Fair Value Measurements (Tables)

6 Months Ended

Jul. 01, 2018

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



	July 1, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Measurements
Financial assets
Cash equivalents	$	9,584	$	9,584	$	338	$	338	Level 1
Non-current cost method investments (a)	639		327,477		639		327,710		Level 3

Financial liabilities
Series 2018-1 Class A-2-I Notes (b)	447,750		430,736		—		—		Level 2
Series 2018-1 Class A-2-II Notes (b)	472,625		455,138		—		—		Level 2
Series 2015-1 Class A-2-I Notes (b)	—		—		855,313		856,510		Level 2
Series 2015-1 Class A-2-II Notes (b)	875,250		876,038		879,750		897,961		Level 2
Series 2015-1 Class A-2-III Notes (b)	486,250		487,368		488,750		513,188		Level 2
7% debentures, due in 2025 (b)	90,139		104,750		89,514		107,000		Level 2
Guarantees of franchisee loan obligations (c)	27		27		37		37		Level 3

_______________

(a)

On February 5, 2018, a subsidiary of ARG Holding Corporation (“ARG Parent”) acquired Buffalo Wild Wings, Inc. As a result, our ownership interest was diluted to 12.3% and now includes both the Arby’s and Buffalo Wild Wings brands under the newly formed combined company, Inspire Brands. The fair value of our indirect investment in Inspire Brands is primarily based on a price per share that was determined at the time that ARG Parent financed the acquisition of Buffalo Wild Wings. In the future, the fair value is expected to be calculated by applying a multiple to Inspire Brand’s adjusted earnings before income taxes, depreciation and amortization. The carrying value of our indirect investment was reduced to zero during 2013 in connection with the receipt of a dividend. 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 equipment financing. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage.

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



			Fair Value Measurements
	July 1, 2018		Level 1		Level 2		Level 3
Held and used	$	161	$	—	$	—	$	161
Held for sale	427		—		—		427
Total	$	588	$	—	$	—	$	588



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