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# SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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# FORM 10-Q

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# Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

# For the Quarterly Period Ended June 29, 2003

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# Commission file number 0-19924

# RARE Hospitality International, Inc.(Exact name of registrant as specified in its charter)

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# Internal Revenue Service - Employer Identification No. 58-1498312

# 8215 Roswell Rd; Bldg. 600; Atlanta, GA 30350
(770) 399-9595(Registrant's telephone number, including area code)

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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      No

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).

# XX   Yes      No

As of August 8, 2003, there
were 22,322,549 shares of common stock of the Registrant outstanding.

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# RARE Hospitality International, Inc. and Subsidiaries

# Index

`Part I - Financial Information                                                                 Page
                                                                                               ----
     Item 1. Consolidated Financial Statements:

                    Consolidated Balance Sheets as of
                    June 29, 2003 and December 29, 2002                                          1

                    Consolidated Statements of Earnings
                    for the quarters and six months ended
                    June 29, 2003 and June 30, 2002                                              2

                    Consolidated Statement of Shareholders' Equity
                    for the six months ended June 29, 2003                                       3

                    Condensed Consolidated Statements of Cash Flows
                    for the six months ended June 29, 2003
                    and June 30, 2002                                                            4

                    Notes to the Consolidated Financial Statements                              5-9

     Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations                                  9-12

     Item 3. Quantitative and Qualitative Disclosures About
                 Market Risk                                                                   12-13

     Item 4. Controls and Procedures                                                            13


Part II - Other Information

     Item 1. Legal Proceedings                                                                  13

     Item 2. Changes in Securities and Use of Proceeds                                          13

     Item 3. Defaults Upon Senior Securities                                                    13

     Item 4. Submission of Matters to a Vote of Securities
                 Holders                                                                       13-14

     Item 5. Other Information                                                                  14

     Item 6. Exhibits and Reports on Form 8-K                                                   14

     Signatures                                                                                 15`

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# Part I. Financial Information
Item 1. Financial Statements

# RARE Hospitality International, Inc. and Subsidiaries
                                          Consolidated Balance Sheets
                                     (In thousands, except share amounts)
                                                  (Unaudited)

`June 29,               December 29,
Assets                                                         2003                     2002
                                                               ----                     ----
Current assets:
    Cash and cash equivalents                                $  9,973                $  13,732
    Short-term investments                                     22,963                   17,735
    Accounts receivable                                         7,202                    6,576
    Inventories                                                15,203                   14,309
    Prepaid expenses                                            3,533                    3,477
    Refundable income taxes                                     4,903                    4,124
    Deferred income taxes                                       4,281                    4,484
                                                             --------                 --------
        Total current assets                                   68,058                   64,437

Property & equipment, less accumulated
  depreciation                                                321,854                  299,773
Goodwill, net                                                  19,187                   19,187
Other                                                           4,145                    3,510
                                                             --------                 --------
        Total assets                                         $413,244                 $386,907
                                                             ========                 ========
Liabilities and Shareholders' Equity
Current liabilities:
    Accounts payable                                         $ 15,489                 $ 17,727
    Accrued expenses                                           43,004                   44,015
    Current installments of obligations under
        capital leases                                            111                       78
                                                             --------                 --------
        Total current liabilities                              58,604                   61,820

Deferred tax liability                                          4,363                    1,138
Obligations under capital leases, net
  of current installments                                      22,336                   22,406
                                                             --------                 --------
        Total liabilities                                      85,303                   85,364

Minority interest                                               1,419                    1,411

Shareholders' equity:
    Preferred stock                                                 -                        -
    Common stock                                              197,826                  191,174
    Unearned compensation-restricted stock                     (1,302)                  (1,124)
    Retained earnings                                         134,987                  112,446
    Treasury stock at cost; 195,000 and 95,000
     shares in 2003 and 2002, respectively                    (4,989)                  (2,364)
                                                             --------                 --------
        Total shareholders' equity                            326,522                  300,132
        Total liabilities and shareholders'                  --------                 --------
         equity                                              $413,244                 $386,907
                                                             ========                 ========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                      Consolidated Statements of Earnings
                               (In thousands, except per share data)
                                         (Unaudited)

`Quarter Ended                Six months Ended
                                                          -------------                -----------------
Revenues:                                            June 29,       June 30,        June 29,       June 30,
                                                       2003           2002            2003           2002
   Restaurant sales:
     LongHorn Steakhouse                              $121,661      $104,559         $240,320       $208,944
     The Capital Grille                                 24,653        21,721           48,107         43,575
     Bugaboo Creek Steak House                          20,249        17,080           40,484         34,326
     Specialty concepts                                  1,959         1,938            3,669          3,666
        Total restaurant sales                         168,522       145,298          332,580        290,511
  Franchise revenues                                        98            88              189            173
        Total revenues                                 168,620       145,386          332,769        290,684
Costs and expenses:
   Cost of restaurant sales                             60,518        52,781          119,158        105,593
   Operating expenses - restaurants                     73,591        63,650          144,217        125,930
   Depreciation and amortization
     - restaurants                                       6,460         5,841           12,717         11,601
   Pre-opening expense                                   1,668           825            2,725          1,739
   General and administrative expenses                  10,024         8,312           19,895         16,685
        Total costs and expenses                       152,261       131,409          298,712        261,548
     Operating income                                   16,359        13,977           34,057         29,136
Interest expense, net                                      213           421              459            870
Minority interest                                           82           120              200            300
   Earnings before income taxes                         16,064        13,436           33,398         27,966
Income tax expense                                       5,224         4,295           10,857          9,090
        Net earnings                                   $10,840        $9,141          $22,541        $18,876

Basic earnings per common share                          $0.49         $0.42            $1.03          $0.87
Diluted earnings per common share                        $0.47         $0.40            $0.97          $0.83

Weighted average common shares outstanding:
   Basic                                                22,061        21,732           21,987         21,612
   Diluted                                              23,175        23,000           23,133         22,836`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                Consolidated Statement of Shareholders' Equity
                                      For the quarter ended June 29, 2003
                                           (In thousands, unaudited)

`Common Stock                                              Total
                                   ----------------   Restricted    Retained     Treasury  Shareholders'
                                Shares       Amount      Stock      Earnings       Stock      Equity
                                ------       ------      -----      --------       -----     --------
Balance, December 29, 2002      22,066      $191,174   $(1,124)    $112,446     $  (2,364)   $300,132

Comprehensive income:

Net earnings                        --            --        --       22,541            --      22,541

                                                                                              -------
Total comprehensive income                                                                     22,541
                                                                                              -------
Amortization of restricted
   stock                            --            --        312          --            --         312
Purchase of common stock
   for treasury                     --            --         --          --        (2,625)     (2,625)
Issuance of shares pursuant
  to restricted stock award         18           490       (490)         --            --          --
Issuance of shares pursuant
  to exercise of stock
  options                          362         3,816         --          --            --       3,816
Tax benefit of stock options
  exercised                         --         2,346         --          --            --       2,346
                                ------      --------    -------    --------     ---------    --------
Balance, June 29, 2003          22,446      $197,826    $(1,302)   $134,987     $  (4,989)   $326,522
                                ======      ========    =======    ========     =========    ========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                Condensed Consolidated Statements of Cash Flows
                                           (In thousands, unaudited)

`Six Months Ended
                                                                                 -----------------
                                                                        June 29,                June 30,
                                                                          2003                    2002
                                                                          ----                    ----
Cash Flows from operating activities:
  Net earnings                                                         $  22,541                 $ 18,876
  Adjustments to reconcile net earnings to
    net cash provided by operating activities:
      Depreciation and amortization                                       13,494                   12,510
      Changes in working capital accounts                                 (5,580)                  (3,381)
      Minority interest                                                      200                      300
      Deferred tax (benefit) expense                                       3,428                   (2,063)

      Issuance of common stock to employee
        retirement plans                                                      --                      219
                                                                       ---------                 --------
  Net cash provided by operating activities                               34,083                   26,461
                                                                       ---------                 --------
Cash flows from investing activities:
  Purchase of property and equipment                                     (35,241)                 (19,959)
  Purchase of short-term investments                                      (5,228)                      --
                                                                       ---------                 --------
  Net cash used by investing activities                                  (40,469)                 (19,959)
                                                                       ---------                 --------
Cash flows from financing activities:
  Distributions to minority partners                                        (192)                    (282)
  Increase (decrease) in bank overdraft included in
    accounts payable                                                       1,665                   (2,881)
  Principal payments on capital leases                                       (37)                     (58)
  Purchase of common stock for treasury                                   (2,625)                      --
  Proceeds from exercise of stock options                                  3,816                    3,945
                                                                       ---------                 --------
  Net cash provided by financing activities                                2,627                      724
                                                                       ---------                 --------
Net (decrease) increase in cash and cash equivalents                      (3,759)                   7,226
Cash and cash equivalents, beginning of period                            13,732                   25,979
                                                                       ---------                 --------
Cash and cash equivalents, end of period                                $  9,973                 $ 33,205
                                                                       =========                 ========
Supplemental disclosure of cash flow information
  Cash paid for income taxes                                            $  6,285                 $  4,938
                                                                       =========                 ========
  Cash paid for interest                                                $    108                 $    600
                                                                       =========                 ========`

See accompanying notes to consolidated financial statements

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# 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 June 29, 2003 and December 29, 2002 and for the
quarters and six months ended June 29, 2003 and June 30, 2002 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 generally
accepted accounting principles have been 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 29, 2002.

The Company operates on a
52- or 53-week fiscal year ending on the last Sunday in each calendar year. Each
of the four fiscal quarters is typically made up of 13 weeks. The fiscal
quarters and year-to-date periods ended June 29, 2003 and June 30, 2002 each
contained 13 weeks and 26 weeks, respectively.

On July 23, 2003, the
Companys Board of Directors approved a 3-for-2 stock split, which will be
effected in the form of a 50% stock dividend to shareholders of record as of the
close of business on August 12, 2003. The new stock certificates will be
distributed on September 2, 2003. Although the financial statements and related
footnotes included herein have not been adjusted to reflect the stock split,
beginning in the third quarter of fiscal year 2003, operating results will be
retroactively restated to give effect for the stock split for all periods
presented.

The table below reflects the Companys earnings
per share on a comparative pre-split and post-split basis:

`Quarter Ended                 Six Months Ended
                                            June 29,        June 30,         June 29,        June 30,
                                              2003            2002             2003            2002
Net earnings                                  ----            ----             ----            ----
  (in thousands)                              $10,840          $9,141         $22,541         $18,876

Earnings per share:

Basic - pre-split                             $  0.49         $  0.42         $  1.03         $  0.87
Basic - post-split                            $  0.33         $  0.28         $  0.68         $  0.58

Diluted - pre-split                           $  0.47         $  0.40         $  0.97         $  0.83
Diluted - post-split                          $  0.31         $  0.26         $  0.65         $  0.55`

2.      New Accounting Pronouncements

In April 2002, the FASB
issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections (SFAS
145). SFAS Nos. 4 and 64 required gains and losses from extinguishment of
debt to be classified as extraordinary items. SFAS 145 rescinds this requirement
and stipulates that gains or losses on extinguishment of debt would have to meet
the criteria of APB Opinion No. 30 to be classified as an extraordinary item. In
addition, any extraordinary gains or losses on extinguishment of debt in prior
periods presented would require reclassification. The Company adopted SFAS 145
as of the beginning of fiscal 2003. The initial adoption of SFAS 145 did not
have an impact on the Companys consolidated results of operations or
financial position.

In June 2002, the FASB
issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities (SFAS 146). This Statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
only when the liability is incurred and measured at fair value. SFAS 146 is
effective for exit or disposal activities that are initiated after December 31,
2002. The initial adoption of this statement did not have an impact on the
Companys consolidated results of operations or financial position.

In November 2002, the FASB
issued Interpretation No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to
Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission
of FASB Interpretation No. 34. This Interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. Interpretation No. 45
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002. The
disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. The Company adopted the
provisions of Interpretation No. 45 as of the beginning of fiscal 2003. The
Company does not have any guarantees that would require additional disclosure as
required by Interpretation No. 45.

In December 2002, the FASB
issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition
and Disclosure (SFAS 148). SFAS 148 amends SFAS 123,
Accounting for Stock-Based Compensation, and provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. SFAS 148 also amends the
disclosure requirements of SFAS 123 to require more prominent and frequent
disclosures in financial statements about the effects of stock-based
compensation. The Company adopted the disclosure provisions of SFAS 148 as of
the beginning of fiscal 2003.

In January 2003, the FASB
issued Interpretation No. 46, Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51. This Interpretation addresses the
consolidation by business enterprises of variable interest entities as defined
in the Interpretation. The Interpretation applies immediately to variable
interests in variable interest entities created after January 31, 2003, and to
variable interests in variable interest entities obtained after January 31,
2003. The Interpretation requires certain disclosures in financial statements
issued after January 31, 2003 if it is reasonably possible that the Company will
consolidate or disclose information about variable interest entities when the
Interpretation becomes effective. The Company does not have any interests that
would change the current consolidated reporting entity or require additional
disclosures required by Interpretation No. 46.

3.       Shareholders' Equity and Stock Based Compensation

During the first quarter of
2003, the Company purchased 100,000 shares of its common stock for a total
purchase price of approximately $2,625,000 (average price of $26.25 per share).

The Company has stock
option plans that provide for the granting of incentive and non-qualified stock
options to employees, officers, directors, consultants, and advisors. 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 option
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:

`Quarter Ended             Six Months Ended
                                                         June 29,      June 30,       June 29,     June 30,
                                                           2003          2002           2003         2002
                                                           ----          ----           ----         ----
Net earnings, as reported                                 $10,840         $9,141       $22,541      $18,876
Stock-based compensation expense
  determined under fair value
  method for all awards, net of tax                           958            768         1,793        1,497
                                                         --------       --------      --------     --------
Proforma net earnings                                      $9,882         $8,373       $20,748      $17,379
                                                         ========       ========      ========     ========
Earnings per share:

Basic - as reported                                    $   0.49         $   0.42      $   1.03     $   0.87
                                                         ========       ========      ========     ========
Basic - proforma                                          $  0.45        $  0.39        $ 0.94       $ 0.80
                                                         ========       ========      ========     ========
Diluted - as reported                                    $   0.47       $   0.40      $   0.97     $   0.83
                                                         ========       ========      ========     ========
Diluted - proforma                                       $   0.43       $   0.36      $   0.90     $   0.76
                                                         ========       ========      ========     ========`

4.  Long-Term Debt

At June 29, 2003, no
borrowings were outstanding under the Companys $100.0 million revolving
credit agreement, and the Company was in compliance with all of its compliance
provisions.

5.  Income Taxes

Income tax expense for the
second quarter and first six months of 2003 has been provided for based on an
estimated 32.5% effective tax rate expected to be applicable for the full 2003
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) and work opportunity
tax credits partially offset by state income taxes.

6.    Earnings Per Share

Basic earnings 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 outstanding, 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 thousands, except per share amounts):

`Quarter Ended             Six months Ended
                                                         June 29,      June 30,       June 29,     June 30,
                                                           2003          2002           2003         2002
                                                           ----          ----           ----         ----
Basic weighted average shares outstanding                  22,061         21,732        21,987       21,612
Dilutive effect of stock options                            1,000          1,178         1,034        1,135
Dilutive effect of restricted stock                           114             90           112           89
                                                         --------       --------      --------     --------
Diluted weighted average shares outstanding                23,175         23,000        23,133       22,836
                                                         ========       ========      ========     ========
Net earnings                                             $ 10,840       $  9,141      $ 22,541     $ 18,876
                                                         ========       ========      ========     ========
Basic earnings per common share                          $   0.49       $   0.42      $   1.03     $   0.87
                                                         ========       ========      ========     ========
Diluted earnings per common share                        $   0.47       $   0.40      $   0.97     $   0.83
                                                         ========       ========      ========     ========`

7.  Derivative Instruments and Comprehensive Income

In 2002 and prior years,
the Company used an interest rate swap agreement to effectively fix the interest
rate on variable rate borrowings under the Companys $100.0 million
revolving credit facility. This interest rate swap agreement was classified as a
hedge of a cash flow exposure and, accordingly, the initial fair value and
subsequent changes therein were reported as a component of other comprehensive
loss and subsequently reclassified into earnings when the forecasted cash flows
affect earnings. Concurrent with the November 2002 amendment and extension of
the Companys $100.0 million revolving credit facility, all amounts
outstanding under the credit facility were repaid and the interest rate swap
agreement was terminated.

For the quarter and six
months ended June 29, 2003, there was no difference between the Companys
net earnings and comprehensive income. A reconciliation of net earnings and
total comprehensive income for the fiscal 2002 periods is as follows (in
thousands):

`Quarter       Six Months
                                                                        Ended           Ended
                                                                       June 30,       June 30,
                                                                         2002           2002
                                                                         ----           ----
Net earnings                                                          $  9,141        $ 18,876
Change in unrealized loss from interest
  Rate swap                                                               (225)           (145)
                                                                      --------        --------
Total comprehensive income                                            $  8,916        $ 18,731
                                                                      ========        ========`

8.      Subsequent Events

On July 23, 2003, the
Companys Board of Directors approved a 3-for-2 stock split, which will be
effected in the form of a 50% stock dividend to shareholders of record as of the
close of business on August 12, 2003. The new stock certificates will be
distributed on September 2, 2003. The financial statements and related footnotes
included herein have been adjusted retroactively and restated to give effect for
the stock split for all periods presented.

Additionally, on July 23,
2003, the Companys Board of Directors authorized the Company to purchase
up to an additional $25.0 million of its common stock from time-to-time through
May 2005.

# Item 2.     Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

Results of Operations

Revenues

The Company currently
derives all of its revenues from restaurant sales and franchise revenues. Total
revenues increased 16.0% and 14.5% for the quarter and six months ended June 29,
2003, respectively, as compared to the same periods of the prior fiscal year.

Same store sales
comparisons for each of the Companys restaurant concepts for the quarter
ended June 29, 2003, consist of sales at restaurants opened prior to October 1,
2001.

# LongHorn Steakhouse:

Sales in the LongHorn
Steakhouse restaurants for the quarter and six months ended June 29, 2003
increased 16.4% and 15.0%, respectively, as compared to the same periods of the
prior year. The increases reflect a 8.9% and 9.1% increase in restaurant
operating weeks in the quarter and six months ended June 29, 2003, respectively,
as compared to the same periods of the prior fiscal year, resulting from an
increase in the restaurant base from 162 LongHorn Steakhouse restaurants at the
end of the second quarter of 2002 to 177 at the end of the second quarter of
2003 and an increase in average weekly sales. Average weekly sales for all
LongHorn Steakhouse restaurants in the second quarter of 2003 were approximately
$53,500, a 6.8% increase over the comparable period in 2002. Same store sales
for the comparable LongHorn Steakhouse restaurants increased 4.9% in the second
quarter of 2003 as compared to the same period in 2002, due to approximately
equal increases in customer counts and average check.

# The Capital Grille:

Sales in The Capital Grille
restaurants for the quarter and six months ended June 29, 2003, increased 13.5%
and 10.4%, respectively, as compared to the same periods of the prior fiscal
year. The increase reflects i) a 4.1% and 2.1% increase in restaurant operating
weeks for the quarter and six months ended June 29, 2003, as compared to the
same periods of the prior fiscal year, resulting from the opening of one The
Capital Grille restaurant during the second quarter of 2003 and ii) an increase
in average weekly sales. Average weekly sales for all The Capital Grille
restaurants in the second quarter of 2003 were approximately $121,400, a 9.0%
increase from the comparable period in 2002. Same store sales for the comparable
The Capital Grille restaurants increased 10.2% in the second quarter of 2003,
primarily due to an increase in customer counts.

# Bugaboo Creek Steak House:

Sales in the Bugaboo Creek
Steak House restaurants increased for the quarter and six months ended June 29,
2003, by 18.6% and 17.9%, respectively, as compared to the same periods of the
prior fiscal year. The increase reflects i) a 14.6% and 15.2% increase in
restaurant weeks in the quarter and six months ended June 29, 2003,
respectively, as compared to the same periods of the prior fiscal year,
resulting from an increase in the restaurant base from 20 Bugaboo Creek Steak
House restaurants at the end of the second quarter of 2002 to 23 restaurants at
the end of the second quarter of 2003 and ii) an increase in average weekly
sales. Average weekly sales for all Bugaboo Creek Steak House restaurants in the
second quarter of 2003 were approximately $69,600, a 3.5% increase from the
comparable period for 2002. Same store sales for the comparable Bugaboo Creek
Steak House restaurants in the second quarter of 2003 increased 3.7% as compared
to the same period in 2002, due primarily to an increase in average check and,
to a lesser extent, an increase in customer counts.

# Franchise Revenue:

Franchise revenues
increased to $98,000 for the second quarter of 2003, from $88,000 for the same
period in 2002 due to sales increases at the three franchised LongHorn
Steakhouse restaurants in Puerto Rico.

# Costs and Expenses

Cost of restaurant sales as
a percentage of restaurant sales decreased to 35.9% for the second quarter of
2003, from 36.3% for the second quarter of 2002, and decreased to 35.8% for the
first six months of 2003 as compared to 36.3% during the same period of 2002.
Favorable contract pricing on red meat more than offset higher seafood costs
related to the LongHorn steak and lobster promotion. The Company is currently
under fixed price contracts with respect to approximately 90% of its beef
products and these contracts are in effect for the remainder of 2003.

Restaurant operating
expense as a percentage of restaurant sales decreased slightly to 43.7% for the
second quarter of 2003 from 43.8% for the second quarter of 2002 and increased
slightly to 43.4% for the first six months of 2003, as compared to 43.3% for the
same period of 2002. The fluctuations in restaurant operating expenses as a
percentage of restaurant sales for the 2003 periods as compared to the prior
year are primarily due to the favorable leveraging effect of increases in
average weekly sales offset by higher utility costs.

Restaurant depreciation as
a percentage of restaurant sales decreased to 3.8% for both the second quarter
and first six months of 2003 as compared to 4.0% for the same periods of the
prior fiscal year due to the favorable leveraging effect of higher average
weekly sales.

Pre-opening expense for the
second quarter of 2003 was $1,668,000, an increase of $843,000 from the same
period of the prior year. This increase was due primarily to the five LongHorn
Steakhouse restaurants, one Bugaboo Creek Steak House restaurant and one The
Capital Grille restaurant opened during the second quarter of 2003 as compared
to only four LongHorn Steakhouse restaurants opened in the same period of the
prior year. The increase in pre-opening expense for the first six months of 2003
as compared to the same period of the prior year was primarily due to the
accelerated expenditures in the second quarter of 2003.

General and administrative
expenses, as a percentage of total revenues, increased to 5.9% for the second
quarter of 2003 from 5.7% for the same period in 2002, and increased to 6.0% for
the first six months of 2003 from 5.7% for the same period of 2002. These
increases were principally due to the full period impact of new hires made in
2002 and full bonus accruals in the 2003 periods as compared to only partial
bonus accruals in the 2002 periods, partially offset by greater leverage of
fixed and semi-fixed general and administrative expenses resulting from higher
average weekly sales volumes.

As a result of the
relationships between revenues and expenses discussed above, the Companys
operating income increased to $16.4 million for the second quarter of 2003 and
increased to $34.1 million for the first six months of 2003 as compared to $14.0
million and $29.1 million, respectively, for the same periods of the prior year.

Interest expense, net
decreased to $213,000 in the second quarter of 2003, and $459,000 for the first
six months of 2003, from $421,000 and $870,000 during the same periods of the
prior year, due to the November 2002 repayment of the $10.0 million, then
outstanding under the Companys revolving credit facility during the 2002
periods. The Company had no amount outstanding under the revolving credit
facility during 2003.

Minority interest expense
decreased to $82,000 for the second quarter and $200,000 for the first six
months of 2003, from $120,000 and $300,000 for the same periods of the prior
year, primarily due to the Companys acquisition of two joint venture
restaurants from two joint venture partners in 2002.

Income tax expense for the
second quarter and first six months of 2003 was 32.5% of earnings before income
taxes, which reflects the effective tax rate expected to be applicable for the
full 2003 fiscal year. These rates in 2003 compare to rates of 32.0% for the
second quarter of 2002, which brought the effective income tax rate for the
first six months of 2002 to 32.5%, which reflected the effective income tax rate
then expected for the full 2002 fiscal year. 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.

Net earnings increased to
$10.8 million for the second quarter of 2003 from net earnings of $9.1 million
for the second quarter of 2002 and increased to $22.5 million for the six months
ended June 29, 2003 from $18.9 million for the six months ended June 30, 2002,
reflecting the net effect of the items discussed above.

# Liquidity and Capital Resources:

The Company requires
capital primarily for the development of new restaurants, selected acquisitions
and the remodeling of existing restaurants. During the first six months of 2003
the Companys principal sources of working capital were cash provided by
operating activities ($34.1 million) and proceeds from the exercise of employee
stock options ($3.8 million). For the first six months of 2003, the principal
uses of working capital were capital expenditures ($35.2 million) for new and
improved facilities, the purchase of short-term investments ($5.2 million) and
the purchase of common stock for treasury ($2.6 million). As of June 29, 2003,
the Company had no borrowings outstanding under the Companys $100.0
million revolving credit facility.

The Company intends to open
an aggregate 20-21 Company-owned LongHorn Steakhouse restaurants, three Bugaboo
Creek Steak House restaurants and one or two The Capital Grille restaurants in
fiscal year 2003. The Company estimates that its capital expenditures for fiscal
year 2003 will be approximately $75-80 million. During the first six months of
2003, the Company opened 13 LongHorn Steakhouse restaurants, one The Capital
Grille restaurant and one Bugaboo Creek Steak House restaurant. As of August 12,
2003, the Company has opened three additional LongHorn Steakhouse restaurants in
the third quarter 2003. 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 2005.

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.

# Forward-Looking Statements

Statements contained in
this Report concerning future results, performance or expectations are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All forward-looking statements in this Report
are made based upon managements current expectations or beliefs, as well
as assumptions made by, and information currently available to, the Company on
the date of this Report. All forward-looking statements involve risks and
uncertainties that could cause actual results, performance or developments to
differ materially from those expressed or implied by those forward-looking
statements, such as: the Companys ability to open the anticipated number
of new restaurants on time and within budget; the Companys ability to
continue to increase same-store sales at anticipated rates; a recession or other
negative effect on business dining patterns, or some other negative effect on
the economy in general; the effect upon dining patterns and the economy in
general, of war, insurrection and/or terrorist attacks on United Sates soil;
unexpected increases in cost of sales or other expenses; and the impact of any
negative publicity or public attitudes related to the consumption of beef. Other
risks and uncertainties include fluctuations in quarterly operating results,
seasonality, guest trends, competition and risks associated with the development
and management of new restaurant sites. More information about factors that
potentially may affect the Companys results, performance or development is
included in the Companys other filings with the Securities and Exchange
Commission, including its annual report on Form 10-K for the year ended December
29, 2002, its quarterly report on Form 10-Q for the quarter ended March 30,
2003, and the Companys press releases and other communications.

# 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 29, 2003, 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 1.25% to 2.0% (depending on the Companys leverage ratio),
or the administrative agents prime rate of interest plus a margin of 0% to
0.75% (depending on the Companys leverage ratio) at the Companys
option. Accordingly, the Company may be exposed to the impact of interest rate
fluctuations. 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.

# Investment Portfolio

The Company invests
portions of its excess cash, if any, in highly liquid investments. At June 29,
2003, the Company had $8.0 million invested in high-grade overnight repurchase
agreements, and $23.0 million in short-term investments in the form of Federal,
state and municipal bonds. As of June 29, 2003, the Company has classified all
short-term investments as trading securities.

# Item 4.  Controls and Procedures

In accordance with the
Securities Exchange Act Rules 13a-15 and 15d-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
concluded that the design and operation of its disclosure controls and
procedures were effective. There have been no significant changes in internal
controls over financial reporting or in other factors that could significantly
affect internal controls over financial reporting subsequent to the date of such
evaluation.

# Part II - Other Information

Item 1. Legal Proceedings

None

# Item 2.  Changes in Securities and Use of Proceeds

None

# Item 3. Defaults Upon Senior Securities

None

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

The 2003 Annual Meeting of
Shareholders of the Company was held on May 12, 2003 at which the following
proposals were voted upon by the shareholders: (i) election of three Class II
directors to serve until the 2006 Annual Meeting of Shareholders; (ii) approval
of the RARE Hospitality International, Inc. Amended and Restated 2002 Long-Term
Incentive Plan; and (iii) ratification of the selection of KPMG LLP as the
Companys independent auditors for the fiscal year ending December 28,
2003. Holders of 22,076,617 shares of the Companys common stock were
entitled to vote at that meeting. The shareholders elected three Class II
directors with a term expiring at the 2006 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              Shares Withholding
                               for:                       Authority:
Carolyn H. Byrd                18,567,061                 1,145,845
Philip J. Hickey, Jr.          18,886,692                   826,214
Dick R. Holbrook               19,288,290                   424,616`

Ronald W. San  Martin,  Eugene I. Lee,  Jr.,  Don L.  Chapman,  Lewis H.  Jordan  and George W.  McKerrow,  Sr.
continued  their terms as  directors.  The RARE  Hospitality  International,  Inc.  Amended and  Restated  2002
Long-Term   Incentive  Plan  was  approved  as  follows:   15,777,695   shares  voted  in  favor  of  approval;
3,843,826,shares  voted against  approval;  and 91,384 shares abstained.  There were no broker  non-votes.  The
selection  of KPMG LLP as  independent  auditors  for the Company for the fiscal year ending  December 28, 2003
was ratified as follows:  19,277,127  shares voted in favor of  ratification;  428,925 shares voted against the
ratification; and 6,853 shares abstained. There were no broker non-votes.

# Item 5. Other Information

None

# Item 6. Exhibits and Reports on Form 8-K

| | (a) | Exhibits Filed.
             10.1 Employment Agreement dated April 28, 2003 between the Registrant and Philip J. Hickey, Jr.
             10.2 Employment Agreement dated April 28, 2003 between the Registrant and Eugene I. Lee.
             10.3 Employment Agreement dated April 28, 2003 between the Registrant and W. Douglas Benn.
             10.4 Employment Agreement dated April 28, 2003 between the Registrant and Joia M. Johnson.
             10.5 Employment Agreement dated April 28, 2003 between the Registrant and Thomas W. Gathers.
             32.1 Written Statement of the Chief Executive Officer of RARE Hospitality International, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
             32.2 Written Statement of the Chief Financial Officer of RARE Hospitality International, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Reports filed on Form 8-K.
             None
| | --- | --------------------------------------------

---

# Signatures

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

`/s/ Philip J. Hickey, Jr.
                      --------------------------
                      Philip J. Hickey, Jr.
                      Chairman of the Board and
                      Chief Executive Officer
                      (Principal Executive Officer)

                      /s/ W. Douglas Benn
                      ------------------------
                      W. Douglas Benn
                      Executive Vice President, Finance
                      and Chief Financial Officer
                      (Principal Financial and
                      Accounting Officer)


Date:   August 12, 2003`

---

# CERTIFICATIONS

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

1. I have reviewed this
quarterly report on Form 10-Q of RARE Hospitality International, Inc.;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge,
    the financial statements, and other financial information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

designed such disclosure controls and procedures 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 quarterly report is being prepared;evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); andpresented in this
        quarterly report our conclusions about the effectiveness of the disclosure controls and procedures
        based on our evaluation as of the Evaluation Date;
5. designed such disclosure controls and procedures 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 quarterly report is being prepared;
6. evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and
7. presented in this
        quarterly report our conclusions about the effectiveness of the disclosure controls and procedures
        based on our evaluation as of the Evaluation Date;
8. The registrant's other
    certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's
    auditors and the audit committee of registrant's board of directors (or persons performing the equivalent
    function):

all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; andany fraud, whether or
        not material, that involves management or other employees who have a significant role in the
        registrant's internal controls; and
9. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
10. any fraud, whether or
        not material, that involves management or other employees who have a significant role in the
        registrant's internal controls; and
11. The registrant's other
    certifying officer and I have indicated in this quarterly report whether or not there were significant
    changes in internal controls or in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.

`August 12, 2003                      /s/ PHILIP J. HICKEY, JR.
                                     --------------------------
                                     Philip J. Hickey, Jr.
                                     Chairman of the Board and
                                     Chief Executive Officer`

I, W. Douglas Benn, certify that:

1. I have reviewed this
quarterly report on Form 10-Q of RARE Hospitality International, Inc.;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge,
    the financial statements, and other financial information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

designed such disclosure controls and procedures 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 quarterly report is being prepared;evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); andpresented in this
        quarterly report our conclusions about the effectiveness of the disclosure controls and procedures
        based on our evaluation as of the Evaluation Date;
5. designed such disclosure controls and procedures 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 quarterly report is being prepared;
6. evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and
7. presented in this
        quarterly report our conclusions about the effectiveness of the disclosure controls and procedures
        based on our evaluation as of the Evaluation Date;
8. The registrant's other
    certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's
    auditors and the audit committee of registrant's board of directors (or persons performing the equivalent
    function):

all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; andany fraud, whether or
        not material, that involves management or other employees who have a significant role in the
        registrant's internal controls; and
9. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
10. any fraud, whether or
        not material, that involves management or other employees who have a significant role in the
        registrant's internal controls; and
11. The registrant's other
    certifying officer and I have indicated in this quarterly report whether or not there were significant
    changes in internal controls or in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.

`August 12, 2003                      /s/ W. DOUGLAS BENN
                                     --------------------
                                     W. Douglas Benn
                                     Executive Vice President, Finance and
                                     Chief Financial Officer`