Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 27, 2016 | Feb. 15, 2017 | Jun. 28, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Texas Roadhouse, Inc. | ||
Entity Central Index Key | 1,289,460 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 27, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-27 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,890,498,677 | ||
Entity Common Stock, Shares Outstanding | 70,728,892 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 27, 2016 | Dec. 29, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 112,944 | $ 59,334 |
Receivables, net of allowance for doubtful accounts of $33 at December 27, 2016 and $6 at December 29, 2015 | 56,127 | 45,421 |
Inventories, net | 16,088 | 15,633 |
Prepaid income taxes | 954 | 53 |
Prepaid expenses | 12,150 | 11,295 |
Deferred tax assets, net | 1,996 | 2,077 |
Total current assets | 200,259 | 133,813 |
Property and equipment, net of accumulated depreciation of $457,102 at December 27, 2016 and $395,886 at December 29, 2015 | 830,054 | 751,288 |
Goodwill | 116,571 | 116,571 |
Intangible assets, net of accumulated amortization of $11,753 at December 27, 2016 and $10,548 at December 29, 2015 | 3,622 | 4,827 |
Other assets | 29,465 | 26,207 |
Total assets | 1,179,971 | 1,032,706 |
Current liabilities: | ||
Current maturities of long-term debt and obligation under capital lease | 167 | 144 |
Accounts payable | 50,789 | 50,996 |
Deferred revenue - gift cards | 129,558 | 101,274 |
Accrued wages | 26,039 | 36,233 |
Income taxes payable | 90 | |
Accrued taxes and licenses | 19,698 | 18,779 |
Dividends payable | 13,418 | 11,919 |
Other accrued liabilities | 39,858 | 37,207 |
Total current liabilities | 279,527 | 256,642 |
Long-term debt and obligation under capital lease, excluding current maturities | 52,381 | 25,550 |
Stock option and other deposits | 7,491 | 7,041 |
Deferred rent | 36,103 | 31,493 |
Deferred tax liabilities, net | 12,268 | 6,402 |
Other liabilities | 33,959 | 28,396 |
Total liabilities | 421,729 | 355,524 |
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, 70,619,737 and 70,091,203 shares issued and outstanding at December 27, 2016 and December 29, 2015, respectively) | 71 | 70 |
Additional paid-in-capital | 219,626 | 201,023 |
Retained earnings | 530,723 | 468,678 |
Accumulated other comprehensive loss | (194) | (109) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 750,226 | 669,662 |
Noncontrolling interests | 8,016 | 7,520 |
Total equity | 758,242 | 677,182 |
Total liabilities and equity | $ 1,179,971 | $ 1,032,706 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 27, 2016 | Dec. 29, 2015 |
Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 33 | $ 6 |
Property and equipment, accumulated depreciation (in dollars) | 457,102 | 395,886 |
Intangible assets, accumulated amortization (in dollars) | $ 11,753 | $ 10,548 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 70,619,737 | 70,091,203 |
Common stock, shares outstanding | 70,619,737 | 70,091,203 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Revenue: | |||
Restaurant sales | $ 1,974,261 | $ 1,791,446 | $ 1,568,556 |
Franchise royalties and fees | 16,453 | 15,922 | 13,592 |
Total revenue | 1,990,714 | 1,807,368 | 1,582,148 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | |||
Cost of sales | 669,203 | 644,001 | 553,144 |
Labor | 590,256 | 524,203 | 459,119 |
Rent | 40,580 | 37,183 | 33,174 |
Other operating | 305,290 | 275,296 | 246,339 |
Pre-opening | 19,547 | 19,116 | 18,452 |
Depreciation and amortization | 82,964 | 69,694 | 59,179 |
Impairment and closure | 179 | 974 | 636 |
General and administrative | 110,795 | 92,336 | 81,656 |
Total costs and expenses | 1,818,814 | 1,662,803 | 1,451,699 |
Income from operations | 171,900 | 144,565 | 130,449 |
Interest expense, net | 1,255 | 1,959 | 2,084 |
Equity income from investments in unconsolidated affiliates | (1,111) | (1,641) | (1,602) |
Income before taxes | 171,756 | 144,247 | 129,967 |
Provision for income taxes | 51,183 | 42,986 | 38,990 |
Net income including noncontrolling interests | 120,573 | 101,261 | 90,977 |
Less: Net income attributable to noncontrolling interests | 4,975 | 4,367 | 3,955 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 115,598 | 96,894 | 87,022 |
Other comprehensive (loss) income, net of tax | |||
Unrealized gain on derivatives, net of tax of ($18), ($513) and ($513), respectively | 27 | 817 | 808 |
Foreign currency translation adjustment, net of tax of $70, $91 and ($39), respectively | (112) | (144) | 62 |
Total other comprehensive (loss) income, net of tax | (85) | 673 | 870 |
Total comprehensive income | $ 115,513 | $ 97,567 | $ 87,892 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | |||
Basic (in dollars per share) | $ 1.64 | $ 1.38 | $ 1.25 |
Diluted (in dollars per share) | $ 1.63 | $ 1.37 | $ 1.23 |
Weighted average shares outstanding: | |||
Basic (in shares) | 70,396 | 70,032 | 69,719 |
Diluted (in shares) | 71,052 | 70,747 | 70,608 |
Cash dividends declared per share (in dollars per share) | $ 0.76 | $ 0.68 | $ 0.60 |
Statements of Income and Compre
Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Consolidated Statements of Income and Comprehensive Income | |||
Unrealized gain on derivatives, (tax) | $ (18) | $ (513) | $ (513) |
Foreign currency translation adjustment, (tax)/benefit | $ 70 | $ 91 | $ (39) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total Texas Roadhouse, Inc. and Subsidiaries | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Dec. 31, 2013 | $ 587,659 | $ 70 | $ 215,051 | $ 374,190 | $ (1,652) | $ 6,201 | $ 593,860 |
Balance (in shares) at Dec. 31, 2013 | 70,352,257 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 87,022 | 87,022 | 3,955 | 90,977 | |||
Other comprehensive income (loss) | 870 | 870 | 870 | ||||
Noncontrolling interests contribution | 764 | 764 | |||||
Distributions to noncontrolling interests holders | (3,856) | (3,856) | |||||
Noncontrolling interests liquidation adjustments | 25 | 25 | 25 | ||||
Noncontrolling interest acquisition | (653) | (653) | (653) | ||||
Dividends declared and paid | (31,333) | (31,333) | (31,333) | ||||
Dividends declared | (10,443) | (10,443) | (10,443) | ||||
Shares issued under share-based compensation plans including tax effects | 8,165 | $ 2 | 8,163 | 8,165 | |||
Shares issued under share-based compensation plans including tax effects (in shares) | 1,169,181 | ||||||
Issuance of shares for franchise acquisition | 1,284 | 1,284 | 1,284 | ||||
Issuance of shares for franchise acquisition (in shares) | 40,699 | ||||||
Repurchase shares of common stock | (42,744) | $ (2) | (42,742) | (42,744) | |||
Repurchase shares of common stock (in shares) | (1,675,000) | ||||||
Indirect repurchase of shares for minimum tax withholdings | (6,843) | (6,843) | (6,843) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (258,356) | ||||||
Share-based compensation | 14,883 | 14,883 | 14,883 | ||||
Balance at Dec. 30, 2014 | 607,892 | $ 70 | 189,168 | 419,436 | (782) | 7,064 | 614,956 |
Balance (in shares) at Dec. 30, 2014 | 69,628,781 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 96,894 | 96,894 | 4,367 | 101,261 | |||
Other comprehensive income (loss) | 673 | 673 | 673 | ||||
Distributions to noncontrolling interests holders | (3,911) | (3,911) | |||||
Noncontrolling interests liquidation adjustments | 22 | 22 | 22 | ||||
Dividends declared and paid | (35,733) | (35,733) | (35,733) | ||||
Dividends declared | (11,919) | (11,919) | (11,919) | ||||
Shares issued under share-based compensation plans including tax effects | 8,977 | $ 1 | 8,976 | 8,977 | |||
Shares issued under share-based compensation plans including tax effects (in shares) | 1,030,184 | ||||||
Repurchase shares of common stock | (11,397) | $ (1) | (11,396) | (11,397) | |||
Repurchase shares of common stock (in shares) | (321,789) | ||||||
Indirect repurchase of shares for minimum tax withholdings | (8,572) | (8,572) | (8,572) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (245,973) | ||||||
Share-based compensation | 22,825 | 22,825 | 22,825 | ||||
Balance at Dec. 29, 2015 | 669,662 | $ 70 | 201,023 | 468,678 | (109) | 7,520 | $ 677,182 |
Balance (in shares) at Dec. 29, 2015 | 70,091,203 | 70,091,203 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 115,598 | 115,598 | 4,975 | $ 120,573 | |||
Other comprehensive income (loss) | (85) | (85) | (85) | ||||
Distributions to noncontrolling interests holders | (4,479) | (4,479) | |||||
Dividends declared and paid | (40,135) | (40,135) | (40,135) | ||||
Dividends declared | (13,418) | (13,418) | (13,418) | ||||
Shares issued under share-based compensation plans including tax effects | 5,959 | $ 1 | 5,958 | 5,959 | |||
Shares issued under share-based compensation plans including tax effects (in shares) | 879,042 | ||||||
Repurchase shares of common stock | (4,110) | (4,110) | (4,110) | ||||
Repurchase shares of common stock (in shares) | (114,700) | ||||||
Indirect repurchase of shares for minimum tax withholdings | (9,312) | (9,312) | (9,312) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (235,808) | ||||||
Share-based compensation | 26,067 | 26,067 | 26,067 | ||||
Balance at Dec. 27, 2016 | $ 750,226 | $ 71 | $ 219,626 | $ 530,723 | $ (194) | $ 8,016 | $ 758,242 |
Balance (in shares) at Dec. 27, 2016 | 70,619,737 | 70,619,737 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Consolidated Statement of Stockholders' Equity | |||
Dividends declared and paid per share (in dollars per share) | $ 0.57 | $ 0.51 | $ 0.45 |
Dividends declared per share (in dollars per share) | $ 0.19 | $ 0.17 | $ 0.15 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Cash flows from operating activities: | |||
Net income including noncontrolling interests | $ 120,573 | $ 101,261 | $ 90,977 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 82,964 | 69,694 | 59,179 |
Deferred income taxes | 5,994 | 411 | (480) |
Loss on disposition of assets | 5,125 | 5,455 | 4,987 |
Impairment and closure costs | 139 | 974 | 626 |
Equity income from investments in unconsolidated affiliates | (1,111) | (1,641) | (1,602) |
Distributions of income received from investments in unconsolidated affiliates | 1,901 | 502 | 541 |
Provision for doubtful accounts | 27 | (4) | 6 |
Share-based compensation expense | 26,067 | 22,825 | 14,883 |
Changes in operating working capital: | |||
Receivables | (10,733) | (11,395) | (8,634) |
Inventories | (455) | (1,377) | (2,278) |
Prepaid expenses | (855) | (743) | (277) |
Other assets | (4,229) | (2,276) | (1,231) |
Accounts payable | 138 | 7,611 | 5,366 |
Deferred revenue-gift cards | 28,284 | 21,812 | 16,660 |
Accrued wages | (10,194) | 5,858 | 1,381 |
Excess tax benefits from share-based compensation | (3,291) | (4,540) | (2,885) |
Prepaid income taxes and income taxes payable | 2,300 | 2,994 | 5,128 |
Accrued taxes and licenses | 919 | 1,187 | 158 |
Other accrued liabilities | 3,326 | 1,991 | 4,905 |
Deferred rent | 4,610 | 4,529 | 3,222 |
Other liabilities | 5,566 | 2,813 | 1,081 |
Net cash provided by operating activities | 257,065 | 227,941 | 191,713 |
Cash flows from investing activities: | |||
Capital expenditures-property and equipment | (164,738) | (173,475) | (125,445) |
Proceeds from sale of property and equipment, including insurance proceeds | 272 | 1,205 | |
Net cash used in investing activities | (164,738) | (173,203) | (124,240) |
Cash flows from financing activities: | |||
Proceeds from (payments on) revolving credit facility, net | 25,000 | (25,000) | |
Proceeds from financing lease obligation | 3,000 | ||
Repurchase of shares of common stock | (4,110) | (11,397) | (42,744) |
Proceeds from noncontrolling interest contributions and other | 764 | ||
Payment of debt assumed, net of cash acquired, in acquisition of noncontrolling interest | (1,050) | ||
Distributions to noncontrolling interests holders | (4,479) | (3,911) | (3,856) |
Excess tax benefits from share-based compensation | 3,291 | 4,540 | 2,885 |
Proceeds from stock option and other deposits, net | 419 | 1,422 | 1,083 |
Indirect repurchase of shares for minimum tax withholdings | (9,312) | (8,572) | (6,843) |
Principal payments on long-term debt and capital lease obligation | (145) | (128) | (411) |
Proceeds from exercise of stock options | 2,673 | 4,696 | 5,280 |
Dividends paid to shareholders | (52,054) | (46,176) | (31,333) |
Net cash used in financing activities | (38,717) | (81,526) | (76,225) |
Net increase (decrease) in cash and cash equivalents | 53,610 | (26,788) | (8,752) |
Cash and cash equivalents—beginning of period | 59,334 | 86,122 | 94,874 |
Cash and cash equivalents—end of period | 112,944 | 59,334 | 86,122 |
Supplemental disclosures of cash flow information: | |||
Interest paid, net of amounts capitalized | 1,011 | 2,321 | 2,374 |
Income taxes paid | 42,890 | 39,581 | 34,342 |
Capital expenditures included in current liabilities | 2,781 | $ 3,726 | 1,115 |
Obligation under capital lease | $ 2,000 | ||
Supplemental schedule of noncash financing activities: | |||
Stock acquisition on noncontrolling interest in franchise restaurant | $ 1,284 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 27, 2016 | |
Basis of Presentation | |
Description of Business | (1) The accompanying Consolidated Financial Statements include the accounts of Texas Roadhouse, Inc. ("TRI"), our wholly‑owned subsidiaries and subsidiaries in which we have a controlling interest (collectively, the "Company," "we," "our" and/or "us") as of December 27, 2016 and December 29, 2015 and for each of the years in the three-year period ended December 27, 2016. As of December 27, 2016, we owned and operated 431 restaurants and franchised an additional 86 restaurants in 49 states and six foreign countries. Of the 431 company-owned restaurants that were operating at December 27, 2016, 415 were wholly‑owned and 16 were majority‑owned. As of December 29, 2015, we owned and operated 401 restaurants and franchised an additional 82 restaurants in 49 states and four foreign countries. Of the 401 company-owned restaurants that were operating at December 29, 2015, 385 were wholly‑owned and 16 were majority-owned. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 27, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) Principles of Consolidation As of December 27, 2016 and December 29, 2015, we owned a 5.0% to 10.0% equity interest in 24 restaurants. Additionally, as of December 27, 2016 and December 29, 2015, we owned a 40% equity interest in four non-Texas Roadhouse restaurants as part of a joint venture agreement with a casual dining restaurant operator in China. The unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in Other assets in our consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our consolidated statements of income and comprehensive income under Equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants as well as the entities whose accounts have been consolidated have been eliminated. (b) Fiscal Year We utilize a 52 or 53 week accounting period that typically ends on the last Tuesday in December. We utilize a 13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal years 2016, 2015 and 2014 were 52 weeks in length. (c) Cash and Cash Equivalents We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Book overdrafts are recorded in accounts payable and are included within operating cash flows. Cash and cash equivalents also included receivables from credit card companies, which amounted to $8.8 million and $7.9 million at December 27, 2016 and December 29, 2015, respectively, because the balances are settled within two to three business days. (d) Receivables Receivables consist principally of amounts due from retail gift card providers, certain franchise restaurants for reimbursement of labor costs, pre‑opening and other expenses, and franchise restaurants for royalty fees. Receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write‑off experience. We review our allowance for doubtful accounts quarterly. Past due balances over 120 days and a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. (e) Inventories Inventories, consisting principally of food, beverages and supplies, are valued at the lower of cost (first‑in, first‑out) or market. (f) Pre‑opening Expenses Pre‑opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of a new restaurant and are comprised principally of opening team and training compensation and benefits, travel expenses, rent, food, beverage and other initial supplies and expenses. (g) Property and Equipment Property and equipment are stated at cost. Expenditures for major renewals and betterments are capitalized while expenditures for maintenance and repairs are expensed as incurred. Depreciation is computed on property and equipment, including assets located on leased properties, over the shorter of the estimated useful lives of the related assets or the underlying lease term using the straight‑line method. In most cases, assets on leased properties are depreciated over a period of time which includes both the initial term of the lease and one or more option periods. See note 2(p) for further discussion of leases and leasehold improvements. The estimated useful lives are: Land improvements 10 - 25 years Buildings and leasehold improvements 10 - 25 years Equipment and smallwares 3 - 10 years Furniture and fixtures 3 - 10 years The cost of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived assets and included in Property and equipment, net. Repairs and maintenance expense amounted to $22.4 million, $20.6 million and $17.9 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. These costs are included in other operating costs in our consolidated statements of income and comprehensive income. (h) Impairment of Goodwill Goodwill represents the excess of cost over fair value of assets of businesses acquired. In accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350, Intangibles – Goodwill and Other ("ASC 350"), we perform tests to assess potential impairments at the end of each fiscal year or during the year if an event or other circumstance indicates that goodwill may be impaired. Our assessment is performed at the reporting unit level, which is at the individual restaurant level. In the first step of the review process, we compare the estimated fair value of the restaurant with its carrying value, including goodwill. If the estimated fair value of the restaurant exceeds its carrying amount, no further analysis is needed. If the estimated fair value of the restaurant is less than its carrying amount, the second step of the review process requires the calculation of the implied fair value of the goodwill by allocating the estimated fair value of the restaurant to all of the assets and liabilities of the restaurant as if it had been acquired in a business combination. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the carrying value of the goodwill associated with the restaurant exceeds the implied fair value of the goodwill, an impairment loss is recognized for that excess amount. The valuation approaches used to determine fair value are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about appropriate revenue growth rates, operating margins, weighted average cost of capital and comparable company and acquisition market multiples. In estimating the fair value using the capitalization of earnings method or discounted cash flows, we consider the period of time the restaurant has been open, the trend of operations over such period and future periods, expectations of future sales growth and terminal value. Assumptions about important factors such as the trend of future operations and sales growth are limited to those that are supportable based upon the plans for the restaurant and actual results at comparable restaurants. When developing these key judgments and assumptions, we consider economic, operational and market conditions that could impact fair value. The judgments and assumptions used are consistent with what we believe hypothetical market participants would use. However, estimates are inherently uncertain and represent only our reasonable expectations regarding future developments. If the estimates used in performing the impairment test prove inaccurate, the fair value of the restaurants may ultimately prove to be significantly lower, thereby causing the carrying value to exceed the fair value and indicating impairment has occurred. In both 2016 and 2015, as a result of our annual goodwill impairment analysis, we determined that there was no goodwill impairment. In 2014, as a result of our annual goodwill impairment analyses, we recorded goodwill impairment charges of $0.6 million, as discussed further in note 14. Refer to note 5 for additional information related to goodwill and intangible assets. (i) Other Assets Other assets consist primarily of deferred compensation plan assets, investments in unconsolidated affiliates, deposits and costs related to the issuance of debt. The debt issuance costs are being amortized to interest expense over the term of the related debt. For further discussion of the deferred compensation plan, see note 13. (j) Impairment or Disposal of Long‑lived Assets In accordance with ASC 360-10-05, Property, Plant and Equipment , long-lived assets related to each restaurant to be held and used in the business, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. When we evaluate restaurants, cash flows are the primary indicator of impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the restaurant to estimated undiscounted future cash flows expected to be generated by the restaurant. Under our policies, trailing 12-month cash flow results below $300,000 at the individual restaurant level signals potential impairment. In our evaluation of restaurants that do not meet the cash flow threshold, we estimate future undiscounted cash flows from operating the restaurant over its estimated useful life, which can be for a period of over 20 years. In the estimation of future cash flows, we consider the period of time the restaurant has been open, the trend of operations over such period and future periods and expectations of future sales growth. Assumptions about important factors such as the trend of future operations and sales growth are limited to those that are supportable based upon the plans for the restaurant and actual results at comparable restaurants. If the carrying amount of the restaurant exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount exceeds the fair value of the assets. We generally measure fair value by independent third party appraisal or discounting estimated future cash flows. When fair value is measured by discounting estimated future cash flows, the assumptions used are consistent with what we believe hypothetical market participants would use. We also use a discount rate that is commensurate with the risk inherent in the projected cash flows. The adjusted carrying amounts of assets to be held and used are depreciated over their remaining useful life. In 2016, 2015 and 2014, as a result of our impairment analysis, we determined that there was no impairment. For further discussion regarding closures and impairments recorded in 2016, 2015 and 2014, including the impairments of goodwill and other long-lived assets, refer to note 14. (k) Insurance Reserves We self‑insure a significant portion of expected losses under our health, workers compensation, general liability, employment practices liability, and property insurance programs. We purchase insurance for individual claims that exceed the retention amounts listed below: Employment practices liability/Class Action $ / $2,000,000 Workers compensation $350,000 General liability $250,000 Employee healthcare $250,000 In addition, we purchase property insurance for claims that exceed $50,000 after an aggregate deductible of $250,000. We record a liability for unresolved claims and for an estimate of incurred but not reported claims based on estimates provided by management, a third party administrator and/or actuary. The estimated liability is based on a number of assumptions and factors regarding economic conditions, the frequency and severity of claims and claim development history and settlement practices. Our assumptions are reviewed, monitored, and adjusted when warranted by changing circumstances. (l) Segment Reporting We consider our restaurant and franchising operations as similar and have aggregated them into a single reportable segment. The majority of the restaurants operate in the U.S. within the casual dining segment of the restaurant industry, providing similar products to similar customers. The restaurants also possess similar pricing structures, resulting in similar long‑term expected financial performance characteristics. As of December 27, 2016, we operated 431 restaurants, each as a single operating segment, and franchised an additional 86 restaurants. Revenue from external customers is derived principally from food and beverage sales. We do not rely on any major customers as a source of revenue. (m) Revenue Recognition Revenue from restaurant sales is recognized when food and beverage products are sold. Deferred revenue primarily represents our liability for gift cards that have been sold, but not yet redeemed. When the gift cards are redeemed, we recognize restaurant sales and reduce deferred revenue. For some of the gift cards that were sold, the likelihood of redemption is remote. When the likelihood of a gift card's redemption is determined to be remote, we record a breakage adjustment and reduce deferred revenue by the amount never expected to be redeemed. We use historic gift card redemption patterns to determine when the likelihood of a gift card's redemption becomes remote and have determined that approximately 4% of the value of the gift cards sold by our company and our third party retailers will never be redeemed. The methodology we use to match the expected redemption value of unredeemed gift cards to our historic redemption patterns is to amortize the estimated breakage rates over a three year period. As a result, the amount of unredeemed gift card liability included in deferred revenue is the full value of unredeemed gift cards less the amortized portion of the breakage rates. We recorded our gift card breakage adjustment as a reduction of other operating expense in our consolidated statements of income and comprehensive income. We review and adjust our estimates on a semi-annual basis. We franchise Texas Roadhouse restaurants. We execute franchise agreements for each franchise restaurant which sets out the terms of our arrangement with the franchisee. Our franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to our approval and payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration. We collect ongoing royalties of 2.0% to 4.0% of sales from our domestic franchisees, along with royalties paid to us by our international franchisees. These ongoing royalties are reflected in the accompanying consolidated statements of income and comprehensive income as franchise royalties and fees. We recognize initial franchise fees as franchise royalties and fees after performing substantially all initial services or conditions required by the franchise agreement, which is generally upon the opening of a restaurant. We received initial franchise fees of $0.3 million, $0.3 million and $0.6 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. Continuing franchise royalties are recognized as revenue as the fees are earned. We also enter into area development agreements for the development of international Texas Roadhouse restaurants. Upfront fees from development agreements are deferred and recognized as franchise royalties and fees on a pro-rata basis as restaurants under the development agreement are opened. We also perform supervisory and administrative services for certain franchise restaurants for which we receive management fees, which are recognized as the services are performed. Revenue from supervisory and administrative services is recorded as a reduction of general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Total revenue from supervisory and administrative services recorded for the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was approximately $1.1 million, $1.1 million and $1.0 million, respectively. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the consolidated statements of income and comprehensive income. (n) Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes , under which deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. We recognize both interest and penalties on unrecognized tax benefits as part of income tax expense. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made. (o) Advertising We have a domestic system‑wide marketing and advertising fund. We maintain control of the marketing and advertising fund and, as such, have consolidated the fund’s activity for the years ended December 27, 2016, December 29, 2015 and December 30, 2014. Domestic company and franchise restaurants are required to remit a designated portion of sales, currently 0.3%, to the advertising fund. These reimbursements do not exceed the costs incurred by the advertising fund throughout the year associated with various marketing programs which are developed internally by us. Therefore, the net amount of the advertising costs incurred less amounts remitted by franchise restaurants is included in general and administrative expense in our consolidated statements of income and comprehensive income. Other costs related to local restaurant area marketing initiatives are included in other operating costs in our consolidated statements of income and comprehensive income. These costs and the company-owned restaurant contribution amounted to approximately $13.3 million, $11.7 million and $10.8 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. (p) Leases and Leasehold Improvements We lease land and buildings for the majority of our restaurants under non‑cancelable lease agreements. Our land and/or building leases typically have initial terms ranging from 10 to 15 years, and certain renewal options for one or more five‑year periods. We account for leases in accordance with ASC 840, Leases , and other related authoritative guidance. When determining the lease term, we include option periods for which failure to renew the lease imposes a penalty on us in such an amount that renewal appears, at the inception of the lease, to be reasonably assured. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements which might become impaired if we choose not to continue the use of the leased property. Certain of our operating leases contain predetermined fixed escalations of the minimum rent during the original term of the lease. For these leases, we recognize the related rent expense on a straight‑line basis over the lease term and record the difference between the amounts charged to operations and amounts paid as deferred rent. We generally do not receive rent concessions or leasehold improvement incentives upon opening a restaurant that is subject to a lease. We may receive rent holidays, which would begin on the possession date and end when the lease commences, during which no cash rent payments are typically due under the terms of the lease. Rent holidays are included in the lease term when determining straight‑line rent expense. Additionally, certain of our operating leases contain clauses that provide for additional contingent rent based on a percentage of sales greater than certain specified target amounts. We recognize contingent rent expense prior to the achievement of the specified target that triggers the contingent rent, provided achievement of the target is considered probable. This may result in some variability in rent expense as a percentage of sales over the term of the lease in restaurants where we pay contingent rent. The judgment regarding the probable term for each restaurant property lease impacts the classification and accounting for a lease as capital or operating, the rent holiday and/or escalation in payments that are taken into consideration when calculating straight‑line rent and the term over which leasehold improvements for each restaurant are amortized. The material factor we consider when making this judgment is the total amount invested in the restaurant at the inception of the lease and whether management believes that renewal appears reasonably assured. While a different term may produce materially different amounts of depreciation, amortization and rent expense than reported, our historical lease renewal rates support the judgments made. We have not made any changes to the nature of the assumptions used to account for leases in any of the fiscal years presented in our consolidated financial statements. Sale leasebacks are transactions through which assets (such as restaurant properties) are sold at fair value and subsequently leased back. The resulting leases generally qualify and are accounted for as operating leases. Financing leases are generally the product of a sale leaseback transaction that does not meet the criteria for sale leaseback accounting. The result of a financing lease is the retention of the “sold” assets within land, building and equipment with a financing lease obligation equal to the amount of proceeds received recorded as a component of other liabilities on our consolidated balance sheets. (q) Use of Estimates We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reporting of revenue and expenses during the period to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card discounts and breakage and income taxes. Actual results could differ from those estimates. (r) Comprehensive Income ASC 220, Comprehensive Income , establishes standards for reporting and the presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and other comprehensive income (loss) items that are excluded from net income under GAAP. Other comprehensive income (loss) consists of the effective unrealized portion of changes in fair value of cash flow hedges and foreign currency translation adjustments. The foreign currency translation adjustment included in comprehensive income on the consolidated statements of income and comprehensive income represents the unrealized impact of translating the financial statements of our foreign investment. This amount is not included in net income and would only be realized upon the disposition of the business. (s) Fair Value of Financial Instruments Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the measurement date. We use a three-tier fair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop our assumptions regarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy. Refer to note 13 for further discussion of fair value measurement. (t) Derivative Instruments and Hedging Activities We do not use derivative instruments for trading purposes. We account for derivatives and hedging activities in accordance with ASC 815, Derivatives and Hedging , which requires that all derivative instruments be recorded on the consolidated balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship. We had two free standing derivative instruments that had been designated and qualified as cash flow hedges. The first interest rate swap agreement expired in November 2015 while the second expired in January 2016. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. There was no hedge ineffectiveness recognized during the years ended December 27, 2016, December 29, 2015 and December 30, 2014. |
Long-term Debt and Obligations
Long-term Debt and Obligations Under Capital Leases | 12 Months Ended |
Dec. 27, 2016 | |
Long-term Debt and Obligation Under Capital Lease | |
Long-term Debt and Obligations Under Capital Leases | (3) Long‑term Debt and Obligation Under Capital Lease Long‑term debt consisted of the following: December 27, December 29, 2016 2015 Installment loan, due 2020 $ $ Obligation under capital lease — Revolver Less current maturities $ $ Maturities of long‑term debt at December 27, 2016 are as follows: 2017 $ 2018 2019 2020 2021 Thereafter $ The interest rate for our installment loan outstanding at both December 27, 2016 and December 29, 2015 was 10.46%. The debt is secured by certain land and building assets and is subject to certain prepayment penalties. During the 52 weeks ended December 27, 2016, we amended an existing lease at one restaurant location to acquire additional square footage. As a result of this amendment, the lease qualified as a capital lease. On November 1, 2013, we entered into Omnibus Amendment No. 1 and Consent to Credit Agreement and Guaranty with respect to our revolving credit facility dated as of August 12, 2011 with a syndicate of commercial lenders led by JP Morgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo, N.A. The amended revolving credit facility, which has a maturity date of November 1, 2018, remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million. The amendment provides us with the option to increase the revolving credit facility by $200.0 million, up to $400.0 million, subject to certain limitations. The terms of the amended revolving credit facility require us to pay interest on outstanding borrowings at the London Interbank Offered Rate ("LIBOR") plus a margin of 0.875% to 1.875%, depending on our leverage ratio, or the Alternate Base Rate, which is the higher of the issuing bank’s prime lending rate, the Federal Funds rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. We are also required to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the amended revolving credit facility, depending on our leverage ratio. The weighted‑average interest rate for the amended revolving credit facility at December 27, 2016 and December 29, 2015 was 1.57% and 3.22%, respectively, including the impact of interest rate swap which expired on January 7, 2016. At December 27, 2016, we had $50.0 million outstanding under the amended revolving credit facility and $143.2 million of availability, net of $6.8 million of outstanding letters of credit. The lenders’ obligation to extend credit under the amended revolving credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio of 2.00 to 1.00 and a maximum consolidated leverage ratio of 3.00 to 1.00. The amended revolving credit facility permits us to incur additional secured or unsecured indebtedness outside the facility, except for the incurrence of secured indebtedness that in the aggregate exceeds 15% of our consolidated tangible net worth or circumstances where the incurrence of secured or unsecured indebtedness would prevent us from complying with our financial covenants. We were in compliance with all financial covenants as of December 27, 2016. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 27, 2016 | |
Property and Equipment, Net | |
Property and Equipment, Net | (4) Property and Equipment, Net Property and equipment were as follows: December 27, December 29, 2016 2015 Land and improvements $ $ Buildings and leasehold improvements Equipment and smallwares Furniture and fixtures Construction in progress Liquor licenses Accumulated depreciation and amortization $ $ The amount of interest capitalized in connection with restaurant construction was approximately $0.3 million for the year ended December 27, 2016 and $0.7 million for each of the years ended December 29, 2015 and December 30, 2014. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 27, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (5) Goodwill and Intangible Assets The changes in the carrying amount of goodwill and intangible assets are as follows: Goodwill Intangible Assets Balance as of December 30, 2014 (1) Additions — — Amortization expense — Disposals and other, net — — Impairment — — Balance as of December 29, 2015 Additions — — Amortization expense — Disposals and other, net — — Impairment — — Balance as of December 27, 2016 (1) Net of $4.2 million of accumulated goodwill impairment losses. Intangible assets consist of reacquired franchise rights. The gross carrying amount and accumulated amortization of the intangible assets at December 27, 2016 were $15.4 million and $11.8 million, respectively. As of December 29, 2015, the gross carrying amount and accumulated amortization of the intangible assets was $15.4 million and $10.5 million. We amortize reacquired franchise rights on a straight-line basis over the remaining term of the franchise operating agreements, which varies by restaurant. Amortization expense for the next five years is expected to range from $0.3 million to $0.9 million. |
Leases
Leases | 12 Months Ended |
Dec. 27, 2016 | |
Leases | |
Leases | (6) Leases The following is a schedule of future minimum lease payments required for operating leases that have initial or remaining non-cancellable terms in excess of one year as of December 27, 2016: Operating Leases 2017 $ 2018 2019 2020 2021 Thereafter Total $ Rent expense for operating leases consisted of the following: December 27, 2016 December 29, 2015 December 30, 2014 Minimum rent—occupancy $ $ $ Contingent rent Rent expense, occupancy Minimum rent—equipment and other Rent expense $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 27, 2016 | |
Income Taxes | |
Income Taxes | (7) Income Taxes Components of our income tax provision for the years ended December 27, 2016, December 29, 2015 and December 30, 2014 are as follows: Fiscal Year Ended December 27, 2016 December 29, 2015 December 30, 2014 Current: Federal $ $ $ State Foreign Total current Deferred: Federal State Total deferred Income tax provision $ $ $ Our pre-tax income is substantially derived from domestic restaurants. A reconciliation of the statutory federal income tax rate to our effective tax rate for December 27, 2016, December 29, 2015 and December 30, 2014 is as follows: December 27, 2016 December 29, 2015 December 30, 2014 Tax at statutory federal rate % % % State and local tax, net of federal benefit FICA tip tax credit Work opportunity tax credit Net income attributable to noncontrolling interests Other Total % % % Components of deferred tax assets (liabilities) are as follows: December 27, 2016 December 29, 2015 Deferred tax assets: Insurance reserves $ $ Other reserves Deferred rent Share-based compensation Deferred revenue—gift cards Deferred compensation Other assets Total deferred tax asset Deferred tax liabilities: Property and equipment Goodwill and intangibles Other liabilities Total deferred tax liability Net deferred tax liability $ $ Current deferred tax asset $ $ Noncurrent deferred tax liability Net deferred tax liability $ $ We have not provided any valuation allowance as we believe the realization of our deferred tax assets is more likely than not. A reconciliation of the beginning and ending liability for unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows: Balance at December 30, 2014 $ Additions to tax positions related to prior years Additions to tax positions related to current year Reductions due to statute expiration Reductions due to exam settlements Balance at December 29, 2015 Additions to tax positions related to prior years Additions to tax positions related to current year Reductions due to statute expiration Reductions due to exam settlement Balance at December 27, 2016 $ We recognize both interest and penalties on unrecognized tax benefits as part of income tax expense. As of December 27, 2016 and December 29, 2015, the total amount of accrued penalties and interest related to uncertain tax provisions was not material. All entities for which unrecognized tax benefits exist as of December 27, 2016 possess a December tax year-end. As a result, as of December 27, 2016, the tax years ended December 31, 2013, December 30, 2014 and December 29, 2015 remain subject to examination by all tax jurisdictions. As of December 27, 2016, no audits were in process by a tax jurisdiction that, if completed during the next twelve months, would be expected to result in a material change to our unrecognized tax benefits. Additionally, as of December 27, 2016, no event occurred that is likely to result in a significant increase or decrease in the unrecognized tax benefits through December 26, 2017. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 27, 2016 | |
Preferred Stock | |
Preferred Stock | (8) Preferred Stock Our Board of Directors is authorized, without further vote or action by the holders of common stock, to issue from time to time up to an aggregate of 1,000,000 shares of preferred stock in one or more series. Each series of preferred stock will have the number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the Board of Directors, which may include, but are not limited to, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. There were no shares of preferred stock outstanding at December 27, 2016 and December 29, 2015. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 27, 2016 | |
Stock Repurchase Program | |
Stock Repurchase Program | (9) Stockholders’ Equity On May 22, 2014, our Board of Directors approved a stock repurchase program under which we may repurchase up to $100.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on February 16, 2012. All repurchases to date under our stock repurchase program have been made through open market transactions. The timing and the amount of any repurchases will be determined by management under parameters established by our Board of Directors, based on an evaluation of our stock price, market conditions and other corporate considerations. For the years ended December 27, 2016, December 29, 2015 and December 30, 2014, we paid approximately $4.1 million, $11.4 million and $42.7 million to repurchase 114,700, 321,789 and 1,675,000 shares of our common stock, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 27, 2016 | |
Earnings Per Share | |
Earnings Per Share | (10) Earnings Per Share The share and net income per share data for all periods presented are based on the historical weighted‑average shares outstanding. The diluted earnings per share calculations show the effect of the weighted‑average stock options, RSUs outstanding and certain performance stock units ("PSUs") from our equity incentive plans as discussed in note 12. The following table summarizes the options and nonvested stock that were outstanding but not included in the computation of diluted earnings per share because their inclusion would have had an anti‑dilutive effect: Fiscal Year Ended December 27, December 29, December 30, 2016 2015 2014 Nonvested stock Options — — — Total PSUs are not included in the diluted earnings per share calculation until the performance-based criteria have been met. See note 12 for further discussion of PSUs. The following table sets forth the calculation of earnings per share and weighted average shares outstanding (in thousands) as presented in the accompanying consolidated statements of income and comprehensive income: December 27, December 29, December 30, 2016 2015 2014 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ Basic EPS: Weighted-average common shares outstanding Basic EPS $ $ $ Diluted EPS: Weighted-average common shares outstanding Dilutive effect of stock options and nonvested stock Shares-diluted Diluted EPS $ $ $ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 27, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | (11) Commitments and Contingencies The estimated cost of completing capital project commitments at December 27, 2016 and December 29, 2015 was approximately $157.5 million and $129.4 million, respectively. As of December 27, 2016 and December 29, 2015, we are contingently liable for $16.4 million and $17.2 million, respectively, for seven leases, listed in the table below. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of December 27, 2016 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2018 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 June 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2019 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable, under the terms of the lease, if the franchisee defaults. (2) As discussed in note 17, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. During the year ended December 27, 2016, we bought most of our beef from three suppliers. Although there are a limited number of beef suppliers, we believe that other suppliers could provide a similar product on comparable terms. A change in suppliers, however, could cause supply shortages, higher costs to secure adequate supplies and a possible loss of sales, which would affect operating results adversely. We have no material minimum purchase commitments with our vendors that extend beyond a year. On September 30, 2011, the U.S. Equal Employment Opportunity Commission ("EEOC") filed a lawsuit styled Equal Employment Opportunity Commission v. Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC and Texas Roadhouse Management Corp. in the United States District Court, District of Massachusetts, Civil Action Number 1:11‑cv‑11732. The complaint alleges that applicants over the age of 40 were denied employment in our restaurants in bartender, host, server and server assistant positions due to their age. The EEOC is seeking injunctive relief, remedial actions, payment of damages to the applicants and costs. A jury trial began on January 9, 2017 and culminated in the declaration of a mistrial on February 3, 2017, after the jury was unable to reach a unanimous verdict. A second trial has been scheduled for May 2017. We deny liability and are vigorously defending this case; however, in view of the inherent uncertainties of litigation, the outcome of this case cannot be predicted at this time. We cannot estimate the amount or range of loss, if any, associated with this matter. On July 15, 2016, the Florida Circuit Court in Palm Beach County approved a settlement agreement styled Andrew Lovett and Semaj Miller, individually and on behalf of others, v. Texas Roadhouse Management Corp. (Case no. 50-2016-CA-007714-MB-AO) resolving alleged violations of the Fair Labor Standards Act asserted on behalf of a purported nationwide class of current and former employees in exchange for a settlement payment not to exceed $9.5 million. For the 52 weeks ended December 27, 2016, we recorded a charge of $7.3 million ($4.5 million after-tax) to cover the costs of the settlement including payments to opt-in members and class attorneys, as well as related settlement administration costs. The pre-tax charge was recorded in general and administrative expenses in our consolidated statements of income and comprehensive income. Occasionally, we are a defendant in litigation arising in the ordinary course of business, including "slip and fall" accidents, employment related claims and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. In the opinion of management, the ultimate disposition of these matters, most of which are covered by insurance, will not have a material effect on our consolidated financial position, results of operations or cash flows. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 27, 2016 | |
Share-based Compensation | |
Share-based Compensation | (12) Share‑based Compensation On May 16, 2013, our stockholders approved the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (the "Plan"). The Plan provides for the granting of incentive and non-qualified stock options to purchase shares of common stock, stock appreciation rights, and full value awards, including restricted stock, restricted stock units ("RSUs"), deferred stock units, performance stock and performance stock units ("PSUs"). This plan replaced the Texas Roadhouse, Inc. 2004 Equity Incentive Plan. The following table summarizes the share‑based compensation recorded in the accompanying consolidated statements of income and comprehensive income: Fiscal Year Ended December 27, December 29, December 30, 2016 2015 2014 Labor expense $ $ $ General and administrative expense Total share-based compensation expense $ $ $ Beginning in 2008, we changed the method by which we provide share-based compensation to our employees by granting RSUs as a form of share-based compensation. Prior to 2008, we issued stock options as share-based compensation to our employees. Beginning in 2015, we began granting PSUs to two of our executives. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. A PSU is the conditional right to receive one share of common stock upon meeting a performance obligation along with the satisfaction of the vesting requirement. Share‑based compensation activity by type of grant as of December 27, 2016 and changes during the period then ended are presented below. Summary Details for RSUs Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted Forfeited Vested Outstanding at December 27, 2016 $ 1.2 $ As of December 27, 2016, with respect to unvested RSUs, there was $17.8 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.2 years. The vesting terms of the RSUs range from approximately 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was $21.5 million, $25.1 million and $20.4 million, respectively. The excess tax benefit realized from tax deductions associated with vested restricted stock units for the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was $1.5 million, $2.8 million and $1.4 million, respectively. Summary Details for PSUs In 2015 and 2016, we granted PSUs to two of our executives subject to a one-year vesting and the achievement of certain earnings targets, which determine the number of units to vest at the end of the vesting period. Share-based compensation is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through the performance period. For each grant, PSUs vest after meeting the performance and service conditions. On January 8, 2015 we granted PSUs with a grant date fair value of approximately $4.0 million based on the grant date price per share of $34.77. On January 8, 2016, 144,000 shares vested related to this PSU grant and were distributed during the 13 weeks ended March 29, 2016. On November 19, 2015 we granted PSUs with a grant date fair value of approximately $3.9 million based on the grant date price per share of $34.11. On January 8, 2017, 188,237 shares vested related to this PSU grant and are expected to be distributed during the 13 weeks ending March 28, 2017. On November 9, 2016 we granted PSUs with a grant date fair value of $4.6 million based on a grant date price per share of $39.88. As of December 27, 2016, with respect to unvested PSUs, there was $4.2 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.0 year. Summary Details for Stock Options Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted — — Cancelled/Expired Exercised Outstanding at December 27, 2016 $ 0.5 $ Exercisable at December 27, 2016 $ 0.5 $ No stock options were granted or vested during the fiscal years ended December 27, 2016, December 29, 2015 and December 30, 2014. The total intrinsic value of options exercised during the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was $6.3 million, $6.5 million and $6.1 million, respectively. For the years ended December 27, 2016, December 29, 2015 and December 30, 2014, cash received before tax withholdings from options exercised was $2.7 million, $4.7 million and $5.3 million, respectively. The excess tax benefit realized from tax deductions associated with options exercised for the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was $1.8 million, $1.7 million and $1.5 million, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 27, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | (13) Fair Value Measurement ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. Level 1 Inputs based on quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. There were no transfers among levels within the fair value hierarchy during the year ended December 27, 2016. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level December 27, 2016 December 29, 2015 Interest rate swap 2 $ — $ Deferred compensation plan—assets 1 Deferred compensation plan—liabilities 1 As of December 29, 2015, the fair value of our interest rate swap was determined based on industry-standard valuation models. Such models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves. See note 15 for discussion of our interest rate swap, which expired on January 7, 2016. The Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as amended, (the "Deferred Compensation Plan") is a nonqualified deferred compensation plan which allows highly compensated employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust. We report the accounts of the rabbi trust in other assets and the corresponding liability in other liabilities in our consolidated financial statements. These investments are considered trading securities and are reported at fair value based on quoted market prices. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the consolidated statements of income and comprehensive income. At December 27, 2016 and December 29, 2015, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values based on the short-term nature of these instruments. The fair value of our amended revolving credit facility at December 27, 2016 and December 29, 2015 approximated its carrying value since it is a variable rate credit facility (Level 2). The fair value of our installment loan is estimated based on the current rates offered to us for instruments of similar terms and maturities. The carrying amounts and related estimated fair values for our installment loan are as follows: December 27, 2016 December 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Installment loan—Level 2 $ $ $ $ |
Impairment and Closure Costs
Impairment and Closure Costs | 12 Months Ended |
Dec. 27, 2016 | |
Impairment and Closure Costs | |
Impairment and Closure Costs | (14) Impairment and Closure Costs We recorded impairment and closure costs of $0.2 million, $1.0 million and $0.6 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively, related to goodwill or costs associated with the closure of restaurants. Impairment and closure costs in 2016 included $0.1 million in closure costs associated with the relocation of one restaurant in the third quarter of 2016 and $0.1 million in closure costs associated with the relocation of one restaurant in the fourth quarter of 2015. Impairment and closure costs in 2015 included $1.0 million in closure costs associated with the relocation of two restaurants in the fourth quarter of 2015. Impairment and closure costs in 2014 included $0.6 million associated with the impairment of goodwill related to one restaurant. The goodwill impairment charges in 2014 resulted from our annual testing which relies, in part, on the historical trends and anticipated future trends of operations of individual restaurants. |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 12 Months Ended |
Dec. 27, 2016 | |
Derivative and Hedging Activities | |
Derivative and Hedging Activities | (15) Derivative and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under FASB ASC 815, Derivatives and Hedging ("ASC 815"). We use interest rate-related derivative instruments to manage our exposure to fluctuations of interest rates. By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We attempt to minimize the credit risk by entering into transactions with high-quality counterparties whose credit rating is evaluated on a quarterly basis. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We attempt to minimize market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be taken. Interest Rate Swaps On January 7, 2009, we entered into an interest rate swap, starting on February 7, 2009, with a notional amount of $25.0 million to hedge a portion of the cash flows of our variable rate borrowings. We designated the interest rate swap as a cash flow hedge of our exposure to variability in future cash flows attributable to interest payments on a $25.0 million tranche of floating rate debt borrowed under our amended revolving credit facility. Under the terms of the swap, we paid a fixed rate of 2.34% on the $25.0 million notional amount and received payments from the counterparty based on one month LIBOR for a term that ended on January 7, 2016, effectively resulting in a fixed rate on the $25.0 million notional amount. We entered into the above interest rate swap with the objective of eliminating the variability of our interest cost that arises because of changes in the variable interest rate for the designated interest payments. Changes in the fair value of the interest rate swaps were reported as a component of accumulated other comprehensive income or loss ("AOCI"). Additionally, amounts related to the yield adjustment of the hedged interest payments were subsequently reclassified into interest expense in the same period during which the related interest affected earnings. We reclassified a loss from AOCI, net of tax, in our consolidated balance sheet to interest expense in our consolidated statement of income and comprehensive income when the interest rate swap expired on January 7, 2016. See note 13 for fair value discussion of the interest rate swap. As of December 29, 2015, we had an interest rate swap designated as a hedging instrument under ASC 815 which was recorded as a derivative liability of approximately $45,000 in other accrued liabilities on the consolidated balance sheet. The following table summarizes the effect of our interest rate swaps in the consolidated statements of income and comprehensive income for the 52 weeks ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively: December 27, December 29, December 30, 2016 2015 2014 Gain recognized in AOCI, net of tax (effective portion) (1) $ $ $ Loss reclassified from AOCI to income (effective portion) (1) $ $ $ (1) The fiscal year ended December 27, 2016 included the effect of one interest rate swap which expired on January 7, 2016, while the fiscal years ended December 29, 2015 and December 30, 2014 included the effect of two interest rate swaps, one of which expired on November 7, 2015. The loss reclassified from AOCI to income was recognized in interest expense on our consolidated statements of income and comprehensive income. For each of the fiscal periods ended December 27, 2016, December 29, 2015 and December 30, 2014, we did not recognize any gain or loss due to hedge ineffectiveness related to the derivative instruments in the consolidated statements of income and comprehensive income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 27, 2016 | |
Accumulated Other Comprehensive Loss. | |
Accumulated Other Comprehensive Loss | (16) Accumulated Other Comprehensive Loss The components of the changes in accumulated other comprehensive loss for the 52 weeks ended December 27, 2016 and December 29, 2015 were as follows: Cash Flow Hedges Foreign Currency Translation Accumulated Other Comprehensive Loss Balance as of December 30, 2014 Other comprehensive loss before reclassifications Reclassification adjustments to income (1) — Income taxes Balance as of December 29, 2015 $ $ $ Other comprehensive loss before reclassifications — Reclassification adjustments to income (1) — Income taxes Balance as of December 27, 2016 $ — $ $ (1) For further discussion of amounts reclassified to income, see note 15. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 27, 2016 | |
Related Party Transactions | |
Related Party Transactions | (17) Related Party Transactions As of December 27, 2016 and December 29, 2015, we had 10 franchise restaurants owned in whole or part by certain of our officers, directors and 5% stockholders of the Company. We had 14 franchise restaurants owned in whole or part by certain of our officers, directors and 5% stockholders of the Company as of December 30, 2014. These entities paid us fees of $2.0 million, $1.8 million and $2.5 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. As discussed in note 11, we are contingently liable on leases which are related to two of these restaurants. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 27, 2016 | |
Selected Quarterly Financial Data (unaudited) | |
Selected Quarterly Financial Data (unaudited) | (18) Selected Quarterly Financial Data (unaudited) 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ $ $ $ $ Total costs and expenses $ $ $ $ $ Income from operations $ $ $ $ $ Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ $ Basic earnings per common share $ $ $ $ $ Diluted earnings per common share $ $ $ $ $ Cash dividends declared per share $ $ $ $ $ 2015 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ $ $ $ $ Total costs and expenses $ $ $ $ $ Income from operations $ $ $ $ $ Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ $ Basic earnings per common share $ $ $ $ $ Diluted earnings per common share $ $ $ $ $ Cash dividends declared per share $ $ $ $ $ |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 27, 2016 | |
Subsequent Events | |
Subsequent Events | (19) Subsequent Events On December 28, 2016, the first day of our 2017 fiscal year, we completed the acquisition of four franchise restaurants located in Florida and Georgia. Pursuant to the terms of the acquisition agreements, we paid an aggregate purchase price of approximately $16.8 million. Two of the acquired restaurants will be wholly-owned and the remaining two restaurants will be majority-owned. We expect to complete the preliminary purchase price allocation relating to this transaction in the first quarter of fiscal 2017. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 27, 2016 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | (a) Principles of Consolidation As of December 27, 2016 and December 29, 2015, we owned a 5.0% to 10.0% equity interest in 24 restaurants. Additionally, as of December 27, 2016 and December 29, 2015, we owned a 40% equity interest in four non-Texas Roadhouse restaurants as part of a joint venture agreement with a casual dining restaurant operator in China. The unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in Other assets in our consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our consolidated statements of income and comprehensive income under Equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants as well as the entities whose accounts have been consolidated have been eliminated. |
Fiscal Year | (b) Fiscal Year We utilize a 52 or 53 week accounting period that typically ends on the last Tuesday in December. We utilize a 13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal years 2016, 2015 and 2014 were 52 weeks in length. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Book overdrafts are recorded in accounts payable and are included within operating cash flows. Cash and cash equivalents also included receivables from credit card companies, which amounted to $8.8 million and $7.9 million at December 27, 2016 and December 29, 2015, respectively, because the balances are settled within two to three business days. |
Receivables | (d) Receivables Receivables consist principally of amounts due from retail gift card providers, certain franchise restaurants for reimbursement of labor costs, pre‑opening and other expenses, and franchise restaurants for royalty fees. Receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write‑off experience. We review our allowance for doubtful accounts quarterly. Past due balances over 120 days and a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventories | (e) Inventories Inventories, consisting principally of food, beverages and supplies, are valued at the lower of cost (first‑in, first‑out) or market. |
Pre-opening Expenses | (f) Pre‑opening Expenses Pre‑opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of a new restaurant and are comprised principally of opening team and training compensation and benefits, travel expenses, rent, food, beverage and other initial supplies and expenses. |
Property and Equipment | (g) Property and Equipment Property and equipment are stated at cost. Expenditures for major renewals and betterments are capitalized while expenditures for maintenance and repairs are expensed as incurred. Depreciation is computed on property and equipment, including assets located on leased properties, over the shorter of the estimated useful lives of the related assets or the underlying lease term using the straight‑line method. In most cases, assets on leased properties are depreciated over a period of time which includes both the initial term of the lease and one or more option periods. See note 2(p) for further discussion of leases and leasehold improvements. The estimated useful lives are: Land improvements 10 - 25 years Buildings and leasehold improvements 10 - 25 years Equipment and smallwares 3 - 10 years Furniture and fixtures 3 - 10 years The cost of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived assets and included in Property and equipment, net. Repairs and maintenance expense amounted to $22.4 million, $20.6 million and $17.9 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. These costs are included in other operating costs in our consolidated statements of income and comprehensive income. |
Impairment of Goodwill | (h) Impairment of Goodwill Goodwill represents the excess of cost over fair value of assets of businesses acquired. In accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350, Intangibles – Goodwill and Other ("ASC 350"), we perform tests to assess potential impairments at the end of each fiscal year or during the year if an event or other circumstance indicates that goodwill may be impaired. Our assessment is performed at the reporting unit level, which is at the individual restaurant level. In the first step of the review process, we compare the estimated fair value of the restaurant with its carrying value, including goodwill. If the estimated fair value of the restaurant exceeds its carrying amount, no further analysis is needed. If the estimated fair value of the restaurant is less than its carrying amount, the second step of the review process requires the calculation of the implied fair value of the goodwill by allocating the estimated fair value of the restaurant to all of the assets and liabilities of the restaurant as if it had been acquired in a business combination. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the carrying value of the goodwill associated with the restaurant exceeds the implied fair value of the goodwill, an impairment loss is recognized for that excess amount. The valuation approaches used to determine fair value are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about appropriate revenue growth rates, operating margins, weighted average cost of capital and comparable company and acquisition market multiples. In estimating the fair value using the capitalization of earnings method or discounted cash flows, we consider the period of time the restaurant has been open, the trend of operations over such period and future periods, expectations of future sales growth and terminal value. Assumptions about important factors such as the trend of future operations and sales growth are limited to those that are supportable based upon the plans for the restaurant and actual results at comparable restaurants. When developing these key judgments and assumptions, we consider economic, operational and market conditions that could impact fair value. The judgments and assumptions used are consistent with what we believe hypothetical market participants would use. However, estimates are inherently uncertain and represent only our reasonable expectations regarding future developments. If the estimates used in performing the impairment test prove inaccurate, the fair value of the restaurants may ultimately prove to be significantly lower, thereby causing the carrying value to exceed the fair value and indicating impairment has occurred. In both 2016 and 2015, as a result of our annual goodwill impairment analysis, we determined that there was no goodwill impairment. In 2014, as a result of our annual goodwill impairment analyses, we recorded goodwill impairment charges of $0.6 million, as discussed further in note 14. Refer to note 5 for additional information related to goodwill and intangible assets. |
Other Assets | (i) Other Assets Other assets consist primarily of deferred compensation plan assets, investments in unconsolidated affiliates, deposits and costs related to the issuance of debt. The debt issuance costs are being amortized to interest expense over the term of the related debt. For further discussion of the deferred compensation plan, see note 13. |
Impairment or Disposal of Long-lived Assets | (j) Impairment or Disposal of Long‑lived Assets In accordance with ASC 360-10-05, Property, Plant and Equipment , long-lived assets related to each restaurant to be held and used in the business, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. When we evaluate restaurants, cash flows are the primary indicator of impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the restaurant to estimated undiscounted future cash flows expected to be generated by the restaurant. Under our policies, trailing 12-month cash flow results below $300,000 at the individual restaurant level signals potential impairment. In our evaluation of restaurants that do not meet the cash flow threshold, we estimate future undiscounted cash flows from operating the restaurant over its estimated useful life, which can be for a period of over 20 years. In the estimation of future cash flows, we consider the period of time the restaurant has been open, the trend of operations over such period and future periods and expectations of future sales growth. Assumptions about important factors such as the trend of future operations and sales growth are limited to those that are supportable based upon the plans for the restaurant and actual results at comparable restaurants. If the carrying amount of the restaurant exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount exceeds the fair value of the assets. We generally measure fair value by independent third party appraisal or discounting estimated future cash flows. When fair value is measured by discounting estimated future cash flows, the assumptions used are consistent with what we believe hypothetical market participants would use. We also use a discount rate that is commensurate with the risk inherent in the projected cash flows. The adjusted carrying amounts of assets to be held and used are depreciated over their remaining useful life. In 2016, 2015 and 2014, as a result of our impairment analysis, we determined that there was no impairment. For further discussion regarding closures and impairments recorded in 2016, 2015 and 2014, including the impairments of goodwill and other long-lived assets, refer to note 14. |
Insurance Reserves | (k) Insurance Reserves We self‑insure a significant portion of expected losses under our health, workers compensation, general liability, employment practices liability, and property insurance programs. We purchase insurance for individual claims that exceed the retention amounts listed below: Employment practices liability/Class Action $ / $2,000,000 Workers compensation $350,000 General liability $250,000 Employee healthcare $250,000 In addition, we purchase property insurance for claims that exceed $50,000 after an aggregate deductible of $250,000. We record a liability for unresolved claims and for an estimate of incurred but not reported claims based on estimates provided by management, a third party administrator and/or actuary. The estimated liability is based on a number of assumptions and factors regarding economic conditions, the frequency and severity of claims and claim development history and settlement practices. Our assumptions are reviewed, monitored, and adjusted when warranted by changing circumstances. |
Segment Reporting | (l) Segment Reporting We consider our restaurant and franchising operations as similar and have aggregated them into a single reportable segment. The majority of the restaurants operate in the U.S. within the casual dining segment of the restaurant industry, providing similar products to similar customers. The restaurants also possess similar pricing structures, resulting in similar long‑term expected financial performance characteristics. As of December 27, 2016, we operated 431 restaurants, each as a single operating segment, and franchised an additional 86 restaurants. Revenue from external customers is derived principally from food and beverage sales. We do not rely on any major customers as a source of revenue. |
Revenue Recognition | (m) Revenue Recognition Revenue from restaurant sales is recognized when food and beverage products are sold. Deferred revenue primarily represents our liability for gift cards that have been sold, but not yet redeemed. When the gift cards are redeemed, we recognize restaurant sales and reduce deferred revenue. For some of the gift cards that were sold, the likelihood of redemption is remote. When the likelihood of a gift card's redemption is determined to be remote, we record a breakage adjustment and reduce deferred revenue by the amount never expected to be redeemed. We use historic gift card redemption patterns to determine when the likelihood of a gift card's redemption becomes remote and have determined that approximately 4% of the value of the gift cards sold by our company and our third party retailers will never be redeemed. The methodology we use to match the expected redemption value of unredeemed gift cards to our historic redemption patterns is to amortize the estimated breakage rates over a three year period. As a result, the amount of unredeemed gift card liability included in deferred revenue is the full value of unredeemed gift cards less the amortized portion of the breakage rates. We recorded our gift card breakage adjustment as a reduction of other operating expense in our consolidated statements of income and comprehensive income. We review and adjust our estimates on a semi-annual basis. We franchise Texas Roadhouse restaurants. We execute franchise agreements for each franchise restaurant which sets out the terms of our arrangement with the franchisee. Our franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to our approval and payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration. We collect ongoing royalties of 2.0% to 4.0% of sales from our domestic franchisees, along with royalties paid to us by our international franchisees. These ongoing royalties are reflected in the accompanying consolidated statements of income and comprehensive income as franchise royalties and fees. We recognize initial franchise fees as franchise royalties and fees after performing substantially all initial services or conditions required by the franchise agreement, which is generally upon the opening of a restaurant. We received initial franchise fees of $0.3 million, $0.3 million and $0.6 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. Continuing franchise royalties are recognized as revenue as the fees are earned. We also enter into area development agreements for the development of international Texas Roadhouse restaurants. Upfront fees from development agreements are deferred and recognized as franchise royalties and fees on a pro-rata basis as restaurants under the development agreement are opened. We also perform supervisory and administrative services for certain franchise restaurants for which we receive management fees, which are recognized as the services are performed. Revenue from supervisory and administrative services is recorded as a reduction of general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Total revenue from supervisory and administrative services recorded for the years ended December 27, 2016, December 29, 2015 and December 30, 2014 was approximately $1.1 million, $1.1 million and $1.0 million, respectively. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the consolidated statements of income and comprehensive income. |
Income Taxes | (n) Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes , under which deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. We recognize both interest and penalties on unrecognized tax benefits as part of income tax expense. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made. |
Advertising | (o) Advertising We have a domestic system‑wide marketing and advertising fund. We maintain control of the marketing and advertising fund and, as such, have consolidated the fund’s activity for the years ended December 27, 2016, December 29, 2015 and December 30, 2014. Domestic company and franchise restaurants are required to remit a designated portion of sales, currently 0.3%, to the advertising fund. These reimbursements do not exceed the costs incurred by the advertising fund throughout the year associated with various marketing programs which are developed internally by us. Therefore, the net amount of the advertising costs incurred less amounts remitted by franchise restaurants is included in general and administrative expense in our consolidated statements of income and comprehensive income. Other costs related to local restaurant area marketing initiatives are included in other operating costs in our consolidated statements of income and comprehensive income. These costs and the company-owned restaurant contribution amounted to approximately $13.3 million, $11.7 million and $10.8 million for the years ended December 27, 2016, December 29, 2015 and December 30, 2014, respectively. |
Leases and Leasehold Improvements | (p) Leases and Leasehold Improvements We lease land and buildings for the majority of our restaurants under non‑cancelable lease agreements. Our land and/or building leases typically have initial terms ranging from 10 to 15 years, and certain renewal options for one or more five‑year periods. We account for leases in accordance with ASC 840, Leases , and other related authoritative guidance. When determining the lease term, we include option periods for which failure to renew the lease imposes a penalty on us in such an amount that renewal appears, at the inception of the lease, to be reasonably assured. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements which might become impaired if we choose not to continue the use of the leased property. Certain of our operating leases contain predetermined fixed escalations of the minimum rent during the original term of the lease. For these leases, we recognize the related rent expense on a straight‑line basis over the lease term and record the difference between the amounts charged to operations and amounts paid as deferred rent. We generally do not receive rent concessions or leasehold improvement incentives upon opening a restaurant that is subject to a lease. We may receive rent holidays, which would begin on the possession date and end when the lease commences, during which no cash rent payments are typically due under the terms of the lease. Rent holidays are included in the lease term when determining straight‑line rent expense. Additionally, certain of our operating leases contain clauses that provide for additional contingent rent based on a percentage of sales greater than certain specified target amounts. We recognize contingent rent expense prior to the achievement of the specified target that triggers the contingent rent, provided achievement of the target is considered probable. This may result in some variability in rent expense as a percentage of sales over the term of the lease in restaurants where we pay contingent rent. The judgment regarding the probable term for each restaurant property lease impacts the classification and accounting for a lease as capital or operating, the rent holiday and/or escalation in payments that are taken into consideration when calculating straight‑line rent and the term over which leasehold improvements for each restaurant are amortized. The material factor we consider when making this judgment is the total amount invested in the restaurant at the inception of the lease and whether management believes that renewal appears reasonably assured. While a different term may produce materially different amounts of depreciation, amortization and rent expense than reported, our historical lease renewal rates support the judgments made. We have not made any changes to the nature of the assumptions used to account for leases in any of the fiscal years presented in our consolidated financial statements. Sale leasebacks are transactions through which assets (such as restaurant properties) are sold at fair value and subsequently leased back. The resulting leases generally qualify and are accounted for as operating leases. Financing leases are generally the product of a sale leaseback transaction that does not meet the criteria for sale leaseback accounting. The result of a financing lease is the retention of the “sold” assets within land, building and equipment with a financing lease obligation equal to the amount of proceeds received recorded as a component of other liabilities on our consolidated balance sheets. |
Use of Estimates | (q) Use of Estimates We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reporting of revenue and expenses during the period to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card discounts and breakage and income taxes. Actual results could differ from those estimates. |
Comprehensive Income | (r) Comprehensive Income ASC 220, Comprehensive Income , establishes standards for reporting and the presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and other comprehensive income (loss) items that are excluded from net income under GAAP. Other comprehensive income (loss) consists of the effective unrealized portion of changes in fair value of cash flow hedges and foreign currency translation adjustments. The foreign currency translation adjustment included in comprehensive income on the consolidated statements of income and comprehensive income represents the unrealized impact of translating the financial statements of our foreign investment. This amount is not included in net income and would only be realized upon the disposition of the business. |
Fair Value of Financial Instruments | (s) Fair Value of Financial Instruments Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the measurement date. We use a three-tier fair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop our assumptions regarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy. Refer to note 13 for further discussion of fair value measurement. |
Derivative Instruments and Hedging Activities | (t) Derivative Instruments and Hedging Activities We do not use derivative instruments for trading purposes. We account for derivatives and hedging activities in accordance with ASC 815, Derivatives and Hedging , which requires that all derivative instruments be recorded on the consolidated balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship. We had two free standing derivative instruments that had been designated and qualified as cash flow hedges. The first interest rate swap agreement expired in November 2015 while the second expired in January 2016. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. There was no hedge ineffectiveness recognized during the years ended December 27, 2016, December 29, 2015 and December 30, 2014. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property and equipment | Land improvements 10 - 25 years Buildings and leasehold improvements 10 - 25 years Equipment and smallwares 3 - 10 years Furniture and fixtures 3 - 10 years |
Schedule of type of individual claims against which there is no insurance purchase | Employment practices liability/Class Action $ / $2,000,000 Workers compensation $350,000 General liability $250,000 Employee healthcare $250,000 |
Long term Debt and Obligation U
Long term Debt and Obligation Under Capital Lease (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Long-term Debt and Obligation Under Capital Lease | |
Schedule of long-term debt | December 27, December 29, 2016 2015 Installment loan, due 2020 $ $ Obligation under capital lease — Revolver Less current maturities $ $ |
Schedule of maturities of long-term debt | 2017 $ 2018 2019 2020 2021 Thereafter $ |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | December 27, December 29, 2016 2015 Land and improvements $ $ Buildings and leasehold improvements Equipment and smallwares Furniture and fixtures Construction in progress Liquor licenses Accumulated depreciation and amortization $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill and intangible assets | Goodwill Intangible Assets Balance as of December 30, 2014 (1) Additions — — Amortization expense — Disposals and other, net — — Impairment — — Balance as of December 29, 2015 Additions — — Amortization expense — Disposals and other, net — — Impairment — — Balance as of December 27, 2016 (1) Net of $4.2 million of accumulated goodwill impairment losses. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Leases | |
Schedule of future minimum lease payments required for operating leases that have initial or remaining noncancellable terms in excess of one year | Operating Leases 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Schedule of rent expense for operating leases | December 27, 2016 December 29, 2015 December 30, 2014 Minimum rent—occupancy $ $ $ Contingent rent Rent expense, occupancy Minimum rent—equipment and other Rent expense $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Income Taxes | |
Schedule of components of income tax and provision | Fiscal Year Ended December 27, 2016 December 29, 2015 December 30, 2014 Current: Federal $ $ $ State Foreign Total current Deferred: Federal State Total deferred Income tax provision $ $ $ |
Schedule of reconciliation of the statutory federal income tax rate to the entity's effective tax rate | December 27, 2016 December 29, 2015 December 30, 2014 Tax at statutory federal rate % % % State and local tax, net of federal benefit FICA tip tax credit Work opportunity tax credit Net income attributable to noncontrolling interests Other Total % % % |
Schedule of components of deferred tax assets (liabilities) | December 27, 2016 December 29, 2015 Deferred tax assets: Insurance reserves $ $ Other reserves Deferred rent Share-based compensation Deferred revenue—gift cards Deferred compensation Other assets Total deferred tax asset Deferred tax liabilities: Property and equipment Goodwill and intangibles Other liabilities Total deferred tax liability Net deferred tax liability $ $ Current deferred tax asset $ $ Noncurrent deferred tax liability Net deferred tax liability $ $ |
Schedule of reconciliation of the beginning and ending liability for unrecognized tax benefits | Balance at December 30, 2014 $ Additions to tax positions related to prior years Additions to tax positions related to current year Reductions due to statute expiration Reductions due to exam settlements Balance at December 29, 2015 Additions to tax positions related to prior years Additions to tax positions related to current year Reductions due to statute expiration Reductions due to exam settlement Balance at December 27, 2016 $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Earnings Per Share | |
Summary of options and nonvested stock that were outstanding but not included in the computation of diluted earnings per share | Fiscal Year Ended December 27, December 29, December 30, 2016 2015 2014 Nonvested stock Options — — — Total |
Schedule of calculation of earnings per share and weighted-average shares outstanding | December 27, December 29, December 30, 2016 2015 2014 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ Basic EPS: Weighted-average common shares outstanding Basic EPS $ $ $ Diluted EPS: Weighted-average common shares outstanding Dilutive effect of stock options and nonvested stock Shares-diluted Diluted EPS $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Commitments and Contingencies | |
Schedule of real estate lease agreements for franchises | Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2018 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 June 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2019 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable, under the terms of the lease, if the franchisee defaults. (2) As discussed in note 17, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | Fiscal Year Ended December 27, December 29, December 30, 2016 2015 2014 Labor expense $ $ $ General and administrative expense Total share-based compensation expense $ $ $ |
Summary of restricted stock unit activity | Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted Forfeited Vested Outstanding at December 27, 2016 $ 1.2 $ |
Summary of stock option activity | Weighted- Weighted-Average Average Exercise Remaining Contractual Aggregate Shares Price Term (years) Intrinsic Value Outstanding at December 29, 2015 $ Granted — — Cancelled/Expired Exercised Outstanding at December 27, 2016 $ 0.5 $ Exercisable at December 27, 2016 $ 0.5 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Fair Value Measurements | |
Schedule of fair value of assets and liabilities measured on a recurring basis | Fair Value Measurements Level December 27, 2016 December 29, 2015 Interest rate swap 2 $ — $ Deferred compensation plan—assets 1 Deferred compensation plan—liabilities 1 |
Schedule of carrying amounts and related estimated fair values for installment loan | December 27, 2016 December 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Installment loan—Level 2 $ $ $ $ |
Derivative and Hedging Activi39
Derivative and Hedging Activities (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Derivative and Hedging Activities | |
Summary of effect of interest rate swaps in the consolidated statements of income and comprehensive income | December 27, December 29, December 30, 2016 2015 2014 Gain recognized in AOCI, net of tax (effective portion) (1) $ $ $ Loss reclassified from AOCI to income (effective portion) (1) $ $ $ The fiscal year ended December 27, 2016 included the effect of one interest rate swap which expired on January 7, 2016, while the fiscal years ended December 29, 2015 and December 30, 2014 included the effect of two interest rate swaps, one of which expired on November 7, 2015. |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Accumulated Other Comprehensive Loss. | |
Schedule of Accumulated Other Comprehensive Loss | Cash Flow Hedges Foreign Currency Translation Accumulated Other Comprehensive Loss Balance as of December 30, 2014 Other comprehensive loss before reclassifications Reclassification adjustments to income (1) — Income taxes Balance as of December 29, 2015 $ $ $ Other comprehensive loss before reclassifications — Reclassification adjustments to income (1) — Income taxes Balance as of December 27, 2016 $ — $ $ (1) |
Selected Quarterly Financial 41
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 27, 2016 | |
Selected Quarterly Financial Data (unaudited) | |
Schedule of selected quarterly financial data | 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ $ $ $ $ Total costs and expenses $ $ $ $ $ Income from operations $ $ $ $ $ Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ $ Basic earnings per common share $ $ $ $ $ Diluted earnings per common share $ $ $ $ $ Cash dividends declared per share $ $ $ $ $ 2015 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ $ $ $ $ Total costs and expenses $ $ $ $ $ Income from operations $ $ $ $ $ Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ $ $ $ $ Basic earnings per common share $ $ $ $ $ Diluted earnings per common share $ $ $ $ $ Cash dividends declared per share $ $ $ $ $ |
Basis of Presentation (Details)
Basis of Presentation (Details) | Dec. 27, 2016restaurantitem | Dec. 29, 2015restaurantitem |
Description of Business | ||
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 6 | 4 |
Company-owned | ||
Description of Business | ||
Number of restaurants | 431 | 401 |
Company-owned | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 415 | 385 |
Company-owned | Majority-owned | ||
Description of Business | ||
Number of restaurants | 16 | 16 |
Franchise | ||
Description of Business | ||
Number of restaurants | 86 | 82 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | ||
Dec. 27, 2016USD ($)restaurant | Dec. 29, 2015USD ($)restaurant | Dec. 30, 2014 | |
Fiscal Year | |||
Length of fiscal year | 364 days | 364 days | 364 days |
Cash and Cash Equivalents | |||
Cash and cash equivalents included receivables from credit card entity | $ | $ 8.8 | $ 7.9 | |
Settlement period of credit card receivables, minimum | 2 days | ||
Settlement period of credit card receivables, maximum | 3 days | ||
Receivables | |||
Minimum number of days receivable are past due, warranting individual evaluation for collectability | 120 days | ||
Minimum | |||
Fiscal Year | |||
Length of fiscal year | 364 days | ||
Length of fiscal quarter | 91 days | ||
Maximum | |||
Fiscal Year | |||
Length of fiscal year | 371 days | ||
Length of fiscal quarter | 98 days | ||
Unconsolidated restaurants | |||
Principles of Consolidation | |||
Number of restaurants | 24 | ||
Unconsolidated restaurants | Minimum | |||
Principles of Consolidation | |||
Ownership percentage by entity | 5.00% | 5.00% | |
Unconsolidated restaurants | Maximum | |||
Principles of Consolidation | |||
Ownership percentage by entity | 10.00% | 10.00% | |
Unconsolidated restaurants | China restaurant operator | |||
Principles of Consolidation | |||
Ownership percentage by entity | 40.00% | 40.00% | |
Number of restaurants | 4 | 4 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (PPE) (Details) - USD ($) | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Property and Equipment | |||
Repairs and maintenance expense | $ 22,400,000 | $ 20,600,000 | $ 17,900,000 |
Impairment of Goodwill | |||
Impairment of goodwill | 0 | 0 | 600,000 |
Impairment or Disposal of Long-Lived Assets | |||
Maximum threshold amount considered for impairment | $ 300,000 | ||
Impairment analysis, estimated useful life of operating a restaurant | 20 years | ||
Impairment of restaurant | $ 0 | $ 0 | $ 0 |
Land improvements | Minimum | |||
Property and Equipment | |||
Estimated useful life | 10 years | ||
Land improvements | Maximum | |||
Property and Equipment | |||
Estimated useful life | 25 years | ||
Buildings and leasehold improvements | Minimum | |||
Property and Equipment | |||
Estimated useful life | 10 years | ||
Buildings and leasehold improvements | Maximum | |||
Property and Equipment | |||
Estimated useful life | 25 years | ||
Equipment and smallwares | Minimum | |||
Property and Equipment | |||
Estimated useful life | 3 years | ||
Equipment and smallwares | Maximum | |||
Property and Equipment | |||
Estimated useful life | 10 years | ||
Furniture and fixtures | Minimum | |||
Property and Equipment | |||
Estimated useful life | 3 years | ||
Furniture and fixtures | Maximum | |||
Property and Equipment | |||
Estimated useful life | 10 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Ins) (Details) | 12 Months Ended |
Dec. 27, 2016USD ($) | |
Insurance claims | |
Property insurance deductible | $ 250,000 |
Plan | Minimum | |
Insurance claims | |
Property insurance claim | 50,000 |
Employment practices liability | |
Insurance Reserves | |
Self-insurance limits | 250,000 |
Employment practices liability/Class Action | |
Insurance Reserves | |
Self-insurance limits | 2,000,000 |
Workers compensation | |
Insurance Reserves | |
Self-insurance limits | 350,000 |
General liability | |
Insurance Reserves | |
Self-insurance limits | 250,000 |
Employee healthcare | |
Insurance Reserves | |
Self-insurance limits | $ 250,000 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Franchise) (Details) - restaurant | Dec. 27, 2016 | Dec. 29, 2015 |
Company-owned | ||
Segment Reporting | ||
Number of restaurants | 431 | 401 |
Franchise | ||
Segment Reporting | ||
Number of restaurants | 86 | 82 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Revenue) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Revenue Recognition | |||
Estimated gift cards sold by Company that are never redeemed (as a percent) | 4.00% | ||
Amortization period of gift cards breakage | 3 years | ||
Ongoing royalties received as a percentage of sales from domestic franchisees and international franchisee, low end of range | 2.00% | ||
Ongoing royalties received as a percentage of sales from domestic franchisees and international franchisee, high end of range | 4.00% | ||
Initial franchise fees | $ 0.3 | $ 0.3 | $ 0.6 |
Revenue recorded for supervisory and administrative services | $ 1.1 | 1.1 | 1 |
Advertising | |||
Designated portion of sales from domestic and franchise restaurants remitted to the advertising fund | 0.30% | ||
Company-owned restaurant contribution and other costs related to marketing initiatives | $ 13.3 | $ 11.7 | $ 10.8 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies(Leases) (Details) - Land and/or building | 12 Months Ended |
Dec. 27, 2016 | |
Leases and Leasehold Improvements | |
Lease renewal term | 5 years |
Minimum | |
Leases and Leasehold Improvements | |
Lease terms | 10 years |
Lease renewal option | 1 year |
Maximum | |
Leases and Leasehold Improvements | |
Lease terms | 15 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies (Derviative) (Details) $ in Millions | 12 Months Ended | |||
Dec. 27, 2016USD ($) | Dec. 29, 2015USD ($) | Dec. 30, 2014USD ($) | Oct. 31, 2015derivative | |
Derivative Instruments and Hedging Activities | ||||
Number of free standing interest rate swap agreements | derivative | 2 | |||
Amount of hedge ineffectiveness | $ | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies (Acctg Pronouncements-Leases and Share-Based) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Summary of Significant Accounting Policies | |||
Operating leases remaining rental payments due | $ 768,383 | ||
Excess tax benefits from share-based compensation | $ 3,291 | $ 4,540 | $ 2,885 |
Long-term Debt and Obligation51
Long-term Debt and Obligations Under Capital Leases (Details) $ in Thousands | 12 Months Ended | |
Dec. 27, 2016USD ($)restaurant | Dec. 29, 2015USD ($) | |
Long-term Debt | ||
Long-term debt and capital lease obligations | $ 52,548 | $ 25,694 |
Less current maturities | 167 | 144 |
Long-term debt and capital lease obligations, excluding current maturities | 52,381 | 25,550 |
Maturities of long-term debt | ||
2,017 | 167 | |
2,018 | 50,186 | |
2,019 | 207 | |
2,020 | 30 | |
2,021 | 14 | |
Thereafter | $ 1,944 | |
Number of restaurant locations lease amended qualifies as capital lease | restaurant | 1 | |
Interest rate swap, entered January 7, 2009 | ||
Maturities of long-term debt | ||
Notional amount of interest rate swap | $ 25,000 | |
Notional amount of hedge obligation | $ 25,000 | |
Fixed interest rate of derivative (as a percent) | 2.34% | |
Installment loan, due 2020 | ||
Long-term Debt | ||
Long-term debt and capital lease obligations | $ 550 | $ 694 |
Maturities of long-term debt | ||
Interest rate (as a percent) | 10.46% | 10.46% |
Obligation under capital lease | ||
Long-term Debt | ||
Long-term debt and capital lease obligations | $ 1,998 | |
Revolver | ||
Long-term Debt | ||
Long-term debt and capital lease obligations | 50,000 | $ 25,000 |
Maturities of long-term debt | ||
Revolving credit facility, maximum borrowing capacity | 200,000 | |
Revolving credit facility contingent increase in maximum borrowing capacity | 200,000 | |
Revolving credit facility maximum borrowing capacity after contingent increase | $ 400,000 | |
Weighted-average interest rate (as a percent) | 1.57% | 3.22% |
Revolving credit facility, amount outstanding | $ 50,000 | |
Revolving credit facility, remaining borrowing capacity | 143,200 | |
Letters of credit outstanding | $ 6,800 | |
Revolving credit facility, fixed charge coverage ratio | 2 | |
Revolving credit facility, leverage ratio | 3 | |
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth | 15.00% | |
Revolver | Minimum | ||
Maturities of long-term debt | ||
Percentage of commitment fee on unused credit facility | 0.125% | |
Revolver | Maximum | ||
Maturities of long-term debt | ||
Percentage of commitment fee on unused credit facility | 0.30% | |
Revolver | LIBOR | Minimum | ||
Maturities of long-term debt | ||
Interest rate added to base rate (as a percent) | 0.875% | |
Revolver | LIBOR | Maximum | ||
Maturities of long-term debt | ||
Interest rate added to base rate (as a percent) | 1.875% | |
Revolver | Federal Funds | ||
Maturities of long-term debt | ||
Interest rate added to base rate (as a percent) | 0.50% | |
Revolver | Adjusted one-month Eurodollar Rate | ||
Maturities of long-term debt | ||
Interest rate added to base rate (as a percent) | 1.00% |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Property and Equipment, Net | |||
Property and Equipment, Gross | $ 1,287,156 | $ 1,147,174 | |
Accumulated depreciation and amortization | (457,102) | (395,886) | |
Property, Plant and Equipment, Net | 830,054 | 751,288 | |
Interest capitalized | 300 | 700 | $ 700 |
Land and improvements | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 119,338 | 109,939 | |
Buildings and leasehold improvements | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 668,519 | 588,095 | |
Equipment and smallwares | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 353,498 | 305,580 | |
Furniture and fixtures | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 105,629 | 93,904 | |
Construction in progress | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 30,394 | 40,496 | |
Liquor licenses | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | $ 9,778 | $ 9,160 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | $ 116,571 | $ 116,571 | |
Impairment | 0 | 0 | $ (600) |
Balance at the end of the period | 116,571 | 116,571 | 116,571 |
Accumulated goodwill impairment loss | 4,200 | ||
Changes in the carrying amount of intangible assets | |||
Balance at the beginning of the period, net | 4,827 | 6,203 | |
Amortization expense | (1,205) | (1,376) | |
Balance at the end of the period, net | 3,622 | 4,827 | $ 6,203 |
Gross carrying amount | 15,400 | 15,400 | |
Accumulated amortization | 11,753 | $ 10,548 | |
Minimum | |||
Changes in the carrying amount of intangible assets | |||
Expected amortization expense for each of the next five years | 300 | ||
Maximum | |||
Changes in the carrying amount of intangible assets | |||
Expected amortization expense for each of the next five years | $ 900 |
Leases (Details)
Leases (Details) $ in Thousands | Dec. 27, 2016USD ($) |
Schedule of future minimum lease payments required for operating leases that have initial or remaining noncancellable terms in excess of one year | |
2,017 | $ 41,554 |
2,018 | 41,568 |
2,019 | 41,579 |
2,020 | 40,517 |
2,021 | 40,891 |
Thereafter | 562,274 |
Total | $ 768,383 |
Leases (Rent) (Details)
Leases (Rent) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Rent expense for operating leases | |||
Minimum rent-occupancy | $ 39,405 | $ 36,104 | $ 32,288 |
Contingent rent | 1,175 | 1,079 | 886 |
Rent expense, occupancy | 40,580 | 37,183 | 33,174 |
Minimum rent-equipment and other | 4,379 | 3,952 | 3,724 |
Rent expense | $ 44,959 | $ 41,135 | $ 36,898 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Current: | |||
Federal | $ 36,201 | $ 33,403 | $ 31,176 |
State | 8,786 | 8,821 | 7,913 |
Foreign | 202 | 351 | 381 |
Total current | 45,189 | 42,575 | 39,470 |
Deferred: | |||
Federal | 5,364 | 274 | (379) |
State | 630 | 137 | (101) |
Total deferred | 5,994 | 411 | (480) |
Income tax provision | $ 51,183 | $ 42,986 | $ 38,990 |
Reconciliation of the statutory federal income tax rate to the entity's effective tax rate | |||
Tax at statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% |
State and local tax, net of federal benefit (as a percent) | 3.40% | 3.50% | 3.50% |
FICA tip tax credit (as a percent) | (6.80%) | (7.20%) | (6.90%) |
Work opportunity tax credit (as a percent) | (0.80%) | (0.90%) | (1.00%) |
Net income attributable to noncontrolling interests (as a percent) | (0.90%) | (1.00%) | (1.00%) |
Other (as a percent) | (0.10%) | 0.40% | 0.40% |
Total (as a percent) | 29.80% | 29.80% | 30.00% |
Deferred tax assets: | |||
Insurance reserves | $ 5,049 | $ 4,463 | |
Other reserves | 587 | 625 | |
Deferred rent | 13,400 | 11,727 | |
Share-based compensation | 8,642 | 7,446 | |
Deferred revenue - gift cards | 10,887 | 7,707 | |
Deferred compensation | 8,422 | 6,749 | |
Other assets | 3,261 | 2,933 | |
Total deferred tax asset | 50,248 | 41,650 | |
Deferred tax liabilities: | |||
Property and equipment | (48,390) | (38,541) | |
Goodwill and intangibles | (5,978) | (5,089) | |
Other liabilities | (6,152) | (2,345) | |
Total deferred tax liability | (60,520) | (45,975) | |
Total net deferred tax liability | (10,272) | (4,325) | |
Current deferred tax asset | 1,996 | 2,077 | |
Noncurrent deferred tax liability | $ (12,268) | $ (6,402) |
Income Taxes (Unrecognized) (De
Income Taxes (Unrecognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2016 | Dec. 29, 2015 | |
Reconciliation of the beginning and ending liability for unrecognized tax benefits | ||
Balance at the beginning of the period | $ 405 | $ 114 |
Additions to tax positions related to prior years | 23 | 315 |
Additions to tax positions related to current year | 274 | 85 |
Reductions due to statute expiration | (4) | (11) |
Reductions due to exam settlement | (187) | (98) |
Balance at the end of the period | $ 511 | $ 405 |
Preferred Stock (Details)
Preferred Stock (Details) | Dec. 27, 2016itemshares | Dec. 29, 2015shares |
Preferred Stock | ||
Number of preferred stock shares authorized to issue | 1,000,000 | 1,000,000 |
Minimum number of series of preferred stock authorized | item | 1 | |
Number of shares of preferred stock outstanding | 0 | 0 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | May 22, 2014 | |
Stock Repurchase Program | ||||
Repurchase of common stock authorized by board of directors | $ 100 | |||
Amount paid for repurchase of common stock | $ 4.1 | $ 11.4 | $ 42.7 | |
Number of shares repurchased | 114,700 | 321,789 | 1,675,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 27, 2016 | Sep. 27, 2016 | Jun. 28, 2016 | Mar. 29, 2016 | Dec. 29, 2015 | Sep. 29, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Antidilutive securities | |||||||||||
Anti-dilutive securities (in shares) | 2 | 1,243 | 16,740 | ||||||||
Earnings per share | |||||||||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 20,725 | $ 25,675 | $ 33,605 | $ 35,593 | $ 22,982 | $ 20,482 | $ 21,138 | $ 32,292 | $ 115,598 | $ 96,894 | $ 87,022 |
Basic EPS: | |||||||||||
Weighted-average common shares outstanding (in shares) | 70,396,000 | 70,032,000 | 69,719,000 | ||||||||
Basic EPS (in dollars per share) | $ 0.29 | $ 0.36 | $ 0.48 | $ 0.51 | $ 0.33 | $ 0.29 | $ 0.30 | $ 0.46 | $ 1.64 | $ 1.38 | $ 1.25 |
Diluted EPS: | |||||||||||
Weighted-average common shares outstanding (in shares) | 70,396,000 | 70,032,000 | 69,719,000 | ||||||||
Dilutive effect of stock options and nonvested stock (in shares) | 656,000 | 715,000 | 889,000 | ||||||||
Shares - diluted (in shares) | 71,052,000 | 70,747,000 | 70,608,000 | ||||||||
Diluted EPS (in dollars per share) | $ 0.29 | $ 0.36 | $ 0.47 | $ 0.50 | $ 0.32 | $ 0.29 | $ 0.30 | $ 0.46 | $ 1.63 | $ 1.37 | $ 1.23 |
Nonvested stock | |||||||||||
Antidilutive securities | |||||||||||
Anti-dilutive securities (in shares) | 2 | 1,243 | 16,740 |
Commitments and Contingencies61
Commitments and Contingencies (Details) $ in Millions | Jul. 15, 2016USD ($) | Dec. 27, 2016USD ($)item | Dec. 29, 2015USD ($)item |
Other Commitments and Contingencies | |||
Estimated cost to complete capital project commitments (in dollars) | $ 157.5 | $ 129.4 | |
Number of suppliers providing most of the company's beef | item | 3 | ||
Lease Agreements | |||
Real estate lease agreements | |||
Contingently liable amount | $ 16.4 | $ 17.2 | |
Number of leases entity contingently liable | item | 7 | 7 | |
Fair Labor Standards Act Class of Employees Claim | |||
Other Commitments and Contingencies | |||
Estimated loss contingency, net of tax | $ 4.5 | ||
Fair Labor Standards Act Class of Employees Claim | General and administrative expense | |||
Other Commitments and Contingencies | |||
Estimated loss contingency recorded during period | $ 7.3 | ||
Fair Labor Standards Act Class of Employees Claim | Maximum | |||
Other Commitments and Contingencies | |||
Settlement amount | $ 9.5 | ||
Everett, Massachusetts | Lease Agreements | |||
Real estate lease agreements | |||
Ownership percentage | 5.00% | ||
Fargo, North Dakota | Lease Agreements | |||
Real estate lease agreements | |||
Ownership percentage | 5.00% |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Share-based compensation expenses | |||
Share-based compensation expense | $ 26,067 | $ 22,825 | $ 14,883 |
Labor expense | |||
Share-based compensation expenses | |||
Share-based compensation expense | 6,124 | 5,329 | 5,523 |
General and administrative expense | |||
Share-based compensation expenses | |||
Share-based compensation expense | $ 19,943 | $ 17,496 | $ 9,360 |
Share-based Compensation (Restr
Share-based Compensation (Restricted Stock and PSU (Details) $ / shares in Units, $ in Thousands | Jan. 08, 2017shares | Nov. 09, 2016USD ($)$ / shares | Jan. 08, 2016shares | Nov. 19, 2015USD ($)$ / shares | Jan. 08, 2015USD ($)$ / shares | Dec. 27, 2016USD ($)item$ / sharesshares | Dec. 29, 2015USD ($)item$ / sharesshares | Dec. 30, 2014USD ($) | Dec. 27, 2016USD ($)item$ / sharesshares |
Share-based compensation | |||||||||
Number of common shares that a holder would receive upon satisfaction of the vesting requirement (in shares) | 1 | 1 | |||||||
Number of common shares that a holder would receive upon meeting a performance obligation and vesting requirement (in shares) | 1 | 1 | |||||||
Restricted Stock Units | |||||||||
Restricted Stock Units, Shares | |||||||||
Outstanding at the beginning of the period (in shares) | 984,586 | ||||||||
Granted (in shares) | 497,329 | ||||||||
Forfeited (in shares) | (35,854) | ||||||||
Vested (in shares) | (526,598) | ||||||||
Outstanding at the end of period (in shares) | 919,463 | 984,586 | 919,463 | ||||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | |||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 32.86 | ||||||||
Granted (in dollars per share) | $ / shares | 41.19 | ||||||||
Forfeited (in dollars per share) | $ / shares | 34.15 | ||||||||
Vested (in dollars per share) | $ / shares | 33.31 | ||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 37.06 | $ 32.86 | $ 37.06 | ||||||
Weighted-Average Remaining Contractual Term (years) | |||||||||
Weighted-Average Remaining Contractual Term | 1 year 2 months 12 days | ||||||||
Aggregate Intrinsic Value | |||||||||
Outstanding at the end of the period (in dollars) | $ | $ 45,574 | $ 45,574 | |||||||
Intrinsic value of awards vested (in dollars) | $ | 21,500 | $ 25,100 | $ 20,400 | ||||||
Unrecognized compensation cost | |||||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 17,800 | $ 17,800 | |||||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year 2 months 12 days | ||||||||
Share-based Compensation, other disclosures | |||||||||
Excess tax benefit realized from tax deductions that vested | $ | $ 1,500 | $ 2,800 | $ 1,400 | ||||||
Restricted Stock Units | Minimum | |||||||||
Share-based Compensation, other disclosures | |||||||||
Vesting period | 1 year | ||||||||
Restricted Stock Units | Maximum | |||||||||
Share-based Compensation, other disclosures | |||||||||
Vesting period | 5 years | ||||||||
PSUs | |||||||||
Share-based compensation | |||||||||
Number of executives granted performance stock units | item | 2 | 2 | 2 | ||||||
Restricted Stock Units, Shares | |||||||||
Vested (in shares) | (188,237) | (144,000) | |||||||
Restricted Stock Units, Weighted-Average Grant Date Fair Value | |||||||||
Granted (in dollars per share) | $ / shares | $ 39.88 | $ 34.11 | $ 34.77 | ||||||
Unrecognized compensation cost | |||||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ | $ 4,200 | $ 4,200 | |||||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year | ||||||||
Share-based Compensation, other disclosures | |||||||||
Vesting period | 1 year | ||||||||
Grant date fair value | $ | $ 4,600 | $ 3,900 | $ 4,000 |
Share-based Compensation (Optio
Share-based Compensation (Options) (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Shares | |||
Outstanding at the beginning of the period (in shares) | 328,498 | ||
Granted (in shares) | 0 | 0 | 0 |
Cancelled/Expired (in shares) | (1,981) | ||
Exercised (in shares) | (208,444) | ||
Outstanding at the end of the period (in shares) | 118,073 | 328,498 | |
Exercisable at the end of period (in shares) | 118,073 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 13.10 | ||
Cancelled/Expired (in dollars per share) | 14.61 | ||
Exercised (in dollars per share) | 12.82 | ||
Outstanding at the end of the period (in dollars per share) | 13.57 | $ 13.10 | |
Exercisable at the end of the period (in dollars per share) | $ 13.57 | ||
Weighted-Average Remaining Contractual Term | |||
Outstanding at the end of the period | 6 months | ||
Exercisable at the end of the period | 6 months | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $ 4,250 | ||
Exercisable at the end of the period (in dollars) | 4,250 | ||
Intrinsic value of options exercised (in dollars) | 6,300 | $ 6,500 | $ 6,100 |
Cash received before tax withholdings from options exercised | 2,700 | 4,700 | 5,300 |
Excess tax benefit realized from tax deductions associated with options exercised | $ 1,800 | $ 1,700 | $ 1,500 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 12 Months Ended | |
Dec. 27, 2016USD ($)item | Dec. 29, 2015USD ($) | |
Fair value of financial instruments | ||
Transfer of asset levels within the fair value hierarchy | $ 0 | |
Minimum number of investment funds in rabbi trust for deferred compensation plan | item | 1 | |
Fair value measured on a recurring basis | Level 2 | ||
Fair value of financial instruments | ||
Interest rate swap | $ (45) | |
Fair value measured on a recurring basis | Level 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | $ 21,951 | 17,401 |
Deferred compensation plan - liabilities | $ (22,128) | $ (17,416) |
Fair Value Measurements (Instal
Fair Value Measurements (Installment Loan) (Details) - USD ($) $ in Thousands | Dec. 27, 2016 | Dec. 29, 2015 |
Carrying Amount | ||
Carrying amount and Fair value of financial instruments | ||
Installment loan | $ 550 | $ 694 |
Fair Value | Level 2 | ||
Carrying amount and Fair value of financial instruments | ||
Installment loan | $ 599 | $ 779 |
Impairment and Closure Costs (D
Impairment and Closure Costs (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 27, 2016USD ($)restaurant | Dec. 29, 2015USD ($)restaurant | Dec. 27, 2016USD ($) | Dec. 29, 2015USD ($) | Dec. 30, 2014USD ($)restaurant | |
Impairment and Closure Costs | |||||
Impairment and closure | $ 179 | $ 974 | $ 636 | ||
Impairment of goodwill | $ 0 | $ 0 | $ 600 | ||
Number of long-lived assets impaired | restaurant | 1 | ||||
Restaurants closed in 2016 | Closed | |||||
Impairment and Closure Costs | |||||
Closure costs | $ 100 | ||||
Number of restaurants relocated | restaurant | 1 | ||||
One restaurant closed in 2015 | Closed | |||||
Impairment and Closure Costs | |||||
Closure costs | $ 100 | ||||
Number of restaurants relocated | restaurant | 1 | ||||
Two restaurants closed in 2015 | Closed | |||||
Impairment and Closure Costs | |||||
Closure costs | $ 1,000 | ||||
Number of restaurants relocated | restaurant | 2 |
Derivative and Hedging Activi68
Derivative and Hedging Activities (Details) | Jan. 07, 2016derivative | Nov. 07, 2015derivative | Dec. 27, 2016USD ($) | Dec. 29, 2015USD ($)derivative | Dec. 30, 2014USD ($)derivative |
Interest rate cash flow hedges | |||||
Gain recognized in OCI, net of tax (effective portion) | $ 27,000 | $ 817,000 | $ 808,000 | ||
Loss reclassified from AOCI to income (effective portion) | 45,000 | $ 1,397,000 | $ 1,480,000 | ||
Interest Rate Swap | |||||
Interest rate cash flow hedges | |||||
Number of interest rate swaps with activity during the period which have expired | derivative | 1 | 1 | |||
Number of interest rate swaps with activity during the period | derivative | 2 | 2 | |||
Interest Rate Swap | Other accrued liabilities | |||||
Interest Rate Swaps | |||||
Derivative liability | $ 45,000 | ||||
Interest rate swap, entered January 7, 2009 | |||||
Interest Rate Swaps | |||||
Notional amount of interest rate swap | 25,000,000 | ||||
Notional amount of hedge obligation | $ 25,000,000 | ||||
Fixed interest rate of derivative (as a percent) | 2.34% |
Accumulated Other Comprehensi69
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2016 | Dec. 29, 2015 | |
Accumulated Other Comprehensive Loss | ||
Balance as of beginning of period | $ 669,662 | |
Balance as of end of period | 750,226 | $ 669,662 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Loss | ||
Balance as of beginning of period | (109) | (782) |
Other comprehensive loss before reclassification | (182) | (302) |
Reclassification adjustments to income (1) | 45 | 1,397 |
Income taxes | 52 | (422) |
Balance as of end of period | (194) | (109) |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Loss | ||
Balance as of beginning of period | (27) | (844) |
Other comprehensive loss before reclassification | (67) | |
Reclassification adjustments to income (1) | 45 | 1,397 |
Income taxes | (18) | (513) |
Balance as of end of period | (27) | |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Loss | ||
Balance as of beginning of period | (82) | 62 |
Other comprehensive loss before reclassification | (182) | (235) |
Income taxes | 70 | 91 |
Balance as of end of period | $ (194) | $ (82) |
Related Party Transactions (Det
Related Party Transactions (Details) - Officers, directors and shareholders $ in Millions | 12 Months Ended | ||
Dec. 27, 2016USD ($)restaurant | Dec. 29, 2015USD ($)restaurant | Dec. 30, 2014USD ($)restaurant | |
Related Party Transactions | |||
Number of franchise restaurants | 10 | 10 | 14 |
Ownership percentage by related party | 5.00% | 5.00% | 5.00% |
Fees received from franchise and license restaurants | $ | $ 2 | $ 1.8 | $ 2.5 |
Number of restaurants for which the entity is contingently liable on the lease | 2 |
Selected Quarterly Financial 71
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 27, 2016 | Sep. 27, 2016 | Jun. 28, 2016 | Mar. 29, 2016 | Dec. 29, 2015 | Sep. 29, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 27, 2016 | Dec. 29, 2015 | Dec. 30, 2014 | |
Selected Quarterly Financial Data (unaudited) | |||||||||||
Revenue | $ 484,710 | $ 481,637 | $ 508,808 | $ 515,559 | $ 454,351 | $ 438,089 | $ 454,698 | $ 460,230 | $ 1,990,714 | $ 1,807,368 | $ 1,582,148 |
Total costs and expenses | 453,871 | 443,169 | 459,026 | 462,748 | 420,638 | 407,533 | 423,002 | 411,630 | 1,818,814 | 1,662,803 | 1,451,699 |
Income from operations | 30,839 | 38,468 | 49,782 | 52,811 | 33,713 | 30,556 | 31,696 | 48,600 | 171,900 | 144,565 | 130,449 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 20,725 | $ 25,675 | $ 33,605 | $ 35,593 | $ 22,982 | $ 20,482 | $ 21,138 | $ 32,292 | $ 115,598 | $ 96,894 | $ 87,022 |
Basic EPS (in dollars per share) | $ 0.29 | $ 0.36 | $ 0.48 | $ 0.51 | $ 0.33 | $ 0.29 | $ 0.30 | $ 0.46 | $ 1.64 | $ 1.38 | $ 1.25 |
Diluted EPS (in dollars per share) | 0.29 | 0.36 | 0.47 | 0.50 | 0.32 | 0.29 | 0.30 | 0.46 | 1.63 | 1.37 | 1.23 |
Cash dividends declared per share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.76 | $ 0.68 | $ 0.60 |
Impairment of goodwill | $ 0 | $ 0 | $ 600 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events. $ in Millions | Dec. 28, 2016USD ($)restaurant |
Subsequent Events | |
Number of franchise restaurants acquired | 4 |
Payment of aggregate purchase price | $ | $ 16.8 |
Wholly-owned | |
Subsequent Events | |
Number of franchise restaurants acquired | 2 |
Majority-owned | |
Subsequent Events | |
Number of franchise restaurants acquired | 2 |