Goodwill And Other Intangible Assets

12 Months Ended

Jan. 01, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

Goodwill activity for 2016 and 2015 was as follows:



	Year End
	January 1, 2017			January 3, 2016

Balance at beginning of year	$	770,781		$	822,562
Sale of the Bakery	—			(12,067		)
Restaurant dispositions	(30,132		)	(32,942		)
Restaurant acquisitions (a)	—			(1,408		)
Currency translation adjustment and other, net	761			(5,364		)
Balance at end of year	$	741,410		$	770,781

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(a)	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 3 for further information.

Our annual goodwill impairment test was completed through a qualitative assessment performed in the fourth quarter of 2016, which indicated the fair value of goodwill of our Wendy’s North America restaurants was more likely than not greater than the carrying amount.

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



	Year End
	January 1, 2017							January 3, 2016
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	903,000	$	—		$	903,000	$	903,000	$	—		$	903,000
Definite-lived:
Franchise agreements	348,403		(137,047		)	211,356		347,970		(120,298		)	227,672
Favorable leases	208,626		(57,440		)	151,186		209,523		(50,750		)	158,773
Reacquired rights under franchise agreements	1,690		(1,536		)	154		8,753		(6,503		)	2,250
Software	123,613		(66,778		)	56,835		97,590		(49,698		)	47,892
	$	1,585,332	$	(262,801	)	$	1,322,531	$	1,566,836	$	(227,249	)	$	1,339,587



Aggregate amortization expense:
Actual for fiscal year (a):
2014	$	42,274
2015	54,686
2016	48,824
Estimate for fiscal year:
2017	$	44,977
2018	43,237
2019	38,988
2020	34,826
2021	29,770
Thereafter	227,733

_______________

(a)

Includes impairment charges on other intangible assets of $3,288, $3,656 and $3,610 during 2016, 2015 and 2014, respectively. See Note 16 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 $1,600, $6,384 and $474 during 2016, 2015 and 2014, 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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