NASDAQ_TXRH_2018

Texas Roadhouse, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

F-22

Components of deferred tax liabilities, net are as follows:

December 25, 2018 December 26, 2017

Deferred tax assets:

Deferred revenue—gift cards ...................... $ 12,851 $ 10,355

Insurance reserves ............................... 3,949 3,638

Other reserves ................................... 890 621

Share-based compensation ........................ 4,623 6,022

Deferred rent .................................... 12,179 10,338

Deferred compensation ........................... 8,483 6,737

Other assets .................................... 2,212 1,866

Total deferred tax asset .............................. 45,187 39,577

Deferred tax liabilities:

Property and equipment ........................... (50,513) (35,430)

Goodwill and intangibles .......................... (5,398) (4,697)

Other liabilities... ............................... (6,544) (4,751)

Total deferred tax liability ........................... (62,455) (44,878)

Net deferred tax liability ............................. $ (17,268) $ (5,301)

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 27, 2016.................. ...................... $ 511

Additions to tax positions related to prior years .......................... 36

Additions to tax positions related to current year ......................... 389

Reductions due to statute expiration ................................... (2)

Reductions due to exam settlements ................................... (128)

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 settlement .................................... —

Balance at December 25, 2018.................. ...................... $ 1,482

As of December 25, 2018 and December 26, 2017, 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 25, 2018 possess a December tax year-end.
As a result, as of December 25, 2018, the tax years ended December 29, 2015, December 27, 2016 and December 26,
2017 remain subject to examination by all tax jurisdictions. As of December 25, 2018, 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 25, 2018, no event occurred that is likely to result in a
significant increase or decrease in the unrecognized tax benefits through December 31, 2019.

(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