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

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 25, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The following table presents goodwill as of December 25, 2016 and December 27, 2015 (in thousands).



	2016		2015
Balance at beginning of year	$	81,957	$	84,115
Acquisition	13,679		295
Foreign currency translation adjustment	299		(2,453		)
Balance at end of year	$	95,935	$	81,957

The Company recorded no goodwill impairment losses in the periods presented in the above table or any prior periods. During 2016, the Company acquired 13 restaurants from a franchisee and finalized the purchase price accounting during the fourth quarter of 2016. During 2015, the Company acquired one restaurant from a franchisee. Refer to Note 3, Acquisitions of Red Robin Franchised Restaurants, for details of the acquisitions.

The following table presents intangible assets as of December 25, 2016 and December 27, 2015 (in thousands):



	2016							2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Franchise rights	$	55,902	$	(27,306	)	$	28,596	$	50,878	$	(23,904	)	$	26,974
Leasehold interests	13,931		(7,400		)	6,531		12,991		(6,643		)	6,348
Liquor licenses	10,253		(9,857		)	396		10,168		(9,751		)	417
	$	80,086	$	(44,563	)	$	35,523	$	74,037	$	(40,298	)	$	33,739
Indefinite-lived intangible assets:
Liquor licenses	$	6,747	$	—		$	6,747	$	5,834	$	—		$	5,834
Intangible assets, net	$	86,833	$	(44,563	)	$	42,270	$	79,871	$	(40,298	)	$	39,573

No impairment charges were recorded related to indefinite-lived intangibles in 2016, 2015, or 2014. There were immaterial impairments of franchise rights and liquor licenses related to the 19 restaurants impaired in 2016, and immaterial impairments of franchise rights and leasehold interests related to the three restaurants impaired in 2014, which are discussed in Note 4, Asset Impairment and Restaurant Closures. There were no other impairments of intangible assets subject to amortization in 2016, 2015, or 2014.

The aggregate amortization expense related to intangible assets subject to amortization for 2016, 2015, and 2014 was $5.1 million, $4.7 million, and $3.9 million.

The estimated aggregate future amortization expense as of December 25, 2016 is as follows (in thousands):



2017	$	4,473
2018	4,262
2019	4,216
2020	3,695
2021	3,263
Thereafter	15,614
	$	35,523

- 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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