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

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

The following table presents goodwill as of September 30, 2012 and December 25, 2011 (in thousands):

	September 30, 2012		December 25, 2011
Balance at beginning of year	$	61,769	$	61,769
Acquisition	756		—
Balance at end of year	$	62,525	$	61,769

The company has no historical goodwill impairment losses in periods prior to those presented in the above table. Refer to Note 6, Acquisition of Red Robin Franchised Restaurant for details of the acquisition.

The following table presents intangible assets subject to amortization as of September 30, 2012 and December 25, 2011 (in thousands):

	September 30, 2012							December 25, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Franchise rights	$	43,518	$	(14,807	)	$	28,711	$	43,494	$	(14,515	)	$	28,979
Leasehold interests	12,744		(4,143		)	8,601		12,955		(3,747		)	9,208
Liquor licenses	8,954		(8,257		)	697		8,210		(7,428		)	782
	$	65,216	$	(27,207	)	$	38,009	$	64,659	$	(25,690	)	$	38,969

There were no impairments to intangible assets during the forty weeks ended September 30, 2012. There was an insignificant impairment of the liquor license related to the one restaurant impaired during the forty weeks ended October 2, 2011, which is discussed in Note 2, Restaurant Impairment and Closures. There were no other impairments of intangible assets subject to amortization as of October 2, 2011. The amortization expense reflected in the consolidated statements of operations totaled $1.2 million and $1.1 million for the twelve weeks ended September 30, 2012 and October 2, 2011, respectively, and $3.6 million for both the forty weeks ended September 30, 2012 and October 2, 2011.

The aggregate future amortization expense as of September 30, 2012 is as follows (in thousands):

Remainder of 2012	$	723
2013	3,038
2014	3,138
2015	2,980
2016	2,834
Thereafer	25,296
	$	38,009

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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