Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:



	December 31, 2017				January 1, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Measurements
Financial assets
Cash equivalents	$	338	$	338	$	5,335	$	5,335	Level 1
Non-current cost method investments (a)	639		327,710		2,436		326,283		Level 3

Financial liabilities
Series 2015-1 Class A-2-I Notes (b)	855,313		856,510		864,063		857,349		Level 2
Series 2015-1 Class A-2-II Notes (b)	879,750		897,961		888,750		880,005		Level 2
Series 2015-1 Class A-2-III Notes (b)	488,750		513,188		493,750		474,543		Level 2
7% debentures, due in 2025 (b)	89,514		107,000		88,277		99,750		Level 2
Guarantees of franchisee loan obligations (c)	37		37		280		280		Level 3

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(a)

The fair value of our indirect investment in Arby’s is based on applying a multiple to Arby’s adjusted earnings before income taxes, depreciation and amortization per its current unaudited financial information. The carrying value of our indirect investment in Arby’s was reduced to zero during 2013 in connection with the receipt of a dividend. See Note 7 for more information. The fair values of our remaining investments are not significant and are based on our review of information provided by the investment managers or investees which was based on (1) valuations performed by the investment managers or investees, (2) quoted market or broker/dealer prices for similar investments and (3) quoted market or broker/dealer prices adjusted by the investment managers for legal or contractual restrictions, risk of nonperformance or lack of marketability, depending upon the underlying investments.


(b)	The fair values were based on quoted market prices in markets that are not considered active markets.

(c)

Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for new restaurant development and equipment financing. In addition during 2012, Wendy’s provided a guarantee to a lender for a franchisee in connection with the refinancing of the franchisee’s debt. Wendy’s was released from this guarantee during the fourth quarter of 2017. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage established at inception adjusted for a history of defaults.

Fair value of assets and liabilities (other than cash and cash equivalents) measure at fair value on a nonrecurring basis



			Fair Value Measurements						2017 Total Losses
	December 31, 2017		Level 1		Level 2		Level 3		2017 Total Losses
Held and used	$	757	$	—	$	—	$	757	$	3,413
Held for sale	1,560		—		—		1,560		684
Total	$	2,317	$	—	$	—	$	2,317	$	4,097



			Fair Value Measurements						2016 Total Losses
	January 1, 2017		Level 1		Level 2		Level 3		2016 Total Losses
Held and used	$	5,462	$	—	$	—	$	5,462	$	15,928
Held for sale	1,552		—		—		1,552		313
Total	$	7,014	$	—	$	—	$	7,014	$	16,241

In addition, the Company measured assets acquired and liabilities assumed at fair value as part of the DavCo and NPC Transactions during 2017. See Note 2 for further information.