Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 20, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | WENDY'S CO | ||
Entity Central Index Key | 30,697 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 239,414,307 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,838.2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 171,447 | $ 198,240 |
Restricted cash | 32,633 | 57,612 |
Accounts and notes receivable, net | 114,390 | 98,825 |
Inventories | 3,156 | 2,851 |
Prepaid expenses and other current assets | 20,125 | 19,244 |
Advertising funds restricted assets | 62,602 | 75,760 |
Total current assets | 404,353 | 452,532 |
Properties | 1,263,059 | 1,192,339 |
Goodwill | 743,334 | 741,410 |
Other intangible assets | 1,321,585 | 1,322,531 |
Investments | 56,002 | 56,981 |
Net investment in direct financing leases | 229,089 | 123,604 |
Other assets | 79,516 | 49,917 |
Total assets | 4,096,938 | 3,939,314 |
Current liabilities: | ||
Current portion of long-term debt | 30,172 | 24,652 |
Accounts payable | 22,764 | 27,635 |
Accrued expenses and other current liabilities | 111,624 | 102,034 |
Advertising funds restricted liabilities | 62,602 | 75,760 |
Total current liabilities | 227,162 | 230,081 |
Long-term debt | 2,724,230 | 2,487,630 |
Deferred income taxes | 299,053 | 446,513 |
Other liabilities | 273,290 | 247,354 |
Total liabilities | 3,523,735 | 3,411,578 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 240,512 and 246,574 shares outstanding, respectively | 47,042 | 47,042 |
Additional paid-in capital | 2,885,955 | 2,878,589 |
Accumulated deficit | (163,289) | (290,857) |
Common stock held in treasury, at cost; 229,912 and 223,850 shares, respectively | (2,150,307) | (2,043,797) |
Accumulated other comprehensive loss | (46,198) | (63,241) |
Total stockholders’ equity | 573,203 | 527,736 |
Total liabilities and stockholders’ equity | $ 4,096,938 | $ 3,939,314 |
Consolidated Balance Sheets Bal
Consolidated Balance Sheets Balance Sheet Parentheticals - $ / shares shares in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 1,500,000 | 1,500,000 |
Common Stock, Shares Issued | 470,424 | 470,424 |
Common Stock, Shares, Outstanding | 240,512 | 246,574 |
Treasury Stock, Shares | 229,912 | 223,850 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Revenues: | |||
Sales | $ 622,802 | $ 920,758 | $ 1,438,802 |
Franchise royalty revenue and fees | 410,503 | 371,545 | 344,523 |
Franchise rental income | 190,103 | 143,115 | 86,972 |
Total revenues | 1,223,408 | 1,435,418 | 1,870,297 |
Costs and expenses: | |||
Cost of sales | 512,947 | 744,701 | 1,184,073 |
Franchise rental expense | 88,015 | 67,760 | 47,779 |
General and administrative | 208,581 | 245,869 | 256,553 |
Depreciation and amortization | 125,687 | 122,704 | 145,051 |
System optimization losses (gains), net | 39,076 | (71,931) | (74,009) |
Reorganization and realignment costs | 22,574 | 10,083 | 21,910 |
Impairment of long-lived assets | 4,097 | 16,241 | 25,001 |
Other operating expense (income), net | 7,673 | (14,789) | (10,531) |
Costs and expenses | 1,008,650 | 1,120,638 | 1,595,827 |
Operating profit | 214,758 | 314,780 | 274,470 |
Interest expense, net | (118,059) | (114,802) | (86,067) |
Loss on early extinguishment of debt | 0 | 0 | (7,295) |
Investment income, net | 2,703 | 723 | 52,214 |
Other income, net | 1,617 | 989 | 806 |
Income from continuing operations before income taxes | 101,019 | 201,690 | 234,128 |
Benefit from (provision for) income taxes | 93,010 | (72,066) | (94,149) |
Income from continuing operations | 194,029 | 129,624 | 139,979 |
Discontinued operations: | |||
Income from discontinued operations, net of income taxes | 0 | 0 | 10,494 |
Gain on disposal of discontinued operations, net of income taxes | 0 | 0 | 10,669 |
Net income from discontinued operations | 0 | 0 | 21,163 |
Net income | $ 194,029 | $ 129,624 | $ 161,142 |
Basic income per share: | |||
Continuing operations | $ 0.79 | $ 0.49 | $ 0.43 |
Discontinued operations | 0 | 0 | 0.07 |
Net income | 0.79 | 0.49 | 0.50 |
Diluted income per share: | |||
Continuing operations | 0.77 | 0.49 | 0.43 |
Discontinued operations | 0 | 0 | 0.06 |
Net income | $ 0.77 | $ 0.49 | $ 0.49 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Net income | $ 194,029 | $ 129,624 | $ 161,142 |
Other comprehensive income (loss), net: | |||
Foreign currency translation adjustment | 15,150 | 5,864 | (37,800) |
Change in unrecognized pension loss, net of income tax (provision) benefit of $(60), $34 and $125, respectively | 96 | (56) | (202) |
Effect of cash flow hedges, net of income tax (provision) benefit of $(1,097), $(1,120) and $918, respectively | 1,797 | 1,774 | (1,527) |
Other comprehensive income (loss), net | 17,043 | 7,582 | (39,529) |
Comprehensive income | $ 211,072 | $ 137,206 | $ 121,613 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrecognized pension loss, net of income tax (provision) benefit of $(60), $34 and $125, respectively | $ (60) | $ 34 | $ 125 |
Effect of cash flow hedges, net of income tax (provision) benefit of $(1,097), $(1,120) and $918, respectively | $ (1,097) | $ (1,120) | $ 918 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Common Stock Held in Treasury | Accumulated Other Comprehensive Income (Loss) |
Stockholders' Equity, beginning of period at Dec. 28, 2014 | $ 1,717,576 | $ 47,042 | $ 2,826,965 | $ (445,917) | $ (679,220) | $ (31,294) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 161,142 | 0 | 0 | 161,142 | 0 | 0 |
Other comprehensive (loss) income, net | (39,529) | 0 | 0 | 0 | 0 | (39,529) |
Cash dividends | (71,845) | 0 | 0 | (71,845) | 0 | 0 |
Repurchases of common stock | (1,100,417) | 0 | 0 | 0 | (1,100,417) | 0 |
Share-based compensation | 23,231 | 0 | 23,231 | 0 | 0 | 0 |
Common stock issued upon exercises of stock options | 23,235 | 0 | (6,719) | 0 | 29,954 | 0 |
Common stock issued upon vesting of restricted shares | (7,397) | 0 | (15,502) | 0 | 8,105 | 0 |
Tax benefit (charge) from share-based compensation | 46,718 | 0 | 46,718 | 0 | 0 | 0 |
Other | 200 | 0 | 59 | (12) | 153 | 0 |
Stockholders' Equity, end of period at Jan. 03, 2016 | 752,914 | 47,042 | 2,874,752 | (356,632) | (1,741,425) | (70,823) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 129,624 | 0 | 0 | 129,624 | 0 | 0 |
Other comprehensive (loss) income, net | 7,582 | 0 | 0 | 0 | 0 | 7,582 |
Cash dividends | (63,832) | 0 | 0 | (63,832) | 0 | 0 |
Repurchases of common stock | (335,258) | 0 | 0 | 0 | (335,258) | 0 |
Share-based compensation | 18,141 | 0 | 18,141 | 0 | 0 | 0 |
Common stock issued upon exercises of stock options | 18,981 | 0 | (6,395) | 0 | 25,376 | 0 |
Common stock issued upon vesting of restricted shares | (3,862) | 0 | (11,195) | 0 | 7,333 | 0 |
Tax benefit (charge) from share-based compensation | 3,257 | 0 | 3,257 | 0 | 0 | 0 |
Other | 189 | 0 | 29 | (17) | 177 | 0 |
Stockholders' Equity, end of period at Jan. 01, 2017 | 527,736 | 47,042 | 2,878,589 | (290,857) | (2,043,797) | (63,241) |
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect of change in accounting principle | 1,880 | 0 | 0 | 1,880 | 0 | 0 |
Net income | 194,029 | 0 | 0 | 194,029 | 0 | 0 |
Other comprehensive (loss) income, net | 17,043 | 0 | 0 | 0 | 0 | 17,043 |
Cash dividends | (68,322) | 0 | 0 | (68,322) | 0 | 0 |
Repurchases of common stock | (127,490) | 0 | 0 | 0 | (127,490) | 0 |
Share-based compensation | 20,928 | 0 | 20,928 | 0 | 0 | 0 |
Common stock issued upon exercises of stock options | 12,696 | 0 | (3,959) | 0 | 16,655 | 0 |
Common stock issued upon vesting of restricted shares | (5,497) | 0 | (9,683) | 0 | 4,186 | 0 |
Other | 200 | 0 | 80 | (19) | 139 | 0 |
Stockholders' Equity, end of period at Dec. 31, 2017 | $ 573,203 | $ 47,042 | $ 2,885,955 | $ (163,289) | $ (2,150,307) | $ (46,198) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 194,029 | $ 129,624 | $ 161,142 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 125,687 | 124,304 | 153,732 |
Share-based compensation | 20,928 | 18,141 | 23,231 |
Impairment of long-lived assets | 4,097 | 16,241 | 25,001 |
Deferred income tax | (119,330) | (14,213) | 89,026 |
Non-cash rent (income) expense, net | (11,822) | (7,543) | 3,364 |
Net receipt (recognition) of deferred vendor incentives | 1,901 | 959 | (2,559) |
System optimization losses (gains), net | 39,076 | (71,931) | (74,041) |
Gain on disposal of the Bakery | 0 | 0 | (25,529) |
Gain on sale of investments, net | (2,570) | (497) | (335) |
Distributions received from TimWen joint venture | 11,713 | 11,426 | 12,451 |
Equity in earnings in joint ventures, net | (7,573) | (8,351) | (9,205) |
Long-term debt-related activities, net (see below) | 12,075 | 11,767 | 8,075 |
Other, net | 1,706 | 4,172 | (4,318) |
Changes in operating assets and liabilities: | |||
Restricted cash | 164 | 228 | (23,640) |
Accounts and notes receivable, net | (17,340) | (34,213) | (40,399) |
Inventories | (305) | 34 | (62) |
Prepaid expenses and other current assets | (3,488) | (3,276) | (5,409) |
Accounts payable | (2,290) | (6,635) | (7,787) |
Accrued expenses and other current liabilities | 4,982 | 18,697 | (8,424) |
Net cash provided by operating activities | 251,640 | 188,934 | 274,314 |
Cash flows from investing activities: | |||
Capital expenditures | (81,710) | (150,023) | (251,622) |
Acquisitions | (86,788) | (2,209) | (1,232) |
Dispositions | 81,516 | 262,173 | 204,388 |
Proceeds from sale of the Bakery | 0 | 0 | 78,408 |
Changes in restricted cash | 24,935 | (14,971) | 3,634 |
Notes receivable, net | (9,000) | (3,581) | 3,289 |
Proceeds from sale of investments | 4,111 | 890 | 621 |
Payments for investments | 375 | 172 | 2,106 |
Net cash (used in) provided by investing activities | (67,311) | 92,107 | 35,380 |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 0 | 0 | 2,294,000 |
Repayments of long-term debt | (28,270) | (24,617) | (1,327,223) |
Change in restricted cash | 0 | 0 | (5,687) |
Deferred financing costs | (1,424) | (1,983) | (43,817) |
Repurchases of common stock | (126,231) | (336,958) | (1,098,717) |
Dividends | (68,322) | (63,832) | (71,845) |
Proceeds from stock option exercises | 12,884 | 19,773 | 27,952 |
Payments Related to Tax Withholding for Share-based Compensation | (5,721) | (4,444) | (12,221) |
Net cash used in financing activities | (217,084) | (412,061) | (237,558) |
Net cash (used in) provided by operations before effect of exchange rate changes on cash | (32,755) | (131,020) | 72,136 |
Effect of exchange rate changes on cash | 5,962 | 2,044 | (12,196) |
Net (decrease) increase in cash and cash equivalents | (26,793) | (128,976) | 59,940 |
Cash and cash equivalents at beginning of period | 198,240 | 327,216 | 267,276 |
Cash and cash equivalents at end of period | 171,447 | 198,240 | 327,216 |
Long-term debt-related activities, net: | |||
Accretion of long-term debt | 1,237 | 1,220 | 1,204 |
Amortization of deferred financing costs | 7,944 | 7,653 | 5,426 |
Loss on early extinguishment of debt | 0 | 0 | 7,295 |
Payments for termination of cash flow hedges | 0 | 0 | (7,337) |
Reclassification of unrealized losses on cash flow hedges | 2,894 | 2,894 | 1,487 |
Long-term debt-related activities, net: | 12,075 | 11,767 | 8,075 |
Cash paid for: | |||
Interest | 128,989 | 117,583 | 84,326 |
Income taxes, net of refunds | 29,311 | 77,620 | 41,275 |
Supplemental non-cash investing and financing activities: | |||
Capital expenditures included in accounts payable | 5,810 | 11,325 | 31,468 |
Capitalized lease obligations | 276,971 | 104,119 | 57,226 |
Accrued debt issuance costs | $ 0 | $ 512 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies | Summary of Significant Accounting Policies Corporate Structure The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is the parent company of its 100% owned subsidiary holding company, Wendy’s Restaurants, LLC (“Wendy’s Restaurants”). Wendy’s Restaurants is the parent company of Wendy’s International, LLC and its subsidiaries (“Wendy’s”). Wendy’s franchises and operates Wendy’s ® quick-service restaurants specializing in hamburger sandwiches throughout North America (defined as the United States of America (“U.S.”) and Canada). Wendy’s also has franchised restaurants in 29 foreign countries and U.S. territories. At December 31, 2017 , Wendy’s operated and franchised 337 and 6,297 restaurants, respectively. On May 31, 2015, Wendy’s completed the sale of its Company-operated bakery, The New Bakery Company, LLC and its subsidiaries (collectively, the “Bakery”), a 100% owned subsidiary of Wendy’s. As a result of the sale of the Bakery, as further discussed in Note 18 , the Bakery’s results of operations for all periods presented and the gain on disposal have been included in “ Net income from discontinued operations ” in our consolidated statements of operations. The Company manages and internally reports its business geographically. The operation and franchising of Wendy’s restaurants in North America comprises virtually all of our current operations and represents a single reportable segment. The revenues and operating results of Wendy’s restaurants outside of North America are not material. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company maintains two national advertising funds (the “Advertising Funds”) established to collect and administer funds contributed for use in advertising and promotional programs for Company-operated and franchised restaurants. The revenue, expenses and cash flows of such advertising funds are not included in the Company’s consolidated statements of operations or consolidated statements of cash flows because the contributions to these advertising funds are designated for specific purposes and the Company acts as an agent, in substance, with regard to these contributions. The assets and liabilities of these funds are reported as “Advertising funds restricted assets” and “Advertising funds restricted liabilities.” The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended December 31, 2017 ” or “ 2017 ,” which consisted of 52 weeks, (2) “the year ended January 1, 2017 ” or “ 2016 ,” which consisted of 52 weeks and (3) “the year ended January 3, 2016 ” or “ 2015 ,” which consisted of 53 weeks. Reclassifications Certain reclassifications have been made to prior year presentation to conform to the current year presentation. Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts. Restricted Cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders, and are restricted in their use. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Company’s senior secured notes. Changes in such restricted cash are presented as a component of cash flows from operating and financing activities in the consolidated statements of cash flows since the cash is restricted to the payment of interest and principal, respectively. Furthermore, certain cash receipts from asset dispositions and insurance proceeds held by the trustee are restricted for reinvestment in capital assets useful to the Company’s operations in accordance with the securitized financing facility. Changes in such restricted cash are presented as a component of cash flows from investing activities in the consolidated statement of cash flows since the cash is restricted for investing activities. In addition, the Company has outstanding letters of credit with various parties that are cash collateralized. The related cash collateral is classified as restricted cash in the consolidated balance sheets. Changes in such restricted cash are presented as a component of cash flows from investing activities in the consolidated statements of cash flows. Refer to Note 6 for further information. Accounts and Notes Receivable, Net Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, credit card receivables and refundable income taxes. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor. Inventories The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. Properties and Depreciation and Amortization Properties are stated at cost, including internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: three to 20 years for office and restaurant equipment (including technology), three to 15 years for transportation equipment and seven to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Capital leases and leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information. The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Assets held for sale are included in “Prepaid expenses and other current assets” in the consolidated balance sheets. Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. For goodwill impairment testing purposes, we include two reporting units comprised of our (1) North America Company-operated and franchise restaurants and (2) international franchise restaurants. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and we must perform step two of the impairment test (measurement). Step two of the impairment test, if necessary, requires the estimation of the fair value for the assets and liabilities of a reporting unit in order to calculate the implied fair value of the reporting unit’s goodwill. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. Impairment of Long-Lived Assets Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees and (2) Company-operated restaurant assets and related definite-lived intangible assets, which include favorable leases and reacquired rights under franchise agreements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our critical estimates in this review process include the anticipated future cash flows from leases and/or subleases or individual Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising; three to five years for computer software; four to 20 years for reacquired rights under franchise agreements; and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows. Investments The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand. (Tim Hortons is a registered trademark of Tim Hortons USA Inc.) In addition, the Company has a 20% share in a joint venture for the operation of Wendy’s restaurants in Brazil (the “Brazil JV”). The Company has significant influence over these investees. Such investments are accounted for using the equity method, under which our results of operations include our share of the income (loss) of the investees in “ Other operating expense (income), net .” Investments in limited partnerships and other non-current investments in which the Company does not have significant influence over the investees, which includes our indirect 18.5% interest (as of December 31, 2017) in Arby’s Restaurant Group, Inc. (“Arby’s”), are recorded at cost with related realized gains and losses reported as income or loss in the period in which the securities are sold or otherwise disposed. Cash distributions and dividends received that are determined to be returns of capital are recorded as a reduction of the carrying value of our investments and returns on our investments are recorded to “Investment income, net.” The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards are determined using the average of the high and low trading prices of our common stock on the date of grant, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Foreign Currency Translation Substantially all of the Company’s foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation are recorded to the “Foreign currency translation adjustment” component of “ Accumulated other comprehensive loss .” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” Restaurant Dispositions In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. Therefore, the Company recognizes the technical assistance and development fees when earned. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information. Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. “Franchise royalty revenue and fees” includes royalties and franchise fees. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees and development fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened as all material services and conditions related to the franchise fee have been substantially performed upon the restaurant opening. Initial franchise fees received in connection with sales of Company-operated restaurants to franchisees and facilitating franchisee-to-franchisee restaurant transfers as well as renewal franchise fees are recognized as revenue when the license agreements are signed and the restaurant has opened since there are no remaining material services and conditions related to the franchise fees. Franchise fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. “Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases. See “Leases” below for further information on rental income and favorable and unfavorable lease amounts. Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Cost of sales excludes depreciation and amortization expense. Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.” Advertising Costs The Company incurs various advertising costs, including contributions to certain advertising cooperatives based upon a percentage of net sales by Company-operated restaurants. All advertising costs are expensed as incurred and are included in “Cost of sales.” Franchise Support and Other Costs The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. These costs primarily relate to franchise development services, facilitating franchisee-to-franchisee restaurant transfers and information technology services, which are charged to “ Other operating expense (income), net ,” as incurred. Self-Insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns and leases sites from third parties, which it leases and/or subleases to franchisees. At inception, each lease or sublease is evaluated to determine whether the lease will be accounted for as an operating or capital lease, including the determination of direct financing leases based on its terms. Capital lease assets and related obligations are recorded at the lower of the present value of future minimum lease payments or fair market value at lease inception. When determining the lease term, we include option periods for which failure to renew the lease imposes a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees, is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement, historical performance of the restaurant and the existence of bargain renewal options. For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense or income, as applicable, on a straight line basis (“Straight-Line Rent”) over the applicable lease terms. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense or income, as applicable, is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid or received as a deferred lease liability or asset which is included in “Other liabilities” or “Other assets,” as applicable. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned. For direct financing leases, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of its gross investment less unearned income. The current and long-term portions of our net investment in direct financing leases are included in “ Accounts and notes receivable, net ” and “ Net investment in direct financing leases ,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Favorable and unfavorable lease amounts are recorded as components of “Other intangible assets” and “Other liabilities,” respectively. Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term. Rental expense, rental income and favorable and unfavorable lease amortization for operating leases is recognized in the consolidated statements of operations based on the nature of the underlying lease. Amounts related to leases for Company-operated restaurants are recorded to “Cost of sales.” Rental expense, including any related amortization, for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense.” Rental income, including any related amortization, for properties leased or subleased to franchisees is recorded to “Franchise rental income.” Amounts related to leases for corporate offices and equipment are recorded to “General and administrative.” Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or capital, including direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of favorable and unfavorable leases. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used. Concentration of Risk Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2017 , 2016 or 2015 . As of December 31, 2017 , Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding produce and breads, that serviced approximately 39% of its Company-operated and franchised restaurants and six additional in-line distributors that, in the aggregate, serviced approximately 53% of its Company-operated and franchised restaurants. We believe that our vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. Wendy’s restaurants are principally located throughout the U.S. and to a lesser extent, in 30 foreign countries and U.S. territories with the largest number in Canada. Wendy’s restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Ohio, Texas, Georgia, California, Pennsylvania, North Carolina and Michigan. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U. S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, poultry, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for ou |
System Optimization Losses (Gai
System Optimization Losses (Gains), Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment | |
System Optimization (Losses) Gains, Net | Properties 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. Depreciation and amortization expense related to properties was $90,971 , $92,286 and $114,961 during 2017 , 2016 and 2015 , respectively. Depreciation and amortization includes $630 , $2,598 and $8,607 of accelerated depreciation and amortization during 2017 , 2016 and 2015 , respectively, on certain long-lived assets to reflect their use over shortened estimated useful lives in connection with the reimaging of restaurants under our Image Activation program. |
System Optimization | |
Property, Plant and Equipment | |
System Optimization (Losses) Gains, Net | System Optimization Losses (Gains), Net In July 2013, the Company announced a system optimization initiative, as part of its brand transformation, which includes a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating franchisee-to-franchisee restaurant transfers. In February 2015, the Company announced plans to reduce its ongoing Company-operated restaurant ownership to approximately 5% of the total system, which the Company completed as of January 1, 2017 . During 2016 and 2015, the Company completed the sale of 310 and 327 Company-operated restaurants to franchisees, respectively, which included the sale of all of its Company-operated restaurants in Canada. In addition, during 2016 and 2015 the Company facilitated the transfer of 144 and 71 restaurants between franchisees, respectively. During 2017, the Company recorded post-closing adjustments on sales of restaurants and completed the sale of other assets, resulting in net gains totaling $4,559 . In addition, the Company facilitated the transfer of 400 restaurants between franchisees during 2017 (excluding the DavCo and NPC Transactions discussed below). While the Company has no plans to reduce its ownership below the 5% level, Wendy’s will continue to optimize its system by facilitating franchisee-to-franchisee restaurant transfers, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base and drive new restaurant development and accelerate reimages in the Image Activation format, which includes innovative exterior and interior restaurant designs. DavCo and NPC Transactions As part of our system optimization initiative, the Company acquired 140 Wendy’s restaurants on May 31, 2017 from DavCo Restaurants, LLC (“DavCo”) for total net cash consideration of $86,788 , which were immediately sold to NPC International, Inc. (“NPC”), an existing franchisee of the Company, for cash proceeds of $70,688 (the “DavCo and NPC Transactions”). As part of the transaction, NPC has agreed to remodel 90 acquired restaurants in the Image Activation format by the end of 2021 and build 15 new Wendy’s restaurants by the end of 2022. Prior to closing the DavCo transaction, seven DavCo restaurants were closed. The acquisition of Wendy’s restaurants from DavCo was not contingent on executing the sale agreement with NPC; as such, the Company accounted for the transactions as an acquisition and subsequent disposition of a business. The total consideration paid to DavCo was allocated to net tangible and identifiable intangible assets acquired based on their estimated fair values. As part of the transactions, the Company retained leases for purposes of subleasing such properties to NPC. 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. Gains and losses recognized on dispositions are recorded to “ System optimization losses (gains), net ” in our consolidated statements of operations. Costs related to dispositions under our system optimization initiative are recorded to “ Reorganization and realignment costs ,” and include severance and related employee costs, professional fees and other associated costs, which are further described in Note 4 . All other costs incurred during 2017 related to facilitating franchisee-to-franchisee restaurant transfers were recorded to “ Other operating expense (income), net .” 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. Assets Held for Sale As of December 31, 2017 and January 1, 2017 , the Company had assets held for sale of $2,235 and $4,800 , respectively, primarily consisting of surplus properties. Assets held for sale are included in “ Prepaid expenses and other current assets .” |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions [Text Block] | Acquisitions The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for restaurants acquired from franchisees: Year Ended 2017 2016 2015 Restaurants acquired from franchisees — 2 4 Total consideration paid, net of cash received $ — $ 2,209 $ 1,232 Identifiable assets acquired and liabilities assumed: Properties — 2,218 1,303 Acquired franchise rights — — 760 Other assets — 9 — Capital leases obligations — — (438 ) Unfavorable leases — — (440 ) Other liabilities — (18 ) (80 ) Total identifiable net assets — 2,209 1,105 — — 127 Post-closing adjustments (a) — — (1,535 ) Goodwill $ — $ — $ (1,408 ) _______________ (a) Post-closing adjustments in 2015 primarily represent an adjustment to the fair value of franchise rights acquired in connection with the acquisition of franchised restaurants during 2014. On May 31, 2017, the Company also entered into the DavCo and NPC Transactions. See Note 2 for further information. |
Reorganization and Reorganizati
Reorganization and Reorganization Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Realignment and Reorganization Costs | Reorganization and Realignment Costs The following is a summary of the initiatives included in “Reorganization and realignment costs:” Year Ended 2017 2016 2015 G&A realignment - May 2017 plan $ 21,663 $ — $ — G&A realignment - November 2014 plan — 692 10,342 System optimization initiative 911 9,391 11,568 Reorganization and realignment costs $ 22,574 $ 10,083 $ 21,910 General and Administrative ( “ G&A ”) Realignment May 2017 Plan In May 2017, the Company initiated a new plan to further reduce its G&A expenses. The Company expects to incur total costs aggregating approximately $28,000 to $33,000 related to the plan. The Company recognized costs totaling $21,663 during 2017, which primarily included severance and related employee costs, share-based compensation and third-party and other costs. The Company expects to incur additional costs aggregating approximately $6,000 to $11,000 , comprised of (1) severance and related employee costs of approximately $2,000 , (2) recruitment and relocation costs of approximately $4,000 , (3) third-party and other costs of approximately $1,000 and (4) share-based compensation of approximately $2,000 . The Company expects to continue to recognize costs associated with the plan into 2019. The following is a summary of the activity recorded as a result of the May 2017 plan: Year Ended 2017 Severance and related employee costs $ 14,956 Recruitment and relocation costs 489 Third-party and other costs 1,091 16,536 Share-based compensation (a) 5,127 Total G&A realignment - May 2017 plan $ 21,663 _______________ (a) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our May 2017 plan. As of December 31, 2017 , the accruals for our May 2017 plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,467 and $3,803 , respectively. The table below presents a rollforward of our accruals for the May 2017 plan. Balance January 1, 2017 Charges Payments Balance December 31, 2017 Severance and related employee costs $ — $ 14,956 $ (2,863 ) $ 12,093 Recruitment and relocation costs — 489 (312 ) 177 Third-party and other costs — 1,091 (1,091 ) — $ — $ 16,536 $ (4,266 ) $ 12,270 November 2014 Plan In November 2014, the Company initiated a plan to reduce its G&A expenses. The plan included a realignment and reinvestment of resources to focus primarily on accelerated restaurant development and consumer-facing restaurant technology to drive long-term growth. The Company achieved the majority of the expense reductions through the realignment of its U.S. field operations and savings at its Restaurant Support Center in Dublin, Ohio, which was substantially completed by the end of the second quarter of 2015. The Company recognized costs of $23,960 in aggregate since inception. The Company did not incur any expenses during 2017 and does not expect to incur additional costs related to the plan. The following is a summary of the activity recorded as a result of the November 2014 plan: Year Ended Total Incurred Since Inception 2016 2015 Severance and related employee costs (a) $ (344 ) $ 3,011 $ 14,584 Recruitment and relocation costs 992 1,658 2,859 Other 44 49 181 692 4,718 17,624 Share-based compensation (b) — 5,624 6,336 Total G&A realignment - November 2014 plan $ 692 $ 10,342 $ 23,960 _______________ (a) 2016 includes a reversal of an accrual of $387 as a result of a change in estimate. (b) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our November 2014 plan. The table below presents a rollforward of our accruals for our November 2014 plan during 2016, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of December 31, 2017 , no accrual remained. Balance January 3, 2016 Charges Payments Balance January 1, 2017 Severance and related employee costs $ 3,431 $ (344 ) $ (2,855 ) $ 232 Recruitment and relocation costs 144 992 (1,136 ) — Other — 44 (44 ) — $ 3,575 $ 692 $ (4,035 ) $ 232 System Optimization Initiative The Company has recognized costs related to its system optimization initiative, which includes a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating franchisee-to-franchisee restaurant transfers. The Company does not expect to incur additional costs in connection with dispositions under our system optimization initiative. The following is a summary of the costs recorded as a result of our system optimization initiative: Year Ended Total Incurred Since Inception 2017 2016 2015 Severance and related employee costs $ 3 $ 82 $ 894 $ 18,237 Professional fees 838 7,437 3,360 17,448 Other 70 272 930 5,813 911 7,791 5,184 41,498 Accelerated depreciation and amortization (a) — 1,600 6,384 25,398 Share-based compensation (b) — — — 5,013 Total system optimization initiative $ 911 $ 9,391 $ 11,568 $ 71,909 _______________ (a) Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold in connection with our system optimization initiative. (b) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative. The tables below present a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities.” Balance January 1, 2017 Charges Payments Balance December 31, 2017 Severance and related employee costs $ — $ 3 $ (3 ) $ — Professional fees 101 838 (939 ) — Other — 70 (70 ) — $ 101 $ 911 $ (1,012 ) $ — Balance January 3, 2016 Charges Payments Balance January 1, 2017 Severance and related employee costs $ 77 $ 82 $ (159 ) $ — Professional fees 708 7,437 (8,044 ) 101 Other 90 272 (362 ) — $ 875 $ 7,791 $ (8,565 ) $ 101 |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Income Per Share Basic income per share for 2017 , 2016 and 2015 was computed by dividing income amounts by the weighted average number of common shares outstanding. Income amounts used to calculate basic and diluted income per share were as follows: Year Ended 2017 2016 2015 Income from continuing operations $ 194,029 $ 129,624 $ 139,979 Net income from discontinued operations — — 21,163 Net income $ 194,029 $ 129,624 $ 161,142 The weighted average number of shares used to calculate basic and diluted income per share were as follows: Year Ended 2017 2016 2015 Common stock: Weighted average basic shares outstanding 244,179 262,209 323,018 Dilutive effect of stock options and restricted shares 8,110 4,503 5,707 Weighted average diluted shares outstanding 252,289 266,712 328,725 Diluted income per share was computed by dividing income by the weighted average number of basic shares outstanding plus the potential common share effect of dilutive stock options and restricted shares. We excluded potential common shares of 1,168 , 1,558 and 2,323 for 2017 , 2016 and 2015 , respectively, from our diluted income per share calculation as they would have had anti-dilutive effects. |
Cash and Receivables
Cash and Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Receivables [Abstract] | |
Cash and Receivables Disclosure [Text Block] | Cash and Receivables Year End December 31, 2017 January 1, 2017 Cash and cash equivalents Cash $ 171,109 $ 192,905 Cash equivalents 338 5,335 $ 171,447 $ 198,240 Restricted cash Current Accounts held by trustee for the securitized financing facility $ 28,933 $ 29,096 Collateral supporting letters of credit 3,205 6,165 Accounts held by trustee for reinvestment in capital assets 5 22,014 Trust for termination costs for former Wendy’s executives 289 168 Other 201 169 $ 32,633 $ 57,612 Non-current (a) Trust for termination costs for former Wendy’s executives $ 165 $ 738 _______________ (a) Included in “Other assets.” Year End December 31, 2017 January 1, 2017 Accounts and Notes Receivable, Net Current Accounts receivable: Franchisees $ 78,699 $ 74,134 Other (a) 37,377 25,732 116,076 99,866 Notes receivable from franchisees (b) (c) 2,860 2,989 118,936 102,855 Allowance for doubtful accounts (4,546 ) (4,030 ) $ 114,390 $ 98,825 Non-Current (d) Notes receivable from franchisees (c) $ 17,589 $ 9,290 Allowance for doubtful accounts — (26 ) $ 17,589 $ 9,264 _______________ (a) Includes income tax refund receivables of $26,262 and $18,111 as of December 31, 2017 and January 1, 2017 , respectively. (b) Includes the current portion of direct financing lease receivables of $625 and $101 as of December 31, 2017 and January 1, 2017 , respectively. See Note 20 for further information. (c) Includes a note receivable from a franchisee in Indonesia, of which $1,008 was included in current notes receivable as of December 31, 2017 and $3,789 and $2,454 was included in non-current notes receivable as of December 31, 2017 and January 1, 2017 , respectively. Non-current notes receivable include notes receivable from the Brazil JV totaling $12,800 and $6,810 as of December 31, 2017 and January 1, 2017 , respectively. See Note 7 for further information. Non-current notes receivable include a note receivable from a franchisee in India of $1,000 as of December 31, 2017 . (d) Included in “Other assets.” The following is an analysis of the allowance for doubtful accounts: Year Ended 2017 2016 2015 Balance at beginning of year: Current $ 4,030 $ 3,488 $ 2,343 Non-current 26 257 246 Provision for doubtful accounts: Franchisees and other 579 390 979 Uncollectible accounts written off, net of recoveries (89 ) (79 ) 177 Balance at end of year: Current 4,546 4,030 3,488 Non-current — 26 257 Total $ 4,546 $ 4,056 $ 3,745 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Investments | Investments The following is a summary of the carrying value of our investments: Year End December 31, January 1, Equity investments $ 55,363 $ 54,545 Cost investments 639 2,436 $ 56,002 $ 56,981 Equity Investments Wendy’s has a 50% share in the TimWen joint venture and a 20% share in the Brazil JV, both of which are accounted for using the equity method of accounting, under which our results of operations include our share of the income (loss) of the investees in “ Other operating expense (income), net .” A wholly-owned subsidiary of Wendy’s entered into the Brazil JV during the second quarter of 2015 for the operation of Wendy’s restaurants in Brazil. Wendy’s, Starboard International Holdings B.V. and Infinity Holding E Participações Ltda. contributed $1 , $2 and $2 , respectively, each receiving proportionate equity interests of 20% , 40% and 40% , respectively. The Company did not receive any distributions and our share of the Brazil JV’s net losses was $1,134 , $271 and $88 during 2017 , 2016 and 2015, respectively. During 2017, a wholly-owned subsidiary of Wendy’s agreed to lend the Brazil JV an aggregate amount up to, but not to exceed, $4,800 , which is in addition to $8,000 previously loaned. During 2017 , 2016 and 2015, $5,990 , $5,110 and $1,700 was loaned to the Brazil JV under these agreements, respectively. The loans are denominated in U.S. Dollars, which is also the functional currency of the subsidiary; therefore, there is no exposure to changes in foreign currency rates. The loans are due October 20, 2020 and bear interest at 6.5% per year. See Note 6 for further discussion. The carrying value of our investment in TimWen exceeded our interest in the underlying equity of the joint venture by $31,033 and $31,213 as of December 31, 2017 and January 1, 2017 , respectively, primarily due to purchase price adjustments from the 2008 merger of Triarc Companies, Inc. and Wendy’s (the “Wendy’s Merger”). Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended December 31, 2017 , January 1, 2017 and January 3, 2016 . Year Ended 2017 2016 2015 Balance at beginning of period $ 54,545 $ 55,541 $ 69,790 Investment 375 172 108 Equity in earnings for the period 9,897 10,627 11,533 Amortization of purchase price adjustments (a) (2,324 ) (2,276 ) (2,328 ) 7,573 8,351 9,205 Distributions received (11,713 ) (11,426 ) (12,451 ) Foreign currency translation adjustment included in “Other comprehensive income (loss), net” and other 4,583 1,907 (11,111 ) Balance at end of period $ 55,363 $ 54,545 $ 55,541 _______________ (a) Based upon an average original aggregate life of 21 years. Indirect Investment in Arby’s In connection with the sale of Arby’s during 2011, Wendy’s Restaurants obtained an 18.5% equity interest in ARG Holding Corporation (“ARG Parent”) (through which Wendy’s Restaurants indirectly retained an 18.5% interest in Arby’s), with a fair value of $19,000 . See Note 12 for further information on the fair value of our indirect investment in Arby’s as of December 31, 2017 and January 1, 2017 . We account for our interest in Arby’s as a cost method investment. The carrying value of our investment was reduced to zero during 2013 in connection with the receipt of a dividend that was determined to be a return of our investment. During 2015, the Company received a dividend of $54,911 from our investment in Arby’s, which was recognized in “Investment income, net.” Our 18.5% equity interest as of December 31, 2017 was diluted to 12.3% on February 5, 2018, when a subsidiary of ARG Parent acquired Buffalo Wild Wings, Inc. As a result, our diluted ownership interest includes both the Arby’s and Buffalo Wild Wings brands under the newly formed combined company, Inspire Brands. |
Properties (Notes)
Properties (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Properties | Properties 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. Depreciation and amortization expense related to properties was $90,971 , $92,286 and $114,961 during 2017 , 2016 and 2015 , respectively. Depreciation and amortization includes $630 , $2,598 and $8,607 of accelerated depreciation and amortization during 2017 , 2016 and 2015 , respectively, on certain long-lived assets to reflect their use over shortened estimated useful lives in connection with the reimaging of restaurants under our Image Activation program. |
Goodwill And Other Intangible A
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 _______________ (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 _______________ (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. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued Expenses | Accrued Expenses and Other Current Liabilities Year End December 31, 2017 January 1, 2017 Accrued compensation and related benefits $ 49,541 $ 47,214 Accrued taxes 19,924 21,571 Other 42,159 33,249 $ 111,624 $ 102,034 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: Year End December 31, January 1, Series 2015-1 Class A-2 Notes: (a) Series 2015-1 Class A-2-I Notes $ 855,313 $ 864,063 Series 2015-1 Class A-2-II Notes 879,750 888,750 Series 2015-1 Class A-2-III Notes 488,750 493,750 7% debentures, due in 2025 (b) 89,514 88,277 Capital lease obligations, due through 2045 467,964 211,714 Unamortized debt issuance costs (26,889 ) (34,272 ) 2,754,402 2,512,282 Less amounts payable within one year (30,172 ) (24,652 ) Total long-term debt $ 2,724,230 $ 2,487,630 Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 31, 2017 were as follows: Fiscal Year 2018 $ 30,172 2019 867,164 2020 21,905 2021 24,033 2022 860,655 Thereafter 987,848 $ 2,791,777 _______________ (a) On June 1, 2015, Wendy’s Funding, LLC (“Wendy’s Funding” or the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of The Wendy’s Company, entered into a base indenture and a related supplemental indenture (collectively, the “Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2015-1 3.371% Fixed Rate Senior Secured Notes, Class A-2-I (the “Series 2015-1 Class A-2-I Notes”) with an initial principal amount of $875,000 , Series 2015-1 4.080% Fixed Rate Senior Secured Notes, Class A-2-II (the “Series 2015-1 Class A-2-II Notes”) with an initial principal amount of $900,000 and the Series 2015-1 4.497% Fixed Rate Senior Secured Notes, Class A-2-III, (the “Series 2015-1 Class A-2-III Notes”) with an initial principal amount of $500,000 (collectively, the “Series 2015-1 Class A-2 Notes”). In addition, the Master Issuer entered into a revolving financing facility of Series 2015-1 Variable Funding Senior Secured Notes, Class A-1 (the “Series 2015-1 Class A-1 Notes” and, together with the Series 2015-1 Class A-2 Notes, the “Series 2015-1 Senior Notes”), which allows for the drawing of up to $150,000 under the Series 2015-1 Class A-1 Notes, which include certain credit instruments, including a letter of credit facility. The Series 2015-1 Class A-1 Notes were issued under the Indenture and allow for drawings on a revolving basis. During 2015, the Company borrowed and repaid $19,000 under the Series 2015-1 Class A-1 Notes. No amounts were borrowed under the Series 2015-1 Class A-1 Notes during 2017 and 2016. The Series 2015-1 Senior Notes were issued in a securitization transaction pursuant to which certain of the Company’s domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual property, were contributed or otherwise transferred to the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company that act as guarantors (the “Guarantors”) of the Series 2015-1 Senior Notes and that have pledged substantially all of their assets, excluding certain real estate assets and subject to certain limitations, to secure the Series 2015-1 Senior Notes. Interest and principal payments on the Series 2015-1 Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Series 2015-1 Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the Series 2015-1 Class A-2 Notes is in June 2045, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment dates of the Series 2015-1 Class A-2-II Notes and the Series 2015-1 Class A-2-III Notes will be seven and 10 years, respectively, from the date of issuance (the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Series 2015-1 Class A-2 Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture. As further discussed below, the Series 2015-1 Class A-2-I Notes were refinanced subsequent to December 31, 2017. The Series 2015-1 Class A-1 Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Series 2015-1 Class A-1 note agreement. There is a commitment fee on the unused portion of the Series 2015-1 Class A-1 Notes which ranges from 0.50% to 0.85% based on utilization. As of December 31, 2017 and January 1, 2017, $29,080 and $26,552 of letters of credit were outstanding against the Series 2015-1 Class A-1 Notes, respectively, which relate primarily to interest reserves required under the Indenture. As further discussed below, the Series 2015-1 Class A-1 Notes were refinanced subsequent to December 31, 2017. During 2017 and 2016 , the Company incurred debt issuance costs of $561 and $2,495 , respectively, in connection with the issuance of the Series 2015-1 Senior Notes. The debt issuance costs are being amortized to “Interest expense, net” through the Anticipated Repayment Dates of the Series 2015-1 Senior Notes utilizing the effective interest rate method. As of December 31, 2017, the effective interest rates, including the amortization of debt issuance costs, were 3.831% , 4.361% and 4.696% for the Series 2015-1 Class A-2-I Notes, Series 2015-1 Class A-2-II Notes and Series 2015-1 Class A-2-III Notes, respectively. The Series 2015-1 Senior Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Series 2015-1 Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Series 2015-1 Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Series 2015-1 Senior Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Series 2015-1 Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Series 2015-1 Class A-2 Notes on the applicable scheduled maturity date. The Series 2015-1 Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Series 2015-1 Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the trustee and the noteholders, and are restricted in their use. As of December 31, 2017 and January 1, 2017 , Wendy’s Funding had restricted cash of $28,933 and $29,096 , respectively, which primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Series 2015-1 Class A-2 Notes. The proceeds from the issuance of the Series 2015-1 Class A-2 Notes, were used to repay all amounts outstanding on the Term A Loans and Term B Loans under the Company’s May 16, 2013 Restated Credit Agreement amended on September 24, 2013 (the “2013 Restated Credit Agreement”). In connection with the repayment of the Term A Loans and Term B Loans, Wendy’s terminated the related interest rate swaps with notional amounts totaling $350,000 and $100,000 , respectively, which had been designated as cash flow hedges. See Note 12 for more information on the interest rate swaps. As a result, the Company recorded a loss on early extinguishment of debt of $7,295 during the second quarter of 2015, primarily consisting of the write-off of deferred costs related to the 2013 Restated Credit Agreement of $7,233 and fees paid to terminate the related interest rate swaps of $62 . On January 17, 2018, Wendy’s Funding completed a refinancing transaction under which the Master Issuer issued Series 2018-1 3.573% Fixed Rate Senior Secured Notes, Class A-2-I (the “Series 2018-1 Class A-2-I Notes”) with an initial principal amount of $450,000 and Series 2018-1 3.884% Fixed Rate Senior Secured Notes, Class A-2-II (the “Series 2018-1 Class A-2-II Notes”) with an initial principal amount of $475,000 (collectively, the “Series 2018-1 Class A-2 Notes”). Interest payments on the Series 2018-1 Class A-2 Notes are payable on a quarterly basis. The legal final maturity date of the Series 2018-1 Class A-2 Notes is in March 2048, but, unless earlier prepaid to the extent permitted under the indenture that governs the Series 2018-1 Class A-2 Notes, the anticipated repayment dates of the Series 2018-1 Class A-2-I Notes and the Series 2018-1 Class A-2-II Notes will be March 2025 and March 2028, respectively. If the Master Issuer has not repaid or redeemed the Series 2018-1 Class A-2 Notes prior to the respective anticipated repayment date, additional interest will accrue on the Series 2018-1 Class A-2 Notes equal to the greater of (a) 5.00% per annum and (b) a per annum interest rate equal to the excess, if any, by which the sum of (i) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00% , plus (iii) (1) with respect to the Series 2018-1 Class A-2-I Notes, 1.35% , and (2) with respect to the Series 2018-1 Class A-2-II Notes, 1.58% , exceeds the original interest rate with respect to such tranche. The net proceeds from the sale of the Series 2018-1 Class A-2 Notes were used to redeem the Master Issuer’s outstanding Series 2015-1 Class A-2-I Notes, to pay prepayment and transaction costs, and for general corporate purposes. As a result, the Company expects to record a loss on early extinguishment of debt of approximately $11,500 during the first quarter of 2018. The Series 2018-1 Class A-2 Notes have scheduled principal payments of $9,250 annually from 2018 through 2024, $423,250 in 2025, $4,750 in each 2026 through 2027 and $427,500 in 2028. Concurrently, the Master Issuer entered into a revolving financing facility of Series 2018-1 Variable Funding Senior Secured Notes, Class A-1 (the “Series 2018-1 Class A-1 Notes” and, together with the Series 2018-1 Class A-2 Notes, the “Series 2018-1 Senior Notes”), which allows for the drawing of up to $150,000 under the Series 2018-1 Class A-1 Notes, which include certain credit instruments, including a letter of credit facility. On the closing date, the Company had no outstanding borrowings under its Series 2018-1 Class A-1 Notes. The Series 2015-1 Class A-1 Notes were canceled on the closing date and the letters of credit outstanding against the Series 2015-1 Class A-1 Notes were transferred to the Series 2018-1 Class A-1 Notes. During 2017 , the Company incurred debt issuance costs of $351 in connection with the issuance of the Series 2018-1 Senior Notes. The debt issuance costs will be amortized to “Interest expense, net” through the anticipated repayment dates of the Series 2018-1 Senior Notes utilizing the effective interest rate method. As of December 31, 2017, the debt issuance costs are included in “ Other assets ” as the Series 2018-1 Senior Notes had not yet been issued. (b) Wendy’s 7% debentures are unsecured and were reduced to fair value in connection with the Wendy’s Merger based on their outstanding principal of $100,000 and an effective interest rate of 8.6% . The fair value adjustment is being accreted and the related charge included in “Interest expense, net” until the debentures mature. These debentures contain covenants that restrict the incurrence of indebtedness secured by liens and certain capitalized lease transactions. Wendy’s U.S. advertising fund has a revolving line of credit of $25,000 . Neither the Company, nor Wendy’s, is the guarantor of the debt. The advertising fund facility was established to fund the advertising fund operations. The availability under this line of credit was $23,713 as of December 31, 2017 . At December 31, 2017 , one of Wendy’s Canadian subsidiaries had a revolving credit facility of C $6,000 which bears interest at the Bank of Montreal Prime Rate. The debt is guaranteed by Wendy’s. The full amount of the line was available under this line of credit as of December 31, 2017 . The following is a summary of the Company’s assets pledged as collateral for certain debt: Year End December 31, Cash and cash equivalents $ 34,704 Restricted cash and other assets (including long-term) 29,047 Accounts and notes receivable, net 50,073 Inventories 2,979 Properties 277,389 Other intangible assets 1,097,066 $ 1,491,258 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. These inputs are classified into the following hierarchy: • Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets. • Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation. Financial Instruments 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 _______________ (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. The carrying amounts of cash, accounts payable and accrued expenses approximated fair value due to the short-term nature of those items. The carrying amounts of accounts and notes receivable, net (both current and non-current) approximated fair value due to the effect of the related allowance for doubtful accounts. Our cash and cash equivalents and guarantees are the only financial assets and liabilities measured and recorded at fair value on a recurring basis. Derivative Instruments The Company’s primary objective for entering into interest rate swap agreements was to manage its exposure to changes in interest rates, as well as to maintain an appropriate mix of fixed and variable rate debt. Our derivative instruments for 2015 included seven forward-starting interest rate swaps designated as cash flow hedges to change the floating rate interest payments for $350,000 and $100,000 in borrowings associated with the Term A Loans and Term B Loans, respectively, under the Company’s prior credit agreement, to fixed rate interest payments beginning June 30, 2015 and maturing on December 31, 2017. In May 2015, the Company terminated these interest rate swaps and paid $7,275 , which was recorded against the derivative liability. In addition, the Company incurred $62 in fees to terminate the interest rate swaps which was included in “Loss on early extinguishment of debt.” See Note 11 for further information. The unrealized loss on the cash flow hedges at termination of $7,275 was reclassified on a straight-line basis from “Accumulated other comprehensive loss” to “Interest expense, net” beginning June 30, 2015 (the original effective date of the interest rate swaps) through December 31, 2017 (the original maturity date of the interest rate swaps). As a result, 2017 , 2016 and 2015 include the reclassification of unrealized losses on the cash flow hedges of $2,894 , $2,894 and $1,487 , respectively, from “Accumulated other comprehensive loss” to “Interest expense.” There was no hedge ineffectiveness from these cash flows hedges through their termination in May 2015. Non-Recurring Fair Value Measurements Assets and liabilities remeasured to fair value on a non-recurring basis resulted in impairment that we have recorded to “ Impairment of long-lived assets ” in our consolidated statements of operations. Total impairment losses may reflect the impact of remeasuring long-lived assets held and used (including land, buildings, leasehold improvements and favorable lease assets) to fair value as a result of (1) the Company’s decision to lease and/or sublease the land and/or buildings to franchisees in connection with the sale or anticipated sale of restaurants and (2) declines in operating performance at Company-operated restaurants. The fair value of long-lived assets held and used presented in the tables below represents the remaining carrying value and was estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future Company-operated restaurant performance. Total impairment losses may also include the impact of remeasuring long-lived assets held for sale, which primarily include surplus properties. The fair values of long-lived assets held for sale presented in the tables below represent the remaining carrying value and were estimated based on current market values. See Note 16 for more information on impairment of our long-lived assets. Fair Value Measurements 2017 Total Losses December 31, Level 1 Level 2 Level 3 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, Level 1 Level 2 Level 3 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. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income from continuing operations before income taxes is set forth below: Year Ended 2017 2016 2015 Domestic $ 86,892 $ 192,082 $ 208,827 Foreign (a) 14,127 9,608 25,301 $ 101,019 $ 201,690 $ 234,128 (a) Excludes foreign income of domestic subsidiaries The benefit from (provision for) income taxes from continuing operations is set forth below: Year Ended 2017 2016 2015 Current: U.S. Federal $ (13,092 ) $ (75,167 ) $ (12,414 ) State (4,055 ) (5,805 ) 3,346 Foreign (9,173 ) (5,307 ) (10,778 ) Current tax provision (26,320 ) (86,279 ) (19,846 ) Deferred: U.S. Federal 127,592 7,975 (53,916 ) State (7,729 ) 6,733 (21,375 ) Foreign (533 ) (495 ) 988 Deferred tax benefit (provision) 119,330 14,213 (74,303 ) Income tax benefit (provision) $ 93,010 $ (72,066 ) $ (94,149 ) Deferred tax assets (liabilities) are set forth below: Year End December 31, 2017 January 1, 2017 Deferred tax assets: Net operating loss and credit carryforwards $ 66,770 $ 44,733 Unfavorable leases 40,544 50,771 Accrued compensation and related benefits 17,904 31,994 Deferred rent 14,862 19,552 Accrued expenses and reserves 9,673 16,486 Other 4,305 9,293 Valuation allowances (47,295 ) (11,400 ) Total deferred tax assets 106,763 161,429 Deferred tax liabilities: Intangible assets (333,708 ) (495,505 ) Owned and leased fixed assets, net of related obligations (47,702 ) (89,251 ) Other (24,406 ) (23,186 ) Total deferred tax liabilities (405,816 ) (607,942 ) $ (299,053 ) $ (446,513 ) Changes in the Company’s deferred tax asset and liability balances were primarily the result of the enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) , described in detail below. Major Tax Legislation On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code that affects 2017, including but not limited to (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries and (2) bonus depreciation that will allow for full expensing of qualified property. The Tax Act also establishes new tax laws that will be effective for 2018, including but not limited to (1) reducing the U.S. federal corporate tax rate from 35% to 21% , (2) a new provision designed to tax global intangible low-taxed income (“GILTI”), (3) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, (4) a limitation on deductible interest expense and (5) limitations on the deductibility of certain executive compensation. The Securities and Exchange Commission issued guidance on accounting for the tax effects of the Tax Act. The guidance provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting. In accordance with the guidance, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue its accounting on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. In our initial analysis of the impact of the Tax Act, we have recorded a discrete net tax benefit of $140,379 for the year ended December 31, 2017. This net benefit primarily consists of a benefit of $164,893 for the impact of the corporate rate reduction on our net deferred tax liabilities, partially offset by a net expense of $22,209 for the international-related provisions, including the transition tax (and the related impact to our recorded valuation allowance) and deferred taxes recorded on foreign earnings previously considered permanently reinvested. The Company has recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities and the transition tax and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made and additional regulatory guidance that may be issued. The Company is not able to determine a provisional estimate for the GILTI tax and, therefore, has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the year ended December 31, 2017. The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows: Amount Expiration Tax credit carryforwards: U.S. federal foreign tax credits $ 15,962 2022-2024 State tax credits 555 2020-2023 Foreign tax credits of non-U.S. subsidiaries 3,023 Not applicable Total $ 19,540 Net operating loss carryforwards: State and local net operating loss carryforwards $ 1,165,832 2018-2035 Foreign net operating loss carryforwards 234 2023-2026 Total $ 1,166,066 The Company’s valuation allowances of $47,295 and $11,400 as of December 31, 2017 and January 1, 2017 , respectively, relate to foreign and state tax credit carryforwards and net operating loss carryforwards. Valuation allowances increased $35,895 and $5,884 during 2017 and 2015, respectively, and decreased $5,697 during 2016, primarily as a result of the Tax Act and our system optimization initiative described in Note 2. The reduction in the U.S. corporate rate from 35% to 21% decreases our ability to utilize foreign tax credit carryforwards after 2017 and we expect them to expire unused. The relative presence of Company-operated restaurants in various states impacts expected future state taxable income available to utilize state net operating loss carryforwards. As the system optimization initiative has changed the Company’s relative presence in various states, the Company’s judgment about the ability to utilize certain state net operating loss carryforwards has likewise changed. The current portion of refundable income taxes was $26,262 and $18,111 as of December 31, 2017 and January 1, 2017, respectively, and is included in “Accounts and notes receivable, net.” Long-term refundable income taxes are included in “Other assets” and amounted to $239 as of January 1, 2017. There were no long-term refundable income taxes as of December 31, 2017. The reconciliation of income tax computed at the U.S. Federal statutory rate of 35% to reported income tax is set forth below: Year Ended 2017 (a) 2016 2015 Income tax provision at the U.S. Federal statutory rate $ (35,357 ) $ (70,592 ) $ (81,945 ) State income tax provision, net of U.S. Federal income tax effect (6,451 ) (3,767 ) (7,234 ) Federal rate change 164,893 — — Prior years’ tax matters (b) 15,964 — — Excess tax benefits from share-based compensation 5,196 — — Domestic tax planning initiatives 4,282 — — Foreign and U.S. tax effects of foreign operations 2,408 2,278 4,389 Valuation allowances (b) (c) (35,895 ) 4,915 (6,075 ) Non-deductible goodwill (d) (15,458 ) (6,409 ) (7,435 ) Transition tax (4,446 ) — — Unrepatriated earnings (1,801 ) — — Non-deductible expenses and other (325 ) 1,509 4,151 $ 93,010 $ (72,066 ) $ (94,149 ) _______________ (a) 2017 includes the following impacts associated with the Tax Act: (1) the revaluation of our U.S. net deferred tax liability at 21% resulting in a benefit of $164,893 , (2) a full valuation allowance of $15,962 on our U.S. foreign tax credit carryforwards due to the decrease in the U.S. federal tax rate, resulting in the Company concluding it is more likely than not that we will not be able to utilize our carryforwards before they expire, (3) a one-time transition tax of $4,446 , (4) deferred tax on unrepatriated earnings of $1,801 and (5) other net expenses of $2,305 . (b) Primarily related to certain state net operating loss carryforwards, previously considered worthless, that existed at the beginning of the year. In 2017, the Company changed its judgment regarding the likelihood of the utilization of these carryforwards. Because of this change, the Company recognized a deferred tax asset of $16,643 , net of federal benefit, which was partially offset by a valuation allowance of $13,667 , net of federal benefit (included in the valuation allowances amount above). (c) 2016 includes a $2,878 benefit related to the correction to a prior year identified and recorded in the first quarter of 2016. (d) Substantially all of the goodwill included in the net (loss) gain on sales of restaurants in 2017, 2016 and 2015 under our system optimization initiative was non-deductible for tax purposes. See Note 2 further information. 2016 includes a $3,837 federal benefit related to the correction to a prior year identified and recorded in the second quarter of 2016. The corresponding state benefit correction of $398 is included in the state income tax provision amount above. The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”). As part of CAP, tax years are examined on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. As such, our tax returns for fiscal years 2009 through 2016 have been settled. Certain of the Company’s state income tax returns from its 2013 fiscal year and forward remain subject to examination. We believe that adequate provisions have been made for any liabilities, including interest and penalties that may result from the completion of these examinations. Unrecognized Tax Benefits As of December 31, 2017 , the Company had unrecognized tax benefits of $28,848 , which, if resolved favorably would reduce income tax expense by $24,018 . A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Year End December 31, January 1, January 3, Beginning balance $ 19,545 $ 21,224 $ 25,715 Additions: Tax positions of current year 8,251 306 927 Tax positions of prior years 1,704 440 476 Reductions: Tax positions of prior years (295 ) (2,126 ) (5,182 ) Settlements (34 ) (42 ) (251 ) Lapse of statute of limitations (323 ) (257 ) (461 ) Ending balance $ 28,848 $ 19,545 $ 21,224 The addition of unrecognized tax benefits in 2017 was primarily related to the filing of amended returns in various jurisdictions, as well as an unfavorable court decision which caused us to change our judgment about the technical merits of a filing position. During 2018 , we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $6,617 due to expected settlements with taxing authorities and the lapse of statutes of limitations. During 2017 , 2016 and 2015 , the Company recognized $161 , $75 and $(1,627) of expense (income) for interest and $(106) , $25 and $(15) of (income) expense for penalties, respectively, related to uncertain tax positions. The Company has approximately $1,451 and $1,296 accrued for interest and $509 and $615 accrued for penalties as of December 31, 2017 and January 1, 2017 , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Dividends During 2017 , 2016 and 2015 , The Wendy’s Company paid dividends per share of $0.28 , $0.245 and $0.225 , respectively. Treasury Stock There were 470,424 shares of common stock issued at the beginning and end of 2017 , 2016 and 2015 . Treasury stock activity for 2017 , 2016 and 2015 was as follows: Treasury Stock 2017 2016 2015 Number of shares at beginning of year 223,850 198,109 104,614 Repurchases of common stock 8,607 29,545 99,881 Common shares issued: Stock options, net (1,853 ) (2,914 ) (5,043 ) Restricted stock, net (612 ) (796 ) (1,258 ) Director fees (15 ) (20 ) (21 ) Other (65 ) (74 ) (64 ) Number of shares at end of year 229,912 223,850 198,109 Repurchases of Common Stock In February 2017, our Board of Directors authorized a repurchase program for up to $150,000 of our common stock through March 4, 2018, when and if market conditions warrant and to the extent legally permissible. During 2017, the Company repurchased 8,607 shares with an aggregate purchase price of $127,367 , of which $1,259 was accrued at December 31, 2017 and excluding commissions of $123 . As of December 31, 2017, the Company had $22,633 of availability remaining under its February 2017 authorization. Subsequent to December 31, 2017 through February 20, 2018, the Company repurchased 1,265 shares with an aggregate purchase price of $20,661 , excluding commissions of $18 . The Company expects to complete the February 2017 authorization during the first quarter of 2018. In February 2018, our Board of Directors authorized the repurchase of up to $175,000 of our common stock through March 3, 2019, when and if market conditions warrant and to the extent legally permissible. On June 1, 2015, our Board of Directors authorized a repurchase program for up to $1,400,000 of our common stock through January 1, 2017, when and if market conditions warranted and to the extent legally permissible. In November 2016, the Company entered into an accelerated share repurchase agreement (the “2016 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing $1,400,000 share repurchase program. Under the 2016 ASR Agreement, the Company paid the financial institution an initial purchase price of $150,000 in cash and received an initial delivery of 11,087 shares of common stock, representing an estimate of 85% of the total shares expected to be delivered under the 2016 ASR Agreement. The total number of shares of common stock ultimately purchased by the Company under the 2016 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2016 ASR Agreement, less an agreed upon discount. On December 27, 2016, the Company completed the 2016 ASR Agreement and received an additional 316 shares of common stock. Additionally, during 2016, the Company repurchased 18,142 shares with an aggregate purchase price of $184,986 , excluding commissions of $272 . As a result, the Company completed substantially all of the $1,400,000 share repurchase program. Also as part of the June 2015 authorization, the Company commenced an $850,000 share repurchase program on June 3, 2015, which included (1) a modified Dutch auction tender offer to repurchase up to $639,000 of our common stock and (2) a separate stock purchase agreement to repurchase up to $211,000 of our common stock from the Trian Group. For additional information on the separate stock purchase agreement see Note 22. On June 30, 2015, the tender offer expired and on July 8, 2015, the Company repurchased 55,808 shares at $11.45 per share for an aggregate purchase price of $639,000 . On July 17, 2015, the Company repurchased 18,416 shares at $11.45 per share, pursuant to the separate stock purchase agreement, for an aggregate purchase price of $210,867 . As a result, the $850,000 share repurchase program that commenced on June 3, 2015 was completed during the third quarter of 2015. During 2015, the Company incurred costs of $2,288 in connection with the tender offer and Trian Group stock purchase agreement, which were recorded to treasury stock. In August 2015, the Company entered into an accelerated share repurchase agreement (the “2015 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase programs. Under the 2015 ASR Agreement, the Company paid the financial institution an initial purchase price of $164,500 in cash and received an initial delivery of 14,385 shares of common stock, representing an estimate of 85% of the total shares expected to be delivered under the 2015 ASR Agreement. The total number of shares of common stock ultimately purchased by the Company under the 2015 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2015 ASR Agreement, less an agreed discount. On September 25, 2015, the Company completed the 2015 ASR Agreement and received an additional 3,551 shares of common stock. During 2015, the Company incurred costs of $58 in connection with the 2015 ASR Agreement, which were recorded to treasury stock. Also as part of the June 2015 authorization, the Company repurchased 2,066 shares during 2015 with an aggregate purchase price of $21,959 , of which $1,700 was accrued at January 3, 2016 and excluding commissions of $28 . In August 2014, our Board of Directors authorized a repurchase program for up to $100,000 of our common stock through December 31, 2015, when and if market conditions warrant and to the extent legally permissible. As part of the August 2014 authorization, $76,111 remained available as of December 28, 2014. During the first and second quarters of 2015, the Company repurchased 5,655 shares with an aggregate purchase price of $61,631 , excluding commissions of $86 . During the third quarter of 2015, the Company repurchased $14,480 through the 2015 ASR Agreement described above. As a result, the $100,000 share repurchase program authorized in August 2014 was completed. Preferred Stock There were 100,000 shares authorized and no shares issued of preferred stock throughout 2017 , 2016 and 2015 . Accumulated Other Comprehensive Loss The following table provides a rollforward of the components of accumulated other comprehensive income (loss) attributable to The Wendy’s Company, net of tax as applicable: Foreign Currency Translation Cash Flow Hedges (a) Pension Total Balance at December 28, 2014 $ (28,363 ) $ (2,044 ) $ (887 ) $ (31,294 ) Current-period other comprehensive loss (37,800 ) (1,527 ) (202 ) (39,529 ) Balance at January 3, 2016 (66,163 ) (3,571 ) (1,089 ) (70,823 ) Current-period other comprehensive income (loss) 5,864 1,774 (56 ) 7,582 Balance at January 1, 2017 (60,299 ) (1,797 ) (1,145 ) (63,241 ) Current-period other comprehensive income 15,150 1,797 96 17,043 Balance at December 31, 2017 $ (45,149 ) $ — $ (1,049 ) $ (46,198 ) _______________ (a) Current-period other comprehensive income (loss) includes the effect of changes in unrealized losses on cash flow hedges, net of tax, for 2015. In addition, 2017, 2016 and 2015 include the reclassification of unrealized losses on cash flow hedges of $1,797 , $1,774 and $915 , respectively, from “Accumulated other comprehensive loss” to our consolidated statements of operations consisting of $2,894 , $2,894 and $1,487 , respectively, recorded to “Interest expense, net,” net of the related income tax benefit of $1,097 , $1,120 and $572 , respectively, recorded to “Provision for income taxes.” See Note 12 for more information. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company maintains several equity plans, which collectively provide or provided for the grant of stock options, restricted shares, tandem stock appreciation rights, restricted share units and performance shares to certain officers, other key employees, non-employee directors and consultants. The Company has not granted any tandem stock appreciation rights. During 2010, the Company implemented the 2010 Omnibus Award Plan (as amended, the “2010 Plan”) for the issuance of equity awards as described above. In June 2015, the 2010 Plan was amended with shareholder approval, to increase the number of shares of common stock available for issuance under the plan by 20,000 . All equity grants during 2017 and 2016 were issued from the 2010 Plan and it is currently the only equity plan from which future equity awards may be granted. As of December 31, 2017 , there were approximately 30,193 shares of common stock available for future grants under the 2010 Plan. During the periods presented in the consolidated financial statements, the Company settled all exercises of stock options and vesting of restricted shares, including performance shares, with treasury shares. Stock Options The Company’s current outstanding stock options have maximum contractual terms of 10 years and vest ratably over three years or cliff vest after three years. The exercise price of options granted is equal to the market price of the Company’s common stock on the date of grant. The fair value of stock options on the date of grant is calculated using the Black-Scholes Model. The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The following table summarizes stock option activity during 2017 : Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding at January 1, 2017 16,697 $ 8.31 Granted 2,826 15.36 Exercised (1,924 ) 7.16 Forfeited and/or expired (274 ) 10.12 Outstanding at December 31, 2017 17,325 $ 9.56 7.1 $ 118,817 Vested or expected to vest at December 31, 2017 17,190 $ 9.54 7.1 $ 118,264 Exercisable at December 31, 2017 10,943 $ 7.95 6.0 $ 92,644 The total intrinsic value of options exercised during 2017 , 2016 and 2015 was $14,624 , $12,594 and $30,116 , respectively. The weighted average grant date fair value of stock options granted during 2017 , 2016 and 2015 was $3.12 , $2.12 and $2.27 , respectively. The weighted average grant date fair value of stock options was determined using the following assumptions: 2017 2016 2015 Risk-free interest rate 1.94 % 1.28 % 1.76 % Expected option life in years 5.62 5.62 5.62 Expected volatility 23.88 % 28.25 % 29.25 % Expected dividend yield 1.82 % 2.38 % 2.23 % The risk-free interest rate represents the U.S. Treasury zero-coupon bond yield correlating to the expected life of the stock options granted. The expected option life represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends for similar grants. The expected volatility is based on the historical market price volatility of the Company as well as our industry peer group. The expected dividend yield represents the Company’s annualized average yield for regular quarterly dividends declared prior to the respective stock option grant dates. The Black-Scholes Model has limitations on its effectiveness including that it was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable and that the model requires the use of highly subjective assumptions including expected stock price volatility. Employee stock option awards have characteristics significantly different from those of traded options and changes in the subjective input assumptions can materially affect the fair value estimates. Restricted Shares The Company grants RSAs and RSUs, which primarily cliff vest after one to three years. For the purposes of our disclosures, the term “Restricted Shares” applies to RSAs and RSUs collectively unless otherwise noted. The fair value of Restricted Shares granted is determined using the average of the high and low trading prices of our common stock on the date of grant. The following table summarizes activity of Restricted Shares during 2017 : Number of Restricted Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2017 1,817 $ 9.30 Granted 560 15.41 Vested (652 ) 8.84 Forfeited (130 ) 10.17 Non-vested at December 31, 2017 1,595 $ 11.36 The total fair value of Restricted Shares that vested in 2017 , 2016 and 2015 was $10,004 , $6,339 and $10,188 , respectively. Performance Shares The Company grants performance-based awards to certain officers and key employees. The vesting of these awards is contingent upon meeting one or more defined operational goals (a performance condition) or common stock share prices (a market condition). The quantity of shares awarded ranges from 0% to 200% of “Target,” as defined in the award agreement as the midpoint number of shares, based on the level of achievement of the performance and market conditions. The fair values of the performance condition awards granted in 2017, 2016 and 2015 were determined using the average of the high and low trading prices of our common stock on the date of grant. Share-based compensation expense recorded for performance condition awards is reevaluated at each reporting period based on the probability of the achievement of the goal. The fair value of market condition awards granted in 2017, 2016 and 2015 were estimated using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and is applied to the average of the high and low trading prices of our common stock on the date of grant. The input variables are noted in the table below: 2017 2016 2015 Risk-free interest rate 1.44 % 0.82 % 1.00 % Expected life in years 3.00 3.00 3.00 Expected volatility 25.06 % 27.03 % 25.56 % Expected dividend yield (a) 0.00 % 0.00 % 0.00 % _______________ (a) The Monte Carlo method assumes a reinvestment of dividends. Share-based compensation expense is recorded ratably for market condition awards during the requisite service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met. The following table summarizes activity of performance shares at Target during 2017 : Performance Condition Awards Market Condition Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2017 799 $ 9.89 352 $ 12.17 Granted 165 13.87 134 16.81 Dividend equivalent units issued (a) 11 — 12 — Vested (b) (371 ) 9.73 — — Forfeited — — — — Non-vested at December 31, 2017 604 $ 11.13 498 $ 13.49 _______________ (a) Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares. There is no weighted average fair value associated with dividend equivalent units. (b) Excludes the vesting of an additional 37 shares, which resulted from the performance of performance condition awards exceeding Target. The total fair value of performance condition awards that vested in 2017 , 2016 and 2015 was $5,666 , $5,954 and $1,156 , respectively. The total fair value of market condition awards that vested in 2015 was $10,073 . No market condition awards vested in 2017 and 2016. Modifications of Share-Based Awards During 2017 and 2015, the Company modified the terms of awards granted to 31 and 25 employees, respectively, in connection with its system optimization initiative and G&A realignment plans discussed in Note 4 as well as the Bakery sale discussed in Note 18. These modifications resulted in the accelerated vesting of certain stock options and performance-based awards upon termination of such employees. As a result, during 2017, the Company recognized an increase in share-based compensation of $4,930 which was included in “Reorganization and realignment costs.” During 2015, the Company recognized an increase in share-based compensation of $5,977 , of which $5,624 , $181 and $172 was included in “Reorganization and realignment costs,” “General and administrative” and “ Net income from discontinued operations ,” respectively, as a result of the modifications. Share-Based Compensation Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Year Ended 2017 2016 2015 Stock options $ 6,923 $ 6,859 $ 10,081 Restricted shares (a) 5,778 5,051 4,834 Performance shares: Performance condition awards 1,764 4,681 888 Market condition awards 1,533 1,550 1,348 Modifications, net 4,930 — 5,805 Share-based compensation (b) 20,928 18,141 22,956 Less: Income tax benefit (b) (4,985 ) (6,520 ) (8,380 ) Share-based compensation, net of income tax benefit $ 15,943 $ 11,621 $ 14,576 _______________ (a) 2017 includes $197 related to retention awards in connection with the Company’s May 2017 G&A realignment plan, which was included in “Reorganization and realignment costs.” See Note 4 for further information. (b) Excludes $275 of pre-tax share-based compensation and $106 of related income tax benefits for 2015, respectively, which are included in “ Net income from discontinued operations .” As of December 31, 2017 , there was $21,495 of total unrecognized share-based compensation, which will be recognized over a weighted average amortization period of 2.06 years. |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 12 Months Ended |
Dec. 31, 2017 | |
Asset Impairment Charges [Abstract] | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets During 2017 , 2016 and 2015 , the Company recorded impairment charges on long-lived assets as a result of (1) the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, (2) the deterioration in operating performance of certain Company-operated restaurants and charges for capital improvements in restaurants impaired in prior years which did not subsequently recover and (3) closing Company-operated restaurants and classifying such surplus properties as held for sale. The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “ Impairment of long-lived assets :” Year Ended 2017 2016 2015 Restaurants leased or subleased to franchisees $ 244 $ 14,010 $ 19,214 Company-operated restaurants 3,169 1,918 3,132 Surplus properties 684 313 2,655 $ 4,097 $ 16,241 $ 25,001 |
Investment Income, Net (Notes)
Investment Income, Net (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Investment Income, Net [Abstract] | |
Investment Income, Net | Investment Income, Net Year Ended 2017 2016 2015 Distributions, including dividends (a) $ — $ — $ 54,911 Gain on sale of investments, net (b) 2,570 497 335 Other than temporary loss on cost method investment (258 ) — (3,150 ) Other, net 391 226 118 $ 2,703 $ 723 $ 52,214 _______________ (a) During 2015, the Company received a dividend of $54,911 from our investment in Arby’s. See Note 7 for further information. (b) Represents gains on sales of certain non-current cost method investments. See Note 7 for further information. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Sale of the Bakery On May 31, 2015, Wendy’s completed the sale of 100% of its membership interest in the Bakery to East Balt US, LLC (the “ Buyer ”) for $78,500 in cash (subject to customary purchase price adjustments). The Company also assigned certain capital leases for transportation equipment to the Buyer but retained the related obligation, which was settled during 2015. Pursuant to the sale agreement, the Company was obligated to continue to provide health insurance benefits to the Bakery’s employees at the Company’s expense through December 31, 2015. The Company recorded a pre-tax gain on the disposal of the Bakery of $25,529 during 2015, which included transaction closing costs and a reduction of goodwill. The Company recognized income tax expense associated with the gain on disposal of $14,860 during 2015, which included the impact of the disposal of non-deductible goodwill. In conjunction with the Bakery sale, Wendy’s entered into a transition services agreement with the Buyer, pursuant to which Wendy’s provided certain continuing corporate and shared services to the Buyer through March 31, 2016 for no additional consideration. A purchasing cooperative, Quality Supply Chain Co-op, Inc., established by Wendy’s and its franchisees, agreed to continue to source sandwich buns from the Bakery, for a specified time period following the sale of the Bakery. As a result, Wendy’s paid the Buyer $6,686 , $10,176 and $8,358 for the purchase of sandwich buns during 2017, 2016 and for the period from June 1, 2015 through January 3, 2016, respectively, which has been recorded to “Cost of sales.” Information related to the Bakery has been reflected in the accompanying consolidated financial statements as follows: • Balance sheets - As a result of our sale of the Bakery on May 31, 2015, there are no remaining Bakery assets and liabilities. • Statements of operations - The Bakery’s results of operations for the period from December 29, 2014 through May 31, 2015 have been presented as discontinued operations. In addition, the gain on disposal of the Bakery has been included in “ Net income from discontinued operations ” for the year ended January 3, 2016. • Statements of cash flows - The Bakery’s cash flows prior to its sale (for the period from December 29, 2014 through May 31, 2015) have been included in, and not separately reported from, our consolidated cash flows. The consolidated statement of cash flows for the year ended January 3, 2016 also includes the effects of the sale of the Bakery. The following table presents the Bakery’s results of operations and the gain on disposal, which have been included in discontinued operations: Year Ended 2015 Revenues (a) $ 25,885 Cost of sales (b) (7,543 ) 18,342 General and administrative (1,093 ) Depreciation and amortization (c) (2,297 ) Other expense, net (d) (19 ) Income from discontinued operations before income taxes 14,933 Provision for income taxes (4,439 ) Income from discontinued operations, net of income taxes 10,494 Gain on disposal of discontinued operations before income taxes 25,529 Provision for income taxes on gain on disposal (14,860 ) Gain on disposal of discontinued operations, net of income taxes 10,669 Net income from discontinued operations $ 21,163 _______________ (a) Includes sales of sandwich buns and related products previously reported in “Sales” as well as rental income. (b) 2015 includes employee separation-related costs of $791 as a result of the sale of the Bakery. In December of 2013, The New Bakery Co. of Ohio, Inc. (the “Bakery Company”), a 100% owned subsidiary of Wendy’s, now known as The Bakery Company, LLC, terminated its participation in a multiemployer pension plan and assumed an estimated withdrawal liability of $13,500 . During the first quarter of 2015, the Company began negotiating the potential sale of the Bakery Company which would result in the buyer re-entering the multiemployer pension plan. As a result, the Company concluded that its loss contingency for the pension withdrawal payments was no longer probable and, as such, reversed $12,486 of the outstanding withdrawal liability to “Cost of sales” during the first quarter of 2015. (c) Included in “Depreciation and amortization” in our consolidated statements of cash flows for the periods presented. (d) Includes net gains on sales of other assets. During 2015, the Bakery received cash proceeds of $50 , resulting in net gains on sales of other assets of $32 . The Bakery’s capital expenditures were $2,693 for 2015, which are included in “Capital expenditures” in our consolidated statements of cash flows. The following table summarizes the gain on the disposal of the Bakery, which has been included in discontinued operations: Year Ended 2015 Proceeds from sale of the Bakery (a) $ 78,408 Net working capital (b) (5,655 ) Net properties sold (c) (30,664 ) Goodwill allocated to the sale of the Bakery (12,067 ) Other (d) (2,684 ) 27,338 Post-closing adjustments on the sale of the Bakery (1,809 ) Gain on disposal of discontinued operations before income taxes 25,529 Provision for income taxes (e) (14,860 ) Gain on disposal of discontinued operations, net of income taxes $ 10,669 _______________ (a) Represents net proceeds received, which includes the purchase price of $78,500 less transaction closing costs paid directly by the Buyer on the Company’s behalf. (b) Primarily represents accounts receivable, inventory, prepaid expenses and accounts payable. (c) Net properties sold consisted primarily of buildings, equipment and capital leases for transportation equipment. (d) Primarily includes the recognition of the Company’s obligation, pursuant to the sale agreement, to provide health insurance benefits to the Bakery’s employees through December 31, 2015 of $1,993 and transaction closing costs paid directly by the Company. (e) Includes the impact of non-deductible goodwill disposed of as a result of the sale. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure | Retirement Benefit Plans 401(k) Plan Subject to certain restrictions, the Company has a 401(k) defined contribution plan (the “401(k) Plan”) for all of its employees who meet certain minimum requirements and elect to participate. The 401(k) Plan permits employees to contribute up to 75% of their compensation, subject to certain limitations and provides for matching employee contributions up to 4% of compensation and for discretionary profit sharing contributions. In connection with the matching and profit sharing contributions, the Company recognized compensation expense of $4,704 , $5,177 and $6,124 in 2017 , 2016 and 2015 , respectively. Pension Plans The Wendy’s Company maintains two domestic qualified defined benefit plans, the benefits under which were frozen in 1988 and for which The Wendy’s Company has no unrecognized prior service cost. Arby’s employees who were eligible to participate through 1988 (the “Eligible Arby’s Employees”) are covered under one of these plans. Pursuant to the terms of the Arby’s sale agreement, Wendy’s Restaurants retained the liabilities related to the Eligible Arby’s Employees under these plans and received $400 from the buyer for the unfunded liability related to the Eligible Arby’s Employees. The measurement date used by The Wendy’s Company in determining amounts related to its defined benefit plans is the same as the Company’s fiscal year end. The balance of the accumulated benefit obligations and the fair value of the plans’ assets at December 31, 2017 were $3,402 and $2,649 , respectively. As of January 1, 2017 , the balance of the accumulated benefit obligations and the fair value of the plans’ assets were $3,609 and $2,641 , respectively. As of December 31, 2017 and January 1, 2017 , each of the plans had accumulated benefit obligations in excess of the fair value of the assets of the respective plan. The Wendy’s Company recognized $159 , $177 , and $149 in benefit plan expenses in 2017 , 2016 and 2015 , respectively, which were included in “General and administrative.” The Wendy’s Company’s future required contributions to the plan are expected to be insignificant. Wendy’s Executive Plans In conjunction with the Wendy’s Merger, amounts due under supplemental executive retirement plans (the “SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to new entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding SERP liabilities have been included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in the aggregate, were approximately $2,476 and $3,101 as of December 31, 2017 and January 1, 2017 , respectively. Pursuant to the terms of the employment agreement that was entered into with our then Chief Executive Officer as of September 12, 2011, the Company implemented a non-qualified, unfunded, deferred compensation plan. The plan provided that the amount of the executive’s base salary in excess of $1,000 in a tax year will be deferred into the plan which accrues employer funded interest. The compensation deferred under the plan was distributed to our former Chief Executive Officer during 2016. Effective January 1, 2017, the Company implemented a non-qualified, unfunded deferred compensation plan for management and highly compensated employees, whereby participants may defer all or a portion of their base compensation and certain incentive awards on a pre-tax basis. The Company credits the amounts deferred with earnings based on the investment options selected by the participants. The Company may also make discretionary contributions to the plan. The total of participant deferrals was $259 at December 31, 2017 , which is included in “ Other liabilities .” |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Leases At December 31, 2017 , Wendy’s and its franchisees operated 6,634 Wendy’s restaurants. Of the 337 Company-operated Wendy’s restaurants, Wendy’s owned the land and building for 146 restaurants, owned the building and held long-term land leases for 141 restaurants and held leases covering land and building for 50 restaurants. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. Certain leases contain contingent rent provisions that require additional rental payments based upon restaurant sales volume in excess of specified amounts. The Company also leases restaurant, office and transportation equipment. Certain leases also provide for payments of other costs such as real estate taxes, insurance and common area maintenance, which have been excluded from rental expense and future minimum rental payments set forth in the tables below. As of December 31, 2017 , Wendy’s also owned 521 and leased 1,296 properties that were either leased or subleased principally to franchisees. Initial lease terms are generally 20 years and, in most cases, provide for rent escalations and renewal options. Certain leases to franchisees also include contingent rent provisions based on sales volume exceeding specified amounts. The lessee bears the cost of real estate taxes, insurance and common area maintenance, which have been excluded from rental income and future minimum rental receipts set forth in the tables below. Rental expense for operating leases consists of the following components: Year Ended 2017 2016 2015 Rental expense: Minimum rentals $ 90,889 $ 77,952 $ 77,606 Contingent rentals 19,021 18,291 18,270 Total rental expense (a) $ 109,910 $ 96,243 $ 95,876 _______________ (a) Amounts exclude sublease income of $126,814 , $95,072 , and $61,618 recognized during 2017 , 2016 and 2015 , respectively. Rental income for operating leases and subleases consists of the following components: Year Ended 2017 2016 2015 Rental income: Minimum rentals $ 169,857 $ 123,171 $ 68,241 Contingent rentals 20,246 19,944 18,731 Total rental income $ 190,103 $ 143,115 $ 86,972 The following table illustrates the Company’s future minimum rental payments and rental receipts for non-cancelable leases and subleases, including rental receipts for direct financing leases as of December 31, 2017 . Rental receipts below are presented separately for owned properties and for leased properties based on the classification of the underlying lease. Rental Payments Rental Receipts Fiscal Year Capital Leases Operating Leases Capital Leases Operating Leases Owned Properties 2018 $ 47,095 $ 96,265 $ 64,511 $ 75,583 $ 53,808 2019 45,700 94,824 65,036 75,787 54,779 2020 46,633 93,803 66,137 75,443 55,392 2021 48,221 93,255 67,929 75,133 56,996 2022 49,320 92,951 69,115 75,488 58,574 Thereafter 759,337 1,116,173 1,048,796 910,200 948,101 Total minimum payments $ 996,306 $ 1,587,271 $ 1,381,524 $ 1,287,634 $ 1,227,650 Less interest (528,342 ) Present value of minimum capital lease payments (a) $ 467,964 _______________ (a) The present value of minimum capital lease payments of $7,422 and $460,542 are included in “Current portion of long-term debt” and “Long-term debt,” respectively. Properties owned by the Company and leased to franchisees and other third parties under operating leases include: Year End December 31, 2017 January 1, 2017 Land $ 272,411 $ 271,160 Buildings and improvements 313,108 312,067 Restaurant equipment 2,444 1,507 587,963 584,734 Accumulated depreciation and amortization (128,003 ) (110,166 ) $ 459,960 $ 474,568 Our net investment in direct financing leases is as follows: Year End December 31, 2017 January 1, 2017 Future minimum rental receipts $ 662,889 $ 401,452 Unearned interest income (433,175 ) (277,747 ) Net investment in direct financing leases 229,714 123,705 Net current investment in direct financing leases (a) (625 ) (101 ) Net non-current investment in direct financing leases (b) $ 229,089 $ 123,604 _______________ (a) Included in “Accounts and notes receivable, net.” (b) Included in “Net investment in direct financing leases.” During 2017, 2016 and 2015, the Company recognized $22,869 , $14,630 and $6,058 in interest income related to our direct financing leases, respectively, which is included in “ Interest expense, net .” |
Guarantees and Other Commitment
Guarantees and Other Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees and Other Commitments and Contingencies | Guarantees and Other Commitments and Contingencies Guarantees and Contingent Liabilities Franchisee Image Activation Incentive Programs In order to promote Image Activation new restaurant development, Wendy’s has an incentive program for franchisees that provides for reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants opened by December 31, 2020, with the value of the incentives declining in the later years of the program. Wendy’s also had incentive programs for 2017 available to franchisees that commenced Image Activation restaurant remodels by December 15, 2017. The remodel incentive programs provide for reductions in royalty payments for one year after the completion of construction. Other Loan Guarantees Wendy’s provides loan guarantees to various lenders on behalf of franchisees entering into pooled debt facility arrangements for new restaurant development and equipment financing to promote systemwide initiatives. Wendy’s has accrued a liability for the fair value of these guarantees, the calculation for which was based upon a weighted average risk percentage established at the inception of each program which has been adjusted for a history of defaults. Wendy’s potential recourse for the aggregate amount of these loans amounted to $316 as of December 31, 2017 . As of December 31, 2017 , the fair value of these guarantees totaled $37 and is included in “Other liabilities.” During 2014, Wendy’s provided a C$2,300 guarantee to a lender on behalf of a franchisee, in connection with the sale of Canadian restaurants to the franchisee under the Company’s system optimization initiative. As a result, the total amount of the guarantee was recorded as a deferred gain in 2014. During 2017, the Company was released from the guarantee and the gain was recognized. During 2012, Wendy’s provided a $2,000 guarantee to a lender for a franchisee, in connection with the refinancing of the franchisee’s debt which originated in 2007. Pursuant to the agreement, the guarantee was subject to an annual reduction over a five year period. During the fourth quarter of 2017, the Company was released from the guarantee and had no outstanding liability accrued as of December 31, 2017 . Lease Guarantees Wendy’s has guaranteed the performance of certain leases and other obligations, primarily from former Company-operated restaurant locations now operated by franchisees, amounting to $59,901 as of December 31, 2017 . These leases extend through 2056. We have not received any notice of default related to these leases as of December 31, 2017 . In the event of default by a franchise owner, Wendy’s generally retains the right to acquire possession of the related restaurant locations. Wendy’s is contingently liable for certain other leases which have been assigned to unrelated third parties who have indemnified Wendy’s against future liabilities amounting to $464 as of December 31, 2017 . These leases expire on various dates through 2021. Insurance Wendy’s is self-insured for most workers’ compensation losses and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. Wendy’s determines its liability for claims incurred but not reported for the insurance liabilities on an actuarial basis. As of December 31, 2017 , the Company had $27,191 recorded for these insurance liabilities. Wendy’s is self-insured for health care claims for eligible participating employees subject to certain deductibles and limitations and determines its liability for health care claims incurred but not reported based on historical claims runoff data. As of December 31, 2017 , the Company had $2,058 recorded for these health care insurance liabilities. Letters of Credit As of December 31, 2017 , the Company had outstanding letters of credit with various parties totaling $32,574 , of which $3,205 were cash collateralized. The outstanding letters of credit include amounts outstanding against the Series 2015-1 Class A-1 Notes. The related cash collateral is classified as “Restricted cash” in the consolidated balance sheet. See Note 6 and Note 11 for further information. We do not expect any material loss to result from these letters of credit. Purchase and Capital Commitments Beverage Agreement The Company has an agreement with a beverage vendor, which provides fountain beverage products and certain marketing support funding to the Company and its franchisees. This agreement requires minimum purchases of fountain syrup (“Syrup”) by the Company and its franchisees at certain agreed upon prices until the total contractual gallon volume usage is reached. This agreement also provides for an annual advance to be paid to the Company based on the vendor’s expectation of the Company’s annual Syrup usage, which is amortized over actual usage during the year. The Company estimates future annual purchases to be approximately $9,800 in 2018, $10,200 in 2019, $10,900 in 2020 and $400 in 2021. Based on current pricing and the expected ratio of usage at Company-operated restaurants to franchised restaurants, our total beverage purchase requirements under the agreement is estimated to be approximately $31,300 over the remaining life of the contract, which expires the later of reaching the minimum usage requirement or January 1, 2023. Beverage purchases made by the Company under this agreement during 2017 , 2016 and 2015 were $9,370 , $12,839 and $15,720 , respectively. As of December 31, 2017 , $2,082 is due to the beverage vendor and is included in “Accounts payable,” principally for annual estimated payments that exceeded usage, under this agreement. Capital Expenditure Commitments As of December 31, 2017 , the Company had $5,810 of outstanding commitments, included in “Accounts payable,” for capital expenditures expected to be paid in 2018. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties The following is a summary of transactions between the Company and its related parties, which are included in continuing operations: Year Ended 2017 2016 2015 Transactions with QSCC: Wendy’s Co-Op (a) $ (987 ) $ (890 ) $ (1,265 ) Lease income (b) (217 ) (193 ) (185 ) TimWen lease and management fee payments (c) $ 12,360 $ 11,602 $ 11,843 _______________ Transactions with QSCC (a) Wendy’s has a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees which establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $987 , $890 and $1,265 in 2017 , 2016 and 2015 , respectively, which are included as a reduction of “Cost of sales.” (b) Effective January 1, 2011 , Wendy’s leased 14,333 square feet of office space to QSCC for an annual base rental of $176 . The lease expired on December 31, 2016. A new lease agreement was signed effective January 1, 2017, expiring on December 31, 2020 for an annual base rental of $215 . The Wendy’s Company received $217 , $193 and $185 of lease income from QSCC during 2017 , 2016 and 2015 , respectively, which has been recorded as a reduction of “General and administrative.” TimWen lease and management fee payments (c) A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen for the operation of Wendy’s/Tim Hortons combo units in Canada. Prior to the second quarter of 2015, Wendy’s operated certain of the Wendy’s/Tim Hortons combo units in Canada and subleased some of the restaurant facilities to franchisees. As a result of the Company completing its plan to sell all of its Company-operated restaurants in Canada to franchisees during the second quarter of 2015, all of the restaurant facilities are subleased to franchisees. Wendy’s paid TimWen $12,572 , $11,806 and $12,059 under these lease agreements during 2017 , 2016 and 2015 , respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $212 , $204 and $216 during 2017 , 2016 and 2015 , respectively, which has been included as a reduction to “General and administrative.” Other related party transactions On June 2, 2015, the Company entered into a stock purchase agreement to repurchase our common stock from Nelson Peltz, Peter W. May (Messrs. Peltz and May are members of the Company’s Board of Directors) and Edward P. Garden (who served on the Company’s Board of Directors until December 14, 2015) and certain of their family members and affiliates, investment funds managed by Trian Fund Management, L.P. (an investment management firm controlled by Messrs. Peltz, May and Garden, “TFM”) and the general partner of certain of those funds (together with Messrs. Peltz, May and Garden, certain of their family members and affiliates and TFM, the “Trian Group”), who in the aggregate owned approximately 24.8% of the Company’s outstanding shares as of May 29, 2015. Pursuant to the agreement, the Trian Group agreed not to tender or sell any of its shares in the modified Dutch auction tender offer the Company commenced on June 3, 2015. Also pursuant to the agreement, the Company agreed, following completion of the tender offer, to purchase from the Trian Group a pro rata amount of its shares based on the number of shares the Company purchased in the tender offer, at the same price received by shareholders who participated in the tender offer. On July 17, 2015, after completion of the modified Dutch auction tender offer, the Company repurchased 18,416 shares of its common stock from the Trian Group at the price paid in the tender offer of $11.45 per share, for an aggregate purchase price of $210,867 . Matthew Peltz, a member of the Company’s Board of Directors, served on the ARG Holding Corporation Board of Directors from September 2012 through December 2015. He did not receive compensation as a director of ARG Holding Corporation. A subsidiary of the Company owned 18.5% of the common stock of ARG Holding Corporation as of December 31, 2017 . |
Legal and Environmental Matters
Legal and Environmental Matters | 12 Months Ended |
Dec. 31, 2017 | |
Loss Contingency [Abstract] | |
Legal and Environmental Matters | Legal and Environmental Matters We are involved in litigation and claims incidental to our current and prior businesses. We provide accruals for such litigation and claims when payment is probable and reasonably estimable. As of December 31, 2017 , the Company had accruals for all of its legal and environmental matters aggregating $1,597 . We cannot estimate the aggregate possible range of loss due to most proceedings, including those described below, being in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur, and significant factual matters unresolved. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. Predicting the outcomes of settlement discussions or judicial or arbitral decisions is thus inherently difficult. Based on currently available information, including legal defenses available to us, and given the aforementioned accruals and our insurance coverage, we do not believe that the outcome of these legal and environmental matters will have a material effect on our consolidated financial position or results of operations. The Company has been named as a defendant in putative class action lawsuits alleging, among other things, that the Company failed to safeguard customer credit card information and failed to provide notice that credit card information had been compromised. Jonathan Torres and other consumers filed an action in the U.S. District Court for the Middle District of Florida (the “Torres Case”). The operative complaint seeks to certify a nationwide class of consumers, or in the alternative, statewide classes of consumers for Florida, New York, New Jersey, Texas, and Tennessee, as well as statewide classes of consumers under those states’ consumer protection and unfair trade practices laws. Certain financial institutions have also filed class actions lawsuits in the U.S. District Court for the Western District of Pennsylvania (the “FI Cases”), which seek to certify a nationwide class of financial institutions that issued payment cards that were allegedly impacted. In the Torres Case and the FI Cases, the plaintiffs seek monetary damages, injunctive and equitable relief, attorneys’ fees and other costs. The Company filed its answer in both cases in 2017. On October 27, 2017, the Company moved for summary judgment to dismiss the operative complaint in the Torres Case. On December 15, 2017, the plaintiffs in that case moved for class certification. The Company filed its memorandum in opposition on January 16, 2018. Both motions are pending before the court. Certain of the Company’s present and former directors have been named in two putative shareholder derivative complaints arising out of the credit card incidents above. The first case, brought by James Graham in the U.S. District Court for the Southern District of Ohio (the “Graham Case”), asserts claims of breach of fiduciary duty, waste of corporate assets, unjust enrichment and gross mismanagement, and additionally names one non-director executive officer of the Company. The second case, brought by Thomas Caracci in the U.S. District Court for the Southern District of Ohio (the “Caracci Case”), asserts claims of breach of fiduciary duty and violations of Section 14(a) and Rule 14a-9 of the Securities Exchange Act of 1934. Collectively, the plaintiffs seek a judgment on behalf of the Company for all damages incurred or that will be incurred as a result of the alleged wrongful acts or omissions, a judgment ordering disgorgement of all profits, benefits, and other compensation obtained by the named individual defendants, a judgment directing the Company to reform its governance and internal procedures, attorneys’ fees and other costs. The Graham Case and the Caracci Case have been consolidated and are pending the Court’s ruling on lead plaintiff and counsel, following which the Company expects that a consolidated complaint will be filed. |
Advertising Costs and Funds
Advertising Costs and Funds | 12 Months Ended |
Dec. 31, 2017 | |
Marketing and Advertising Expense [Abstract] | |
Advertising Costs and Funds | Advertising Costs and Funds We currently maintain two national advertising funds established to collect and administer funds contributed for use in advertising and promotional programs. Contributions to the Advertising Funds are required from both Company-operated and franchised restaurants and are based on a percentage of restaurant sales. In addition to the contributions to the various Advertising Funds, Company-operated and franchised restaurants make additional contributions to other local and regional advertising programs. Restricted assets and related liabilities of the Advertising Funds at December 31, 2017 and January 1, 2017 were as follows: Year End December 31, 2017 January 1, 2017 Cash and cash equivalents $ 8,579 $ 19,359 Accounts and notes receivable, net 47,288 49,983 Other assets 6,735 6,418 Total assets $ 62,602 $ 75,760 Accounts payable $ 5,601 $ 8,362 Accrued expenses and other current liabilities 63,646 71,068 Member’s deficit (6,645 ) (3,670 ) Total liabilities and deficit $ 62,602 $ 75,760 Our advertising expenses in 2017 , 2016 and 2015 totaled $27,921 , $41,064 and $64,312 , respectively. Beginning in 2018, the Company will consolidate the operations and cash flow results of our national advertising funds as a result of amended guidance for revenue recognition. See “New Accounting Standards” in Note 1 for further information. |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segments, Geographical Areas [Abstract] | |
Geographic Information [Text Block] | Geographic Information The table below presents revenues and properties information by geographic area: U.S. Canada Other International Total 2017 Revenues $ 1,154,873 $ 50,431 $ 18,104 $ 1,223,408 Properties 1,226,714 36,213 132 1,263,059 2016 Revenues $ 1,373,345 $ 45,959 $ 16,114 $ 1,435,418 Properties 1,162,006 30,257 76 1,192,339 2015 Revenues $ 1,749,131 $ 104,003 $ 17,163 $ 1,870,297 Properties 1,198,553 29,296 95 1,227,944 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) [Text Block] | Quarterly Financial Information (Unaudited) The tables below set forth summary unaudited consolidated quarterly financial information for 2017 and 2016 . The Company reports on a fiscal year typically consisting of 52 or 53 weeks ending on the Sunday closest to December 31. All of the Company’s fiscal quarters in 2017 and 2016 contained 13 weeks. 2017 Quarter Ended (a) April 2 July 2 October 1 December 31 Revenues $ 285,819 $ 320,342 $ 308,000 $ 309,247 Cost of sales 123,407 129,360 132,387 127,793 Operating profit 60,720 25,794 61,657 66,587 Net income (loss) $ 22,341 $ (1,845 ) $ 14,257 $ 159,276 Basic income (loss) per share $ .09 $ (.01 ) $ .06 $ .66 Diluted income (loss) per share $ .09 $ (.01 ) $ .06 $ .64 2016 Quarter Ended (b) April 3 July 3 October 2 January 1 Revenues $ 378,787 $ 382,718 $ 364,012 $ 309,901 Cost of sales 214,736 202,554 186,546 140,865 Operating profit 63,829 65,648 106,088 79,215 Net income $ 25,363 $ 26,480 $ 48,890 $ 28,891 Basic income per share $ 0.09 $ 0.10 $ 0.19 $ 0.11 Diluted income per share $ 0.09 $ 0.10 $ 0.18 $ 0.11 _______________ (a) The Company’s consolidated statements of operations in fiscal 2017 were materially impacted by system optimization losses, net, reorganization and realignment costs and the benefit from income taxes. The pre-tax impact of system optimization losses, net for the second quarter was $41,050 (see Note 2 for additional information). The pre-tax impact of reorganization and realignment costs for the second, third and fourth quarters was $17,699 , $2,888 and $1,806 , respectively (see Note 4 for additional information). The benefit from income taxes for the fourth quarter was $121,649 and included the impact of the Tax Act (see Note 13 for additional information). (b) The Company’s consolidated statements of operations in fiscal 2016 were materially impacted by system optimization gains, net, reorganization and realignment costs, impairment of long-lived assets and a gain recognized on a lease buyout. The pre-tax impact of system optimization gains, net for the first, third and fourth quarters was $8,426 , $37,756 and $23,825 , respectively (see Note 2 for additional information). The pre-tax impact of reorganization and realignment costs for the first, second, third and fourth quarters was $3,250 , $2,487 , $2,129 and $2,217 , respectively (see Note 4 for additional information). The pre-tax impact of impairment of long-lived assets during the first, second and fourth quarters was $7,105 , $5,525 and $3,250 , respectively (see Note 16 for additional information). The pre-tax impact of a gain recognized on a lease buyout during the first quarter was $11,606 . |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation, Policy | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company maintains two national advertising funds (the “Advertising Funds”) established to collect and administer funds contributed for use in advertising and promotional programs for Company-operated and franchised restaurants. The revenue, expenses and cash flows of such advertising funds are not included in the Company’s consolidated statements of operations or consolidated statements of cash flows because the contributions to these advertising funds are designated for specific purposes and the Company acts as an agent, in substance, with regard to these contributions. The assets and liabilities of these funds are reported as “Advertising funds restricted assets” and “Advertising funds restricted liabilities.” |
Use of Estimates, Policy | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Fiscal Year, Policy | Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended December 31, 2017 ” or “ 2017 ,” which consisted of 52 weeks, (2) “the year ended January 1, 2017 ” or “ 2016 ,” which consisted of 52 weeks and (3) “the year ended January 3, 2016 ” or “ 2015 ,” which consisted of 53 weeks. |
Reclassifications, Policy | Reclassifications Certain reclassifications have been made to prior year presentation to conform to the current year presentation. |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts. |
Restricted Cash, Policy | Restricted Cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders, and are restricted in their use. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Company’s senior secured notes. Changes in such restricted cash are presented as a component of cash flows from operating and financing activities in the consolidated statements of cash flows since the cash is restricted to the payment of interest and principal, respectively. Furthermore, certain cash receipts from asset dispositions and insurance proceeds held by the trustee are restricted for reinvestment in capital assets useful to the Company’s operations in accordance with the securitized financing facility. Changes in such restricted cash are presented as a component of cash flows from investing activities in the consolidated statement of cash flows since the cash is restricted for investing activities. In addition, the Company has outstanding letters of credit with various parties that are cash collateralized. The related cash collateral is classified as restricted cash in the consolidated balance sheets. Changes in such restricted cash are presented as a component of cash flows from investing activities in the consolidated statements of cash flows. Refer to Note 6 for further information. |
Accounts and Notes Receivable, Net, Policy | Accounts and Notes Receivable, Net Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, credit card receivables and refundable income taxes. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor. |
Inventories, Policy | Inventories The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. |
Properties and Depreciation and Amortization, Policy | Properties and Depreciation and Amortization Properties are stated at cost, including internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: three to 20 years for office and restaurant equipment (including technology), three to 15 years for transportation equipment and seven to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Capital leases and leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information. The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Assets held for sale are included in “Prepaid expenses and other current assets” in the consolidated balance sheets. |
Goodwill, Policy | Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. For goodwill impairment testing purposes, we include two reporting units comprised of our (1) North America Company-operated and franchise restaurants and (2) international franchise restaurants. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and we must perform step two of the impairment test (measurement). Step two of the impairment test, if necessary, requires the estimation of the fair value for the assets and liabilities of a reporting unit in order to calculate the implied fair value of the reporting unit’s goodwill. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. |
Impairment of Long-Lived Assets, Policy | Impairment of Long-Lived Assets Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees and (2) Company-operated restaurant assets and related definite-lived intangible assets, which include favorable leases and reacquired rights under franchise agreements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our critical estimates in this review process include the anticipated future cash flows from leases and/or subleases or individual Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. |
Other Intangible Assets, Policy | Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising; three to five years for computer software; four to 20 years for reacquired rights under franchise agreements; and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows. |
Investments, Policy | Investments The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand. (Tim Hortons is a registered trademark of Tim Hortons USA Inc.) In addition, the Company has a 20% share in a joint venture for the operation of Wendy’s restaurants in Brazil (the “Brazil JV”). The Company has significant influence over these investees. Such investments are accounted for using the equity method, under which our results of operations include our share of the income (loss) of the investees in “ Other operating expense (income), net .” Investments in limited partnerships and other non-current investments in which the Company does not have significant influence over the investees, which includes our indirect 18.5% interest (as of December 31, 2017) in Arby’s Restaurant Group, Inc. (“Arby’s”), are recorded at cost with related realized gains and losses reported as income or loss in the period in which the securities are sold or otherwise disposed. Cash distributions and dividends received that are determined to be returns of capital are recorded as a reduction of the carrying value of our investments and returns on our investments are recorded to “Investment income, net.” The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. |
Share-based Compensation, Policy | Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards are determined using the average of the high and low trading prices of our common stock on the date of grant, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. |
Foreign Currency Translation, Policy | Foreign Currency Translation Substantially all of the Company’s foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation are recorded to the “Foreign currency translation adjustment” component of “ Accumulated other comprehensive loss .” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” |
Income Taxes, Policy | Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” |
Restaurant Dispositions, Policy | Restaurant Dispositions In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. Therefore, the Company recognizes the technical assistance and development fees when earned. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information. |
Revenue Recognition, Policy | Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. “Franchise royalty revenue and fees” includes royalties and franchise fees. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees and development fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened as all material services and conditions related to the franchise fee have been substantially performed upon the restaurant opening. Initial franchise fees received in connection with sales of Company-operated restaurants to franchisees and facilitating franchisee-to-franchisee restaurant transfers as well as renewal franchise fees are recognized as revenue when the license agreements are signed and the restaurant has opened since there are no remaining material services and conditions related to the franchise fees. Franchise fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. “Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases. See “Leases” below for further information on rental income and favorable and unfavorable lease amounts. |
Cost of Sales, Policy | Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Cost of sales excludes depreciation and amortization expense. |
Vendor Incentives, Policy | Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.” |
Advertising Costs, Policy | Advertising Costs The Company incurs various advertising costs, including contributions to certain advertising cooperatives based upon a percentage of net sales by Company-operated restaurants. All advertising costs are expensed as incurred and are included in “Cost of sales.” |
Franchise Support and Other Costs, Policy | Franchise Support and Other Costs The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. These costs primarily relate to franchise development services, facilitating franchisee-to-franchisee restaurant transfers and information technology services, which are charged to “ Other operating expense (income), net ,” as incurred. |
Self-insurance, Policy | Self-Insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. |
Leases, Policy | Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns and leases sites from third parties, which it leases and/or subleases to franchisees. At inception, each lease or sublease is evaluated to determine whether the lease will be accounted for as an operating or capital lease, including the determination of direct financing leases based on its terms. Capital lease assets and related obligations are recorded at the lower of the present value of future minimum lease payments or fair market value at lease inception. When determining the lease term, we include option periods for which failure to renew the lease imposes a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees, is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement, historical performance of the restaurant and the existence of bargain renewal options. For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense or income, as applicable, on a straight line basis (“Straight-Line Rent”) over the applicable lease terms. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense or income, as applicable, is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid or received as a deferred lease liability or asset which is included in “Other liabilities” or “Other assets,” as applicable. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned. For direct financing leases, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of its gross investment less unearned income. The current and long-term portions of our net investment in direct financing leases are included in “ Accounts and notes receivable, net ” and “ Net investment in direct financing leases ,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Favorable and unfavorable lease amounts are recorded as components of “Other intangible assets” and “Other liabilities,” respectively. Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term. Rental expense, rental income and favorable and unfavorable lease amortization for operating leases is recognized in the consolidated statements of operations based on the nature of the underlying lease. Amounts related to leases for Company-operated restaurants are recorded to “Cost of sales.” Rental expense, including any related amortization, for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense.” Rental income, including any related amortization, for properties leased or subleased to franchisees is recorded to “Franchise rental income.” Amounts related to leases for corporate offices and equipment are recorded to “General and administrative.” Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or capital, including direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of favorable and unfavorable leases. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used. |
Concentration of Risk, Policy | Concentration of Risk Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2017 , 2016 or 2015 . As of December 31, 2017 , Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding produce and breads, that serviced approximately 39% of its Company-operated and franchised restaurants and six additional in-line distributors that, in the aggregate, serviced approximately 53% of its Company-operated and franchised restaurants. We believe that our vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. Wendy’s restaurants are principally located throughout the U.S. and to a lesser extent, in 30 foreign countries and U.S. territories with the largest number in Canada. Wendy’s restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Ohio, Texas, Georgia, California, Pennsylvania, North Carolina and Michigan. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U. S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, poultry, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. However, our exposure to Canadian dollar foreign currency risk is mitigated by the fact that there are no Company-operated restaurants in Canada and less than 10% of Wendy’s franchised restaurants are in Canada. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties, franchise fees and rent. In addition, we have notes receivable from certain of our franchisees. The financial condition of these franchisees is largely dependent upon the underlying business trends of the Wendy’s brand and market conditions within the quick-service restaurant industry. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. |
New Accounting Standards and New Accounting Standards Adopted, Policy | New Accounting Standards Adopted In March 2016, the Financial Accounting Standards Board (“FASB”) issued an amendment related to equity method accounting, which eliminates the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in level of ownership interest or degree of influence. The Company adopted this amendment, prospectively, during the first quarter of 2017. The adoption of this guidance did not impact our consolidated financial statements. In March 2016, the FASB issued an amendment that clarifies the steps for assessing triggering events of embedded contingent put and call options within debt instruments. The Company adopted this amendment during the first quarter of 2017. The adoption of this guidance did not impact our consolidated financial statements. In March 2016, the FASB issued an amendment that modifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory withholding requirements, as well as statement of cash flows presentation. The transition requirement is generally modified retrospective, with the exception of recognition of excess tax benefits and tax deficiencies that requires prospective adoption. The Company adopted this amendment during the first quarter of 2017. The cash flows used in financing activities related to the excess tax benefits from share-based compensation arrangements, which amounted to $3,082 and $49,613 during our 2016 and 2015 fiscal years, respectively, was reclassified retrospectively to cash flows provided by operating activities. Additionally, during our 2016 and 2015 fiscal years, $4,444 and $12,221 , respectively, was paid to taxing authorities for withheld shares on share-based compensation arrangement activities, which was reclassified retrospectively from cash flows provided by operating activities to cash flows used in financing activities. Upon adoption of the amendment in the first quarter of 2017, the Company recognized $1,880 in unrecognized tax benefit for deductions in excess of cumulative compensation costs relating to the exercise of stock options and vesting of restricted stock. This tax benefit was recognized as a reduction to the Company’s deferred tax liability with an equal offsetting increase to “Accumulated deficit.” The Company will continue to estimate forfeitures each period. In July 2015, the FASB issued an amendment that requires entities to measure inventory at the lower of cost and net realizable value, rather than the lower of cost or market, with market value represented by replacement cost, net realizable value or net realizable value less a normal profit margin. The Company adopted this amendment during the first quarter of 2017. The adoption of this guidance did not impact our consolidated financial statements. New Accounting Standards In February 2018, the FASB issued an amendment that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company does not expect the amendment, which is effective beginning with our 2019 fiscal year, to have a material impact on our consolidated financial statements. In May 2017, the FASB issued new guidance on the scope of modification accounting for share-based payment arrangements. The new guidance will provide relief to entities that make non-substantive changes to their share-based payment arrangements. The Company does not expect the amendment, which requires prospective adoption and is effective commencing with our 2018 fiscal year, to have a material impact on our consolidated financial statements. In January 2017, the FASB issued an amendment that simplifies the accounting for goodwill impairment by eliminating step two from the goodwill impairment test. The Company does not expect the amendment, which requires prospective adoption and is effective commencing with our 2020 fiscal year, to have a material impact on our consolidated financial statements. In January 2017, the FASB issued an amendment that clarifies the definition of a business in determining whether to account for a transaction as an asset acquisition or a business combination. The Company does not expect the amendment, which is effective commencing with our 2018 fiscal year, to have a material impact on our consolidated financial statements. In November 2016, the FASB issued an amendment that clarifies guidance for proper classification and presentation of restricted cash in the statement of cash flows. Accordingly, changes in restricted cash that have historically been included within operating, investing and financing activities have been eliminated, and restricted cash is combined with cash and cash equivalents when reconciling the beginning and end of period balances for all periods presented. The amendment requires retrospective adoption and is effective commencing with our 2018 fiscal year. The adoption of this amendment will primarily result in an increase in net cash used in investing activities of approximately $25,000 during 2017 and an increase in net cash provided by investing activities of approximately $15,000 during 2016. Additionally, net cash provided by operating activities will decrease approximately $13,000 in 2017 and increase approximately $5,000 in 2016. Year-end cash, cash equivalents and restricted cash will increase approximately $41,000 , $78,000 and $58,000 as of December 31, 2017 , January 1, 2017 and January 3, 2016, respectively. This amendment will not impact the Company’s consolidated statements of operations and consolidated balance sheets. In August 2016, the FASB issued an amendment that provides guidance for proper classification of certain cash receipts and payments in the statement of cash flows. The amendment requires retrospective adoption for all periods presented in the statement of cash flows and is effective commencing with our 2018 fiscal year. The Company does not expect the amendment to have a material impact on our consolidated financial statements. In June 2016, the FASB issued an amendment that will require the Company to determine impairment of financial instruments based on expected losses rather than incurred losses. The transition method varies with the type of instrument; however, most debt instruments will be transitioned using a modified retrospective approach. The amendment is effective commencing with our 2020 fiscal year. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In March 2016, the FASB issued an amendment that provides guidance on extinguishing financial liabilities for certain prepaid stored-value products. The Company does not expect the amendment, which is effective commencing with our 2018 fiscal year, to have a material impact on our consolidated financial statements. In February 2016, the FASB issued new guidance on leases, which outlines principles for the recognition, measurement, presentation and disclosure of leases applicable to both lessors and lessees. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months. The amendment requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements and plan to reflect adoption when effective in the first quarter of our 2019 fiscal year. As shown in Note 20 , there are $1,587,271 in future minimum rental payments for operating leases that are not currently on our balance sheet; therefore, we expect this will have a material impact on our balance sheet and related disclosures. In January 2016, the FASB issued an amendment that revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The amendment is effective commencing with our 2018 fiscal year and requires enhanced disclosures. The Company does not expect the amendment to have a material impact on our consolidated financial statements. In May 2014, the FASB issued amended guidance for revenue recognition. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and is effective commencing with our 2018 fiscal year. The guidance allows for either a full retrospective or modified retrospective transition method. We currently expect to apply the modified retrospective method upon adoption. This guidance will not impact our recognition of revenue from Company-operated restaurant sales or our recognition of continuing royalty revenues from franchisees, which are based on a percentage of franchise sales. Under current guidance, we recognize initial fees from franchisees when we have performed all material obligations and services, which generally occurs when the franchised restaurant opens. Under the new guidance, we anticipate recognizing the initial fees from franchisees over the life of the related franchise agreements. If the new guidance had been in effect for our 2017 and 2016 fiscal years, our revenues would have been reduced by approximately $16,000 and $14,000 , respectively, as a result of deferring the recognition of initial fees from franchisees. Upon adoption of the new guidance, we expect to record approximately $86,000 in deferred revenue on our consolidated balance sheet. Additionally, under current guidance, our advertising fund contributions from franchisees and the related advertising expenditures are reported on a net basis in our consolidated balance sheet as “Advertising funds restricted assets” and “Advertising funds restricted liabilities.” Under the new guidance, we expect to consolidate the operations and cash flow results of our national advertising funds. If the new guidance had been in effect for our 2017 and 2016 fiscal years, our consolidated revenues and consolidated expenses would have increased by approximately $324,000 and $327,000 for 2017, respectively, and by approximately $307,000 and $309,000 for 2016, respectively, as a result of consolidating our national advertising funds. |
System Optimization Losses (G36
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. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for restaurants acquired from franchisees: Year Ended 2017 2016 2015 Restaurants acquired from franchisees — 2 4 Total consideration paid, net of cash received $ — $ 2,209 $ 1,232 Identifiable assets acquired and liabilities assumed: Properties — 2,218 1,303 Acquired franchise rights — — 760 Other assets — 9 — Capital leases obligations — — (438 ) Unfavorable leases — — (440 ) Other liabilities — (18 ) (80 ) Total identifiable net assets — 2,209 1,105 — — 127 Post-closing adjustments (a) — — (1,535 ) Goodwill $ — $ — $ (1,408 ) _______________ (a) Post-closing adjustments in 2015 primarily represent an adjustment to the fair value of franchise rights acquired in connection with the acquisition of franchised restaurants during 2014. |
Reorganization and Reorganiza38
Reorganization and Reorganization Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the initiatives included in “Reorganization and realignment costs:” Year Ended 2017 2016 2015 G&A realignment - May 2017 plan $ 21,663 $ — $ — G&A realignment - November 2014 plan — 692 10,342 System optimization initiative 911 9,391 11,568 Reorganization and realignment costs $ 22,574 $ 10,083 $ 21,910 |
G&A Realignment – May 2017 Plan | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the activity recorded as a result of the May 2017 plan: Year Ended 2017 Severance and related employee costs $ 14,956 Recruitment and relocation costs 489 Third-party and other costs 1,091 16,536 Share-based compensation (a) 5,127 Total G&A realignment - May 2017 plan $ 21,663 _______________ (a) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our May 2017 plan. |
Schedule of Restructuring Reserve by Type of Cost | As of December 31, 2017 , the accruals for our May 2017 plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,467 and $3,803 , respectively. The table below presents a rollforward of our accruals for the May 2017 plan. Balance January 1, 2017 Charges Payments Balance December 31, 2017 Severance and related employee costs $ — $ 14,956 $ (2,863 ) $ 12,093 Recruitment and relocation costs — 489 (312 ) 177 Third-party and other costs — 1,091 (1,091 ) — $ — $ 16,536 $ (4,266 ) $ 12,270 |
G&A Realignment - November 2014 Plan | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the activity recorded as a result of the November 2014 plan: Year Ended Total Incurred Since Inception 2016 2015 Severance and related employee costs (a) $ (344 ) $ 3,011 $ 14,584 Recruitment and relocation costs 992 1,658 2,859 Other 44 49 181 692 4,718 17,624 Share-based compensation (b) — 5,624 6,336 Total G&A realignment - November 2014 plan $ 692 $ 10,342 $ 23,960 _______________ (a) 2016 includes a reversal of an accrual of $387 as a result of a change in estimate. (b) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our November 2014 plan. |
Schedule of Restructuring Reserve by Type of Cost | The table below presents a rollforward of our accruals for our November 2014 plan during 2016, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of December 31, 2017 , no accrual remained. Balance January 3, 2016 Charges Payments Balance January 1, 2017 Severance and related employee costs $ 3,431 $ (344 ) $ (2,855 ) $ 232 Recruitment and relocation costs 144 992 (1,136 ) — Other — 44 (44 ) — $ 3,575 $ 692 $ (4,035 ) $ 232 |
System Optimization | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the costs recorded as a result of our system optimization initiative: Year Ended Total Incurred Since Inception 2017 2016 2015 Severance and related employee costs $ 3 $ 82 $ 894 $ 18,237 Professional fees 838 7,437 3,360 17,448 Other 70 272 930 5,813 911 7,791 5,184 41,498 Accelerated depreciation and amortization (a) — 1,600 6,384 25,398 Share-based compensation (b) — — — 5,013 Total system optimization initiative $ 911 $ 9,391 $ 11,568 $ 71,909 _______________ (a) Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold in connection with our system optimization initiative. (b) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative. |
Schedule of Restructuring Reserve by Type of Cost | The tables below present a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities.” Balance January 1, 2017 Charges Payments Balance December 31, 2017 Severance and related employee costs $ — $ 3 $ (3 ) $ — Professional fees 101 838 (939 ) — Other — 70 (70 ) — $ 101 $ 911 $ (1,012 ) $ — Balance January 3, 2016 Charges Payments Balance January 1, 2017 Severance and related employee costs $ 77 $ 82 $ (159 ) $ — Professional fees 708 7,437 (8,044 ) 101 Other 90 272 (362 ) — $ 875 $ 7,791 $ (8,565 ) $ 101 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of income (loss) amounts attributable to parent used to calculate basic and diluted income (loss) per share | Income amounts used to calculate basic and diluted income per share were as follows: Year Ended 2017 2016 2015 Income from continuing operations $ 194,029 $ 129,624 $ 139,979 Net income from discontinued operations — — 21,163 Net income $ 194,029 $ 129,624 $ 161,142 |
Number of shares used to calculate basic and diluted income per share | The weighted average number of shares used to calculate basic and diluted income per share were as follows: Year Ended 2017 2016 2015 Common stock: Weighted average basic shares outstanding 244,179 262,209 323,018 Dilutive effect of stock options and restricted shares 8,110 4,503 5,707 Weighted average diluted shares outstanding 252,289 266,712 328,725 |
Cash and Receivables (Tables)
Cash and Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Receivables [Abstract] | |
Schedule of Cash and Cash Equivalents | Year End December 31, 2017 January 1, 2017 Cash and cash equivalents Cash $ 171,109 $ 192,905 Cash equivalents 338 5,335 $ 171,447 $ 198,240 Restricted cash Current Accounts held by trustee for the securitized financing facility $ 28,933 $ 29,096 Collateral supporting letters of credit 3,205 6,165 Accounts held by trustee for reinvestment in capital assets 5 22,014 Trust for termination costs for former Wendy’s executives 289 168 Other 201 169 $ 32,633 $ 57,612 Non-current (a) Trust for termination costs for former Wendy’s executives $ 165 $ 738 _______________ (a) Included in “Other assets.” |
Schedule of Accounts, Notes, Loans and Financing Receivable | Year End December 31, 2017 January 1, 2017 Accounts and Notes Receivable, Net Current Accounts receivable: Franchisees $ 78,699 $ 74,134 Other (a) 37,377 25,732 116,076 99,866 Notes receivable from franchisees (b) (c) 2,860 2,989 118,936 102,855 Allowance for doubtful accounts (4,546 ) (4,030 ) $ 114,390 $ 98,825 Non-Current (d) Notes receivable from franchisees (c) $ 17,589 $ 9,290 Allowance for doubtful accounts — (26 ) $ 17,589 $ 9,264 _______________ (a) Includes income tax refund receivables of $26,262 and $18,111 as of December 31, 2017 and January 1, 2017 , respectively. (b) Includes the current portion of direct financing lease receivables of $625 and $101 as of December 31, 2017 and January 1, 2017 , respectively. See Note 20 for further information. (c) Includes a note receivable from a franchisee in Indonesia, of which $1,008 was included in current notes receivable as of December 31, 2017 and $3,789 and $2,454 was included in non-current notes receivable as of December 31, 2017 and January 1, 2017 , respectively. Non-current notes receivable include notes receivable from the Brazil JV totaling $12,800 and $6,810 as of December 31, 2017 and January 1, 2017 , respectively. See Note 7 for further information. Non-current notes receivable include a note receivable from a franchisee in India of $1,000 as of December 31, 2017 . (d) Included in “Other assets.” |
Allowance for Doubtful Accounts | The following is an analysis of the allowance for doubtful accounts: Year Ended 2017 2016 2015 Balance at beginning of year: Current $ 4,030 $ 3,488 $ 2,343 Non-current 26 257 246 Provision for doubtful accounts: Franchisees and other 579 390 979 Uncollectible accounts written off, net of recoveries (89 ) (79 ) 177 Balance at end of year: Current 4,546 4,030 3,488 Non-current — 26 257 Total $ 4,546 $ 4,056 $ 3,745 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Equity Method Investments | |
Schedule of Cost and Equity Method Investments | The following is a summary of the carrying value of our investments: Year End December 31, January 1, Equity investments $ 55,363 $ 54,545 Cost investments 639 2,436 $ 56,002 $ 56,981 |
Schedule of Equity Method Investments | Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended December 31, 2017 , January 1, 2017 and January 3, 2016 . Year Ended 2017 2016 2015 Balance at beginning of period $ 54,545 $ 55,541 $ 69,790 Investment 375 172 108 Equity in earnings for the period 9,897 10,627 11,533 Amortization of purchase price adjustments (a) (2,324 ) (2,276 ) (2,328 ) 7,573 8,351 9,205 Distributions received (11,713 ) (11,426 ) (12,451 ) Foreign currency translation adjustment included in “Other comprehensive income (loss), net” and other 4,583 1,907 (11,111 ) Balance at end of period $ 55,363 $ 54,545 $ 55,541 _______________ (a) Based upon an average original aggregate life of 21 years. |
Properties (Tables)
Properties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Properties | 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. |
Goodwill And Other Intangible43
Goodwill And Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | 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 _______________ (a) Goodwill acquired and disposed of during 2017 resulted from the DavCo and NPC Transactions. See Note 2 for further information. |
Schedule Of Finite Lived And Indefinite Lived Intangible Assets | 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 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | 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 _______________ (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. |
Accrued Expenses and Other Cu44
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Year End December 31, 2017 January 1, 2017 Accrued compensation and related benefits $ 49,541 $ 47,214 Accrued taxes 19,924 21,571 Other 42,159 33,249 $ 111,624 $ 102,034 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consisted of the following: Year End December 31, January 1, Series 2015-1 Class A-2 Notes: (a) Series 2015-1 Class A-2-I Notes $ 855,313 $ 864,063 Series 2015-1 Class A-2-II Notes 879,750 888,750 Series 2015-1 Class A-2-III Notes 488,750 493,750 7% debentures, due in 2025 (b) 89,514 88,277 Capital lease obligations, due through 2045 467,964 211,714 Unamortized debt issuance costs (26,889 ) (34,272 ) 2,754,402 2,512,282 Less amounts payable within one year (30,172 ) (24,652 ) Total long-term debt $ 2,724,230 $ 2,487,630 Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 31, 2017 were as follows: Fiscal Year 2018 $ 30,172 2019 867,164 2020 21,905 2021 24,033 2022 860,655 Thereafter 987,848 $ 2,791,777 _______________ (a) On June 1, 2015, Wendy’s Funding, LLC (“Wendy’s Funding” or the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of The Wendy’s Company, entered into a base indenture and a related supplemental indenture (collectively, the “Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2015-1 3.371% Fixed Rate Senior Secured Notes, Class A-2-I (the “Series 2015-1 Class A-2-I Notes”) with an initial principal amount of $875,000 , Series 2015-1 4.080% Fixed Rate Senior Secured Notes, Class A-2-II (the “Series 2015-1 Class A-2-II Notes”) with an initial principal amount of $900,000 and the Series 2015-1 4.497% Fixed Rate Senior Secured Notes, Class A-2-III, (the “Series 2015-1 Class A-2-III Notes”) with an initial principal amount of $500,000 (collectively, the “Series 2015-1 Class A-2 Notes”). In addition, the Master Issuer entered into a revolving financing facility of Series 2015-1 Variable Funding Senior Secured Notes, Class A-1 (the “Series 2015-1 Class A-1 Notes” and, together with the Series 2015-1 Class A-2 Notes, the “Series 2015-1 Senior Notes”), which allows for the drawing of up to $150,000 under the Series 2015-1 Class A-1 Notes, which include certain credit instruments, including a letter of credit facility. The Series 2015-1 Class A-1 Notes were issued under the Indenture and allow for drawings on a revolving basis. During 2015, the Company borrowed and repaid $19,000 under the Series 2015-1 Class A-1 Notes. No amounts were borrowed under the Series 2015-1 Class A-1 Notes during 2017 and 2016. The Series 2015-1 Senior Notes were issued in a securitization transaction pursuant to which certain of the Company’s domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual property, were contributed or otherwise transferred to the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company that act as guarantors (the “Guarantors”) of the Series 2015-1 Senior Notes and that have pledged substantially all of their assets, excluding certain real estate assets and subject to certain limitations, to secure the Series 2015-1 Senior Notes. Interest and principal payments on the Series 2015-1 Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Series 2015-1 Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the Series 2015-1 Class A-2 Notes is in June 2045, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment dates of the Series 2015-1 Class A-2-II Notes and the Series 2015-1 Class A-2-III Notes will be seven and 10 years, respectively, from the date of issuance (the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Series 2015-1 Class A-2 Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture. As further discussed below, the Series 2015-1 Class A-2-I Notes were refinanced subsequent to December 31, 2017. The Series 2015-1 Class A-1 Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Series 2015-1 Class A-1 note agreement. There is a commitment fee on the unused portion of the Series 2015-1 Class A-1 Notes which ranges from 0.50% to 0.85% based on utilization. As of December 31, 2017 and January 1, 2017, $29,080 and $26,552 of letters of credit were outstanding against the Series 2015-1 Class A-1 Notes, respectively, which relate primarily to interest reserves required under the Indenture. As further discussed below, the Series 2015-1 Class A-1 Notes were refinanced subsequent to December 31, 2017. During 2017 and 2016 , the Company incurred debt issuance costs of $561 and $2,495 , respectively, in connection with the issuance of the Series 2015-1 Senior Notes. The debt issuance costs are being amortized to “Interest expense, net” through the Anticipated Repayment Dates of the Series 2015-1 Senior Notes utilizing the effective interest rate method. As of December 31, 2017, the effective interest rates, including the amortization of debt issuance costs, were 3.831% , 4.361% and 4.696% for the Series 2015-1 Class A-2-I Notes, Series 2015-1 Class A-2-II Notes and Series 2015-1 Class A-2-III Notes, respectively. The Series 2015-1 Senior Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Series 2015-1 Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Series 2015-1 Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Series 2015-1 Senior Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Series 2015-1 Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Series 2015-1 Class A-2 Notes on the applicable scheduled maturity date. The Series 2015-1 Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Series 2015-1 Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the trustee and the noteholders, and are restricted in their use. As of December 31, 2017 and January 1, 2017 , Wendy’s Funding had restricted cash of $28,933 and $29,096 , respectively, which primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Series 2015-1 Class A-2 Notes. The proceeds from the issuance of the Series 2015-1 Class A-2 Notes, were used to repay all amounts outstanding on the Term A Loans and Term B Loans under the Company’s May 16, 2013 Restated Credit Agreement amended on September 24, 2013 (the “2013 Restated Credit Agreement”). In connection with the repayment of the Term A Loans and Term B Loans, Wendy’s terminated the related interest rate swaps with notional amounts totaling $350,000 and $100,000 , respectively, which had been designated as cash flow hedges. See Note 12 for more information on the interest rate swaps. As a result, the Company recorded a loss on early extinguishment of debt of $7,295 during the second quarter of 2015, primarily consisting of the write-off of deferred costs related to the 2013 Restated Credit Agreement of $7,233 and fees paid to terminate the related interest rate swaps of $62 . On January 17, 2018, Wendy’s Funding completed a refinancing transaction under which the Master Issuer issued Series 2018-1 3.573% Fixed Rate Senior Secured Notes, Class A-2-I (the “Series 2018-1 Class A-2-I Notes”) with an initial principal amount of $450,000 and Series 2018-1 3.884% Fixed Rate Senior Secured Notes, Class A-2-II (the “Series 2018-1 Class A-2-II Notes”) with an initial principal amount of $475,000 (collectively, the “Series 2018-1 Class A-2 Notes”). Interest payments on the Series 2018-1 Class A-2 Notes are payable on a quarterly basis. The legal final maturity date of the Series 2018-1 Class A-2 Notes is in March 2048, but, unless earlier prepaid to the extent permitted under the indenture that governs the Series 2018-1 Class A-2 Notes, the anticipated repayment dates of the Series 2018-1 Class A-2-I Notes and the Series 2018-1 Class A-2-II Notes will be March 2025 and March 2028, respectively. If the Master Issuer has not repaid or redeemed the Series 2018-1 Class A-2 Notes prior to the respective anticipated repayment date, additional interest will accrue on the Series 2018-1 Class A-2 Notes equal to the greater of (a) 5.00% per annum and (b) a per annum interest rate equal to the excess, if any, by which the sum of (i) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00% , plus (iii) (1) with respect to the Series 2018-1 Class A-2-I Notes, 1.35% , and (2) with respect to the Series 2018-1 Class A-2-II Notes, 1.58% , exceeds the original interest rate with respect to such tranche. The net proceeds from the sale of the Series 2018-1 Class A-2 Notes were used to redeem the Master Issuer’s outstanding Series 2015-1 Class A-2-I Notes, to pay prepayment and transaction costs, and for general corporate purposes. As a result, the Company expects to record a loss on early extinguishment of debt of approximately $11,500 during the first quarter of 2018. The Series 2018-1 Class A-2 Notes have scheduled principal payments of $9,250 annually from 2018 through 2024, $423,250 in 2025, $4,750 in each 2026 through 2027 and $427,500 in 2028. Concurrently, the Master Issuer entered into a revolving financing facility of Series 2018-1 Variable Funding Senior Secured Notes, Class A-1 (the “Series 2018-1 Class A-1 Notes” and, together with the Series 2018-1 Class A-2 Notes, the “Series 2018-1 Senior Notes”), which allows for the drawing of up to $150,000 under the Series 2018-1 Class A-1 Notes, which include certain credit instruments, including a letter of credit facility. On the closing date, the Company had no outstanding borrowings under its Series 2018-1 Class A-1 Notes. The Series 2015-1 Class A-1 Notes were canceled on the closing date and the letters of credit outstanding against the Series 2015-1 Class A-1 Notes were transferred to the Series 2018-1 Class A-1 Notes. During 2017 , the Company incurred debt issuance costs of $351 in connection with the issuance of the Series 2018-1 Senior Notes. The debt issuance costs will be amortized to “Interest expense, net” through the anticipated repayment dates of the Series 2018-1 Senior Notes utilizing the effective interest rate method. As of December 31, 2017, the debt issuance costs are included in “ Other assets ” as the Series 2018-1 Senior Notes had not yet been issued. (b) Wendy’s 7% debentures are unsecured and were reduced to fair value in connection with the Wendy’s Merger based on their outstanding principal of $100,000 and an effective interest rate of 8.6% . The fair value adjustment is being accreted and the related charge included in “Interest expense, net” until the debentures mature. These debentures contain covenants that restrict the incurrence of indebtedness secured by liens and certain capitalized lease transactions. |
Aggregate maturities of long-term debt | Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 31, 2017 were as follows: Fiscal Year 2018 $ 30,172 2019 867,164 2020 21,905 2021 24,033 2022 860,655 Thereafter 987,848 $ 2,791,777 |
Pledged Assets | The following is a summary of the Company’s assets pledged as collateral for certain debt: Year End December 31, Cash and cash equivalents $ 34,704 Restricted cash and other assets (including long-term) 29,047 Accounts and notes receivable, net 50,073 Inventories 2,979 Properties 277,389 Other intangible assets 1,097,066 $ 1,491,258 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | 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 _______________ (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, Level 1 Level 2 Level 3 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, Level 1 Level 2 Level 3 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. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income from continuing operations before income taxes is set forth below: Year Ended 2017 2016 2015 Domestic $ 86,892 $ 192,082 $ 208,827 Foreign (a) 14,127 9,608 25,301 $ 101,019 $ 201,690 $ 234,128 (a) Excludes foreign income of domestic subsidiaries |
Schedule of Components of Income Tax Expense (Benefit) | The benefit from (provision for) income taxes from continuing operations is set forth below: Year Ended 2017 2016 2015 Current: U.S. Federal $ (13,092 ) $ (75,167 ) $ (12,414 ) State (4,055 ) (5,805 ) 3,346 Foreign (9,173 ) (5,307 ) (10,778 ) Current tax provision (26,320 ) (86,279 ) (19,846 ) Deferred: U.S. Federal 127,592 7,975 (53,916 ) State (7,729 ) 6,733 (21,375 ) Foreign (533 ) (495 ) 988 Deferred tax benefit (provision) 119,330 14,213 (74,303 ) Income tax benefit (provision) $ 93,010 $ (72,066 ) $ (94,149 ) |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) are set forth below: Year End December 31, 2017 January 1, 2017 Deferred tax assets: Net operating loss and credit carryforwards $ 66,770 $ 44,733 Unfavorable leases 40,544 50,771 Accrued compensation and related benefits 17,904 31,994 Deferred rent 14,862 19,552 Accrued expenses and reserves 9,673 16,486 Other 4,305 9,293 Valuation allowances (47,295 ) (11,400 ) Total deferred tax assets 106,763 161,429 Deferred tax liabilities: Intangible assets (333,708 ) (495,505 ) Owned and leased fixed assets, net of related obligations (47,702 ) (89,251 ) Other (24,406 ) (23,186 ) Total deferred tax liabilities (405,816 ) (607,942 ) $ (299,053 ) $ (446,513 ) |
Summary of Net Operating Loss and Tax Credit Carryforwards | The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows: Amount Expiration Tax credit carryforwards: U.S. federal foreign tax credits $ 15,962 2022-2024 State tax credits 555 2020-2023 Foreign tax credits of non-U.S. subsidiaries 3,023 Not applicable Total $ 19,540 Net operating loss carryforwards: State and local net operating loss carryforwards $ 1,165,832 2018-2035 Foreign net operating loss carryforwards 234 2023-2026 Total $ 1,166,066 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax computed at the U.S. Federal statutory rate of 35% to reported income tax is set forth below: Year Ended 2017 (a) 2016 2015 Income tax provision at the U.S. Federal statutory rate $ (35,357 ) $ (70,592 ) $ (81,945 ) State income tax provision, net of U.S. Federal income tax effect (6,451 ) (3,767 ) (7,234 ) Federal rate change 164,893 — — Prior years’ tax matters (b) 15,964 — — Excess tax benefits from share-based compensation 5,196 — — Domestic tax planning initiatives 4,282 — — Foreign and U.S. tax effects of foreign operations 2,408 2,278 4,389 Valuation allowances (b) (c) (35,895 ) 4,915 (6,075 ) Non-deductible goodwill (d) (15,458 ) (6,409 ) (7,435 ) Transition tax (4,446 ) — — Unrepatriated earnings (1,801 ) — — Non-deductible expenses and other (325 ) 1,509 4,151 $ 93,010 $ (72,066 ) $ (94,149 ) _______________ (a) 2017 includes the following impacts associated with the Tax Act: (1) the revaluation of our U.S. net deferred tax liability at 21% resulting in a benefit of $164,893 , (2) a full valuation allowance of $15,962 on our U.S. foreign tax credit carryforwards due to the decrease in the U.S. federal tax rate, resulting in the Company concluding it is more likely than not that we will not be able to utilize our carryforwards before they expire, (3) a one-time transition tax of $4,446 , (4) deferred tax on unrepatriated earnings of $1,801 and (5) other net expenses of $2,305 . (b) Primarily related to certain state net operating loss carryforwards, previously considered worthless, that existed at the beginning of the year. In 2017, the Company changed its judgment regarding the likelihood of the utilization of these carryforwards. Because of this change, the Company recognized a deferred tax asset of $16,643 , net of federal benefit, which was partially offset by a valuation allowance of $13,667 , net of federal benefit (included in the valuation allowances amount above). (c) 2016 includes a $2,878 benefit related to the correction to a prior year identified and recorded in the first quarter of 2016. (d) Substantially all of the goodwill included in the net (loss) gain on sales of restaurants in 2017, 2016 and 2015 under our system optimization initiative was non-deductible for tax purposes. See Note 2 further information. 2016 includes a $3,837 federal benefit related to the correction to a prior year identified and recorded in the second quarter of 2016. The corresponding state benefit correction of $398 is included in the state income tax provision amount above. |
Schedule of Unrecognized Tax Benefits Roll Forward | As of December 31, 2017 , the Company had unrecognized tax benefits of $28,848 , which, if resolved favorably would reduce income tax expense by $24,018 . A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Year End December 31, January 1, January 3, Beginning balance $ 19,545 $ 21,224 $ 25,715 Additions: Tax positions of current year 8,251 306 927 Tax positions of prior years 1,704 440 476 Reductions: Tax positions of prior years (295 ) (2,126 ) (5,182 ) Settlements (34 ) (42 ) (251 ) Lapse of statute of limitations (323 ) (257 ) (461 ) Ending balance $ 28,848 $ 19,545 $ 21,224 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | There were 470,424 shares of common stock issued at the beginning and end of 2017 , 2016 and 2015 . Treasury stock activity for 2017 , 2016 and 2015 was as follows: Treasury Stock 2017 2016 2015 Number of shares at beginning of year 223,850 198,109 104,614 Repurchases of common stock 8,607 29,545 99,881 Common shares issued: Stock options, net (1,853 ) (2,914 ) (5,043 ) Restricted stock, net (612 ) (796 ) (1,258 ) Director fees (15 ) (20 ) (21 ) Other (65 ) (74 ) (64 ) Number of shares at end of year 229,912 223,850 198,109 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides a rollforward of the components of accumulated other comprehensive income (loss) attributable to The Wendy’s Company, net of tax as applicable: Foreign Currency Translation Cash Flow Hedges (a) Pension Total Balance at December 28, 2014 $ (28,363 ) $ (2,044 ) $ (887 ) $ (31,294 ) Current-period other comprehensive loss (37,800 ) (1,527 ) (202 ) (39,529 ) Balance at January 3, 2016 (66,163 ) (3,571 ) (1,089 ) (70,823 ) Current-period other comprehensive income (loss) 5,864 1,774 (56 ) 7,582 Balance at January 1, 2017 (60,299 ) (1,797 ) (1,145 ) (63,241 ) Current-period other comprehensive income 15,150 1,797 96 17,043 Balance at December 31, 2017 $ (45,149 ) $ — $ (1,049 ) $ (46,198 ) _______________ (a) Current-period other comprehensive income (loss) includes the effect of changes in unrealized losses on cash flow hedges, net of tax, for 2015. In addition, 2017, 2016 and 2015 include the reclassification of unrealized losses on cash flow hedges of $1,797 , $1,774 and $915 , respectively, from “Accumulated other comprehensive loss” to our consolidated statements of operations consisting of $2,894 , $2,894 and $1,487 , respectively, recorded to “Interest expense, net,” net of the related income tax benefit of $1,097 , $1,120 and $572 , respectively, recorded to “Provision for income taxes.” See Note 12 for more information. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity during 2017 : Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding at January 1, 2017 16,697 $ 8.31 Granted 2,826 15.36 Exercised (1,924 ) 7.16 Forfeited and/or expired (274 ) 10.12 Outstanding at December 31, 2017 17,325 $ 9.56 7.1 $ 118,817 Vested or expected to vest at December 31, 2017 17,190 $ 9.54 7.1 $ 118,264 Exercisable at December 31, 2017 10,943 $ 7.95 6.0 $ 92,644 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | The weighted average grant date fair value of stock options was determined using the following assumptions: 2017 2016 2015 Risk-free interest rate 1.94 % 1.28 % 1.76 % Expected option life in years 5.62 5.62 5.62 Expected volatility 23.88 % 28.25 % 29.25 % Expected dividend yield 1.82 % 2.38 % 2.23 % |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes activity of Restricted Shares during 2017 : Number of Restricted Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2017 1,817 $ 9.30 Granted 560 15.41 Vested (652 ) 8.84 Forfeited (130 ) 10.17 Non-vested at December 31, 2017 1,595 $ 11.36 |
Schedule of Share-based Payment Award, Performance Share Awards, Valuation Assumptions | The input variables are noted in the table below: 2017 2016 2015 Risk-free interest rate 1.44 % 0.82 % 1.00 % Expected life in years 3.00 3.00 3.00 Expected volatility 25.06 % 27.03 % 25.56 % Expected dividend yield (a) 0.00 % 0.00 % 0.00 % _______________ (a) The Monte Carlo method assumes a reinvestment of dividends. |
Schedule of Nonvested Performance-based Units Activity | The following table summarizes activity of performance shares at Target during 2017 : Performance Condition Awards Market Condition Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2017 799 $ 9.89 352 $ 12.17 Granted 165 13.87 134 16.81 Dividend equivalent units issued (a) 11 — 12 — Vested (b) (371 ) 9.73 — — Forfeited — — — — Non-vested at December 31, 2017 604 $ 11.13 498 $ 13.49 _______________ (a) Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares. There is no weighted average fair value associated with dividend equivalent units. (b) Excludes the vesting of an additional 37 shares, which resulted from the performance of performance condition awards exceeding Target. |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Year Ended 2017 2016 2015 Stock options $ 6,923 $ 6,859 $ 10,081 Restricted shares (a) 5,778 5,051 4,834 Performance shares: Performance condition awards 1,764 4,681 888 Market condition awards 1,533 1,550 1,348 Modifications, net 4,930 — 5,805 Share-based compensation (b) 20,928 18,141 22,956 Less: Income tax benefit (b) (4,985 ) (6,520 ) (8,380 ) Share-based compensation, net of income tax benefit $ 15,943 $ 11,621 $ 14,576 _______________ (a) 2017 includes $197 related to retention awards in connection with the Company’s May 2017 G&A realignment plan, which was included in “Reorganization and realignment costs.” See Note 4 for further information. (b) Excludes $275 of pre-tax share-based compensation and $106 of related income tax benefits for 2015, respectively, which are included in “ Net income from discontinued operations .” |
Impairment of Long-Lived Asse50
Impairment of Long-Lived Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Impairment of long-lived assets | |
Impaired Long-Lived Assets Held and Used | |
Impairment of Long-Lived Assets | The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “ Impairment of long-lived assets :” Year Ended 2017 2016 2015 Restaurants leased or subleased to franchisees $ 244 $ 14,010 $ 19,214 Company-operated restaurants 3,169 1,918 3,132 Surplus properties 684 313 2,655 $ 4,097 $ 16,241 $ 25,001 |
Investment Income, Net (Tables)
Investment Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment Income, Net [Abstract] | |
Investment Income | Year Ended 2017 2016 2015 Distributions, including dividends (a) $ — $ — $ 54,911 Gain on sale of investments, net (b) 2,570 497 335 Other than temporary loss on cost method investment (258 ) — (3,150 ) Other, net 391 226 118 $ 2,703 $ 723 $ 52,214 _______________ (a) During 2015, the Company received a dividend of $54,911 from our investment in Arby’s. See Note 7 for further information. (b) Represents gains on sales of certain non-current cost method investments. See Note 7 for further information. |
Discontinued Operations (Tables
Discontinued Operations (Tables) - Bakery | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Schedule of income from discontinued operations | The following table presents the Bakery’s results of operations and the gain on disposal, which have been included in discontinued operations: Year Ended 2015 Revenues (a) $ 25,885 Cost of sales (b) (7,543 ) 18,342 General and administrative (1,093 ) Depreciation and amortization (c) (2,297 ) Other expense, net (d) (19 ) Income from discontinued operations before income taxes 14,933 Provision for income taxes (4,439 ) Income from discontinued operations, net of income taxes 10,494 Gain on disposal of discontinued operations before income taxes 25,529 Provision for income taxes on gain on disposal (14,860 ) Gain on disposal of discontinued operations, net of income taxes 10,669 Net income from discontinued operations $ 21,163 _______________ (a) Includes sales of sandwich buns and related products previously reported in “Sales” as well as rental income. (b) 2015 includes employee separation-related costs of $791 as a result of the sale of the Bakery. In December of 2013, The New Bakery Co. of Ohio, Inc. (the “Bakery Company”), a 100% owned subsidiary of Wendy’s, now known as The Bakery Company, LLC, terminated its participation in a multiemployer pension plan and assumed an estimated withdrawal liability of $13,500 . During the first quarter of 2015, the Company began negotiating the potential sale of the Bakery Company which would result in the buyer re-entering the multiemployer pension plan. As a result, the Company concluded that its loss contingency for the pension withdrawal payments was no longer probable and, as such, reversed $12,486 of the outstanding withdrawal liability to “Cost of sales” during the first quarter of 2015. (c) Included in “Depreciation and amortization” in our consolidated statements of cash flows for the periods presented. (d) Includes net gains on sales of other assets. During 2015, the Bakery received cash proceeds of $50 , resulting in net gains on sales of other assets of $32 . |
Discontinued Operations, Disposed of by Sale | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Schedule of income from discontinued operations | The following table summarizes the gain on the disposal of the Bakery, which has been included in discontinued operations: Year Ended 2015 Proceeds from sale of the Bakery (a) $ 78,408 Net working capital (b) (5,655 ) Net properties sold (c) (30,664 ) Goodwill allocated to the sale of the Bakery (12,067 ) Other (d) (2,684 ) 27,338 Post-closing adjustments on the sale of the Bakery (1,809 ) Gain on disposal of discontinued operations before income taxes 25,529 Provision for income taxes (e) (14,860 ) Gain on disposal of discontinued operations, net of income taxes $ 10,669 _______________ (a) Represents net proceeds received, which includes the purchase price of $78,500 less transaction closing costs paid directly by the Buyer on the Company’s behalf. (b) Primarily represents accounts receivable, inventory, prepaid expenses and accounts payable. (c) Net properties sold consisted primarily of buildings, equipment and capital leases for transportation equipment. (d) Primarily includes the recognition of the Company’s obligation, pursuant to the sale agreement, to provide health insurance benefits to the Bakery’s employees through December 31, 2015 of $1,993 and transaction closing costs paid directly by the Company. (e) Includes the impact of non-deductible goodwill disposed of as a result of the sale. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Schedule of Rent Expense | Rental expense for operating leases consists of the following components: Year Ended 2017 2016 2015 Rental expense: Minimum rentals $ 90,889 $ 77,952 $ 77,606 Contingent rentals 19,021 18,291 18,270 Total rental expense (a) $ 109,910 $ 96,243 $ 95,876 _______________ (a) Amounts exclude sublease income of $126,814 , $95,072 , and $61,618 recognized during 2017 , 2016 and 2015 , respectively. |
Schedule of Rent Income | Rental income for operating leases and subleases consists of the following components: Year Ended 2017 2016 2015 Rental income: Minimum rentals $ 169,857 $ 123,171 $ 68,241 Contingent rentals 20,246 19,944 18,731 Total rental income $ 190,103 $ 143,115 $ 86,972 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table illustrates the Company’s future minimum rental payments and rental receipts for non-cancelable leases and subleases, including rental receipts for direct financing leases as of December 31, 2017 . Rental receipts below are presented separately for owned properties and for leased properties based on the classification of the underlying lease. Rental Payments Rental Receipts Fiscal Year Capital Leases Operating Leases Capital Leases Operating Leases Owned Properties 2018 $ 47,095 $ 96,265 $ 64,511 $ 75,583 $ 53,808 2019 45,700 94,824 65,036 75,787 54,779 2020 46,633 93,803 66,137 75,443 55,392 2021 48,221 93,255 67,929 75,133 56,996 2022 49,320 92,951 69,115 75,488 58,574 Thereafter 759,337 1,116,173 1,048,796 910,200 948,101 Total minimum payments $ 996,306 $ 1,587,271 $ 1,381,524 $ 1,287,634 $ 1,227,650 Less interest (528,342 ) Present value of minimum capital lease payments (a) $ 467,964 _______________ (a) The present value of minimum capital lease payments of $7,422 and $460,542 are included in “Current portion of long-term debt” and “Long-term debt,” respectively. |
Schedule Of Property Subject to or Available for Operating Lease | Properties owned by the Company and leased to franchisees and other third parties under operating leases include: Year End December 31, 2017 January 1, 2017 Land $ 272,411 $ 271,160 Buildings and improvements 313,108 312,067 Restaurant equipment 2,444 1,507 587,963 584,734 Accumulated depreciation and amortization (128,003 ) (110,166 ) $ 459,960 $ 474,568 |
Schedule of Capital Leased Assets | Our net investment in direct financing leases is as follows: Year End December 31, 2017 January 1, 2017 Future minimum rental receipts $ 662,889 $ 401,452 Unearned interest income (433,175 ) (277,747 ) Net investment in direct financing leases 229,714 123,705 Net current investment in direct financing leases (a) (625 ) (101 ) Net non-current investment in direct financing leases (b) $ 229,089 $ 123,604 _______________ (a) Included in “Accounts and notes receivable, net.” (b) Included in “Net investment in direct financing leases.” |
Transactions with Related Par54
Transactions with Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions by Related Party | The following is a summary of transactions between the Company and its related parties, which are included in continuing operations: Year Ended 2017 2016 2015 Transactions with QSCC: Wendy’s Co-Op (a) $ (987 ) $ (890 ) $ (1,265 ) Lease income (b) (217 ) (193 ) (185 ) TimWen lease and management fee payments (c) $ 12,360 $ 11,602 $ 11,843 _______________ Transactions with QSCC (a) Wendy’s has a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees which establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $987 , $890 and $1,265 in 2017 , 2016 and 2015 , respectively, which are included as a reduction of “Cost of sales.” (b) Effective January 1, 2011 , Wendy’s leased 14,333 square feet of office space to QSCC for an annual base rental of $176 . The lease expired on December 31, 2016. A new lease agreement was signed effective January 1, 2017, expiring on December 31, 2020 for an annual base rental of $215 . The Wendy’s Company received $217 , $193 and $185 of lease income from QSCC during 2017 , 2016 and 2015 , respectively, which has been recorded as a reduction of “General and administrative.” TimWen lease and management fee payments (c) A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen for the operation of Wendy’s/Tim Hortons combo units in Canada. Prior to the second quarter of 2015, Wendy’s operated certain of the Wendy’s/Tim Hortons combo units in Canada and subleased some of the restaurant facilities to franchisees. As a result of the Company completing its plan to sell all of its Company-operated restaurants in Canada to franchisees during the second quarter of 2015, all of the restaurant facilities are subleased to franchisees. Wendy’s paid TimWen $12,572 , $11,806 and $12,059 under these lease agreements during 2017 , 2016 and 2015 , respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $212 , $204 and $216 during 2017 , 2016 and 2015 , respectively, which has been included as a reduction to “General and administrative.” |
Advertising Costs and Funds (Ta
Advertising Costs and Funds (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Assets and Liabilities | |
Restricted Assets and Liabilities | |
Schedule of Restricted Assets and Liabilities | Restricted assets and related liabilities of the Advertising Funds at December 31, 2017 and January 1, 2017 were as follows: Year End December 31, 2017 January 1, 2017 Cash and cash equivalents $ 8,579 $ 19,359 Accounts and notes receivable, net 47,288 49,983 Other assets 6,735 6,418 Total assets $ 62,602 $ 75,760 Accounts payable $ 5,601 $ 8,362 Accrued expenses and other current liabilities 63,646 71,068 Member’s deficit (6,645 ) (3,670 ) Total liabilities and deficit $ 62,602 $ 75,760 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segments, Geographical Areas [Abstract] | |
Geographic Information [Table Text Block] | The table below presents revenues and properties information by geographic area: U.S. Canada Other International Total 2017 Revenues $ 1,154,873 $ 50,431 $ 18,104 $ 1,223,408 Properties 1,226,714 36,213 132 1,263,059 2016 Revenues $ 1,373,345 $ 45,959 $ 16,114 $ 1,435,418 Properties 1,162,006 30,257 76 1,192,339 2015 Revenues $ 1,749,131 $ 104,003 $ 17,163 $ 1,870,297 Properties 1,198,553 29,296 95 1,227,944 |
Quarterly Financial Informati57
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information (Unaudited) [Table Text Block] | The tables below set forth summary unaudited consolidated quarterly financial information for 2017 and 2016 . The Company reports on a fiscal year typically consisting of 52 or 53 weeks ending on the Sunday closest to December 31. All of the Company’s fiscal quarters in 2017 and 2016 contained 13 weeks. 2017 Quarter Ended (a) April 2 July 2 October 1 December 31 Revenues $ 285,819 $ 320,342 $ 308,000 $ 309,247 Cost of sales 123,407 129,360 132,387 127,793 Operating profit 60,720 25,794 61,657 66,587 Net income (loss) $ 22,341 $ (1,845 ) $ 14,257 $ 159,276 Basic income (loss) per share $ .09 $ (.01 ) $ .06 $ .66 Diluted income (loss) per share $ .09 $ (.01 ) $ .06 $ .64 2016 Quarter Ended (b) April 3 July 3 October 2 January 1 Revenues $ 378,787 $ 382,718 $ 364,012 $ 309,901 Cost of sales 214,736 202,554 186,546 140,865 Operating profit 63,829 65,648 106,088 79,215 Net income $ 25,363 $ 26,480 $ 48,890 $ 28,891 Basic income per share $ 0.09 $ 0.10 $ 0.19 $ 0.11 Diluted income per share $ 0.09 $ 0.10 $ 0.18 $ 0.11 _______________ (a) The Company’s consolidated statements of operations in fiscal 2017 were materially impacted by system optimization losses, net, reorganization and realignment costs and the benefit from income taxes. The pre-tax impact of system optimization losses, net for the second quarter was $41,050 (see Note 2 for additional information). The pre-tax impact of reorganization and realignment costs for the second, third and fourth quarters was $17,699 , $2,888 and $1,806 , respectively (see Note 4 for additional information). The benefit from income taxes for the fourth quarter was $121,649 and included the impact of the Tax Act (see Note 13 for additional information). (b) The Company’s consolidated statements of operations in fiscal 2016 were materially impacted by system optimization gains, net, reorganization and realignment costs, impairment of long-lived assets and a gain recognized on a lease buyout. The pre-tax impact of system optimization gains, net for the first, third and fourth quarters was $8,426 , $37,756 and $23,825 , respectively (see Note 2 for additional information). The pre-tax impact of reorganization and realignment costs for the first, second, third and fourth quarters was $3,250 , $2,487 , $2,129 and $2,217 , respectively (see Note 4 for additional information). The pre-tax impact of impairment of long-lived assets during the first, second and fourth quarters was $7,105 , $5,525 and $3,250 , respectively (see Note 16 for additional information). The pre-tax impact of a gain recognized on a lease buyout during the first quarter was $11,606 . |
Summary of Significant Accoun58
Summary of Significant Accounting Policies Corporate Structure (Details) | Dec. 31, 2017countriesRestaurant |
Franchisor Disclosure | |
Number of Restaurants | 6,634 |
Entity Operated Units | |
Franchisor Disclosure | |
Number of Restaurants | 337 |
Franchised Units | |
Franchisor Disclosure | |
Number of Restaurants | 6,297 |
Other International | Franchised Units | |
Franchisor Disclosure | |
Number of Countries Entity Operates | countries | 29 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies Principles of Consolidation (Details) | 12 Months Ended |
Dec. 31, 2017funds | |
Accounting Policies [Abstract] | |
Number of Advertising Funds | 2 |
Summary of Significant Accoun60
Summary of Significant Accounting Policies Cash Equivalents (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Accounting Policies [Abstract] | |
Cash Equivalents, Insurance from Securities Investor Protection Corporation, Maximum per Account | $ 500 |
Summary of Significant Accoun61
Summary of Significant Accounting Policies Properties and Depreciation and Amortization (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Office and restaurant equipment | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 3 years |
Office and restaurant equipment | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 20 years |
Transportation equipment | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 3 years |
Transportation equipment | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 15 years |
Buildings and improvements | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 7 years |
Buildings and improvements | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 30 years |
Summary of Significant Accoun62
Summary of Significant Accounting Policies Goodwill (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Goodwill | |
Number of Reporting Units | 2 |
Summary of Significant Accoun63
Summary of Significant Accounting Policies Other Intangible Assets and Deferred Financing Costs (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer software | Minimum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Computer software | Maximum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Reacquired rights under franchise agreements | Minimum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Reacquired rights under franchise agreements | Maximum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Franchise agreements | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Summary of Significant Accoun64
Summary of Significant Accounting Policies Investments (Details) | Dec. 31, 2017 | Jan. 01, 2012 |
TimWen | ||
Schedule of Investments | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
Brazil JV | ||
Schedule of Investments | ||
Equity Method Investment, Ownership Percentage | 20.00% | |
Arby's Restaurant Group, Inc | ||
Schedule of Investments | ||
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received | 18.50% | 18.50% |
Summary of Significant Accoun65
Summary of Significant Accounting Policies Self-insurance (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Insurance Claims | |
Loss Contingencies | |
Loss Contingency, Range of Possible Loss per Occurrence, Maximum | $ 500 |
Summary of Significant Accoun66
Summary of Significant Accounting Policies Leases (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | |
Operating Leased Assets | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 15 years |
Maximum | |
Operating Leased Assets | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 20 years |
Summary of Significant Accoun67
Summary of Significant Accounting Policies Concentration of Risk (Details) | 12 Months Ended |
Dec. 31, 2017countriesstatesdistributorscustomers | |
Concentration Risk | |
Number of Customers Accounting for More Than 10% of Revenues | customers | 0 |
Number of Main In-line Distributors | 1 |
Number of Additional In-line Distributors | 6 |
Number of States Where Restaurants are Located | states | 50 |
Foreign Countries | |
Concentration Risk | |
Number of Countries Entity Operates (Including Canada) | countries | 30 |
Main In-line Distributor Risk | |
Concentration Risk | |
Concentration Risk, Percentage | 39.00% |
Additional In-line Distributor Risk | |
Concentration Risk | |
Concentration Risk, Percentage | 53.00% |
Geographic Concentration Risk | |
Concentration Risk | |
Concentration Risk, Percentage | 10.00% |
Summary of Significant Accoun68
Summary of Significant Accounting Policies New Accounting Standards (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Dec. 28, 2014 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Payments Related to Tax Withholding for Share-based Compensation | $ (5,721) | $ (4,444) | $ (12,221) | |
Cumulative effect of change in accounting principle | 1,880 | |||
Change in net cash provided by (used in) investing activities | 67,311 | (92,107) | (35,380) | |
Change in net cash provided by (used in) operating activities | (251,640) | (188,934) | (274,314) | |
Change in cash, cash equivalents and restricted cash | 171,447 | 198,240 | 327,216 | $ 267,276 |
Operating Leases, Future Minimum Payments Due | 1,587,271 | |||
Advertising Expense | 27,921 | 41,064 | 64,312 | |
Share-based compensation guidance | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 3,082 | 49,613 | ||
Payments Related to Tax Withholding for Share-based Compensation | (4,444) | (12,221) | ||
Cumulative effect of change in accounting principle | 1,880 | |||
Restricted cash guidance | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Change in net cash provided by (used in) investing activities | 25,000 | (15,000) | ||
Change in net cash provided by (used in) operating activities | (13,000) | 5,000 | ||
Change in cash, cash equivalents and restricted cash | 41,000 | 78,000 | $ 58,000 | |
Lease guidance | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Operating Leases, Future Minimum Payments Due | 1,587,271 | |||
Revenue recognition guidance | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Initial Franchise Fees | 16,000 | 14,000 | ||
Deferred Revenue, Additions | 86,000 | |||
Advertising Revenue | 324,000 | 307,000 | ||
Advertising Expense | $ 327,000 | $ 309,000 |
System Optimization Losses (G69
System Optimization Losses (Gains), Net Summary of DavCo and NPC Transactions (Details) $ in Thousands | May 31, 2017Restaurant | Jul. 02, 2017USD ($) | Jan. 01, 2017USD ($) | Oct. 02, 2016USD ($) | Apr. 03, 2016USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($) |
Property, Plant and Equipment | ||||||||
Goodwill | $ 741,410 | $ 743,334 | $ 741,410 | $ 770,781 | ||||
Proceeds from sales | 81,516 | 262,173 | 204,388 | |||||
System optimization (losses) gains, net | $ (41,050) | $ 23,825 | $ 37,756 | $ 8,426 | (39,076) | 71,931 | 74,009 | |
DavCo Acquisition | ||||||||
Property, Plant and Equipment | ||||||||
Restaurants acquired from franchisees | Restaurant | 140 | |||||||
Restaurants closed before acquisition | Restaurant | 7 | |||||||
Total consideration paid | 86,788 | |||||||
Net assets held for sale | 70,688 | |||||||
Capital lease assets | 49,360 | |||||||
Deferred taxes | 27,830 | |||||||
Capital lease obligations | (97,797) | |||||||
Net unfavorable leases | (22,330) | |||||||
Other liabilities | (6,924) | |||||||
Total identifiable net assets | 20,827 | |||||||
Goodwill | 65,961 | |||||||
Favorable Lease Assets | 1,229 | |||||||
Unfavorable Lease Liabilities | 23,559 | |||||||
Supplemental deferred purchase price | 6,269 | |||||||
Tax deductible goodwill | 21,795 | |||||||
NPC Disposition | ||||||||
Property, Plant and Equipment | ||||||||
Significant Changes, Franchises Sold | Restaurant | 140 | |||||||
Number of sold restaurants to be reimaged | Restaurant | 90 | |||||||
Number of restaurants to be built by the end of 2022 | Restaurant | 15 | |||||||
Proceeds from sales | 70,688 | |||||||
Net Assets Sold | (70,688) | |||||||
Goodwill | (65,961) | |||||||
Net favorable leases | 24,034 | |||||||
Other | (1,708) | |||||||
System optimization (losses) gains, net | (43,635) | $ 0 | $ 0 | |||||
Favorable Lease Assets | 30,068 | |||||||
Unfavorable Lease Liabilities | $ 6,034 |
System Optimization Losses (G70
System Optimization Losses (Gains), Net Summary of Disposition Activity (Details) CAD in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Jul. 02, 2017USD ($) | Jan. 01, 2017USD ($) | Oct. 02, 2016USD ($) | Apr. 03, 2016USD ($) | Dec. 31, 2017USD ($)Restaurant | Dec. 31, 2017CADRestaurant | Jan. 01, 2017USD ($)Restaurant | Jan. 03, 2016USD ($)Restaurant | Dec. 28, 2014Restaurant | Feb. 28, 2015 | |
Property, Plant and Equipment | ||||||||||
Future company-owned restaurant ownership percentage | 5.00% | |||||||||
System optimization losses (gains), net | ||||||||||
Proceeds from sales | $ 81,516 | $ 262,173 | $ 204,388 | |||||||
System optimization (losses) gains, net | $ (41,050) | $ 23,825 | $ 37,756 | $ 8,426 | $ (39,076) | $ 71,931 | $ 74,009 | |||
Sale of Company-Owned Restaurants to Franchisees | ||||||||||
System optimization losses (gains), net | ||||||||||
Number of restaurants sold to franchisees | Restaurant | 0 | 0 | 310 | 327 | ||||||
Proceeds from sales | $ 0 | $ 251,446 | $ 193,860 | |||||||
Net assets sold | 0 | (115,052) | (86,493) | |||||||
Goodwill related to sales of restaurants | 0 | (41,561) | (29,970) | |||||||
Net unfavorable leases | 0 | (24,592) | (846) | |||||||
Other | 0 | 3,103 | 5,499 | |||||||
Gain on sales of restaurants, net, before post-closing adjustments | 0 | 67,138 | 71,052 | |||||||
Post-closing adjustments on sales of restaurants | 2,541 | (1,411) | 1,285 | |||||||
System optimization (losses) gains, net | 2,541 | 65,727 | 72,337 | |||||||
Favorable Lease Assets | 7,612 | 34,437 | ||||||||
Unfavorable Lease Liabilities | $ 32,204 | 35,283 | ||||||||
Deferred Gain on Sale of Property | $ 4,568 | |||||||||
Franchises Sold, Deferred Gain on Sale | Restaurant | 17 | |||||||||
Cash Payments from Post Closing Adjustments, Net of Proceeds | 294 | |||||||||
Recognition of deferred gain on sale of property | $ 312 | |||||||||
Recognition of Gain on Sale of Property | $ 4,492 | |||||||||
Sale of franchise-operated restaurant to franchisee | ||||||||||
System optimization losses (gains), net | ||||||||||
Number of restaurants sold to franchisees | Restaurant | 400 | 400 | 144 | 71 | ||||||
Sale of Company-operated restaurants to franchisees and sale of other assets | ||||||||||
System optimization losses (gains), net | ||||||||||
System optimization (losses) gains, net | $ 4,559 | |||||||||
Sale of Other Assets | ||||||||||
System optimization losses (gains), net | ||||||||||
Proceeds from sales | 10,534 | $ 10,727 | $ 10,478 | |||||||
System optimization (losses) gains, net | 2,018 | $ 6,204 | 1,672 | |||||||
Recognition of deferred gain on sale of property | 375 | |||||||||
Guarantee Obligations | Sale of Company-Owned Restaurants to Franchisees | ||||||||||
System optimization losses (gains), net | ||||||||||
Franchises Sold, Deferred Gain on Sale | Restaurant | 8 | |||||||||
Recognition of deferred gain on sale of property | $ 1,822 | |||||||||
Canada, Dollars | Guarantee Obligations | Sale of Company-Owned Restaurants to Franchisees | ||||||||||
System optimization losses (gains), net | ||||||||||
Recognition of deferred gain on sale of property | CAD | CAD 2,300 | |||||||||
System Optimization | ||||||||||
System optimization losses (gains), net | ||||||||||
Goodwill, Transfers | $ 11,429 |
System Optimization Losses (G71
System Optimization Losses (Gains), Net Assets Held for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Property, Plant and Equipment [Abstract] | ||
Assets Held for sale | $ 2,235 | $ 4,800 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Restaurant | Jan. 01, 2017USD ($)Restaurant | Jan. 03, 2016USD ($)Restaurant | |
Business Acquisition | |||
Goodwill | $ 743,334 | $ 741,410 | $ 770,781 |
Acquisitions | |||
Business Acquisition | |||
Restaurants acquired from franchisees | Restaurant | 0 | 2 | 4 |
Total consideration paid, net of cash received | $ 0 | $ 2,209 | $ 1,232 |
Properties | 0 | 2,218 | 1,303 |
Acquired franchise rights | 0 | 0 | 760 |
Other assets | 0 | 9 | 0 |
Capital lease obligations | 0 | 0 | (438) |
Unfavorable leases | 0 | 0 | (440) |
Other liabilities | 0 | (18) | (80) |
Total identifiable net assets | 0 | 2,209 | 1,105 |
Business Combination, Consideration Transferred, Net of Identifiable Assets Acquired and Liabilities Assumes | 0 | 0 | 127 |
Goodwill | 0 | 0 | (1,408) |
Prior period acquisition | Acquisitions | |||
Business Acquisition | |||
Goodwill | $ 0 | $ 0 | $ (1,535) |
Reorganization and Reorganiza73
Reorganization and Reorganization Costs Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 1,806 | $ 2,888 | $ 17,699 | $ 2,217 | $ 2,129 | $ 2,487 | $ 3,250 | $ 22,574 | $ 10,083 | $ 21,910 |
G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | 21,663 | 0 | 0 | |||||||
G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | 0 | 692 | 10,342 | |||||||
System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 911 | $ 9,391 | $ 11,568 |
Reorganization and Reorganiza74
Reorganization and Reorganization Costs G&A Realignment Costs - May 2017 Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 1,806 | $ 2,888 | $ 17,699 | $ 2,217 | $ 2,129 | $ 2,487 | $ 3,250 | $ 22,574 | $ 10,083 | $ 21,910 |
G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 16,536 | |||||||||
Reorganization and realignment costs | 21,663 | $ 0 | $ 0 | |||||||
Employee Severance | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 14,956 | |||||||||
Restructuring and Related Cost, Expected Cost Remaining | 2,000 | 2,000 | ||||||||
Recruitment and relocation | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 489 | |||||||||
Restructuring and Related Cost, Expected Cost Remaining | 4,000 | 4,000 | ||||||||
Other Restructuring | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 1,091 | |||||||||
Restructuring and Related Cost, Expected Cost Remaining | 1,000 | 1,000 | ||||||||
Share Based Compensation Expense | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | 5,127 | |||||||||
Restructuring and Related Cost, Expected Cost Remaining | 2,000 | 2,000 | ||||||||
Minimum | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Expected Cost Remaining | 6,000 | 6,000 | ||||||||
Restructuring and Related Cost, Expected Cost | 28,000 | 28,000 | ||||||||
Maximum | G&A Realignment – May 2017 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Expected Cost Remaining | 11,000 | 11,000 | ||||||||
Restructuring and Related Cost, Expected Cost | $ 33,000 | $ 33,000 |
Reorganization and Reorganiza75
Reorganization and Reorganization Costs G&A Realignment Accrual Rollforward - May 2017 Plan (Details) - G&A Realignment – May 2017 Plan $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Restructuring Cost and Reserve | |
Beginning balance | $ 0 |
Charges | 16,536 |
Payments | (4,266) |
Ending balance | 12,270 |
Employee Severance | |
Restructuring Cost and Reserve | |
Beginning balance | 0 |
Charges | 14,956 |
Payments | (2,863) |
Ending balance | 12,093 |
Recruitment and relocation | |
Restructuring Cost and Reserve | |
Beginning balance | 0 |
Charges | 489 |
Payments | (312) |
Ending balance | 177 |
Other Restructuring | |
Restructuring Cost and Reserve | |
Beginning balance | 0 |
Charges | 1,091 |
Payments | (1,091) |
Ending balance | 0 |
Accrued Liabilities | |
Restructuring Cost and Reserve | |
Ending balance | 8,467 |
Other liabilities | |
Restructuring Cost and Reserve | |
Ending balance | $ 3,803 |
Reorganization and Reorganiza76
Reorganization and Reorganization Costs G&A Realignment Costs - November 2014 Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 1,806 | $ 2,888 | $ 17,699 | $ 2,217 | $ 2,129 | $ 2,487 | $ 3,250 | $ 22,574 | $ 10,083 | $ 21,910 |
G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 692 | 4,718 | ||||||||
Restructuring and Related Cost, Cost Incurred to Date | 17,624 | 17,624 | ||||||||
Reorganization and realignment costs | 0 | 692 | 10,342 | |||||||
Restructuring Charges, Incurred to Date | 23,960 | 23,960 | ||||||||
Employee Severance | G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring Reserve, Accrual Adjustment | (387) | |||||||||
Restructuring and Related Cost, Incurred Cost | (344) | 3,011 | ||||||||
Restructuring and Related Cost, Cost Incurred to Date | 14,584 | 14,584 | ||||||||
Recruitment and relocation | G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 992 | 1,658 | ||||||||
Restructuring and Related Cost, Cost Incurred to Date | 2,859 | 2,859 | ||||||||
Other Restructuring | G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 44 | 49 | ||||||||
Restructuring and Related Cost, Cost Incurred to Date | 181 | 181 | ||||||||
Share Based Compensation Expense | G&A Realignment - November 2014 Plan | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 0 | $ 5,624 | ||||||||
Restructuring Charges, Incurred to Date | $ 6,336 | $ 6,336 |
Reorganization and Reorganiza77
Reorganization and Reorganization Costs G&A Realignment Accrual Rollforward - November 2014 Plan (Details) - G&A Realignment - November 2014 Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | |||
Beginning balance | $ 232 | $ 3,575 | |
Charges | 692 | $ 4,718 | |
Payments | (4,035) | ||
Ending balance | 0 | 232 | 3,575 |
Employee Severance | |||
Restructuring Cost and Reserve | |||
Beginning balance | 232 | 3,431 | |
Charges | (344) | 3,011 | |
Payments | (2,855) | ||
Ending balance | 232 | 3,431 | |
Recruitment and relocation | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 144 | |
Charges | 992 | 1,658 | |
Payments | (1,136) | ||
Ending balance | 0 | 144 | |
Other Restructuring | |||
Restructuring Cost and Reserve | |||
Beginning balance | $ 0 | 0 | |
Charges | 44 | 49 | |
Payments | (44) | ||
Ending balance | $ 0 | $ 0 |
Reorganization and Reorganiza78
Reorganization and Reorganization Costs System Optimization Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | $ 1,806 | $ 2,888 | $ 17,699 | $ 2,217 | $ 2,129 | $ 2,487 | $ 3,250 | $ 22,574 | $ 10,083 | $ 21,910 |
System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 911 | 7,791 | 5,184 | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 41,498 | 41,498 | ||||||||
Reorganization and realignment costs | 911 | 9,391 | 11,568 | |||||||
Restructuring Charges, Incurred to Date | 71,909 | 71,909 | ||||||||
Employee Severance | System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 3 | 82 | 894 | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 18,237 | 18,237 | ||||||||
Professional Fees | System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 838 | 7,437 | 3,360 | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 17,448 | 17,448 | ||||||||
Other Restructuring | System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Restructuring and Related Cost, Incurred Cost | 70 | 272 | 930 | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 5,813 | 5,813 | ||||||||
Accelerated Depreciation and Amortization | System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | 0 | 1,600 | 6,384 | |||||||
Restructuring Charges, Incurred to Date | 25,398 | 25,398 | ||||||||
Share Based Compensation Expense | System Optimization | ||||||||||
Restructuring Cost and Reserve | ||||||||||
Reorganization and realignment costs | 0 | $ 0 | $ 0 | |||||||
Restructuring Charges, Incurred to Date | $ 5,013 | $ 5,013 |
Reorganization and Reorganiza79
Reorganization and Reorganization Costs System Optimization Accrual Rollforward (Details) - System Optimization - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Restructuring Cost and Reserve | |||
Beginning balance | $ 101 | $ 875 | |
Charges | 911 | 7,791 | $ 5,184 |
Payments | (1,012) | (8,565) | |
Ending balance | 0 | 101 | 875 |
Employee Severance | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 77 | |
Charges | 3 | 82 | 894 |
Payments | (3) | (159) | |
Ending balance | 0 | 0 | 77 |
Professional Fees | |||
Restructuring Cost and Reserve | |||
Beginning balance | 101 | 708 | |
Charges | 838 | 7,437 | 3,360 |
Payments | (939) | (8,044) | |
Ending balance | 0 | 101 | 708 |
Other Restructuring | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 90 | |
Charges | 70 | 272 | 930 |
Payments | (70) | (362) | |
Ending balance | $ 0 | $ 0 | $ 90 |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Income from continuing operations | $ 194,029 | $ 129,624 | $ 139,979 | ||||||||
Net income (loss) from discontinued operations | 0 | 0 | 21,163 | ||||||||
Net income | $ 159,276 | $ 14,257 | $ (1,845) | $ 22,341 | $ 28,891 | $ 48,890 | $ 26,480 | $ 25,363 | $ 194,029 | $ 129,624 | $ 161,142 |
Common Stock: | |||||||||||
Weighted average basic shares outstanding | 244,179 | 262,209 | 323,018 | ||||||||
Dilutive effect of stock options and restricted shares | 8,110 | 4,503 | 5,707 | ||||||||
Weighted average diluted shares outstanding | 252,289 | 266,712 | 328,725 | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,168 | 1,558 | 2,323 |
Cash and Receivables Cash and C
Cash and Receivables Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Dec. 28, 2014 |
Cash and Cash Equivalents | ||||
Cash | $ 171,109 | $ 192,905 | ||
Cash Equivalents | 338 | 5,335 | ||
Cash and cash equivalents | 171,447 | 198,240 | $ 327,216 | $ 267,276 |
Restricted Cash and Cash Equivalents, Current | 32,633 | 57,612 | ||
Restricted Cash | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 32,633 | 57,612 | ||
Restricted Cash | Accounts held by trustee for the securitized financing facility | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 28,933 | 29,096 | ||
Restricted Cash | Collateral supporting letters of credit | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 3,205 | 6,165 | ||
Restricted Cash | Accounts held by trustee for reinvestment in capital assets | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 5 | 22,014 | ||
Restricted Cash | Trust for Termination Costs for Former Wendy's Executives | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 289 | 168 | ||
Restricted Cash | Other | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Current | 201 | 169 | ||
Deferred Costs and Other Assets | Trust for Termination Costs for Former Wendy's Executives | ||||
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents, Noncurrent | $ 165 | $ 738 |
Cash and Receivables Accounts a
Cash and Receivables Accounts and Notes Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Dec. 28, 2014 |
Accounts, Notes, Loans and Financing Receivable | ||||
Accounts receivable, gross, current | $ 116,076 | $ 99,866 | ||
Accounts and notes receivable, gross, current | 118,936 | 102,855 | ||
Allowance for doubtful accounts, current | (4,546) | (4,030) | $ (3,488) | $ (2,343) |
Accounts and notes receivable, net, current | 114,390 | 98,825 | ||
Allowance for doubtful accounts, noncurrent | 0 | (26) | $ (257) | $ (246) |
Income Taxes Receivable | 26,262 | 18,111 | ||
Net current investment in direct financing leases | (625) | (101) | ||
Franchisees | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Accounts receivable, gross, current | 78,699 | 74,134 | ||
Notes receivable from franchisees, gross, current | 2,860 | 2,989 | ||
Notes and loans receivable from franchisees, gross, noncurrent | 17,589 | 9,290 | ||
Allowance for doubtful accounts, noncurrent | 0 | (26) | ||
Notes and loans receivable, net, noncurrent | 17,589 | 9,264 | ||
Other Receivables | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Accounts receivable, gross, current | 37,377 | 25,732 | ||
Indonesia | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Notes receivable from franchisees, gross, current | 1,008 | |||
Notes and loans receivable from franchisees, gross, noncurrent | 3,789 | 2,454 | ||
Brazil JV | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Notes and loans receivable from franchisees, gross, noncurrent | 12,800 | $ 6,810 | ||
India Franchisee | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Notes and loans receivable from franchisees, gross, noncurrent | $ 1,000 |
Cash and Receivables Allowance
Cash and Receivables Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning Balance, Current | $ 4,030 | $ 3,488 | $ 2,343 |
Beginning Balance, Noncurrent | 26 | 257 | 246 |
Provision for Doubtful Accounts, Franchisees and other | 579 | 390 | 979 |
Uncollectible accounts written-off, net of recoveries | (89) | (79) | |
Uncollectible accounts written off, net of recoveries | 177 | ||
Ending Balance, Current | 4,546 | 4,030 | 3,488 |
Ending Balance, Noncurrent | 0 | 26 | 257 |
Allowances for Doubtful Accounts Receivable, Balance | $ 4,546 | $ 4,056 | $ 3,745 |
Investments Carrying Value of I
Investments Carrying Value of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Schedule of Investments | ||
Equity investments | $ 55,363 | $ 54,545 |
Cost investments | 639 | 2,436 |
Investments | $ 56,002 | $ 56,981 |
Investments Equity Investment S
Investments Equity Investment Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 28, 2015 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
TimWen and Brazil JV | ||||
Schedule of Equity Method Investments | ||||
Equity in earnings for the period | $ 9,897 | $ 10,627 | $ 11,533 | |
TimWen | ||||
Schedule of Equity Method Investments | ||||
Equity Method Investment, Ownership Percentage | 50.00% | |||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ 31,033 | 31,213 | ||
Brazil JV | ||||
Schedule of Equity Method Investments | ||||
Equity Method Investment, Ownership Percentage | 20.00% | |||
Payments to Acquire Interest in Joint Venture | $ 1 | |||
Payments to Acquire Interest in Joint Venture, Starbord | 2 | |||
Payments to Acquire Interest in Joint Venture, Infinity | $ 2 | |||
Equity Method Investment, Initial Ownership Percentage | 20.00% | |||
Equity Method Investment Ownership Percentage, Starbord | 40.00% | |||
Equity Method Investment Ownership Percentage, Infinity | 40.00% | |||
Equity in earnings for the period | $ (1,134) | (271) | (88) | |
Loan agreement, Maximum loan amount | $ 8,000 | 4,800 | ||
Amount loaned to Brazil JV | $ 5,990 | $ 5,110 | $ 1,700 | |
Note Receivable, Interest Rate | 6.50% |
Investments Investment Rollforw
Investments Investment Rollforward (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)years | Jan. 01, 2017USD ($)years | Jan. 03, 2016USD ($)years | |
Schedule of Equity Method Investments | |||
Balance at beginning of period | $ 54,545 | ||
Distributions received | (11,713) | $ (11,426) | $ (12,451) |
Foreign currency translation adjustment included in “Other comprehensive income (loss), net” | 15,150 | 5,864 | $ (37,800) |
Balance at end of period | $ 55,363 | $ 54,545 | |
TimWen | |||
Schedule of Equity Method Investments | |||
Equity Method Investment, Purchase Price Adjustment, Amortization Period | years | 21 | 21 | 21 |
TimWen and Brazil JV | |||
Schedule of Equity Method Investments | |||
Balance at beginning of period | $ 54,545 | $ 55,541 | $ 69,790 |
Investment | 375 | 172 | 108 |
Equity in earnings for the period | 9,897 | 10,627 | 11,533 |
Amortization of purchase price adjustments | (2,324) | (2,276) | (2,328) |
Equity in Earnings, Net of Amortization of Purchase Price Adjustment | 7,573 | 8,351 | 9,205 |
Distributions received | (11,713) | (11,426) | (12,451) |
Foreign currency translation adjustment included in “Other comprehensive income (loss), net” | 4,583 | 1,907 | (11,111) |
Balance at end of period | $ 55,363 | $ 54,545 | $ 55,541 |
Investments Indirect Investment
Investments Indirect Investment in Arby's (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Jan. 01, 2012 | Feb. 05, 2018 | Dec. 29, 2013 | |
Schedule of Investments | ||||||
Investment Income, Dividend | $ 0 | $ 0 | $ 54,911 | |||
Arby's Restaurant Group, Inc | ||||||
Schedule of Investments | ||||||
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received | 18.50% | 18.50% | ||||
Carrying value of Arby's investment | $ 0 | |||||
Arby's Restaurant Group, Inc | Subsequent Event | ||||||
Schedule of Investments | ||||||
Percentage of Arby's Stock after Dilutive Effect of Acquisition | 12.30% | |||||
Arby's Restaurant Group, Inc | Investment Income | ||||||
Schedule of Investments | ||||||
Investment Income, Dividend | $ 54,911 | |||||
Common stock | Arby's Restaurant Group, Inc | ||||||
Schedule of Investments | ||||||
Noncash or Part Noncash Divestiture, Amount of Consideration Received | $ 19,000 |
Properties (Details)
Properties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | $ 1,752,720 | $ 1,607,805 | |
Accumulated Depreciation and Amortization | (489,661) | (415,466) | |
Properties | 1,263,059 | 1,192,339 | $ 1,227,944 |
Capital Leases, Accumulated Amortization | 22,688 | 13,705 | |
Depreciation and amortization | 125,687 | 122,704 | 145,051 |
Land | |||
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | 379,297 | 381,305 | |
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | 503,955 | 504,730 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | 390,958 | 371,954 | |
Office and restaurant equipment | |||
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | 255,632 | 234,275 | |
Capital leases | |||
Property, Plant and Equipment | |||
Property, Plant and Equipment, Gross | 222,878 | 115,541 | |
Property, Plant and Equipment | |||
Property, Plant and Equipment | |||
Depreciation and amortization | 90,971 | 92,286 | 114,961 |
Assets, Accelerated Useful Lives | |||
Property, Plant and Equipment | |||
Depreciation and amortization | $ 630 | $ 2,598 | $ 8,607 |
Goodwill And Other Intangible89
Goodwill And Other Intangible Assets Schedule of Goodwill and Other Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Dec. 29, 2013 | |
Goodwill | |||
Goodwill Impairment | $ 9,397 | ||
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 741,410 | $ 770,781 | |
Restaurant acquisitions | 65,961 | 0 | |
Restaurant dispositions | (65,961) | (30,132) | |
Currency translation adjustment and other, net | 1,924 | 761 | |
Balance at end of year | $ 743,334 | $ 741,410 |
Goodwill And Other Intangible90
Goodwill And Other Intangible Assets Schedule of Finite-Lived And Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Indefinite Lived And Finite Lived Intangible Assets, Gross | $ 1,631,188 | $ 1,585,332 |
Finite-Lived Intangible Assets, Accumulated Amortization | (309,603) | (262,801) |
Other intangible assets | 1,321,585 | 1,322,531 |
Franchise agreements | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 349,499 | 348,403 |
Finite-Lived Intangible Assets, Accumulated Amortization | (154,140) | (137,047) |
Finite-Lived Intangible Assets, Net | 195,359 | 211,356 |
Favorable leases | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 239,096 | 208,626 |
Finite-Lived Intangible Assets, Accumulated Amortization | (69,128) | (57,440) |
Finite-Lived Intangible Assets, Net | 169,968 | 151,186 |
Reacquired rights under franchise agreements | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 1,680 | 1,690 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,589) | (1,536) |
Finite-Lived Intangible Assets, Net | 91 | 154 |
Software | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 137,913 | 123,613 |
Finite-Lived Intangible Assets, Accumulated Amortization | (84,746) | (66,778) |
Finite-Lived Intangible Assets, Net | 53,167 | 56,835 |
Trademarks | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 903,000 | 903,000 |
Accumulated Amortization, Indefinite Lived Assets | $ 0 | $ 0 |
Goodwill And Other Intangible91
Goodwill And Other Intangible Assets Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Finite-Lived Intangible Assets | |||
Amortization of intangible assets | $ 47,302 | $ 48,824 | $ 54,686 |
Future amortization, 2018 | 48,220 | ||
Future amortization, 2019 | 43,854 | ||
Future amortization, 2020 | 39,748 | ||
Future amortization, 2021 | 34,706 | ||
Future amortization, 2022 | 30,229 | ||
Future amortization, Thereafter | 221,828 | ||
Impairment of Intangible Assets (Excluding Goodwill) | $ 52 | 3,288 | 3,656 |
System Optimization | Assets, Accelerated Useful Lives | Reacquired rights under franchise agreements | |||
Finite-Lived Intangible Assets | |||
Amortization of intangible assets | $ 1,600 | $ 6,384 |
Accrued Expenses and Other Cu92
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Accrued Liabilities [Abstract] | ||
Accrued compensation and related benefits | $ 49,541 | $ 47,214 |
Accrued taxes | 19,924 | 21,571 |
Other | 42,159 | 33,249 |
Accrued Liabilities, Current | $ 111,624 | $ 102,034 |
Long-Term Debt Schedule of Long
Long-Term Debt Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Apr. 01, 2018 | Jun. 28, 2015 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Jan. 17, 2018 | Jun. 01, 2015 | |
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 2,754,402 | $ 2,512,282 | |||||
Less amounts payable within one year | (30,172) | (24,652) | |||||
Total long-term debt | 2,724,230 | 2,487,630 | |||||
Letters of Credit Outstanding, Amount | 32,574 | ||||||
Restricted Cash and Cash Equivalents, Current | 32,633 | 57,612 | |||||
Loss on early extinguishment of debt | 0 | 0 | $ 7,295 | ||||
Subsequent Event | Forecast | |||||||
Debt Instrument | |||||||
Loss on early extinguishment of debt | $ (11,500) | ||||||
Interest Rate Swap | |||||||
Debt Instrument | |||||||
Payments for fees to terminate cash flow hedge | $ 62 | ||||||
Restricted Cash | |||||||
Debt Instrument | |||||||
Restricted Cash and Cash Equivalents, Current | 32,633 | 57,612 | |||||
Accounts held by trustee for the securitized financing facility | Restricted Cash | |||||||
Debt Instrument | |||||||
Restricted Cash and Cash Equivalents, Current | 28,933 | 29,096 | |||||
Capital lease obligations, due through 2045 | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | 467,964 | 211,714 | |||||
Series 2015-1 Class A-2-I Notes | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 855,313 | 864,063 | $ 875,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.371% | ||||||
Debt Instrument, Interest Rate at Period End | 3.831% | ||||||
Series 2015-1 Class A-2-II Notes | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 879,750 | 888,750 | $ 900,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.08% | ||||||
Anticipated Repayment Date | 7 years | ||||||
Debt Instrument, Interest Rate at Period End | 4.361% | ||||||
Series 2015-1 Class A-2-III Notes | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 488,750 | 493,750 | $ 500,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.497% | ||||||
Anticipated Repayment Date | 10 years | ||||||
Debt Instrument, Interest Rate at Period End | 4.696% | ||||||
7% debentures, due in 2025 | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 89,514 | 88,277 | |||||
Debt Instrument, Interest Rate at Period End | 8.60% | ||||||
Debt Instrument, Face Amount | $ 100,000 | ||||||
Other Debt Obligations | |||||||
Debt Instrument | |||||||
Unamortized debt issuance costs | $ (26,889) | (34,272) | |||||
Series 2015-1 Class A-1 Notes | Minimum | |||||||
Debt Instrument | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | ||||||
Series 2015-1 Class A-1 Notes | Maximum | |||||||
Debt Instrument | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.85% | ||||||
Series 2015-1 Class A-1 Notes | Letter of Credit | |||||||
Debt Instrument | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 150,000 | ||||||
Line of Credit, Current | $ 0 | 0 | |||||
Letters of Credit Outstanding, Amount | 29,080 | 26,552 | |||||
Series 2015-1 Class A-1 Notes | Line of Credit | |||||||
Debt Instrument | |||||||
Repayments of Long-term Lines of Credit | 19,000 | ||||||
Series 2015-1 Senior Notes | |||||||
Debt Instrument | |||||||
Deferred Finance Costs, Gross | $ 561 | $ 2,495 | |||||
Term A Loan, 2018 | Interest Rate Swap | Cash Flow Hedging | |||||||
Debt Instrument | |||||||
Derivative Liability, Notional Amount | 350,000 | ||||||
Term B Loan, 2019 | Interest Rate Swap | Cash Flow Hedging | |||||||
Debt Instrument | |||||||
Derivative Liability, Notional Amount | $ 100,000 | ||||||
Term Loan, 2013 | |||||||
Debt Instrument | |||||||
Loss on early extinguishment of debt | (7,295) | ||||||
Write off of Deferred Debt Issuance Cost | $ 7,233 | ||||||
Series 2018-1 Class A-2-I Notes | Subsequent Event | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 450,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.573% | ||||||
Additional Interest Rate On Debt, After Anticipated Repayment Date | 1.35% | ||||||
Series 2018-1 Class A-2-II Notes | Subsequent Event | |||||||
Debt Instrument | |||||||
Debt and Capital Lease Obligations | $ 475,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.884% | ||||||
Additional Interest Rate On Debt, After Anticipated Repayment Date | 1.58% | ||||||
Series 2018-1 Class A-2 Notes | Subsequent Event | |||||||
Debt Instrument | |||||||
Additional Interest Rate On Debt, After Anticipated Repayment Date | 5.00% | ||||||
Long-term Debt, Maturities, Repayments of Principal Annually for the Next Seven Years | $ 9,250 | ||||||
Long-term Debt, Maturities, Repayments of Principal in 2025 | 423,250 | ||||||
Long-term Debt, Maturities, Repayments of Principal in 2026 and 2027 | 4,750 | ||||||
Long-term Debt, Maturities, Repayments of Principal in 2028 | 427,500 | ||||||
Series 2018-1 Class A-1 Notes | Letter of Credit | Subsequent Event | |||||||
Debt Instrument | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | 150,000 | ||||||
Line of Credit, Current | 0 | ||||||
Series 2018-1 Senior Notes | Subsequent Event | |||||||
Debt Instrument | |||||||
Deferred Finance Costs, Gross | $ 351 |
Long-Term Debt Maturities of lo
Long-Term Debt Maturities of long-term debt (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument | |
2,018 | $ 30,172 |
2,019 | 867,164 |
2,020 | 21,905 |
2,021 | 24,033 |
2,022 | 860,655 |
Thereafter | 987,848 |
Total long-term debt, Gross | $ 2,791,777 |
Long-Term Debt Other Long-term
Long-Term Debt Other Long-term Debt Disclosure (Details) - Dec. 31, 2017 $ in Thousands | USD ($) | CAD |
Wendy's U.S. Advertising Fund | ||
Debt Instrument | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ | $ 25,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ | $ 23,713 | |
Canadian Subsidiary | ||
Debt Instrument | ||
Line of Credit Facility, Maximum Borrowing Capacity | CAD | CAD 6,000,000 | |
Revolving credit, Number of Entities | CAD | 1 |
Long-Term Debt Assets Pledged a
Long-Term Debt Assets Pledged as Collateral (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Assets Pledged as Collateral | |
Assets pledged as collateral | $ 1,491,258 |
Cash and cash equivalents | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 34,704 |
Restricted Cash and other assets (including long-term) | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 29,047 |
Accounts and notes receivable, net | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 50,073 |
Inventories | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 2,979 |
Properties | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 277,389 |
Other intangible assets | |
Assets Pledged as Collateral | |
Assets pledged as collateral | $ 1,097,066 |
Fair Value Measurements Financi
Fair Value Measurements Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 | Dec. 29, 2013 |
Reported Value Measurement | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | $ 338 | $ 5,335 | |
Cost Method Investments, Fair Value Disclosure | 639 | 2,436 | |
Guarantees of franchisee loans | 37 | 280 | |
Reported Value Measurement | Series 2015-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 855,313 | 864,063 | |
Reported Value Measurement | Series 2015-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 879,750 | 888,750 | |
Reported Value Measurement | Series 2015-1 Class A-2-III Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 488,750 | 493,750 | |
Reported Value Measurement | Debentures, 7% | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 89,514 | 88,277 | |
Estimate of Fair Value, Fair Value Disclosure | Fair Value, Inputs, Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 338 | 5,335 | |
Estimate of Fair Value, Fair Value Disclosure | Fair Value, Inputs, Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cost Method Investments, Fair Value Disclosure | 327,710 | 326,283 | |
Guarantees of franchisee loans | 37 | 280 | |
Estimate of Fair Value, Fair Value Disclosure | Series 2015-1 Class A-2-I Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 856,510 | 857,349 | |
Estimate of Fair Value, Fair Value Disclosure | Series 2015-1 Class A-2-II Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 897,961 | 880,005 | |
Estimate of Fair Value, Fair Value Disclosure | Series 2015-1 Class A-2-III Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 513,188 | 474,543 | |
Estimate of Fair Value, Fair Value Disclosure | Debentures, 7% | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 107,000 | $ 99,750 | |
Arby's Restaurant Group, Inc | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Non-current cost method investments | $ 0 | ||
Arby's Restaurant Group, Inc | Reported Value Measurement | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Non-current cost method investments | $ 0 |
Fair Value Measurements Derivat
Fair Value Measurements Derivative Instruments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | ||
May 31, 2015USD ($) | Jun. 28, 2015USD ($) | May 31, 2015USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($)cash_flow_hedge | |
Derivatives, Fair Value | ||||||
Number of Interest Rate Derivatives Held | cash_flow_hedge | 7 | |||||
Payments for termination of cash flow hedge, Operating | $ 0 | $ 0 | $ 7,337 | |||
Unrealized Gain (Loss) on Cash Flow Hedging Instruments | $ (7,275) | |||||
Gain (Loss) on Cash Flow Hedge Ineffectiveness, Net | $ 0 | |||||
Interest Expense | ||||||
Derivatives, Fair Value | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 2,894 | $ 2,894 | 1,487 | |||
Interest Rate Swap | ||||||
Derivatives, Fair Value | ||||||
Payments for termination of cash flow hedge, Operating | $ 7,275 | |||||
Payments for fees to terminate cash flow hedge | $ 62 | |||||
Term A Loan, 2018 | Interest Rate Swap | Cash Flow Hedging | ||||||
Derivatives, Fair Value | ||||||
Derivative Liability, Notional Amount | 350,000 | |||||
Term B Loan, 2019 | Interest Rate Swap | Cash Flow Hedging | ||||||
Derivatives, Fair Value | ||||||
Derivative Liability, Notional Amount | $ 100,000 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value of Items Measured on Nonrecurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jan. 01, 2017 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | $ 1,797 | $ 1,774 | $ 915 | |||
Held and used, Total losses | 3,413 | 15,928 | ||||
Held for sale, Total losses | 684 | 313 | ||||
Impairment of long-lived assets | $ 3,250 | $ 5,525 | $ 7,105 | 4,097 | 16,241 | $ 25,001 |
Fair Value, Measurements, Nonrecurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 5,462 | 757 | 5,462 | |||
Held for sale | 1,552 | 1,560 | 1,552 | |||
Total | 7,014 | 2,317 | 7,014 | |||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 0 | 0 | 0 | |||
Held for sale | 0 | 0 | 0 | |||
Total | 0 | 0 | 0 | |||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 0 | 0 | 0 | |||
Held for sale | 0 | 0 | 0 | |||
Total | 0 | 0 | 0 | |||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Property, Plant, and Equipment, Fair Value Disclosure | 5,462 | 757 | 5,462 | |||
Held for sale | 1,552 | 1,560 | 1,552 | |||
Total | $ 7,014 | $ 2,317 | $ 7,014 |
Income Taxes Income from Contin
Income Taxes Income from Continuing Operations before Income Tax and Noncontrolling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Income from continuing operations before income taxes and noncontrolling interests [Line Items] | |||
Domestic | $ 86,892 | $ 192,082 | $ 208,827 |
Foreign | 14,127 | 9,608 | 25,301 |
Income from continuing operations before income taxes | $ 101,019 | $ 201,690 | $ 234,128 |
Income Taxes (Provision For) Be
Income Taxes (Provision For) Benefit from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Deferred: | ||||
Deferred tax benefit (provision) | $ 119,330 | $ 14,213 | $ (89,026) | |
Income tax benefit (provision) | $ 121,649 | 93,010 | (72,066) | (94,149) |
Continuing Operations [Member] | ||||
Current: | ||||
U.S. Federal | (13,092) | (75,167) | (12,414) | |
State | (4,055) | (5,805) | 3,346 | |
Foreign | (9,173) | (5,307) | (10,778) | |
Current tax provision | (26,320) | (86,279) | (19,846) | |
Deferred: | ||||
U.S. Federal | 127,592 | 7,975 | (53,916) | |
State | (7,729) | 6,733 | (21,375) | |
Foreign | (533) | (495) | 988 | |
Deferred tax benefit (provision) | 119,330 | 14,213 | (74,303) | |
Income tax benefit (provision) | $ 93,010 | $ (72,066) | $ (94,149) |
Income Taxes Deferred Tax Asset
Income Taxes Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Deferred Tax Assets | ||
Net operating loss and credit carryforwards | $ 66,770 | $ 44,733 |
Unfavorable leases | 40,544 | 50,771 |
Accrued compensation and related benefits | 17,904 | 31,994 |
Deferred rent | 14,862 | 19,552 |
Accrued expenses and reserves | 9,673 | 16,486 |
Other | 4,305 | 9,293 |
Valuation allowances | (47,295) | (11,400) |
Total deferred tax assets | 106,763 | 161,429 |
Deferred Tax Liabilities | ||
Intangible assets | (333,708) | (495,505) |
Owned and leased fixed assets net of related obligations | (47,702) | (89,251) |
Other | (24,406) | (23,186) |
Total deferred tax liabilities | (405,816) | (607,942) |
Deferred Tax Liabilities, Net | $ (299,053) | $ (446,513) |
Income Taxes Major Tax Legislat
Income Taxes Major Tax Legislation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Major Tax Legislation [Line Items] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||||
Income tax benefit (provision) | $ 121,649 | $ 93,010 | $ (72,066) | $ (94,149) | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 164,893 | $ 0 | $ 0 | ||
Forecast | |||||
Major Tax Legislation [Line Items] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||||
Tax Act | |||||
Major Tax Legislation [Line Items] | |||||
Income tax benefit (provision) | 140,379 | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 164,893 | ||||
Expense (benefit) International-Related Provisions | $ 22,209 |
Income Taxes Income Taxes Net O
Income Taxes Income Taxes Net Operating Losses and Tax Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Summary of Net Operating Loss and Tax Credit Carryforwards [Line Items] | ||||
Tax Credit Carryforward, Amount | $ 19,540 | |||
Net Operating Loss Carryforwards | 1,166,066 | |||
Deferred Tax Assets, Valuation Allowance | 47,295 | $ 11,400 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 35,895 | (5,697) | $ 5,884 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||
Income Taxes Receivable, Current | $ 26,262 | 18,111 | ||
Income Taxes Receivable, Noncurrent | 0 | $ 239 | ||
Domestic Tax Authority [Member] | ||||
Summary of Net Operating Loss and Tax Credit Carryforwards [Line Items] | ||||
Tax Credit Carryforward, Amount | 15,962 | |||
State and Local Jurisdiction [Member] | ||||
Summary of Net Operating Loss and Tax Credit Carryforwards [Line Items] | ||||
Tax Credit Carryforward, Amount | 555 | |||
Net Operating Loss Carryforwards | 1,165,832 | |||
Foreign Tax Authority [Member] | ||||
Summary of Net Operating Loss and Tax Credit Carryforwards [Line Items] | ||||
Tax Credit Carryforward, Amount | 3,023 | |||
Net Operating Loss Carryforwards | $ 234 | |||
Forecast | ||||
Summary of Net Operating Loss and Tax Credit Carryforwards [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Income Taxes Income Taxes Effec
Income Taxes Income Taxes Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Effective Income Tax Rate Reconciliation [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||||||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ (35,357) | $ (70,592) | $ (81,945) | ||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | (6,451) | (3,767) | (7,234) | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 164,893 | 0 | 0 | ||||
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Amount | 15,964 | 0 | 0 | ||||
Effective Income Tax Rate Reconciliation, Share based Compensation, Excess Tax Benefit, Amount | 5,196 | 0 | 0 | ||||
Domestic Tax Planning Initiatives | 4,282 | 0 | 0 | ||||
Foreign and U.S. tax effects of foreign operations | 2,408 | 2,278 | 4,389 | ||||
Valuation allowances | (35,895) | 4,915 | (6,075) | ||||
Non-deductible goodwill | (15,458) | (6,409) | (7,435) | ||||
One-time Transition Tax | (4,446) | 0 | 0 | ||||
Deferred Tax Liabilities Deemed Repatriation | $ (1,801) | (1,801) | 0 | 0 | |||
Non-deductible expenses and other, net | (325) | 1,509 | 4,151 | ||||
Income tax benefit (provision) | 121,649 | 93,010 | $ (72,066) | $ (94,149) | |||
Deferred Tax Assets, Net | 16,643 | 16,643 | |||||
Valuation Allowances and Reserves, Balance | 13,667 | 13,667 | |||||
Quantifying Misstatement in Current Year Financial Statements, Amount | $ (2,878) | ||||||
Quantifying Misstatement in Current Year Financial Statements, Federal Amount | $ (3,837) | ||||||
Quantifying Misstatement in Current Year Financial Statements, State Amount | $ (398) | ||||||
Forecast | |||||||
Effective Income Tax Rate Reconciliation [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||||||
Tax Act | |||||||
Effective Income Tax Rate Reconciliation [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 164,893 | ||||||
One-time Transition Tax | (4,446) | ||||||
Deferred Tax Liabilities Deemed Repatriation | (1,801) | (1,801) | |||||
Income tax benefit (provision) | 140,379 | ||||||
Tax Credit Carryforward, Valuation Allowance | $ 15,962 | 15,962 | |||||
Other Tax Expense (Benefit) | $ 2,305 |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Income Tax Contingency [Line Items] | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | $ 24,018 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | 19,545 | $ 21,224 | $ 25,715 |
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 8,251 | 306 | 927 |
Tax positions of prior years, additions | 1,704 | 440 | 476 |
Tax positions of prior years, reductions | (295) | (2,126) | (5,182) |
Settlements, reductions | (34) | (42) | (251) |
Lapse of statute of limitations, reductions | (323) | (257) | (461) |
Unrecognized Tax Benefits, Ending Balance | 28,848 | 19,545 | 21,224 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound | 6,617 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 161 | 75 | (1,627) |
Unrecognized Tax Benefits, Income Tax Penalties Expense | (106) | 25 | $ (15) |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 1,451 | 1,296 | |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | $ 509 | $ 615 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Dec. 27, 2016 | Sep. 25, 2015 | Aug. 31, 2015 | Jul. 17, 2015 | Jul. 08, 2015 | Nov. 30, 2016 | Feb. 20, 2018 | Sep. 27, 2015 | Jun. 28, 2015 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Feb. 22, 2017 | Jun. 03, 2015 | Jun. 01, 2015 | Dec. 28, 2014 | Aug. 31, 2014 |
Common Stock, Dividends, Per Share, Cash Paid | $ 0.28 | $ 0.245 | $ 0.225 | ||||||||||||||
Number of Shares, beginning of year | 470,424 | 470,424 | 470,424 | 470,424 | 470,424 | ||||||||||||
Number of Shares, end of year | 470,424 | 470,424 | 470,424 | ||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Number of Shares at beginning of year | 229,912 | 223,850 | |||||||||||||||
Number of Shares at end of year | 229,912 | 223,850 | |||||||||||||||
Initial Shares Delivered Under ASR Agreement Percentage | 85.00% | 85.00% | |||||||||||||||
Preferred Stock, Shares Authorized | 100,000 | 100,000 | 100,000 | ||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | ||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | $ 1,797 | $ 1,774 | $ 915 | ||||||||||||||
Subsequent Event | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 1,265 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 20,661 | ||||||||||||||||
Stock Repurchase Program, Cost Incurred | 18 | ||||||||||||||||
$150 Million Share Repurchase Program | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 8,607 | ||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 150,000 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 127,367 | ||||||||||||||||
Stock Repurchase Program, Repurchase Accrual | 1,259 | ||||||||||||||||
Stock Repurchase Program, Cost Incurred | 123 | ||||||||||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 22,633 | ||||||||||||||||
February 2018 Repurchase Program [Domain] [Domain] | Subsequent Event | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 175,000 | ||||||||||||||||
$1.4 Billion Repurchase Program | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 18,142 | 2,066 | |||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 1,400,000 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 184,986 | $ 21,959 | |||||||||||||||
Stock Repurchase Program, Repurchase Accrual | 1,700 | ||||||||||||||||
Stock Repurchase Program, Cost Incurred | $ 272 | 28 | |||||||||||||||
Accelerated Share Repurchase Program | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 316 | 3,551 | 14,385 | 11,087 | |||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 164,500 | ||||||||||||||||
Stock Repurchase Program, Cost Incurred | 58 | ||||||||||||||||
Treasury Stock, Value Acquired, Cost Method, Anticipated Under Accelerated Share Repurchase Program | $ 150,000 | ||||||||||||||||
Tender Offer and Purchase Agreement | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 850,000 | ||||||||||||||||
Tender Offer | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 55,808 | ||||||||||||||||
Stock Repurchase Program, Authorized Amount | 639,000 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 639,000 | ||||||||||||||||
Stock Repurchase Program, Cost Incurred | $ 2,288 | ||||||||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 11.45 | ||||||||||||||||
Purchase agreement | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 18,416 | ||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 211,000 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 210,867 | ||||||||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 11.45 | ||||||||||||||||
$100 Million Repurchase Program | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Repurchases of common stock | 5,655 | ||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | ||||||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 14,480 | $ 61,631 | |||||||||||||||
Stock Repurchase Program, Cost Incurred | $ 86 | ||||||||||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 76,111 | ||||||||||||||||
Common Stock Held in Treasury | |||||||||||||||||
Stockholders' Equity Activity | |||||||||||||||||
Number of Shares at beginning of year | 229,912 | 104,614 | 223,850 | 198,109 | 104,614 | ||||||||||||
Repurchases of common stock | 8,607 | 29,545 | 99,881 | ||||||||||||||
Common shares issued, stock options, net | (1,853) | (2,914) | (5,043) | ||||||||||||||
Common shares issued, restricted stock, net | (612) | (796) | (1,258) | ||||||||||||||
Common shares issued, Director fees | (15) | (20) | (21) | ||||||||||||||
Common shares issued, Other | (65) | (74) | (64) | ||||||||||||||
Number of Shares at end of year | 229,912 | 223,850 | 198,109 |
Stockholders' Equity Accumulate
Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Dec. 28, 2014 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | $ 1,797 | $ 1,774 | $ 915 | |
Accumulated other comprehensive loss | (46,198) | (63,241) | (70,823) | $ (31,294) |
Current-period other comprehensive income (loss) | 17,043 | 7,582 | (39,529) | |
Interest Expense | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | (2,894) | (2,894) | (1,487) | |
Provision for income taxes | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (1,097) | (1,120) | (572) | |
Accumulated Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive loss | (45,149) | (60,299) | (66,163) | (28,363) |
Current-period other comprehensive income (loss) | 15,150 | 5,864 | (37,800) | |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive loss | 0 | (1,797) | (3,571) | (2,044) |
Current-period other comprehensive income (loss) | 1,797 | 1,774 | (1,527) | |
Accumulated Defined Benefit Plans Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive loss | (1,049) | (1,145) | (1,089) | $ (887) |
Current-period other comprehensive income (loss) | $ 96 | $ (56) | $ (202) |
Share-Based Compensation Summar
Share-Based Compensation Summary (Details) - 2010 Plan [Member] - shares shares in Thousands | Dec. 31, 2017 | Jun. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Increase of Number of Shares Available for Grant | 20,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 30,193 |
Share-Based Compensation Stock
Share-Based Compensation Stock Options (Details) - Stock Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Share-based Compensation, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning of period | 16,697 | ||
Granted | 2,826 | ||
Exercised | (1,924) | ||
Forfeited and/or expired | (274) | ||
Outstanding, end of period | 17,325 | 16,697 | |
Vested or expected to vest, end of period | 17,190 | ||
Exercisable, end of period | 10,943 | ||
Weighted average exercise price, outstanding at beginning of period | $ 8.31 | ||
Weighted average exercise price, granted | 15.36 | ||
Weighted average exercise price, exercised | 7.16 | ||
Weighted average exercise price, forfeited and/or expired | 10.12 | ||
Weighted average exercise price, outstanding at end of period | 9.56 | $ 8.31 | |
Weighted average exercise price, vested or expected to vest | 9.54 | ||
Weighted average exercise price, exercisable | $ 7.95 | ||
Weighted average remaining contractual life in years, outstanding | 7 years 1 month 6 days | ||
Weighted average remaining contractual life in years, vested or expected to vest | 7 years 1 month 6 days | ||
Weighted average remaining contractual life in years, exercisable | 6 years | ||
Aggregate intrinsic value, outstanding | $ 118,817 | ||
Aggregate intrinsic value, vested or expected to vest | 118,264 | ||
Aggregate intrinsic value, exercisable | 92,644 | ||
Total intrinsic value, exercises in period | $ 14,624 | $ 12,594 | $ 30,116 |
Weighted average grant date fair value, granted | $ 3.12 | $ 2.12 | $ 2.27 |
Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate | 1.94% | 1.28% | 1.76% |
Expected option life in years | 5 years 7 months 12 days | 5 years 7 months 12 days | 5 years 7 months 12 days |
Expected volatility | 23.88% | 28.25% | 29.25% |
Expected dividend yield | 1.82% | 2.38% | 2.23% |
Share-Based Compensation Restri
Share-Based Compensation Restricted Shares (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Share-based Compensation, Restricted Stock, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, beginning of period | 1,817 | ||
Granted | 560 | ||
Vested | (652) | ||
Forfeited | (130) | ||
Non-vested, end of period | 1,595 | 1,817 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 9.30 | ||
Weighted average grant date fair value, granted | 15.41 | ||
Weighted average grant date fair value, vested | 8.84 | ||
Weighted average grant date fair value, forfeited | 10.17 | ||
Weighted average grant date fair value, non-vested, end of period | $ 11.36 | $ 9.30 | |
Total fair value, vested in period | $ 10,004 | $ 6,339 | $ 10,188 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Share-Based Compensation Perfor
Share-Based Compensation Performance Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Share-based Compensation, Performance Shares, Nonvested, Number of Shares [Roll Forward] | |||
Weighted average grant date fair value, dividend equivalent units issued | $ 0 | ||
Performance Condition Award [Member] | |||
Share-based Compensation, Performance Shares, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, beginning of period | 799 | ||
Granted | 165 | ||
Dividend equivalent units issued | 11 | ||
Vested | (371) | ||
Forfeited | 0 | ||
Non-vested, end of period | 604 | 799 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 9.89 | ||
Weighted average grant date fair value, granted | 13.87 | ||
Weighted average grant date fair value, dividend equivalent units issued | 0 | ||
Weighted average grant date fair value, vested | 9.73 | ||
Weighted average grant date fair value, forfeited | 0 | ||
Weighted average grant date fair value, non-vested, end of period | $ 11.13 | $ 9.89 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Incremental Above Target | 37 | ||
Total fair value, vested in period | $ 5,666 | $ 5,954 | $ 1,156 |
Market Condition Performance Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.44% | 0.82% | 1.00% |
Expected life in years | 3 years | 3 years | 3 years |
Expected volatility | 25.06% | 27.03% | 25.56% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Share-based Compensation, Performance Shares, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, beginning of period | 352 | ||
Granted | 134 | ||
Dividend equivalent units issued | 12 | ||
Vested | 0 | ||
Forfeited | 0 | ||
Non-vested, end of period | 498 | 352 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 12.17 | ||
Weighted average grant date fair value, granted | 16.81 | ||
Weighted average grant date fair value, dividend equivalent units issued | 0 | ||
Weighted average grant date fair value, vested | 0 | ||
Weighted average grant date fair value, forfeited | 0 | ||
Weighted average grant date fair value, non-vested, end of period | $ 13.49 | $ 12.17 | |
Total fair value, vested in period | $ 0 | $ 0 | $ 10,073 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance Shares Vesting Range, Percentage of Target | 0.00% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance Shares Vesting Range, Percentage of Target | 200.00% |
Share-Based Compensation Modifi
Share-Based Compensation Modifications of Share-Based Awards (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)employees | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($)employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of employees subject to modification | employees | 31 | 25 | |
Increase in employee share-based compensation due to award modification | $ 5,977 | ||
Share-based compensation | $ 20,928 | $ 18,141 | 22,956 |
Reorganization and realignment [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in employee share-based compensation due to award modification | 4,930 | ||
Share-based compensation | 197 | ||
Modified Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 4,930 | $ 0 | 5,805 |
Modified Awards [Member] | Reorganization and realignment [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | 5,624 | ||
Modified Awards [Member] | General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | 181 | ||
Modified Awards [Member] | Income (loss) of discontinued operations, net of income taxes [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 172 |
Share-Based Compensation Share-
Share-Based Compensation Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 20,928 | $ 18,141 | $ 22,956 |
Less: Income tax benefit | 4,985 | 6,520 | 8,380 |
Share-based compensation, net of income tax benefit | 15,943 | 11,621 | 14,576 |
Total share-based compensation not yet recognized, non-vested awards | $ 21,495 | ||
Total share-based compensation not yet recognized, period for recognition, non-vested awards | 2 years 22 days | ||
Stock Options [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 6,923 | 6,859 | 10,081 |
Restricted Stock [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 5,778 | 5,051 | 4,834 |
Performance Condition Award [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 1,764 | 4,681 | 888 |
Market Condition Performance Award [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 1,533 | 1,550 | 1,348 |
Modified Awards [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 4,930 | $ 0 | 5,805 |
Income (loss) of discontinued operations, net of income taxes [Member] | Modified Awards [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 172 | ||
Bakery | Income (loss) of discontinued operations, net of income taxes [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 275 | ||
Less: Income tax benefit | $ 106 |
Impairment of Long-Lived Ass115
Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jan. 01, 2017 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Impairment of Long-Lived Assets | ||||||
Impairment of long-lived assets | $ 3,250 | $ 5,525 | $ 7,105 | $ 4,097 | $ 16,241 | $ 25,001 |
Properties and Other Intangible Assets, Franchisee Leased / Subleased Assets | ||||||
Impairment of Long-Lived Assets | ||||||
Impairment of long-lived assets | 244 | 14,010 | 19,214 | |||
Properties and Other Intangible Assets, Operating Restaurants | ||||||
Impairment of Long-Lived Assets | ||||||
Impairment of long-lived assets | 3,169 | 1,918 | 3,132 | |||
Surplus Properties | ||||||
Impairment of Long-Lived Assets | ||||||
Impairment of long-lived assets | 684 | 313 | 2,655 | |||
Impairment of long-lived assets | ||||||
Impairment of Long-Lived Assets | ||||||
Impairment of long-lived assets | $ 4,097 | $ 16,241 | $ 25,001 |
Investment Income, Net (Details
Investment Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Net Investment Income | |||
Distributions, including dividends | $ 0 | $ 0 | $ 54,911 |
Gain on sale of investments, net | 2,570 | 497 | 335 |
Other than temporary loss on cost method investment | (258) | 0 | (3,150) |
Other, net | 391 | 226 | 118 |
Investment income, net | $ 2,703 | $ 723 | 52,214 |
Arby's Restaurant Group, Inc | Investment Income | |||
Net Investment Income | |||
Distributions, including dividends | $ 54,911 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 7 Months Ended | 12 Months Ended | |||
Jan. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | May 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Gain on disposal of discontinued operations before income taxes | $ 0 | $ 0 | $ 25,529 | ||
Disposal Group, Including Discontinued Operation, Assets | 2,235 | 4,800 | |||
Bakery | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Percentage of Membership Interests Sold | 100.00% | ||||
Capital Expenditure, Discontinued Operations | 2,693 | ||||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | 0 | 0 | ||
Disposal Group, Including Discontinued Operation, Liabilities | 0 | 0 | 0 | ||
Bakery | Cost of Sales | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Discontinued Operation, Amount of Continuing Cash Flows after Disposal | $ 8,358 | $ 6,686 | $ 10,176 | ||
Disposal Group, Not Discontinued Operations | Bakery | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Disposal Group, Including Discontinued Operation, Consideration | $ 0 | ||||
Discontinued Operations | Bakery | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Disposal Group, Including Discontinued Operation, Consideration | $ 78,500 | ||||
Gain on disposal of discontinued operations before income taxes | 25,529 | ||||
Provision for income taxes on gain on disposal | $ 14,860 |
Discontinued Operations Net Inc
Discontinued Operations Net Income (Loss) from Bakery Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Apr. 03, 2016 | Sep. 27, 2015 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | Dec. 29, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Income (loss) from discontinued operations, net of income taxes | $ 0 | $ 0 | $ 10,494 | ||||||
Gain on disposal of discontinued operations before income taxes | 0 | 0 | 25,529 | ||||||
Gain on disposal of discontinued operations, net of income taxes | 0 | 0 | 10,669 | ||||||
Net income (loss) from discontinued operations | 0 | 0 | 21,163 | ||||||
Proceeds from sales | 81,516 | 262,173 | 204,388 | ||||||
Gain on sales of other assets, net | $ (41,050) | $ 23,825 | $ 37,756 | $ 8,426 | (39,076) | 71,931 | 74,009 | ||
Bakery | Discontinued Operations | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Revenues | 25,885 | ||||||||
Cost of sales | (7,543) | ||||||||
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | 18,342 | ||||||||
General and administrative | (1,093) | ||||||||
Depreciation and amortization | (2,297) | ||||||||
Other expense, net | (19) | ||||||||
Income (loss) from discontinued operations before income taxes | 14,933 | ||||||||
(Provision for) benefit from income taxes | (4,439) | ||||||||
Income (loss) from discontinued operations, net of income taxes | 10,494 | ||||||||
Gain on disposal of discontinued operations before income taxes | 25,529 | ||||||||
Provision for income taxes on gain on disposal | (14,860) | ||||||||
Gain on disposal of discontinued operations, net of income taxes | 10,669 | ||||||||
Net income (loss) from discontinued operations | 21,163 | ||||||||
Severance Related Costs Associated with Discontinued Operation | 791 | ||||||||
Withdrawal from Multiemployer Defined Benefit Plan | Bakery | Discontinued Operations | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Loss Contingency Accrual, Period Increase (Decrease) | $ (12,486) | $ 13,500 | |||||||
Sale of Other Assets | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Proceeds from sales | 10,534 | 10,727 | 10,478 | ||||||
Gain on sales of other assets, net | $ 2,018 | $ 6,204 | 1,672 | ||||||
Sale of Other Assets | Bakery | Discontinued Operations | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Proceeds from sales | 50 | ||||||||
Gain on sales of other assets, net | $ 32 |
Discontinued Operations Gain on
Discontinued Operations Gain on Disposal of the Bakery (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 27, 2015 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | May 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Proceeds from sale of the Bakery | $ 0 | $ 0 | $ 78,408 | ||
Goodwill allocated to the sale of the Bakery | (65,961) | (30,132) | |||
Gain on disposal of discontinued operations before income taxes | 0 | 0 | 25,529 | ||
Gain on disposal of discontinued operations, net of income taxes | $ 0 | $ 0 | 10,669 | ||
Bakery | Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Proceeds from sale of the Bakery | 78,408 | ||||
Net working capital | 5,655 | ||||
Net properties sold | 30,664 | ||||
Goodwill allocated to the sale of the Bakery | (12,067) | ||||
Other | 2,684 | ||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Post Closing Adjustments, before Income Tax | 27,338 | ||||
Post-closing adjustments on the sale of the Bakery | (1,809) | ||||
Gain on disposal of discontinued operations before income taxes | 25,529 | ||||
Provision for income taxes | (14,860) | ||||
Gain on disposal of discontinued operations, net of income taxes | $ 10,669 | ||||
Disposal Group, Including Discontinued Operation, Consideration | $ 78,500 | ||||
Obligation for Employer Provided Health Insurance [Member] | Bakery | Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Other | $ (1,993) |
Retirement Benefit Plans Define
Retirement Benefit Plans Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percent | 75.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 4.00% | ||
Defined Contribution Plan, Cost Recognized | $ 4,704 | $ 5,177 | $ 6,124 |
Retirement Benefit Plans Def121
Retirement Benefit Plans Defined Benefit Plans (Details) - Pension Plans, Defined Benefit [Member] $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2011USD ($) | Dec. 31, 2017USD ($)Pension_Plans | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($) | |
Defined Benefit Plan Disclosure | ||||
Defined Benefit Plans, Number of Plans | Pension_Plans | 2 | |||
Defined Benefit Plan, Amortization of Prior Service Cost | $ 0 | |||
Defined Benefit Plan, Accumulated Benefit Obligation | 3,402 | $ 3,609 | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2,649 | 2,641 | ||
General and Administrative Expense | ||||
Defined Benefit Plan Disclosure | ||||
Pension Expense | $ 159 | $ 177 | $ 149 | |
Arby's Restaurant Group, Inc | ||||
Defined Benefit Plan Disclosure | ||||
Defined Benefit Plan, Proceeds Received from Buyer for Unfunded Liability | $ 400 |
Retirement Benefit Plans Execut
Retirement Benefit Plans Executive Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2017 | Dec. 31, 2017 | |
Other liabilities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Deferred Compensation Arrangements, Recorded Liability | $ 259 | |
Chief Executive Officer | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Deferred Compensation Arrangement with Individual, Base Salary | $ 1,000 | |
Supplemental Employee Retirement Plans, Defined Benefit | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Pension and Other Postretirement Defined Benefit Plans, Liabilities | $ 3,101 | $ 2,476 |
Leases Lease Disclosure (Detail
Leases Lease Disclosure (Details) | 12 Months Ended |
Dec. 31, 2017PropertyRestaurant | |
Property Subject to or Available for Operating Lease | |
Number of Restaurants | Restaurant | 6,634 |
Minimum | |
Property Subject to or Available for Operating Lease | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 15 years |
Maximum | |
Property Subject to or Available for Operating Lease | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 20 years |
Lessee Disclosure | Minimum | |
Property Subject to or Available for Operating Lease | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 15 years |
Lessee Disclosure | Maximum | |
Property Subject to or Available for Operating Lease | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 20 years |
Lessee Disclosure | Land and Building | |
Property Subject to or Available for Operating Lease | |
Property Subject to or Available for Operating Lease, Number of Units | 146 |
Lessee Disclosure | Property Subject to Operating Lease | Land and Building | |
Property Subject to or Available for Operating Lease | |
Property Subject to or Available for Operating Lease, Number of Units | 50 |
Lessee Disclosure | Property Subject to Operating Lease | Land | |
Property Subject to or Available for Operating Lease | |
Property Subject to or Available for Operating Lease, Number of Units | 141 |
Lessor Disclosure | |
Property Subject to or Available for Operating Lease | |
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 20 years |
Lessor Disclosure | Property Subject to Operating Lease | |
Property Subject to or Available for Operating Lease | |
Property Subject to or Available for Operating Lease, Number of Units | 1,296 |
Lessor Disclosure | Property Subject to Operating Lease | Assets Leased to Others | |
Property Subject to or Available for Operating Lease | |
Property Subject to or Available for Operating Lease, Number of Units | 521 |
Entity Operated Units | |
Property Subject to or Available for Operating Lease | |
Number of Restaurants | Restaurant | 337 |
Leases Operating Lease Rent Exp
Leases Operating Lease Rent Expense and Rent Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Operating Leased Assets | |||
Rental expense, Minimum rentals | $ 90,889 | $ 77,952 | $ 77,606 |
Rental expense, Contingent rentals | 19,021 | 18,291 | 18,270 |
Total rent expense | 109,910 | 96,243 | 95,876 |
Sublease income | 126,814 | 95,072 | 61,618 |
Rental income, Minimum rentals | 169,857 | 123,171 | 68,241 |
Rental income, Contingent rentals | 20,246 | 19,944 | 18,731 |
Total rental income | $ 190,103 | $ 143,115 | $ 86,972 |
Leases Future Minimum Rent (Det
Leases Future Minimum Rent (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leased Assets | |
Rental Payments, Capital Leases, 2018 | $ 47,095 |
Rental Payments, Capital Leases, 2019 | 45,700 |
Rental Payments, Capital Leases, 2020 | 46,633 |
Rental Payments, Capital Leases, 2021 | 48,221 |
Rental Payments, Capital Leases, 2022 | 49,320 |
Rental Payments, Capital Leases, Thereafter | 759,337 |
Rental Payments, Capital Leases, Total minimum payments | 996,306 |
Less interest | (528,342) |
Present value of minimum capital lease payments | 467,964 |
Rental Payments, Operating Leases, 2018 | 96,265 |
Rental Payments, Operating Leases, 2019 | 94,824 |
Rental Payments, Operating Leases, 2020 | 93,803 |
Rental Payments, Operating Leases, 2021 | 93,255 |
Rental Payments, Operating Leases, 2022 | 92,951 |
Rental Payments, Operating Leases, Thereafter | 1,116,173 |
Rental Payments, Operating Leases, Total minimum payments | 1,587,271 |
Rental Receipts, Capital Leases, 2018 | 64,511 |
Rental Receipts, Capital Leases, 2019 | 65,036 |
Rental Receipts, Capital Leases, 2020 | 66,137 |
Rental Receipts, Capital Leases, 2021 | 67,929 |
Rental Receipts, Capital Leases, 2022 | 69,115 |
Rental Receipts, Capital Leases, Thereafter | 1,048,796 |
Rental Receipts, Capital Leases, Total minimum payments | 1,381,524 |
Rental Receipts, Operating Leases, 2018 | 75,583 |
Rental Receipts, Operating Leases, 2019 | 75,787 |
Rental Receipts, Operating Leases, 2020 | 75,443 |
Rental Receipts, Operating Leases, 2021 | 75,133 |
Rental Receipts, Operating Leases, 2022 | 75,488 |
Rental Receipts, Operating Leases, Thereafter | 910,200 |
Rental Receipts, Operating Leases, Total minimum payments | 1,287,634 |
Rental Receipts, Owned Properties, 2018 | 53,808 |
Rental Receipts, Owned Properties, 2019 | 54,779 |
Rental Receipts, Owned Properties, 2020 | 55,392 |
Rental Receipts, Owned Properties, 2021 | 56,996 |
Rental Receipts, Owned Properties, 2022 | 58,574 |
Rental Receipts, Owned Properties, Thereafter | 948,101 |
Rental Receipts, Owned Properties, Total minimum payments | 1,227,650 |
Current portion of long-term debt | |
Operating Leased Assets | |
Capital Lease Obligations, Current | 7,422 |
Long-term Debt | |
Operating Leased Assets | |
Capital Lease Obligations, Noncurrent | $ 460,542 |
Leases Properties Leased to Thi
Leases Properties Leased to Third Parties (Details) - Property Subject to Operating Lease - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Property Subject to or Available for Operating Lease | ||
Property Leased To Others | $ 587,963 | $ 584,734 |
Property Leased To Others, Accumulated Depreciation | (128,003) | (110,166) |
Property Leased To Others, Net | 459,960 | 474,568 |
Land | ||
Property Subject to or Available for Operating Lease | ||
Property Leased To Others | 272,411 | 271,160 |
Buildings and improvements | ||
Property Subject to or Available for Operating Lease | ||
Property Leased To Others | 313,108 | 312,067 |
Restaurant equipment | ||
Property Subject to or Available for Operating Lease | ||
Property Leased To Others | $ 2,444 | $ 1,507 |
Leases Net Investment in Direct
Leases Net Investment in Direct Financing Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Capital Leased Assets | |||
Future minimum rental receipts | $ 662,889 | $ 401,452 | |
Unearned interest income | (433,175) | (277,747) | |
Net investment in direct financing leases | 229,714 | 123,705 | |
Net current investment in direct financing leases | (625) | (101) | |
Net non-current investment in direct financing leases | 229,089 | 123,604 | |
Interest income from direct financing leases | $ 22,869 | $ 14,630 | $ 6,058 |
Guarantees and Other Commitm128
Guarantees and Other Commitments and Contingencies Franchisee Image Activation Programs (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Other commitments | |
Letters of Credit Outstanding, Amount | $ 32,574 |
Guarantees and Other Commitm129
Guarantees and Other Commitments and Contingencies Other Loan Guarantees (Details) CAD in Thousands, $ in Thousands | Dec. 31, 2017USD ($)yr | Dec. 28, 2014CAD | Dec. 30, 2012USD ($) |
New store development and equipment financing | |||
Guarantor Obligations | |||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 316 | ||
New store development and equipment financing | Other liabilities | |||
Guarantor Obligations | |||
Guarantor Obligations, Current Carrying Value | $ 37 | ||
Guarantee of Indebtedness of Others | |||
Guarantor Obligations | |||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 2,000 | ||
Guarantee Obligations, Reduction Period | yr | 5 | ||
Guarantor Obligations, Current Carrying Value | $ 0 | ||
Canada, Dollars | Guarantee of Indebtedness of Others | Other liabilities | |||
Guarantor Obligations | |||
Guarantor Obligations, Maximum Exposure, Undiscounted | CAD | CAD 2,300 |
Guarantees and Other Commitm130
Guarantees and Other Commitments and Contingencies Lease Guarantees (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Property Lease Guarantee | |
Guarantor Obligations | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 59,901 |
Indirect Guarantee of Indebtedness | |
Guarantor Obligations | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 464 |
Guarantees and Other Commitm131
Guarantees and Other Commitments and Contingencies Insurance (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Other commitments | |
Accrued Risk Insurance | $ 27,191 |
Accrued Health Insurance | 2,058 |
Insurance Claims | |
Other commitments | |
Loss Contingency, Range of Possible Loss per Occurrence, Maximum | $ 500 |
Guarantees and Other Commitm132
Guarantees and Other Commitments and Contingencies Letters of Credit (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Guarantor Obligations | |
Letters of Credit Outstanding, Amount | $ 32,574 |
Collateral Supporting Letters of Credit | |
Guarantor Obligations | |
Letters of Credit Outstanding, Amount | $ 3,205 |
Guarantees and Other Commitm133
Guarantees and Other Commitments and Contingencies Beverage Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Long-term Purchase Commitment | |||
Purchase Obligation, Due in Next Twelve Months | $ 9,800 | ||
Purchase Obligation, Due in Second Year | 10,200 | ||
Purchase Obligation, Due in Third Year | 10,900 | ||
Purchase Obligation, Due in Fourth Year | 400 | ||
Purchase Obligation | 31,300 | ||
Purchase Obligation, Purchases During Period | 9,370 | $ 12,839 | $ 15,720 |
Accounts Payable | |||
Long-term Purchase Commitment | |||
Amount Due from (to) Vendor for Difference between Estimated Annual Usage and Contractual Terms | $ (2,082) |
Guarantees and Other Commitm134
Guarantees and Other Commitments and Contingencies Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Capital expenditures included in accounts payable | $ 5,810 | $ 11,325 | $ 31,468 |
Accounts Payable | |||
Capital expenditures included in accounts payable | $ 5,810 |
Transactions with Related Pa135
Transactions with Related Parties Related Party Transaction Summary (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($) | Jan. 01, 2011USD ($)ft² | |
QSCC | ||||
Related Party Transaction | ||||
Area of Real Estate Property | ft² | 14,333 | |||
Annual Base Rental | $ 215 | $ 176 | ||
QSCC | Patronage Dividends | Cost of Sales | ||||
Related Party Transaction | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 987 | $ 890 | $ 1,265 | |
QSCC | Lease Income | General and Administrative Expense | ||||
Related Party Transaction | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 217 | 193 | 185 | |
TimWen | ||||
Related Party Transaction | ||||
TimWen lease expense | 12,360 | 11,602 | 11,843 | |
TimWen | Cost of Sales | ||||
Related Party Transaction | ||||
TimWen lease expense | 12,572 | 11,806 | 12,059 | |
TimWen | General and Administrative Expense | ||||
Related Party Transaction | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 212 | $ 204 | $ 216 |
Transactions with Related Pa136
Transactions with Related Parties Other Related Party Transactions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jul. 17, 2015 | Dec. 31, 2017 | May 29, 2015 | Jan. 01, 2012 |
Related Party Transaction | ||||
Percentage of Outstanding Shares Owned by the Trian Group | 24.80% | |||
Purchase agreement | ||||
Related Party Transaction | ||||
Treasury Stock, Shares, Acquired | 18,416 | |||
Treasury Stock Acquired, Average Cost Per Share | $ 11.45 | |||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 210,867 | |||
Arby's Restaurant Group, Inc | ||||
Related Party Transaction | ||||
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received | 18.50% | 18.50% |
Legal and Environmental Matt137
Legal and Environmental Matters (Details) $ in Thousands | Dec. 31, 2017USD ($)Civil_complaints |
Loss Contingency [Abstract] | |
Accruals for legal and environmental matters | $ | $ 1,597 |
Number of Putative Shareholder Derivative Complaints | Civil_complaints | 2 |
Advertising Costs and Funds (De
Advertising Costs and Funds (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)funds | Jan. 01, 2017USD ($) | Jan. 03, 2016USD ($) | |
Restricted Assets and Liabilities | |||
Number of Advertising Funds | funds | 2 | ||
Advertising funds restricted assets | $ 62,602 | $ 75,760 | |
Advertising funds restricted liabilities | 62,602 | 75,760 | |
Advertising Expense | 27,921 | 41,064 | $ 64,312 |
Restricted Assets and Liabilities | |||
Restricted Assets and Liabilities | |||
Cash and cash equivalents | 8,579 | 19,359 | |
Accounts and notes receivable, net | 47,288 | 49,983 | |
Other assets | 6,735 | 6,418 | |
Advertising funds restricted assets | 62,602 | 75,760 | |
Accounts payable | 5,601 | 8,362 | |
Accrued expenses and other liabilities | 63,646 | 71,068 | |
Member's deficit | (6,645) | (3,670) | |
Advertising funds restricted liabilities | $ 62,602 | $ 75,760 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | $ 309,247 | $ 308,000 | $ 320,342 | $ 285,819 | $ 309,901 | $ 364,012 | $ 382,718 | $ 378,787 | $ 1,223,408 | $ 1,435,418 | $ 1,870,297 |
Properties | 1,263,059 | 1,192,339 | 1,263,059 | 1,192,339 | 1,227,944 | ||||||
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 1,154,873 | 1,373,345 | 1,749,131 | ||||||||
Properties | 1,226,714 | 1,162,006 | 1,226,714 | 1,162,006 | 1,198,553 | ||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 50,431 | 45,959 | 104,003 | ||||||||
Properties | 36,213 | 30,257 | 36,213 | 30,257 | 29,296 | ||||||
Other International | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 18,104 | 16,114 | 17,163 | ||||||||
Properties | $ 132 | $ 76 | $ 132 | $ 76 | $ 95 |
Quarterly Financial Informat140
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | Jan. 03, 2016 | |
Quarterly Financial Data Table [Abstract] | |||||||||||
Revenues | $ 309,247 | $ 308,000 | $ 320,342 | $ 285,819 | $ 309,901 | $ 364,012 | $ 382,718 | $ 378,787 | $ 1,223,408 | $ 1,435,418 | $ 1,870,297 |
Cost of sales | 127,793 | 132,387 | 129,360 | 123,407 | 140,865 | 186,546 | 202,554 | 214,736 | 512,947 | 744,701 | 1,184,073 |
Operating profit | 66,587 | 61,657 | 25,794 | 60,720 | 79,215 | 106,088 | 65,648 | 63,829 | 214,758 | 314,780 | 274,470 |
Income from continuing operations | 194,029 | 129,624 | 139,979 | ||||||||
Net income (loss) from discontinued operations | 0 | 0 | 21,163 | ||||||||
Net income (loss) | $ 159,276 | $ 14,257 | $ (1,845) | $ 22,341 | $ 28,891 | $ 48,890 | $ 26,480 | $ 25,363 | $ 194,029 | $ 129,624 | $ 161,142 |
Basic income per share | |||||||||||
Continuing operations | $ 0.79 | $ 0.49 | $ 0.43 | ||||||||
Discontinued operations | 0 | 0 | 0.07 | ||||||||
Basic income (loss) per share | $ 0.66 | $ 0.06 | $ (0.01) | $ 0.09 | $ 0.11 | $ 0.19 | $ 0.10 | $ 0.09 | 0.79 | 0.49 | 0.50 |
Diluted income per share | |||||||||||
Continuing operations | 0.77 | 0.49 | 0.43 | ||||||||
Discontinued operations | 0 | 0 | 0.06 | ||||||||
Diluted income (loss) per share | $ 0.64 | $ 0.06 | $ (0.01) | $ 0.09 | $ 0.11 | $ 0.18 | $ 0.10 | $ 0.09 | $ 0.77 | $ 0.49 | $ 0.49 |
System optimization (losses) gains, net | $ (41,050) | $ 23,825 | $ 37,756 | $ 8,426 | $ (39,076) | $ 71,931 | $ 74,009 | ||||
Reorganization and realignment costs | $ 1,806 | $ 2,888 | $ 17,699 | 2,217 | $ 2,129 | $ 2,487 | 3,250 | 22,574 | 10,083 | 21,910 | |
Income tax benefit (provision) | $ 121,649 | 93,010 | (72,066) | (94,149) | |||||||
Impairment of long-lived assets | $ 3,250 | $ 5,525 | 7,105 | $ 4,097 | $ 16,241 | $ 25,001 | |||||
Gain on lease buyout | $ 11,606 |