UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

~~___________________________________~~__________________________

FORM 10-Q

~~___________________________________~~__________________________

Quarterly Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the Quarterly Period Ended ~~June~~April 261, ~~2005~~2007

Commission file number 0-19924

RARE Hospitality International, Inc.

(Exact name of registrant as specified in its charter)

Georgia (State or other jurisdiction of incorporation or organization	58-1498312 (I. R. S. Employer Identification No.)
8215 Roswell Rd; Bldg. 600; Atlanta, GA (Address of principal executive offices)	30350 (Zip Code)

Georgia

58-1498312

(State or other jurisdiction of

(I. R. S. Employer

incorporation or organization)

Identification No.)

8215 Roswell Road, Bldg. 600; Atlanta, GA

30350

(Address of principal executive offices)

(Zip Code)

(770) 399-9595

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

XX Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, ~~(as~~or ~~defined~~a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act).

XXx ~~Yes~~Large Noaccelerated filer o Accelerated filer o Non-accelerated filer

AsIndicate ofby ~~August~~check 2,mark ~~2005,~~if ~~there~~the ~~were~~registrant ~~33,972,981~~is ~~shares~~a ofshell ~~common~~company ~~stock~~(as defined in Rule 12b-2 of the ~~Registrant~~Exchange ~~outstanding~~Act).

Yes o No x

As of May 7, 2007, there were 30,753,182 shares of common stock of the Registrant outstanding.

RARE Hospitality International, Inc. and Subsidiaries

Index

Part I - Financial Information	Page
Item 1. Consolidated Financial Statements (Unaudited):
Consolidated Balance Sheets as of June 26, 2005 and December 26, 2004	1
Consolidated Statements of Operations for the quarters and six months ended June 26, 2005 and June 27, 2004	2
Consolidated Statement of Shareholders’ Equity for the six months ended June 26, 2005	3
Condensed Consolidated Statements of Cash Flows for the six months ended June 26, 2005 and June 27, 2004	4
Notes to the Consolidated Financial Statements	5-7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-10
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	11
Part II - Other Information
Item 1. Legal Proceedings	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Submission of Matters to a Vote of Securities Holders	11-12
Item 5. Other Information	12
Item 6. Exhibits and Reports on Form 8-K	12
Signatures	12

Part I - Financial Information

Page

~~RARE~~Item ~~Hospitality International, Inc~~1. ~~and~~Consolidated ~~Subsidiaries~~Financial Statements:

Consolidated Balance Sheets as of

~~(In~~April ~~thousands)~~1, 2007 and December 31, 2006 1

~~(Unaudited)~~Consolidated Statements of Operations for the

Assets	June 26, 2005	December 26, 2004
Current assets:
Cash and cash equivalents	$ 25,412	$ 19,547
Short-term investments	13,282	34,895
Accounts receivable	10,909	9,212
Inventories	13,491	12,564
Prepaid expenses	5,518	6,898
Refundable income taxes	--	3,327
Deferred income taxes	10,524 -----------	9,272 -----------
Total current assets	79,136	95,715
Property & equipment, less accumulated depreciation and amortization of $186,742 in 2005 and $171,305 in 2004	459,625	438,479
Goodwill	19,187	19,187
Other	16,326 -----------	14,739 -----------
Total assets	$ 574,274 ========	$ 568,120 ========
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$ 26,130	$ 33,113
Accrued expenses	65,940	69,937
Income taxes payable	3,422	--
Current installments of obligations under capital leases	251 -----------	207 -----------
Total current liabilities	95,743	103,257
Obligations under capital leases, net of current installments	37,001	37,136
Deferred income taxes	11,932	14,964
Other	7,653 -----------	6,820 -----------
Total liabilities	152,329	162,177
Minority interest	1,286	1,309
Shareholders’ equity:
Preferred stock	--	--
Common stock	223,843	217,146
Unearned compensation-restricted stock	(1,599)	(1,588)
Retained earnings	231,522	202,253
Treasury stock at cost; 1,283 shares in 2005 and 593 shares in 2004	(33,107) -----------	(13,177) -----------
Total shareholders’ equity	420,659 -----------	404,634 -----------
Total liabilities and shareholders’ equity	$ 574,274 ========	$ 568,120 ========

quarters ended April 1, 2007 and April 2, 2006

~~See~~Consolidated ~~accompanying~~Statement ~~notes~~of toShareholders’ ~~consolidated~~Equity ~~financial~~and ~~statements~~Comprehensive

~~RARE~~Income ~~Hospitality~~for ~~International,~~the ~~Inc.~~quarter ~~and~~ended ~~Subsidiaries~~April 1, 2007 3

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Revenues:	Quarter Ended		Six Months Ended
	June 26, 2005	June 27, 2004	June 26, 2005	June 27, 2004
Restaurant sales:
LongHorn Steakhouse	$168,492	$147,183	$333,686	$292,342
The Capital Grille	39,625	31,113	78,017	60,950
Bugaboo Creek Steak House	24,022	23,615	48,657	47,901
Specialty concepts	2,001 ----------	2,052 ----------	3,653 ----------	3,788 ----------
Total restaurant sales	234,140	203,963	464,013	404,981
Franchise revenues	124 ----------	101 ----------	221 ----------	200 ----------
Total revenues	234,264 ----------	204,064 ----------	464,234 ----------	405,181 ----------
Costs and expenses:
Cost of restaurant sales	86,508	75,152	170,206	147,726
Operating expenses - restaurants	103,072	87,911	203,293	173,584
Depreciation and amortization - restaurants	8,680	7,457	17,132	14,636
Pre-opening expense	2,270	1,612	3,897	3,206
General and administrative expenses	12,599 ----------	11,746 ----------	25,022 ----------	23,406 ----------
Total costs and expenses	213,129 ----------	183,878 ----------	419,550 ----------	362,558 ----------
Operating income	21,135	20,186	44,684	42,623
Interest expense, net	394	207	651	323
Minority interest	60 ----------	92 ----------	186 ----------	201 ----------
Earnings before income taxes	20,681	19,887	43,847	42,099
Income tax expense	6,876 ----------	6,610 ----------	14,578 ----------	13,995 ----------
Net earnings	$13,805 ======	$13,277 ======	$29,269 ======	$28,104 ======
Basic earnings per common share	$ 0.41 ======	$ 0.39 ======	$ 0.86 ======	$ 0.84 ======
Diluted earnings per common share	$ 0.39 ======	$ 0.37 ======	$ 0.83 ======	$ 0.79 ======
Weighted average common shares outstanding:
Basic	33,985 ======	33,646 ======	34,072 ======	33,618 ======
Diluted	35,217 ======	35,585 ======	35,409 ======	35,551 ======

See accompanying notes to consolidated financial statements

RARE Hospitality International, Inc. and Subsidiaries

Consolidated Statement of Shareholders’ Equity

For the six months ended June 26, 2005

(In thousands, unaudited)

	Common Stock		Restricted Stock	Unearned Compensation- Retained Earnings	Treasury Stock	Total Shareholders’ Equity
	Shares	Amount
Balance, December 26, 2004	34,802	$ 217,146	$(1,588)	$ 202,253	$(13,177)	$ 404,634
Net earnings and total comprehensive income	--	--	--	29,269	--	29,269
Purchase of common stock for treasury	--	--	--	--	(19,930)	(19,930)
Amortization of restricted stock	--	--	757	--	--	757
Issuance of shares pursuant to restricted stock award	28	863	(863)	--	--	--
Forfeiture of restricted stock	(8)	(182)	95	--	--	(87)
Issuance of shares pursuant to exercise of stock options	316	4,012	--	--	--	4,012
Tax benefit of stock options exercised	-- --------	2,004 -------------	-- ----------	-- ------------	-- ------------	2,004 -------------
Balance, June 26, 2005	35,138 =====	$ 223,843 ========	$(1,599) ======	$ 231,522 =======	$(33,107) =======	$ 420,659 ========

See accompanying notes to consolidated financial statements

RARE Hospitality International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

~~(In~~for ~~thousands~~the quarters ended April 1, ~~unaudited)~~2007 and April 2, 2006 4

	Six-Months Ended
	June 26, 2005	June 27, 2004
Cash flows from operating activities:
Net earnings	$ 29,269	$ 28,104
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	18,704	15,856
Changes in working capital accounts	(2,700)	(8,392)
Minority interest	186	201
Deferred tax (benefit) expense	(4,284)	3,635
Sale (purchase) of short-term investments	21,613 ------------	(2,215) ------------
Net cash provided by operating activities	62,788 ------------	37,189 ------------
Cash flows from investing activities:
Purchase of property and equipment	(39,083) ------------	(46,635) ------------
Net cash used by investing activities	(39,083) ------------	(46,635) ------------
Cash flows from financing activities:
Purchase of common stock for treasury	(19,930)	(8,188)
Proceeds from exercise of stock options	4,012	3,031
Distributions to minority partners	(209)	(209)
Increase (decrease) in bank overdraft included in accounts payable and accrued liabilities	(1,622)	2,958
Principal payments on capital leases	(91) ------------	(54) ------------
Net cash used by financing activities	(17,840) ------------	(2,462) ------------
Net increase (decrease) in cash and cash equivalents	5,865	(11,908)
Cash and cash equivalents, beginning of period	19,547 ------------	22,230 ------------
Cash and cash equivalents, end of period	$ 25,412 =======	$ 10,322 =======
Supplemental disclosure of cash flow information
Cash paid for income taxes	$ 10,060 =======	$ 9,745 =======
Cash paid for interest net of amounts capitalized	$ 1,124 =======	$ 1,284 =======
Supplemental disclosure of non-cash financing and investing activities:
Assets acquired under capital lease	-- =======	$ 11,668 =======

Notes to the Consolidated Financial Statements

~~See~~Item ~~accompanying~~2. ~~notes~~Management’s toDiscussion ~~consolidated~~and ~~financial~~Analysis ~~statements~~of

~~RARE~~Financial ~~Hospitality~~Condition ~~International,~~and ~~Inc.~~Results of Operations 8

~~Notes~~Item to3. ~~Consolidated~~Quantitative ~~Financial~~and ~~Statements~~Qualitative Disclosures About Market Risk 12

~~(Unaudited)~~Item 4. Controls and Procedures 12

1.Part ~~Basis~~II of- ~~Presentation~~Other Information

~~The~~Item ~~consolidated financial statements of RARE Hospitality International, Inc~~1. ~~and~~Legal ~~subsidiaries~~Proceedings (the “Company”) as of June 26, 2005 and December 26, 2004 and for the quarters and six months ended June 26, 2005 and June 27, 2004 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 26, 2004.12

~~The~~Item ~~Company records revenues for normal recurring sales upon the performance of services~~1A. ~~Revenues~~Risk ~~from~~Factors the sale of franchises are recognized as income when substantially all of the Company’s material obligations under the franchise agreement have been performed. Continuing royalties, which are a percentage of net sales of franchised restaurants, are accrued as income when earned.12

~~The~~Item ~~Company operates on a 52 or 53 week fiscal year ending on the last Sunday in December~~2. ~~The~~Unregistered ~~fiscal~~Sales ~~quarters ended June 26, 2005 and June 27, 2004 each contained 13 weeks and are referred to hereafter as the second quarter~~ of ~~2005~~Equity ~~and~~Securities ~~the second quarter of 2004, respectively. Together, the first~~ and ~~second~~Use ~~quarters~~ of ~~each~~Proceeds ~~fiscal year is referred to as the six months ended June 26, 2005 and June 27, 2004, respectively.~~13

~~Certain~~Item ~~prior period amounts in the accompanying Consolidated Balance Sheet and Condensed Consolidated Statement of Cash Flows have been reclassified to conform to the presentation in fiscal 2005~~3. ~~These~~Defaults ~~reclassifications~~Upon ~~had~~Senior noSecurities ~~effect on the Company’s Consolidated Statements of Operations.~~13

2Item 4. ~~New~~Submission ~~Accounting~~of ~~Pronouncements~~Matters to a Vote of Securities Holders 13

InItem ~~December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No~~5. ~~123~~Other ~~(revised~~Information 2004), “Share-Based Payment,” (SFAS 123R). SFAS 123R is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.” Among other items, SFAS 123R eliminates the use of the intrinsic value method of accounting, and requires companies to recognize the cost of awards of equity instruments granted in exchange for employee services received, based on the grant date fair value of those awards, in the financial statements. The effective date of SFAS 123R was the first interim period beginning after June 15, 2005; however, on April 14, 2005, the Securities and Exchange Commission announced that the effective date of SFAS 123R was postponed until the first annual period beginning after June 15, 2005.13

~~SFAS~~Item ~~123R permits companies to adopt its requirements using either a “modified prospective” method, or a “modified retrospective” method~~6. ~~Under~~Exhibits the “modified prospective” method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS 123 for all unvested awards granted prior to the effective date of SFAS 123R. Under the “modified retrospective” method, the requirements are the same as under the “modified prospective” method, but this method also permits entities to restate financial statements of previous periods based on proforma disclosures made in accordance with SFAS 123.13

~~The~~Signatures Company currently utilizes the Black-Scholes option-pricing model to measure the fair value of stock options granted to employees. While SFAS 123R permits entities to continue to use this model, the standard also permits the use of a “lattice” model. SFAS 123R also requires that the benefits associated with the tax deductions in excess of recognized compensation cost be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after the effective date. These future amounts cannot be estimated because they depend on, among other things, when employees exercise stock options. 13

AsPart ~~disclosed~~I in- ~~Note~~Financial 3, compensation cost for stock options for which the requisite future service has not yet taken place is disclosed as a proforma expense by applying the provisions of SFAS 123. The proforma application of SFAS 123 had a dilutive effect of approximately $0.02 per diluted share in the second quarter of 2005 and approximately $0.05 per diluted share for the first six months of 2005 and is expected to have a proforma dilutive effect of approximately $0.03 to $0.04 per diluted share in each of the remaining quarters of 2005. Compensation cost for stock options vesting beginning in fiscal 2006, and all restricted stock, will be expensed in accordance with the provisions of SFAS 123R, which will be effective for the Company at the beginning of fiscal 2006. Management is currently analyzing the implementation alternatives and requirements and is evaluating the impact of the adoption of this Standard on the Company’s consolidated financial statements.Information

3Item 1. ~~Shareholders’~~Consolidated ~~Equity~~Financial ~~and Stock Based Compensation~~Statements

~~The~~RARE ~~Company~~Hospitality ~~has stock-based compensation plans that provide for the granting of restricted stock and incentive and non-qualified stock options to employees~~International, ~~officers, directors, consultants, and advisors~~Inc. ~~Under the plans, options are granted at an exercise price equal to the fair market value of the underlying common stock on the date of grant. The Company applies APB Opinion No. 25~~ and related interpretations in accounting for its stock-based plans as permitted under SFAS 123 and SFAS 148. Accordingly, no compensation cost has been recognized for the Company’s stock option plans. Had the compensation cost for the Company’s stock option plans been determined based on the fair value at the grant dates for awards under those plans consistent with the fair value methodology of SFAS 123, the Company’s net income and earnings per share would have been as follows (in thousands, except per share data):Subsidiaries

	Quarter Ended		Six Months Ended
	June 26, 2005	June 27, 2004	June 26, 2005	June 27, 2004
Net earnings, as reported	$13,805	$ 13,277	$29,269	$ 28,104
Add: stock-based compensation expense
Included in reported net earnings, net of tax	228	156	470	316
Deduct: stock-based compensation expense
Determined under fair value method for all awards, net of tax	(1,037) ------------	(1,254) ------------	(2,263) ------------	(2,403) ------------
Proforma net earnings	$ 12,996 ======	$ 12,179 ======	$ 27,476 ======	$ 26,017 ======
Earnings per share:
Basic – as reported	$ 0.41 ======	$ 0.39 ======	$ 0.86 ======	$ 0.84 ======
Basic - proforma	$ 0.38 ======	$ 0.36 ======	$ 0.81 ======	$ 0.77 ======
Diluted – as reported	$ 0.39 ======	$ 0.37 ======	$ 0.83 ======	$ 0.79 ======
Diluted - proforma	$ 0.37 ======	$ 0.35 ======	$ 0.78 ======	$ 0.74 ======

Consolidated Balance Sheets

4.(In ~~Long-Term Debt~~thousands)

At June 26, 2005, no borrowings were outstanding under the Company’s $100.0 million revolving credit agreement, and the Company was in compliance with all of its debt covenant provisions. Interest expense is reported net of interest income and capitalized interest. Interest income equated to $306,000 and $67,000 for the second quarter of 2005 and 2004, respectively and to $562,000 and $187,000 for the first six months of 2005 and 2004, respectively. Interest capitalized in the second quarter of 2005 and 2004 was $157,000 and $413,000, respectively and was $500,000 and $829,000, for the first six months of 2005 and 2004, respectively.(Unaudited)

5.April ~~Income~~1, ~~Taxes~~December 31,

~~Income~~Assets ~~tax~~2007 expense for the second quarter and first six months of 2005 has been provided for based on an estimated 33.25% effective tax rate expected to be applicable for the full 2005 fiscal year. The effective income tax rate differs from applying the statutory federal income tax rate of 35% to pre-tax earnings primarily due to employee FICA tip tax credits and work opportunity tax credits (both are a reduction in income tax expense) partially offset by state income taxes. 2006

6.Current ~~Treasury Shares~~assets:

~~The~~Cash ~~Company’s~~and ~~Board~~cash ofequivalents Directors has authorized the purchase of shares of the Company’s common stock from time to time through open market transactions, block purchases or in privately negotiated transactions. On April 20, 2005, the Board of Directors authorized the Company to use up to $~~29.0~~ ~~million to purchase shares of its common stock. During the second quarter of 2005~~13,759 ~~the Company repurchased 690,000 shares of its common stock at an average price of~~ $~~28.88~~ ~~for an aggregate cost of $19~~31,~~930,000. As of June 26, 2005, approximately $9,070,000 remained available under the Company’s $29.0 million share repurchase authorization.~~378

7.Short-term ~~Earnings~~investments ~~Per~~6,047 ~~Share~~6,001

~~Basic~~Accounts ~~earnings~~receivable per common share equals net earnings divided by the weighted average number of common shares outstanding and does not include the dilutive effect of stock options or restricted stock. Diluted earnings per common share equals net earnings divided by the weighted average number of common shares outstanding15,136 after giving effect to dilutive stock options and restricted stock. A reconciliation between basic and diluted weighted average shares outstanding and the related earnings per share calculation is presented below (in thousands15, ~~except per share amounts):~~663

	Quarter Ended		Six Months Ended
	June 26, 2005	June 27, 2004	June 26, 2005	June 27, 2004
Basic weighted average shares outstanding	33,985	33,646	34,072	33,618
Dilutive effect of stock options	1,147	1,727	1,254	1,722
Dilutive effect of restricted stock	85 -----------	212 -----------	83 -----------	211 -----------
Diluted weighted average shares outstanding	35,217 =======	35,585 =======	35,409 =======	35,551 =======
Net earnings	$ 13,805 =======	$ 13,277 =======	$ 29,269 =======	$ 28,104 =======
Basic earnings per common share	$ 0.41 =======	$ 0.39 =======	$ 0.86 =======	$ 0.84 =======
Diluted earnings per common share	$ 0.39 =======	$ 0.37 =======	$ 0.83 =======	$ 0.79 =======

Inventories

16,476

16,274

8.Prepaid ~~Comprehensive~~expenses ~~Income~~5,775 6,872

~~For~~Deferred ~~the~~income ~~quarters~~taxes ~~ended June 26~~17,878 ~~2005 and June 27~~16, ~~2004, there was no difference between the Company’s net earnings and comprehensive income.~~681

9.Assets ~~Subsequent~~of ~~Events~~discontinued operations 31,738 31,939

~~On July 22, 2005, the Company announced that its Board of Directors had authorized the repurchase of up to an additional $30.0 million of the Company’s outstanding common stock from time~~-to-~~time through May 1, 2007. This new share~~-~~repurchase~~---------- ~~authorization supplements the $29.0 million authorization made on April 20, 2005, which also expires on May 1, 2007.~~-------------

OnTotal ~~July~~current ~~22,~~assets ~~2005~~106,809 ~~the Company also entered into an amendment to its revolving credit facility~~124, to extend the facility’s maturity through July 22, 2010, and improve its costs and terms. The total amount the Company may borrow under the amended facility remains at $100.0 million and amounts outstanding under the amended credit facility would bear interest at LIBOR plus a margin of 0.50% to 1.25% depending on the Company’s leverage ratio or the Administrative Agent’s prime rate of interest at the Company’s option.808

~~Item~~Property 2.& ~~Management’s~~equipment, ~~Discussion~~less ~~and~~accumulated ~~Analysis~~depreciation ~~of Financial Condition~~ and ~~Results of Operations~~

~~Results~~amortization of ~~Operations~~$208,574 in 2007 and $197,959 in 2006 548,990 525,160

~~Revenues~~Goodwill 19,187 19,187

~~The~~Deferred ~~Company~~income ~~currently~~taxes ~~derives all of its revenues from restaurant sales and franchise revenues. Total revenues increased 14.8% and 14.6% for the quarter and six months ended June 26~~3,275 ~~2005, respectively, as compared to the same periods of the prior fiscal year.~~--

~~Same~~Other ~~store~~27,386 ~~sales comparisons for each of the Company’s restaurant concepts for the quarter ended June~~ 26, ~~2005, consist of sales at restaurants opened prior to September 29, 2003.~~057

------------- ~~LongHorn Steakhouse:~~-------------

~~Sales~~Total inassets ~~the~~$ ~~LongHorn Steakhouse restaurants for the quarter and six months ended June 26~~705,647 2005 increased 14.5% and 14.1%, respectively, as compared to the same periods of the prior year. The increase reflects (i) a 12.1% and 12.3% increase in restaurant operating weeks in the quarter and six months ended June 26, 2005, respectively, as compared to the same periods of the prior fiscal year, resulting from an increase in the restaurant base from 201 LongHorn Steakhouse restaurants at the end of the second quarter of 2004 to 225 at the end of the second quarter of 2005 and (ii) an increase in average weekly sales. Average weekly sales for all LongHorn Steakhouse restaurants in the second quarter of 2005 were $~~58,241,~~ a 2.1% increase over the comparable period in 2004. Same store sales for the comparable LongHorn Steakhouse restaurants increased 2.2% in the second quarter of 2005 as compared to the same period in 2004695, ~~due to approximately equal increases in average check and customer counts.~~212

======== ~~The Capital Grille:~~========

~~Sales~~Liabilities ~~in The Capital Grille restaurants for the quarter~~ and ~~six~~Shareholders’ months ended June 26, 2005, increased 27.4% and 28.0%, respectively, as compared to the same periods of the prior fiscal year. The increase reflects (i) a 17.5% and 17.6% increase in restaurant operating weeks for the quarter and six months ended June 26, 2005, respectively, as compared to the same periods of the prior fiscal year, resulting from an increase in the restaurant base from 18 The Capital Grille restaurants at the end of the second quarter 2004 to 22 restaurants at the end of the second quarter of 2005 and (ii) an increase in average weekly sales. Average weekly sales for all The Capital Grille restaurants in the second quarter of 2005 were $147,306, an 8.4% increase from the comparable period in 2004. Same store sales for the comparable The Capital Grille restaurants increased 5.0% in the second quarter of 2005, due almost entirely to increases in average check.Equity

Current ~~Bugaboo Creek Steak House~~liabilities:

~~Sales~~Accounts inpayable ~~the~~$ ~~Bugaboo Creek Steak House restaurants increased for the quarter and six months ended June 26~~30,952 2005, by 1.7% and 1.6%, respectively, as compared to the same periods of the prior fiscal year. The increase reflects increases of 5.3% and 6.7% in restaurant weeks in the quarter and six months ended June 26, 2005, respectively, as compared to the same periods of the prior fiscal year, resulting from an increase in the restaurant base from 26 Bugaboo Creek Steak House restaurants at the end of the second quarter of 2004 to 29 restaurants at the end of the second quarter of 2005, partially offset by a decrease in average weekly sales and by the temporary closure of one restaurant during the second quarter due to a fire. Average weekly sales for all Bugaboo Creek Steak House restaurants in the second quarter of 2005 were $~~67,479,~~ a 3.4% decrease from the comparable period for 2004. Same store sales for the comparable Bugaboo Creek Steak House restaurants in the second quarter of 2005 decreased 3.6% as compared to the same period in 200433, ~~primarily due to a decrease in average check and a slight decrease in customer counts.~~891

Accrued ~~Franchise~~expenses ~~Revenue:~~72,941 89,202

~~Franchise~~Income ~~revenues~~taxes ~~increased~~payable ~~to $124~~6,~~000~~927 ~~for the second quarter and increased to $221~~2,000 for the first six months of 2005, from $101,000 and $200,000 for the same periods of the prior fiscal year, due to sales increases at the three franchised LongHorn Steakhouse restaurants in Puerto Rico.953

Current ~~Costs~~installments ~~and~~of ~~Expenses~~obligations under

~~Cost~~capital ofleases ~~restaurant~~379 sales as a percentage of restaurant sales increased to 36.9% for the second quarter of 2005, from 36.8% for the second quarter of 2004, and increased to 36.7% for the first six months of 2005 as compared to 36.5% during the same period of 2004. These increases resulted primarily from higher contract pricing on commodities in 2005, particularly pricing with respect to beef contracts, and was partially offset by a 2% - 3% increase in menu prices. The Company is currently under fixed price contracts with respect to its anticipated beef needs and these contracts are in effect for the remainder of 2005. The Company expects its cost of restaurant sales as a percentage of restaurant sales in the remainder of 2005 to be approximately 0.1% to 0.2% lower than the comparable quarters of 2004. Many of the food products, other than protein products, purchased by the Company are affected by commodity pricing and are, therefore, subject to price volatility caused by weather, production problems, delivery difficulties and other factors, which are outside the control of the Company.345

~~Restaurant~~Liabilities ~~operating expense as a percentage~~ of ~~restaurant~~discontinued ~~sales~~operations ~~increased to 44.0% for the second quarter of 2005 from 43.1% for the second quarter of 2004 and increased to 43.8% for the first six months of 2005~~6,291 as compared to 42.9% for the same period of 2004. These increases in restaurant operating expenses as a percentage of restaurant sales for the 2005 periods as compared to the prior year were primarily due to increases in the cost of utilities7, ~~unemployment tax increases and wage rate pressures, including a $1.00 per hour state mandated increase in the Florida minimum wage.~~652

~~Restaurant~~------------- depreciation as a percentage of restaurant sales, was 3.7% for both the second quarter and first six months of 2005, as compared to 3.7% and 3.6% for the same periods of the prior fiscal year, respectively.-------------

~~Pre-opening~~Total ~~expense~~current ~~for~~liabilities ~~the second quarter of 2005 was $2~~117,~~270,000,~~490 ~~an increase of $658~~134,000 from the same period of the prior year. Pre-opening expense for the first six months of 2005 was $3.9 million as compared to $3.2 million during the same period of the prior year. The increase in pre-opening expense in 2005, as compared to the same periods of the prior year, was primarily due to accelerated expenditures in the first six months of 2005, resulting from a greater number of planned new restaurant openings in 2005, as compared to 2004.043

~~General~~Obligations ~~and~~under ~~administrative~~capital ~~expenses~~leases, as a percentage of total revenues, decreased to 5.4% for the second quarter of 2005 from 5.8% for the same period in 2004, and decreased to 5.4% for the first six months of 2005 from 5.8% for the same period of 2004. These decreases were principally due to decreased bonus accruals and greater leverage of fixed and semi-fixed general and administrative expenses resulting from higher average weekly sales volumes.net

~~As a result~~ of ~~the~~current ~~relationships~~installments ~~between revenues and expenses discussed above~~49,033 the Company’s operating income increased to $21.1 million for the second quarter of 2005 and increased to $44.7 million for the first six months of 2005 as compared to $20.2 million and $42.6 million41, ~~respectively, for the same periods of the prior year.~~290

~~Interest~~Deferred expense, net increased to $394,000 in the second quarter of 2005, and $651,000 for the first six months of 2005, from $207,000 and $323,000 during the same periods of the prior year, primarily due to an increase in the level of interest associated with the Company’s new capital lease obligations partially offset by an increase in the dollar amount of interest income. ~~This~~taxes ~~interest~~-- ~~income offset was higher in 2005 than in the comparable periods of 2004 due to an increase in the interest income rate earned on investments. To date~~1, ~~the Company has had no amounts outstanding under the revolving credit facility and had no amounts outstanding during 2004.~~192

~~Minority~~Convertible ~~interest~~Senior ~~expense~~Notes ~~decreased to $60~~125,000 ~~for the second quarter and $186~~125,000 for the first six months of 2004, from $92,000 and $201,000 for the same periods of the prior year, which reflects the joint venture partner’s share of profitability of the Company’s three joint venture restaurants.

~~Income~~Other ~~tax expense for the second quarter and first six months of 2005 was 33.25% of earnings before income taxes~~39,135 which reflects the effective tax rate expected to be applicable for the full 2005 fiscal year. This rate in 2005 is the same as the effective income tax rate for the full 2004 fiscal year. The Company’s effective income tax rate differs from applying the statutory federal income tax rate of 35% to pre-tax income32, ~~primarily due to employee FICA tip tax credits and work opportunity tax credits partially offset by state income taxes.~~995

~~Net~~------------- earnings increased to $13.8 million for the second quarter of 2005 from net earnings of $13.3 million for the second quarter of 2004 and increased to $29.3 million for the six months ended June 26, 2005 from $28.1 million for the six months ended June 27, 2004, reflecting the net effect of the items discussed above.-------------

~~Outlook~~Total ~~for~~liabilities ~~Future~~330,658 ~~Operating Results~~334,520

~~The~~Minority ~~Company~~interest ~~expects 2005 diluted earnings per common share in a range of $~~1~~.52 to $1.55~~,107 which includes expense of approximately $0.02 per diluted share related to restricted stock to be issued as part of the Company’s recently adopted stock-based compensation plan for management. This level of earnings per common share assumes same store sales increases for the second half of 2005 in a range of 3% to 4% for LongHorn Steakhouse, 4% to 5% for The Capital Grille and 0% to 1~~% for Bugaboo Creek Steak House and the projected restaurant openings discussed below.~~,044

~~Liquidity~~------------- ~~and Capital Resources:~~-------------

~~The Company requires capital primarily for the development of new restaurants, the remodeling of existing restaurants and selected acquisitions. During the first six months of 2005, the Company~~Shareholders’s principal sources of working capital were cash provided by operating activities ($62.8 million) and proceeds from the exercise of employee stock options ($4.0 million). For the first six months of 2005, the principal uses of working capital were capital expenditures ($39.1 million) related to new and improved facilities and the purchase of common stock for treasury ($19.9 million).equity:

~~The~~Preferred ~~Company~~stock ~~intends~~– tono ~~open~~par 27value ~~LongHorn~~-- Steakhouse restaurants, three The Capital Grille restaurants and three Bugaboo Creek Steak House restaurants in fiscal year 2005. The Company estimates that its capital expenditures for fiscal year 2005 will be approximately $95 to $105 million. During the first six months of 2005, the Company opened 15 LongHorn Steakhouse restaurants, two The Capital Grille restaurants and one Bugaboo Creek Steak House restaurant. Management believes that available cash, cash provided by operations, and available borrowings under the Company’s $100.0 million revolving credit facility will provide sufficient funds to finance the Company’s expansion plans.--

~~The~~Common ~~Company’s Board of Directors has authorized the purchase of shares of the Company’s common~~ stock ~~from time to time through open market transactions~~253,933 ~~block purchases or in privately negotiated transactions. On April 20~~247, 2005, the Board of Directors authorized the Company to use up to $29.0 million to purchase shares of its common stock. During the second quarter of 2005, the Company repurchased 690,000 shares of its common stock at an average price of $28.88 for an aggregate cost of $19,930,000. As of June 26, 2005, approximately $9,070,000 remained available under the Company’s $29.0 million share repurchase authorization.661

OnRetained ~~July~~earnings 22297,921 ~~2005~~284, the Company announced that its Board of Directors had authorized the repurchase of up to an additional $30.0 million of the Company’s outstanding common stock from time-to-time through May 1, 2007. This new share-repurchase authorization supplements the $29.0 million authorization made on April 20, 2005, which also expires on May 1, 2007.082

~~Since~~Treasury ~~substantially~~shares ~~all~~at ~~sales~~cost; in5,746 ~~the~~shares ~~Company’s~~in ~~restaurants~~2007 ~~are~~and ~~for cash~~5,567 ~~and accounts payable are generally due~~ in ~~seven~~2006 ~~to 30 days~~(177,972) ~~the Company operates with little or negative working capital.~~(172,095)

~~Forward~~-~~Looking~~------------ ~~Statements~~-------------

~~Statements~~Total contained in this report concerning liquidity and capital resources and future operating results contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as assumptions on which such statements are based. All forward-looking statements in this Form 10-Q are based upon information available to the Company as of the date of this report. Forward-looking statements involve a number of risks and uncertainties, and in addition to the factors discussed elsewhere in this Form 10-Q, other factors that could cause actual results, performance or developments to differ materially from those expressed or implied by those forward-looking statements include the following: failure of facts to conform to necessary management estimates and assumptions regarding financial and operating matters; the Companyshareholders’s ~~ability~~equity ~~to identify and secure suitable locations for new restaurants on acceptable terms~~373,882 ~~open the anticipated number of new restaurants on time and within budget~~359, achieve anticipated rates of same store sales, hire and train additional restaurant personnel and integrate new restaurants into its operations; the continued implementation of the Company’s business discipline over a large and growing restaurant base; unexpected increases in cost of sales or employees, pre-opening or other expenses; the economic conditions in the new markets into which the Company expands and possible uncertainties in the customer base in these areas; fluctuations in quarterly operating results; seasonality; unusual weather patterns or events; changes in customer dining patterns; the impact of any negative publicity or public attitudes related to the consumption of beef; unforeseen increases in commodity pricing; disruption of established sources of product supply or distribution; competitive pressures from other national and regional restaurant chains; legislation affecting the restaurant industry; business conditions, such as inflation or a recession, or other negative effect on dining patterns, or some other negative effect on the economy, in general, including (without limitation) war, insurrection and/or terrorist attacks on United States soil; growth in the restaurant industry and the general economy; changes in monetary and fiscal policies, laws and regulations; and the risks identified from time to time in the Company’s SEC reports, including the Company’s Annual Report on Form 10-K for 2004, registration statements and public announcements. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.648

-------------

Total liabilities and shareholders’ equity

705,647

695,212

========

See accompanying notes to consolidated financial statements

RARE Hospitality International, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Quarter Ended

April 1,

April 2,

2007

2006

Revenues:

Restaurant sales:

LongHorn Steakhouse

209,713

208,006

The Capital Grille

56,058

51,642

Specialty concepts

1,741

2,080

-------------

Total restaurant sales

267,512

261,728

Franchise revenues

127

133

-------------

Total revenues

267,639

261,861

-------------

Costs and expenses:

Cost of restaurant sales

98,037

95,467

Operating expenses - restaurants

117,190

111,859

Depreciation and amortization - restaurants

10,108

9,029

Pre-opening expense - restaurants

2,803

2,614

General and administrative expenses

16,464

17,105

-------------

Total costs and expenses

244,602

236,074

-------------

Operating income

23,037

25,787

Interest expense, net

1,535

670

Minority interest

-------------

Earnings from continuing operations before income taxes

21,411

25,022

Income tax expense

7,064

8,268

-------------

Income from continuing operations

14,347

16,754

-------------

Earnings (loss) from discontinued operations,

net of income taxes

(508)

466

-------------

Net earnings

13,839

17,220

========

Basic earnings (loss) per common share:

Continuing operations

0.48

0.50

Discontinued operations

(0.02)

0.01

-------------

0.46

0.51

========

Diluted earnings (loss) per common share:

Continuing operations

0.46

0.49

Discontinued operations

(0.02)

0.01

-------------

0.45

0.50

========

Weighted average common shares outstanding (basic)

30,103

33,482

========

Weighted average common shares outstanding (diluted)

31,086

34,486

========

See accompanying notes to consolidated financial statements

RARE Hospitality International, Inc. and Subsidiaries

Consolidated Statement of Shareholders’ Equity and Comprehensive Income

For the quarter ended April 1, 2007

(In thousands, unaudited)

Total

Common Stock

Retained

Treasury

Shareholders’

Dollars

Earnings

Equity

Balance, December 31, 2006

36,054

247,661

284,082

(172,095)

359,648

Net earnings and total comprehensive income

13,839

Purchase of common stock for treasury

(5,877)

Stock based compensation expense

2,656

Issuance of shares pursuant to non-vested

stock awards

Issuance of shares pursuant to exercise of

stock options

165

2,711

Tax benefit of stock options exercised and

vesting of awards of non-vested stock

905

-------------

---------------

--------------

---------------

Balance, April 1, 2007

36,316

253,933

297,921

(177,972)

373,882

========

=========

========

=========

See accompanying notes to consolidated financial statements

RARE Hospitality International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands, unaudited)

Quarter Ended

April 1,

April 2,

2007

2006

Cash flows from operating activities:

Net earnings

13,839

17,220

Adjustments to reconcile net earnings to net cash provided by

operating activities:

(Income) loss from discontinued operations, net of income taxes

508

(466)

Depreciation and amortization

10,615

9,487

Stock-based compensation expense

2,656

2,077

Minority interest

Deferred tax expense

(1,401)

(4,000)

Sale (purchase) of short-term investments, net

(46)

5,908

Changes in assets and liabilities:

Accounts receivable

527

1,654

Inventories

(202)

(307)

Prepaid expenses

1,097

732

Other assets

(492)

275

Income taxes payable

4,198

10,642

Accounts payable

1,451

(2,070)

Accrued expenses

(19,077)

(9,593)

Other liabilities

1,040

(57)

------------

Net cash provided by operating activities of continuing operations

14,804

31,597

------------

Net cash provided by operating activities of discontinued operations

966

------------

Cash flows from investing activities:

Purchase of property and equipment by continuing operations

(26,597)

(27,449)

------------

Purchase of property and equipment by discontinued operations

(94)

(965)

------------

Cash flows from financing activities:

Principal payments on capital leases

(71)

(65)

Tenant incentives received under capital leases

785

Distributions to minority partners

(28)

(80)

Decrease in bank overdraft included in accounts

payable and accrued expenses

(3,242)

(5,390)

Purchase of common stock for treasury

(5,877)

Proceeds from exercise of stock options

2,711

2,068

Tax benefit from share-based compensation

681

965

------------

Net cash used in financing activities of continuing operations

(5,826)

(1,717)

------------

Net increase (decrease) in cash and cash equivalents

(17,621)

2,432

Cash and cash equivalents at beginning of year

31,437

12,168

------------

Cash and cash equivalents at end of the period

13,816

14,600

=======

Cash and cash equivalents of continuing operations at end of the period

13,759

14,538

=======

Cash and cash equivalents of discontinued operations at end of the period

=======

Supplemental disclosure of cash flow information:

Cash paid for income taxes

3,195

859

=======

Cash paid for interest net of amounts capitalized

846

760

=======

Supplemental disclosure of non-cash financing and investing activities:

Assets acquired under capital lease

7,848

=======

See accompanying notes to consolidated financial statements.

RARE Hospitality International, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1.	Basis of Presentation

The consolidated financial statements of RARE Hospitality International, Inc. and subsidiaries (the “Company”) as of April 1, 2007 and December 31, 2006 and for the quarters ended April 1, 2007 and April 2, 2006 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

The Company records revenue for normal recurring sales upon the performance of services. Revenue from the sale of franchises is recognized as income when substantially all of the Company’s material obligations under the franchise agreement have been performed. Continuing royalties, which are a percentage of net sales of franchised restaurants, are accrued as income when earned.

The Company’s fiscal year is a 52- or 53-week year ending on the last Sunday in each calendar year. Each of the four fiscal quarters is typically made up of 13 weeks; however, since fiscal 2006 was a 53-week period, the quarter ended April 2, 2006 contained 14 operating weeks, compared to 13 operating weeks in the quarter ended April 1, 2007.

In the accompanying consolidated financial statements, the results of operations relating to the Bugaboo Creek Steak House business to be divested are presented as discontinued operations. The assets and liabilities of discontinued operations are primarily comprised of fixed assets and accrued liabilities, respectively. Financial results for Bugaboo Creek Steak House for the quarters ended April 1, 2007 and April 2, 2006, were as follows (in thousands):

Fiscal Quarter

--------------------------------------------------------

13 Weeks

14 Weeks

Ended

April 1,

April 2,

2007

2006

--------------

Restaurant Sales

25,712

30,255

--------------

Costs and expenses:

Cost of restaurant sales

9,261

11,038

Operating expenses-restaurants

13,863

15,986

Depreciation and amortization-restaurants

1,164

Pre-opening expense-restaurants

102

General and administrative expenses

1,155

1,270

--------------

Total costs and expenses

24,279

29,560

--------------

Earnings before income taxes

1,433

695

Income tax expense

473

229

--------------

Net earnings before loss on disposal

960

466

Loss on disposal of discontinued operations (net of

tax benefit of $790)

(1,468)

--------------

Net earnings (loss)

(508)

466

========

Loss from discontinued operations for the first quarter of 2007 includes impairment and termination charges of approximately $2.3 million ($1.5 million, net of tax) which consists of rent termination charges of $1.1 million, accrued employee termination costs of $0.7 million and approximately $0.5 million related to management’s estimate of additional impairment to be realized upon the anticipated divestiture of the Bugaboo Creek Steak House business. In addition to costs already recorded for impairment and termination charges, the Company expects to accrue additional retention bonuses of approximately $0.7 million in the second quarter of 2007. Management anticipates consummation of the sale of the Bugaboo Creek Steak House business in the third quarter of 2007. Unless otherwise noted, discussions and amounts throughout these Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations relate to the Company’s continuing operations.

2.	Share-Based Compensation

The Company has various share-based compensation programs, which provide for equity awards, including stock options, restricted stock awards (“non-vested stock awards”) and performance-based restricted stock units. Total share-based compensation expense of approximately $2.7 million and $2.1 million, have been included in the Company’s Consolidated Statements of Operations for the quarters ended April 1, 2007 and April 2, 2006, respectively.

The following table provides information about the common stock that may be issued under all of the Company’s existing equity compensation plans as of April 1, 2007:

Number of Securities To

Weighted Average

Number of Securities

Be Issued Upon Exercise

Price of

Remaining Available

Plan Category

Of Outstanding Awards

Outstanding Awards

for Future Issuance

-----------------------------------------------------------------------------------------------------------------------------------------------------------------

Equity compensation

2,531,536

(1)

28.02

768,735

(6)

plans approved by

571,736

(2)

14.73

13,354

shareholders

114,312

(3)

17.91

529,332

(4)

8.25

Equity compensation plans

not approved by shareholders

25,250

(5)

8.39

----------------

--------------

-----------------

Total

3,772,166

22.80

782,089

==========

(1)

RARE Hospitality International, Inc. Amended and Restated 2002 Long-Term Incentive Plan.

(2)

RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan.

(3)

Amended and Restated RARE Hospitality International, Inc. 1996 Stock Plan for Outside Directors. No further options may be granted under the terms of this plan.

(4)

LongHorn Steaks, Inc. Amended and Restated 1992 Incentive Plan. No further options may be granted under the terms of this plan.

(5)

These options were granted on the same terms as those under the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan and were granted at prices which equated to current market value on the date of grant, are generally exercisable after three to five years, and must be exercised within ten years from the date of grant.

(6)

These shares may also be granted as future awards of non-vested stock.

Stock Options

Upon adoption of Statement of Financial Accounting Standards No. 123 (revised) “Share Based Payments” (“SFAS 123R”), the Company elected to continue to use the Black-Scholes option pricing model to calculate the grant-date fair value of option awards. The fair value of options granted during the quarter ended April 1, 2007 and the quarter ended April 2, 2006 were calculated using the following assumptions:

Fiscal Quarters Ended

---------------------------------------------

April 1,

April 2,

2007

2006

---------

Expected life (in years)

4.00

Expected volatility

29.02%

27.34%

Risk-free interest rate

4.750%

4.375%

Expected dividend yield

0.00%

Option activity for the quarter ended April 1, 2007 was as follows:

Weighted-Average

Options

Exercise Price

-----------

-----------------

Outstanding at December 31, 2006

3,565,234

21.54

Granted

426,223

31.88

Exercised

(164,776)

16.45

Forfeited or Cancelled

(54,515)

30.61

---------------

Outstanding at April 1, 2007

3,772,166

22.80

=========

The fair value of options granted in the quarter ended April 1, 2007 was approximately $3.5 million. The fair value of options granted in the quarter ended April 2, 2006 was approximately $5.9 million. Total intrinsic value of options exercised in the quarters ended April 1, 2007 and April 2, 2006 was approximately $2.4 million and $2.9 million, respectively. As of April 1, 2007, the total intrinsic value of options outstanding and options exercisable was approximately $29.7 million and $29.1 million, respectively. Intrinsic value is the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised.

The following table summarizes information concerning outstanding and exercisable options as of April 1, 2007:

Range of Exercise Prices

Options Outstanding

Options Exercisable

------------------------------

-------------------------

------------------------

Options

Life(1)

Price(2)

Options

Price(2)

----------

---------

--------------

----------

--------------

$0.01-$5.00

34,000

0.9

4.33

34,000

4.33

$5.01-$10.00

558,794

2.7

8.41

558,794

8.41

$10.01-$15.00

448,542

3.8

14.74

448,542

14.74

$15.01-$20.00

549,402

5.4

17.47

549,402

17.47

$20.01-$25.00

157,388

6.5

22.21

147,388

22.03

$25.01-$30.00

611,361

7.5

27.47

391,928

27.21

$30.01 or greater

1,412,679

9.0

31.61

420,313

31.48

--------------

-------

--------------

3,772,166

6.5

22.80

2,550,367

18.90

========

(1)

Represents the weighted-average remaining contractual life in years.

(2)

Represents the weighted-average exercise price.

Non-vested Stock Awards

Non-vested stock awards as of April 1, 2007 and changes during the quarter ended April 1, 2007 were as follows:

Weighted-Average

Grant Date

Fair Value

-----------

--------------

Non-vested at December 31, 2006

301,781

30.17

Granted

97,012

32.02

Vested

(9,143)

28.84

Transferred to Treasury

(13,346)

30.50

Forfeited

(5,083)

18.02

-----------

------------

Non-vested at April 1, 2007

371,221

30.84

=======

Total grant date fair value of non-vested stock awards that vested during the quarters ended April 1, 2007 and April 2, 2006 was $264,000 and $579,000, respectively. The total grant date fair value of non-vested stock awards at April 1, 2007 was $11,450,000.

Performance-Based Restricted Stock Units

The total number of performance-based restricted stock units granted in the first quarter of 2007 was 68,749 compared to 71,732 for the first quarter of 2006. The amount expensed for the quarter ended April 1, 2007 was approximately $226,000 compared to $92,000 for the quarter ended April 2, 2006, based upon the number of units granted and management’s estimate of the revenue and adjusted earnings per share to be achieved as compared to the respective targets. Amounts expensed will be periodically adjusted to reflect the most current projection of the achievement of performance goals.

3.	Long-Term Debt

As of April 1, 2007, no borrowings were outstanding under the Company’s $100.0 million revolving credit agreement, and the Company was in compliance with all of its debt covenants. Interest expense is reported net of $242,000 and $173,000 of interest income in the first quarter of 2007 and 2006, respectively. Interest capitalized in the first quarter of 2007 and 2006 was $254,000 and $225,000, respectively.

4.	Income Taxes

Income tax expense on restaurant operations for the first quarter of 2007 has been recorded based on an estimated 33.0% effective tax rate expected to be applicable for the full 2007 fiscal year. The effective income tax rate differs from applying the statutory federal income tax rate of 35% to pre-tax earnings primarily due to employee FICA tip tax credits (a reduction in income tax expense) partially offset by state income taxes. The effective tax benefit rate used related to the Bugaboo Creek impairment charge under Statement of Financial Accounting Standards No. 144 is a federal statutory rate of 35%.

The Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” an interpretation of FASB Statement No. 109 (“FIN 48”) on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no adjustment in the liability for unrecognized income tax benefits.

As of April 1, 2007, the Company had approximately $4.3 million of unrecognized tax benefits including approximately $1.2 million of interest and penalties, which are included in other long-term liabilities in the Consolidated Balance Sheet. The entire balance of unrecognized tax benefits, if recognized, would affect the effective tax rate. Any interest and/or penalties associated with uncertain tax positions are recognized as income tax expense.

Management does not anticipate that the total unrecognized tax benefits will significantly change due to the settlement of audits and the expiration of statutes of limitations within 12 months of the date of this report. With few exceptions, the Company is no longer subject to federal and state tax examinations for years prior to 2003.

5.	Earnings Per Share

A reconciliation of the common share components for the basic and diluted earnings per share calculations follows (in thousands, except per share amounts):

Quarter Ended

-------------------

13 Weeks Ended

14 Weeks Ended

April 1,

April 2,

2007

2006

-----------

Weighted average number of common shares used in basic calculation

30,103

33,482

Dilutive effect of non-vested stock awards

125

Dilutive effect of net shares issuable pursuant to stock option plans

858

945

-----------

Weighted average number of common shares used in diluted calculation

31,086

34,486

=======

Income from continuing operations

14,347

16,754

Income (loss) from discontinued operations, net of income tax

(508)

466

-----------

Net earnings

13,839

17,220

=======

Basic earnings (loss) per common share:

Continuing operations

0.48

0.50

Discontinued operations

(0.02)

0.01

-----------

Net earnings

0.46

0.51

=======

Diluted earnings (loss) per common share*:

Continuing operations

0.46

0.49

Discontinued operations

(0.02)

0.01

-----------

Net earnings

0.45

0.50

=======

*Per share amounts do not necessarily sum due to rounding.

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted average number of common and potential common shares outstanding during the applicable period and includes the dilutive effect of stock options or non-vested stock. The Company uses the treasury stock method to calculate the effect of outstanding shares, which computes total proceeds to the Company as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

For the quarters ended April 1, 2007 and April 2, 2006, antidilutive share-based compensation awards for 1,350,000 and 1,027,000 shares, respectively, were excluded from the diluted earnings per share calculation.

6.	Comprehensive Income

For the quarters ended April 1, 2007 and April 2, 2006, there was no difference between the Company’s net earnings and comprehensive income.

Item 2.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS 109, “Accounting for Income Taxes.” FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no adjustment in the liability for unrecognized income tax benefits.

Due to the adoption of FIN 48, which required companies to reclassify uncertain tax positions in Income and Other Taxes Payable, other long-term liabilities increased by approximately $4.3 million and the non-current deferred tax asset increased by approximately $1.3 million.

Results of Operations

First quarter 2007 compared to first quarter 2006

Revenue

The Company currently derives all of its revenue from restaurant sales and franchise revenues. Total revenue increased 2.2% to approximately $267.6 million for the first quarter of 2007 compared to approximately $261.9 million for the first quarter of 2006.

The Company’s fiscal year is a 52- or 53-week year, ending on the last Sunday in each calendar year. Each of the four quarters is typically made up of 13 weeks; however, since fiscal 2006 was a 53-week period, the first quarter of 2006 contained 14 weeks. This additional week had an unfavorable effect on the Company’s revenue and operating results for the first quarter of 2007 as compared to the first quarter of 2006.

Same store sales comparisons for each of the Company’s restaurant concepts for the first quarter of 2007 consist of sales at restaurants opened prior to June 27, 2005.

LongHorn Steakhouse:

Sales in the LongHorn Steakhouse restaurants increased 0.8% to approximately $209.7 million for the first quarter of 2007 compared to approximately $208.0 million for the first quarter of 2006. The increase reflects a 3.8% increase in restaurant operating weeks in the first quarter of 2007 as compared to the same period of the prior year, resulting from an increase in the restaurant base from 246 LongHorn Steakhouse restaurants at the end of the first quarter of 2006 to 274 at the end of the first quarter of 2007. The restaurant operating week increase was negatively impacted by the effect of comparing the 2007 13-week quarter to a 14-week quarter in 2006. Excluding this additional week in 2006, total restaurant operating weeks would have increased by 11.7% in the first quarter of 2007 as compared to the same period in 2006. Average weekly sales for all LongHorn Steakhouse restaurants in the first quarter of 2007 were $59,815, a 2.8% decrease as compared to $61,558 for the first quarter of 2006. Same store sales for the comparable LongHorn Steakhouse restaurants decreased 1.0% in the first quarter of 2007, as compared to the same period in 2006, due to a decrease in guest counts partially offset by an increase in check average.

The Capital Grille:

Sales in The Capital Grille restaurants increased 8.6% to approximately $56.1 million for the first quarter of 2007, compared to approximately $51.6 million for the same period in 2006. The increase reflects a 5.0% increase in restaurant operating weeks in the first quarter of 2007 as compared to the same period of the prior year, resulting from an increase in the restaurant base from 24 The Capital Grille restaurants at the end of the first quarter of 2006 to 27 at the end of the first quarter of 2007. The restaurant operating week increase was negatively impacted by the effect of comparing the 2007 13-week quarter to a 14-week quarter in 2006. Excluding this additional week in 2006, total restaurant operating weeks would have increased by 13.0% in the first quarter of 2007 as compared to the same period in 2006. Average weekly sales for all The Capital Grille restaurants in the first quarter of 2007 were $165,363, a 3.4% increase, as compared to $159,882 for the comparable period in 2006. Same store sales for the comparable The Capital Grille restaurants increased 5.0% in the first quarter of 2007 as compared to the same period in 2006, due primarily to an increase in average check as guest counts were flat to slightly positive.

Franchise Revenue:

Franchise revenues decreased to $127,000 for the first quarter of 2007 from $133,000 for the same period in 2006.

Costs and Expenses

Cost of restaurant sales as a percentage of restaurant sales increased slightly to 36.6% for the first quarter of 2007 from 36.5% for the same period of 2006, primarily due to higher contracted beef costs partially offset by menu price increases. The Company expects its cost of restaurant sales as a percentage of restaurant sales in the second quarter of 2007 to be approximately 0.4% to 0.5% higher than the comparable period of 2006 and 0.3% to 0.4% higher for the third and fourth quarters of 2007 than the comparable quarters of 2006. Many of the food products, other than protein products, purchased by the Company are affected by commodity pricing and are, therefore, subject to price volatility caused by weather, production problems, delivery difficulties and other factors, which are outside the control of the Company.

Restaurant operating expenses in the first quarter of 2007 were approximately 1.1% higher, as a percentage of restaurant sales, than in the first quarter of 2006 due to the de-leveraging effect of negative comparable sales in the LongHorn concept, as well as higher self insurance costs and increased labor costs for tipped employees.

Depreciation and amortization - restaurants was approximately 3.8% of restaurant sales in the first quarter of 2007, as compared to 3.4% of restaurant sales in the first quarter of 2006. This increase as a percentage of restaurant sales is the result of the de-leveraging effect of lower comparable sales on this relatively fixed expense and, to a lesser extent, the higher costs of construction on newer restaurants.

Pre-opening expense for the first quarter of 2007 increased to $2.8 million, from $2.6 million, in the same period of the prior year. The amounts charged to pre-opening expense in any period are dependent upon the number of restaurants to be opened and the restaurant concept. The Company opened 10 LongHorn Steakhouse restaurants and one The Capital Grille restaurant in both the first quarter of 2007 and the first quarter of 2006.

General and administrative expenses as a percentage of total revenues decreased to 6.2% for the first quarter of 2007, as compared to 6.5% for the corresponding period of the prior year. This decrease is primarily associated with lower manager trainee expense from improved management retention, lower management bonus accruals in the first quarter of 2007, as compared to the first quarter of 2006, and aggressive management of other general and administrative costs.

As a result of the relationships between revenues and expenses discussed above, the Company’s operating income decreased to approximately $23.0 million for the first quarter of 2007 from approximately $25.8 million for the corresponding period of the prior year.

Interest expense, net increased to $1.5 million in the first quarter of 2007 from $0.7 million in the same period of the prior year. The increase in interest expense, net is primarily due to the issuance of $125,000,000 of 2.5% convertible debt in November of 2006 and, to a lesser extent, the interest expense associated with new capital lease obligations and a decrease in the dollar amount of interest income. This decrease in interest income earned on investments was due to a reduction in the average amount invested in 2007, as compared to the prior year.

Minority interest expense decreased to $91,000 for the first quarter of 2007 from $95,000 for the same period of the prior year.

Income tax expense for the first quarter of 2007 was unchanged at 33.0% of earnings before income taxes, based on the effective tax rate expected to be applicable for the full 2007 fiscal year compared to the first quarter of 2006. The Company’s effective income tax rate differs from applying the statutory federal income tax rate of 35% to pre-tax income, primarily due to employee FICA tip tax credits and work opportunity tax credits partially offset by state income taxes.

The net loss from discontinued operations of $0.5 million in the first quarter of 2007 reflects impairment and termination charges of approximately $2.3 million ($1.5 million, net of tax) related to management’s estimate of additional impairment to be realized upon the anticipated divestiture of the Bugaboo Creek Steak House business.

Net income of $13.8 million for the first quarter of 2007, as compared to net income of $17.2 million for the first quarter of 2006, reflects the net effect of the items discussed above.

Outlook for Future Operating Results

The Company expects 2007 diluted earnings per common share in a range of $1.59 to $1.64. This level of earnings per common share assumes same store sales increases for the second quarter of 2007 in a range of 0% to 2% for LongHorn Steakhouse and 3% to 4% for The Capital Grille; same-store sales increases for the second half of 2007 in a range of 0% to 2% for LongHorn and 3% to 4% for Capital Grille; and the projected restaurant openings discussed below.

Liquidity and Capital Resources:

The Company requires capital primarily for the development of new restaurants, the remodeling of existing restaurants and selected acquisitions. During the first quarter of 2007, the Company’s principal sources of working capital were cash provided by operating activities ($14.8 million) and proceeds from the exercise of employee stock options ($2.7 million). For the first quarter of 2007, the principal uses of funds consisted of costs associated with expansion, principally leasehold improvements, equipment, land, and buildings associated with the construction of new restaurants ($26.6 million) and the purchase of common stock for treasury ($5.9 million).

The Company intends to open 32-34 LongHorn Steakhouse restaurants and four The Capital Grille restaurants in fiscal year 2007. The Company estimates that its capital expenditures for fiscal year 2007 will be approximately $120 to $130 million. During the first quarter of 2007, the Company opened 10 LongHorn Steakhouse restaurants and one The Capital Grille restaurant. Management believes that available cash, cash provided by operations, and available borrowings under the Company’s $100.0 million revolving credit facility will provide sufficient funds to finance the Company’s expansion plans through the year 2008.

Since substantially all sales in the Company’s restaurants are for cash, and accounts payable are generally due in seven to 30 days, the Company operates with little or negative working capital.

Critical Accounting Policies and Significant Estimates

There have been no material changes to the Company’s critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in Form 10-K for the fiscal year ended December 31, 2006, except as follows:

FIN 48 – The Company accounts for uncertain tax positions in accordance with FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”). The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. As such, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of income.

For additional information regarding the adoption of FIN 48, see Note 4, Income Taxes to this Quarterly Report on Form 10-Q. For further discussion of the Company’s critical accounting estimates related to income taxes, see the 2006 Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

As of April 1, 2007, the Company had no off-balance sheet arrangements.

Contractual Obligations

The Company’s material contractual obligations are summarized and included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. During the quarter ended April 1, 2007, there have been no material changes outside the ordinary course of business in the contractual obligations specified in the 2006 10-K.

Forward-Looking Statements

Statements contained in this report concerning liquidity and capital resources and future operating results contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as assumptions on which such statements are based. All forward-looking statements in this Form 10-Q are based upon information available to the Company on the date of this report. Forward-looking statements involve a number of risks and uncertainties, and in addition to the factors discussed elsewhere in this Form 10-Q, other factors that could cause actual results, performance or developments to differ materially from those expressed or implied by those forward-looking statements include the following: the ability of the Company to close the sale of its Bugaboo Creek Steak House restaurants; failure of facts to conform to necessary management estimates and assumptions regarding financial and operating matters; the Company’s ability to identify and secure suitable locations for new restaurants on acceptable terms, open the anticipated number of new restaurants on time and within budget, achieve anticipated rates of same store sales, hire and train additional restaurant personnel and integrate new restaurants into its operations; the continued implementation of the Company’s business discipline over a large and growing restaurant base; increases in the cost of construction of new restaurants; unexpected increases in cost of sales or employee, pre-opening or other expenses; the economic conditions in the new markets into which the Company expands and possible uncertainties in the customer base in these areas; fluctuations in quarterly operating results; seasonality; unusual weather patterns or events; changes in customer dining patterns; the impact of any negative publicity or public attitudes related to the consumption of beef or other products sold by the Company; unforeseen increases in commodity pricing; disruption of established sources of product supply or distribution; competitive pressures from other national and regional restaurant chains; legislation affecting the restaurant industry, including (without limitation) minimum wage and mandatory healthcare legislation; business conditions, such as inflation or a recession, or other negative effect on dining patterns, or some other negative effect on the economy, in general, including (without limitation) war, insurrection and/or terrorist attacks on United States soil; growth in the restaurant industry and the general economy; changes in monetary and fiscal policies, laws and regulations; and the risks identified from time to time in the Company’s SEC reports, including the Company’s Annual Report on Form 10-K for 2006, quarterly reports on Form 10-Q and its current reports on Form 8-K, registration statements, press releases and other public announcements. Any forward looking statement speaks only as of the date on which it was made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company may be exposed to market risk from changes in interest rates on debt.

As of ~~June~~April 261, ~~2005~~2007, the Company had no borrowings outstanding under its $100.0 million revolving credit facility. Amounts outstanding under such credit facility bear interest at LIBOR plus a margin of 10.~~25%~~50 to 1.7525% (the “applicable margin” depending on the Company’s leverage ratio), or the administrative agent’s prime rate of interest at the Company’s option. Accordingly, the Company may be exposed to the impact of interest rate movements. To achieve the Company’s objective of managing its exposure to interest rate changes, the Company may from time to time use interest rate swaps. The Company currently does not have any interest rate swap agreements.

On July 22, 2005, the Company entered into an amendment to its revolving credit facility, to extend the facility’s maturity through July 22, 2010, and improve its costs and terms. The total amount the Company may borrow under the new facility remains at $100.0 million and amounts outstanding under the amended credit facility would bear interest at LIBOR plus a margin of 0.50% to 1.25% depending on the Company’s leverage ratio or the Administrative Agent’s prime rate of interest at the Company’s option.

Investment Portfolio

The Company invests portions of its excess cash, if any, in highly liquid investments. At ~~June~~April 261, ~~2005~~2007, the Company had $217.27 million in high-grade overnight repurchase agreements, and $136.30 million in short-term investments in the form of ~~Federal~~federal, state, and municipal bonds ~~and commercial paper~~. As of ~~June~~April 261, ~~2005~~2007, the Company has classified all short-term investments as trading securities. The market risk on such investments is minimal due to their short-term nature.

Item 4. Controls and Procedures

In accordance with ~~the~~ Securities Exchange Act Rule 13a-15, the Company’s management, under the supervision of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the design and operation of the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in SEC rules and instructions for Form 10-Q. During the Company’s last fiscal quarter, there were no changes in internal controls over financial reporting or in other factors that ~~has~~have materially affected, or isare reasonably likely to materially affect internal controls over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

~~None~~There have been no material changes in the status of the Company’s legal proceedings from those described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

Item 2 1A. ~~Unregistered~~Risk ~~Sales of Equity Securities and Use of Proceeds~~Factors

~~Issuer~~There ~~Purchases~~have ofbeen ~~Equity~~no ~~Securities~~material changes in the risk factors disclosed by the Company under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

	Purchases of Equity Securities
	(a)	(c)	(b)	(d)
	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
Period
March 28, 2005 through April 24, 2005	--	--	--	$29,000,000
April 25, 2005 through May 22, 2005	690,000	$28.88	$28.88	$9,070,000
May 23, 2005 through June 26, 2005	--	--	--	$9,070,000

Item 2. Unregistered Sales of Securities and Use of Proceeds

~~(1) On April 20, 2005, the Company announced that its Board of Directors authorized the repurchase of up to $29~~None.0 million of the Company’s outstanding common stock from time-to-time through May 1, 2007. The Company’s prior share-repurchase authorization expired on May 1, 2005. On July 22, 2005, the Company announced that its Board of Directors had authorized the repurchase of up to an additional $30.0 million of the Company’s outstanding common stock from time-to-time through May 1, 2007. This new share-repurchase authorization supplements the $29.0 million authorization made on April 20, 2005, which also expires on May 1, 2007.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Securities Holders

The 2005 Annual Meeting of Shareholders of the Company was held on May 9, 2005 at which the following proposals were voted upon by the shareholders: (i) election of three Class I directors to serve until the 2008 Annual Meeting of Shareholders; (ii) approval of the RARE Hospitality International, IncNone. Executive Officer Performance Incentive Plan; and (iii) ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm to serve for the fiscal year ending December 25, 2005. Holders of 34,373,156 shares of the Company’s common stock were entitled to vote at that meeting. The shareholders elected three Class I directors with a term expiring at the 2008 Annual Meeting. As to each of the following named individuals, the holders of the indicated number of shares of the Company’s common stock voted for his election, and the holders of the indicated number of shares withheld authority to vote for election. There were no broker non-votes.

	Shares Voting For:	Shares Withholding Authority:
Class I
Roger L. Boeve	31,850,955	1,313,613
Don L. Chapman	30,527,543	2,637,025
Lewis H. Jordan	31,855,450	1,309,118

Carolyn H. Byrd, Philip J. Hickey, Jr., Dick R. Holbrook, Eugene I. Lee, Ronald W. San Martin and James D. Dixon continued their terms as directors. The RARE Hospitality International, Inc. Executive Officer Performance Incentive Plan was approved as follows: 30,269,895 shares voted in favor of approval; 2,888,881 shares voted against approval; 5,791 shares abstained; and there was 1 broker non-vote. The selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 25, 2005 was ratified as follows: 30,908,921 shares voted in favor of ratification; 2,245,309 shares voted against the ratification; 10,338 shares abstained; and there were no broker non-votes.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits Filed.

3(1) --	Bylaws of the Registrant, as amended.
31(1) --	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.
31(2) --	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32(1) --	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1).
32(2) --	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1).
	(1) These exhibits are deemed to accompany this report and are not “filed” as part of the report.

31.1

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act

31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1).

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1).

(1)

These exhibits are deemed to accompany this report and are not “filed” as part of the report.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:~~__________~~ ~~_____________________________________~~May ~~W. Douglas Benn Executive Vice President~~11, ~~Finance~~2007 ~~and~~/s/ ~~Chief~~W. ~~Financial~~Douglas ~~Officer (Principal Financial Officer)~~Benn

W. Douglas Benn

Executive Vice President, Finance

and Chief Financial Officer

(Principal Financial Officer)

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Philip J. Hickey, Jr., certify that:

I have reviewed this quarterly report on Form 10-Q of RARE Hospitality International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

~~Date:__________~~(a) ~~_____________________________________~~All ~~Philip~~significant J.deficiencies ~~Hickey,~~and ~~Jr.~~material ~~Chairman~~weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the ~~Board~~registrant’s ability to record, process, summarize and ~~Chief~~report ~~Executive~~financial ~~Officer~~information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 11, 2007

/s/ Philip J. Hickey, Jr.

Philip J. Hickey, Jr.

Chairman of the Board and

Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, W. Douglas Benn, certify that:

I have reviewed this quarterly report on Form 10-Q of RARE Hospitality International, Inc.;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

~~Date:__________~~(a) ~~_____________________________________~~All W.significant ~~Douglas~~deficiencies ~~Benn~~and ~~Executive~~material ~~Vice~~weaknesses ~~President~~in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, ~~Finance~~process, summarize and ~~Chief~~report ~~Financial~~financial ~~Officer~~information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2007

/s/ W. Douglas Benn

W. Douglas Benn

Executive Vice President, Finance and

Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the quarterly report of RARE Hospitality International, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended ~~June~~April 261, ~~2005~~2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip J. Hickey, Jr., Chief Executive Officer of the Registrant, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) The Report, to which this certification is attached as Exhibit 32.1, fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

~~Date~~Dated:~~__________~~ ~~_____________________________________~~May 11, 2007 /s/ Philip J. Hickey, Jr. ~~Chief Executive Officer~~

Philip J. Hickey, Jr.

Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the quarterly report of RARE Hospitality International, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended ~~June~~April 261, ~~2005~~2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, W. Douglas Benn, Executive Vice President, Finance and Chief Financial Officer of the Registrant, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) The Report, to which this certification is attached as Exhibit 32.1, fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:~~__________~~ ~~_____________________________________~~May 11, 2007 /s/ W. Douglas Benn ~~Chief Financial Officer~~

W. Douglas Benn

Executive Vice President, Finance and

Chief Financial Officer

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