EX-99.2 3 exhibit99-2_01272011.htm EXHIBIT 99.2 exhibit99-2_01272011.htm
Financial Overview
Steve Hare
Chief Financial Officer
 
 
 
Quarterly Revenues 2010 vs. 2009
2
In Millions
Full-Year 2010 Revenues = $3.4 billion
(1)
(1) Q4 2009 includes an extra fiscal week
 
 
 
Quarterly Adjusted EBITDA(1) 2010 vs. 2009
3
Full-Year 2010 Adjusted EBITDA = $396.9 million, -3.6% vs. 2009
+14.7%
+3.2%
-19.6%
-6.4%
(2)
(1) See Appendix
(2) Normalized for 53rd week ($13.6 million)
In Millions
 
 
 
Wendy’s Systemwide Same-Store Sales
Company-owned 0.2% -2.9% -3.1%  -0.9%  -1.7%
Franchised  1.0%   -1.4% -1.3%   0.6%  -0.3%
4
2010
 
 
 
Wendy’s Company-Owned Restaurant Margin
(1)Excludes incremental advertising for Wendy’s new breakfast in 2010.
(2)Excludes impact of 53rd week in 2009
Q4 -120 bps
-120 bps due to
Commodities
2010 +40 bps
-60 bps
Commodities
5
 
 
 
Arby’s Systemwide Same-Store Sales
Company-owned  -11.6% -8.8% -9.5% 2.9% -7.1%
Franchised -11.4% -6.7% -4.1% 1.6% -5.2%
6
2010
 
 
 
Arby’s Company-Owned Restaurant Margin
(1)Excludes non-recurring items and the impact of the extra week in 2009.
Q4 -10 bps
-160 bps due to
Commodities
2010 -180 bps
-75 bps due to
Commodities
7
 
 
 
Returning Value to Shareholders
• Regular quarterly dividend increased 33%
• Paid $27.6MM in dividends during 2010
Dividend Increase
• Purchased 52MM shares, or 11% of shares
 outstanding, for $245MM since 2009
• $250MM authorized for future purchases
Share Repurchase
Program
8
Returned $195 million in 2010
 
 
 
Capital Structure
9
*See Appendix.
 
 
 
— Pro forma Company EBITDA of $345-$355 million
 (Assumes sale of Arby’s and G&A reductions at beginning of fiscal 2011)
— Wendy’s same-store sales growth +1% to +3%
— Wendy’s company-operated restaurant margin*
 improvement of 30 to 60 basis points
10
2011 Outlook Assumptions
*Includes breakfast expense in 2010 and 2011.
 
 
 
11
2011 Commodities Increasing Approximately 2-3%
 
 
 
12
2011 Development and
Capital Expenditure Plan
 
 
 
— Reduce corporate G&A to support a single brand
— Eliminate approximately $200 million of capital lease obligations
 related to Arby’s
— Reduce future capital expenditures for Arby’s
— Proceeds from sale of Arby’s would be available for re-investment
13
Benefits of Potential Sale of Arby’s
Sale would be accretive to
earnings and free cash flow
 
 
 
— Consistent same-store sales growth
— Company-operated restaurant margin improvement
— Daypart expansion
— New units - North America and International
— Franchisee royalty growth
14
Long-Term EBITDA Growth Target of 10-15%
Beginning in 2012
 
 
 
15
 
 
 
16
Appendix - EBITDA and Adjusted EBITDA Reconciliations
(In Millions)
Fourth Quarter
 
Twelve Months
(Unaudited)
Preliminary
2010
 
Actual
2009
 
 
Preliminary 2010
 
Actual
2009
EBITDA
$ 85.8
 
$ 82.6
 
 $ 384.0
 
 $ 384.4
Depreciation and amortization
(44.7)
 
(46.9)
 
(182.2)
 
(190.3)
Impairment of long-lived assets
(28.1)
 
(51.0)
 
(69.4)
 
(82.1)
 
Operating profit (loss)
13.0
 
(15.3)
 
 
132.4
 
112.0
Interest expense
(32.7)
 
(37.0)
 
(137.2)
 
(126.7)
Loss on early extinguishment of debt
-
 
-
 
(26.2)
 
-
Investment income (expense), net
-
 
0.8
 
5.2
 
(3.0)
Other than temporary losses on investments
-
 
-
 
-
 
(3.9)
Other income, net
0.9
 
1.3
 
3.8
 
1.5
 Loss before income taxes
(18.8)
 
(50.2)
 
(22.0)
 
(20.1)
Benefit from income taxes
8.0
 
35.5
 
17.7
 
23.6
 Net (loss) income from continuing operations
$ (10.8)
 
$ (14.7)
 
$ (4.3)
 
$ 3.5
(In Millions)
Fourth Quarter
 
Twelve Months
(Unaudited)
Preliminary
2010
 
Actual
2009
 
Preliminary 2010
 
Actual
2009
EBITDA
$ 85.8
 
$ 82.6
 
 $ 384.0
 
 $ 384.4
Plus:
 Integration costs in general and administrative (G&A)
1.2
 
5.4
 
 
5.5
 
 
16.6
 SSG purchasing co-op expenses in G&A
0.3
 
-
 
5.2
 
-
 Incremental advertising for Wendy’s new breakfast
1.7
 
-
 
7.2
 
-
 Reversal of pension withdrawal expense in cost of sales
(5.0)
 
-
 
(5.0)
 
-
 Wendy’s purchasing co-op start-up costs in G&A
-
 
15.5
 
-
 
15.5
 Facilities relocation and corporate restructuring
-
 
2.1
 
-
 
11.0
 Pension withdrawal expense in cost of sales
-
 
5.0
 
-
 
5.0
 Benefit from vacation policy standardization in G&A
-
 
(3.4)
 
-
 
(3.4)
 Benefit from vacation policy standardization in cost of sales
-
 
(3.9)
 
-
 
(3.9)
Adjusted EBITDA
 84.0
 
 103.3
 
 396.9
 
 425.2
Less:
 
 
 
 
 
 
 
 EBITDA effect of additional week in 2009
N.A.
 
(13.6)
 
N.A.
 
(13.6)
Normalized 52 weeks adjusted EBITDA
$ 84.0
 
$ 89.7
 
$ 396.9
 
$ 411.6
 
 
 
17
Appendix -Adjusted Restaurant Margin