Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

Goodwill activity for 2017 and 2016 was as follows:



	Year End
	December 31, 2017			January 1, 2017

Balance at beginning of year	$	741,410		$	770,781
Restaurant acquisitions (a)	65,961			—
Restaurant dispositions (a)	(65,961		)	(30,132		)
Currency translation adjustment and other, net	1,924			761
Balance at end of year	$	743,334		$	741,410

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(a)	Goodwill acquired and disposed of during 2017 resulted from the DavCo and NPC Transactions. See Note 2 for further information.

Our annual goodwill impairment test was completed through a qualitative assessment performed in the fourth quarter of 2017, which indicated the fair value of goodwill of our Wendy’s North America restaurants was more likely than not greater than the carrying amount. International franchise restaurants goodwill was determined to be fully impaired during the fourth quarter of 2013, which resulted in an impairment charge of $9,397.

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



	Year End
	December 31, 2017							January 1, 2017
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	903,000	$	—		$	903,000	$	903,000	$	—		$	903,000
Definite-lived:
Franchise agreements	349,499		(154,140		)	195,359		348,403		(137,047		)	211,356
Favorable leases	239,096		(69,128		)	169,968		208,626		(57,440		)	151,186
Reacquired rights under franchise agreements	1,680		(1,589		)	91		1,690		(1,536		)	154
Software	137,913		(84,746		)	53,167		123,613		(66,778		)	56,835
	$	1,631,188	$	(309,603	)	$	1,321,585	$	1,585,332	$	(262,801	)	$	1,322,531



Aggregate amortization expense:
Actual for fiscal year (a):
2015	$	54,686
2016	48,824
2017	47,302
Estimate for fiscal year:
2018	$	48,220
2019	43,854
2020	39,748
2021	34,706
2022	30,229
Thereafter	221,828

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(a)

Includes impairment charges on other intangible assets of $52, $3,288 and $3,656 during 2017, 2016 and 2015, 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 were sold as a part of our system optimization initiative of $1,600 and $6,384 during 2016 and 2015, 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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