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THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
(b) Restaurant acquisitions in 2015 primarily represents an adjustment to the fair value of franchise rights acquired
in connection with the acquisition of franchised restaurants during 2014. See Note 4 for further information.
During the fourth quarter of 2013, step one of our annual goodwill impairment test indicated that our
international franchise restaurants reporting unit was impaired as its carrying amount exceeded its fair value. The fair
value of our international franchise reporting unit was based on the income approach, which was determined based on
the present value of the anticipated cash flows associated with the reporting unit. The decline in the fair value of the
international franchise restaurants reporting unit resulted from lower than anticipated current and future operating
results including lower projected growth rates and profitability levels than previously anticipated. Step two of our
process resulted in an impairment charge of $9,397, which represented the total amount of goodwill recorded for our
international franchise restaurants reporting unit. We concluded in 2015, 2014 and 2013 that our remaining
goodwill related to our North America company-owned and franchise restaurants reporting unit was not impaired.
The following is a summary of the components of other intangible assets and the related amortization expense:
Year End 2015 Year End 2014
Cost
Accumulated
Amortization Net Cost
Accumulated
Amortization Net
Indefinite-lived:
Trademarks ............. $ 903,000 $ — $ 903,000 $ 903,000 $ — $ 903,000
Definite-lived:
Franchise agreements ..... 347,970 (120,298) 227,672 350,802 (104,596) 246,206
Favorable leases .......... 209,523 (50,750) 158,773 192,854 (43,231) 149,623
Reacquired rights under
franchise agreements .... 8,753 (6,503) 2,250 8,685 (1,109) 7,576
Software ............... 97,590 (49,698) 47,892 84,974 (40,072) 44,902
$1,566,836 $(227,249) $1,339,587 $1,540,315 $(189,008) $1,351,307
Aggregate amortization expense:
Actual for fiscal year (a):
2013 ............................................................ $ 55,482
2014 ............................................................ 42,274
2015 ............................................................ 54,686
Estimate for fiscal year:
2016 ............................................................ $ 44,180
2017 ............................................................ 41,090
2018 ............................................................ 37,758
2019 ............................................................ 32,708
2020 ............................................................ 30,270
Thereafter ........................................................ 250,581
(a) Includes impairment charges on other intangible assets of $3,656, $3,610, $2,470 during 2015, 2014 and 2013,
respectively. See Note 17 for more information on impairment of our long-lived assets. Also includes accelerated
amortization on previously acquired franchise rights in territories that will be or have been sold as a part of our
system optimization initiative of $6,384, $474 and $16,907 during 2015, 2014 and 2013, respectively.
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