NASDAQ_TXRH_2018

(coco) #1
Texas Roadhouse, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Tabular amounts in thousands, except share and per share data)

F-21


A reconciliation of the statutory federal income tax rate to our effective tax rate for December 25, 2018,
December 26, 2017 and December 27, 2016 is as follows:


Fiscal Year Ended
December 25, 2018 December 26, 2017 December 27, 2016
Tax at statutory federal rate ....... 21.0 % 35.0 % 35.0 %
State and local tax, net of federal
benefit ........................ 3.6 3.3 3.4
FICA tip tax credit .............. (9.6) (7.0) (6.8)
Work opportunity tax credit....... (1.5) (0.9) (0.8)
Stock compensation ............. (1.4) (1.8) (0.1)
Net income attributable to
noncontrolling interests .......... (0.8) (1.1) (0.9)
Officers compensation ........... 1.7 0.1 0.1
Tax reform ..................... — (1.7) —
Other ......................... (0.1) 0.2 (0.1)
Total .......................... 12.9 % 26.1 % 29.8 %

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.


Our effective tax rate decreased to 26.1% in 2017 compared to 29.8% in 2016 primarily due to the adoption of
Accounting Standards Update 2016-09, Compensation – Stock Compensation ("ASU 2016-09") and new tax legislation
that was enacted in late 2017. As a result of the new guidance requirements, excess tax benefits and tax deficiencies
from share-based compensation are recognized within the income tax provision. During 2017, we recognized $3.4
million, or $0.05 per share, as an income tax benefit related to the new guidance requirements. Also during 2017, as a
result of the new tax legislation, we recognized $3.1 million, or $0.04 per share, as an income tax benefit which includes
an income tax benefit of approximately $3.8 million to revalue our deferred tax balances as of the enactment date and an
income tax expense of approximately $0.7 million related to our foreign operations.


During the first quarter of 2017, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which
required deferred tax assets and liabilities to be classified as noncurrent on our consolidated balance sheets. We adopted
ASU 2015-17 on a prospective basis.

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