Wendy's CoWEN
Wendy's Co Fair Value Disclosure
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:
| Year End | |||||||||||||||||||||||||||||
| December 28, 2025 | December 29, 2024 | ||||||||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | Fair Value Measurements | |||||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||||||||
| Cash equivalents | $ | 210,607 | $ | 210,607 | $ | 319,212 | $ | 319,212 | Level 1 | ||||||||||||||||||||
| Other investments in equity securities (a) | — | — | 1,718 | 1,718 | Level 2 | ||||||||||||||||||||||||
| Financial liabilities (b) | |||||||||||||||||||||||||||||
| Series 2025-1 Class A-2-I Notes | 450,000 | 447,075 | — | — | Level 2 | ||||||||||||||||||||||||
| Series 2022-1 Class A-2-I Notes | 96,500 | 95,284 | 97,500 | 93,744 | Level 2 | ||||||||||||||||||||||||
| Series 2022-1 Class A-2-II Notes | 382,134 | 371,625 | 386,134 | 371,855 | Level 2 | ||||||||||||||||||||||||
| Series 2021-1 Class A-2-I Notes | 414,269 | 385,726 | 418,769 | 376,256 | Level 2 | ||||||||||||||||||||||||
| Series 2021-1 Class A-2-II Notes | 620,530 | 553,699 | 627,030 | 551,981 | Level 2 | ||||||||||||||||||||||||
| Series 2019-1 Class A-2-I Notes | — | — | 353,673 | 345,093 | Level 2 | ||||||||||||||||||||||||
| Series 2019-1 Class A-2-II Notes | 394,123 | 383,403 | 398,623 | 387,039 | Level 2 | ||||||||||||||||||||||||
| Series 2018-1 Class A-2-II Notes | 431,599 | 421,630 | 436,349 | 418,027 | Level 2 | ||||||||||||||||||||||||
7% debentures, due in 2025 | — | — | 48,913 | 50,034 | Level 2 | ||||||||||||||||||||||||
_______________
(a)The fair value of our other investments in equity securities is based on our review of information provided by the investment manager, which is based on observable price changes in orderly transactions for a similar investment of the same issuer.
(b)The fair values were based on quoted market prices in markets that are not considered active markets.
The carrying amounts of cash, accounts payable and accrued expenses approximate 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) approximate fair value due to the effect of the related allowance for doubtful accounts. Our cash equivalents are the only financial assets measured and recorded at fair value on a recurring basis.
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, favorable lease assets and ROU assets) to fair value as a result of (1) the deterioration in operating performance or anticipated closures of certain Company-operated restaurants and (2) 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, including any subsequent lease modifications. The fair values of long-lived assets held and used presented in the tables below represent the remaining carrying value and were estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future anticipated Company-operated restaurant performance. Total impairment losses may also include the impact of remeasuring long-lived assets held for sale. 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 18 for further information on impairment of our long-lived assets.
| Fair Value Measurements | 2025 Total Losses | ||||||||||||||||||||||||||||
| December 28, 2025 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| Held and used | $ | 1,367 | $ | — | $ | — | $ | 1,367 | $ | 11,548 | |||||||||||||||||||
| Held for sale | 2,457 | — | — | 2,457 | 547 | ||||||||||||||||||||||||
| Total | $ | 3,824 | $ | — | $ | — | $ | 3,824 | $ | 12,095 | |||||||||||||||||||
| Fair Value Measurements | 2024 Total Losses | ||||||||||||||||||||||||||||
| December 29, 2024 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| Held and used | $ | 2,391 | $ | — | $ | — | $ | 2,391 | $ | 9,073 | |||||||||||||||||||
| Held for sale | 1,558 | — | — | 1,558 | 640 | ||||||||||||||||||||||||
| Total | $ | 3,949 | $ | — | $ | — | $ | 3,949 | $ | 9,713 | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Mar 1, 2023 | |
| 2022 | Mar 1, 2022 | |
| 2021 | Mar 3, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 3, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.