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Stockholders' Equity
 6 Months Ended
Jul. 04, 2017
Stockholders' Equity  
Stockholders' Equity

 

5. Stockholders’ Equity

 

On April 27, 2017, our Board of Directors (“Board”) declared a quarterly cash dividend of $0.24 per share that was paid on May 30, 2017 to the stockholders of record at the close of business on May 17, 2017.  Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of our Facility and such other factors that the Board considers relevant.

 

On July 21, 2016, our Board increased the authorization to repurchase our common stock by 7.5 million shares to 56.0 million shares.  Under this and all previous authorizations, we cumulatively repurchased 47.5 million shares at a total cost of $1,440.4 million through July 4, 2017, including 0.4 million shares at a cost of $21.3 million during the second quarter of fiscal 2017.  Repurchased common stock is reflected as a reduction of stockholders’ equity in treasury stock.  Share repurchases have been executed in accordance with Rule 10b5-1 and Rule 10b-18 of the Securities Act of 1934 (the “Act”) based on plans adopted from time to time by our Board in furtherance of its repurchase authorization.  Repurchases made during the second quarter of fiscal 2017 were made under a Rule 10b5-1 plan adopted by our Board on October 20, 2016, effective from January 3, 2017 through June 30, 2017, and under a Rule 10b-18 plan adopted by our Board on April 27, 2017, effective from May 8, 2017 through May 19, 2017.  On April 27, 2017, our Board also approved the adoption of a Rule 10b5-1 plan, which is effective from July 5, 2017 through December 29, 2017.

 

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.  All purchases in the open market are made in compliance with Rule 10b-18.  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 and growth capital contributions to North Italia and Flower Child, 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 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.