximately 671,000 restricted share awards vested with a fair value of $12.6 million. Approximately 199,000 of these shares were repurchased from employees upon vesting for $3.7 million to satisfy minimum tax withholding obligations. The repurchased common stock is reflected as a reduction of shareholders’ equity.

As of June 25, 2008, we had credit facilities aggregating $550 million, consisting of a revolving credit facility of $300 million and uncommitted credit facilities of $250 million. In February 2009, we completed the renewal of our revolving credit facility which was set to expire in October 2009. The new facility was reduced to $215 million, bears interest at LIBOR plus 3.25% and expires in February 2012. The decision to downsize our total borrowing capacity under the new revolving credit facility was a result of the Macaroni Grill divestiture, reduced new company-owned restaurant development and our focus on debt repayment.

During the second quarter of fiscal 2009, Standard and Poor’s (“S&P”) reaffirmed our debt rating of BBB- (investment grade) with a stable outlook. However, Moody’s downgraded our corporate family rating to Ba1 (non-investment grade) and our senior unsecured note rating to Ba2 (non-investment grade) with a stable outlook. Under the terms and conditions of our uncommitted credit facility agreements, we had to maintain an investment grade rating with both S&P and Moody’s in order to utilize the credit facilities. As a result of our split rating, our uncommitted credit facilities totaling $250 million are no longer available and the spread over LIBOR has increased since year-end on our term loan (LIBOR plus 0.95%). We manage total borrowings under all of our credit facilities to never exceed total capacity under the revolving credit facility. As a result, outstanding balances on the uncommitted credit facilities were repaid in the second quarter with funds drawn on the revolving credit facility. As of March 25, 2009, we have $184.3 million available to us under our revolving credit facility and we are in compliance with all financial debt covenants.

Our balance sheet is a primary focus as we have committed to reducing our leverage allowing us to retain the investment grade rating from S&P and ultimately regain our investment grade rating from Moody’s. To accomplish this goal, payments of $59.3 million were made on the revolving credit facility during the third quarter of fiscal 2009 resulting in fiscal year-to-date debt reductions of $123.3 million. Subsequent

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to the end of the third quarter, the remaining $30.7 million balance on the revolving credit facility was paid down to zero. Additionally, subsequent to the end of the third quarter, we received a $6.0 million distribution from Mac Acquisition that represented substantially all of our equity investment in the entity and cancelled the three-year $10.0 million unsecured standby letter of credit agreement. We currently plan to continue utilizing available free cash flow to pay down debt in fiscal 2009 and 2010. We have also reduced capital expenditures for fiscal 2009, curtailed virtually all company-owned new restaurant development in fiscal 2010 and placed a moratorium on all share repurchase activity to ensure we maintain adequate cash flow to meet our current obligations and continue to pay down debt.

We believe that our various sources of capital, including cash flow from operating activities 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.

This excerpt taken from the EAT 10-Q filed Feb 2, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. We expect our ability to generate solid cash flows from operations to continue into the future. Net cash provided by operating activities for the first two quarters of fiscal 2009 decreased to approximately $94.8 million compared to $241.1 million for the first two quarters in the prior year primarily due to a decline in operating profitability, a reduction in gift card sales and the timing of income tax payments as well as operational payments and receipts.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, investments in information technology infrastructure and ongoing remodel investments. Capital expenditures were $59.6 million for the first two quarters of fiscal 2009 compared to $159.2 million for the same period of fiscal 2008. The reduction in capital expenditures is primarily due to a decrease in company-owned restaurants developed in the first two quarters of fiscal 2009 compared to the same period of prior year. We estimate that our capital expenditures during fiscal 2009, excluding Macaroni Grill, will be approximately $110 million and will be funded entirely by cash from operations.

Excluding the impact of assets held for sale, the working capital deficit increased to $199.6 million at December 24, 2008 from $188.2 million at June 25, 2008 primarily due to the reclassification of $90 million of long-term debt to current liabilities, partially offset by an increase in third party gift card receivables due to sales during the holiday season and timing of operational payments and receipts.

We paid dividends of $11.2 million, or $0.11 per share, to common stock shareholders in December 2008 and a total of $22.9 million, or $0.22 per share, to common stock shareholders year-to-date. We plan to keep future quarterly dividend payouts stable at $0.11 per share.

The Board of Directors has authorized a total of $2,060.0 million in share repurchases, which 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. As of December 24, 2008, approximately $60 million was available under our share repurchase authorizations. We did not repurchase any common shares under our share repurchase

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plan during the first two quarters of fiscal 2009. We have currently placed a moratorium on share repurchases but, in the future, we may consider additional share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. During the first two quarters of fiscal 2009, approximately 642,000 restricted share awards vested with a fair value of $12.3 million. Approximately 190,000 of these shares were repurchased from employees upon vesting for $3.6 million to satisfy minimum tax withholding obligations. The repurchased common stock is reflected as a reduction of shareholders’ equity.

During the second quarter of fiscal 2009, Standard and Poor’s (“S&P”) reaffirmed our debt rating of BBB- (investment grade) with a stable outlook. However, Moody’s downgraded our corporate family rating to Ba1 (non-investment grade) and our senior unsecured note rating to Ba2 (non-investment grade) with a stable outlook. As a result of our split rating, our borrowing costs will increase due to increased spreads over LIBOR on our term loan (LIBOR plus 0.95%) and revolving credit facility (LIBOR plus 1.25%). Additionally, under the terms and conditions of our uncommitted credit facility agreements, we have to maintain an investment grade rating with both S&P and Moody’s in order to utilize the credit facilities. Therefore, our uncommitted credit facilities totaling $250 million are no longer available. We manage total borrowings under all of our credit facilities to never exceed total capacity under the revolving credit facility. As a result, outstanding balances on the uncommitted credit facilities were repaid with funds drawn on the revolving credit facility. As of December 24, 2008, we have $90 million outstanding and $210 million available to us under our revolving credit facility. Subsequent to December 24, 2008, we paid down the outstanding balance on the revolving credit facility by approximately $20 million.

Our revolving credit facility of $300 million expires in October 2009. As a result, the $90 million outstanding under this facility has been classified as current in our consolidated balance sheet as of December 24, 2008. We are in the final stages of renewing this credit facility for a three-year term with a syndicate of banks and, based on the levels of commitment provided in discussions to date with lenders, we expect to complete the transaction in February 2009. Under the new revolving credit facility, the spreads over LIBOR will increase due to market conditions as well as a change in our credit rating. Due to the divestiture of Macaroni Grill, the reduction in new company-owned restaurant development and our focus on debt repayment, we anticipate that our future borrowing needs will be reduced and, therefore, we have elected to reduce the size of the revolving credit facility to a level that still provides us with adequate liquidity. As of December 24, 2008, we are in compliance with all financial debt covenants.

Our balance sheet is a primary focus as we have committed to reducing our leverage allowing us to retain the investment grade rating from S&P and ultimately regain our investment grade rating from Moody’s. To accomplish this goal, we used cash proceeds from the sale of Macaroni Grill as well as free cash flow to pay down our credit facilities by $60 million in the second quarter, leaving the remainder of the Macaroni Grill cash proceeds to fund our short term working capital needs. We currently plan to continue utilizing available free cash flow to pay down debt in fiscal 2009 and 2010. We have also reduced capital expenditures for fiscal 2009, eliminated virtually all company-owned restaurant development in fiscal 2010 and placed a moratorium on all share repurchase activity to ensure we maintain adequate cash flow to meet our current obligations and continue to pay down debt.

We believe that our various sources of capital, including cash flow from operating activities and availability under our existing and future 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.

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This excerpt taken from the EAT 10-Q filed Oct 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. We expect our ability to generate solid cash flows from operations to continue into the future. Net cash provided by operating activities for the first quarter of fiscal 2009 decreased to approximately $53.4 million compared to $92.9 million in the prior year primarily due to lower income (adjusted for non-cash items) driven by a reduction in revenues and incremental margin pressures as well as the timing of operational payments.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, investments in information technology infrastructure and ongoing reimage programs. Capital expenditures were $31.3 million for the first quarter of fiscal 2009 compared to $76.9 million for the same period of fiscal 2008. The reduction in capital expenditures is primarily due to a decrease in company-owned restaurants developed in the first quarter of fiscal 2009 compared to the same period of prior year. We estimate that our capital expenditures during fiscal 2009 will be approximately $135 to $145 million and we will continue to evaluate capital spending throughout the remainder of the year. Capital expenditures will be funded entirely by cash from operations and existing credit facilities.

Excluding the impact of assets held for sale, the working capital deficit decreased to $158.8 million at September 24, 2008 from $188.2 million at June 25, 2008 primarily due to the timing of operational payments and receipts.

We paid dividends of $11.7 million, or $0.11 per share, to common stock shareholders in September 2008.

The Board of Directors has authorized a total of $2,060.0 million of share repurchases, which 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. As of September 24, 2008, approximately $60 million was available under our share repurchase authorizations. We did not repurchase any common shares under our share repurchase plan during the first quarter of fiscal 2009. In the future, we may consider additional share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. During the first quarter of fiscal 2009, approximately 640,000 restricted share awards vested with a fair value of $12.3 million. Approximately 190,000 of these shares were repurchased from employees upon vesting for $3.6 million to satisfy minimum tax withholding obligations. The repurchased common stock is reflected as a reduction of shareholders’ equity.

In September 2008, we extended the expiration date of our $100.0 million uncommitted credit facility through September 2009.

In October 2008, Moody’s placed Brinker’s credit ratings under review for possible downgrade prompted by our revised earnings expectations for fiscal 2009. Moody’s review will focus on our ability to improve operating performance and debt protection metrics over the intermediate term. As a result of this review, the availability under our $150 million uncommitted credit facility decreased to approximately $50 million. If our current rating is confirmed, the availability under this facility will return to $150 million. However, if we are downgraded by the rating agency, our uncommitted credit facilities totaling $250 million will no longer be available. The review and subsequent outcome of the review do not have any impact on the availability under our $300 million revolving credit facility. In late October, Standard & Poor’s reviewed Brinker’s outlook also prompted by our revised earnings expectations. The credit rating remained unchanged at BBB- (investment grade) with a stable outlook. We are committed to maintaining our investment grade credit rating and are taking actions to ensure our current investment grade rating is reaffirmed. We expect to receive net cash proceeds of $125.5 million, excluding fees and expenses associated with the closing of the transaction, from the sale of Macaroni Grill in the second quarter of fiscal 2009 and will use the proceeds to pay down debt. In addition, we are reducing planned capital expenditures for fiscal 2009, eliminating almost all company-owned restaurant development in fiscal 2010 and suspending all share repurchase activity to ensure we maintain our investment grade rating. We expect this review to be completed and a determination made before the end of the second quarter of fiscal 2009.

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We believe that our various sources of capital, including cash flows from operating activities, availability under existing credit facilities, and the ability to acquire financing, 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 facilities and from our internal cash generating capabilities to adequately manage our ongoing business.

This excerpt taken from the EAT 10-Q filed May 5, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. We expect our ability to generate strong cash flows from operations to continue into the future. Net cash provided by operating activities of continuing operations for the first nine months of fiscal 2008 decreased to approximately $255.8 million compared to $336.4 million in the prior year due to lower adjusted earnings, reduced income taxes payable and the timing of operational payments and receipts.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $211.5 million for the first three quarters of fiscal 2008 compared to $287.9 million for the same period of fiscal 2007. The reduction in capital expenditures is primarily due to a decrease in new restaurants developed this year. We estimate that our capital expenditures for fiscal 2008 will be approximately $265 million and will be funded entirely from operations and existing credit facilities.

On January 31, 2008, we announced the declaration of a cash dividend to common stock shareholders in the amount of $0.11 per share. Dividends of $11.1 million were paid in March 2008 and we have paid approximately $31.8 million in dividends year-to-date.

The Board of Directors has authorized a total of $2,060.0 million in share repurchases, which 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. In June 2007, we entered into a written trading plan in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which provided for the purchase of up to $140.0 million of shares of our common stock. Following the completion of this plan, we entered into another 10b5-1 plan for the purchase of up to $100.0 million of shares of our common stock in November 2007. The latest trading plan was completed on November 23, 2007. Pursuant to our stock repurchase plan, we repurchased approximately 9.1 million shares of our common stock for approximately $240 million during the first three quarters of fiscal 2008, which was funded using proceeds from the sales of restaurants to franchisees. In the future, we may consider additional share repurchases based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

In August 2007, we extended the $50.0 million uncommitted credit facility through August 2008. In September 2007, we increased the $50.0 million uncommitted credit facility to $100.0 million and extended the expiration date to September 2008.

On October 24, 2007 we entered into a three-year term loan agreement for $400 million and terminated the one-year unsecured committed credit facility of $400 million set to expire in April 2008. The term loan proceeds were used to pay off all outstanding amounts under the one-year unsecured committed credit facility. The term loan bears interest at LIBOR plus an applicable margin, which is a function of our credit rating at such time, but is subject to a maximum of LIBOR plus 1.5% Based on our current credit rating, we are paying interest at a rate of LIBOR plus 0.65%.

Excluding the impact of assets held for sale, the working capital deficit decreased to $226.2 million at March 26, 2008 from $271.7 million at June 27, 2007 primarily due to increases in income taxes receivable and deferred tax assets resulting from declining earnings and tax law changes that provide additional bonus depreciation for capital asset purchases during calendar year 2008. These decreases were partially offset by increases in accounts payable due to timing of operational payments, increases in gift card liabilities from the holiday season and increases in lease reserves related to restaurant closures that occurred in the third quarter of fiscal 2008.

We believe that our various sources of capital, including availability under existing credit facilities, ability to acquire additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations. We also expect to receive cash proceeds from the sale of Macaroni Grill in the first half of fiscal 2009. When the timing and amount of the proceeds are firmly established, we will make the determination as to the appropriate use of the funds for the business at that time. 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 facilities and from our internal cash generating capabilities to adequately manage our ongoing business.

This excerpt taken from the EAT 10-Q filed Jan 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. We expect our ability to generate strong cash flows from operations to continue into the future. Net cash provided by operating activities of continuing operations decreased to $214.4 million for the first two quarters of fiscal 2008 from $256.6 million for the first two quarters of fiscal 2007 primarily due to the sale of 173 restaurants to franchisees as well as declines in operating earnings adjusted for non-cash items and the timing and amount of operational receipts and payments.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $149.4 million for the first two quarters of fiscal 2008 compared to $185.8 million for the same period of fiscal 2007. We estimate that our capital expenditures for fiscal 2008 will be approximately $330 to $340 million and will be funded entirely from operations and existing credit facilities.

In November 2007, we announced the declaration of a cash dividend to common stock shareholders in the amount of $0.11 per share which represented a 22% increase in our quarterly dividend. Dividends of $11.1 million were paid in December 2007 and we have paid approximately $20.6 million in dividends year-to-date.

The Board of Directors has authorized a total of $2,060.0 million in share repurchases, which 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. In June 2007, we entered into a written trading plan in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which provided for the purchase of up to $140.0 million of shares of our common stock. Following the expiration of this plan, we entered into another 10b5-1 plan for the purchase of up to $100.0 million of shares of our common stock in November 2007. We terminated the latest trading plan on November 23, 2007. Pursuant to our stock repurchase plan, we repurchased approximately 9.1 million shares of our common stock for approximately $240 million during the first two quarters of fiscal 2008, which was funded through existing credit facilities.

In the future, we may consider additional share repurchases based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

On October 24, 2007 we entered into a three-year term loan agreement for $400.0 million and terminated the one-year unsecured committed credit facility of $400.0 million set to expire in April 2008. The term loan proceeds were used to pay off all outstanding amounts under the one-year unsecured committed credit facility. The term loan bears interest at LIBOR plus an applicable margin, which is a function of our credit rating at such time, but is subject to a maximum of LIBOR plus 1.5% Based on our current credit rating, we are paying interest at a rate of LIBOR plus 0.65%.

Excluding the impact of assets held for sale, the working capital deficit increased to $310.0 million at December 26, 2007 from $270.7 million at June 27, 2007 primarily due to the increase in gift card liabilities as a result of increased holiday sales and an increase in income taxes payable due to timing of payments. These increases were partially offset by an increase in third party gift card receivables as well as the reclassification of certain tax exposures to long-term pursuant to the adoption of FIN 48.

We believe that our various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, 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 facilities and from our internal cash generating capabilities to adequately manage our ongoing business.

This excerpt taken from the EAT 10-Q filed Nov 5, 2007.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash flows generated from our restaurant operations. We expect our ability to generate strong cash flows from operations to continue into the future. Net cash provided by operating activities of continuing operations decreased to $77.9 million for the first quarter of fiscal 2008 from $92.6 million in the first quarter of fiscal 2007 primarily due to the timing and amount of income taxes.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $70.9 million for the first quarter of fiscal 2008 compared to $86.4 million for the same period of fiscal 2007. We estimate that our capital expenditures for fiscal 2008 will be approximately $360 to $380 million and will be funded entirely from operations and existing credit facilities.

In August 2007, we announced the declaration of a dividend to common stock shareholders in the amount of $0.09 per share. Dividends of $9.5 million were paid in September 2007.

In August 2007, we extended our $50.0 million uncommitted credit facility through August 2008. In September 2007, we increased the $50.0 million uncommitted credit facility to $100.0 million and extended the expiration to September 2008.

Excluding the impact of assets held for sale, the working capital deficit decreased to $245.2 million at September 26, 2007 from $270.7 million at June 27, 2007 primarily due to the timing of operational receipts and payments and the reclassification of certain tax exposures to long-term upon the adoption of FIN 48.

This excerpt taken from the EAT 10-Q filed May 7, 2007.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $172.9 million at March 28, 2007 from $138.9 million at June 28, 2006 primarily due to the increase in accounts payable due to timing of payments as well as an increase in income taxes payable. Net cash provided by operating activities of continuing operations decreased to $390.5 million for year-to-date fiscal 2007 from $390.9 million during the same period in fiscal 2006 due to the timing of operational receipts and payments, partially offset by increased profitability. We believe that our various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $301.1 million for year-to-date fiscal 2007 compared to $253.6 million for the same period of fiscal 2006. We estimate that our capital expenditures during the fourth quarter of fiscal 2007 will be approximately $125.0 million and will be funded entirely from operations and existing credit facilities.

We sold fifteen Chili’s restaurants and one On the Border restaurant to franchisees during the first three quarters of fiscal 2007 for cash proceeds of $22.1 million.

In February 2007, we announced the declaration of a dividend to common stock shareholders in the amount of $0.09 per share. The dividend was paid in March 2007, bringing total dividends paid year-to-date fiscal 2007 to approximately $30.4 million.

The Board of Directors has authorized a total of $1,760.0 million in share repurchases, which 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. In order to accomplish this goal, we have implemented several programs during fiscal year 2007. In August 2006, we announced a modified “Dutch auction” tender offer for up to approximately 17.5 million shares of common stock. In November 2006, we entered into a written trading plan in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which provided for the purchase of up to $100.0 million of shares of our common stock. Following the expiration of this plan, we entered into another trading plan for the purchase of up to $200.0 million of shares of our common stock in February 2007. Including the tender offer and 10b5-1 plans, we repurchased approximately 7.7 million shares of our common stock for $222.1 million during the first three quarters of fiscal 2007, which was funded through existing credit facilities. We terminated the latest trading plan on April 18, 2007.

On April 23, 2007, we announced a plan to return capital to shareholders through an ASR transaction for the remainder of our share repurchase authorizations of $297 million. The number of shares to be repurchased will be determined based on the volume weighted average share price during a specified period of time, subject to certain provisions that establish a minimum and maximum number of shares that may be repurchased. The purchases will be executed by a broker-dealer over a time period not to exceed five and one-half months from the initial execution date. Shares repurchased under the ASR will be held as treasury shares. Under no circumstances will we be required to deliver shares or cash upon settlement to the broker-dealer in this transaction.

In April 2007, we also entered into an agreement for a one-year unsecured committed credit facility of $400.0 million. The facility bears interest at LIBOR plus an applicable margin, which is a function of our credit rating at such time, but is subject to a maximum of LIBOR plus 1.0%. The new credit facility will be used to fund the ASR and for general corporate purposes. Depending upon the amount utilized, we may pursue a refinancing of this credit facility subject to market conditions. We expect our interest expense to increase in the fourth quarter of fiscal 2007 due to borrowings under the new credit facility.

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 facilities and from our internal cash generating capabilities to adequately manage the expansion of our business.

This excerpt taken from the EAT 10-Q filed Feb 5, 2007.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $323.2 million at December 27, 2006 from $255.1 million at June 28, 2006 primarily due to the increase in gift card liabilities as a result of increased holiday sales and the increase in income taxes payable due to timing of payments, partially offset by cash used for repurchases of treasury stock. Net cash provided by operating activities of continuing operations increased to $293.3 million for the first two quarters of fiscal 2007 from $281.3 million during the same period in fiscal 2006 due to increased profitability, partially offset by the timing of operational receipts and payments. We believe that our various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $194.8 million for the first two quarters of fiscal 2007 compared to $164.2 million for the same period of fiscal 2006. We estimate that our capital expenditures during the third quarter of fiscal 2007 will be approximately $138.1 million and will be funded entirely from operations and existing credit facilities.

We sold fifteen Chili’s restaurants to a franchisee for cash proceeds of $20.1 million during the first quarter of fiscal 2007.

In November 2006, we announced the declaration of a dividend to common stock shareholders and increased the amount paid by 35% to $0.09 per share. The dividend was paid in November 2006, bringing total dividends paid during the first two quarters of fiscal 2007 to approximately $19.4 million.

The Board of Directors authorized an increase in the stock repurchase plan of $450.0 million in August 2006, bringing the total to $1,760.0 million.

In August 2006, we announced a plan to return capital to shareholders through a modified “Dutch auction” tender offer for up to approximately 17.5 million shares of common stock. In October 2006, we accepted for purchase approximately 1.9 million shares of common stock at a purchase price of $26.67 per share, for a total cost of $51.9 million including related transaction costs. The tender offer was funded through existing lines of credit.

In November 2006, we entered into a written trading plan that complies with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which provides for the purchase of up to $100 million of shares of our common stock. The timing and actual number of shares repurchased depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. All purchases are made subject to the restrictions of Rule 10b-18 relating to volume, price and timing so as to minimize the impact of the purchases upon the market for our shares. As of December 27, 2006, 945,000 shares have been repurchased for approximately $28.5 million under the plan.

Including the tender offer and 10b5-1 plan, we repurchased approximately 4.5 million shares of our common stock for $119.2 million during the first two quarters of fiscal 2007. As of December 27, 2006, approximately $450.2 million was available under our share repurchase authorizations. Our stock repurchase plan will be used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We will consider additional share repurchases based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity. Additional purchases will be funded entirely from operations, existing credit facilities, and the sale of company-owned restaurants.

We allowed a one-year unsecured committed credit facility of $400.0 million to expire unused in December 2006.

This excerpt taken from the EAT 10-Q filed Nov 6, 2006.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $258.1 million at September 27, 2006 from $255.1 million at June 28, 2006. Net cash provided by operating activities of continuing operations increased to $108.9 million for the first quarter of fiscal 2007 from $103.4 million during the same period in fiscal 2006 due to increased profitability and the timing of operational receipts and payments. We believe that our various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $90.9 million for the first quarter of fiscal 2007 compared to $75.7 million for the same period of fiscal 2006. We estimate that our capital expenditures during the second quarter of fiscal 2007 will be approximately $110.0 million and will be funded entirely from operations and existing credit facilities.

We sold fifteen Chili’s restaurants to a franchisee for cash proceeds of $20.1 million during the first quarter of fiscal 2007.

In August 2006, we announced the declaration of a dividend to common stock shareholders in the amount of $0.10 per share. The dividend was paid in September 2006 and totaled approximately $8.3 million. On November 1, 2006, the Board of Directors authorized an increase in the quarterly dividend payable in November 2006 resulting in an estimated aggregate payout of approximately $11.1 million.

We entered into an agreement for a one-year unsecured committed credit facility of $400.0 million on August 28, 2006. The facility bears interest at LIBOR plus 0.55% (5.87% as of September 27, 2006) with a maximum rate of LIBOR plus 1.0%. There were no amounts outstanding under the facility at September 27, 2006. Depending upon the amount utilized, we may pursue a refinancing of this credit facility subject to market conditions.

The Board of Directors authorized an increase in the stock repurchase plan of $450.0 million in August 2006, bringing the total to $1,760.0 million. Pursuant to our stock repurchase plan, we repurchased approximately 1.1 million shares of our common stock for $38.9 million during the first quarter of fiscal 2007. As of September 27, 2006, approximately $530.5 million was available under our share repurchase authorizations. Our stock repurchase plan will be used to primarily return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We will consider additional share repurchases based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

On August 28, 2006, we announced a plan to return capital to shareholders through a modified “Dutch auction” tender offer for up to approximately 11.7 million shares of common stock. On October 18, 2006, we accepted for purchase approximately 1.3 million shares of common stock at a purchase price of $40.00 per share, for a total cost of $50.4 million excluding related transaction costs. The tender offer was funded through existing lines of credit.

This excerpt taken from the EAT 10-Q filed May 8, 2006.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $290.3 million at March 29, 2006 from $117.0 million at June 29, 2005, primarily due to purchases of treasury stock. Net cash provided by operating activities of continuing operations increased to $390.9 million for the first three quarters of fiscal 2006 from $317.3 million during the same period in fiscal 2005 due to increased profitability and the timing of operational receipts and payments. The Company believes that its various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $253.6 million for the first three quarters of fiscal 2006 compared to $237.1 million for the same period of fiscal 2005. The Company estimates that its capital expenditures during the fourth quarter of fiscal 2006 will approximate $100.0 million and will be funded entirely from operations and existing credit facilities.

The Company completed the sale of Corner Bakery in February 2006 for gross cash proceeds of $72.5 million. Additionally, the Company sold six Chili’s restaurants and two On The Border restaurants to franchise partners for cash proceeds of $19.0 million during the third quarter of fiscal 2006.

In the second quarter of fiscal 2006, the Company acquired sixteen restaurants from its franchise partners for approximately $23.1 million.

In February 2006, the Company announced the declaration of a dividend to common stock shareholders in the amount of $0.10 per share. The dividend was paid in March 2006, bringing total dividends paid during the first three quarters of fiscal 2006 to $17.1 million.

The Board of Directors authorized increases in the stock repurchase plan of $150.0 million in August 2005 and February 2006, bringing the total to $1,310.0 million. Pursuant to the Company’s stock repurchase plan, the Company repurchased approximately 6.4 million shares of its common stock for $252.5 million during the first three quarters of fiscal 2006. As of March 29, 2006, approximately $172.7 million was available under the Company’s share repurchase authorizations. The Company’s stock repurchase plan will be used to minimize the dilutive impact of stock options and other share-based awards. The Company will consider additional share repurchases based on several factors, including the Company’s cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

The Company is not aware of any other event or trend that would potentially affect its liquidity. In the event such a trend develops, the Company believes that there are sufficient funds available under its credit facilities and from its internal cash generating capabilities to adequately manage the expansion of its business.

This excerpt taken from the EAT 10-Q filed Feb 6, 2006.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $206.3 million at December 28, 2005 from $117.0 million at June 29, 2005, primarily due to purchases of treasury stock. Net cash provided by operating activities of continuing operations increased to $281.3 million for the first two quarters of fiscal 2006 from $191.2 million during the same period in fiscal 2005 due to increased profitability and the timing of operational receipts and payments. The Company believes that its various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $164.2 million for the first two quarters of fiscal 2006 compared to $159.1 million for the same period of fiscal 2005. The Company estimates that its capital expenditures for continuing operations during the third quarter of fiscal 2006 will approximate $99.0 million. These capital expenditures will be funded entirely from operations and existing credit facilities.

In the second quarter of fiscal 2006, the Company acquired sixteen restaurants from its franchise partners for approximately $23.1 million.

In February 2006, the Company completed the sale of Corner Bakery for gross cash proceeds of $72.5 million. Additionally, the Company sold six Chili’s restaurants to a franchise partner for cash proceeds of $14.6 million during the third quarter of fiscal 2006.

In September 2005, the Company announced the declaration of its first quarterly dividend to common stock shareholders in the amount of $0.10 per share. The dividend was paid in December 2005 and totaled approximately $8.6 million.

In August 2005, the Board of Directors authorized an increase in the stock repurchase plan of $150.0 million, bringing the total to $1,160.0 million. Pursuant to the Company’s stock repurchase plan, the Company repurchased approximately 4.3 million shares of its common stock for $167.0 million during the first two quarters of fiscal 2006. As of December 28, 2005, approximately $108.1 million was available under the Company’s share repurchase authorizations. The Company’s stock repurchase plan will be used to minimize the dilutive impact of stock options and other share-based awards. The Company will consider additional share repurchases based on several factors, including the Company’s cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

This excerpt taken from the EAT 10-Q filed Nov 7, 2005.

LIQUIDITY AND CAPITAL RESOURCES

The working capital deficit increased to $168.9 million at September 28, 2005 from $117.0 million at June 29, 2005, primarily due to purchases of treasury stock, the accrual of dividends declared during the first quarter of fiscal 2006, and the decision to dissolve a savings plan in the second quarter of fiscal 2006, which resulted in the obligation being reclassified as a current liability. Net cash provided by operating activities of continuing operations increased to $103.4 million for the first quarter of fiscal 2006 from $51.7 million during the same period in fiscal 2005 due to increased profitability and the timing of operational receipts and payments. The Company believes that its various sources of capital, including availability under existing credit facilities, ability to raise additional financing, and cash flow from operating activities of continuing operations, are adequate to finance operations as well as the repayment of current debt obligations.

Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures were $75.7 million for the first quarter of fiscal 2006 compared to $79.8 million for the same period of fiscal 2005. The Company estimates that its capital expenditures for continuing operations during the second quarter of fiscal 2006 will approximate $87.0 million. These capital expenditures will be funded entirely from operations and existing credit facilities.

In September 2005, the Company entered into an agreement to sell Corner Bakery. The sale is expected to be completed during December 2005 for gross cash proceeds of approximately $70.0 to $75.0 million.

In September 2005, the Company announced the declaration of its first quarterly dividend to common stock shareholders in the amount of $0.10 per share. The dividend will be payable in December 2005 and is estimated to be $8.0 to $9.0 million.

In August 2005, the Board of Directors authorized an increase in the stock repurchase plan of $150.0 million, bringing the total to $1,160.0 million. Pursuant to the Company’s stock repurchase plan, the Company repurchased approximately 3.6 million shares of its common stock for $139.1 million during the first quarter of fiscal 2006. As of September 28, 2005, approximately $136.0 million was available under the Company’s share repurchase authorizations. The Company’s stock repurchase plan will be used to minimize the dilutive impact of stock options and other stock-based awards. The Company will consider additional share repurchases based on several factors, including the Company’s cash position, share price, operational liquidity, and planned investment and financing needs. The repurchased common stock is reflected as a reduction of shareholders’ equity.

Brinker International (EAT)

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