Texas Roadhouse, Inc. and SubsidiariesNotes 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 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.................. ....................... $ 1,546As 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.