Net cash provided by operating activities was $352.9 million in 2018 compared to $286.4 million in 2017. The
increase was primarily due to an increase in net income and non-cash items such as deferred income taxes, depreciation
and amortization expense and share-based compensation expense along with an increase in working capital. The increase
in net income was primarily driven by a decrease in income tax expense due to new tax legislation that was enacted in
late 2017. The increase in working capital was primarily due to an increase in deferred revenue related to gift cards and
an increase in accounts payable partially offset by an increase in prepaid income taxes.
Net cash provided by operating activities was $286.4 million in 2017 compared to $257.1 million in 2016. The
increase was primarily due to an increase in net income and non-cash items such as depreciation and amortization
expense along with an increase in working capital. The increase in net income was primarily driven by an increase in
comparable restaurant sales at existing restaurants, the continued opening of new restaurants and lower commodity costs,
primarily beef, partially offset by higher labor and general and administrative expenses. The increase in working capital
was primarily due to an increase in cash flows related to a change in the timing of payments for accrued wages.
Our operations have not required significant working capital and, like many restaurant companies, we can operate
with negative working capital. Sales are primarily for cash, and restaurant operations do not require significant
inventories or receivables. In addition, we receive trade credit for the purchase of food, beverages and supplies, thereby
reducing the need for incremental working capital to support growth.
Net cash used in investing activities was $158.1 million in 2018 compared to $178.2 million in 2017 and $164.7
million in 2016. The decrease in 2018 and increase in 2017 was primarily due to the acquisition of four franchise
restaurants in Q1 2017 for an aggregate purchase price of $16.5 million.
We require capital principally for the development of new company restaurants, the refurbishment or relocation of
existing restaurants and the acquisition of franchise restaurants, if any. We either lease our restaurant site locations under
operating leases for periods of five to 30 years (including renewal periods) or purchase the land when appropriate. As of
December 25, 2018, 143 of the 491 company restaurants have been developed on land which we own.
The following table presents a summary of capital expenditures (in thousands):2018 2017 2016
New company restaurants ............................................. $ 83,633 $ 104,819 $ 100,840
Refurbishment of existing restaurants ................................... 58,125 49,344 53,527
Relocation of existing restaurants ...................................... 6,100 4,807 6,678
Capital expenditures related to support center office ....................... 8,122 2,658 3,693
Total capital expenditures ............................................. $ 155,980 $ 161,628 $ 164,738
Our future capital requirements will primarily depend on the number of new restaurants we open, the timing of
those openings and the restaurant prototype developed in a given fiscal year. These requirements will include costs
directly related to opening new restaurants and relocating existing restaurants and may also include costs necessary to
ensure that our infrastructure is able to support a larger restaurant base. In 2019, we expect our capital expenditures to be
approximately $210.0 million to $220.0 million, the majority of which will relate to planned restaurant openings,
including 25 to 30 company restaurant openings in 2019, the relocation of existing company restaurants and capital
expenditures related to the remodeling of our support center office. This amount excludes any cash used for franchise
acquisitions. We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided
by operating activities and, if needed, funds available under our amended credit facility. For 2019, we anticipate net cash
provided by operating activities will exceed capital expenditures, which we currently plan to use to pay dividends, as
approved by our Board of Directors and/or repurchase common stock.
Net cash used in financing activities was $135.5 million in 2018 compared to $70.2 million in 2017. The increase
is primarily due to the $50.0 million repayment of our revolving credit facility in Q2 2018 along with an increase in
dividends paid.
Net cash used in financing activities was $70.2 million in 2017 compared to $38.7 million in 2016. The increase is
primarily due to borrowings on our amended revolving credit facility that occurred in Q1 2016 and an increase in
dividends paid. These increases were partially offset by decreased spending on share repurchases, along with proceeds
from noncontrolling interest contributions.