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48
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 26, 2010 and December 27, 2009
(Dollar amounts in thousands, except per-share amounts)
The following table summarizes the financial instruments measured at fair value in our consolidated balance sheet as of
December 26, 2010:
Cash Equivalents
$
2,608
–
–
2,608
Marketable Securities
4,987
11,949
–
16,936
Derivatives
86 – – 86
Liabilities
Total
Fair Value Measurements
Assets
Level 1 Level 2 Level 3
We classified a portion of our marketable securities as available-for-sale and trading securities which were reported at
fair market value, using the “market approach” valuation technique. The “market approach” valuation method uses prices and
other relevant information observable in market transactions involving identical or comparable assets. Our trading securities
are valued using the Level 1 approach. Our cash equivalents include commercial paper and money market funds which are
valued using a Level 1 approach. Our available-for-sale marketable securities are valued using a Level 2 approach using
observable direct and indirect inputs for municipal bonds. Our derivatives consist of natural gas commodity future contracts
which are valued with a Level 1 approach using quoted prices in an active market for identical derivative liabilities that are
traded on an exchange.
There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the fiscal years ended December
26, 2010, December 27, 2009, and December 28, 2008.
Our financial assets and liabilities requiring a fair-value measurement on a non-recurring basis were not significant as of
December 26, 2010.
Assets and liabilities that are measured at fair value on a recurring basis
At December 26, 2010, we did not have any significant nonfinancial assets or liabilities that required a fair-value
measurement on a recurring basis.
Assets and liabilities that are measured at fair value on a non-recurring basis
We generally estimate long-lived asset fair values, including property, plant and equipment and leasehold improvements,
using the income approach. The inputs used to determine fair value relate primarily to future assumptions regarding
restaurant sales and profitability. These inputs are categorized as Level 3 inputs. The inputs used represent management’s
assumptions about what information market participants would use in pricing the assets and are based upon the best
information available at the balance sheet date.
The following table presents the asset impairment charges we recorded during 2009 and the net carrying value of those
impaired long-lived assets as of December 27, 2009:
Fair Value Measured
and Recorded At
Reporting Date
Net Carrying
Value as of
December 27, 2009
Level 1
Level 2
Level 3
2009 Impairment
Charges
Long-lived assets $
296
—
—
296
(296)