Goodwill And Other Intangible Assets

12 Months Ended

Jan. 03, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

Goodwill activity for 2015 and 2014 was as follows:



	Year End
	2015			2014

Balance at beginning of year	$	822,562		$	842,544
Sale of the Bakery	(12,067		)	—
Restaurant dispositions (a)	(32,942		)	(27,571		)
Restaurant acquisitions (b)	(1,408		)	11,455
Currency translation adjustment and other, net	(5,364		)	(3,866		)
Balance at end of year	$	770,781		$	822,562

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(a)	During 2015 and 2014, in connection with the Company’s plan to sell company-owned restaurants as part of its ongoing system optimization initiative, goodwill of $32,942 and $11,574, respectively, was reclassified to assets held for sale, of which $20,431 and $2,035, respectively, was disposed of as a result of the sale of company-owned restaurants. See Note 3 for further information.


(b)	Restaurant acquisitions in 2015 primarily represents an adjustment to the fair value of franchise rights acquired in connection with the acquisition of franchised restaurants during 2014. See Note 4 for further information.

During the fourth quarter of 2013, step one of our annual goodwill impairment test indicated that our international franchise restaurants reporting unit was impaired as its carrying amount exceeded its fair value. The fair value of our international franchise reporting unit was based on the income approach, which was determined based on the present value of the anticipated cash flows associated with the reporting unit. The decline in the fair value of the international franchise restaurants reporting unit resulted from lower than anticipated current and future operating results including lower projected growth rates and profitability levels than previously anticipated. Step two of our process resulted in an impairment charge of $9,397, which represented the total amount of goodwill recorded for our international franchise restaurants reporting unit. We concluded in 2015, 2014 and 2013 that our remaining goodwill related to our North America company-owned and franchise restaurants reporting unit was not impaired.

The following is a summary of the components of other intangible assets and the related amortization expense:



	Year End 2015							Year End 2014
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	903,000	$	—		$	903,000	$	903,000	$	—		$	903,000
Definite-lived:
Franchise agreements	347,970		(120,298		)	227,672		350,802		(104,596		)	246,206
Favorable leases	209,523		(50,750		)	158,773		192,854		(43,231		)	149,623
Reacquired rights under franchise agreements	8,753		(6,503		)	2,250		8,685		(1,109		)	7,576
Software	97,590		(49,698		)	47,892		84,974		(40,072		)	44,902
	$	1,566,836	$	(227,249	)	$	1,339,587	$	1,540,315	$	(189,008	)	$	1,351,307



Aggregate amortization expense:
Actual for fiscal year (a):
2013	$	55,482
2014	42,274
2015	54,686
Estimate for fiscal year:
2016	$	44,180
2017	41,090
2018	37,758
2019	32,708
2020	30,270
Thereafter	250,581

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(a)

Includes impairment charges on other intangible assets of $3,656, $3,610, $2,470 during 2015, 2014 and 2013, respectively. See Note 17 for more information on impairment of our long-lived assets. Also includes accelerated amortization on previously acquired franchise rights in territories that will be or have been sold as a part of our system optimization initiative of $6,384, $474 and $16,907 during 2015, 2014 and 2013, respectively.

- 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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