The Cheesecake Factory Incorporated and Subsidiaries
Notes to Consolidated Financial Statements

10. Stockholders’ Equity:

We effected a three-for-two stock split in the form of a 50% stock dividend on December 8, 2004. In connection with this stock split, $266,000 was transferred to common stock from retained earnings and $83,000 was paid to stockholders for fractional shares. All references in the Consolidated Financial Statements to shares of common stock and related prices, weighted average number of shares, per share amounts and stock option plan data have been adjusted to reflect the stock split, except for the number of shares issued at December 30, 2003 listed on the Consolidated Balance Sheets.

During fiscal 2004, our Board of Directors increased the share repurchase authorization of our common shares to 6,000,000 from 2,531,250. Shares may be repurchased in the open market or through privately negotiated transactions at times and prices considered appropriate by us. The Company repurchased 335,017 shares of our common stock for $9.3 million during fiscal 2004. As of December 28, 2004, we had repurchased a total of 1,950,967 shares for a total cost of $26.5 million under this authorization. The Company’s stock repurchase plan will be used to minimize the dilutive impact of our stock option programs. The repurchased common stock is reflected as a reduction of stockholders’ equity.