Texas Roadhouse (TXRH) 10-Q 3 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 26, 2018	Jul. 25, 2018
Document and Entity Information
Entity Registrant Name	Texas Roadhouse, Inc.
Entity Central Index Key	1,289,460
Document Type	10-Q
Document Period End Date	Jun. 26, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-25
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		71,475,375
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 26, 2018	Dec. 26, 2017
Current assets:
Cash and cash equivalents	$ 154,353	$ 150,918
Receivables, net of allowance for doubtful accounts of $60 at June 26, 2018 and $43 at December 26, 2017	32,151	76,496
Inventories, net	17,025	16,306
Prepaid income taxes	779
Prepaid expenses	12,491	13,361
Total current assets	216,799	257,081
Property and equipment, net of accumulated depreciation of $564,899 at June 26, 2018 and $527,710 at December 26, 2017	928,765	912,147
Goodwill	121,040	121,040
Intangible assets, net of accumulated amortization of $13,046 at June 26, 2018 and $12,675 at December 26, 2017	2,329	2,700
Other assets	42,660	37,655
Total assets	1,311,593	1,330,623
Current liabilities:
Current maturities of long-term debt and obligation under capital lease	10	9
Accounts payable	58,372	57,579
Deferred revenue-gift cards	97,545	156,627
Accrued wages	32,744	29,678
Income taxes payable	2,293	2,494
Accrued taxes and licenses	21,232	21,997
Dividends payable	17,868	14,945
Other accrued liabilities	50,328	46,669
Total current liabilities	280,392	329,998
Long-term debt and obligation under capital lease, excluding current maturities	1,976	51,981
Stock option and other deposits	7,694	7,699
Deferred rent	44,523	42,141
Deferred tax liabilities, net	8,619	5,301
Other liabilities	46,791	42,112
Total liabilities	389,995	479,232
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, 71,474,209 and 71,168,897 shares issued and outstanding at June 26, 2018 and December 26, 2017, respectively)	71	71
Additional paid-in-capital	243,357	236,548
Retained earnings	664,668	602,499
Accumulated other comprehensive loss	(47)	(39)
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity	908,049	839,079
Noncontrolling interests	13,549	12,312
Total equity	921,598	851,391
Total liabilities and equity	$ 1,311,593	$ 1,330,623

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 26, 2018	Dec. 26, 2017
Condensed Consolidated Balance Sheets
Receivables, allowance for doubtful accounts (in dollars)	$ 60	$ 43
Property and equipment, accumulated depreciation (in dollars)	564,899	527,710
Intangible assets, accumulated amortization (in dollars)	$ 13,046	$ 12,675
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	71,474,209	71,168,897
Common stock, shares outstanding	71,474,209	71,168,897

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017
Revenues
Total revenue	$ 629,237	$ 566,262	$ 1,256,942	$ 1,133,948
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Labor	199,647	174,585	395,677	344,932
Rent	12,119	11,112	23,970	21,981
Other operating	94,858	84,837	187,236	170,497
Pre-opening	4,107	5,014	9,151	9,754
Depreciation and amortization	25,165	23,106	49,649	45,702
Impairment and closure costs	22		108	11
General and administrative	35,004	28,223	65,179	68,471
Total costs and expenses	574,970	512,048	1,137,804	1,030,712
Income from operations	54,267	54,214	119,138	103,236
Interest expense, net	283	379	642	711
Equity income from investments in unconsolidated affiliates	(445)	(470)	(769)	(790)
Income before taxes	54,429	54,305	119,265	103,315
Provision for income taxes	8,466	15,126	16,923	28,113
Net income including noncontrolling interests	45,963	39,179	102,342	75,202
Less: Net income attributable to noncontrolling interests	1,736	1,598	3,574	3,308
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	44,227	37,581	98,768	71,894
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax of $40, ($14), ($9) and ($27), respectively	(118)	22	(8)	43
Total other comprehensive (loss) income, net of tax	(118)	22	(8)	43
Total comprehensive income	$ 44,109	$ 37,603	$ 98,760	$ 71,937
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic (in dollars per share)	$ 0.62	$ 0.53	$ 1.38	$ 1.01
Diluted (in dollars per share)	$ 0.62	$ 0.53	$ 1.37	$ 1.01
Weighted average shares outstanding:
Basic (in shares)	71,445	70,973	71,389	70,876
Diluted (in shares)	71,897	71,437	71,853	71,398
Cash dividends declared per share (in dollars per share)	$ 0.25	$ 0.21	$ 0.50	$ 0.42
Restaurant and other sales
Revenues
Total revenue	$ 624,073	$ 562,160	$ 1,246,475	$ 1,125,480
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales	204,048	185,171	406,834	369,364
Franchise royalties and fees
Revenues
Total revenue	$ 5,164	$ 4,102	$ 10,467	$ 8,468

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017
Condensed Consolidated Statements of Income and Comprehensive Income
Foreign currency translation adjustment, (tax)/benefit	$ 40	$ (14)	$ (9)	$ (27)

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 26, 2018 - 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. 26, 2017	$ 839,079	$ 71	$ 236,548	$ 602,499	$ (39)	$ 12,312	$ 851,391
Balance (in shares) at Dec. 26, 2017		71,168,897					71,168,897
Increase (Decrease) in Stockholders' Equity
Net income	98,768			98,768		3,574	$ 102,342
Other comprehensive loss, net	(8)				(8)		(8)
Noncontrolling interests contribution						865	865
Contribution from executive officer	1,000		1,000				1,000
Distributions to noncontrolling interest holders						(3,202)	(3,202)
Dividends declared ($0.50 per share)	(35,721)			(35,721)			(35,721)
Shares issued under share-based compensation plans including tax effects (in shares)		478,690
Indirect repurchase of shares for minimum tax withholdings	(10,047)		(10,047)				(10,047)
Indirect repurchase of shares for minimum tax withholdings (in shares)		(173,378)
Cumulative effect of change in accounting principle | ASU 2014-09	(878)			(878)			(878)
Share-based compensation	15,856		15,856				15,856
Balance at Jun. 26, 2018	$ 908,049	$ 71	$ 243,357	$ 664,668	$ (47)	$ 13,549	$ 921,598
Balance (in shares) at Jun. 26, 2018		71,474,209					71,474,209

Condensed Consolidated Stateme7

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical)	6 Months Ended
	Jun. 26, 2018$ / shares
Condensed Consolidated Statement of Stockholders' Equity
Dividends declared and paid per share (in dollars per share)	$ 0.5

Condensed Consolidated Stateme8

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017
Cash flows from operating activities:
Net income including noncontrolling interests	$ 102,342	$ 75,202
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	49,649	45,702
Deferred income taxes	3,609	(3,780)
Loss on disposition of assets	2,852	2,339
Contribution from executive officer	1,000
Equity income from investments in unconsolidated affiliates	(769)	(790)
Distributions of income received from investments in unconsolidated affiliates	367	370
Provision for doubtful accounts	17	19
Share-based compensation expense	15,856	12,365
Changes in operating working capital:
Receivables	44,328	26,814
Inventories	(719)	819
Prepaid expenses	870	980
Other assets	(4,600)	(4,046)
Accounts payable	(61)	(744)
Deferred revenue-gift cards	(59,082)	(51,170)
Accrued wages	3,066	3,083
Prepaid income taxes and income taxes payable	(980)	7,254
Accrued taxes and licenses	(765)	1,208
Other accrued liabilities	2,247	5,883
Deferred rent	2,382	2,842
Other liabilities	3,498	3,958
Net cash provided by operating activities	165,107	128,308
Cash flows from investing activities:
Capital expenditures-property and equipment	(66,718)	(73,637)
Acquisition of franchise restaurants, net of cash acquired		(16,528)
Net cash used in investing activities	(66,718)	(90,165)
Cash flows from financing activities:
Proceeds from noncontrolling interest contribution and other	865	3,457
Distributions to noncontrolling interest holders	(3,202)	(2,748)
Proceeds from stock option and other deposits, net	232	436
Indirect repurchase of shares for minimum tax withholdings	(10,047)	(8,626)
Principal payments on long-term debt and capital lease obligation	(50,004)	(81)
Proceeds from exercise of stock options		1,291
Dividends paid to shareholders	(32,798)	(28,308)
Net cash used in financing activities	(94,954)	(34,579)
Net increase in cash and cash equivalents	3,435	3,564
Cash and cash equivalents—beginning of period	150,918	112,944
Cash and cash equivalents—end of period	154,353	116,508
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	485	588
Income taxes paid	14,295	24,638
Capital expenditures included in current liabilities	$ 14,268	$ 6,110

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 26, 2018
Description of Business
Basis of Presentation	(1) Basis of Presentation The accompanying unaudited condensed 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 June 26, 2018 and December 26, 2017 and for the 13 and 26 weeks ended June 26, 2018 and June 27, 2017. As of June 26, 2018, we owned and operated 476 restaurants and franchised an additional 90 restaurants in 49 states and eight foreign countries. Of the 476 company restaurants that were operating at June 26, 2018, 458 were wholly-owned and 18 were majority-owned. Of the 90 franchise restaurants, 70 were domestic restaurants and 20 were international restaurants. As of June 27, 2017, we owned and operated 448 restaurants and franchised an additional 84 restaurants in 49 states and six foreign countries. Of the 448 company restaurants that were operating at June 27, 2017, 430 were wholly-owned and 18 were majority-owned. Of the 84 franchise restaurants, 70 were domestic restaurants and 14 were international restaurants. As of June 26, 2018 and June 27, 2017, we owned 5.0% to 10.0% equity interest in 24 franchise restaurants. Additionally, as of June 26, 2018 and June 27, 2017, 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 unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our unaudited condensed 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. We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amounts of property and equipment and goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card breakage and third party fees and income taxes. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission ("SEC"). Operating results for the 13 and 26 weeks ended June 26, 2018 are not necessarily indicative of the results that may be expected for the year ending December 25, 2018. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 26, 2017. Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 26, 2018
Recent Accounting Pronouncements
Recent Accounting Pronouncements	(2) Recent Accounting Pronouncements Revenue Recognition (Accounting Standards Codification 606, "ASC 606") On December 27, 2017, we adopted ASC 606, Revenue from Contracts with Customers . This ASC requires an entity to allocate the transaction price received from customers to each separate and distinct performance obligation and recognize revenue as these performance obligations are satisfied. This standard replaces most existing revenue recognition guidance in GAAP. The adoption of this standard did not have an impact on our recognition of sales from company restaurants or our recognition of continuing fees from franchisees, which are based on a percentage of franchise restaurant sales. As further detailed below, the adoption of this standard did have an impact on the recognition of initial franchise fees and upfront fees from international development agreements. In addition, certain transactions that were previously recorded as expense are now classified as revenue. We utilized the cumulative-effect method of adoption and recorded a $0.9 million reduction, net of tax, to retained earnings as of the first day of fiscal 2018 to reflect the change in the recognition pattern of initial franchise fees and upfront fees. The comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effects of the changes made to our unaudited condensed consolidated balance sheet as of December 26, 2017 as a result of the adoption of ASC 606 were as follows: Balance at ASC 606 Balance at December 26, 2017 Adjustments December 27, 2017 Liabilities Deferred tax liabilities, net $ 5,301 $ (299) $ 5,002 Other liabilities, non-current 42,112 1,177 43,289 Equity Retained earnings $ 602,499 $ (878) $ 601,621 Under ASC 606, because the services we provide related to initial franchise fees and upfront fees from international development agreements do not contain separate and distinct performance obligations from the franchise right, these fees will be recognized on a straight-line basis over the term of the associated franchise agreement. Under previous guidance, initial franchise fees were recognized when the related services had been provided, which was generally upon the opening of the restaurant, and upfront fees were recognized on a pro-rata basis as restaurants under the development agreement were opened. These fees will continue to be recorded as a component of franchise royalties and fees in our unaudited condensed consolidated statements of income and comprehensive income. ASC 606 requires sales-based royalties to continue to be recognized as franchise restaurant sales occur. In addition, certain transactions that were previously recorded as expense will be classified as revenue. These transactions include breakage income and third party gift card fees from our gift card program as well as accounting fees, supervision fees and advertising contributions received from our franchisees. Under ASC 606, breakage income and third party gift card fees are recorded as a component of restaurant and other sales in our unaudited condensed consolidated statements of income and comprehensive income. Under previous guidance, these transactions were recorded as a component of other operating expense. Also under ASC 606, accounting fees, supervision fees and advertising contributions received from our franchisees are recorded as a component of franchise royalties and fees in our unaudited condensed consolidated statements of income and comprehensive income. Under previous guidance, these transactions were recorded as a reduction of general and administrative expense. As noted above, we adopted ASC 606 as of the first day of fiscal 2018. The comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of adopting ASC 606 as compared to the previous revenue recognition guidance on our unaudited condensed consolidated balance sheet and unaudited condensed consolidated statements of income and comprehensive income was as follows: June 26, 2018 Balances Without Adoption Impact of As Reported Adoption of ASC 606 ASC 606 Balance Sheet Liabilities Deferred tax liabilities, net $ 8,619 $ 8,917 $ (298) Other liabilities, non-current 46,791 45,616 1,175 Equity Retained earnings $ 664,668 $ 665,545 $ (877) 13 Weeks Ended June 26, 2018 26 Weeks Ended June 26, 2018 Balances Without Adoption Balances Without Adoption Adoption of Impact of Adoption of Impact of As Reported ASC 606 ASC 606 As Reported ASC 606 ASC 606 Income Statement Revenue Restaurant and other sales $ 624,073 $ 625,535 $ (1,462) $ 1,246,475 $ 1,249,750 $ (3,275) Franchise royalties and fees 5,164 4,509 655 10,467 9,230 1,237 Costs and expenses Other operating 94,858 96,320 (1,462) 187,236 190,511 (3,275) General and administrative 35,004 34,391 613 65,179 63,943 1,236 Provision for income taxes 8,466 8,455 11 16,923 16,923 - Net Income $ 44,227 $ 44,196 $ 31 $ 98,768 $ 98,767 $ 1 Statement of Cash Flows (Accounting Standards Update 2016-15, "ASU 2016-15") In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which adds and/or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. We adopted this guidance as of the beginning of our 2018 fiscal year. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows. Income Taxes (Accounting Standards Update 2016-16, "ASU 2016-16") In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) , which addresses the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This standard will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. We adopted this guidance as of the beginning of our 2018 fiscal year. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows. Compensation – Stock Compensation (Accounting Standards Update 2017-09, "ASU 2017-09") In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when a change in the terms or conditions of a share-based payment award must be accounted for as a modification. ASU 2017-09 requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change in the terms and conditions of the award. We adopted this guidance as of the beginning of our 2018 fiscal year. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows. Leases (Accounting Standards Update 2016-02, "ASU 2016-02") In February 2016, the FASB issued ASU 2016-02, Leases , which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. This update also requires additional disclosures about the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (our 2019 fiscal year). In March 2018, the FASB approved an amendment that allowed a modified retrospective approach and new required lease disclosures for all leases existing or entered into after either the beginning of the year of adoption or the earliest comparative period in the consolidated financial statements. We had operating leases with remaining rental payments of approximately $877.0 million as of June 26, 2018. The discounted minimum remaining rental payments will be the starting point for determining the right-of-use asset and lease liability. While we are still in the process of assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows, we expect the adoption of this standard will have a material impact on our consolidated financial position due to the recognition of the right-of-use asset and lease liability related to operating leases. While the new standard is also expected to impact the measurement and presentation of elements of expenses and cash flows related to leasing arrangements, we do not presently believe there will be a material impact on our consolidated results of operations, cash flows, or the related notes. Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected versus incurred losses for financial assets held. ASU 2016-13 is effective for annual periods beginning after December 15, 2019 (our 2020 fiscal year), with early adoption permitted for annual periods beginning after December 15, 2018. We are currently assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows. Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment and is expected to reduce the cost and complexity of accounting for goodwill. ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Instead, goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019 (our 2020 fiscal year) and will be applied on a prospective basis. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows.

Revenues

Revenues	6 Months Ended
	Jun. 26, 2018
Revenues.
Revenues	(3) Revenues The following table disaggregates our revenue by major source (in thousands): 13 Weeks Ended 26 Weeks Ended June 26, 2018 June 26, 2018 Restaurant and other sales $ 624,073 $ 1,246,475 Franchise royalties 4,336 8,820 Franchise fees 828 1,647 Total revenue $ 629,237 $ 1,256,942 Restaurant sales include the sale of food and beverage products to our customers. We recognize this revenue when the products are sold. All 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 unaudited condensed consolidated statements of income and comprehensive income. Other sales include the amortization of gift card breakage and fees associated with third party gift card sales. We record deferred revenue 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 are 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. This breakage adjustment is recorded consistent with the historic redemption pattern of the associated gift card. In addition, we incur fees on all gift cards that are sold through third party retailers. These fees are also deferred and recorded consistent with the historic redemption pattern of the associated gift cards. For the 13 and 26 weeks ended June 26, 2018, we recognized gift card fees, net of gift card breakage income, of approximately $1.5 million and $3.3 million, respectively. Total deferred revenue related to our gift cards is included in deferred revenue-gift cards in our unaudited condensed consolidated balance sheets and includes the full value of unredeemed gift cards less the amortized portion of the breakage rates and the unamortized portion of third party fees. As of June 26, 2018 and December 26, 2017, our deferred revenue balance related to gift cards was approximately $97.5 million and $156.6 million, respectively. This change was primarily due to the redemption of gift cards partially offset by the sale of additional gift cards. We recognized sales of approximately $21.8 million and $86.4 million for the 13 and 26 weeks ended June 26, 2018, respectively, related to the amount in deferred revenue as of December 26, 2017. Franchise royalties include continuing fees received from our franchising of Texas Roadhouse restaurants. We execute franchise agreements for each franchise restaurant which sets out the terms of our arrangement with the franchisee. These agreements require the franchisee to pay ongoing royalties of generally 4.0% of gross sales from our domestic franchisees, along with royalties paid to us by our international franchisees. Franchise royalties are recognized as revenue as the corresponding franchise restaurant sales occur. Franchise fees are all remaining fees from our franchisees including initial fees, upfront fees from international agreements, fees paid to our domestic marketing and advertising fund, and fees for supervisory and administrative services. Our franchise agreements typically require the franchisee to pay an initial, non-refundable fee. Subject to our approval and payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration. These initial fees and renewal fees are deferred and recognized over the term of the agreement. We also enter into area development agreements for the development of international Texas Roadhouse restaurants. Upfront fees from development agreements are deferred and recognized on a pro-rata basis over the term of the individual restaurant franchise agreement as restaurants under the development agreement are opened. Our domestic franchise agreement also requires our franchisees to remit 0.3% of sales to our system-wide marketing and advertising fund. These amounts are recognized as revenue as the corresponding franchise restaurant sales occur. Finally, we perform supervisory and administrative services for certain franchise restaurants for which we receive management fees, which are recognized as the services are performed. Total deferred revenue related to our franchise agreements is included in other liabilities in our unaudited condensed consolidated balance sheets and was approximately $1.2 million as of June 26, 2018 and December 26, 2017. We recognized revenue of approximately $0.1 million and $0.2 million for the 13 and 26 weeks ended June 26, 2018, respectively, related to the amount in deferred revenue as of December 26, 2017.

Long-term Debt and Obligations

Long-term Debt and Obligations Under Capital Leases	6 Months Ended
	Jun. 26, 2018
Long-term Debt and Obligation Under Capital Lease
Long-term Debt and Obligations Under Capital Leases	(4) Long-term Debt and Obligation Under Capital Lease Long-term debt consisted of the following: June 26, December 26, 2018 2017 Obligation under capital lease $ 1,986 $ 1,990 Revolver — 50,000 1,986 51,990 Less current maturities 10 9 $ 1,976 $ 51,981 On August 7, 2017, we entered into the Amended and Restated Credit Agreement (the "Amended Credit Agreement") with respect to our revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo Bank, N.A. The revolving credit facility remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million with the option to increase the revolving credit facility by an additional $200.0 million subject to certain limitations. The Amended Credit Agreement extends the maturity date of our revolving credit facility until August 5, 2022. The terms of the Amended Credit Agreement require us to pay interest on outstanding borrowings at the London Interbank Offered Rate ("LIBOR") plus a margin of 0.875% to 1.875% and to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the revolving credit facility, in each case depending on our leverage ratio, or the Alternate Base Rate, which is the highest of the issuing banks’ prime lending rate, the Federal Reserve Bank of New York rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. In April 2018, we paid off our outstanding credit facility of $50.0 million. The weighted-average interest rate for the amended revolving credit facility as of June 26, 2018 and December 26, 2017 was 2.81% and 2.37%, respectively. As of June 26, 2018, we had $192.5 million of availability, net of $7.5 million of outstanding letters of credit. The lenders’ obligation to extend credit pursuant to the Amended Credit Agreement 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 Credit Agreement permits us to incur additional secured or unsecured indebtedness outside the amended revolving credit facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of June 26, 2018.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 26, 2018
Income Taxes
Income Taxes	(5) Income Taxes A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 and 26 weeks ended June 26, 2018 and June 27, 2017 is as follows: 13 Weeks Ended 26 Weeks Ended June 26, 2018 June 27, 2017 June 26, 2018 June 27, 2017 Tax at statutory federal rate 21.0 % 35.0 % 21.0 % 35.0 % State and local tax, net of federal benefit 3.5 3.4 3.8 3.4 FICA tip tax credit (9.2) (7.2) (9.4) (7.1) Work opportunity tax credit (1.6) (0.8) (1.4) (0.8) Stock compensation (0.6) (1.8) (1.4) (2.5) Net income attributable to noncontrolling interests (0.2) (1.1) (0.7) (1.1) Officer compensation 1.3 0.1 1.1 0.1 Other 1.4 0.3 1.2 0.2 Total 15.6 % 27.9 % 14.2 % 27.2 % Our effective tax rate decreased to 15.6% for the 13 weeks ended June 26, 2018 compared to 27.9% for the 13 weeks ended June 27, 2017. For the 26 weeks ended June 26, 2018, our effective tax rate decreased to 14.2% compared to 27.2% for the 26 weeks ended June 27, 2017. These decreases are driven by new tax legislation that was enacted in late 2017. As a result of the new tax legislation, significant tax changes were enacted including a reduction of the federal corporate tax rate from 35.0% to 21.0%. These changes were generally effective at the beginning of our 2018 fiscal year.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 26, 2018
Commitments and Contingencies
Commitments and Contingencies	(6) Commitments and Contingencies The estimated cost of completing capital project commitments at June 26, 2018 and December 26, 2017 was approximately $153.8 million and $150.0 million, respectively. As of June 26, 2018 and December 26, 2017, we were contingently liable for $15.2 million and $15.6 million, respectively, for seven lease guarantees, 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 June 26, 2018 and December 26, 2017 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 2023 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 March 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 7, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with non-Texas Roadhouse 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 13 and 26 weeks ended June 26, 2018, we bought most of our beef from three suppliers. A change in suppliers could cause supply shortages and/or 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. We and the U.S. Equal Employment Opportunity Commission entered into a consent decree dated March 31, 2017 (the "Consent Decree") to settle the 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 "Lawsuit"). The Consent Decree resolves the issues litigated in the Lawsuit. Under the Consent Decree, among other terms, we have established a fund of $12.0 million, from which awards of monetary relief, allocated as wages for tax purposes, may be made to eligible claimants in accordance with procedures set forth in the Consent Decree. We recorded a pre-tax charge of $14.9 million ($9.2 million after-tax) related to the Lawsuit and Consent Decree during the 13 weeks ended March 28, 2017. The pre-tax charge includes $12.6 million of costs associated with the legal settlement and $2.3 million of legal fees associated with the defense of the case. In addition, we recorded $0.6 million of claims administration costs during the 13 weeks ended June 26, 2018. These pre-tax charges were recorded in general and administrative expense in our unaudited condensed consolidated statements of income and comprehensive income. Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including "slip and fall" accidents, employment related claims, claims related to our service of alcohol, and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. None of these types of litigation, most of which are covered by insurance, has had a material effect on us and, as of the date of this report, we are not party to any litigation that we believe could have a material adverse effect on our business.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 26, 2018
Related Party Transactions
Related Party Transactions	(7) Related Party Transactions As of June 26, 2018 and June 27, 2017, we had 10 franchise restaurants owned in whole or part, by certain officers, directors and 5% stockholders of the Company. For the 13 week periods ended June 26, 2018 and June 27, 2017, these entities paid us fees of approximately $0.6 million and $0.5 million, respectively. For both of the 26 week periods ended June 26, 2018 and June 27, 2017, these entities paid us fees of approximately $1.1 million. As disclosed in note 6, we are contingently liable on leases related to two of these restaurants. In addition, for the 13 weeks ended June 26, 2018, our founder made a personal contribution of $1.0 million to cover a portion of the planned expenses incurred as part of the annual managing partner conference which marked our 25th anniversary. These amounts were recorded as general and administrative expense on the condensed consolidated statement of income and as additional paid-in-capital on the condensed consolidated statement of stockholders’ equity.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 26, 2018
Earnings Per Share
Earnings Per Share	(8) 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 and restricted stock units outstanding from our equity incentive plans. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met. For the 13 week periods ended June 26, 2018 and June 27, 2017, there were 1,231 and 17,691 shares of nonvested stock, respectively, that were outstanding but not included in the computation of diluted earnings per share because their inclusion would have had an anti-dilutive effect. For the 26 week periods ended June 26, 2018 and June 27, 2017, there were 7,937 and 31,136 shares of nonvested stock, respectively, that were not included because they would have had an anti-dilutive effect. The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 26 Weeks Ended June 26, 2018 June 27, 2017 June 26, 2018 June 27, 2017 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 44,227 $ 37,581 $ 98,768 $ 71,894 Basic EPS: Weighted-average common shares outstanding 71,445 70,973 71,389 70,876 Basic EPS $ 0.62 $ 0.53 $ 1.38 $ 1.01 Diluted EPS: Weighted-average common shares outstanding 71,445 70,973 71,389 70,876 Dilutive effect of stock options and nonvested stock 452 464 464 522 Shares-diluted 71,897 71,437 71,853 71,398 Diluted EPS $ 0.62 $ 0.53 $ 1.37 $ 1.01

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 26, 2018
Fair Value Measurements
Fair Value Measurements	(9) Fair Value Measurements ASC 820, Fair Value Measurements ("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 Level 2 Level 3 There were no transfers among levels within the fair value hierarchy during the 13 and 26 weeks ended June 26, 2018. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level June 26, 2018 December 26, 2017 Deferred compensation plan—assets 1 $ 32,299 $ 28,754 Deferred compensation plan—liabilities 1 (32,353) (28,829) 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 amounts of the rabbi trust in other assets and the corresponding liability in other liabilities in our unaudited condensed 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 unaudited condensed consolidated statements of income and comprehensive income. At June 26, 2018 and December 26, 2017, 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 revolving credit facility at December 26, 2017 approximated its carrying value since it is a variable rate credit facility (Level 2).

Stock Repurchase Program

Stock Repurchase Program	6 Months Ended
	Jun. 26, 2018
Stockholders' Equity
Stockholders' Equity	(10) Stock Repurchase Program 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. We did not repurchase any shares of common stock during the 13 and 26 week periods ended June 26, 2018 or June 27, 2017, respectively. As of June 26, 2018, we had approximately $69.9 million remaining under our authorized stock repurchase program.

Recent Accounting Pronounceme19

Recent Accounting Pronouncements (Tables)	6 Months Ended
	Jun. 26, 2018
ASU 2014-09
Schedule of cumulative effects of the changes on adoption of ASU 2014-09	Balance at ASC 606 Balance at December 26, 2017 Adjustments December 27, 2017 Liabilities Deferred tax liabilities, net $ 5,301 $ (299) $ 5,002 Other liabilities, non-current 42,112 1,177 43,289 Equity Retained earnings $ 602,499 $ (878) $ 601,621 June 26, 2018 Balances Without Adoption Impact of As Reported Adoption of ASC 606 ASC 606 Balance Sheet Liabilities Deferred tax liabilities, net $ 8,619 $ 8,917 $ (298) Other liabilities, non-current 46,791 45,616 1,175 Equity Retained earnings $ 664,668 $ 665,545 $ (877) 13 Weeks Ended June 26, 2018 26 Weeks Ended June 26, 2018 Balances Without Adoption Balances Without Adoption Adoption of Impact of Adoption of Impact of As Reported ASC 606 ASC 606 As Reported ASC 606 ASC 606 Income Statement Revenue Restaurant and other sales $ 624,073 $ 625,535 $ (1,462) $ 1,246,475 $ 1,249,750 $ (3,275) Franchise royalties and fees 5,164 4,509 655 10,467 9,230 1,237 Costs and expenses Other operating 94,858 96,320 (1,462) 187,236 190,511 (3,275) General and administrative 35,004 34,391 613 65,179 63,943 1,236 Provision for income taxes 8,466 8,455 11 16,923 16,923 - Net Income $ 44,227 $ 44,196 $ 31 $ 98,768 $ 98,767 $ 1

Revenues (Tables)

Revenues (Tables)	6 Months Ended
	Jun. 26, 2018
Revenues.
Schedule of disaggregates revenue	The following table disaggregates our revenue by major source (in thousands): 13 Weeks Ended 26 Weeks Ended June 26, 2018 June 26, 2018 Restaurant and other sales $ 624,073 $ 1,246,475 Franchise royalties 4,336 8,820 Franchise fees 828 1,647 Total revenue $ 629,237 $ 1,256,942

Long term Debt and Obligation U

Long term Debt and Obligation Under Capital Lease (Tables)	6 Months Ended
	Jun. 26, 2018
Long-term Debt and Obligation Under Capital Lease
Schedule of long-term debt	June 26, December 26, 2018 2017 Obligation under capital lease $ 1,986 $ 1,990 Revolver — 50,000 1,986 51,990 Less current maturities 10 9 $ 1,976 $ 51,981

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 26, 2018
Income Taxes
Schedule of reconciliation of the statutory federal income tax rate to the entity's effective tax rate	13 Weeks Ended 26 Weeks Ended June 26, 2018 June 27, 2017 June 26, 2018 June 27, 2017 Tax at statutory federal rate 21.0 % 35.0 % 21.0 % 35.0 % State and local tax, net of federal benefit 3.5 3.4 3.8 3.4 FICA tip tax credit (9.2) (7.2) (9.4) (7.1) Work opportunity tax credit (1.6) (0.8) (1.4) (0.8) Stock compensation (0.6) (1.8) (1.4) (2.5) Net income attributable to noncontrolling interests (0.2) (1.1) (0.7) (1.1) Officer compensation 1.3 0.1 1.1 0.1 Other 1.4 0.3 1.2 0.2 Total 15.6 % 27.9 % 14.2 % 27.2 %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 26, 2018
Commitments and Contingencies
Schedule of real estate lease agreements for franchises	Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2019 Montgomeryville, Pennsylvania (1) October 2004 March 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 7, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company. (3) Leases associated with non-Texas Roadhouse 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.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 26, 2018
Earnings Per Share
Schedule of calculation of earnings per share and weighted-average shares outstanding	The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 26 Weeks Ended June 26, 2018 June 27, 2017 June 26, 2018 June 27, 2017 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 44,227 $ 37,581 $ 98,768 $ 71,894 Basic EPS: Weighted-average common shares outstanding 71,445 70,973 71,389 70,876 Basic EPS $ 0.62 $ 0.53 $ 1.38 $ 1.01 Diluted EPS: Weighted-average common shares outstanding 71,445 70,973 71,389 70,876 Dilutive effect of stock options and nonvested stock 452 464 464 522 Shares-diluted 71,897 71,437 71,853 71,398 Diluted EPS $ 0.62 $ 0.53 $ 1.37 $ 1.01

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 26, 2018
Fair Value Measurements
Schedule of fair value of assets and liabilities measured on a recurring basis	Fair Value Measurements Level June 26, 2018 December 26, 2017 Deferred compensation plan—assets 1 $ 32,299 $ 28,754 Deferred compensation plan—liabilities 1 (32,353) (28,829)

Basis of Presentation (Details)

Basis of Presentation (Details)	Jun. 26, 2018restaurantitem	Jun. 27, 2017restaurantitem
Description of Business
Number of states in which restaurants operate | item	49	49
Number of countries in which restaurants operate | item	8	6
Company
Description of Business
Number of restaurants	476	448
Company | Wholly-owned
Description of Business
Number of restaurants	458	430
Company | Majority-owned
Description of Business
Number of restaurants	18	18
Franchise
Description of Business
Number of restaurants	90	84
Franchise | Domestic
Description of Business
Number of restaurants	70	70
Franchise | International
Description of Business
Number of restaurants	20	14
Franchise | Unconsolidated
Description of Business
Number of restaurants	24	24
Franchise | Unconsolidated | Minimum
Description of Business
Ownership percentage by entity	5.00%	5.00%
Franchise | Unconsolidated | Maximum
Description of Business
Ownership percentage by entity	10.00%	10.00%
Non-Texas Roadhouse restaurants | Unconsolidated
Description of Business
Number of restaurants	4	4
Ownership percentage by entity	40.00%	40.00%

Recent Accounting Pronounceme27

Recent Accounting Pronouncements - Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 26, 2018	Dec. 27, 2017	Dec. 26, 2017
Liabilities
Deferred tax liabilities, net	$ 8,619	$ 5,002	$ 5,301
Other liabilities, non-current	46,791	43,289	42,112
Equity
Retained earnings	664,668	601,621	$ 602,499
Balances Without Adoption of ASU 2014-09
Liabilities
Deferred tax liabilities, net	8,917
Other liabilities, non-current	45,616
Equity
Retained earnings	665,545
ASU 2014-09 | Adoption Impact of ASU 2014-09
Liabilities
Deferred tax liabilities, net	(298)	(299)
Other liabilities, non-current	1,175	1,177
Equity
Retained earnings	$ (877)	$ (878)

Recent Accounting Pronounceme28

Recent Accounting Pronouncements - Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017
Revenues
Revenue	$ 629,237	$ 566,262	$ 1,256,942	$ 1,133,948
Costs and expenses
Other operating	94,858	84,837	187,236	170,497
General and administrative	35,004	28,223	65,179	68,471
Provision for income taxes	8,466	15,126	16,923	28,113
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	44,227	37,581	98,768	71,894
Balances Without Adoption of ASU 2014-09
Costs and expenses
Other operating	96,320		190,511
General and administrative	34,391		63,943
Provision for income taxes	8,455		16,923
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	44,196		98,767
ASU 2014-09 | Adoption Impact of ASU 2014-09
Costs and expenses
Other operating	(1,462)		(3,275)
General and administrative	613		1,236
Provision for income taxes	11
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	31		1
Restaurant and other sales
Revenues
Revenue	624,073	562,160	1,246,475	1,125,480
Restaurant and other sales | Balances Without Adoption of ASU 2014-09
Revenues
Revenue	625,535		1,249,750
Restaurant and other sales | ASU 2014-09 | Adoption Impact of ASU 2014-09
Revenues
Revenue	(1,462)		(3,275)
Franchise royalties and fees
Revenues
Revenue	5,164	$ 4,102	10,467	$ 8,468
Franchise royalties and fees | Balances Without Adoption of ASU 2014-09
Revenues
Revenue	4,509		9,230
Franchise royalties and fees | ASU 2014-09 | Adoption Impact of ASU 2014-09
Revenues
Revenue	$ 655		$ 1,237

Recent Accounting Pronounceme29

Recent Accounting Pronouncements - Leases (Details) $ in Millions	Jun. 26, 2018USD ($)
ASU 2016-02
Accounting pronouncements
Leases	$ 877

Revenues (Details)

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 26, 2018	Jun. 26, 2018
Revenues
Total revenue	$ 629,237	$ 1,256,942
Restaurant and other sales
Revenues
Total revenue	624,073	1,246,475
Franchise royalties
Revenues
Total revenue	4,336	8,820
Franchise fees
Revenues
Total revenue	$ 828	$ 1,647

Revenues - Other (Details)

Revenues - Other (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 26, 2018	Jun. 26, 2018	Dec. 26, 2017
Revenues
Estimated gift cards sold by Company that are never redeemed (as a percent)		4.00%
Gift card fees, net of gift card breakage income	$ 1,500	$ 3,300
Deferred revenue-gift cards	97,545	97,545	$ 156,627
Franchise royalties and fees
Revenues
Deferred revenue recognized	100	$ 200
Sales percentage, remittance to marketing and advertising		0.30%
Franchise royalties
Revenues
Ongoing royalties received as a percentage of gross sales from domestic franchisees and international franchisee		4.00%
Gift cards
Revenues
Deferred revenue recognized	21,800	$ 86,400
Other Liabilities | Franchise royalties and fees
Revenues
Deferred revenue	$ 1,200	$ 1,200	$ 1,200

Long-term Debt and Obligation32

Long-term Debt and Obligations Under Capital Leases (Details) - USD ($) $ in Thousands	Aug. 07, 2017	Apr. 30, 2018	Jun. 26, 2018	Dec. 26, 2017
Long-term debt
Long-term debt and capital lease obligations			$ 1,986	$ 51,990
Less current maturities			10	9
Long-term debt and capital lease obligations, excluding current maturities			1,976	51,981
Maturities of long-term debt
Long-term debt and capital lease obligations			1,986	51,990
Obligation under capital lease
Long-term debt
Long-term debt and capital lease obligations			1,986	1,990
Maturities of long-term debt
Long-term debt and capital lease obligations			$ 1,986	1,990
Revolver
Long-term debt
Long-term debt and capital lease obligations				50,000
Maturities of long-term debt
Long-term debt and capital lease obligations				$ 50,000
Revolving Credit Facility
Revolving credit facility, maximum borrowing capacity	$ 200,000
Revolving credit facility contingent increase in maximum borrowing capacity	200,000
Repayment of credit facility		$ 50,000
Weighted-average interest rate (as a percent)			2.81%	2.37%
Revolving credit facility, remaining borrowing capacity			$ 192,500
Letters of credit outstanding			$ 7,500
Threshold for aggregate secured indebtedness	$ 125,000
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth	20.00%
Revolver | Minimum
Revolving Credit Facility
Percentage of commitment fee on unused credit facility	0.125%
Revolving credit facility, fixed charge coverage ratio	2
Revolver | Maximum
Revolving Credit Facility
Percentage of commitment fee on unused credit facility	0.30%
Revolving credit facility, leverage ratio	3
Revolver | LIBOR | Minimum
Revolving Credit Facility
Interest rate added to base rate (as a percent)	0.875%
Revolver | LIBOR | Maximum
Revolving Credit Facility
Interest rate added to base rate (as a percent)	1.875%
Revolver | Federal Reserve Bank of New York
Revolving Credit Facility
Interest rate added to base rate (as a percent)	0.50%
Revolver | Adjusted Eurodollar Rate
Revolving Credit Facility
Interest rate added to base rate (as a percent)	1.00%
Interest period	1 month

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017
Reconciliation of the statutory federal income tax rate to the entity's effective tax rate
Tax at statutory federal rate (as a percent)	21.00%	35.00%	21.00%	35.00%
State and local tax, net of federal benefit (as a percent)	3.50%	3.40%	3.80%	3.40%
FICA tip tax credit (as a percent)	(9.20%)	(7.20%)	(9.40%)	(7.10%)
Work opportunity tax credit (as a percent)	(1.60%)	(0.80%)	(1.40%)	(0.80%)
Stock compensation (as a percent)	(0.60%)	(1.80%)	(1.40%)	(2.50%)
Net income attributable to noncontrolling interests (as a percent)	(0.20%)	(1.10%)	(0.70%)	(1.10%)
Officer compensation	1.30%	0.10%	1.10%	0.10%
Other (as a percent)	1.40%	0.30%	1.20%	0.20%
Total (as a percent)	15.60%	27.90%	14.20%	27.20%

Commitments and Contingencies34

Commitments and Contingencies (Details) $ in Millions	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 26, 2018USD ($)item	Mar. 28, 2017USD ($)	Jun. 26, 2018USD ($)item	Dec. 26, 2017USD ($)item	Mar. 31, 2017USD ($)
Commitments and Contingencies
Estimated cost to complete capital project commitments (in dollars)	$ 153.8		$ 153.8	$ 150
Number of suppliers providing most of the company's beef | item	3		3
Lease Agreements
Commitments and Contingencies
Number of leases guarantees entity contingently liable | item			7	7
Lease Agreements | Maximum
Commitments and Contingencies
Contingently liable amount	$ 15.2		$ 15.2	$ 15.6
U.S. Equal Employment Opportunity Commission
Commitments and Contingencies
Contingently liable amount					$ 12
Estimated loss contingency, net of tax		$ 9.2
Claims administration costs	$ 0.6
U.S. Equal Employment Opportunity Commission | General and administrative expense
Commitments and Contingencies
Total pre-tax charge		14.9
Legal settlement amount		12.6
Pre-tax charge associated with the legal fees		$ 2.3
Everett, Massachusetts | Lease Agreements
Commitments and Contingencies
Ownership percentage	5.00%		5.00%
Fargo, North Dakota | Lease Agreements
Commitments and Contingencies
Ownership percentage	5.00%		5.00%

Related Party Transactions (Det

Related Party Transactions (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2018USD ($)restaurant	Jun. 27, 2017USD ($)restaurant	Jun. 26, 2018USD ($)restaurant	Jun. 30, 2017USD ($)
Franchise
Related Party Transactions
Number of franchise restaurants	90	84	90
Officers, directors and shareholders | Franchise
Related Party Transactions
Number of franchise restaurants	10	10	10
Ownership percentage by entity	5.00%	5.00%	5.00%
Fees received from franchise and license restaurants | $	$ 0.6	$ 0.5	$ 1.1	$ 1.1
Number of restaurants for which the entity is contingently liable on the lease			2
Founder | Personal contribution
Related Party Transactions
Transactions with related party | $	$ 1

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017
Earnings per share
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$ 44,227	$ 37,581	$ 98,768	$ 71,894
Basic EPS:
Weighted-average common shares outstanding (in shares)	71,445,000	70,973,000	71,389,000	70,876,000
Basic EPS (in dollars per share)	$ 0.62	$ 0.53	$ 1.38	$ 1.01
Diluted EPS:
Weighted-average common shares outstanding (in shares)	71,445,000	70,973,000	71,389,000	70,876,000
Dilutive effect of stock options and nonvested stock (in shares)	452,000	464,000	464,000	522,000
Shares - diluted (in shares)	71,897,000	71,437,000	71,853,000	71,398,000
Diluted EPS (in dollars per share)	$ 0.62	$ 0.53	$ 1.37	$ 1.01
Nonvested stock
Antidilutive securities
Anti-dilutive securities (in shares)	1,231	17,691	7,937	31,136

Fair Value Measurements (Detail

Fair Value Measurements (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 26, 2018USD ($)	Jun. 26, 2018USD ($)item	Dec. 26, 2017USD ($)
Fair value of financial instruments
Transfer of asset levels within the fair value hierarchy	$ 0	$ 0
Minimum number of investment funds in rabbi trust for deferred compensation plan | item		1
Fair value measured on a recurring basis | Level 1
Fair value of financial instruments
Deferred compensation plan - assets	32,299	$ 32,299	$ 28,754
Deferred compensation plan - liabilities	$ (32,353)	$ (32,353)	$ (28,829)

Stock Repurchase Program (Detai

Stock Repurchase Program (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2018	Jun. 27, 2017	Jun. 26, 2018	Jun. 27, 2017	May 22, 2014
Stockholders' Equity
Repurchase of common stock authorized by board of directors					$ 100
Payments to repurchase common stock	$ 0	$ 0	$ 0	$ 0
Amount remaining under authorized stock repurchase program	$ 69.9		$ 69.9