Texas Roadhouse, Inc 10-K for FY2019

Texas Roadhouse, Inc. (TXRH)

10-K 2020-02-28 For: 2019-12-31

Added on April 10, 2026

About this 10-K

Texas Roadhouse, Inc filed this 10-K on February 28, 2020, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.76B; up 12.2% from $2.46B a year earlier
Net income: $174.45M; up 10.3% from net income of $158.23M a year earlier
Diluted EPS: $2.46; up 11.8% from $2.20 a year earlier

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(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TXRH	NASDAQ Global Select Market


Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻	Smaller reporting company ☐
			Emerging growth company ☐

		Page
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	30
Item 2.	Properties	30
Item 3.	Legal Proceedings	31
Item 4.	Mine Safety Disclosures	31
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
Item 6.	Selected Financial Data	34
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 8.	Financial Statements and Supplementary Data	51
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	51
Item 9A.	Controls and Procedures	52
Item 9B.	Other Information	52
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	53
Item 11.	Executive Compensation	53
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	53
Item 13.	Certain Relationships and Related Transactions, and Director Independence	53
Item 14.	Principal Accounting Fees and Services	53
PART IV
Item 15. Item 16.	Exhibits, Financial Statement Schedules Form 10-K Summary	54 56
	Signatures


	Average Cost		Low		High
Land(1)	$	1,295,000	$	700,000	$	1,760,000
Building(2)		2,290,000		1,710,000		3,610,000
Furniture and Equipment		1,255,000		1,100,000		1,370,000
Pre-opening costs		665,000		535,000		915,000
Other(3)		10,000		—		90,000
Total	$	5,515,000


Delaware (State or other jurisdiction of incorporation or organization)		20-1083890 (IRS Employer Identification Number)


	Number of Restaurants
	Company	Franchise	Total
Alabama	8	—	8
Alaska	2	—	2
Arizona	18	—	18
Arkansas	6	—	6
California	4	8	12
Colorado	16	1	17
Connecticut	5	—	5
Delaware	2	2	4
Florida	39	—	39
Georgia	10	5	15
Idaho	5	—	5
Illinois	16	—	16
Indiana	21	8	29
Iowa	9	—	9
Kansas	6	1	7
Kentucky	13	2	15
Louisiana	10	1	11
Maine	3	—	3
Maryland	8	6	14
Massachusetts	10	1	11
Michigan	14	3	17
Minnesota	4	—	4
Mississippi	3	—	3
Missouri	17	—	17
Montana	—	1	1
Nebraska	3	1	4
Nevada	2	—	2
New Hampshire	3	—	3
New Jersey	9	—	9
New Mexico	5	—	5
New York	20	—	20
North Carolina	19	—	19
North Dakota	2	1	3
Ohio	32	2	34
Oklahoma	8	—	8
Oregon	2	—	2
Pennsylvania	25	6	31
Rhode Island	3	—	3
South Carolina	3	6	9
South Dakota	2	—	2
Tennessee	15	2	17
Texas	69	5	74
Utah	9	1	10
Vermont	1	—	1
Virginia	17	—	17
Washington	1	—	1
West Virginia	3	3	6
Wisconsin	10	3	13
Wyoming	2	—	2
Total domestic restaurants	514	69	583
Bahrain	—	1	1
China	—	1	1
South Korea	—	1	1
Kuwait	—	3	3
Mexico	—	1	1
Philippines	—	5	5
Qatar	—	2	2
Saudi Arabia	—	5	5
Taiwan	—	3	3
United Arab Emirates	—	6	6
Total international restaurants	—	28	28
Total system-wide restaurants	514	97	611


Name	Age	Position
W. Kent Taylor	64	Chairman, Chief Executive Officer, and President
S. Chris Jacobsen	54	Chief Marketing Officer
Tonya R. Robinson	51	Chief Financial Officer
Douglas W. Thompson	56	Chief Operating Officer


State	Owned	Leased	Total
Alabama	3	5	8
Alaska	—	2	2
Arizona	6	12	18
Arkansas	1	5	6
California	1	3	4
Colorado	7	9	16
Connecticut	—	5	5
Delaware	1	1	2
Florida	7	32	39
Georgia	3	7	10
Idaho	1	4	5
Illinois	3	13	16
Indiana	13	8	21
Iowa	2	7	9
Kansas	2	4	6
Kentucky	4	9	13
Louisiana	2	8	10
Maine	—	3	3
Maryland	—	8	8
Massachusetts	1	9	10
Michigan	4	10	14
Minnesota	1	3	4
Mississippi	1	2	3
Missouri	2	15	17
Nebraska	1	2	3
Nevada	—	2	2
New Hampshire	2	1	3
New Jersey	—	9	9
New Mexico	1	4	5
New York	3	17	20
North Carolina	4	15	19
North Dakota	—	2	2
Ohio	12	20	32
Oklahoma	2	6	8
Oregon	—	2	2
Pennsylvania	3	22	25
Rhode Island	—	3	3
South Carolina	—	3	3
South Dakota	1	1	2
Tennessee	—	15	15
Texas	38	31	69
Utah	1	8	9
Vermont	—	1	1
Virginia	6	11	17
Washington	—	1	1
West Virginia	1	2	3
Wisconsin	4	6	10
Wyoming	2	—	2
Total	146	368	514


				Total Number	Maximum Number
				of Shares	(or Approximate
				Purchased as	Dollar Value) of
				Part of Publicly	Shares that May
	Total Number	Average		Announced	Yet Be Purchased
	of Shares	Price Paid		Plans or	Under the Plans
Period	Purchased	per Share		Programs	or Programs
September 25 to October 22	96,802	$	50.15	96,802	$	164,410,020
October 23 to November 19	36,636	$	53.25	36,636	$	162,459,227
November 20 to December 31	36,749	$	56.63	36,749	$	160,378,001
Total	170,187			170,187


	12/30/2014		12/29/2015		12/27/2016		12/26/2017		12/24/2018		12/31/2019
Texas Roadhouse, Inc.	$	100.00	$	106.75	$	146.71	$	160.09	$	168.18	$	166.73
Russell 3000	$	100.00	$	99.21	$	109.18	$	128.38	$	114.72	$	153.08
Russell 3000 Restaurant	$	100.00	$	118.28	$	122.98	$	146.30	$	146.54	$	187.31


	Fiscal Year
	2019		2018		2017		2016		2015
		(in thousands, except per share data)
Consolidated Statements of Income:
Revenue:
Restaurant sales and other	$	2,734,177	$	2,437,115	$	2,203,017	$	1,974,261	$	1,791,446
Franchise royalties and fees		21,986		20,334		16,514		16,453		15,922
Total revenue		2,756,163		2,457,449		2,219,531		1,990,714		1,807,368
Income from operations		212,023		187,789		186,206		171,900		144,565
Income before taxes		213,915		188,551		186,117		171,756		144,247
Provision for income taxes		32,397		24,257		48,581		51,183		42,986
Net income including noncontrolling interests	$	181,518	$	164,294	$	137,536	$	120,573	$	101,261
Less: Net income attributable to noncontrolling interests		7,066		6,069		6,010		4,975		4,367
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	174,452	$	158,225	$	131,526	$	115,598	$	96,894
Net income per common share:
Basic	$	2.47	$	2.21	$	1.85	$	1.64	$	1.38
Diluted	$	2.46	$	2.20	$	1.84	$	1.63	$	1.37
Weighted average shares outstanding:
Basic		70,509		71,467		70,989		70,396		70,032
Diluted		70,916		71,964		71,527		71,052		70,747

Cash dividends declared per share	$	1.20	$	1.00	$	0.84	$	0.76	$	0.68


	Results of Operations
	Fiscal Year
	2019		2018		2017
	$	%	$	%	$	%
	(In thousands)
Consolidated Statements of Income:
Revenue:
Restaurant and other sales	2,734,177	99.2	2,437,115	99.2	2,203,017	99.3
Franchise royalties and fees	21,986	0.8	20,334	0.8	16,514	0.7
Total revenue	2,756,163	100.0	2,457,449	100.0	2,219,531	100.0
Costs and expenses:
(As a percentage of restaurant and other sales)
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales	883,357	32.3	795,300	32.6	721,550	32.8
Labor	905,614	33.1	793,384	32.6	687,545	31.2
Rent	52,531	1.9	48,791	2.0	44,807	2.0
Other operating	418,448	15.3	375,477	15.4	342,702	15.6
(As a percentage of total revenue)
Pre-opening	20,156	0.7	19,051	0.8	19,274	0.9
Depreciation and amortization	115,544	4.2	101,216	4.1	93,499	4.2
Impairment and closure, net	(899)	NM	278	NM	654	NM
General and administrative	149,389	5.4	136,163	5.5	123,294	5.6
Total costs and expenses	2,544,140	92.3	2,269,660	92.4	2,033,325	91.6
Income from operations	212,023	7.7	187,789	7.6	186,206	8.4
Interest income (expense), net	1,514	0.1	(591)	(0.0)	(1,577)	(0.1)
Equity income from investments in unconsolidated affiliates	378	0.0	1,353	0.1	1,488	0.1
Income before taxes	213,915	7.8	188,551	7.7	186,117	8.4
Provision for income taxes	32,397	1.2	24,257	1.0	48,581	2.2
Net income including noncontrolling interests	181,518	6.6	164,294	6.7	137,536	6.2
Net income attributable to noncontrolling interests	7,066	0.3	6,069	0.2	6,010	0.3
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	174,452	6.3	158,225	6.4	131,526	5.9


	Reconciliation of Income from Operations to Restaurant Margin
	Fiscal Year Ended
	2019	2018	2017
	(In thousands, except per store week)

Income from operations	$ 212,023	$ 187,789	$ 186,206

Less:
Franchise royalties and fees	21,986	20,334	16,514

Add:
Pre-opening	20,156	19,051	19,274
Depreciation and amortization	115,544	101,216	93,499
Impairment and closure, net	(899)	278	654
General and administrative	149,389	136,163	123,294
Restaurant margin	$ 474,227	$ 424,163	$ 406,413

Restaurant margin $/store week	$ 17,914	$ 17,177	$ 17,462
Restaurant margin (as a percentage of restaurant and other sales)	17.3%	17.4%	18.4%


	Total	Texas Roadhouse	Bubba's 33	Other
Balance at December 25, 2018	582	555	25	2
Company openings	22	19	3	—
Franchise openings - Domestic	1	1	—	—
Franchise openings - International	8	8	—	—
Franchise closings - International	(2)	(2)	—	—
Balance at December 31, 2019	611	581	28	2


	December 31, 2019	December 25, 2018	December 26, 2017
Company - Texas Roadhouse	484	464	440
Company - Bubba's 33	28	25	20
Company - Other	2	2	2
Franchise - Texas Roadhouse - U.S.	69	69	70
Franchise - Texas Roadhouse - International	28	22	17
Total	611	582	549


		Menu Price
		Increases
Q4 2019		1.9%
Q2 2019		1.5%
Q4 2018		1.7%
Q1 2018		0.8%
Q4 2017		0.3%
Q2 2017		0.5%
Q4 2016		1.0%


	Payments Due by Period
			Less than						More than
	Total		1 year		1 - 3 Years		3 - 5 Years		5 years
Obligation under finance lease	$	2,111	$	—	$	—	$	—	$	2,111
Interest on finance lease		4,938		278		561		569		3,530
Operating lease obligations		990,321		52,450		107,622		108,630		721,619
Capital obligations		163,546		163,546		—		—		—
Total contractual obligations(1)	$	1,160,916	$	216,274	$	108,183	$	109,199	$	727,260


	Lease	Current Lease
	Assignment Date	Term Expiration
Everett, Massachusetts (1)(2)	September 2002	February 2023
Longmont, Colorado (1)	October 2003	May 2029
Montgomeryville, Pennsylvania (1)	October 2004	March 2021
Fargo, North Dakota (1)(2)	February 2006	July 2021
Logan, Utah (1)	January 2009	August 2024
Irving, Texas (3)	December 2013	December 2024
Louisville, Kentucky (3)(4)	December 2013	November 2023


	Shares to Be	Shares
	Issued Upon	Available for
Plan Category	Vest Date (1)	Future Grants
Plans approved by stockholders	913,427	3,110,767
Plans not approved by stockholders	—	—
Total	913,427	3,110,767


Description		Page Number in Report
Reports of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2019 and December 25, 2018		F-5
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2019, December 25, 2018 and December 26, 2017		F-6
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, December 25, 2018 and December 26, 2017		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2019, December 25, 2018 and December 26, 2017		F-8
Notes to Consolidated Financial Statements		F-9


Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the period ended June 28, 2016) (File No. 000- 50972)
3.2		Bylaws of Registrant (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form S-1 of Registrant (File No. 333-115259))
4.1		Registration Rights Agreement, dated as of May 7, 2004, among Registrant and others (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 of Registrant (File No. 333-115259))
4.2		Description of Securities
10.1		Form of Director and Executive Officer Indemnification Agreement (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 of Registrant (File No. 333-115259))
10.2		Form of Limited Partnership Agreement and Operating Agreement for certain company-managed Texas Roadhouse restaurants, including schedule of the owners of such restaurants and the aggregate interests held by directors, executive officers and 5% stockholders who are parties to such an agreement (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 of Registrant (File No. 333-115259))
10.3		Form of Franchise Agreement and Preliminary Agreement for a Texas Roadhouse restaurant franchise, including schedule of directors, executive officers and 5% stockholders which have entered into either agreement (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-1 of Registrant (File No. 333-115259))
10.4		Schedule of the owners of company-managed Texas Roadhouse restaurants and the aggregate interests held by directors, executive officers and 5% stockholders who are parties to Limited Partnership Agreements and Operating Agreements as of December 31, 2019 the form of which is set forth in Exhibit 10.2 of this Form 10-K
10.5		Schedule of the directors, executive officers and 5% stockholders which have entered into Franchise Agreements or Preliminary Agreements for a Texas Roadhouse Franchise as of December 31, 2019 the form of which is set forth in Exhibit 10.3 of this Form 10-K
10.6*		Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference from Appendix A to the Texas Roadhouse, Inc. Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 5, 2013 (File No. 000-50972))


Exhibit No.		Description
10.7*		Form of Restricted Stock Unit Award under the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2013 (File No. 000-50972))
10.8*		Texas Roadhouse, Inc. Cash Bonus Plan for cash incentive awards granted pursuant to the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2013 (File No. 000-50972))
10.9*		Employment Agreement between the Registrant and W. Kent Taylor entered into as of December 26, 2017 (incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K ended December 25, 2018 (File No. 000-50972))
10.10*		Employment Agreement between the Registrant and Scott M. Colosi entered into as of December 26, 2017 (incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K ended December 26, 2017 (File No. 000-50972))
10.11*		Employment Agreement between the Registrant and Celia Catlett entered into as of December 26, 2017 (incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K ended December 26, 2017 (File No. 000-50972))
10.12*		Employment Agreement between the Registrant and S. Chris Jacobsen entered into as of December 26, 2017 (incorporated by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K ended December 26, 2017 (File No. 000-50972))
10.13*		Form of Performance Stock Unit Award Agreement under the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form 10-K for the year ended December 29, 2015 (File No. 000-50972))
10.14*		First Amendment to Employment Agreement between Texas Roadhouse Management Corp. and Scott M. Colosi entered into as of May 17, 2018 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated May 18, 2018 (File No. 000-50972))
10.15*		Employment Agreement between Texas Roadhouse Management Corp. and Tonya Robinson entered into as of May 18, 2018 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2018 (File No. 000-50972))
10.16*		Employment Agreement between Texas Roadhouse Management Corp. and Doug Thompson entered into as of August 23, 2018 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2018 (File No. 000-50972))
10.17*		Amended and Restated Form of Restricted Stock Unit Award Agreement under the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan for officers (incorporated by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014 (File No. 000-50972))
10.18*		Amended and Restated Form of Restricted Stock Unit Award Agreement under the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan for non-officers (incorporated by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014 (File No. 000-50972))
10.19*		Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as amended December 19, 2007 and December 31, 2008 (incorporated by reference to Exhibit 10.42 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014 (File No. 000-50972))
10.20*		Third Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., effective January 1, 2010 (incorporated by reference to Exhibit 10.43 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014 (File No. 000-50972))
10.21*		Form of Nonqualified Stock Option Agreement under Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K for the year ended December 29, 2015 (File No. 000-50972))
10.22		Master Lease Agreement dated October 26, 2018 between Paragon Centre Holdings, LLC and Texas Roadhouse Holdings LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2018 (File No. 000-50972))
10.23		Consent Decree dated March 31, 2017, among Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC, Texas Roadhouse Management Corp. and the EEOC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated March 31, 2017 (File No. 000-50972))


Exhibit No.		Description
10.24		Amended and Restated Credit Agreement dated as of August 7, 2017, by and among Texas Roadhouse Inc., and the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated August 7, 2017 (File No. 000-50972))
10.25*		Consulting Agreement and General Release of Claims between Scott M. Colosi and Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC and Texas Roadhouse Management Corp. entered into July 3, 2019 (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 3, 2019 (File No. 000-50972))
10.26*		Executive Transition and Consulting Agreement between Celia Catlett and Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC and Texas Roadhouse Management Corp. entered into on August 21, 2019 (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated August 21, 2019 (File No. 000-50972))
10.27		Assignment and Assumption Agreement between Texas Roadhouse Holdings LLC and Texas Roadhouse, Inc. dated October 26, 2018
10.28		First Amendment to Paragon Centre Master Lease Agreement between Paragon Centre Holdings, LLC and Texas Roadhouse, Inc. dated December 13, 2019
21.1		List of Subsidiaries
23.1		Consent of KPMG LLP, Independent Registered Public Accounting Firm
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		The following financial statements from the Texas Roadhouse, Inc. Annual Report on Form 10-K for the year ended December 31, 2019, filed February 28, 2020, formatted in inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
104		Cover page, formatted in iXBRL and contained in Exhibit 101.

	TEXAS ROADHOUSE, INC.

	By:	/s/ W. Kent Taylor
		W. Kent Taylor
		Chairman of the Company, Chief Executive
		Officer, Director
	Date: February 28, 2020

Signature	Title	Date

/s/ W. Kent Taylor W. Kent Taylor	Chairman of the Company, Chief Executive Officer, Director (Principal Executive Officer)	February 28, 2020

/s/ Tonya R. Robinson Tonya R. Robinson	Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)	February 28, 2020

/s/ Gregory N. Moore Gregory N. Moore	Director	February 28, 2020

/s/ Curtis A. Warfield	Director	February 28, 2020
Curtis A. Warfield	Director	February 28, 2020

/s/ Kathleen M. Widmer Kathleen M. Widmer	Director	February 28, 2020

/s/ James R. Zarley James R. Zarley	Director	February 28, 2020


	December 31, 2019		December 25, 2018
Assets
Current assets:
Cash and cash equivalents	$	107,879	$	210,125
Receivables, net of allowance for doubtful accounts of $12 at December 31, 2019 and $34 at December 25, 2018		99,305		92,114
Inventories, net		20,267		18,827
Prepaid income taxes		2,015		7,569
Prepaid expenses		18,433		16,384
Total current assets		247,899		345,019
Property and equipment, net of accumulated depreciation of $678,988 at December 31, 2019 and $602,451 at December 25, 2018		1,056,563		956,676
Operating lease right-of-use asset, net		499,801		—
Goodwill		124,748		123,220
Intangible assets, net of accumulated amortization of $14,141 at December 31, 2019 and $13,416 at December 25, 2018		1,234		1,959
Other assets		53,320		42,402
Total assets	$	1,983,565	$	1,469,276
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities	$	17,263	$	—
Accounts payable		61,653		62,060
Deferred revenue-gift cards		209,258		192,242
Accrued wages		39,699		34,159
Accrued taxes and licenses		30,433		24,631
Dividends payable		—		17,904
Other accrued liabilities		58,914		54,146
Total current liabilities		417,220		385,142
Operating lease liabilities, net of current portion		538,710		—
Restricted stock and other deposits		8,249		7,703
Deferred rent		—		48,079
Deferred tax liabilities, net		22,695		17,268
Other liabilities		65,522		50,376
Total liabilities		1,052,396		508,568
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity:
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding)		—		—
Common stock ($0.001 par value, 100,000,000 shares authorized, 69,400,252 and 71,617,510 shares issued and outstanding at December 31, 2019 and December 25, 2018, respectively)		69		72
Additional paid-in-capital		140,501		257,388
Retained earnings		775,649		688,337
Accumulated other comprehensive loss		(225)		(228)
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity		915,994		945,569
Noncontrolling interests		15,175		15,139
Total equity		931,169		960,708
Total liabilities and equity	$	1,983,565	$	1,469,276


	Fiscal Year Ended
	December 31,		December 25,		December 26,
	2019		2018		2017
Revenue:
Restaurant and other sales	$	2,734,177	$	2,437,115	$	2,203,017
Franchise royalties and fees		21,986		20,334		16,514
Total revenue		2,756,163		2,457,449		2,219,531
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales		883,357		795,300		721,550
Labor		905,614		793,384		687,545
Rent		52,531		48,791		44,807
Other operating		418,448		375,477		342,702
Pre-opening		20,156		19,051		19,274
Depreciation and amortization		115,544		101,216		93,499
Impairment and closure, net		(899)		278		654
General and administrative		149,389		136,163		123,294
Total costs and expenses		2,544,140		2,269,660		2,033,325
Income from operations		212,023		187,789		186,206
Interest income (expense), net		1,514		(591)		(1,577)
Equity income from investments in unconsolidated affiliates		378		1,353		1,488
Income before taxes		213,915		188,551		186,117
Provision for income taxes		32,397		24,257		48,581
Net income including noncontrolling interests		181,518		164,294		137,536
Less: Net income attributable to noncontrolling interests		7,066		6,069		6,010
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	174,452	$	158,225	$	131,526
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of ($1), $53 and ($97), respectively		3		(189)		155
Total comprehensive income	$	174,455	$	158,036	$	131,681
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	2.47	$	2.21	$	1.85
Diluted	$	2.46	$	2.20	$	1.84
Weighted average shares outstanding:
Basic		70,509		71,467		70,989
Diluted		70,916		71,964		71,527
Cash dividends declared per share	$	1.20	$	1.00	$	0.84



								Accumulated		Total Texas
				Additional				Other		Roadhouse, Inc.
		Par		Paid-in-		Retained		Comprehensive		and		Noncontrolling
	Shares	Value		Capital		Earnings		Loss		Subsidiaries		Interests		Total
Balance, December 27, 2016	70,619,737	$	71	$	219,626	$	530,723	$	(194)	$	750,226	$	8,016	$	758,242
Net income	—		—		—		131,526		—		131,526		6,010		137,536
Other comprehensive income, net of tax	—		—		—		—		155		155		—		155
Noncontrolling interests contribution	—		—		—		—		—		—		3,457		3,457
Distributions to noncontrolling interest holders	—		—		—		—		—		—		(5,171)		(5,171)
Dividends declared ($0.84 per share)	—		—		—		(59,681)		—		(59,681)		—		(59,681)
Shares issued under share-based compensation plans including tax effects	800,189		1		1,557		—		—		1,558		—		1,558
Indirect repurchase of shares for minimum tax withholdings	(251,029)		(1)		(11,638)		—		—		(11,639)		—		(11,639)
Cumulative effect of change in accounting principle	—		—		69		(69)		—		—		—		—
Share-based compensation	—		—		26,934		—		—		26,934		—		26,934
Balance, December 26, 2017	71,168,897	$	71	$	236,548	$	602,499	$	(39)	$	839,079	$	12,312	$	851,391
Net income	—		—		—		158,225		—		158,225		6,069		164,294
Other comprehensive loss, net of tax	—		—		—		—		(189)		(189)		—		(189)
Noncontrolling interests contribution	—		—		—		—		—		—		2,551		2,551
Distributions to noncontrolling interest holders	—		—		—		—		—		—		(5,746)		(5,746)
Acquisition of noncontrolling interest	—		—		(75)		—		—		(75)		(47)		(122)
Contribution from executive officer	—		—		1,000		—		—		1,000		—		1,000
Dividends declared ($1.00 per share)	—		—		—		(71,509)		—		(71,509)		—		(71,509)
Shares issued under share-based compensation plans including tax effects	684,804		1		(1)		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(236,191)		—		(14,067)		—		—		(14,067)		—		(14,067)
Cumulative effect of adoption of ASC 606, Revenue from Contracts with Customers, net of tax	—		—		—		(878)		—		(878)		—		(878)
Share-based compensation	—		—		33,983		—		—		33,983		—		33,983
Balance, December 25, 2018	71,617,510	$	72	$	257,388	$	688,337	$	(228)	$	945,569	$	15,139	$	960,708
Net income	—		—		—		174,452		—		174,452		7,066		181,518
Other comprehensive income, net of tax	—		—		—		—		3		3		—		3
Distributions to noncontrolling interest holders	—		—		—		—		—		—		(6,357)		(6,357)
Acquisition of noncontrolling interest and other	—		—		(70)		—		—		(70)		(673)		(743)
Dividends declared ($1.20 per share)	—		—		—		(84,462)		—		(84,462)		—		(84,462)
Shares issued under share-based compensation plans including tax effects	617,395		—		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(209,408)		—		(12,471)		—		—		(12,471)		—		(12,471)
Repurchase of shares of common stock	(2,625,245)		(3)		(139,846)		—		—		(139,849)		—		(139,849)
Cumulative effect of adoption of ASC 842, Leases, net of tax	—		—		—		(2,678)		—		(2,678)		—		(2,678)
Share-based compensation	—		—		35,500		—		—		35,500		—		35,500
Balance, December 31, 2019	69,400,252	$	69	$	140,501	$	775,649	$	(225)	$	915,994	$	15,175	$	931,169


Land improvements		10 - 25 years
Buildings and leasehold improvements		10 - 25 years
Furniture, fixtures and equipment		3 - 10 years


Employment practices liability/Class Action	$250,000	/	$2,000,000
Workers' compensation	$350,000
General liability	$500,000
Property	$250,000
Employee healthcare	$350,000


	Goodwill		Intangible Assets
Balance as of December 26, 2017 (1)	$	121,040	$	2,700
Additions		2,180		—
Amortization expense		—		(741)
Disposals and other, net		—		—
Impairment		—		—
Balance as of December 25, 2018	$	123,220	$	1,959
Additions		1,528		—
Amortization expense		—		(725)
Disposals and other, net		—		—
Impairment		—		—
Balance as of December 31, 2019	$	124,748	$	1,234


	Leases
	Real estate		Equipment		Total
Operating lease right-of-use assets	$	495,903	$	3,898	$	499,801

Current portion of operating lease liabilities		15,966		1,297		17,263
Operating lease liabilities, net of current portion		536,109		2,601		538,710
Total operating lease liabilities	$	552,075	$	3,898	$	555,973


		Fiscal Year Ended
Real estate costs		December 31, 2019
Operating lease	$	54,844
Variable lease		1,590
Short-term lease		120
Total lease costs	$	56,554


Real estate lease liability maturity analysis		Total
2020	$	52,450
2021		53,393
2022		54,229
2023		54,268
2024		54,362
Thereafter		721,619
Total	$	990,321
Less interest		438,246
Total discounted operating lease liabilities	$	552,075


		Fiscal Year Ended
Real estate leases other information		December 31, 2019
Cash paid for amounts included in measurement of operating lease liabilities	$	49,018
Right-of-use assets obtained in exchange for new operating lease liabilities	$	51,220
Weighted-average remaining lease term (years)		17.82
Weighted-average discount rate		6.77


	Operating Leases
2019	$	50,030
2020		49,582
2021		49,917
2022		50,237
2023		49,854
Thereafter		677,710
Total	$	927,330