Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 25, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | Texas Roadhouse, Inc. | ||
Entity Central Index Key | 0001289460 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Trading Symbol | TXRH | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 69,405,753 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-50972 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-1083890 | ||
Entity Address, Address Line One | 6040 Dutchmans Lane | ||
Entity Address, City or Town | Louisville | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40205 | ||
City Area Code | 502 | ||
Local Phone Number | 426-9984 | ||
Title of 12(b) Security | Common Stock | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 3,496,055,254 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 107,879 | $ 210,125 |
Receivables, net of allowance for doubtful accounts of $12 at December 31, 2019 and $34 at December 25, 2018 | 99,305 | 92,114 |
Inventories, net | 20,267 | 18,827 |
Prepaid income taxes | 2,015 | 7,569 |
Prepaid expenses | 18,433 | 16,384 |
Total current assets | 247,899 | 345,019 |
Property and equipment, net of accumulated depreciation of $678,988 at December 31, 2019 and $602,451 at December 25, 2018 | 1,056,563 | 956,676 |
Operating lease right-of-use assets | 499,801 | |
Goodwill | 124,748 | 123,220 |
Intangible assets, net of accumulated amortization of $14,141 at December 31, 2019 and $13,416 at December 25, 2018 | 1,234 | 1,959 |
Other assets | 53,320 | 42,402 |
Total assets | 1,983,565 | 1,469,276 |
Current liabilities: | ||
Current portion of operating lease liabilities | 17,263 | |
Accounts payable | 61,653 | 62,060 |
Deferred revenue-gift cards | 209,258 | 192,242 |
Accrued wages | 39,699 | 34,159 |
Accrued taxes and licenses | 30,433 | 24,631 |
Dividends payable | 17,904 | |
Other accrued liabilities | 58,914 | 54,146 |
Total current liabilities | 417,220 | 385,142 |
Operating lease liabilities, net of current portion | 538,710 | |
Restricted stock and other deposits | 8,249 | 7,703 |
Deferred rent | 48,079 | |
Deferred tax liabilities, net | 22,695 | 17,268 |
Other liabilities | 65,522 | 50,376 |
Total liabilities | 1,052,396 | 508,568 |
Texas Roadhouse, Inc. and subsidiaries stockholders' equity: | ||
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding) | ||
Common stock ($0.001 par value, 100,000,000 shares authorized, 69,400,252 and 71,617,510 shares issued and outstanding at December 31, 2019 and December 25, 2018, respectively) | 69 | 72 |
Additional paid-in-capital | 140,501 | 257,388 |
Retained earnings | 775,649 | 688,337 |
Accumulated other comprehensive loss | (225) | (228) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 915,994 | 945,569 |
Noncontrolling interests | 15,175 | 15,139 |
Total equity | 931,169 | 960,708 |
Total liabilities and equity | $ 1,983,565 | $ 1,469,276 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 12 | $ 34 |
Property and equipment, accumulated depreciation (in dollars) | 678,988 | 602,451 |
Intangible assets, accumulated amortization (in dollars) | $ 14,141 | $ 13,416 |
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 | 69,400,252 | 71,617,510 |
Common stock, shares outstanding | 69,400,252 | 71,617,510 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Revenue: | |||
Revenue | $ 2,756,163 | $ 2,457,449 | $ 2,219,531 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | |||
Cost of sales | 883,357 | 795,300 | 721,550 |
Labor | 905,614 | 793,384 | 687,545 |
Rent | 52,531 | 48,791 | 44,807 |
Other operating | 418,448 | 375,477 | 342,702 |
Pre-opening | 20,156 | 19,051 | 19,274 |
Depreciation and amortization | 115,544 | 101,216 | 93,499 |
Impairment and closure, net | (899) | 278 | 654 |
General and administrative | 149,389 | 136,163 | 123,294 |
Total costs and expenses | 2,544,140 | 2,269,660 | 2,033,325 |
Income from operations | 212,023 | 187,789 | 186,206 |
Interest income (expense), net | 1,514 | (591) | (1,577) |
Equity income from investments in unconsolidated affiliates | 378 | 1,353 | 1,488 |
Income before taxes | 213,915 | 188,551 | 186,117 |
Provision for income taxes | 32,397 | 24,257 | 48,581 |
Net income including noncontrolling interests | 181,518 | 164,294 | 137,536 |
Less: Net income attributable to noncontrolling interests | 7,066 | 6,069 | 6,010 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 174,452 | 158,225 | 131,526 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment, net of tax of ($1), $53 and ($97), respectively | 3 | (189) | 155 |
Total comprehensive income | $ 174,455 | $ 158,036 | $ 131,681 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | |||
Basic | $ 2.47 | $ 2.21 | $ 1.85 |
Diluted | $ 2.46 | $ 2.20 | $ 1.84 |
Weighted average shares outstanding: | |||
Basic | 70,509 | 71,467 | 70,989 |
Diluted | 70,916 | 71,964 | 71,527 |
Cash dividends declared per share | $ 1.20 | $ 1 | $ 0.84 |
Restaurant and other sales | |||
Revenue: | |||
Revenue | $ 2,734,177 | $ 2,437,115 | $ 2,203,017 |
Franchise royalties and fees | |||
Revenue: | |||
Revenue | $ 21,986 | $ 20,334 | $ 16,514 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Consolidated Statements of Income and Comprehensive Income | |||
Foreign currency translation adjustment, (tax)/benefit | $ (1) | $ 53 | $ (97) |
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. 27, 2016 | $ 750,226 | $ 71 | $ 219,626 | $ 530,723 | $ (194) | $ 8,016 | $ 758,242 |
Balance (in shares) at Dec. 27, 2016 | 70,619,737 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 131,526 | 131,526 | 6,010 | 137,536 | |||
Other comprehensive income (loss), net of tax | 155 | 155 | 155 | ||||
Noncontrolling interests contribution | 3,457 | 3,457 | |||||
Distributions to noncontrolling interest holders | (5,171) | (5,171) | |||||
Dividends declared | (59,681) | (59,681) | (59,681) | ||||
Shares issued under share-based compensation plans including tax effects | 1,558 | $ 1 | 1,557 | 1,558 | |||
Shares issued under share-based compensation plans including tax effects (in shares) | 800,189 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (11,639) | $ (1) | (11,638) | $ (11,639) | |||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (251,029) | ||||||
Repurchase of shares of common stock (in shares) | 0 | ||||||
Cumulative effect of change in accounting principle | 69 | (69) | |||||
Share-based compensation | 26,934 | 26,934 | $ 26,934 | ||||
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 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 158,225 | 158,225 | 6,069 | 164,294 | |||
Other comprehensive income (loss), net of tax | (189) | (189) | (189) | ||||
Noncontrolling interests contribution | 2,551 | 2,551 | |||||
Contribution from executive officer | 1,000 | 1,000 | 1,000 | ||||
Distributions to noncontrolling interest holders | (5,746) | (5,746) | |||||
Acquisition of noncontrolling interest | (75) | (75) | (47) | (122) | |||
Dividends declared | (71,509) | (71,509) | (71,509) | ||||
Shares issued under share-based compensation plans including tax effects | $ 1 | (1) | |||||
Shares issued under share-based compensation plans including tax effects (in shares) | 684,804 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (14,067) | (14,067) | $ (14,067) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (236,191) | ||||||
Repurchase of shares of common stock (in shares) | 0 | ||||||
Cumulative effect of change in accounting principle | ASU 2014-09 (Topic 606) | (878) | (878) | $ (878) | ||||
Share-based compensation | 33,983 | 33,983 | 33,983 | ||||
Balance at Dec. 25, 2018 | 945,569 | $ 72 | 257,388 | 688,337 | (228) | 15,139 | $ 960,708 |
Balance (in shares) at Dec. 25, 2018 | 71,617,510 | 71,617,510 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 174,452 | 174,452 | 7,066 | $ 181,518 | |||
Other comprehensive income (loss), net of tax | 3 | 3 | 3 | ||||
Distributions to noncontrolling interest holders | (6,357) | (6,357) | |||||
Acquisition of noncontrolling interest | (70) | (70) | (673) | (743) | |||
Dividends declared | (84,462) | (84,462) | (84,462) | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 617,395 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (12,471) | (12,471) | (12,471) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (209,408) | ||||||
Repurchase of shares of common stock | (139,849) | $ (3) | (139,846) | $ (139,849) | |||
Repurchase of shares of common stock (in shares) | (2,625,245) | (2,625,245) | |||||
Cumulative effect of change in accounting principle | ASU 2016-02 (Topic 842) | (2,678) | (2,678) | $ (2,678) | ||||
Share-based compensation | 35,500 | 35,500 | 35,500 | ||||
Balance at Dec. 31, 2019 | $ 915,994 | $ 69 | $ 140,501 | $ 775,649 | $ (225) | $ 15,175 | $ 931,169 |
Balance (in shares) at Dec. 31, 2019 | 69,400,252 | 69,400,252 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 24, 2019 | Jun. 25, 2019 | Mar. 26, 2019 | Dec. 25, 2018 | Sep. 25, 2018 | Jun. 26, 2018 | Mar. 27, 2018 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Consolidated Statement of Stockholders' Equity | |||||||||||
Dividends declared (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.20 | $ 1 | $ 0.84 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Cash flows from operating activities: | |||
Net income including noncontrolling interests | $ 181,518 | $ 164,294 | $ 137,536 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 115,544 | 101,216 | 93,499 |
Deferred income taxes | 6,335 | 12,319 | (5,069) |
Loss on disposition of assets | 5,885 | 6,008 | 4,961 |
Impairment and closure costs | (1,283) | 105 | 600 |
Contribution from executive officer | 1,000 | ||
Equity income from investments in unconsolidated affiliates | (378) | (1,353) | (1,488) |
Distributions of income received from investments in unconsolidated affiliates | 1,837 | 656 | 1,424 |
Provision for doubtful accounts | (22) | (9) | 10 |
Share-based compensation expense | 35,500 | 33,983 | 26,934 |
Changes in operating working capital: | |||
Receivables | (5,774) | (15,597) | (20,379) |
Inventories | (1,414) | (2,495) | (48) |
Prepaid expenses | (2,049) | (3,023) | (1,211) |
Other assets | (12,823) | (4,290) | (7,401) |
Accounts payable | 407 | 8,882 | 1,601 |
Deferred revenue-gift cards | 16,991 | 35,519 | 26,678 |
Accrued wages | 5,540 | 4,481 | 3,639 |
Prepaid income taxes and income taxes payable | 5,554 | (8,581) | 3,448 |
Accrued taxes and licenses | 5,802 | 2,634 | 2,299 |
Other accrued liabilities | (3,773) | 7,569 | 5,148 |
Operating lease right-of-use assets and lease liabilities | 5,826 | ||
Deferred rent | 5,938 | 6,038 | |
Other liabilities | 15,075 | 3,612 | 8,154 |
Net cash provided by operating activities | 374,298 | 352,868 | 286,373 |
Cash flows from investing activities: | |||
Capital expenditures-property and equipment | (214,340) | (155,980) | (161,628) |
Acquisition of franchise restaurants, net of cash acquired | (1,536) | (2,165) | (16,528) |
Proceeds from sale of property and equipment | 1,056 | ||
Net cash used in investing activities | (214,820) | (158,145) | (178,156) |
Cash flows from financing activities: | |||
Debt issuance costs | (476) | ||
Proceeds from noncontrolling interest contribution | 2,551 | 3,457 | |
Distributions to noncontrolling interest holders | (6,357) | (5,746) | (5,171) |
Acquisition of noncontrolling interest | (743) | (122) | |
Proceeds from restricted stock and other deposits, net | 62 | 418 | 740 |
Indirect repurchase of shares for minimum tax withholdings | (12,471) | (14,067) | (11,639) |
Principal payments on long-term debt and finance lease obligation | (50,000) | (558) | |
Proceeds from exercise of stock options | 1,558 | ||
Repurchase of shares of common stock | (139,849) | ||
Dividends paid to shareholders | (102,366) | (68,550) | (58,154) |
Net cash used in financing activities | (261,724) | (135,516) | (70,243) |
Net (decrease) increase in cash and cash equivalents | (102,246) | 59,207 | 37,974 |
Cash and cash equivalents-beginning of period | 210,125 | 150,918 | 112,944 |
Cash and cash equivalents-end of period | 107,879 | 210,125 | 150,918 |
Supplemental disclosures of cash flow information: | |||
Interest paid, net of amounts capitalized | 738 | 896 | 1,216 |
Income taxes paid | 20,440 | 20,519 | 50,201 |
Capital expenditures included in current liabilities | $ 15,416 | $ 7,332 | $ 12,156 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | |
Description of Business | (1) Description of Business 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 31, 2019 and December 25, 2018 and for each of the years in the three-year period ended December 31, 2019. As of December 31, 2019, we owned and operated 514 restaurants and franchised an additional 97 restaurants in 49 states and ten foreign countries. Of the 514 company restaurants that were operating at December 31, 2019, 494 were wholly-owned and 20 were majority-owned. Of the 97 franchise restaurants, 69 were domestic and 28 were international restaurants. As of December 25, 2018, we owned and operated 491 restaurants and franchised an additional 91 restaurants in 49 states and nine foreign countries. Of the 491 company restaurants that were operating at December 25, 2018, 471 were wholly-owned and 20 were majority-owned. Of the 91 franchise restaurants, 69 were domestic and 22 were international restaurants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) Principles of Consolidation As of December 31, 2019 and December 25, 2018, we owned a 5.0% to 10.0% equity interest in 24 restaurants. Additionally, as of December 31, 2019 and December 25, 2018, 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 53 week 13 53 weeks 14 weeks. Fiscal year 2019 was 53 weeks in length. In fiscal year 2019, the 53 rd to diluted earnings per share in our consolidated statements of income and comprehensive income. Fiscal years 2018 and 2017 were 52 (c) Cash and Cash Equivalents We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents also included receivables from credit card companies, which amounted to $22.4 million and $34.1 million at December 31, 2019 and December 25, 2018, respectively, because the balances are settled within two three (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 net realizable value. (f) 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(g) for further discussion of leases. The estimated useful lives are: Land improvements 10 Buildings and leasehold improvements 10 Furniture, fixtures and equipment 3 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 $27.9 million, $29.7 million and $25.8 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. These costs are included in other operating costs in our consolidated statements of income and comprehensive income. (g) Leases We lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements which have initial terms and one or more option periods. In addition, certain of these leases contain pre-determined fixed escalations of the minimum rent over the lease term. Beginning in 2019 with the adoption of ASC 842, Leases (h) 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 was not due to any goodwill impairment concerns within any of our reporting units. In addition, we determined this did not represent a material change to a method of applying an accounting principle. 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 2019, 2018 and 2017, as a result of our annual goodwill impairment analysis, we determined that there was no goodwill impairment. Refer to note 7 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 and deposits. For further discussion of the deferred compensation plan, see note 15. (j) Impairment or Disposal of Long-lived Assets In accordance with ASC 360, Property, Plant and Equipment , long-lived assets related to each restaurant to be held and used in the business, such as property and equipment, right-of-use assets 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 under a predetermined amount 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 . 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 estimated 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. See note 16 for further discussion of amounts recorded as part of our impairment analysis. (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 $250,000 / $2,000,000 Workers' compensation $350,000 General liability $500,000 Property $250,000 Employee healthcare $350,000 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 31, 2019, we operated 514 restaurants, each as a single operating segment, and franchised an additional 97 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 We recognize revenue from restaurant sales 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. We also recognize revenue from our franchising of Texas Roadhouse restaurants. This includes franchise royalties, initial and upfront franchise fees, fees paid to our domestic marketing and advertising fund, and fees for supervisory and administrative services. For further discussion of revenue, see note 3. We adopted ASC 606, Revenue from Contracts with Customers, 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 prior to adoption 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 consolidated balance sheet and our consolidated statements of income and comprehensive income was not significant. 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 are 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 continue to be recorded as a component of franchise royalties and fees in our 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 prior to adoption are now 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 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 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 beginning of our 2018 fiscal year. The comparative financial information prior to adoption has not been restated and continues to be reported under the accounting standards in effect for those periods. For further discussion of revenue, see note 3. (n) Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes (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 31, 2019, December 25, 2018 and December 26, 2017. Domestic company and franchise restaurants are required to remit a designated portion of sales, currently 0.3% , to the advertising fund. Advertising contributions related to company restaurants are recorded as a component of other operating costs. Advertising contributions received from our franchisees are recorded as a component of franchise royalties and fees 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 (p) Pre-opening Expenses Pre-opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of a new or relocated restaurant and are comprised principally of opening team and training team compensation and benefits, travel expenses, rent, food, beverage and other initial supplies and expenses. (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 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 breakage and third party fees 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 foreign currency translation adjustments which are excluded from net income under GAAP. Foreign currency translation adjustment 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 our investment. (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 15 for further discussion of fair value measurement. (t) Recent Accounting Pronouncements Leases (Accounting Standards Codification 842, "ASC 842") On December 26, 2018, we adopted ASC 842, Leases As further described in note 8, we lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements. We adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. ASC 842 also permitted the election of certain practical expedients upon adoption. We elected the transition package of practical expedients which allowed us to carryforward the historical lease classification. We also elected the practical expedient to not separate lease and non-lease components for all leases entered into after the date of adoption. Finally, we elected the hindsight practical expedient which required us to assess the lease term for all existing leases. This resulted in extending the terms for certain existing leases in which renewal options had already been exercised or were reasonably certain of being exercised and shortening the terms for certain existing leases in which renewal options were not reasonably certain of being exercised. As a result of the hindsight election, we recorded a $2.7 million reduction, net of tax, to retained earnings as of the first day of fiscal 2019 to reflect the change in lease terms. The adoption of this standard had a significant impact on our consolidated balance sheet. There was no significant impact to our results of operations or cash flows. This standard did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our credit facility. 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 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 Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes disclosure requirements for fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 (our 2020 fiscal year) and for interim periods within those years, with early adoption permitted. We do not believe this standard will have a significant impact on our consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Revenue | (3) Revenue The following table disaggregates our revenue by major source (in thousands): Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Restaurant and other sales $ 2,734,177 $ 2,437,115 $ 2,203,017 Franchise royalties 19,445 17,443 16,195 Franchise fees 2,541 2,891 319 Total revenue $ 2,756,163 $ 2,457,449 $ 2,219,531 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 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 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 years ended December 31, 2019 and December 25, 2018, we recognized gift card fees, net of gift card breakage income, of million, respectively. Total deferred revenue related to our gift cards is included in deferred revenue-gift cards in our 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 December 31, 2019 and December 25, 2018, our deferred revenue balance related to gift cards was million, respectively. This change was primarily due to the sale of additional gift cards partially offset by the redemption of gift cards. We recognized restaurant sales of 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 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 consolidated balance sheets and was million as of December 25, 2018. We recognized revenue of million for both years ended December 31, 2019 and December 25, 2018 related to the amounts in deferred revenue as of December 25, 2018 and December 26, 2017, respectively. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | |
Acquisitions | (4) Acquisitions On October 28, 2019, we acquired one franchise restaurant in Georgia which was subsequently relocated. Pursuant to the terms of the acquisition agreement, we paid a total purchase price of $1.5 million. This transaction was accounted for using the purchase method as defined in ASC 805, Business Combinations " " ). As a result of this acquisition, On December 3, 2018, we acquired one franchise restaurant in Florida which was subsequently relocated. Pursuant to the terms of the acquisition agreement, we paid a total purchase price of million charge to settle a pre-existing relationship. This transaction was accounted for using the purchase method as defined in ASC 805 . As a result of this acquisition, These acquisitions are consistent with our long-term strategy to increase net income and earnings per share. Pro forma results of operations and revenue and earnings for the years ended December 31, 2019 and December 25, 2018 have not been presented because the effect of the acquisitions was not material to our consolidated financial position, results of operations or cash flows. |
Long-term Debt and Obligation U
Long-term Debt and Obligation Under Capital Lease | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Debt and Obligation Under Capital Lease | |
Long-term Debt and Obligation Under Capital Lease | (5) Long-term Debt 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 amended 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 amended 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 amended 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 December 31, 2019 and December 25, 2018 was 2.64% and 3.81% , respectively. As of December 31, 2019, we had $191.8 million of availability, net of $8.2 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 December 31, 2019. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | (6) Property and Equipment, Net Property and equipment were as follows: December 31, December 25, 2019 2018 Land and improvements $ 135,708 $ 127,579 Buildings and leasehold improvements 922,036 835,490 Furniture, fixtures and equipment 614,920 556,254 Construction in progress 51,924 28,975 Liquor licenses 10,963 10,829 1,735,551 1,559,127 Accumulated depreciation and amortization (678,988) (602,451) $ 1,056,563 $ 956,676 There was no interest capitalized in connection with restaurant construction for the year ended December 31, 2019. For the years ended December 25, 2018 and December 26, 2017, the amount of interest capitalized in connection with restaurant construction was $0.1 million and $0.4 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (7) 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 26, 2017 (1) $ 121,040 $ 2,700 Additions 2,180 — Amortization expense — (741) Disposals and other, net — — Impairment — — Balance as of December 25, 2018 $ 123,220 $ 1,959 Additions 1,528 — Amortization expense — (725) Disposals and other, net — — Impairment — — Balance as of December 31, 2019 $ 124,748 $ 1,234 (1) Net of $4.8 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 31, 2019 were $15.4 million and $14.1 million, respectively. As of December 25, 2018, the gross carrying amount and accumulated amortization of the intangible assets was $15.4 million and $13.4 million, respectively. 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 $0.1 million to $0.4 million. Refer to note 4 for discussion of the acquisitions completed for the years ended December 31, 2019 and December 25, 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | (8) Leases We recognize right-of-use assets and lease liabilities for both real estate and equipment leases that have a term in excess of one year . As of December 31, 2019, these amounts were as follows: Leases Real estate Equipment Total Operating lease right-of-use assets $ 495,903 $ 3,898 $ 499,801 Current portion of operating lease liabilities 15,966 1,297 17,263 Operating lease liabilities, net of current portion 536,109 2,601 538,710 Total operating lease liabilities $ 552,075 $ 3,898 $ 555,973 Information related to our real estate leases as of and for the fiscal year ended December 31, 2019 was as follows (in thousands): Fiscal Year Ended Real estate costs December 31, 2019 Operating lease $ 54,844 Variable lease 1,590 Short-term lease 120 Total lease costs $ 56,554 Real estate lease liability maturity analysis Total 2020 $ 52,450 2021 53,393 2022 54,229 2023 54,268 2024 54,362 Thereafter 721,619 Total $ 990,321 Less interest 438,246 Total discounted operating lease liabilities $ 552,075 Fiscal Year Ended Real estate leases other information December 31, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 49,018 Right-of-use assets obtained in exchange for new operating lease liabilities $ 51,220 Weighted-average remaining lease term (years) 17.82 Weighted-average discount rate 6.77 Operating lease payments exclude $32.6 million of minimum lease payments for executed real estate leases that we have not yet taken possession. In addition to the above operating leases, as of December 31, 2019 we had one finance lease with a right-of-use asset balance and lease liability balance of $1.7 million and $2.1 million, respectively. The right-of-use asset balance is included as a component of other assets and the lease liability balance as a component of other liabilities in the consolidated balance sheets. Beginning in 2019, we recognize operating lease right-of-use assets and operating lease liabilities for real estate leases, including our restaurant leases and Support Center lease, as well as certain restaurant equipment leases based on the present value of the lease payments over the lease term. We estimate the present value based on our incremental borrowing rate which corresponds to the underlying lease term. In addition, operating lease right-of-use assets are reduced for accrued rent and increased for any initial direct costs recognized at lease inception. For leases commencing in 2019 and later, we account for lease and non-lease components as a single lease component. Certain of our operating leases contain predetermined fixed escalations of the minimum rent over the lease term. For these leases, we recognize the related rent expense on a straight-line basis over the lease term. We may receive rent concessions or leasehold improvement incentives upon opening a restaurant that is subject to a lease which we consider when determining straight-line rent expense. We also may receive rent holidays, which would begin on the possession date and end when the store opens, 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. In recognizing straight-line rent expense, we record the difference between amounts charged to operations and amounts paid as accrued rent. Straight-line rent expense is included as an operating lease cost in the table above. 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. In addition, certain of our operating leases have variable escalations of the minimum rent that depend on an index or rate. We recognize variable rent expense when the escalation is determinable. Contingent rent and variable rent expense are included as variable lease costs in the table above. The following is a schedule of future minimum lease payments required for operating leases that have remaining terms in excess of one year as of December 25, 2018: Operating Leases 2019 $ 50,030 2020 49,582 2021 49,917 2022 50,237 2023 49,854 Thereafter 677,710 Total $ 927,330 Rent expense for operating leases consisted of the following: Fiscal Year Ended December 25, 2018 December 26, 2017 Minimum rent—occupancy $ 47,741 $ 43,621 Contingent rent 1,050 1,186 Rent expense, occupancy 48,791 44,807 Minimum rent—equipment and other 6,176 5,087 Rent expense $ 54,967 $ 49,894 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | (9) Income Taxes Components of our income tax provision for the years ended December 31, 2019, December 25, 2018 and December 26, 2017 are as follows: Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Current: Federal $ 15,643 $ 2,934 $ 43,108 State 10,050 8,794 10,233 Foreign 369 210 309 Total current 26,062 11,938 53,650 Deferred: Federal 4,396 11,909 (4,830) State 1,939 410 (239) Total deferred 6,335 12,319 (5,069) Income tax provision $ 32,397 $ 24,257 $ 48,581 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 31, 2019, December 25, 2018 and December 26, 2017 is as follows: Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Tax at statutory federal rate 21.0 % 21.0 % 35.0 % State and local tax, net of federal benefit 3.8 3.6 3.3 FICA tip tax credit (9.4) (9.6) (7.0) Work opportunity tax credit (1.5) (1.5) (0.9) Stock compensation (0.1) (1.4) (1.8) Net income attributable to noncontrolling interests (0.6) (0.8) (1.1) Officers compensation 1.2 1.7 0.1 Tax reform — — (1.7) Other 0.7 (0.1) 0.2 Total 15.1 % 12.9 % 26.1 % Our effective tax rate increased to 15.1% in 2019 compared to 12.9% in 2018 primarily due to lower excess tax benefits related to our share-based compensation program partially offset by lower non-deductible officer compensation. In addition, the prior year tax rate benefitted from an adjustment related to tax reform that we recorded in conjunction with the filing of our 2017 tax return. Our effective tax rate decreased to 12.9% in 2018 compared to 26.1 % in 2017 primarily due to new tax legislation 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% and changes in the federal taxes paid on foreign sourced earnings. Components of deferred tax liabilities, net are as follows: December 31, 2019 December 25, 2018 Deferred tax assets: Deferred revenue—gift cards $ 16,122 $ 12,851 Insurance reserves 4,774 3,949 Other reserves 601 890 Share-based compensation 5,510 4,623 Operating lease liabilities 137,744 — Deferred rent — 12,179 Deferred compensation 10,503 8,483 Tax credit carryforwards 1,710 — Other assets 2,482 2,212 Total deferred tax asset 179,446 45,187 Deferred tax liabilities: Property and equipment (63,777) (50,513) Goodwill and intangibles (6,241) (5,398) Operating lease right-of-use asset (123,813) — Other liabilities (8,310) (6,544) Total deferred tax liability (202,141) (62,455) Net deferred tax liability $ (22,695) $ (17,268) As of December 31, 2019, we have federal tax credit carryforwards of $1.5 million expiring in 2038 and state tax credit carryforwards of $0.2 million expiring in 2023. 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 26, 2017 $ 806 Additions to tax positions related to prior years 36 Additions to tax positions related to current year 754 Reductions due to statute expiration (114) Reductions due to exam settlements — Balance at December 25, 2018 1,482 Additions to tax positions related to prior years 16 Additions to tax positions related to current year 362 Reductions due to statute expiration (314) Reductions due to exam settlement — Balance at December 31, 2019 $ 1,546 As of December 31, 2019 and December 25, 2018, 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 31, 2019 possess a December tax year-end. As a result, as of December 31, 2019, the tax years ended December 27, 2016, December 26, 2017 and December 25, 2018 remain subject to examination by all tax jurisdictions. As of December 31, 2019, 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 31, 2019, no event occurred that is likely to result in a significant increase or decrease in the unrecognized tax benefits through December 29, 2020. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Preferred Stock | |
Preferred Stock | (10) 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 31, 2019 and December 25, 2018. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | (11) Stockholders’ Equity On May 31, 2019, our Board of Directors approved a stock repurchase program under which we may repurchase up to $250.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on May 22, 2014. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases are 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 year ended December 31, 2019, we paid $139.8 million to repurchase 2,625,245 shares of our common stock. This includes repurchases of $89.6 million under the new repurchase program and repurchases of $50.2 million under the previous stock repurchase program. We did not repurchase any shares of common stock during the years ended December 25, 2018 and December 26, 2017. As of December 31, 2019, we had $160.4 million remaining under our authorized stock repurchase program. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share | |
Earnings Per Share | (12) 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 restricted stock units and stock options 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. See note 14 for further discussion of our equity incentive plans. For all years presented, shares of non-vested stock that were not included because they would have had an anti-dilutive effect were not significant. 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: Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 174,452 $ 158,225 $ 131,526 Basic EPS: Weighted-average common shares outstanding 70,509 71,467 70,989 Basic EPS $ 2.47 $ 2.21 $ 1.85 Diluted EPS: Weighted-average common shares outstanding 70,509 71,467 70,989 Dilutive effect of nonvested stock 407 497 538 Shares-diluted 70,916 71,964 71,527 Diluted EPS $ 2.46 $ 2.20 $ 1.84 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (13) Commitments and Contingencies The estimated cost of completing capital project commitments at December 31, 2019 and December 25, 2018 was $163.5 million and $168.3 million, respectively. As of December 31, 2019 and December 25, 2018, we are contingently liable for $13.9 million and $14.8 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 31, 2019 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 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 Louisville, Kentucky (3)(4) December 2013 November 2023 (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 31, 2019, 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. 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. For the year ended December 26, 2017, we recorded a pre-tax charge of $14.9 million ($9.2 million after-tax) related to the Lawsuit and Consent Decree which included costs associated with the legal settlement and legal fees associated with the defense of the case. For the year ended December 25, 2018, we recorded million of claims administration costs. These amounts were recorded in general and administrative expense 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, 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. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation | |
Share-based Compensation | (14) 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 various forms of equity awards including options, stock appreciation rights, full value awards, and performance based awards. This plan replaced the Texas Roadhouse, Inc. 2004 Equity Incentive Plan. The Company provides restricted stock units ("RSUs") to employees as a form of share-based compensation. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In addition to RSUs, the Company provides performance stock units ("PSUs") to executives as a form of share-based compensation. 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. The following table summarizes the share-based compensation recorded in the accompanying consolidated statements of income and comprehensive income: Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Labor expense $ 9,032 $ 8,463 $ 7,171 General and administrative expense 26,468 25,520 19,763 Total share-based compensation expense $ 35,500 $ 33,983 $ 26,934 Share- based compensation activity by type of grant as of December 31, 2019 and changes during the period then ended are presented below. For both RSUs and PSUs, we do not estimate forfeitures as we record them as they occur. Summary Details for RSUs Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 25, 2018 824,945 $ 53.51 Granted 561,191 57.84 Forfeited (74,483) 56.75 Vested (475,226) 55.13 Outstanding at December 31, 2019 836,427 $ 55.20 1.1 $ 47,110 As of December 31, 2019, with respect to unvested RSUs, there was $20.8 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.1 years. The vesting terms of the RSUs range from 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the years ended December 31, 2019, December 25, 2018 and December 26, 2017 was $27.8 million, $32.1 million and $23.4 million, respectively. The excess tax benefit associated with vested RSUs for the years ended December 31, 2019, December 25, 2018 and December 26, 2017 was $0.3 million, $1.9 million and $1.6 million, respectively, which was recognized in the income tax provision. Summary Details for PSUs Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 25, 2018 90,000 $ 54.18 Granted 117,000 61.86 Incremental Performance Shares (1) 52,169 54.18 Forfeited (40,000) 61.86 Vested (142,169) 54.18 Outstanding at December 31, 2019 77,000 $ 61.86 0.1 $ 4,337 (1) Additional shares from the December 2017 PSU grant that vested in January 2019 due to exceeding the initial 100% target. We grant PSUs to certain 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 expense 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. The total intrinsic value of PSUs vested during the years ended December 31, 2019, December 25, 2018 and December 26, 2017 was $8.8 million, $8.9 million and $8.6 million, respectively. On January 8, 2020, 95,946 shares vested related to the January 2019 PSU grant and are expected to be distributed during the 13 weeks ending March 31, 2020. This included 77,000 granted shares and 18,946 incremental shares due to the grant exceeding the initial 100% target. As of December 31, 2019, with respect to unvested PSUs, there was $0.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.1 year. There was no allowable excess tax benefit associated with vested PSUs for the year ended December 31, 2019. The excess tax benefit associated with vested PSUs for the years ended December 25, 2018 and December 26, 2017 was $0.7 million and $0.8 million, respectively, which was recognized within the income tax provision. Summary Details for Stock Options No stock options were granted or vested during the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017. The total intrinsic value of options exercised during the year ended December 26, 2017 was $4.0 million. For the year ended December 26, 2017, cash received before tax withholdings from options exercised was $1.6 million. The excess tax benefit for the year ended December 26, 2017 was |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurement | |
Fair Value Measurement | (15) Fair Value Measurement ASC 820, Fair Value Measurements and Disclosures 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 31, 2019. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level December 31, 2019 December 25, 2018 Deferred compensation plan—assets 1 $ 44,623 $ 31,632 Deferred compensation plan—liabilities 1 (44,679) (31,721) 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. The following table presents the fair value of our assets measured on a nonrecurring basis: Fair Value Measurements Total gain (loss) Fiscal Year Ended December 31, December 25, December 31, December 25, Level 2019 2018 2019 2018 Long-lived assets held for use 1 $ 1,684 $ — $ 1,190 $ — Operating lease right-of-use assets 3 $ 611 $ — $ (1,144) $ — Long-lived assets held for use include leasehold improvements for one restaurant that is subject to a forced relocation. These assets are valued using a Level 1 input, or the contractually negotiated price we will receive. These assets are included in property and equipment in our consolidated balance sheets. These assets were recorded at their fair value, resulting in a gain of $1.2 million, which is included in impairment and closure, net in our consolidated statements of income. For further discussion of impairment charges, see note 16. Operating lease right-of-use assets include the lease related assets for one underperforming restaurant in which the carrying value of the right-of-use asset for the associated land and building lease was reduced to fair value. These assets are valued using a Level 3 input, or the discounted cashflows we expect to receive based on the future operations of this location. This resulted in a loss of $1.1 million, which is included in impairment and closure, net in our consolidated statements of income. For further discussion of impairment charges, see note 16. At December 31, 2019 and December 25, 2018, 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. |
Impairment and Closure Costs
Impairment and Closure Costs | 12 Months Ended |
Dec. 31, 2019 | |
Impairment and Closure Costs | |
Impairment and Closure Costs | (16) Impairment and Closure Costs We recorded impairment and closure costs of ($0.9) million, $0.3 million and $0.7 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017. Impairment and closure costs in 2019 included a gain of $2.6 million related to the forced relocation of one restaurant. This included a gain of $1.2 million related to the leasehold improvements and a gain of $1.4 million to settle a favorable operating lease. Also, in 2019, we recorded a charge of $1.1 million related to the impairment of the right-of-use asset at an underperforming restaurant. The remaining costs of $0.6 million related to costs associated with the relocation of restaurants. Impairment and closure costs in 2018 and 2017 were related to costs associated with the relocation of restaurants. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | (17) Related Party Transactions As of December 31, 2019 and December 25, 2018, we had nine franchise restaurants and one majority-owned company restaurant owned in part by certain of our officers or the former president of the Company. As of December 26, 2017, we had ten franchise restaurants owned in part by certain of our officers, directors and 5% stockholders of the Company. These franchise entities paid us fees of $2.2 million, $2.1 million and $2.1 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. As discussed in note 13, we are contingently liable on leases which are related to On December 3, 2018, we acquired one franchise restaurant owned in part by our founder. This entity paid us fees of $0.1 million for the year ended December 25, 2018. See note 4 for further discussion of this acquisition. In addition, in 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. This amount was recorded as general and administrative expense on the consolidated statements of income and comprehensive income and as additional paid-in-capital on the consolidated statements of stockholders’ equity. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (unaudited) | |
Selected Quarterly Financial Data (unaudited) | (18) Selected Quarterly Financial Data (unaudited) 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ 690,608 $ 689,828 $ 650,489 $ 725,238 $ 2,756,163 Total costs and expenses $ 630,163 $ 636,545 $ 605,605 $ 671,827 $ 2,544,140 Income from operations $ 60,445 $ 53,283 $ 44,884 $ 53,411 $ 212,023 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 50,390 $ 44,845 $ 36,531 $ 42,686 $ 174,452 Basic earnings per common share $ 0.70 $ 0.63 $ 0.53 $ 0.61 $ 2.47 Diluted earnings per common share $ 0.70 $ 0.63 $ 0.52 $ 0.61 $ 2.46 Cash dividends declared per share $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 1.20 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ 627,705 $ 629,237 $ 594,595 $ 605,912 $ 2,457,449 Total costs and expenses $ 562,834 $ 574,970 $ 559,151 $ 572,705 $ 2,269,660 Income from operations $ 64,871 $ 54,267 $ 35,444 $ 33,207 $ 187,789 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 54,541 $ 44,227 $ 29,125 $ 30,332 $ 158,225 Basic earnings per common share $ 0.76 $ 0.62 $ 0.41 $ 0.42 $ 2.21 Diluted earnings per common share $ 0.76 $ 0.62 $ 0.40 $ 0.42 $ 2.20 Cash dividends declared per share $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 1.00 The fourth quarter of 2019 includes an estimated impact of $0.10 to $0.11 per diluted share for the 53 rd |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | (a) Principles of Consolidation As of December 31, 2019 and December 25, 2018, we owned a 5.0% to 10.0% equity interest in 24 restaurants. Additionally, as of December 31, 2019 and December 25, 2018, 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 53 week 13 53 weeks 14 weeks. Fiscal year 2019 was 53 weeks in length. In fiscal year 2019, the 53 rd to diluted earnings per share in our consolidated statements of income and comprehensive income. Fiscal years 2018 and 2017 were 52 |
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. Cash and cash equivalents also included receivables from credit card companies, which amounted to $22.4 million and $34.1 million at December 31, 2019 and December 25, 2018, respectively, because the balances are settled within two three |
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 net realizable value. |
Property and Equipment | (f) 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(g) for further discussion of leases. The estimated useful lives are: Land improvements 10 Buildings and leasehold improvements 10 Furniture, fixtures and equipment 3 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 $27.9 million, $29.7 million and $25.8 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. These costs are included in other operating costs in our consolidated statements of income and comprehensive income. |
Leases | (g) Leases We lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements which have initial terms and one or more option periods. In addition, certain of these leases contain pre-determined fixed escalations of the minimum rent over the lease term. Beginning in 2019 with the adoption of ASC 842, Leases |
Goodwill | (h) 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 was not due to any goodwill impairment concerns within any of our reporting units. In addition, we determined this did not represent a material change to a method of applying an accounting principle. 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 2019, 2018 and 2017, as a result of our annual goodwill impairment analysis, we determined that there was no goodwill impairment. Refer to note 7 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 and deposits. For further discussion of the deferred compensation plan, see note 15. |
Impairment or Disposal of Long-lived Assets | (j) Impairment or Disposal of Long-lived Assets In accordance with ASC 360, Property, Plant and Equipment , long-lived assets related to each restaurant to be held and used in the business, such as property and equipment, right-of-use assets 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 under a predetermined amount 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 . 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 estimated 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. See note 16 for further discussion of amounts recorded as part of our impairment analysis. |
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 $250,000 / $2,000,000 Workers' compensation $350,000 General liability $500,000 Property $250,000 Employee healthcare $350,000 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 31, 2019, we operated 514 restaurants, each as a single operating segment, and franchised an additional 97 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 We recognize revenue from restaurant sales 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. We also recognize revenue from our franchising of Texas Roadhouse restaurants. This includes franchise royalties, initial and upfront franchise fees, fees paid to our domestic marketing and advertising fund, and fees for supervisory and administrative services. For further discussion of revenue, see note 3. We adopted ASC 606, Revenue from Contracts with Customers, 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 prior to adoption 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 consolidated balance sheet and our consolidated statements of income and comprehensive income was not significant. 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 are 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 continue to be recorded as a component of franchise royalties and fees in our 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 prior to adoption are now 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 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 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 beginning of our 2018 fiscal year. The comparative financial information prior to adoption has not been restated and continues to be reported under the accounting standards in effect for those periods. For further discussion of revenue, see note 3. |
Income Taxes | (n) Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes |
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 31, 2019, December 25, 2018 and December 26, 2017. Domestic company and franchise restaurants are required to remit a designated portion of sales, currently 0.3% , to the advertising fund. Advertising contributions related to company restaurants are recorded as a component of other operating costs. Advertising contributions received from our franchisees are recorded as a component of franchise royalties and fees 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 |
Pre-opening Expenses | (p) Pre-opening Expenses Pre-opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of a new or relocated restaurant and are comprised principally of opening team and training team compensation and benefits, travel expenses, rent, food, beverage and other initial supplies and expenses. |
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 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 breakage and third party fees 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 foreign currency translation adjustments which are excluded from net income under GAAP. Foreign currency translation adjustment 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 our investment. |
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 15 for further discussion of fair value measurement. |
Recent Accounting Pronouncements | (t) Recent Accounting Pronouncements Leases (Accounting Standards Codification 842, "ASC 842") On December 26, 2018, we adopted ASC 842, Leases As further described in note 8, we lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements. We adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. ASC 842 also permitted the election of certain practical expedients upon adoption. We elected the transition package of practical expedients which allowed us to carryforward the historical lease classification. We also elected the practical expedient to not separate lease and non-lease components for all leases entered into after the date of adoption. Finally, we elected the hindsight practical expedient which required us to assess the lease term for all existing leases. This resulted in extending the terms for certain existing leases in which renewal options had already been exercised or were reasonably certain of being exercised and shortening the terms for certain existing leases in which renewal options were not reasonably certain of being exercised. As a result of the hindsight election, we recorded a $2.7 million reduction, net of tax, to retained earnings as of the first day of fiscal 2019 to reflect the change in lease terms. The adoption of this standard had a significant impact on our consolidated balance sheet. There was no significant impact to our results of operations or cash flows. This standard did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our credit facility. 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 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 Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes disclosure requirements for fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 (our 2020 fiscal year) and for interim periods within those years, with early adoption permitted. We do not believe this standard will have a significant impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property and equipment | Land improvements 10 Buildings and leasehold improvements 10 Furniture, fixtures and equipment 3 |
Schedule of type of individual claims against which there is no insurance purchase | Employment practices liability/Class Action $250,000 / $2,000,000 Workers' compensation $350,000 General liability $500,000 Property $250,000 Employee healthcare $350,000 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Schedule of disaggregated revenue | The following table disaggregates our revenue by major source (in thousands): Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Restaurant and other sales $ 2,734,177 $ 2,437,115 $ 2,203,017 Franchise royalties 19,445 17,443 16,195 Franchise fees 2,541 2,891 319 Total revenue $ 2,756,163 $ 2,457,449 $ 2,219,531 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Schedule of property and equipment | December 31, December 25, 2019 2018 Land and improvements $ 135,708 $ 127,579 Buildings and leasehold improvements 922,036 835,490 Furniture, fixtures and equipment 614,920 556,254 Construction in progress 51,924 28,975 Liquor licenses 10,963 10,829 1,735,551 1,559,127 Accumulated depreciation and amortization (678,988) (602,451) $ 1,056,563 $ 956,676 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill and intangible assets | Goodwill Intangible Assets Balance as of December 26, 2017 (1) $ 121,040 $ 2,700 Additions 2,180 — Amortization expense — (741) Disposals and other, net — — Impairment — — Balance as of December 25, 2018 $ 123,220 $ 1,959 Additions 1,528 — Amortization expense — (725) Disposals and other, net — — Impairment — — Balance as of December 31, 2019 $ 124,748 $ 1,234 (1) Net of $4.8 million of accumulated goodwill impairment losses. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of lease costs | Leases Real estate Equipment Total Operating lease right-of-use assets $ 495,903 $ 3,898 $ 499,801 Current portion of operating lease liabilities 15,966 1,297 17,263 Operating lease liabilities, net of current portion 536,109 2,601 538,710 Total operating lease liabilities $ 552,075 $ 3,898 $ 555,973 |
Schedule of operating leases maturity analysis | Fiscal Year Ended Real estate costs December 31, 2019 Operating lease $ 54,844 Variable lease 1,590 Short-term lease 120 Total lease costs $ 56,554 Real estate lease liability maturity analysis Total 2020 $ 52,450 2021 53,393 2022 54,229 2023 54,268 2024 54,362 Thereafter 721,619 Total $ 990,321 Less interest 438,246 Total discounted operating lease liabilities $ 552,075 Fiscal Year Ended Real estate leases other information December 31, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 49,018 Right-of-use assets obtained in exchange for new operating lease liabilities $ 51,220 Weighted-average remaining lease term (years) 17.82 Weighted-average discount rate 6.77 |
Schedule of future minimum lease payments required for operating leases that have initial or remaining non-cancellable terms in excess of one year | Operating Leases 2019 $ 50,030 2020 49,582 2021 49,917 2022 50,237 2023 49,854 Thereafter 677,710 Total $ 927,330 |
Schedule of rent expense for operating leases | Fiscal Year Ended December 25, 2018 December 26, 2017 Minimum rent—occupancy $ 47,741 $ 43,621 Contingent rent 1,050 1,186 Rent expense, occupancy 48,791 44,807 Minimum rent—equipment and other 6,176 5,087 Rent expense $ 54,967 $ 49,894 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of components of our income tax provision | Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Current: Federal $ 15,643 $ 2,934 $ 43,108 State 10,050 8,794 10,233 Foreign 369 210 309 Total current 26,062 11,938 53,650 Deferred: Federal 4,396 11,909 (4,830) State 1,939 410 (239) Total deferred 6,335 12,319 (5,069) Income tax provision $ 32,397 $ 24,257 $ 48,581 |
Schedule of reconciliation of the statutory federal income tax rate to our effective tax rate | Fiscal Year Ended December 31, 2019 December 25, 2018 December 26, 2017 Tax at statutory federal rate 21.0 % 21.0 % 35.0 % State and local tax, net of federal benefit 3.8 3.6 3.3 FICA tip tax credit (9.4) (9.6) (7.0) Work opportunity tax credit (1.5) (1.5) (0.9) Stock compensation (0.1) (1.4) (1.8) Net income attributable to noncontrolling interests (0.6) (0.8) (1.1) Officers compensation 1.2 1.7 0.1 Tax reform — — (1.7) Other 0.7 (0.1) 0.2 Total 15.1 % 12.9 % 26.1 % |
Schedule of components of deferred tax assets (liabilities) | December 31, 2019 December 25, 2018 Deferred tax assets: Deferred revenue—gift cards $ 16,122 $ 12,851 Insurance reserves 4,774 3,949 Other reserves 601 890 Share-based compensation 5,510 4,623 Operating lease liabilities 137,744 — Deferred rent — 12,179 Deferred compensation 10,503 8,483 Tax credit carryforwards 1,710 — Other assets 2,482 2,212 Total deferred tax asset 179,446 45,187 Deferred tax liabilities: Property and equipment (63,777) (50,513) Goodwill and intangibles (6,241) (5,398) Operating lease right-of-use asset (123,813) — Other liabilities (8,310) (6,544) Total deferred tax liability (202,141) (62,455) Net deferred tax liability $ (22,695) $ (17,268) |
Schedule of reconciliation of the beginning and ending liability for unrecognized tax benefits | Balance at December 26, 2017 $ 806 Additions to tax positions related to prior years 36 Additions to tax positions related to current year 754 Reductions due to statute expiration (114) Reductions due to exam settlements — Balance at December 25, 2018 1,482 Additions to tax positions related to prior years 16 Additions to tax positions related to current year 362 Reductions due to statute expiration (314) Reductions due to exam settlement — Balance at December 31, 2019 $ 1,546 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 consolidated statements of income and comprehensive income: Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 174,452 $ 158,225 $ 131,526 Basic EPS: Weighted-average common shares outstanding 70,509 71,467 70,989 Basic EPS $ 2.47 $ 2.21 $ 1.85 Diluted EPS: Weighted-average common shares outstanding 70,509 71,467 70,989 Dilutive effect of nonvested stock 407 497 538 Shares-diluted 70,916 71,964 71,527 Diluted EPS $ 2.46 $ 2.20 $ 1.84 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Lease Assignment Date And Term Expiration Date [Table Text Block] | Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 Louisville, Kentucky (3)(4) December 2013 November 2023 (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. 31, 2019 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Labor expense $ 9,032 $ 8,463 $ 7,171 General and administrative expense 26,468 25,520 19,763 Total share-based compensation expense $ 35,500 $ 33,983 $ 26,934 |
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 25, 2018 824,945 $ 53.51 Granted 561,191 57.84 Forfeited (74,483) 56.75 Vested (475,226) 55.13 Outstanding at December 31, 2019 836,427 $ 55.20 1.1 $ 47,110 |
Summary of performance share units | Weighted-Average Weighted-Average Grant Date Fair Remaining Contractual Aggregate Shares Value Term (years) Intrinsic Value Outstanding at December 25, 2018 90,000 $ 54.18 Granted 117,000 61.86 Incremental Performance Shares (1) 52,169 54.18 Forfeited (40,000) 61.86 Vested (142,169) 54.18 Outstanding at December 31, 2019 77,000 $ 61.86 0.1 $ 4,337 (1) Additional shares from the December 2017 PSU grant that vested in January 2019 due to exceeding the initial 100% target. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurement | |
Schedule of fair values for our financial assets and liabilities measured on a recurring basis | Fair Value Measurements Level December 31, 2019 December 25, 2018 Deferred compensation plan—assets 1 $ 44,623 $ 31,632 Deferred compensation plan—liabilities 1 (44,679) (31,721) |
Schedule of fair value of assets and liabilities measured on a nonrecurring basis | Fair Value Measurements Total gain (loss) Fiscal Year Ended December 31, December 25, December 31, December 25, Level 2019 2018 2019 2018 Long-lived assets held for use 1 $ 1,684 $ — $ 1,190 $ — Operating lease right-of-use assets 3 $ 611 $ — $ (1,144) $ — |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (unaudited) | |
Schedule of selected quarterly financial data (unaudited) | 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ 690,608 $ 689,828 $ 650,489 $ 725,238 $ 2,756,163 Total costs and expenses $ 630,163 $ 636,545 $ 605,605 $ 671,827 $ 2,544,140 Income from operations $ 60,445 $ 53,283 $ 44,884 $ 53,411 $ 212,023 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 50,390 $ 44,845 $ 36,531 $ 42,686 $ 174,452 Basic earnings per common share $ 0.70 $ 0.63 $ 0.53 $ 0.61 $ 2.47 Diluted earnings per common share $ 0.70 $ 0.63 $ 0.52 $ 0.61 $ 2.46 Cash dividends declared per share $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 1.20 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Total Revenue $ 627,705 $ 629,237 $ 594,595 $ 605,912 $ 2,457,449 Total costs and expenses $ 562,834 $ 574,970 $ 559,151 $ 572,705 $ 2,269,660 Income from operations $ 64,871 $ 54,267 $ 35,444 $ 33,207 $ 187,789 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 54,541 $ 44,227 $ 29,125 $ 30,332 $ 158,225 Basic earnings per common share $ 0.76 $ 0.62 $ 0.41 $ 0.42 $ 2.21 Diluted earnings per common share $ 0.76 $ 0.62 $ 0.40 $ 0.42 $ 2.20 Cash dividends declared per share $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 1.00 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Dec. 31, 2019restaurantitem | Dec. 25, 2018restaurantitem |
Description of Business | ||
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 10 | 9 |
Company | ||
Description of Business | ||
Number of restaurants | 514 | 491 |
Company | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 494 | 471 |
Company | Majority-owned | ||
Description of Business | ||
Number of restaurants | 20 | 20 |
Franchise | ||
Description of Business | ||
Number of restaurants | 97 | 91 |
Franchise | Domestic | ||
Description of Business | ||
Number of restaurants | 69 | 69 |
Franchise | International | ||
Description of Business | ||
Number of restaurants | 28 | 22 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | Dec. 31, 2019USD ($)restaurant$ / shares | Dec. 31, 2019USD ($)restaurant$ / shares | Sep. 24, 2019USD ($)$ / shares | Jun. 25, 2019USD ($)$ / shares | Mar. 26, 2019USD ($)$ / shares | Dec. 25, 2018USD ($)restaurant$ / shares | Sep. 25, 2018USD ($)$ / shares | Jun. 26, 2018USD ($)$ / shares | Mar. 27, 2018USD ($)$ / shares | Dec. 31, 2019USD ($)restaurant$ / shares | Dec. 25, 2018USD ($)restaurant$ / shares | Dec. 26, 2017USD ($)$ / shares |
Fiscal Year | ||||||||||||
Length of fiscal year | 371 days | 364 days | 364 days | |||||||||
Revenue | $ 725,238,000 | $ 650,489,000 | $ 689,828,000 | $ 690,608,000 | $ 605,912,000 | $ 594,595,000 | $ 629,237,000 | $ 627,705,000 | $ 2,756,163,000 | $ 2,457,449,000 | $ 2,219,531,000 | |
Earnings Per Share, Diluted | $ / shares | $ 0.61 | $ 0.52 | $ 0.63 | $ 0.70 | $ 0.42 | $ 0.40 | $ 0.62 | $ 0.76 | $ 2.46 | $ 2.20 | $ 1.84 | |
Cash and Cash Equivalents | ||||||||||||
Cash and cash equivalents included receivables from credit card entity | $ 22,400,000 | $ 22,400,000 | $ 34,100,000 | $ 22,400,000 | $ 34,100,000 | |||||||
Settlement period of credit card receivables, minimum | 2 days | |||||||||||
Settlement period of credit card receivables, maximum | 3 days | |||||||||||
Income Taxes | ||||||||||||
Deferred Income Tax, Valuation Allowance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Receivables | ||||||||||||
Minimum number of days receivable are past due, warranting individual evaluation for collectability | 120 days | |||||||||||
Franchise | ||||||||||||
Principles of Consolidation | ||||||||||||
Number of restaurants | restaurant | 97 | 97 | 91 | 97 | 91 | |||||||
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 | Franchise | ||||||||||||
Principles of Consolidation | ||||||||||||
Number of restaurants | restaurant | 24 | 24 | 24 | 24 | 24 | |||||||
Unconsolidated | Non-Texas Roadhouse restaurants | ||||||||||||
Principles of Consolidation | ||||||||||||
Ownership percentage by entity | 40.00% | 40.00% | 40.00% | 40.00% | 40.00% | |||||||
Number of restaurants | restaurant | 4 | 4 | 4 | 4 | 4 | |||||||
Unconsolidated | Minimum | Franchise | ||||||||||||
Principles of Consolidation | ||||||||||||
Ownership percentage by entity | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | |||||||
Unconsolidated | Maximum | Franchise | ||||||||||||
Principles of Consolidation | ||||||||||||
Ownership percentage by entity | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||||||
Restaurant and other sales | ||||||||||||
Fiscal Year | ||||||||||||
Revenue | $ 59,000,000 | $ 2,734,177,000 | $ 2,437,115,000 | $ 2,203,017,000 | ||||||||
Restaurant and other sales | Minimum | ||||||||||||
Fiscal Year | ||||||||||||
Earnings Per Share, Diluted | $ / shares | $ 0.10 | $ 0.10 | ||||||||||
Restaurant and other sales | Maximum | ||||||||||||
Fiscal Year | ||||||||||||
Earnings Per Share, Diluted | $ / shares | $ 0.11 | $ 0.11 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, PPE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Property and Equipment | |||
Repairs and maintenance expense | $ 27,900 | $ 29,700 | $ 25,800 |
Impairment of Goodwill | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Minimum | |||
Impairment or Disposal of Long-Lived Assets | |||
Impairment analysis, estimated useful life of operating a restaurant | 20 years | ||
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 | ||
Furniture, fixtures And equipment | Minimum | |||
Property and Equipment | |||
Estimated useful life | 3 years | ||
Furniture, fixtures And equipment | Maximum | |||
Property and Equipment | |||
Estimated useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Ins (Details) | Dec. 31, 2019USD ($) |
Insurance Reserves | |
Self-insurance limit, Employee practices liability | $ 250,000 |
Self-insurance limit, Employee practices liability Class Action | 2,000,000 |
Self-insurance limit, Workers compensation | 350,000 |
Self-insurance limit, General liability | 500,000 |
Self-insurance limit, Property | 250,000 |
Self-insurance limit, Employee healthcare | $ 350,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Segment (Details) - restaurant | Dec. 31, 2019 | Dec. 25, 2018 |
Company | ||
Segment Reporting | ||
Number of restaurants | 514 | 491 |
Franchise | ||
Segment Reporting | ||
Number of restaurants | 97 | 91 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Revenue (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2018USD ($) | |
ASU 2014-09 (Topic 606) | |
Cumulative effect on retained earnings | $ 878 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Advertising (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
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 | $ 18.3 | $ 17.1 | $ 14.5 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies, Recent Accounting Pronouncements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
ASU 2016-02 (Topic 842) | |
Accounting pronouncements | |
Cumulative effect on retained earnings | $ (2,678) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2019 | Sep. 24, 2019 | Jun. 25, 2019 | Mar. 26, 2019 | Dec. 25, 2018 | Sep. 25, 2018 | Jun. 26, 2018 | Mar. 27, 2018 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 |
Revenue | ||||||||||||
Total revenue | $ 725,238 | $ 650,489 | $ 689,828 | $ 690,608 | $ 605,912 | $ 594,595 | $ 629,237 | $ 627,705 | $ 2,756,163 | $ 2,457,449 | $ 2,219,531 | |
Restaurant and other sales | ||||||||||||
Revenue | ||||||||||||
Total revenue | $ 59,000 | 2,734,177 | 2,437,115 | 2,203,017 | ||||||||
Franchise royalties | ||||||||||||
Revenue | ||||||||||||
Total revenue | 19,445 | 17,443 | 16,195 | |||||||||
Franchise fees | ||||||||||||
Revenue | ||||||||||||
Total revenue | $ 2,541 | $ 2,891 | $ 319 |
Revenue - Other (Details)
Revenue - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 25, 2018 | |
Revenue | ||
Estimated gift cards sold by Company that are never redeemed (as a percent) | 4.00% | |
Gift card fees | $ 9,100 | $ 5,200 |
Deferred revenue-gift cards | 209,258 | 192,242 |
Franchise royalties and fees | ||
Revenue | ||
Deferred revenue recognized | $ 300 | |
Ongoing royalties received as a percentage of gross sales from domestic franchisees and international franchisee | 4.00% | |
Sales percentage, remittance to marketing and advertising | 0.30% | |
Gift cards | ||
Revenue | ||
Deferred revenue-gift cards | $ 209,300 | 192,200 |
Deferred revenue recognized | 135,200 | 108,700 |
Other Liabilities | Franchise royalties and fees | ||
Revenue | ||
Deferred revenue | $ 1,900 | $ 1,800 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | Oct. 28, 2019USD ($)restaurant | Dec. 03, 2018USD ($)restaurant |
One Franchise Restaurant In Georgia | ||
Acquisitions | ||
Number of restaurants acquired | restaurant | 1 | |
Purchase price paid | $ 1.5 | |
Goodwill deductible for tax purposes | $ 1.5 | |
One franchise restaurant in Florida | ||
Acquisitions | ||
Number of restaurants acquired | restaurant | 1 | |
Purchase price paid | $ 2.2 | |
Acquisition related charge | 0.3 | |
Goodwill deductible for tax purposes | $ 2.2 |
Long-term Debt and Obligation_2
Long-term Debt and Obligation Under Capital Lease (Details) - Revolver - USD ($) $ in Millions | Aug. 07, 2017 | Apr. 30, 2018 | Dec. 31, 2019 | Dec. 25, 2018 |
Revolving Credit Facility | ||||
Revolving credit facility, maximum borrowing capacity | $ 200 | |||
Revolving credit facility contingent increase in maximum borrowing capacity | $ 200 | |||
Repayment of credit facility | $ 50 | |||
Weighted-average interest rate (as a percent) | 2.64% | 3.81% | ||
Revolving credit facility, remaining borrowing capacity | $ 191.8 | |||
Letters of credit outstanding | $ 8.2 | |||
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth | 20.00% | |||
Minimum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.125% | |||
Revolving credit facility, fixed charge coverage ratio | 2 | |||
Threshold for aggregate secured indebtedness | $ 125 | |||
Maximum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.30% | |||
Revolving credit facility, leverage ratio | 3 | |||
LIBOR | Minimum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.875% | |||
LIBOR | Maximum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.875% | |||
Federal Reserve Bank of New York | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.50% | |||
Adjusted Eurodollar Rate | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.00% | |||
Interest period | 1 month |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Property and Equipment, Net | |||
Property and Equipment, Gross | $ 1,735,551 | $ 1,559,127 | |
Accumulated depreciation and amortization | (678,988) | (602,451) | |
Property, Plant and Equipment, Net | 1,056,563 | 956,676 | |
Interest capitalized | 0 | 100 | $ 400 |
Land and improvements | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 135,708 | 127,579 | |
Buildings and leasehold improvements | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 922,036 | 835,490 | |
Furniture, fixtures And equipment | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 614,920 | 556,254 | |
Construction in progress | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | 51,924 | 28,975 | |
Liquor licenses | |||
Property and Equipment, Net | |||
Property and Equipment, Gross | $ 10,963 | $ 10,829 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | $ 123,220 | $ 121,040 | |
Additions | 1,528 | 2,180 | |
Impairment | 0 | 0 | $ 0 |
Balance at the end of the period | 124,748 | 123,220 | 121,040 |
Accumulated goodwill impairment loss | 4,800 | ||
Changes in the carrying amount of intangible assets | |||
Balance at the beginning of the period, net | 1,959 | 2,700 | |
Amortization expense | (725) | (741) | |
Balance at the end of the period, net | 1,234 | 1,959 | $ 2,700 |
Gross carrying amount | 15,400 | 15,400 | |
Accumulated amortization | 14,141 | $ 13,416 | |
Minimum | |||
Changes in the carrying amount of intangible assets | |||
Expected amortization expense for each of the next five years | 100 | ||
Maximum | |||
Changes in the carrying amount of intangible assets | |||
Expected amortization expense for each of the next five years | $ 400 |
Leases (Details)
Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
Term (in years) | 1 year |
Operating lease right-of-use assets | $ 499,801 |
Current portion of operating lease liabilities | 17,263 |
Operating lease liabilities, net of current portion | 538,710 |
Total operating lease liabilities | 555,973 |
Real estate | |
Leases | |
Operating lease right-of-use assets | 495,903 |
Current portion of operating lease liabilities | 15,966 |
Operating lease liabilities, net of current portion | 536,109 |
Total operating lease liabilities | 552,075 |
Equipment | |
Leases | |
Operating lease right-of-use assets | 3,898 |
Current portion of operating lease liabilities | 1,297 |
Operating lease liabilities, net of current portion | 2,601 |
Total operating lease liabilities | $ 3,898 |
Leases - Real estate costs (Det
Leases - Real estate costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease costs | |
Operating lease | $ 54,844 |
Variable lease | 1,590 |
Short-term lease | 120 |
Total lease costs | $ 56,554 |
Leases - Real estate lease liab
Leases - Real estate lease liability maturity analysis (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
Total operating lease liabilities | $ 555,973 |
Real estate | |
Leases | |
2020 | 52,450 |
2021 | 53,393 |
2022 | 54,229 |
2023 | 54,268 |
2024 | 54,362 |
Thereafter | 721,619 |
Total | 990,321 |
Less interest | 438,246 |
Total operating lease liabilities | $ 552,075 |
Leases - Real estate leases oth
Leases - Real estate leases other information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)lease | |
Leases | |
Cash paid for amounts included in measurement of operating lease liabilities | $ 49,018 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 51,220 |
Weighted-average remaining lease term | 17 years 9 months 25 days |
Weighted-average discount rate | 6.77% |
Operating lease not yet taken possession | $ 32,600 |
Number of finance leases | lease | 1 |
Right-of-use asset | $ 1,700 |
Lease liability | $ 2,100 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) $ in Thousands | Dec. 25, 2018USD ($) |
Leases | |
2019 | $ 50,030 |
2020 | 49,582 |
2021 | 49,917 |
2022 | 50,237 |
2023 | 49,854 |
Thereafter | 677,710 |
Total | $ 927,330 |
Leases - Rent expense (Details)
Leases - Rent expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2018 | Dec. 26, 2017 | |
Leases | ||
Rent expense | $ 54,967 | $ 49,894 |
Occupancy | ||
Leases | ||
Minimum rent | 47,741 | 43,621 |
Contingent rent | 1,050 | 1,186 |
Rent expense | 48,791 | 44,807 |
Equipment and other | ||
Leases | ||
Minimum rent | $ 6,176 | $ 5,087 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Current: | |||
Federal | $ 15,643 | $ 2,934 | $ 43,108 |
State | 10,050 | 8,794 | 10,233 |
Foreign | 369 | 210 | 309 |
Total current | 26,062 | 11,938 | 53,650 |
Deferred: | |||
Federal | 4,396 | 11,909 | (4,830) |
State | 1,939 | 410 | (239) |
Total deferred | 6,335 | 12,319 | (5,069) |
Income tax provision | $ 32,397 | $ 24,257 | $ 48,581 |
Reconciliation of the statutory federal income tax rate to our effective tax rate: | |||
Tax at statutory federal rate (as a percent) | 21.00% | 21.00% | 35.00% |
State and local tax, net of federal benefit (as a percent) | 3.80% | 3.60% | 3.30% |
FICA tip tax credit (as a percent) | (9.40%) | (9.60%) | (7.00%) |
Work opportunity tax credit (as a percent) | (1.50%) | (1.50%) | (0.90%) |
Stock compensation (as a percent) | 0.10% | 1.40% | 1.80% |
Net income attributable to noncontrolling interests (as a percent) | (0.60%) | (0.80%) | (1.10%) |
Officers compensation | 1.20% | 1.70% | 0.10% |
Tax reform | (1.70%) | ||
Other (as a percent) | 0.70% | (0.10%) | 0.20% |
Total (as a percent) | 15.10% | 12.90% | 26.10% |
Income Taxes, Deferred Tax Asse
Income Taxes, Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
Deferred tax assets: | ||
Deferred revenue-gift cards | $ 16,122 | $ 12,851 |
Insurance reserves | 4,774 | 3,949 |
Other reserves | 601 | 890 |
Share-based compensation | 5,510 | 4,623 |
Operating lease right-of-use assets and lease liabilities | 137,744 | |
Deferred rent | 12,179 | |
Deferred compensation | 10,503 | 8,483 |
Tax credit carryforwards | 1,710 | |
Other assets | 2,482 | 2,212 |
Total deferred tax asset | 179,446 | 45,187 |
Deferred tax liabilities: | ||
Property and equipment | (63,777) | (50,513) |
Goodwill and intangibles | (6,241) | (5,398) |
Operating lease right-of-use asset | (123,813) | |
Other liabilities | (8,310) | (6,544) |
Total deferred tax liability | (202,141) | (62,455) |
Net deferred tax liability | (22,695) | $ (17,268) |
Federal Tax | ||
Deferred tax assets: | ||
Tax credit carryforwards | 1,500 | |
State Tax | ||
Deferred tax assets: | ||
Tax credit carryforwards | $ 200 |
Income Taxes (Unrecognized) (De
Income Taxes (Unrecognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 25, 2018 | |
Reconciliation of the beginning and ending liability for unrecognized tax benefits: | ||
Balance at the beginning of the period | $ 1,482 | $ 806 |
Additions to tax positions related to prior years | 16 | 36 |
Additions to tax positions related to current year | 362 | 754 |
Reductions due to statute expiration | (314) | (114) |
Balance at the end of the period | $ 1,546 | $ 1,482 |
Preferred Stock (Details)
Preferred Stock (Details) | Dec. 31, 2019itemshares | Dec. 25, 2018itemshares |
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 | 1 |
Number of shares of preferred stock outstanding | 0 | 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | May 31, 2019 | |
Stockholders' Equity | ||||
Repurchase of common stock authorized by board of directors | $ 250,000 | |||
Number of shares repurchased | 2,625,245 | 0 | 0 | |
Payments to repurchase common stock | $ 139,849 | |||
Amount remaining under authorized stock repurchase program | 160,400 | |||
Stock Repurchase Program [Member] | ||||
Stockholders' Equity | ||||
Payments to repurchase common stock | 89,600 | |||
Previous Stock Repurchase Program [Member] | ||||
Stockholders' Equity | ||||
Payments to repurchase common stock | $ 50,200 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 24, 2019 | Jun. 25, 2019 | Mar. 26, 2019 | Dec. 25, 2018 | Sep. 25, 2018 | Jun. 26, 2018 | Mar. 27, 2018 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Earnings per share | |||||||||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 174,452 | $ 158,225 | $ 131,526 | ||||||||
Basic EPS: | |||||||||||
Weighted-average common shares outstanding (in shares) | 70,509 | 71,467 | 70,989 | ||||||||
Basic EPS (in dollars per share) | $ 0.61 | $ 0.53 | $ 0.63 | $ 0.70 | $ 0.42 | $ 0.41 | $ 0.62 | $ 0.76 | $ 2.47 | $ 2.21 | $ 1.85 |
Diluted EPS: | |||||||||||
Weighted-average common shares outstanding (in shares) | 70,509 | 71,467 | 70,989 | ||||||||
Dilutive effect of nonvested stock (in shares) | 407 | 497 | 538 | ||||||||
Shares-diluted (in shares) | 70,916 | 71,964 | 71,527 | ||||||||
Diluted EPS (in dollars per share) | $ 0.61 | $ 0.52 | $ 0.63 | $ 0.70 | $ 0.42 | $ 0.40 | $ 0.62 | $ 0.76 | $ 2.46 | $ 2.20 | $ 1.84 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2017USD ($) | Dec. 31, 2019USD ($)item | Dec. 25, 2018USD ($)item | Dec. 26, 2017USD ($) |
Commitments and Contingencies | ||||
Estimated cost to complete capital project commitments (in dollars) | $ 163.5 | $ 168.3 | ||
Number of suppliers providing most of the company's beef | item | 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 | $ 13.9 | $ 14.8 | ||
U.S. Equal Employment Opportunity Commission | ||||
Commitments and Contingencies | ||||
Estimated loss contingency, net of tax | $ 9.2 | |||
Legal settlement expense | $ 12 | |||
U.S. Equal Employment Opportunity Commission | General and administrative expense | ||||
Commitments and Contingencies | ||||
Total pre-tax charge | $ 14.9 | |||
Legal settlement expense | $ 1.5 | |||
Everett, Massachusetts | Officers, directors and shareholders | ||||
Commitments and Contingencies | ||||
Ownership percentage | 5.00% | |||
Fargo, North Dakota | Officers, directors and shareholders | ||||
Commitments and Contingencies | ||||
Ownership percentage | 5.00% |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Share-based Compensation | |||
Share-based compensation expense | $ 35,500 | $ 33,983 | $ 26,934 |
Labor expense | |||
Share-based Compensation | |||
Share-based compensation expense | 9,032 | 8,463 | 7,171 |
General and administrative expense | |||
Share-based Compensation | |||
Share-based compensation expense | $ 26,468 | $ 25,520 | $ 19,763 |
Share-based Compensation, Restr
Share-based Compensation, Restricted Stock and PSU (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 08, 2020 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 | Dec. 31, 2015 |
RSUs | ||||||
Share-based Compensation | ||||||
Number of common shares that a holder would receive upon satisfaction of the vesting requirement (in shares) | 1 | |||||
Shares | ||||||
Outstanding at the beginning of the period (in shares) | 824,945 | |||||
Granted (in shares) | 561,191 | |||||
Forfeited (in shares) | (74,483) | |||||
Vested (in shares) | (475,226) | |||||
Outstanding at the end of period (in shares) | 836,427 | 824,945 | ||||
Weighted-Average Grant Date Fair Value | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 53.51 | |||||
Granted (in dollars per share) | 57.84 | |||||
Forfeited (in dollars per share) | 56.75 | |||||
Vested (in dollars per share) | 55.13 | |||||
Outstanding at the end of the period (in dollars per share) | $ 55.20 | $ 53.51 | ||||
Weighted-Average Remaining Contractual Term (years) | ||||||
Weighted-Average Remaining Contractual Term | 1 year 1 month 6 days | |||||
Aggregate Intrinsic Value | ||||||
Outstanding at the end of the period (in dollars) | $ 47,110 | |||||
Unrecognized compensation cost | ||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ 20,800 | |||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 year 1 month 6 days | |||||
Share-based Compensation, other disclosures | ||||||
Intrinsic value of awards vested (in dollars) | $ 27,800 | $ 32,100 | $ 23,400 | |||
Excess tax benefit recognized within the income tax provision | $ 300 | $ 1,900 | $ 1,600 | |||
RSUs | Minimum | ||||||
Share-based Compensation, other disclosures | ||||||
Vesting period | 1 year | |||||
RSUs | Maximum | ||||||
Share-based Compensation, other disclosures | ||||||
Vesting period | 5 years | |||||
PSUs | ||||||
Share-based Compensation | ||||||
Number of common shares that a holder would receive upon meeting a performance obligation and vesting requirement (in shares) | 1 | |||||
Shares | ||||||
Outstanding at the beginning of the period (in shares) | 90,000 | |||||
Granted (in shares) | 77,000 | 117,000 | ||||
Incremental Performance Shares (in shares) | 18,946 | 52,169 | ||||
Forfeited (in shares) | (40,000) | |||||
Vested (in shares) | (95,946) | (142,169) | ||||
Outstanding at the end of period (in shares) | 77,000 | 90,000 | ||||
Weighted-Average Grant Date Fair Value | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 54.18 | |||||
Granted (in dollars per share) | 61.86 | |||||
Incremental Performance Shares (in dollars per share) | 54.18 | |||||
Forfeited (in dollars per share) | 61.86 | |||||
Vested (in dollars per share) | 54.18 | |||||
Outstanding at the end of the period (in dollars per share) | $ 61.86 | $ 54.18 | ||||
Weighted-Average Remaining Contractual Term (years) | ||||||
Weighted-Average Remaining Contractual Term | 1 month 6 days | |||||
Aggregate Intrinsic Value | ||||||
Outstanding at the end of the period (in dollars) | $ 4,337 | |||||
Unrecognized compensation cost | ||||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ 100 | |||||
Expected weighted-average period of recognition of unrecognized compensation cost of unvested awards | 1 month 6 days | |||||
Share-based Compensation, other disclosures | ||||||
Target percentage relating to shares granted (as a percent) | 100.00% | |||||
Vesting period | 1 year | 1 year | 1 year | 1 year | 1 year | |
Intrinsic value of awards vested (in dollars) | $ 8,800 | $ 8,900 | $ 8,600 | |||
Excess tax benefit recognized within the income tax provision | $ 0 | $ 700 | $ 800 |
Share-based Compensation, Optio
Share-based Compensation, Options (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Aggregate Intrinsic Value | |||
Proceeds from exercise of stock options | $ 1,558 | ||
Stock Options | |||
Shares | |||
Granted (in shares) | 0 | 0 | 0 |
Stock options vested (in shares) | 0 | 0 | 0 |
Aggregate Intrinsic Value | |||
Intrinsic value of options exercised (in dollars) | $ 4,000 | ||
Proceeds from exercise of stock options | 1,600 | ||
Excess tax benefit recorded in additional paid-in capital | $ 1,000 |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Assets and Liabilities (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 25, 2018USD ($) | |
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 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | $ 44,623 | $ 31,632 |
Deferred compensation plan - liabilities | $ (44,679) | $ (31,721) |
Fair Value Measurement - Assets
Fair Value Measurement - Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Operating lease right-of-use assets | $ 499,801 |
Long-lived assets held for use, total gain (loss) | 1,200 |
Operating lease right-of-use assets, total gain (loss) | (1,100) |
Level 1 | Fair value measured on a nonrecurring basis | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Long-lived assets held for use, fair value measurements | 1,684 |
Long-lived assets held for use, total gain (loss) | 1,190 |
Level 3 | Fair value measured on a nonrecurring basis | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Operating lease right-of-use assets | 611 |
Operating lease right-of-use assets, total gain (loss) | $ (1,144) |
Impairment and Closure Costs (D
Impairment and Closure Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Impairment and Closure Costs | |||
Asset Impairment Charges | $ (0.9) | $ 0.3 | $ 0.7 |
Gain related to the forced relocation | 2.6 | ||
Long-lived assets held for use, total gain (loss) | 1.2 | ||
Gain to settle a favorable operating lease | 1.4 | ||
Operating lease right-of-use assets, Loss | 1.1 | ||
Costs associated with the relocation of restaurants | $ 0.6 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | Dec. 03, 2018USD ($)restaurant | Dec. 31, 2019USD ($)restaurant | Dec. 25, 2018USD ($)restaurant | Dec. 26, 2017USD ($)restaurant |
Franchise | ||||
Related Party Transactions | ||||
Number of restaurants | 97 | 91 | ||
Officers, directors and shareholders | Majority-owned | ||||
Related Party Transactions | ||||
Number of restaurants | 1 | |||
Officers, directors and shareholders | Franchise | ||||
Related Party Transactions | ||||
Number of restaurants | 9 | 10 | ||
Ownership percentage | 5.00% | 5.00% | 5.00% | |
Fees received from franchise and license restaurants | $ | $ 2.2 | $ 2.1 | $ 2.1 | |
Number of restaurants for which the entity is contingently liable on the lease | 2 | |||
Founder | Franchise | ||||
Related Party Transactions | ||||
Number of restaurants acquired | 1 | |||
Fees received from franchise and license restaurants | $ | $ 0.1 | |||
Founder | Personal contribution | ||||
Related Party Transactions | ||||
Transactions with related party | $ | $ 1 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Dec. 31, 2019 | Sep. 24, 2019 | Jun. 25, 2019 | Mar. 26, 2019 | Dec. 25, 2018 | Sep. 25, 2018 | Jun. 26, 2018 | Mar. 27, 2018 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 |
Selected quarterly financial data | ||||||||||||
Total revenue | $ 725,238 | $ 650,489 | $ 689,828 | $ 690,608 | $ 605,912 | $ 594,595 | $ 629,237 | $ 627,705 | $ 2,756,163 | $ 2,457,449 | $ 2,219,531 | |
Total costs and expenses | 671,827 | 605,605 | 636,545 | 630,163 | 572,705 | 559,151 | 574,970 | 562,834 | 2,544,140 | 2,269,660 | 2,033,325 | |
Income from operations | 53,411 | 44,884 | 53,283 | 60,445 | 33,207 | 35,444 | 54,267 | 64,871 | 212,023 | 187,789 | 186,206 | |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 42,686 | $ 36,531 | $ 44,845 | $ 50,390 | $ 30,332 | $ 29,125 | $ 44,227 | $ 54,541 | $ 174,452 | $ 158,225 | $ 131,526 | |
Basic EPS (in dollars per share) | $ 0.61 | $ 0.53 | $ 0.63 | $ 0.70 | $ 0.42 | $ 0.41 | $ 0.62 | $ 0.76 | $ 2.47 | $ 2.21 | $ 1.85 | |
Diluted EPS (in dollars per share) | 0.61 | 0.52 | 0.63 | 0.70 | 0.42 | 0.40 | 0.62 | 0.76 | 2.46 | 2.20 | 1.84 | |
Cash dividends declared per share | 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.20 | $ 1 | $ 0.84 | |
Restaurant and other sales | ||||||||||||
Selected quarterly financial data | ||||||||||||
Total revenue | $ 59,000 | $ 2,734,177 | $ 2,437,115 | $ 2,203,017 | ||||||||
Restaurant and other sales | Minimum | ||||||||||||
Selected quarterly financial data | ||||||||||||
Diluted EPS (in dollars per share) | $ 0.10 | 0.10 | ||||||||||
Restaurant and other sales | Maximum | ||||||||||||
Selected quarterly financial data | ||||||||||||
Diluted EPS (in dollars per share) | $ 0.11 | $ 0.11 |