Debt and Equity

Debt

The Wendy’s Restaurants senior secured term loan facility (the “Term Loan”), which is part of the credit agreement entered into in May 2010 and is further described in the Form 10-K, requires prepayments of principal amounts resulting from certain events and on an annual basis from Wendy’s Restaurants excess cash flow as defined under the Term Loan. An excess cash flow payment for fiscal 2010 of $24,874 was paid in the first quarter of 2011. Wendy’s Restaurants was not required to utilize any portion of the proceeds from the sale of Arby’s described in Note 2 as a Term Loan prepayment.

In the second quarter of 2010 the Companies recognized a loss on early extinguishment of debt of $26,197 related to the repayment of debt from the proceeds of the Term Loan as discussed above. This loss consisted of (1) a $14,953 premium payment required to redeem the Wendy’s 6.25% senior notes, (2) $5,477 for the write-off of the unaccreted discount of the Wendy’s 6.25% senior notes (recorded in connection with the Wendy’s merger), and (3) $5,767 for the write-off of deferred costs associated with the repayment of the Wendy’s Restaurants prior senior secured term loan.

Stockholders’ Equity

(The Wendy’s Company)

The following is a summary of the changes in stockholders’ equity:



	Nine Months Ended
	October 2, 2011			October 3, 2010
Balance, beginning of year	$	2,163,174		$	2,336,339
Comprehensive (loss) income (a)	(6,858		)	14,347
Share-based compensation	13,756			10,519
Exercises of stock options	5,199			1,227
Dividends paid	(24,584		)	(19,260		)
Repurchases of common stock for treasury	(152,681		)	(167,744		)
Other	(653		)	(841		)
Balance, end of the period	$	1,997,353		$	2,174,587

_______________


(a)	The following is a summary of the components of comprehensive income, net of income taxes:



	Nine Months Ended
	October 2, 2011			October 3, 2010
Net income	$	5,891		$	6,433
Net change in currency translation adjustment	(12,703		)	7,878
Net unrealized losses on available-for-sale securities	—			(59		)
Change in net unrecognized pension loss	(46		)	95
Other comprehensive (loss) income	(12,749		)	7,914
Comprehensive (loss) income	$	(6,858	)	$	14,347

Invested Equity

(Wendy’s Restaurants)

The following is a summary of the changes in invested equity:



	Nine Months Ended
	October 2, 2011			October 3, 2010
Balance, beginning of year	$	1,776,630		$	2,197,907
Comprehensive (loss) income (a)	(90		)	15,061
Share-based compensation	12,973			9,841
Dividends paid to The Wendy’s Company	—			(443,700		)
Other	—			(76		)
Balance, end of the period	$	1,789,513		$	1,779,033

_______________


(a)	The following is a summary of the components of comprehensive income, net of income taxes:



	Nine Months Ended
	October 2, 2011			October 3, 2010
Net income	$	12,314		$	7,172
Net change in currency translation adjustment	(12,703		)	7,878
Change in net unrecognized pension loss (b)	299			11
Other comprehensive (loss) income	(12,404		)	7,889
Comprehensive (loss) income	$	(90	)	$	15,061


(b)	Includes the reclassification of the change in net unrecognized pension loss related to Arby’s pension liability to a subsidiary of The Wendy’s Company.