RED ROBIN GOURMET BURGERS INCRRGB
RED ROBIN GOURMET BURGERS INC Fair Value Disclosure
9. Fair Value Measurements
Fair value measurements are made under a three-tier fair value hierarchy, which prioritizes the inputs used in the measuring of fair value:
Level 1: Observable inputs that reflect unadjusted quote prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other current liabilities approximate fair value due to the short-term nature or maturity of the instruments.
The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value and are included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. The Company records equal and offsetting amounts to the deferred compensation plan assets for the Company's payment liabilities which are included in accrued liabilities and other in the accompanying Consolidated Balance Sheets. The fair market value of mutual funds is measured using Level 1 inputs (quoted prices for identical assets in active markets), and were $1.9 million and $1.8 million as of December 28, 2025, and December 29, 2024, respectively. See Note 15. Employee Benefit Programs for additional information.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on the Consolidated Financial Statements on a nonrecurring basis include items such as property, plant and equipment, right of use assets, and intangible assets. These assets are measured at fair value if determined to be impaired.
During fiscal years 2025, 2024, and 2023, the Company measured non-financial assets for impairment using continuing and projected future cash flows, as discussed in Note 4. Other (Gains) Charges, net which were based on significant inputs not observable in the market and thus represented a Level 3 fair value measurement.
Based on our fiscal years 2025, 2024, and 2023 impairment analyses, we impaired long-lived assets at 4, 58 and 19 locations with carrying values of $6.1 million, $71.3 million, and $36.5 million, respectively. We determined the fair value of these long-lived assets in fiscal years 2025, 2024, and 2023 to be $3.4 million, $39.4 million and $27.4 million, respectively, based on Level 3 fair value measurements.
Liquor licenses with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on quoted prices in the active market for the license in the same or similar jurisdictions, representing a Level 1 fair value measurement. During the fourth quarter of fiscal 2025, the Company performed its annual review of its indefinite lived liquor licenses that had a carrying value of $4.0 million, resulting in no impairment recorded. Impairment charges of $1.1 million and $0.2 million were recorded to liquor licenses with indefinite lives in fiscal years 2024 and 2023, respectively.
Disclosures of Fair Value of Other Assets and Liabilities
The carrying value of our variable rate Credit Facility, which utilized level 2 fair value inputs, approximated fair value as of December 28, 2025 and December 29, 2024, as such debt bears interest at floating rates which approximate market rates.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.