Wendy's 2014 Annual Report Download - page 93

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THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
The following is a summary of the Company’s assets pledged as collateral for certain debt:
Year End
2014
Cash and cash equivalents ................................................... $ 167,485
Accounts and notes receivable (including long-term) .............................. 68,464
Inventories .............................................................. 8,807
Properties ............................................................... 272,505
Goodwill ............................................................... 710,710
Other intangible assets ..................................................... 1,201,742
Other assets (including long-term) ............................................ 30,645
$2,460,358
(11) 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 at December 28, 2014 and December 29, 2013:
December 28,
2014
December 29,
2013
Carrying
Amount Fair Value
Carrying
Amount Fair Value Fair Value Measurements
Financial assets
Cash equivalents .................. $ 61,450 $ 61,450 $405,874 $405,874 Level 1
Non-current cost method
investments (a) ................. 4,264 147,760 3,387 130,433 Level 3
Cash flow hedges (b) .............. — — 1,212 1,212 Level 2
Financial liabilities
Cash flow hedges (b) .............. 3,343 3,343 — — Level 2
Term A Loans, due in 2018 (c) ...... 541,733 540,717 570,625 569,555 Level 2
Term B Loans, due in 2019 (c) ...... 759,758 752,160 767,452 767,452 Level 2
7% debentures, due in 2025 (c) ...... 85,853 104,250 84,666 98,250 Level 2
Guarantees of franchisee loan
obligations (d) ................. 968 968 884 884 Level 3
(a) The fair value of our indirect investment in Arby’s is based on applying a multiple to Arby’s earnings before
income taxes, depreciation and amortization per its current unaudited financial information. The carrying value
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