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System Optimization Losses (Gains), Net (Tables)
 12 Months Ended
Dec. 31, 2017
Property, Plant and Equipment  
Summary of DavCo and NPC Transactions
The following is a summary of the activity recorded as a result of the DavCo and NPC Transactions:
 
Year Ended
 
2017
Acquisition (a)
 
Total consideration paid
$
86,788

Identifiable assets and liabilities assumed:
 
Net assets held for sale
70,688

Capital lease assets
49,360

Deferred taxes
27,830

Capital lease obligations
(97,797
)
Net unfavorable leases (b)
(22,330
)
Other liabilities (c)
(6,924
)
Total identifiable net assets
20,827

Goodwill (d)
$
65,961

 
 
Disposition
 
Proceeds
$
70,688

Net assets sold
(70,688
)
Goodwill (d)
(65,961
)
Net favorable leases (e)
24,034

Other (f)
(1,708
)
Loss on DavCo and NPC Transactions
$
(43,635
)
_______________

(a)
The fair values of the identifiable intangible assets and taxes related to the acquisition are provisional amounts as of December 31, 2017, pending final purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process.

(b)
Includes favorable lease assets of $1,229 and unfavorable lease liabilities of $23,559.

(c)
Includes a supplemental purchase price estimated at $6,269 to be paid to DavCo for the resolution of certain lease-related matters, which is included in “Accrued expenses and other current liabilities.”

(d)
Includes tax deductible goodwill of $21,795.

(e)
The Company recorded favorable lease assets of $30,068 and unfavorable lease liabilities of $6,034 as a result of subleasing land, buildings and leasehold improvements to NPC.

(f)
Includes cash payments for selling and other costs associated with the transaction.

Summary of Disposition Activity
 
Year End
 
December 31, 2017
 
January 1, 2017
Owned:
 
 
 
Land
$
379,297

 
$
381,305

Buildings and improvements
503,955

 
504,730

Leasehold improvements
390,958

 
371,954

Office and restaurant equipment
255,632

 
234,275

Leased:
 
 
 
Capital leases (a)
222,878

 
115,541

 
1,752,720

 
1,607,805

Accumulated depreciation and amortization (b)
(489,661
)
 
(415,466
)
 
$
1,263,059

 
$
1,192,339

_______________

(a)
These assets principally include buildings and improvements.

(b)
Includes $22,688 and $13,705 of accumulated amortization related to capital leases at December 31, 2017 and January 1, 2017, respectively.
System Optimization  
Property, Plant and Equipment  
Summary of Disposition Activity
The following is a summary of the disposition activity recorded as a result of our system optimization initiative:
 
Year Ended
 
2017
 
2016
 
2015
Number of restaurants sold to franchisees
—

 
310

 
327

 
 
 
 
 
 
Proceeds from sales of restaurants
$
—

 
$
251,446

 
$
193,860

Net assets sold (a)
—

 
(115,052
)
 
(86,493
)
Goodwill related to sales of restaurants (b)
—

 
(41,561
)
 
(29,970
)
Net unfavorable leases (c)
—

 
(24,592
)
 
(846
)
Other (d)
—

 
(3,103
)
 
(5,499
)
 
—

 
67,138

 
71,052

Post-closing adjustments on sales of restaurants (e)
2,541

 
(1,411
)
 
1,285

Gain on sales of restaurants, net
2,541

 
65,727

 
72,337

 
 
 
 
 
 
Gain on sales of other assets, net (f)
2,018

 
6,204

 
1,672

Loss on DavCo and NPC Transactions
(43,635
)
 
—

 
—

System optimization (losses) gains, net
$
(39,076
)
 
$
71,931

 
$
74,009

_______________

(a)
Net assets sold consisted primarily of equipment.

(b)
Goodwill disposed of as a result of the sale of Company-operated restaurants during 2016 included goodwill of $11,429 that had been reclassified to assets held for sale during 2015.  See Note 9 for further information.

(c)
During 2016 and 2015, the Company recorded favorable lease assets of $7,612 and $34,437, respectively, and unfavorable lease liabilities of $32,204 and $35,283, respectively, as a result of leasing and/or subleasing land, buildings, and/or leasehold improvements to franchisees, in connection with sales of restaurants.

(d)
2015 includes a deferred gain of $4,568 on the sale of 17 restaurants to franchisees during 2015 as a result of certain contingencies related to the extension of lease terms.

(e)
2017 includes (1) cash proceeds, net of payments, of $294 related to post-closing reconciliations with franchisees, (2) the recognition of a deferred gain of $312 as a result of the resolution of certain contingencies related to the extension of lease terms for a Canadian restaurant and (3) the recognition of a deferred gain of $1,822 (C$2,300) resulting from the release of a guarantee provided by Wendy’s to a lender on behalf of a franchisee in connection with the sale of eight Canadian restaurants to the franchisee during 2014. See Note 21 for further information on the guarantee.

2015 includes the recognition of a gain on sale of $4,492 related to the repayment of notes receivable from franchisees in connection with sales of restaurants in 2014.

(f)
During 2017, 2016 and 2015, Wendy’s received cash proceeds of $10,534, $10,727 and $10,478, respectively, primarily from the sale of surplus properties. 2017 also includes the recognition of a deferred gain of $375 related to the sale of a share in an aircraft.