XML 51 R22.htm IDEA: XBRL DOCUMENT v2.4.0.6
Fair Value Measurement
 12 Months Ended
Dec. 25, 2012
Fair Value Measurement  
Fair Value Measurement

(14) Fair Value Measurement

        ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date.

  Level 1   Inputs based on quoted prices in active markets for identical assets.
  Level 2   Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly.
  Level 3   Inputs that are unobservable for the asset.

        There were no transfers among levels within the fair value hierarchy during the year ended December 25, 2012.

        The following table presents the fair values for our financial assets and liabilities measured on a recurring basis:

 
   Fair Value Measurements  
 
   Level   December 25,
2012		   December 27,
2011		  

Interest rate swaps

   2   $ (4.016 ) $ (4,247 )

Deferred compensation plan—assets

   1     9,145     6,748  

Deferred compensation plan—liabilities

   1     (9,160 )   (6,714 )
               

Total

       $ (4,031 ) $ (4,213 )
               

        The fair value of our interest rate swaps were determined based on the present value of expected future cash flows considering the risks involved, including nonperformance risk, and using discount rates appropriate for the duration. See note 16 for discussion of our interest rate swaps.

        The Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as amended, (the "Deferred Compensation Plan") is a nonqualified deferred compensation plan which allows highly compensated employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust. We report the accounts of the rabbi trust in our consolidated financial statements. These investments are considered trading securities and are reported at fair value based on third-party broker statements. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense on the consolidated statements of income and other comprehensive income.

        The following table presents the fair values for our assets and liabilities measured on a nonrecurring basis:

 
   Fair Value Measurements    
  
 
   Level   December 25,
2012		   December 27,
2011		   Total losses  

Long-lived assets held for sale

     2   $ 1,398   $ 1,398   $ —  

Long-lived assets held for use

     2     939     1,017     —  

Goodwill and intangible assets

     3     740     1,238     465  
                     

Total

         $ 3,077   $ 3,653   $ 465  
                     

        Long-lived assets held for sale include land and building and are valued using Level 2 inputs, primarily independent third party appraisal. These assets are included in Property and equipment in our consolidated balance sheets. Cost to market and/or sell the assets are factored into the estimates of fair value.

        Long-lived assets held for use include building, equipment and furniture and fixtures and are valued using Level 2 inputs, primarily an independent third party appraisal. These assets are included in Property and equipment in our consolidated balance sheets. Depreciation expense of $0.1 million was recorded on these assets during the 52 weeks ended December 25, 2012.

        As of December 25, 2012 and December 27, 2011, goodwill in the table above relates to one and two underperforming restaurants, respectively, in which the carrying value of the associated goodwill was reduced to fair value, based on their historical results and anticipated future trends of operations. These charges are included in Impairment and closures in our consolidated statements of income and other comprehensive income. For further discussion of impairment charges, see note 16.

        At December 25, 2012 and December 27, 2011, the fair value of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying value based on the short-term nature of these instruments. The fair value of our long-term debt is estimated based on the current rates offered to us for instruments of similar terms and maturities. The carrying amounts and related estimated fair values for our debt is as follows:

 
   December 25, 2012   December 27, 2011  
 
   Carrying
Amount		   Fair Value   Carrying
Amount		   Fair Value  

Installment loans—Level 2

   $ 1,473   $ 1,752   $ 1,679   $ 2,044  

Revolver—Level 1

     50,000     50,000     60,000     60,000