Red Robin Gourmet Burgers, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

Fair Value Measurements

9 Months Ended

Oct. 04, 2015

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short term nature or maturity of the instruments.

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of October 4, 2015 and December 28, 2014 (in thousands):



	October 4, 2015		Level 1		Level 2		Level 3
Assets:
Investments in rabbi trust	$	6,630	$	6,630	$	—	$	—
Total assets measured at fair value	$	6,630	$	6,630	$	—	$	—
Liabilities:
Derivative—interest rate swap	$	—	$	—	$	—	$	—
Total liabilities measured at fair value	$	—	$	—	$	—	$	—

	December 28, 2014		Level 1		Level 2		Level 3
Assets:
Investments in rabbi trust	$	5,723	$	5,723	$	—	$	—
Total assets measured at fair value	$	5,723	$	5,723	$	—	$	—
Liabilities:
Derivative—interest rate swap	$	347	$	—	347		$	—
Total liabilities measured at fair value	$	347	$	—	$	347	$	—

The Company had no financial assets or liabilities that were measured using level 3 inputs during the forty weeks ended October 4, 2015, other than an immaterial amount related to the land and building associated with one restaurant acquired from a franchisee. The Company also had no non-financial assets or liabilities that were required to be measured on a recurring basis.

Disclosures of Fair Value of Other Assets and Liabilities

The Company’s liabilities under its credit facility and capital leases are carried at historical cost in the accompanying condensed consolidated balance sheets. For disclosure purposes, the Company estimated the fair value of the credit facility and capital lease obligations using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt. Both the credit facility and the Company’s capital lease obligations are considered to be level 2 instruments. The following table presents the carrying value and estimated fair value of Company’s credit facility and capital lease obligations as of October 4, 2015 and December 28, 2014 (in thousands):



	October 4, 2015				December 28, 2014
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Credit facility	$	164,000	$	163,876	$	138,500	$	138,397
Capital lease obligations	8,065		9,362		8,521		10,004
Total	$	172,065	$	173,238	$	147,021	$	148,401

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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