Texas Roadhouse, 

Inc.
Consolidated Balance Sheets
(in thousands, except share data)
December 27, December 26, December 25,
2005 2006 2007
Assets
Current assets:
Cash and cash equivalents 28,987 33,784 11,564
Receivables, net of allowance 9,613 8,299 18,303
Inventories, net 5,893 6,436 7,277
Prepaid income taxes 1,866 0 0
Prepaid expenses 2,259 2,920 3,646
Deferred tax assets 621 1,066 841
Other current assets 40 0 0
Total current assets 49,279 52,505 41,631

Property and equipment, net 210,382 305,731 390,378

Goodwill 51,063 86,649 101,856
Intangible asset, net 0 4,880 8,414
Other assets 1,869 2,823 3,750
Total assets 312,593 452,588 546,029

Liabilities and Stockholders' Equity

Current liabilities:
Current maturities of long-term debt and
obligations under capital leases 498 653 302
Current maturities of obligations under capital
leases 140
Accounts payable 17,415 18,794 23,716
Deferred revenue—gift cards/certificates 19,355 26,205 32,088
Accrued wages 9,220 12,653 14,561
Income tax payable 0 3,725 721
Accrued taxes and licenses 3,646 6,726 6,439
Other accrued liabilities 5,695 8,139 10,432
Total current liabilities 55,969 76,895 88,259

Long-term debt and obligations under capital

leases, excluding current maturities 6,255 35,362 66,482
Obligations under capital leases, excluding
current maturities 626
Stock option and other deposits 3,404 4,102 4,916
Deferred rent 4,502 5,829 7,472
Deferred tax liabilities 6,679 7,823 4,900
Fair value of derivative financial instruments 0 0 0
Other liabilities 2,932 2,198 4,235
Total liabilities 80,367 132,209 176,264
Minority interest in consolidated subsidiaries 651 1,305 2,384
Stockholders' equity:
Preferred stock ($0.001 par value, 1,000,000 share 0 0 0
Common stock, Class A, ($0.001 par value, 100,000,000 shares65authorized, 64,070,620
69 and 69,582,602
70 shares iss
Common stock, Class B, ($0.001 par value, 8,000,000 shares authorized,
5 5,265,376
5 shares issued
5 and outstandin
Additional paid in capital 201,764 255,253 264,234
Retained earnings 29,738 63,747 103,072
Accumulated other comprehensive loss 3 0 0
Total stockholders' equity 231,575 319,074 367,381

Total liabilities and stockholders' equity 312,593 452,588 546,029

Consolidated Statements of Income

(in thousands)
Fiscal Year Ended
December 27, December 26, December 25,
2005 2006 2007
Revenue:
Restaurant sales 448,341 586,557 724,372
Franchise royalties and fees 10,443 10,574 10,717
Total revenue 458,784 597,131 735,089

Costs and expenses:

Restaurant operating costs:
Cost of sales (158,004) (205,615) (255,060)
Labor (122,090) (162,610) (205,780)
Rent (8,397) (10,052) (11,735)
Other operating (75,083) (95,536) (116,258)
Pre-opening (8,092) (12,508) (12,741)
Depreciation and amortization (14,582) (21,357) (30,446)
Impairment and closures (481) (1,721)
General and administrative (25,240) (34,603) (38,135)
Total costs and expenses (411,488) (542,762) (671,876)

Income from operations 47,296 54,369 63,213

Interest expense, net (263) (645) (2,295)
Minority interest (549) (585) (711)
Equity income from investments in unconsolidated a 130 251 294
Income before taxes 46,614 53,390 60,501
Provision for income taxes (16,292) (19,381) (21,176)
Net income 30,322 34,009 39,325

Dividends 0 0 0

Operating Leases: Future noncancelable payments.

10,215 10,742 12,329
8,793 9,959 11,976
8,285 9,820 12,077
8,166 9,932 12,189
8,423 10,032 11,978
Thereafter 49,357 57,665 63,843

Present value 71,976 83,258 96,042

Estimated cost of debt:
6.0%

Historical Performance
Fiscal Year Ended
December 27, December 26, December 25,
2005 2006 2007
December 30,
2008

5,258
9,922
8,140
3,429
6,097
1,962
0
34,808

456,132
114,807
12,807
4,109
622,663

228

32,175
32,265
15,500
0
8,544
10,931
99,643

132,482

3,784
9,920
6,205
2,704
5,128
259,866
 2,807

0
64
5
220,385
141,240
(1,704)
359,990

622,663

December 30,
2008

871,556
8,905
880,461

(308,123)
(253,132)
(15,879)
(146,019)
(11,604)
(37,694)
(2,175)
(43,808)
(818,434)

62,027
(3,844)
(841)
215
57,557
(19,389)
38,168

18,793
18,629
18,735
18,551
18,314
 114,592

159,202

December 30,
2008
Texas Roadhouse, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
December 27, December 26, December 25,
2005 2006 2007
Assets
Current assets:
Cash and cash equivalents 28,987 33,784 11,564
Receivables, net of allowance 9,613 8,299 18,303
Inventories, net 5,893 6,436 7,277
Prepaid income taxes 1,866 0 0
Prepaid expenses 2,259 2,920 3,646
Deferred tax assets 621 1,066 841
Other current assets 40 0 0
Total current assets 49,279 52,505 41,631

Property and equipment, net 210,382 305,731 390,378

Goodwill 51,063 86,649 101,856
Intangible asset, net 0 4,880 8,414
Other assets 1,869 2,823 3,750
Total assets 312,593 452,588 546,029

Liabilities and Stockholders' Equity

Current liabilities:
Current maturities of long-term debt and
obligations under capital leases 498 653 302
Current maturities of obligations under capital
leases 140
Accounts payable 17,415 18,794 23,716
Deferred revenue—gift cards/certificates 19,355 26,205 32,088
Accrued wages 9,220 12,653 14,561
Income tax payable 0 3,725 721
Accrued taxes and licenses 3,646 6,726 6,439
Other accrued liabilities 5,695 8,139 10,432
Total current liabilities 55,969 76,895 88,259

Long-term debt and obligations under capital

leases, excluding current maturities 6,255 35,362 66,482
Obligations under capital leases, excluding
current maturities 626
Stock option and other deposits 3,404 4,102 4,916
Deferred rent 4,502 5,829 7,472
Deferred tax liabilities 6,679 7,823 4,900
Fair value of derivative financial instruments 0 0 0
Other liabilities 2,932 2,198 4,235
Total liabilities 80,367 132,209 176,264
Minority interest in consolidated subsidiaries 651 1,305 2,384
Stockholders' equity:
Preferred stock ($0.001 par value, 1,000,000 share 0 0 0
Common stock, Class A, ($0.001 par value, 100,000,000 shares65authorized, 64,070,620
69 and 69,582,602
70 shares iss
Common stock, Class B, ($0.001 par value, 8,000,000 shares authorized,
5 5,265,376
5 shares issued
5 and outstandin
Additional paid in capital 201,764 255,253 264,234
Retained earnings 29,738 63,747 103,072
Accumulated other comprehensive loss 3 0 0
Total stockholders' equity 231,575 319,074 367,381

Total liabilities and stockholders' equity 312,593 452,588 546,029

Consolidated Statements of Income

(in thousands)
Fiscal Year Ended
December 27, December 26, December 25,
2005 2006 2007
Revenue:
Restaurant sales 448,341 586,557 724,372
Franchise royalties and fees 10,443 10,574 10,717
Total revenue 458,784 597,131 735,089

Costs and expenses:

Restaurant operating costs:
Cost of sales (158,004) (205,615) (255,060)
Labor (122,090) (162,610) (205,780)
Rent (8,397) (10,052) (11,735)
Other operating (75,083) (95,536) (116,258)
Pre-opening (8,092) (12,508) (12,741)
Depreciation and amortization (14,582) (21,357) (30,446)
Impairment and closures (481) (1,721)
General and administrative (25,240) (34,603) (38,135)
Total costs and expenses (411,488) (542,762) (671,876)

Income from operations 47,296 54,369 63,213

Interest expense, net (263) (645) (2,295)
Minority interest (549) (585) (711)
Equity income from investments in unconsolidated a 130 251 294
Income before taxes 46,614 53,390 60,501
Provision for income taxes (16,292) (19,381) (21,176)
Net income 30,322 34,009 39,325

Dividends 0 0 0

Operating Leases: Future noncancelable payments.

10,215 10,742 12,329
8,793 9,959 11,976
8,285 9,820 12,077
8,166 9,932 12,189
8,423 10,032 11,978
Thereafter 49,357 57,665 63,843

Present value 71,976 83,258 96,042

Estimated cost of debt:
6.0%

Historical Performance
Fiscal Year Ended
December 27, December 26, December 25,
2005 2006 2007
NOPAT
Operating approach
Income from operations 54,369 63,213
Provision for income taxes (19,381) (21,176)
Reverse taxes on financial items:
Interest expense, net (258) (918)
Minority interest (234) (284)
Equity income from investments in unconsolidated affiliates 100 118
Change in deferred taxes:
Asset (445) 225
Liability 1,144 (2,923)
NOPAT 35,295 38,254

Financing approach
Net income 34,009 39,325
Reverse financial items after tax:
Interest expense, net 387 1,377
Minority interest 351 427
Equity income from investments in unconsolidated affiliates (151) (176)
Change in deferred taxes:
Asset (445) 225
Liability 1,144 (2,923)
NOPAT 35,295 38,254

Invested Capital
Operating approach
Receivables, net of allowance 9,613 8,299 18,303
Inventories, net 5,893 6,436 7,277
Prepaid income taxes 1,866 0 0
Prepaid expenses 2,259 2,920 3,646
Other current assets 40 0 0
Property and equipment, net 210,382 305,731 390,378
Goodwill 51,063 86,649 101,856
Intangible asset, net 0 4,880 8,414
Other assets 1,869 2,823 3,750
Accounts payable (17,415) (18,794) (23,716)
Deferred revenue—gift cards/certificates (19,355) (26,205) (32,088)
Accrued wages (9,220) (12,653) (14,561)
Income tax payable 0 (3,725) (721)
Accrued taxes and licenses (3,646) (6,726) (6,439)
Other accrued liabilities (5,695) (8,139) (10,432)
Other liabilities (2,932) (2,198) (4,235)
Operating Invested Capital 224,722 339,298 441,432

Financing approach
Cash and cash equivalents (28,987) (33,784) (11,564)
Deferred tax assets (621) (1,066) (841)
Current maturities of long-term debt and obligation 498 653 302
Current maturities of obligations under capital leas 140 0 0
Long-term debt and obligations under capital lease 6,255 35,362 66,482
Obligations under capital leases, excluding current 626 0 0
Stock option and other deposits 3,404 4,102 4,916
Deferred rent 4,502 5,829 7,472
Deferred tax liabilities 6,679 7,823 4,900
Fair value of derivative financial instruments 0 0 0
Minority interest in consolidated subsidiaries 651 1,305 2,384
Total stockholders' equity 231,575 319,074 367,381
Financial invested capital 224,722 339,298 441,432

Adjustments for Operating Leases

NOPAT, unadjusted 35,295 38,254
Add back implied interest on operating leases 4,995 5,763
Tax on interest added back (1,998) (2,305)
NOPAT, adjusted 38,293 41,712

Operating Invested Capital, unadjusted 224,722 339,298 441,432

Add present value of operating leases 71,976 83,258 96,042
Operating Invested Capital, adjusted 296,698 422,556 537,474

Fiscal Year Ended

December 27, December 26, December 25,
2005 2006 2007
Historical performance measures
ROIC 12.9% 9.9%
EVA @ 7.5% 16,040 10,020
FCF (87,565) (73,207)
December 30,
2008

5,258
9,922
8,140
3,429
6,097
1,962
0
34,808

456,132
114,807
12,807
4,109
622,663

228

32,175
32,265
15,500
0
8,544
10,931
99,643

132,482

3,784
9,920
6,205
2,704
5,128
259,866
 2,807

0
64
5
220,385
141,240
(1,704)
359,990

622,663

December 30,
2008

871,556
8,905
880,461

(308,123)
(253,132)
(15,879)
(146,019)
(11,604)
(37,694)
(2,175)
(43,808)
(818,434)

62,027
(3,844)
(841)
215
57,557
(19,389)
38,168

18,793
18,629
18,735
18,551
18,314
 114,592

159,202

December 30,
2008

62,027
(19,389)

(1,538)
(336)
86

(1,121)
1,305
41,034

38,168

2,306
505
(129)

(1,121)
1,305
41,034

9,922
8,140
3,429
6,097
0
456,132
114,807
12,807
4,109
(32,175)
(32,265)
(15,500)
 0
(8,544)
(10,931)
(5,128)
510,900

(5,258)
(1,962)
228
0
132,482
0
3,784
9,920
6,205
2,704
2,807
359,990
510,900

41,034
9,552
(3,821)
46,765

510,900
159,202
670,102

December 30,
2008

8.7%
6,455
(85,862)