(X) | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
( ) | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 38-0471180 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Dave Thomas Blvd., Dublin, Ohio | 43017 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, $.10 par value | The NASDAQ Stock Market LLC | |
Securities Registered Pursuant to Section 12(g) of the Act: None |
• | competition, including pricing pressures, couponing, aggressive marketing and the potential impact of competitors’ new unit openings on sales of Wendy’s restaurants; |
• | consumers’ perceptions of the relative quality, variety, affordability and value of the food products we offer; |
• | food safety events, including instances of food-borne illness (such as salmonella or E. Coli) involving Wendy’s or its supply chain; |
• | consumer concerns over nutritional aspects of beef, poultry, french fries or other products we sell, or concerns regarding the effects of disease outbreaks such as “mad cow disease” and avian influenza or “bird flu”; |
• | the effects of negative publicity that can occur from increased use of social media; |
• | success of operating and marketing initiatives, including advertising and promotional efforts and new product and concept development by us and our competitors; |
• | the impact of general economic conditions and high unemployment rates on consumer spending, particularly in geographic regions that contain a high concentration of Wendy’s restaurants; |
• | changes in consumer tastes and preferences, and in discretionary consumer spending; |
• | changes in spending patterns and demographic trends, such as the extent to which consumers eat meals away from home; |
• | certain factors affecting our franchisees, including the business and financial viability of franchisees, the timely payment of such franchisees’ obligations due to us or to national or local advertising organizations, and the ability of our franchisees to open new restaurants in accordance with their development commitments, including their ability to finance restaurant development and remodels; |
• | changes in commodity costs (including beef, chicken and corn), labor, supply, fuel, utilities, distribution and other operating costs; |
• | availability, location and terms of sites for restaurant development by us and our franchisees; |
• | development costs, including real estate and construction costs; |
• | delays in opening new restaurants or completing remodels of existing restaurants, including risks associated with the Image Activation program; |
• | the timing and impact of acquisitions and dispositions of restaurants; |
• | our ability to successfully integrate acquired restaurant operations; |
• | anticipated or unanticipated restaurant closures by us and our franchisees; |
• | our ability to identify, attract and retain potential franchisees with sufficient experience and financial resources to develop and operate Wendy’s restaurants successfully; |
• | availability of qualified restaurant personnel to us and to our franchisees, and the ability to retain such personnel; |
• | our ability, if necessary, to secure alternative distribution of supplies of food, equipment and other products to Wendy’s restaurants at competitive rates and in adequate amounts, and the potential financial impact of any interruptions in such distribution; |
• | availability and cost of insurance; |
• | adverse weather conditions; |
• | availability, terms (including changes in interest rates) and deployment of capital; |
• | changes in, and our ability to comply with, legal, regulatory or similar requirements, including franchising laws, payment card industry rules, overtime rules, minimum wage rates, wage and hour laws, government-mandated health care benefits, tax legislation, federal ethanol policy and accounting standards; |
• | the costs, uncertainties and other effects of legal, environmental and administrative proceedings; |
• | the effects of charges for impairment of goodwill or for the impairment of other long-lived assets; |
• | the effects of war or terrorist activities; |
• | expenses and liabilities for taxes related to periods up to the date of sale of Arby’s as a result of the indemnification provisions of the Arby’s Purchase and Sale Agreement; and |
• | other risks and uncertainties affecting us and our subsidiaries referred to in this Annual Report on Form 10-K (see especially “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and in our other current and periodic filings with the Securities and Exchange Commission. |
2012 | 2011 | 2010 | ||||||
Restaurants open at beginning of period | 6,594 | 6,576 | 6,541 | |||||
Restaurants opened during period | 101 | 89 | 78 | |||||
Restaurants closed during period | (135 | ) | (71 | ) | (43 | ) | ||
Restaurants open at end of period | 6,560 | 6,594 | 6,576 |
• | our ability to attract new franchisees; |
• | the availability of site locations for new restaurants; |
• | the ability of potential restaurant owners to obtain financing; |
• | the ability of restaurant owners to hire, train and retain qualified operating personnel; |
• | construction and development costs of new restaurants, particularly in highly-competitive markets; |
• | the ability of restaurant owners to secure required governmental approvals and permits in a timely manner, or at all; and |
• | adverse weather conditions. |
• | diversion of management attention to the integration of acquired restaurant operations; |
• | increased operating expenses and the inability to achieve expected cost savings and operating efficiencies; |
• | exposure to liabilities arising out of sellers’ prior operations of acquired restaurants; and |
• | incurrence or assumption of debt to finance acquisitions or improvements and/or the assumption of long-term, non-cancelable leases. |
• | significant adverse changes in the business climate; |
• | current period operating or cash flow losses combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with long-lived assets; |
• | a current expectation that more-likely-than-not (e.g., a likelihood that is more than 50%) long-lived assets will be sold or otherwise disposed of significantly before the end of their previously estimated useful life; and |
• | a significant drop in our stock price. |
• | making it more difficult to meet payment and other obligations under outstanding debt; |
• | resulting in an event of default if our subsidiaries fail to comply with the financial and other restrictive covenants contained in debt agreements, which event of default could result in all of our subsidiaries’ debt becoming immediately due and payable; |
• | reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; |
• | subjecting us to the risk of increased sensitivity to interest rate increases on our indebtedness with variable interest rates, including borrowings under the Credit Agreement; |
• | limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy; and |
• | placing us at a competitive disadvantage compared to our competitors that are less leveraged. |
ACTIVE FACILITIES | FACILITIES-LOCATION | LAND TITLE | APPROXIMATE SQ. FT. OF FLOOR SPACE | |||||
Corporate Headquarters | Dublin, Ohio | Owned | 324,025 | * | ||||
Wendy’s Restaurants of Canada Inc. | Oakville, Ontario, Canada | Leased | 35,125 |
* | QSCC, the independent Wendy’s purchasing cooperative in which Wendy’s has non-controlling representation on the board of directors, leases 14,333 square feet of this space from Wendy’s. |
Wendy’s | ||||||
State | Company | Franchise | ||||
Alabama | — | 96 | ||||
Alaska | — | 7 | ||||
Arizona | 43 | 55 | ||||
Arkansas | — | 64 | ||||
California | 51 | 208 | ||||
Colorado | 46 | 80 | ||||
Connecticut | 5 | 45 | ||||
Delaware | — | 15 | ||||
Florida | 182 | 302 | ||||
Georgia | 51 | 238 | ||||
Hawaii | 8 | — | ||||
Idaho | — | 29 | ||||
Illinois | 101 | 93 | ||||
Indiana | 5 | 174 | ||||
Iowa | — | 44 | ||||
Kansas | 10 | 62 | ||||
Kentucky | 3 | 137 | ||||
Louisiana | 58 | 71 | ||||
Maine | — | 20 | ||||
Maryland | — | 112 | ||||
Massachusetts | 80 | 13 | ||||
Michigan | 20 | 248 | ||||
Minnesota | — | 68 | ||||
Mississippi | — | 95 | ||||
Missouri | 39 | 57 | ||||
Montana | — | 16 | ||||
Nebraska | — | 33 | ||||
Nevada | — | 45 | ||||
New Hampshire | 4 | 21 | ||||
New Jersey | 14 | 125 | ||||
New Mexico | 24 | 13 | ||||
New York | 63 | 153 | ||||
North Carolina | 39 | 213 | ||||
North Dakota | — | 9 | ||||
Ohio | 74 | 347 | ||||
Oklahoma | — | 39 | ||||
Oregon | 18 | 31 | ||||
Pennsylvania | 79 | 179 | ||||
Rhode Island | 9 | 8 | ||||
South Carolina | — | 132 | ||||
South Dakota | — | 9 | ||||
Tennessee | — | 184 | ||||
Texas | 104 | 275 | ||||
Utah | 54 | 31 | ||||
Vermont | — | 4 | ||||
Virginia | 54 | 160 | ||||
Washington | 30 | 43 | ||||
West Virginia | 21 | 51 | ||||
Wisconsin | — | 57 | ||||
Wyoming | — | 14 | ||||
District of Columbia | — | 3 | ||||
Domestic subtotal | 1,289 | 4,528 | ||||
Canada | 138 | 231 | ||||
North America subtotal | 1,427 | 4,759 |
Wendy’s | |||||||
Country/Territory | Company | Franchise | |||||
Argentina | — | 1 | |||||
Aruba | — | 4 | |||||
Bahamas | — | 11 | |||||
Costa Rica | — | 13 | |||||
Curacao | — | 1 | |||||
Dominican Republic | — | 8 | |||||
El Salvador | — | 14 | |||||
Grand Cayman Islands | — | 2 | |||||
Guam | — | 4 | |||||
Guatemala | — | 9 | |||||
Honduras | — | 35 | |||||
Indonesia | — | 25 | |||||
Jamaica | — | 4 | |||||
Japan | — | 2 | (a) | ||||
Malaysia | — | 10 | |||||
Mexico | — | 25 | |||||
New Zealand | — | 18 | |||||
Panama | — | 7 | |||||
Philippines | — | 32 | |||||
Puerto Rico | — | 76 | |||||
Russian Federation | — | 8 | |||||
Singapore | — | 11 | |||||
Trinidad and Tobago | — | 3 | |||||
United Arab Emirates | — | 13 | |||||
Venezuela | — | 36 | |||||
U. S. Virgin Islands | — | 2 | |||||
International subtotal | — | 374 | |||||
Grand total | 1,427 | 5,133 |
(a) | Wendy’s is a 49% partner in a joint venture for the operation of Wendy’s restaurants in Japan. |
Market Price | |||||||
Fiscal Quarters | Common Stock | ||||||
High | Low | ||||||
2012 | |||||||
First Quarter ended April 1 | $ | 5.50 | $ | 4.67 | |||
Second Quarter ended July 1 | 5.09 | 4.37 | |||||
Third Quarter ended September 30 | 4.80 | 4.16 | |||||
Fourth Quarter ended December 30 | 4.87 | 4.09 | |||||
2011 | |||||||
First Quarter ended April 3 | $ | 5.22 | $ | 4.40 | |||
Second Quarter ended July 3 | 5.20 | 4.50 | |||||
Third Quarter ended October 2 | 5.62 | 4.36 | |||||
Fourth Quarter ended January 1 | 5.58 | 4.29 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (2) | |||||
October 1, 2012 through November 4, 2012 | — | — | — | — | |||||
November 5, 2012 through December 2, 2012 | 194,604 | $4.62 | — | $ | 100,000,000 | ||||
December 3, 2012 through December 30, 2012 | 99,672 | $4.74 | — | $ | 100,000,000 | ||||
Total | 294,276 | $4.66 | — | $ | 100,000,000 |
Year Ended (1) (2) | ||||||||||||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | January 3, 2010 | December 28, 2008 (3) | ||||||||||||||||
(In Millions, except per share amounts) | ||||||||||||||||||||
Sales | $ | 2,198.3 | $ | 2,126.6 | $ | 2,079.1 | $ | 2,134.2 | $ | 530.8 | ||||||||||
Franchise revenues | 306.9 | 304.8 | 296.3 | 302.9 | 74.6 | |||||||||||||||
Revenues | 2,505.2 | 2,431.4 | 2,375.4 | 2,437.1 | 605.4 | |||||||||||||||
Operating profit (loss) | 122.7 | (7) | 137.1 | (8) | 150.4 | (9) | 97.6 | (10) | (32.4 | ) | ||||||||||
Income (loss) from continuing operations | 8.0 | (7) | 17.9 | (8) | 18.1 | (9) | 5.4 | (10) | (128.1 | ) | (11) | |||||||||
Income (loss) from discontinued operations (4) | 1.5 | (8.0 | ) | (22.4 | ) | (0.3 | ) | (351.6 | ) | |||||||||||
Net income (loss) | 7.1 | (7) | 9.9 | (8) | (4.3 | ) | (9) | 5.1 | (10) | (479.7 | ) | (11) | ||||||||
Basic and diluted income (loss) per share (5): | ||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||
Common stock | .02 | .04 | .04 | .01 | (.81 | ) | ||||||||||||||
Class B common stock | N/A | N/A | N/A | N/A | (.33 | ) | ||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Common stock | — | (.02 | ) | (.05 | ) | — | (2.24 | ) | ||||||||||||
Class B common stock | N/A | N/A | N/A | N/A | (.91 | ) | ||||||||||||||
Net income (loss) | ||||||||||||||||||||
Common stock | .02 | .02 | (.01 | ) | .01 | (3.05 | ) | |||||||||||||
Class B common stock | N/A | N/A | N/A | N/A | (1.24 | ) | ||||||||||||||
Cash dividends per share: | ||||||||||||||||||||
Common stock | .10 | .08 | .07 | .06 | .26 | |||||||||||||||
Class B common stock | N/A | N/A | N/A | N/A | .26 | |||||||||||||||
Weighted average diluted shares outstanding (6): | ||||||||||||||||||||
Common stock | 392.1 | 407.2 | 427.2 | 466.7 | 137.7 | |||||||||||||||
Class B common stock | N/A | N/A | N/A | N/A | 48.0 | |||||||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | January 3, 2010 | December 28, 2008 (3) | ||||||||||||||||
(In Millions) | ||||||||||||||||||||
Working capital (deficiency) | $ | 423.0 | $ | 398.7 | $ | 333.3 | $ | 403.8 | $ | (121.7 | ) | |||||||||
Properties | 1,250.3 | 1,192.2 | 1,551.3 | 1,619.2 | 1,770.4 | |||||||||||||||
Total assets | 4,303.2 | 4,289.1 | 4,732.7 | 4,975.4 | 4,645.6 | |||||||||||||||
Long-term debt, including current portion | 1,457.6 | 1,357.0 | 1,572.4 | 1,522.9 | 1,111.6 | |||||||||||||||
Stockholders’ equity | 1,985.9 | 1,996.1 | 2,163.2 | 2,336.3 | 2,383.4 |
(1) | The Wendy’s Company reports on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to December 31. Except for the 2009 fiscal year, which contained 53 weeks, each of The Wendy’s Company’s fiscal years presented above contained 52 weeks. All references to years relate to fiscal years rather than calendar years. The financial position and results of operations for Wendy’s are included commencing with the Wendy’s merger on September 29, 2008. Immediately prior to this merger, each share of our Class B common stock was converted into Class A common stock on a one for one basis. In connection with the May 28, |
(2) | On July 4, 2011, Wendy’s Restaurants completed the sale of 100% of the common stock of its then wholly owned subsidiary, Arby’s Restaurant Group, Inc. (“Arby’s”). Arby’s operating results for all periods presented through its July 4, 2011 date of sale are classified as discontinued operations. Balance sheet information for all periods prior to January 1, 2012 includes Arby’s. |
(3) | As of December 29, 2008, The Wendy’s Company adopted new accounting guidance related to non-controlling interests (formerly referred to as minority interests). This adoption resulted in the retrospective reclassification of minority interests of $0.1 million from its former presentation as a liability to “Stockholders’ equity” in 2008. Income attributable to non-controlling interests in 2008 was not material. |
(4) | Income from discontinued operations in 2012 included certain post-closing Arby’s related transactions, net of income taxes, of $1.5 million. Loss from discontinued operations in 2011 also included a loss on disposal, net of income taxes, of $8.8 million. Loss from discontinued operations, net of income taxes, in 2009 and 2008 also included income from discontinued operations, net of income taxes, of our former premium beverage and soft drink concentrate business segment and our former utility and municipal services and refrigeration business segment of $1.6 million and $2.2 million, respectively. |
(5) | For the purposes of calculating loss per share amount for 2008, loss was allocated between The Wendy’s Company Class A common stock and The Wendy’s Company Class B common stock proportionately based on weighted average basic shares outstanding. |
(6) | The weighted average number of shares used in the calculation of diluted income per share in 2009 through 2012 consists of the weighted average basic shares outstanding for common stock and potential shares of common stock reflecting the effect of 0.5 million, 0.9 million, 2.0 million and 1.9 million dilutive stock options and restricted shares for 2009, 2010, 2011 and 2012, respectively. The weighted average number of shares used in the calculation of diluted loss per share for 2008 is the same as basic loss per share since all potentially dilutive securities would have had an antidilutive effect based on the loss from continuing operations. |
(7) | Reflects certain significant charges and gains recorded during 2012 as follows: $62.1 million charged to operating profit, consisting of $41.0 million for facilities relocation costs and other transactions, including costs for severance, relocation and other items associated with the sale of Arby’s and relocation of the Company’s Atlanta restaurant support center to Ohio and the discontinuation of the breakfast daypart at certain restaurants and $21.1 million for impairment of long-lived assets other than goodwill; $38.4 million, net of income taxes, charged to income from continuing operations and net income related to these charges; $46.5 million, net of income taxes, charged to income from continuing operations and net income related to costs incurred for the early extinguishment of debt; and an $18.0 million gain, net of income taxes, recognized in income from continuing operations and net income in connection with the sale of our investment in Jurlique International Pty Ltd. (“Jurlique”). As a result of the sale of our investment in Jurlique, we have reflected net income attributable to noncontrolling interests of $2.4 million, net of income taxes, which is included in income from continuing operations and excluded from net income attributable to The Wendy’s Company. |
(8) | Reflects certain significant charges recorded during 2011 as follows: $58.6 million charged to operating profit, consisting of $45.7 million for transaction related and other costs for severance, relocation and other items associated with the sale of Arby’s and the relocation of the Company’s Atlanta restaurant support center to Ohio and $12.9 million for impairment of long-lived assets other than goodwill; and $36.4 million, net of income taxes, charged to income from continuing operations and net income related to these charges. |
(9) | Reflects certain significant charges recorded during 2010 as follows: $26.3 million charged to operating profit for impairment of long-lived assets other than goodwill; $16.3 million, net of income taxes, charged to income from continuing operations and net loss related to this charge; and $16.2 million, net of income taxes, charged to income from continuing operations and net loss related to costs incurred for the early extinguishment of debt. |
(10) | Reflects a significant charge recorded during 2009 of $25.6 million charged to operating profit for impairment of long-lived assets other than goodwill and $15.9 million, net of income taxes, charged to income from continuing operations and net income related to this charge. |
(11) | Reflects a significant charge recorded during 2008 of $92.4 million, net of income taxes, charged to loss from continuing operations and net loss for other than temporary losses on investments. |
• | Same-Store Sales |
• | Restaurant Margin |
2012 | 2011 | 2010 | |||||||||||||||||
Amount | Change | Amount | Change | Amount | |||||||||||||||
Revenues: | |||||||||||||||||||
Sales | $ | 2,198.3 | $ | 71.7 | $ | 2,126.6 | $ | 47.5 | $ | 2,079.1 | |||||||||
Franchise revenues | 306.9 | 2.1 | 304.8 | 8.5 | 296.3 | ||||||||||||||
2,505.2 | 73.8 | 2,431.4 | 56.0 | 2,375.4 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 1,881.2 | 65.1 | 1,816.1 | 59.1 | 1,757.0 | ||||||||||||||
General and administrative | 287.8 | (4.6 | ) | 292.4 | (19.1 | ) | 311.5 | ||||||||||||
Depreciation and amortization | 147.0 | 24.0 | 123.0 | (3.8 | ) | 126.8 | |||||||||||||
Impairment of long-lived assets | 21.1 | 8.2 | 12.9 | (13.4 | ) | 26.3 | |||||||||||||
Facilities relocation costs and other transactions | 41.0 | (4.7 | ) | 45.7 | 45.7 | — | |||||||||||||
Other operating expense, net | 4.4 | 0.2 | 4.2 | 0.8 | 3.4 | ||||||||||||||
2,382.5 | 88.2 | 2,294.3 | 69.3 | 2,225.0 | |||||||||||||||
Operating profit | 122.7 | (14.4 | ) | 137.1 | (13.3 | ) | 150.4 | ||||||||||||
Interest expense | (98.6 | ) | 15.5 | (114.1 | ) | 4.3 | (118.4 | ) | |||||||||||
Loss on early extinguishment of debt | (75.1 | ) | (75.1 | ) | — | 26.2 | (26.2 | ) | |||||||||||
Investment income, net | 36.3 | 35.8 | 0.5 | (4.8 | ) | 5.3 | |||||||||||||
Other income, net | 1.6 | 0.7 | 0.9 | (1.6 | ) | 2.5 | |||||||||||||
(Loss) income from continuing operations before income taxes and noncontrolling interests | (13.1 | ) | (37.5 | ) | 24.4 | 10.8 | 13.6 | ||||||||||||
Benefit from (provision for) income taxes | 21.1 | 27.6 | (6.5 | ) | (11.0 | ) | 4.5 | ||||||||||||
Income from continuing operations | 8.0 | (9.9 | ) | 17.9 | (0.2 | ) | 18.1 | ||||||||||||
Net income (loss) from discontinued operations | 1.5 | 9.5 | (8.0 | ) | 14.4 | (22.4 | ) | ||||||||||||
Net income (loss) | 9.5 | (0.4 | ) | 9.9 | 14.2 | (4.3 | ) | ||||||||||||
Net income attributable to noncontrolling interests | (2.4 | ) | (2.4 | ) | — | — | — | ||||||||||||
Net income (loss) attributable to The Wendy’s Company | $ | 7.1 | $ | (2.8 | ) | $ | 9.9 | $ | 14.2 | $ | (4.3 | ) |
2012 | 2011 | 2010 | ||||||||||||||||
Sales: | ||||||||||||||||||
Wendy’s | $ | 2,129.3 | $ | 2,050.1 | $ | 1,980.6 | ||||||||||||
Bakery and other (a) | 69.0 | 76.5 | 98.5 | |||||||||||||||
Total sales | $ | 2,198.3 | $ | 2,126.6 | $ | 2,079.1 | ||||||||||||
% of Sales | % of Sales | % of Sales | ||||||||||||||||
Cost of sales: | ||||||||||||||||||
Wendy’s | ||||||||||||||||||
Food and paper | $ | 707.3 | 33.2% | $ | 679.5 | 33.1% | $ | 638.8 | 32.2 | % | ||||||||
Restaurant labor | 641.3 | 30.1% | 613.2 | 29.9% | 590.0 | 29.8 | % | |||||||||||
Occupancy, advertising and other operating costs | 483.6 | 22.7% | 470.6 | 23.0% | 458.6 | 23.2 | % | |||||||||||
Total cost of sales | 1,832.2 | 86.0% | 1,763.3 | 86.0% | 1,687.4 | 85.2 | % | |||||||||||
Bakery and other (a) | 49.0 | n/m | 52.8 | n/m | 69.6 | n/m | ||||||||||||
Total cost of sales | $ | 1,881.2 | 85.6% | $ | 1,816.1 | 85.4% | $ | 1,757.0 | 84.5 | % |
2012 | 2011 | 2010 | |||||||||
Margin $: | |||||||||||
Wendy’s | $ | 297.1 | $ | 286.8 | $ | 293.2 | |||||
Bakery and other (a) | 20.0 | 23.7 | 28.9 | ||||||||
Total margin | $ | 317.1 | $ | 310.5 | $ | 322.1 | |||||
Wendy’s restaurant margin % | 14.0 | % | 14.0 | % | 14.8 | % |
(a) | During the first quarter of 2011, QSCC began managing the operations for kids’ meal promotion items sold to franchisees. |
New Method | Old Method | |||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||
Wendy’s restaurant statistics: | ||||||||||||||||||
North America same-store sales: | ||||||||||||||||||
Company-owned restaurants | 1.6 | % | 2.0 | % | (1.7 | )% | 1.5 | % | 2.0 | % | (1.7 | )% | ||||||
Franchised restaurants | 1.6 | % | 1.9 | % | (0.3 | )% | 1.6 | % | 1.9 | % | (0.3 | )% | ||||||
Systemwide | 1.6 | % | 1.9 | % | (0.6 | )% | 1.5 | % | 1.9 | % | (0.6 | )% | ||||||
Total same-store sales: | ||||||||||||||||||
Company-owned restaurants | 1.6 | % | 2.0 | % | (1.7 | )% | 1.5 | % | 2.0 | % | (1.7 | )% | ||||||
Franchised restaurants (a) | 1.7 | % | 2.0 | % | (0.3 | )% | 1.6 | % | 2.0 | % | (0.3 | )% | ||||||
Systemwide (a) | 1.7 | % | 2.0 | % | (0.6 | )% | 1.6 | % | 2.0 | % | (0.6 | )% |
(a) | Includes international franchised restaurants same-store sales. |
Company-owned | Franchised | Systemwide | |||||||
Restaurant count: | |||||||||
Restaurant count at January 2, 2011 | 1,394 | 5,182 | 6,576 | ||||||
Opened | 20 | 69 | 89 | ||||||
Closed | (15 | ) | (56 | ) | (71 | ) | |||
Net purchased from (sold by) franchisees | 18 | (18 | ) | — | |||||
Restaurant count at January 1, 2012 | 1,417 | 5,177 | 6,594 | ||||||
Opened | 16 | 85 | 101 | ||||||
Closed | (32 | ) | (103 | ) | (135 | ) | |||
Net purchased from (sold by) franchisees | 26 | (26 | ) | — | |||||
Restaurant count at December 30, 2012 | 1,427 | 5,133 | 6,560 |
2012 | 2011 | 2010 | ||||||||||
Company-owned average unit volumes: | ||||||||||||
Wendy’s | $ | 1,483.8 | $ | 1,456.4 | $ | 1,417.8 |
Sales | Change | ||||||
2012 | 2011 | ||||||
Wendy’s | $ | 79.2 | $ | 69.5 | |||
Bakery and other | (7.5 | ) | (22.0 | ) | |||
$ | 71.7 | $ | 47.5 |
Franchise Revenues | Change | ||||||
2012 | 2011 | ||||||
Franchise revenues | $ | 2.1 | $ | 8.5 |
Cost of Sales | Change | ||||
2012 | 2011 | ||||
Food and paper | 0.1 | % | 0.9 | % | |
Restaurant labor | 0.2 | % | 0.1 | % | |
Occupancy, advertising and other operating costs | (0.3 | )% | (0.2 | )% | |
0.0 | % | 0.8 | % |
General and Administrative | Change | ||||||
2012 | 2011 | ||||||
Professional services | $ | (8.2 | ) | $ | 7.1 | ||
Transition service agreement | 6.8 | (6.8 | ) | ||||
Franchise incentives | 2.4 | (6.8 | ) | ||||
SSG co-op formation & funding | 2.3 | (7.4 | ) | ||||
Integration costs | — | (5.5 | ) | ||||
Other, net | (7.9 | ) | 0.3 | ||||
$ | (4.6 | ) | $ | (19.1 | ) |
Depreciation and Amortization | Change | ||||||
2012 | 2011 | ||||||
Restaurants | $ | 21.7 | $ | (1.4 | ) | ||
Other | 2.3 | (2.4 | ) | ||||
$ | 24.0 | $ | (3.8 | ) |
Impairment of Long-Lived Assets | Change | ||||||
2012 | 2011 | ||||||
Restaurants, primarily properties | $ | 6.6 | $ | (13.4 | ) | ||
Aircraft | 1.6 | — | |||||
$ | 8.2 | $ | (13.4 | ) |
Facilities Relocation Costs and Other Transactions | Year Ended | ||||||
2012 | 2011 | ||||||
Facilities relocation and other transition costs | $ | 29.0 | $ | 5.5 | |||
Breakfast discontinuation | 10.6 | — | |||||
Arby’s transaction related costs | 1.4 | 40.2 | |||||
$ | 41.0 | $ | 45.7 |
Interest Expense | Change | ||||||
2012 | 2011 | ||||||
Senior Notes | $ | (29.1 | ) | $ | 0.2 | ||
Amortization of deferred financing costs | (2.0 | ) | 0.2 | ||||
Term loans | 15.2 | 1.8 | |||||
Interest rate swaps | 0.1 | 2.3 | |||||
Wendy’s 6.25% senior notes | — | (7.7 | ) | ||||
Other, net | 0.3 | (1.1 | ) | ||||
$ | (15.5 | ) | $ | (4.3 | ) |
Investment Income, Net | Change | ||||||
2012 | 2011 | ||||||
Gain on sale of investments, net | $ | 27.5 | $ | 0.1 | |||
Distributions, including dividends | 8.3 | — | |||||
Gain on DFR Notes | — | (4.9 | ) | ||||
$ | 35.8 | $ | (4.8 | ) |
Change | |||||||
2012 | 2011 | ||||||
Federal and state benefit on variance in (loss) income from continuing operations before income taxes and noncontrolling interests | $ | 23.1 | $ | (4.9 | ) | ||
Foreign tax credit, net of tax on foreign earnings | (0.8 | ) | (6.5 | ) | |||
Corrections related to prior years’ tax matters | 7.6 | — | |||||
Adjustments related to prior year tax matters | (2.2 | ) | 0.9 | ||||
Other | (0.1 | ) | (0.5 | ) | |||
$ | 27.6 | $ | (11.0 | ) |
• | a $54.0 million unfavorable impact in accrued expenses and other current liabilities for the comparable periods. This unfavorable impact was primarily due to (1) an increase in payments and a decrease in charges for Arby’s transaction related costs and facilities relocation and transition costs related to the relocation of the Company’s Atlanta restaurant support center to Ohio, (2) a decrease in interest expense and the corresponding accrual primarily due to the purchase and redemption of the Senior Notes, as further discussed below and (3) a decrease in accrued income taxes; and |
• | a $20.6 million unfavorable impact in accounts payable for the comparable periods. This unfavorable impact was primarily due to (1) higher payments in 2012 in comparison to 2011 for capital expenditures accrued at the end of 2011 and 2010, respectively and (2) changes in accounts payable due to the timing of payments between the comparable periods. |
• | Proceeds from the sale of our cost investment in Jurlique of $27.3 million; |
• | $40.6 million for the acquisition of franchised restaurants; |
• | Cash capital expenditures totaling $197.6 million, including $71.9 million for reimaged and new Image Activation restaurants, $13.5 million for other remodeled and new restaurants, $28.0 million for restaurant point-of-sale equipment, $23.2 million for the construction of a new building at our corporate headquarters, in part related to the relocation of our Atlanta restaurant support center, and the renovation of portions of the corporate headquarters and $61.0 million for various capital projects; |
• | Proceeds from the Term Loan of $1,113.8 million; |
• | Repayments of $1,044.3 million of long-term debt, primarily related to the 2010 Term Loan and Senior Notes; |
• | Financing cost payments related to the Credit Agreement; |
• | Premium payments on the redemption/purchase of the Senior Notes of $43.2 million; and |
• | Dividend payments of $39.0 million. |
• | a $40.6 million favorable impact in accrued expenses and other current liabilities for the comparable periods. This favorable impact was primarily due to the following: (1) an increase in amounts accrued for termination, severance and relocation costs associated with the sale of Arby’s and the related plans for the relocation of the Company’s Atlanta restaurant support center to Ohio, (2) payments to QSCC in the first quarter of 2010 which were accrued in 2009, (3) a decrease in amounts paid in 2011 versus 2010 under incentive compensation plans for the 2010 and 2009 fiscal years, respectively and (4) a decrease in interest payments in 2011 compared to 2010, partially offset by a decrease in accrued interest expense both primarily due to the redemption of the Wendy’s 6.25% senior notes in the second quarter of 2010 and a $190.0 million decrease in long-term debt which was assumed by Buyer on July 4, 2011. These favorable changes were partially offset by a decrease in the current income tax provision due to variations in taxable income of continuing operations during the same comparable periods; and |
• | a $27.2 million favorable impact in accounts payable resulting from an increase in accounts payable of $11.4 million during 2011 compared to a decrease in accounts payable of $15.8 million during 2010. The changes for 2011 and 2010 were primarily due to the following: (1) an increase in amounts payable for food purchases at Wendy’s as a result of higher sales trends in 2011 as compared to 2010, (2) a decrease in payments for expenses at Arby’s as a result of its sale on July 4, 2011, (3) amounts payable related to the Wendy’s annual convention held in the 2011 fourth quarter and (4) a decrease in payments for Wendy’s kids’ meal promotion items as the management for kids’ meal promotion items sold to franchisees was transferred to QSCC in the first quarter of 2011. |
• | Proceeds from the sale of Arby’s of $97.9 million, which is net of the following: Arby’s cash balance of $7.1 million at the sale date, customary purchase price adjustments primarily related to working capital and transaction closing costs paid through January 1, 2012; |
• | Repayments of long-term debt of $38.7 million, including an excess cash flow prepayment of $24.9 million as required by the 2010 Term Loan; |
• | Cash capital expenditures totaling $146.8 million, which included $27.5 million for the remodeling of restaurants, $23.9 million for the construction of new restaurants and $95.4 million for various capital projects; |
• | Dividend payments of $32.4 million; and |
• | Repurchases of common stock of $157.6 million, including commissions of $0.6 million. |
• | Capital expenditures of approximately $245.0 million as discussed below in “Capital Expenditures;” |
• | Potential restaurant acquisitions and dispositions; |
• | The costs of any potential financing activities; |
• | Quarterly cash dividends aggregating up to approximately $62.9 million as discussed below in “Dividends;” and |
• | Potential stock repurchases of up to $100.0 million. |
Year End | |||
2012 | |||
Long-term debt, including current portion | $ | 1,457.6 | |
Stockholders’ equity | 1,985.9 | ||
$ | 3,443.5 |
• | The completion of the Credit Agreement, as further discussed below, which resulted in additional debt from the $1,125.0 million Term Loan offset by the principal reductions of (1) the 2010 Term Loan of $467.8 million and (2) the redemption and purchase of the outstanding Senior Notes of $565.0 million; and |
• | Dividends paid of $39.0 million. |
Year End | |||
2012 | |||
Term Loan | $ | 1,114.8 | |
6.20% senior notes | 226.0 | ||
7% debentures | 83.5 | ||
Capital lease obligations, excluding interest | 32.6 | ||
Other | 0.7 | ||
Total long-term debt, including current portion | $ | 1,457.6 |
Fiscal Years | ||||||||||||||||||||
2013 | 2014-2015 | 2016-2017 | After 2017 | Total | ||||||||||||||||
Long-term debt obligations (a) | $ | 79.7 | $ | 381.3 | $ | 139.0 | $ | 1,297.3 | $ | 1,897.3 | ||||||||||
Capital lease obligations (b) | 4.4 | 9.3 | 8.2 | 43.8 | 65.7 | |||||||||||||||
Operating lease obligations (c) | 66.4 | 113.1 | 99.9 | 642.5 | 921.9 | |||||||||||||||
Purchase obligations (d) | 55.7 | 49.6 | 41.1 | 30.0 | 176.4 | |||||||||||||||
Other | 7.4 | 1.5 | 0.9 | — | 9.8 | |||||||||||||||
Total (e) | $ | 213.6 | $ | 554.8 | $ | 289.1 | $ | 2,013.6 | $ | 3,071.1 |
(a) | Excludes capital lease obligations, which are shown separately in the table. The table includes interest of approximately $446.6 million. The table also reflects the effect of interest rate swaps which lowered our interest rate on our 6.20% Wendy’s senior notes. These amounts exclude the fair value adjustments related to certain debt assumed in the Wendy’s merger. |
(b) | Excludes related sublease rental receipts of $8.9 million on capital lease obligations. The table includes interest of approximately $33.1 million for capital lease obligations. |
(c) | Represents the minimum lease cash payments. Excludes aggregate related sublease rental receipts of $58.8 million. |
(d) | Includes (1) $132.7 million for the remaining beverage purchase requirement under the previous beverage agreement as of December 30, 2012, (2) $22.1 million for capital expenditures, (3) $20.0 million for utility commitments and (4) $1.6 million of other purchase obligations. The Company entered into a new beverage agreement, effective January 1, 2013, which establishes a new contract term and, among other terms, revised pricing and usage requirements. Based on current pricing and the current ratio of usage at company-owned restaurants to franchised restaurants, our total beverage purchase requirement under the new agreement is estimated to be approximately $170.0 million over the remaining life of the contract, which expires the later of reaching the minimum usage requirement or January 1, 2023. |
(e) | Excludes obligation for uncertain income tax positions of $28.8 million. We are unable to predict when and if cash payments on any of this accrual will be required. |
Year End | |||
2012 | |||
Lease guarantees and contingent rent on leases (a) | $ | 54.8 | |
Recourse on loans (b) | 13.0 | ||
Letters of credit (c) | 20.6 | ||
Other guarantees (d) | 3.0 | ||
Total | $ | 91.4 |
(a) | Wendy’s is contingently liable for certain leases and other obligations primarily from former company-owned restaurant locations now operated by franchises amounting to $48.1 million as of December 30, 2012. These leases extend through 2050. In addition, Wendy’s is contingently liable for certain other leases which have been assigned to unrelated third parties, who have indemnified Wendy’s against future liabilities amounting to $6.7 million as of December 30, 2012. These leases expire on various dates through 2021. |
(b) | Wendy’s provided loan guarantees to various lenders on behalf of franchisees under pooled debt facility arrangements for new store development and equipment financing to promote systemwide initiatives. Recourse on the majority of these loans is limited, generally to a percentage of the original loan amount or the current loan balance on individual franchisee loans or an aggregate minimum for the entire loan arrangement. During 2012, Wendy’s provided a $2.0 million guarantee to a lender for a franchisee, in connection with the refinancing of the franchisee’s debt which originated in 2007. Pursuant to the agreement, the guarantee is subject to an annual reduction over a five year period. |
(c) | The Company has outstanding letters of credit of $20.6 million with various parties. The Company does not expect any material loss to result from these letters of credit because we do not believe performance will be required. |
(d) | In 2012, Wendy’s (1) provided a guarantee to certain lenders to the Japan JV for which our joint venture partners have agreed, should it become necessary, to reimburse and otherwise indemnify us for their 51% share of the guarantee and (2) agreed to reimburse and otherwise indemnify our joint venture partners for our 49% share of the guarantee by our joint venture partners of a line of credit granted by a different lender to the Japan JV to fund working capital requirements. As of December 30, 2012, our portion of these contingent obligations totaled approximately $3.0 million based upon then current rates of exchange. The fair value of our guarantees is immaterial. In early 2013, the joint venture partners agreed on a plan to finance anticipated future cash requirements of the Japan JV. As determined by the amount of future capital contributions by each of the partners, Wendy’s may become the majority owner of the Japan JV. The Japan JV and the effect of the noncontrolling interest in the Japan JV would then be included in the Wendy’s consolidated financial statements from the date that Wendy’s became the majority owner, or otherwise assumed day-to-day control of the Japan JV’s operations. Our obligations, including the funding of anticipated future cash requirements of the Japan JV of approximately $3.0 million, could total up to approximately $8.0 million if our joint venture partners are unable to perform their reimbursement and indemnity obligations to us. |
• | Impairment of goodwill and indefinite-lived intangible assets: |
• | Impairment of long-lived assets: |
• | Realizability of deferred tax assets: |
• | Federal and state income tax uncertainties: |
• | Legal and environmental reserves: |
Year End 2012 | |||||||
Carrying Value | Interest Rate Risk | ||||||
Interest rate swaps | $ | 8.2 | $ | (2.1 | ) | ||
Variable-rate long-term debt, excluding capital lease obligations | (1,114.8 | ) | (68.7 | ) | |||
Fixed-rate long-term debt, excluding capital lease obligations | (310.2 | ) | (12.0 | ) |
Year End 2011 | |||||||
Carrying Value | Interest Rate Risk | ||||||
Interest rate swaps | $ | 11.7 | $ | (5.8 | ) | ||
Variable-rate long-term debt, excluding capital lease obligations | (466.1 | ) | (24.5 | ) | |||
Fixed-rate long-term debt, excluding capital lease obligations | (874.2 | ) | (71.9 | ) |
Page | |
Glossary of Defined Terms | |
Report of Independent Registered Public Accounting Firm | |
Consolidated Statements of Operations for the years ended December 30, 2012, January 1, 2012 and January 2, 2011 | |
Consolidated Statements of Comprehensive Income for the years ended December 30, 2012, January 1, 2012 and January 2, 2011 | |
Consolidated Statements of Stockholders’ Equity for the years ended December 30, 2012, January 1, 2012 and January 2, 2011 | |
Consolidated Statements of Cash Flows for the years ended December 30, 2012, January 1, 2012 and January 2, 2011 | |
(1) Summary of Significant Accounting Policies | |
(2) Discontinued Operations | |
(3) Acquisitions and Dispositions | |
(4) DFR Notes | |
(5) Income (Loss) Per Share | |
(6) Cash and Receivables | |
(7) Pledged Assets | |
(8) Investments | |
(9) Properties | |
(10) Goodwill and Other Intangible Assets | |
(11) Accrued Expenses and Other Current Liabilities | |
(12) Long-Term Debt | |
(13) Fair Value Measurements | |
(14) Income Taxes | |
(15) Stockholders’ Equity | |
(16) Share-Based Compensation | |
(17) Facilities Relocation Costs and Other Transactions | |
(18) Impairment of Long-Lived Assets | |
(19) Investment Income, Net | |
(20) Retirement Benefit Plans | |
(21) Lease Commitments | |
(22) Guarantees and Other Commitments and Contingencies | |
(23) Transactions with Related Parties | |
(24) Legal, Environmental and Other Matters | |
(25) Advertising Costs and Funds | |
(26) Geographic Information | |
(27) Quarterly Financial Information (Unaudited) |
Defined Term | Footnote Where Defined | |
2010 Plan | (16) | Share-Based Compensation |
2010 Term Loan | (12) | Long-Term Debt |
2012 Lease | (23) | Transactions with Related Parties |
401(k) Plan | (20) | Retirement Benefit Plans |
Advertising Funds | (25) | Advertising Costs and Funds |
Aircraft Lease Agreement | (23) | Transactions with Related Parties |
Arby’s | (1) | Summary of Significant Accounting Policies |
ARCOP | (23) | Transactions with Related Parties |
Bakery | (20) | Retirement Benefit Plans |
Black-Scholes Model | (1) | Summary of Significant Accounting Policies |
Buyer | (2) | Discontinued Operations |
Buyer Parent | (2) | Discontinued Operations |
CAP | (14) | Income Taxes |
CBA | (20) | Retirement Benefit Plans |
Company | (1) | Summary of Significant Accounting Policies |
Contingent Rent | (1) | Summary of Significant Accounting Policies |
Credit Agreement | (12) | Long-Term Debt |
DFR | (4) | DFR Notes |
DFR Notes | (4) | DFR Notes |
Double Cheese | (3) | Acquisitions and Dispositions |
Eligible Arby’s Employees | (20) | Retirement Benefit Plans |
Equity Plans | (16) | Share-Based Compensation |
FASB | (1) | Summary of Significant Accounting Policies |
Former Executives | (8) | Investments |
GAAP | (1) | Summary of Significant Accounting Policies |
Grants | (16) | Share-Based Compensation |
IRS | (14) | Income Taxes |
Japan JV | (1) | Summary of Significant Accounting Policies |
Jurl | (8) | Investments |
Jurlique | (8) | Investments |
Liquidation Services Agreement | (23) | Transactions with Related Parties |
Management Company | (23) | Transactions with Related Parties |
New CBA | (20) | Retirement Benefit Plans |
Pisces | (3) | Acquisitions and Dispositions |
Pisces Acquisition | (3) | Acquisitions and Dispositions |
PPA | (20) | Retirement Benefit Plans |
QSCC | (1) | Summary of Significant Accounting Policies |
Rent Holiday | (1) | Summary of Significant Accounting Policies |
Restricted Shares | (16) | Share-Based Compensation |
RSAs | (16) | Share-Based Compensation |
RSUs | (16) | Share-Based Compensation |
Senior Notes | (12) | Long-Term Debt |
SERP | (20) | Retirement Benefit Plans |
Defined Term | Footnote Where Defined | |
Services Agreement | (23) | Transactions with Related Parties |
SSG | (23) | Transactions with Related Parties |
Straight-Line Rent | (1) | Summary of Significant Accounting Policies |
Subleases | (23) | Transactions with Related Parties |
Syrup | (22) | Guarantees and Other Commitments and Contingencies |
TASCO | (23) | Transactions with Related Parties |
Term Loan | (12) | Long-Term Debt |
The Wendy’s Company | (1) | Summary of Significant Accounting Policies |
THI | (1) | Summary of Significant Accounting Policies |
TimWen | (1) | Summary of Significant Accounting Policies |
Union Pension Fund | (20) | Retirement Benefit Plans |
U.S. | (1) | Summary of Significant Accounting Policies |
Wendy’s | (1) | Summary of Significant Accounting Policies |
Wendy’s Co-op | (23) | Transactions with Related Parties |
Wendy’s Restaurants | (1) | Summary of Significant Accounting Policies |
December 30, 2012 | January 1, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 453,361 | $ | 475,231 | |||
Accounts and notes receivable | 61,164 | 68,349 | |||||
Inventories | 13,805 | 12,903 | |||||
Prepaid expenses and other current assets | 24,231 | 27,397 | |||||
Deferred income tax benefit | 91,489 | 80,970 | |||||
Advertising funds restricted assets | 65,777 | 70,547 | |||||
Total current assets | 709,827 | 735,397 | |||||
Properties | 1,250,338 | 1,192,200 | |||||
Goodwill | 876,201 | 870,431 | |||||
Other intangible assets | 1,301,537 | 1,304,288 | |||||
Investments | 113,283 | 119,271 | |||||
Deferred costs and other assets | 52,013 | 67,542 | |||||
Total assets | $ | 4,303,199 | $ | 4,289,129 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 12,911 | $ | 6,597 | |||
Accounts payable | 70,826 | 81,301 | |||||
Accrued expenses and other current liabilities | 137,348 | 178,298 | |||||
Advertising funds restricted liabilities | 65,777 | 70,547 | |||||
Total current liabilities | 286,862 | 336,743 | |||||
Long-term debt | 1,444,651 | 1,350,402 | |||||
Deferred income taxes | 438,217 | 458,107 | |||||
Other liabilities | 147,614 | 147,808 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued | 47,042 | 47,042 | |||||
Additional paid-in capital | 2,782,765 | 2,779,871 | |||||
Accumulated deficit | (467,007 | ) | (434,999 | ) | |||
Common stock held in treasury, at cost | (382,926 | ) | (395,947 | ) | |||
Accumulated other comprehensive income | 5,981 | 102 | |||||
Total stockholders’ equity | 1,985,855 | 1,996,069 | |||||
Total liabilities and stockholders’ equity | $ | 4,303,199 | $ | 4,289,129 |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Revenues: | |||||||||||
Sales | $ | 2,198,323 | $ | 2,126,544 | $ | 2,079,081 | |||||
Franchise revenues | 306,919 | 304,814 | 296,358 | ||||||||
2,505,242 | 2,431,358 | 2,375,439 | |||||||||
Costs and expenses: | |||||||||||
Cost of sales | 1,881,248 | 1,816,109 | 1,756,954 | ||||||||
General and administrative | 287,808 | 292,390 | 311,511 | ||||||||
Depreciation and amortization | 146,976 | 122,992 | 126,846 | ||||||||
Impairment of long-lived assets | 21,097 | 12,883 | 26,326 | ||||||||
Facilities relocation costs and other transactions | 41,031 | 45,711 | — | ||||||||
Other operating expense, net | 4,335 | 4,152 | 3,357 | ||||||||
2,382,495 | 2,294,237 | 2,224,994 | |||||||||
Operating profit | 122,747 | 137,121 | 150,445 | ||||||||
Interest expense | (98,604 | ) | (114,110 | ) | (118,385 | ) | |||||
Loss on early extinguishment of debt | (75,076 | ) | — | (26,197 | ) | ||||||
Investment income, net | 36,243 | 484 | 5,259 | ||||||||
Other income, net | 1,565 | 945 | 2,434 | ||||||||
(Loss) income from continuing operations before income taxes and noncontrolling interests | (13,125 | ) | 24,440 | 13,556 | |||||||
Benefit from (provision for) income taxes | 21,083 | (6,528 | ) | 4,555 | |||||||
Income from continuing operations | 7,958 | 17,912 | 18,111 | ||||||||
Discontinued operations: | |||||||||||
Income (loss) from discontinued operations, net of income taxes | 1,951 | 762 | (22,436 | ) | |||||||
Loss on disposal of discontinued operations, net of income taxes | (442 | ) | (8,799 | ) | — | ||||||
Net income (loss) from discontinued operations | 1,509 | (8,037 | ) | (22,436 | ) | ||||||
Net income (loss) | 9,467 | 9,875 | (4,325 | ) | |||||||
Net income attributable to noncontrolling interests | (2,384 | ) | — | — | |||||||
Net income (loss) attributable to The Wendy’s Company | $ | 7,083 | $ | 9,875 | $ | (4,325 | ) | ||||
Basic and diluted income (loss) per share attributable to The Wendy’s Company: | |||||||||||
Continuing operations | $ | .02 | $ | .04 | $ | .04 | |||||
Discontinued operations | — | (.02 | ) | (.05 | ) | ||||||
Net income (loss) | $ | .02 | $ | .02 | $ | (.01 | ) | ||||
Dividends per share | $ | .10 | $ | .08 | $ | .07 |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Net income (loss) | $ | 9,467 | $ | 9,875 | $ | (4,325 | ) | ||||
Other comprehensive income (loss), net: | |||||||||||
Foreign currency translation adjustment | 6,096 | (6,869 | ) | 12,666 | |||||||
Change in unrecognized pension loss, net of income tax benefit (provision) of $127, $(21), and $(54), respectively | (217 | ) | (46 | ) | 95 | ||||||
Change in unrealized gain on available-for-sale securities, net of income tax benefit of $41 | — | — | (59 | ) | |||||||
Other comprehensive income (loss), net | 5,879 | (6,915 | ) | 12,702 | |||||||
Comprehensive income | 15,346 | 2,960 | 8,377 | ||||||||
Comprehensive income attributable to noncontrolling interests | (2,384 | ) | — | — | |||||||
Comprehensive income attributable to The Wendy’s Company | $ | 12,962 | $ | 2,960 | $ | 8,377 |
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Common Stock Held in Treasury | Foreign Currency Translation Adjustment | Other | Total | |||||||||||||||||||||
Balance at January 3, 2010 | $ | 47,042 | $ | 2,761,433 | $ | (380,480 | ) | $ | (85,971 | ) | $ | (4,696 | ) | $ | (989 | ) | $ | 2,336,339 | |||||||||
Net loss | — | — | (4,325 | ) | — | — | — | (4,325 | ) | ||||||||||||||||||
Changes in accumulated other comprehensive income (loss) | — | — | — | — | 12,666 | 36 | 12,702 | ||||||||||||||||||||
Cash dividends | — | — | (27,621 | ) | — | — | — | (27,621 | ) | ||||||||||||||||||
Accrued dividends on non-vested restricted stock | — | — | (38 | ) | — | — | — | (38 | ) | ||||||||||||||||||
Repurchases of common stock | — | — | — | (167,743 | ) | — | — | (167,743 | ) | ||||||||||||||||||
Share-based compensation expense | — | 13,704 | — | — | — | — | 13,704 | ||||||||||||||||||||
Common stock issued upon exercises of stock options | — | (562 | ) | — | 1,840 | — | — | 1,278 | |||||||||||||||||||
Common stock issued upon vesting of restricted shares | — | (2,765 | ) | — | 2,101 | — | — | (664 | ) | ||||||||||||||||||
Tax charge from share-based compensation | — | (664 | ) | — | — | — | — | (664 | ) | ||||||||||||||||||
Other | — | (20 | ) | — | 226 | — | — | 206 | |||||||||||||||||||
Balance at January 2, 2011 | 47,042 | 2,771,126 | (412,464 | ) | (249,547 | ) | 7,970 | (953 | ) | 2,163,174 | |||||||||||||||||
Net income | — | — | 9,875 | — | — | — | 9,875 | ||||||||||||||||||||
Changes in accumulated other comprehensive income (loss) | — | — | — | — | (6,869 | ) | (46 | ) | (6,915 | ) | |||||||||||||||||
Cash dividends | — | — | (32,366 | ) | — | — | — | (32,366 | ) | ||||||||||||||||||
Accrued dividends on non-vested restricted stock | — | — | (44 | ) | — | — | — | (44 | ) | ||||||||||||||||||
Repurchases of common stock | — | — | — | (157,556 | ) | — | — | (157,556 | ) | ||||||||||||||||||
Share-based compensation expense | — | 17,688 | — | — | — | — | 17,688 | ||||||||||||||||||||
Common stock issued upon exercises of stock options | — | (891 | ) | — | 7,084 | — | — | 6,193 | |||||||||||||||||||
Common stock issued upon vesting of restricted shares | — | (6,136 | ) | — | 3,871 | — | — | (2,265 | ) | ||||||||||||||||||
Tax charge from share-based compensation | — | (1,923 | ) | — | — | — | — | (1,923 | ) | ||||||||||||||||||
Other | — | 7 | — | 201 | — | — | 208 | ||||||||||||||||||||
Balance at January 1, 2012 | 47,042 | 2,779,871 | (434,999 | ) | (395,947 | ) | 1,101 | (999 | ) | 1,996,069 | |||||||||||||||||
Net income attributable to The Wendy’s Company | — | — | 7,083 | — | — | — | 7,083 | ||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 2,384 | — | — | — | 2,384 | ||||||||||||||||||||
Distribution to noncontrolling interests | — | — | (2,384 | ) | — | — | — | (2,384 | ) | ||||||||||||||||||
Changes in accumulated other comprehensive income (loss) | — | — | — | — | 6,096 | (217 | ) | 5,879 | |||||||||||||||||||
Cash dividends | — | — | (39,043 | ) | — | — | — | (39,043 | ) | ||||||||||||||||||
Accrued dividends on non-vested restricted stock | — | — | (48 | ) | — | — | — | (48 | ) | ||||||||||||||||||
Share-based compensation expense | — | 11,473 | — | — | — | — | 11,473 | ||||||||||||||||||||
Common stock issued upon exercises of stock options | — | (2,621 | ) | — | 10,197 | — | — | 7,576 | |||||||||||||||||||
Common stock issued upon vesting of restricted shares | — | (3,021 | ) | — | 2,604 | — | — | (417 | ) | ||||||||||||||||||
Tax charge from share-based compensation | — | (2,906 | ) | — | — | — | — | (2,906 | ) | ||||||||||||||||||
Other | — | (31 | ) | — | 220 | — | — | 189 | |||||||||||||||||||
Balance at December 30, 2012 | $ | 47,042 | $ | 2,782,765 | $ | (467,007 | ) | $ | (382,926 | ) | $ | 7,197 | $ | (1,216 | ) | $ | 1,985,855 |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 9,467 | $ | 9,875 | $ | (4,325 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 154,174 | 145,302 | 182,172 | ||||||||
Loss on early extinguishment of debt | 75,076 | — | — | ||||||||
Distributions received from TimWen joint venture | 15,274 | 14,942 | 13,980 | ||||||||
Share-based compensation | 11,473 | 17,688 | 13,704 | ||||||||
Impairment of long-lived assets | 21,097 | 14,441 | 69,477 | ||||||||
Net (recognition) receipt of deferred vendor incentives | (920 | ) | 7,070 | (587 | ) | ||||||
Accretion of long-term debt | 7,973 | 8,120 | 15,016 | ||||||||
Amortization of deferred financing costs | 4,241 | 6,216 | 11,779 | ||||||||
Non-cash rent expense | 7,210 | 7,554 | 9,334 | ||||||||
Loss on disposal of Arby’s | 442 | 8,799 | — | ||||||||
Equity in earnings in joint ventures, net | (8,724 | ) | (9,465 | ) | (9,459 | ) | |||||
Deferred income tax | (31,598 | ) | 1,624 | (29,779 | ) | ||||||
Operating investment adjustments, net (see below) | (27,769 | ) | (145 | ) | (5,201 | ) | |||||
Other, net | 3,093 | 2,999 | 8,264 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts and notes receivable | 3,999 | (2,690 | ) | (4,730 | ) | ||||||
Inventories | (561 | ) | (517 | ) | 394 | ||||||
Prepaid expenses and other current assets | (1,360 | ) | (7,580 | ) | 1,514 | ||||||
Accounts payable | (9,266 | ) | 11,364 | (15,795 | ) | ||||||
Accrued expenses and other current liabilities | (42,906 | ) | 11,120 | (29,508 | ) | ||||||
Net cash provided by operating activities | 190,415 | 246,717 | 226,250 | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (197,590 | ) | (146,763 | ) | (147,969 | ) | |||||
Acquisitions | (40,608 | ) | (11,210 | ) | (3,123 | ) | |||||
Franchise loans, net | 3,092 | (4,003 | ) | — | |||||||
Sale of Arby’s, net | — | 97,925 | — | ||||||||
Dispositions | 21,023 | 6,960 | 5,660 | ||||||||
Investment activities, net (see below) | 27,949 | (841 | ) | 32,158 | |||||||
Other, net | (3,251 | ) | (265 | ) | 352 | ||||||
Net cash used in investing activities | (189,385 | ) | (58,197 | ) | (112,922 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt | 1,113,750 | — | 497,661 | ||||||||
Repayments of long-term debt | (1,044,310 | ) | (38,702 | ) | (474,791 | ) | |||||
Deferred financing costs | (15,566 | ) | (57 | ) | (16,353 | ) | |||||
Premium payments on redemption/purchase of notes | (43,151 | ) | — | — | |||||||
Repurchases of common stock | — | (157,556 | ) | (173,537 | ) | ||||||
Dividends | (39,043 | ) | (32,366 | ) | (27,621 | ) | |||||
Distribution to noncontrolling interests | (3,667 | ) | — | — | |||||||
Proceeds from stock option exercises | 7,806 | 6,359 | 1,444 | ||||||||
Other, net | 52 | (2,262 | ) | (953 | ) | ||||||
Net cash used in financing activities | (24,129 | ) | (224,584 | ) | (194,150 | ) | |||||
Net cash used in operations before effect of exchange rate changes on cash | (23,099 | ) | (36,064 | ) | (80,822 | ) | |||||
Effect of exchange rate changes on cash | 1,229 | (1,213 | ) | 1,611 | |||||||
Net decrease in cash and cash equivalents | (21,870 | ) | (37,277 | ) | (79,211 | ) | |||||
Cash and cash equivalents at beginning of period | 475,231 | 512,508 | 591,719 | ||||||||
Cash and cash equivalents at end of period | $ | 453,361 | $ | 475,231 | $ | 512,508 |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Detail of cash flows related to investments: | |||||||||||
Operating investment adjustments, net: | |||||||||||
Gain on sale of investments | $ | (27,769 | ) | $ | — | $ | — | ||||
Income on collection of DFR Notes | — | — | (4,909 | ) | |||||||
Other net recognized gains | — | (145 | ) | (292 | ) | ||||||
$ | (27,769 | ) | $ | (145 | ) | $ | (5,201 | ) | |||
Investment activities, net: | |||||||||||
Proceeds from sales of investments | $ | 27,949 | $ | 342 | $ | 1,810 | |||||
Proceeds from repayment of DFR Notes | — | — | 30,752 | ||||||||
Cost of securities | — | — | (404 | ) | |||||||
Investment in joint venture | — | (1,183 | ) | — | |||||||
$ | 27,949 | $ | (841 | ) | $ | 32,158 | |||||
Supplemental cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 110,701 | $ | 111,675 | $ | 127,753 | |||||
Income taxes, net of refunds | $ | 10,124 | $ | 13,588 | $ | 14,262 | |||||
Supplemental non-cash investing and financing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | 22,109 | $ | 23,767 | $ | 14,985 | |||||
Capitalized lease obligations | $ | 16,280 | $ | 2,341 | $ | 5,775 | |||||
Indirect investment in Arby’s | $ | — | $ | 19,000 | $ | — | |||||
• | Balance sheets - As a result of our sale of Arby’s on July 4, 2011, there are no remaining Arby’s assets and liabilities included in our consolidated balance sheets. |
• | Statements of operations - Arby’s income (loss) from operations for the period from January 3, 2011 through July 3, 2011 and the year ended January 2, 2011 has been classified as discontinued operations. Net loss from discontinued operations for the year ended January 1, 2012 also includes additional Arby’s expenses which were incurred as a result of the sale and the loss on the disposal of Arby’s. Net income from discontinued operations for the year ended December 30, 2012 includes certain post-closing Arby’s related transactions, as further described below. |
• | Statements of cash flows - Arby’s cash flows prior to its sale (for the period from January 3, 2011 through July 3, 2011 and for the year ended January 2, 2011) have been included in and not separately reported from our cash flows. The consolidated statements of cash flows for the year ended January 1, 2012 also includes the effects of the sale of Arby’s. The statement of cash flows for the year ended December 30, 2012 includes the effect of certain post-closing Arby’s related transactions, as further described below. |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Revenues | $ | — | $ | 546,453 | $ | 1,040,975 | ||||||
Income (loss) from discontinued operations, net of income taxes: | ||||||||||||
Income (loss) from discontinued operations before income taxes | $ | 907 | $ | 1,692 | $ | (35,550 | ) | |||||
Benefit from (provision for) income taxes | 1,044 | (930 | ) | 13,114 | ||||||||
1,951 | 762 | (22,436 | ) | |||||||||
Loss on disposal of discontinued operations, net of income taxes | (442 | ) | (8,799 | ) | — | |||||||
Net income (loss) from discontinued operations | $ | 1,509 | $ | (8,037 | ) | $ | (22,436 | ) |
Total purchase price paid in cash | $ | 18,915 | ||
Identifiable assets acquired and liabilities assumed: | ||||
Cash | 55 | |||
Inventories | 149 | |||
Properties | 12,485 | |||
Deferred taxes and other assets | 1,773 | |||
Acquired territory rights (a) | 18,390 | |||
Favorable ground leases | 222 | |||
Capitalized lease obligations | (14,394 | ) | ||
Deferred vendor incentives (b) | (382 | ) | ||
Unfavorable leases | (992 | ) | ||
Other liabilities | (952 | ) | ||
Total identifiable net assets | 16,354 | |||
Goodwill (preliminary) (c) | $ | 2,561 |
(a) | The acquired territory rights have a weighted average amortization period of 13 years. |
(b) | Included in “Other liabilities.” |
(c) | This goodwill is not deductible or amortizable for income tax purposes. |
Year Ended 2012 | Year Ended 2011 | ||||||||||||||
As Reported | As Adjusted | As Reported | As Adjusted | ||||||||||||
Revenues: | |||||||||||||||
Sales | $ | 2,198,323 | $ | 2,218,199 | $ | 2,126,544 | $ | 2,171,509 | |||||||
Franchise revenues | 306,919 | 306,122 | 304,814 | 303,003 | |||||||||||
Total revenues | 2,505,242 | 2,524,321 | 2,431,358 | 2,474,512 | |||||||||||
Operating profit | 122,747 | 123,823 | 137,121 | 139,695 | |||||||||||
Net income | 9,467 | 10,342 | 9,875 | 11,834 | |||||||||||
Net income attributable to The Wendy’s Company | 7,083 | 7,958 | 9,875 | 11,834 | |||||||||||
Basic and diluted net income per share | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.03 |
Total purchase price paid in cash | $ | 19,181 | ||
Identifiable assets acquired and liabilities assumed: | ||||
Cash | 27 | |||
Inventories | 163 | |||
Properties | 12,753 | |||
Deferred taxes and other assets | 190 | |||
Acquired territory rights (a) | 2,640 | |||
Favorable ground leases | 1,147 | |||
Capitalized lease obligations | (948 | ) | ||
Deferred vendor incentives (b) | (248 | ) | ||
Unfavorable leases | (531 | ) | ||
Other liabilities | (727 | ) | ||
Total identifiable net assets | 14,466 | |||
Goodwill (c) | $ | 4,715 |
(a) | The acquired territory rights have a weighted average amortization period of 13 years. |
(b) | Included in “Other liabilities.” |
(c) | Goodwill is partially amortizable for income tax purposes. |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Amounts attributable to The Wendy’s Company: | ||||||||||||
Income from continuing operations | $ | 5,574 | $ | 17,912 | $ | 18,111 | ||||||
Net income (loss) from discontinued operations | 1,509 | (8,037 | ) | (22,436 | ) | |||||||
Net income (loss) | $ | 7,083 | $ | 9,875 | $ | (4,325 | ) |
Year Ended | |||||||||
2012 | 2011 | 2010 | |||||||
Common stock: | |||||||||
Weighted average basic shares outstanding | 390,275 | 405,224 | 426,247 | ||||||
Dilutive effect of stock options and restricted shares | 1,865 | 1,956 | 948 | ||||||
Weighted average diluted shares outstanding | 392,140 | 407,180 | 427,195 |
Year End | ||||||||
2012 | 2011 | |||||||
Cash and cash equivalents | ||||||||
Cash | $ | 188,436 | $ | 471,110 | ||||
Cash equivalents | 264,925 | 4,121 | ||||||
$ | 453,361 | $ | 475,231 | |||||
Restricted cash equivalents | ||||||||
Current (a) | ||||||||
Trust for termination costs for former Wendy’s executives | $ | 168 | $ | 190 | ||||
Other | 152 | 149 | ||||||
$ | 320 | $ | 339 | |||||
Non-current (b) | ||||||||
Trust for termination costs for former Wendy’s executives | $ | 3,295 | $ | 3,372 | ||||
Collateral supporting letters of credit securing payments due under leases | — | 686 | ||||||
$ | 3,295 | $ | 4,058 |
(a) | Included in “Prepaid expenses and other current assets.” |
(b) | Included in “Deferred costs and other assets.” |
Year End | ||||||||
2012 | 2011 | |||||||
Accounts and Notes Receivable | ||||||||
Current | ||||||||
Accounts receivable: | ||||||||
Franchisees | $ | 56,494 | $ | 57,965 | ||||
Other | 8,638 | 12,998 | ||||||
65,132 | 70,963 | |||||||
Notes receivables from franchisees (a) | 2,353 | 1,439 | ||||||
67,485 | 72,402 | |||||||
Allowance for doubtful accounts | (6,321 | ) | (4,053 | ) | ||||
$ | 61,164 | $ | 68,349 | |||||
Non-Current (b) | ||||||||
Notes receivables from franchisees (a) | $ | 10,227 | $ | 13,393 | ||||
Allowance for doubtful accounts | (2,881 | ) | (963 | ) | ||||
$ | 7,346 | $ | 12,430 |
(a) | Includes $1,687 and $1,857 of loans to franchisees for the purchase of equipment utilized in the breakfast program which are included in current and non-current notes receivable, respectively, as of December 30, 2012. The Company has provided a full allowance for doubtful accounts on the amounts owed as of December 30, 2012 (see Note 17 for further information). |
(b) | Included in “Deferred costs and other assets.” |
Year End | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Balance at beginning of year: | ||||||||||||
Current | $ | 4,053 | $ | 7,321 | $ | 6,540 | ||||||
Non-current | 963 | 3,778 | 22,566 | |||||||||
Provision for doubtful accounts: | ||||||||||||
Franchisees and other | 670 | 264 | 9,694 | |||||||||
DFR Notes (see Note 4) | — | — | (21,227 | ) | ||||||||
Arby’s allowance transferred in sale | — | (5,504 | ) | — | ||||||||
Uncollectible accounts written off, net of recoveries | (28 | ) | (843 | ) | (6,474 | ) | ||||||
Breakfast notes receivables fully reserved (see Note 17) | 3,544 | — | — | |||||||||
Balance at end of year: | ||||||||||||
Current | 6,321 | 4,053 | 7,321 | |||||||||
Non-current | 2,881 | 963 | 3,778 | |||||||||
Total | $ | 9,202 | $ | 5,016 | $ | 11,099 |
Year End | |||
2012 | |||
Cash and cash equivalents | $ | 121,360 | |
Accounts and notes receivable (including long-term) | 65,109 | ||
Inventories | 12,473 | ||
Properties | 272,778 | ||
Goodwill | 732,027 | ||
Other intangible assets | 1,227,992 | ||
Other assets | 19,760 | ||
$ | 2,451,499 |
Year End | |||||||
2012 | 2011 | ||||||
Equity investments: | |||||||
Joint venture with THI | $ | 89,370 | $ | 91,742 | |||
Joint venture in Japan (a) | (1,750 | ) | 77 | ||||
Cost investments: | |||||||
Arby’s | 19,000 | 19,000 | |||||
Jurlique | — | 325 | |||||
Other cost investments | 4,913 | 8,127 | |||||
$ | 111,533 | $ | 119,271 |
(a) | In 2012, our equity investment in the Japan JV was included in “Other liabilities;” Wendy’s has provided certain guarantees and the partners have agreed on a plan to finance anticipated future cash requirements of the Japan JV as further described below. |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Balance at beginning of period | $ | 91,742 | $ | 98,631 | $ | 97,476 | ||||||
Equity in earnings for the period | 13,680 | 13,505 | 12,316 | |||||||||
Amortization of purchase price adjustments (a) | (3,129 | ) | (2,934 | ) | (2,857 | ) | ||||||
10,551 | 10,571 | 9,459 | ||||||||||
Distributions received | (15,274 | ) | (14,942 | ) | (13,980 | ) | ||||||
Foreign currency translation adjustment included in “Other comprehensive income (loss), net” | 2,351 | (2,518 | ) | 5,676 | ||||||||
Balance at end of period (b) | $ | 89,370 | $ | 91,742 | $ | 98,631 |
(a) | Based upon an average original aggregate life of 21 years. |
(b) | Included in “Investments.” |
Year End | ||||||||
2012 | 2011 | |||||||
Balance sheet information: | ||||||||
Properties | $ | 73,013 | $ | 73,394 | ||||
Cash and cash equivalents | 3,538 | 2,621 | ||||||
Accounts receivable | 3,274 | 4,231 | ||||||
Other | 2,516 | 2,565 | ||||||
$ | 82,341 | $ | 82,811 | |||||
Accounts payable and accrued liabilities | $ | 3,215 | $ | 2,281 | ||||
Other liabilities | 8,561 | 8,655 | ||||||
Partners’ equity | 70,565 | 71,875 | ||||||
$ | 82,341 | $ | 82,811 |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Income statement information: | ||||||||||||
Revenues | $ | 39,702 | $ | 39,374 | $ | 37,242 | ||||||
Income before income taxes and net income | 27,377 | 27,358 | 24,247 |
Year Ended | ||||||||
2012 | 2011 | |||||||
Balance at beginning of period | $ | 77 | $ | — | ||||
Initial investment | — | 1,183 | ||||||
Equity in losses for the period | (1,827 | ) | (1,106 | ) | ||||
Balance at end of period (a) | $ | (1,750 | ) | $ | 77 |
(a) | Included in “Other liabilities” in 2012 and in “Investments” in 2011. |
Year End | ||||||||
2012 | 2011 | |||||||
Balance sheet information: | ||||||||
Current assets: | ||||||||
Cash | $ | 347 | $ | 686 | ||||
Inventories | 23 | 39 | ||||||
Prepaid expenses and other current assets | 265 | 281 | ||||||
Total current assets | 635 | 1,006 | ||||||
Properties | 1,343 | 2,625 | ||||||
Deposits and other assets | 703 | 493 | ||||||
Total assets | $ | 2,681 | $ | 4,124 | ||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 1,443 | $ | 414 | ||||
Accounts payable | 342 | 1,193 | ||||||
Accrued expenses and other current liabilities | 92 | 76 | ||||||
Total current liabilities | 1,877 | 1,683 | ||||||
Long-term debt | 4,912 | 1,689 | ||||||
Other liabilities | 614 | 526 | ||||||
Partners’ (deficit) equity | (4,722 | ) | 226 | |||||
Total liabilities and partners’ equity | $ | 2,681 | $ | 4,124 |
Year Ended | ||||||||
2012 | 2011 | |||||||
Income statement information: | ||||||||
Revenues | $ | 2,322 | $ | 69 | ||||
Loss before income taxes and net loss | (5,322 | ) | (2,293 | ) |
Year End | |||||||
2012 | 2011 | ||||||
Owned: | |||||||
Land | $ | 400,571 | $ | 401,950 | |||
Buildings and improvements | 421,127 | 384,798 | |||||
Office, restaurant and transportation equipment (a) | 446,022 | 352,595 | |||||
Leasehold improvements | 345,415 | 323,701 | |||||
Leased: | |||||||
Capital leases (b) | 36,551 | 27,514 | |||||
1,649,686 | 1,490,558 | ||||||
Accumulated depreciation and amortization (c) | (399,348 | ) | (298,358 | ) | |||
$ | 1,250,338 | $ | 1,192,200 |
(a) | Includes a company-owned aircraft at December 30, 2012. This aircraft was classified as held for sale at January 1, 2012 and was included in “Prepaid expenses and other current assets.” |
(b) | These assets principally include buildings and improvements. |
(c) | Includes $10,273 and $8,139 of accumulated amortization related to capital leases at December 30, 2012 and January 1, 2012, respectively. |
Year End | ||||||||
2012 | 2011 | |||||||
Balance at beginning of year | $ | 870,431 | $ | 883,644 | ||||
Arby’s disposition, net of accumulated impairment losses of $482,075 | — | (17,617 | ) | |||||
Restaurant acquisitions and dispositions, net | 4,567 | 5,626 | ||||||
Currency translation adjustment | 1,203 | (1,222 | ) | |||||
Balance at end of year | $ | 876,201 | $ | 870,431 |
Year End 2012 | Year End 2011 | ||||||||||||||||||||||
Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | ||||||||||||||||||
Indefinite-lived: | |||||||||||||||||||||||
Trademarks | $ | 903,000 | $ | — | $ | 903,000 | $ | 903,000 | $ | — | $ | 903,000 | |||||||||||
Definite-lived: | |||||||||||||||||||||||
Franchise agreements | 353,778 | (71,795 | ) | 281,983 | 353,262 | (54,853 | ) | 298,409 | |||||||||||||||
Favorable leases | 103,914 | (30,369 | ) | 73,545 | 108,304 | (24,961 | ) | 83,343 | |||||||||||||||
Reacquired rights under franchise agreements | 23,065 | (779 | ) | 22,286 | 1,215 | (1 | ) | 1,214 | |||||||||||||||
Computer software | 45,005 | (24,282 | ) | 20,723 | 36,817 | (18,495 | ) | 18,322 | |||||||||||||||
$ | 1,428,762 | $ | (127,225 | ) | $ | 1,301,537 | $ | 1,402,598 | $ | (98,310 | ) | $ | 1,304,288 |
Aggregate amortization expense: | |||
Actual for fiscal year (a): | |||
2010 | $ | 36,662 | |
2011 | 33,181 | ||
2012 | 32,713 | ||
Estimate for fiscal year: | |||
2013 | $ | 31,385 | |
2014 | 30,872 | ||
2015 | 28,560 | ||
2016 | 26,487 | ||
2017 | 25,400 | ||
Thereafter | 255,833 |
(a) | Includes $1,757, $2,763, and $5,125 of impairment charges related to other intangible assets in 2012, 2011 and 2010, respectively. |
Year End | ||||||||
2012 | 2011 | |||||||
Accrued compensation and related benefits | $ | 67,862 | $ | 67,560 | ||||
Accrued taxes | 28,593 | 37,040 | ||||||
Accrued interest | 6,211 | 29,958 | ||||||
Other | 34,682 | 43,740 | ||||||
$ | 137,348 | $ | 178,298 |
Year End | |||||||
2012 | 2011 | ||||||
Term Loan, due in 2019 (a) | $ | 1,114,826 | $ | — | |||
Senior Notes, repaid in July 2012 (a) | — | 554,901 | |||||
2010 Term Loan, repaid in May 2012 (a) | — | 466,062 | |||||
6.20% senior notes, due in 2014 (b) | 225,940 | 224,643 | |||||
7% debentures, due in 2025 (c) | 83,496 | 82,342 | |||||
Capital lease obligations, due through 2040 | 32,594 | 16,688 | |||||
6.54% aircraft term loan, repaid in June 2012 (d) | — | 11,303 | |||||
Other | 706 | 1,060 | |||||
1,457,562 | 1,356,999 | ||||||
Less amounts payable within one year | (12,911 | ) | (6,597 | ) | |||
Total long-term debt | $ | 1,444,651 | $ | 1,350,402 |
Fiscal Year | ||||
2013 | $ | 12,911 | ||
2014 | 237,990 | |||
2015 | 15,397 | |||
2016 | 12,396 | |||
2017 | 12,588 | |||
Thereafter | 1,192,018 | |||
$ | 1,483,300 |
(a) | On May 15, 2012, Wendy’s entered into a Credit Agreement, as amended (the “Credit Agreement”), which includes a senior secured term loan facility (the “Term Loan”) of $1,125,000 and a senior secured revolving credit facility of $200,000 and contains provisions for an uncommitted increase of up to $275,000 principal amount of the revolving credit facility and/or Term Loan subject to the satisfaction of certain conditions. The revolving credit facility includes a sub-facility for the issuance of up to $70,000 of letters of credit. The Credit Agreement replaced the $650,000 credit agreement and the amended senior secured term loan (the “2010 Term Loan”) executed in 2010. The obligations under the Credit Agreement are secured by substantially all of the non-real estate assets and stock of Wendy’s and its domestic subsidiaries (other than certain unrestricted subsidiaries) and 65% of the stock of certain of its foreign subsidiaries in each case subject to certain limitations and exceptions. |
Year Ended 2012 | |||
Premium payment to redeem/purchase Senior Notes | $ | 43,151 | |
Unaccreted discount on Senior Notes | 9,272 | ||
Deferred costs associated with the Senior Notes | 12,433 | ||
Unaccreted discount on 2010 Term Loan | 1,695 | ||
Deferred costs associated with the 2010 Term Loan | 8,525 | ||
Loss on early extinguishment of debt | $ | 75,076 |
(b) | Wendy’s 6.20% senior notes were reduced to fair value in connection with the Wendy’s merger based on outstanding principal of $225,000 and an effective interest rate of 7.0%. The fair value adjustment is being accreted and the related charge included in “Interest expense” until the notes mature. The carrying value of the Wendy’s senior notes is adjusted to reflect the fair value of interest rate swaps associated with this debt. As of December 30, 2012 and January 1, 2012, this adjustment increased the carrying value of the 6.20% senior notes by $8,169 and $11,695, respectively. These notes are unsecured and are redeemable prior to maturity at our option. The Wendy’s senior notes contain covenants that restrict the incurrence of indebtedness secured by liens and certain capitalized lease transactions. Wendy’s was in compliance with these covenants as of December 30, 2012. |
(c) | Wendy’s 7% debentures are unsecured and were reduced to fair value in connection with the Wendy’s merger based on their outstanding principal of $100,000 and an effective interest rate of 8.6%. The fair value adjustment is being accreted and the related charge included in “Interest expense” until the debentures mature. These debentures contain covenants |
(d) | During the first quarter of 2012, the Company made a $3,911 prepayment on its aircraft financing facility to comply with a requirement that the outstanding principal balance be no more than 85% of the appraised value of the aircraft. On June 25, 2012, the Company voluntarily repaid the remaining outstanding principal, including accrued interest thereon related to this facility, totaling $6,656. |
December 30, 2012 | January 1, 2012 | ||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Fair Value Measurements | |||||||||||||
Financial assets | |||||||||||||||||
Non-current cost method investments (a) | $ | 23,913 | $ | 50,761 | $ | 27,452 | $ | 62,496 | Level 3 | ||||||||
Interest rate swaps (b) | 8,169 | 8,169 | 11,695 | 11,695 | Level 2 | ||||||||||||
Financial liabilities | |||||||||||||||||
Term Loan, due in 2019 (c) | 1,114,826 | 1,130,434 | — | — | Level 2 | ||||||||||||
Senior Notes, repaid in July 2012 (c) | — | — | 554,901 | 621,500 | Level 2 | ||||||||||||
2010 Term Loan, repaid in May 2012 (c) | — | — | 466,062 | 466,940 | Level 2 | ||||||||||||
6.20% senior notes, due in 2014 (c) | 225,940 | 240,750 | 224,643 | 231,750 | Level 2 | ||||||||||||
7% debentures, due in 2025 (c) | 83,496 | 99,900 | 82,342 | 84,000 | Level 2 | ||||||||||||
Capital lease obligations (d) | 32,594 | 33,299 | 16,688 | 18,123 | Level 3 | ||||||||||||
6.54% aircraft term loan, repaid in June 2012 (d) | — | — | 11,303 | 11,367 | Level 3 | ||||||||||||
Other | 706 | 707 | 1,060 | 1,072 | Level 3 | ||||||||||||
Guarantees of franchisee loan obligations (e) | 940 | 940 | 1,275 | 1,275 | Level 3 |
(a) | The fair value of our indirect investment in Arby’s is based on a review of its current unaudited financial information. The fair values of the remaining investments were principally based on quoted market or broker/dealer prices. To the extent that some of these investments, including the underlying investments in investment limited partnerships, do not have available quoted market or broker/dealer prices, we relied on our review of valuations performed by the investment managers or investees or third party appraisals. The fair value of our investment in Jurlique at January 1, 2012 was based upon an agreement with a third party to purchase Jurlique (which was completed in February 2012). See Note 8 for more information related to the sale of Jurlique. |
(b) | The fair values were based on information provided by the bank counterparties that is model-driven and where inputs were observable or where significant value drivers were observable. |
(c) | The fair values were based on quoted market prices in markets that are not considered active markets. |
(d) | The fair values were determined by discounting the future scheduled principal payments using an interest rate assuming the same original issuance spread over a current U.S. Treasury bond yield for securities with similar durations. |
(e) | Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into pooled debt facility arrangements for new restaurant development and equipment financing. During 2012, Wendy’s provided a guarantee to a lender for a franchisee in connection with the refinancing of the franchisee’s debt. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage established at inception adjusted for a history of defaults. |
Fair Value Measurements | 2012 Total Losses | ||||||||||||||||||
December 30, 2012 | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Long-lived assets | $ | 7,311 | $ | — | $ | — | $ | 7,311 | $ | 19,469 | |||||||||
Aircraft | 5,926 | — | — | 5,926 | 1,628 | ||||||||||||||
Total | $ | 13,237 | $ | — | $ | — | $ | 13,237 | $ | 21,097 |
Fair Value Measurements | 2011 Total Losses | ||||||||||||||||||
January 1, 2012 | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Long-lived assets | $ | 575 | $ | — | $ | — | $ | 575 | $ | 12,883 | |||||||||
Total | $ | 575 | $ | — | $ | — | $ | 575 | $ | 12,883 |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Domestic | $ | (23,154 | ) | $ | 11,967 | $ | (2,244 | ) | ||||
Foreign, principally Canada | 10,029 | 12,473 | 15,800 | |||||||||
$ | (13,125 | ) | $ | 24,440 | $ | 13,556 |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Current: | ||||||||||||
U.S. Federal | $ | 104 | $ | — | $ | — | ||||||
State | (669 | ) | (675 | ) | (5,774 | ) | ||||||
Foreign, principally Canada | (8,667 | ) | (5,540 | ) | (7,076 | ) | ||||||
Current tax provision | (9,232 | ) | (6,215 | ) | (12,850 | ) | ||||||
Deferred: | ||||||||||||
U.S. Federal | 6,458 | 1,367 | 10,982 | |||||||||
State | 18,026 | (2,788 | ) | 4,356 | ||||||||
Foreign, principally Canada | 5,831 | 1,108 | 2,067 | |||||||||
Deferred tax benefit (provision) | 30,315 | (313 | ) | 17,405 | ||||||||
Income tax benefit (provision) | $ | 21,083 | $ | (6,528 | ) | $ | 4,555 |
Year End | ||||||||
2012 | 2011 | |||||||
Deferred tax assets: | ||||||||
Operating and capital loss carryforwards | $ | 108,297 | $ | 98,173 | ||||
Tax credit carryforwards | 91,319 | 83,708 | ||||||
Accrued compensation and related benefits | 35,397 | 38,198 | ||||||
Unfavorable leases | 16,581 | 18,731 | ||||||
Accrued expenses and reserves | 32,090 | 35,338 | ||||||
Other | 18,442 | 20,679 | ||||||
Valuation allowances | (21,052 | ) | (17,397 | ) | ||||
Total deferred tax assets | 281,074 | 277,430 | ||||||
Deferred tax liabilities: | ||||||||
Intangible assets | (480,790 | ) | (502,570 | ) | ||||
Owned and leased fixed assets net of related obligations | (121,706 | ) | (125,788 | ) | ||||
Other | (25,306 | ) | (26,209 | ) | ||||
Total deferred tax liabilities | (627,802 | ) | (654,567 | ) | ||||
$ | (346,728 | ) | $ | (377,137 | ) |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Income tax benefit (provision) at the U.S. Federal statutory rate | $ | 4,594 | $ | (8,554 | ) | $ | (4,745 | ) | ||||
State income tax benefit (provision), net of U.S. Federal income tax effect | 7,709 | (2,251 | ) | (1,122 | ) | |||||||
Corrections related to prior years’ tax matters (a) | 7,620 | — | — | |||||||||
Foreign and U.S. tax effects of foreign operations (b) | 347 | 1,147 | 7,693 | |||||||||
Dividends received deduction (c) | 1,133 | — | — | |||||||||
Jobs tax credits, net | 970 | 1,914 | 2,044 | |||||||||
Non-deductible expenses | (1,263 | ) | (622 | ) | (439 | ) | ||||||
Adjustments related to prior year tax matters | (359 | ) | 1,881 | 983 | ||||||||
Other, net (d) | 332 | (43 | ) | 141 | ||||||||
$ | 21,083 | $ | (6,528 | ) | $ | 4,555 |
(a) | Corrections in 2012 related to tax matters in prior years for the effects of tax depreciation in states that do not follow federal law of $3,300, the effects of a one-time federal employment tax credit in 2011 of $2,220 and a correction to certain deferred tax assets and liabilities of $2,100. |
(b) | Includes previously unrecognized benefit in 2010 of foreign tax credits, net of foreign income and withholding taxes on the repatriation of foreign earnings. |
(c) | During 2012, we received a dividend of $4,625 from our investment in Arby’s (see Note 8 for further information). |
(d) | Includes U.S. Federal uncertain tax positions in 2012. |
Year End | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Beginning balance | $ | 30,614 | $ | 36,434 | $ | 39,118 | ||||||
Additions: | ||||||||||||
Tax positions related to the current year | — | — | 19 | |||||||||
Tax positions of prior years | 3,410 | 948 | 4,921 | |||||||||
Reductions: | ||||||||||||
Tax positions of prior years | (2,964 | ) | (3,410 | ) | (4,419 | ) | ||||||
Settlements | (1,327 | ) | (1,922 | ) | (416 | ) | ||||||
Lapse of statute of limitations | (885 | ) | (1,436 | ) | (2,789 | ) | ||||||
Ending balance | $ | 28,848 | $ | 30,614 | $ | 36,434 |
Treasury Stock | |||||||||
2012 | 2011 | 2010 | |||||||
Number of shares at beginning of year | 80,700 | 52,050 | 17,492 | ||||||
Repurchase of common stock | — | 30,983 | 35,406 | ||||||
Common shares issued: | |||||||||
Stock options, net | (2,079 | ) | (1,461 | ) | (383 | ) | |||
Restricted stock, net | (211 | ) | (693 | ) | (266 | ) | |||
Director fees | (45 | ) | (42 | ) | (47 | ) | |||
Other | (314 | ) | (137 | ) | (152 | ) | |||
Number of shares at end of year | 78,051 | 80,700 | 52,050 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Aggregate Intrinsic Value | |||||||||
Outstanding at January 1, 2012 | 30,259 | $ | 6.16 | |||||||||
Granted | 6,073 | 4.69 | ||||||||||
Exercised | (3,233 | ) | 4.10 | |||||||||
Forfeited and/or expired | (4,538 | ) | 6.35 | |||||||||
Outstanding at December 30, 2012 | 28,561 | $ | 6.05 | 5.7 | $ | 4,513 | ||||||
Vested or expected to vest at December 30, 2012 | 27,944 | $ | 6.08 | 5.6 | $ | 4,444 | ||||||
Exercisable at December 30, 2012 | 19,161 | $ | 6.71 | 4.0 | $ | 3,457 |
2012 | 2011 | 2010 | ||||||
Risk-free interest rate | 0.98 | % | 1.74 | % | 2.01 | % | ||
Expected option life in years | 6.62 | 5.62 | 5.40 | |||||
Expected volatility | 45.9 | % | 45.2 | % | 45.2 | % | ||
Expected dividend yield | 1.71 | % | 1.59 | % | 1.53 | % |
Number of Restricted Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested at January 1, 2012 | 1,043 | $ | 4.82 | |||
Granted | 1,332 | 4.64 | ||||
Vested | (446 | ) | 4.60 | |||
Forfeited | (53 | ) | 4.62 | |||
Non-vested at December 30, 2012 | 1,876 | $ | 4.72 |
2012 | 2011 | 2010 | ||||||
Risk-free interest rate | 0.41 | % | 0.61 | % | 0.93 | % | ||
Expected life in years | 2.99 | 3.02 | 2.98 | |||||
Expected volatility | 34.0 | % | 52.0 | % | 55.0 | % | ||
Expected dividend yield (a) | 0.00 | % | 0.00 | % | 0.00 | % |
(a) | The Monte Carlo method assumes a reinvestment of dividends. |
Performance Condition Awards | Market Condition Awards | ||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||
Non-vested at January 1, 2012 | 655 | $ | 3.91 | 1,441 | $ | 6.46 | |||||||
Granted | — | — | 896 | 6.04 | |||||||||
Dividend equivalent units issued (a) | 11 | — | 39 | — | |||||||||
Vested | — | — | — | — | |||||||||
Forfeited | (155 | ) | 3.91 | (229 | ) | 6.37 | |||||||
Non-vested at December 30, 2012 | 511 | $ | 3.91 | 2,147 | $ | 6.38 |
(a) | Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares. There is no weighted average fair value associated with dividend equivalent units. |
Year Ended | |||||||||||
2012 | 2011 | 2010 | |||||||||
Stock options (a) | $ | 5,578 | $ | 9,898 | $ | 7,700 | |||||
Restricted Shares | 2,730 | 1,943 | 2,311 | ||||||||
Performance Shares: | |||||||||||
Performance Condition Shares | — | 820 | — | ||||||||
Market Condition Shares (b) | 3,210 | 4,688 | 478 | ||||||||
Compensation adjustments, net (c) | (45 | ) | (361 | ) | — | ||||||
Compensation expense credited to “Stockholders’ Equity” (d) | 11,473 | 16,988 | 10,489 | ||||||||
Interest on Restricted Share dividends | — | 2 | 3 | ||||||||
Total share-based compensation expense | 11,473 | 16,990 | 10,492 | ||||||||
Less: Income tax benefit | (4,286 | ) | (6,338 | ) | (3,773 | ) | |||||
Share-based compensation expense, net of income tax benefit | $ | 7,187 | $ | 10,652 | $ | 6,719 |
(a) | 2011 includes expense of $3,068 for the accelerated vesting of awards in conjunction with the sale of Arby’s and the announcement of the relocation of the Company’s Atlanta restaurant support center to Ohio. |
(b) | 2011 includes expense of $2,347 for the accelerated vesting of awards partially offset by a credit of $384 for awards that were forfeited in conjunction with the sale of Arby’s and the announcement of the relocation of the Company’s Atlanta restaurant support center to Ohio. |
(c) | Adjustments relate to modifications of share-based compensation awards. |
(d) | Excludes $700 and $3,215 for 2011 and 2010, respectively, which is included in discontinued operations. |
Year Ended | |||||||
2012 | 2011 | ||||||
Facilities relocation and other transition costs | $ | 28,990 | $ | 5,527 | |||
Breakfast discontinuation | 10,569 | — | |||||
Arby’s transaction related costs | 1,472 | 40,184 | |||||
$ | 41,031 | $ | 45,711 |
Year Ended | Total Incurred Since Inception | Total Expected to be Incurred | ||||||||||||||
2012 | 2011 | |||||||||||||||
Severance, retention and other payroll costs | $ | 9,952 | $ | 5,345 | $ | 15,297 | $ | 16,577 | ||||||||
Relocation costs | 5,222 | — | 5,222 | 7,546 | ||||||||||||
Atlanta facility closure costs | 4,541 | — | 4,541 | 4,541 | ||||||||||||
Consulting and professional fees | 4,928 | — | 4,928 | 5,968 | ||||||||||||
Other | 2,126 | 14 | 2,140 | 2,250 | ||||||||||||
26,769 | 5,359 | 32,128 | 36,882 | |||||||||||||
Accelerated depreciation expense | 1,921 | 197 | 2,118 | 2,118 | ||||||||||||
Share-based compensation | 300 | (29 | ) | 271 | 271 | |||||||||||
Total | $ | 28,990 | $ | 5,527 | $ | 34,517 | $ | 39,271 |
Balance January 1, 2012 | Charges | Payments | Balance December 30, 2012 | |||||||||||||
Severance, retention and other payroll costs | $ | 5,345 | $ | 9,952 | $ | (11,176 | ) | $ | 4,121 | |||||||
Relocation costs | — | 5,222 | (4,722 | ) | 500 | |||||||||||
Atlanta facility closure costs | — | 4,541 | (371 | ) | 4,170 | |||||||||||
Consulting and professional fees | — | 4,928 | (4,848 | ) | 80 | |||||||||||
Other | — | 2,126 | (2,117 | ) | 9 | |||||||||||
$ | 5,345 | $ | 26,769 | $ | (23,234 | ) | $ | 8,880 |
Balance January 2, 2011 | Charges | Payments | Balance January 1, 2012 | |||||||||||||
Severance, retention and other payroll costs | $ | — | $ | 5,345 | $ | — | $ | 5,345 | ||||||||
Other | — | 14 | (14 | ) | — | |||||||||||
$ | — | $ | 5,359 | $ | (14 | ) | $ | 5,345 |
Year Ended | Total Incurred Since Inception | Total Expected to Be Incurred | ||||||||||||||
2012 | 2011 | |||||||||||||||
Severance, retention and other payroll costs (a) | $ | 615 | $ | 29,194 | $ | 29,809 | $ | 29,809 | ||||||||
Relocation costs (b) | 349 | 1,670 | 2,019 | 2,421 | ||||||||||||
Consulting and professional fees | 7 | 2,935 | 2,942 | 2,942 | ||||||||||||
Other | 278 | 288 | 566 | 566 | ||||||||||||
1,249 | 34,087 | 35,336 | 35,738 | |||||||||||||
Share-based compensation (a)(b) | 223 | 6,097 | 6,320 | 6,717 | ||||||||||||
$ | 1,472 | $ | 40,184 | $ | 41,656 | $ | 42,455 |
(a) | 2011 transaction related costs included $20,806 of costs incurred by the Company in accordance with the termination provisions of the employment agreements for three senior executives (principally for required payments of $14,481 and vesting of previously issued stock awards of $6,325). |
(b) | Relocation costs are expensed as incurred. However, payments of $750 made due to the relocation of a corporate executive will be expensed over the three year period following this executive’s relocation in accordance with the terms of the agreement. The agreement also included a restricted share award with a grant date fair value of $750 which is being expensed over a three year requisite service period. These expenses are the only remaining Arby’s transaction related costs expected to be incurred. |
Balance January 1, 2012 | Charges | Payments | Balance December 30, 2012 | |||||||||||||
Severance, retention and other payroll costs | $ | 14,414 | $ | 615 | $ | (14,333 | ) | $ | 696 | |||||||
Relocation costs | 1,101 | 349 | (1,450 | ) | — | |||||||||||
Consulting and professional fees | — | 7 | (7 | ) | — | |||||||||||
Other | — | 278 | (278 | ) | — | |||||||||||
$ | 15,515 | $ | 1,249 | $ | (16,068 | ) | $ | 696 |
Balance January 2, 2011 | Charges | Payments | Balance January 1, 2012 | |||||||||||||
Severance, retention and other payroll costs | $ | — | $ | 29,194 | $ | (14,780 | ) | $ | 14,414 | |||||||
Relocation costs | — | 1,670 | (569 | ) | 1,101 | |||||||||||
Consulting and professional fees | — | 2,935 | (2,935 | ) | — | |||||||||||
Other | — | 288 | (288 | ) | — | |||||||||||
$ | — | $ | 34,087 | $ | (18,572 | ) | $ | 15,515 |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Properties | $ | 17,712 | $ | 10,120 | $ | 21,201 | ||||||
Intangible assets | 1,757 | 2,763 | 5,125 | |||||||||
Aircraft | 1,628 | — | — | |||||||||
$ | 21,097 | $ | 12,883 | $ | 26,326 |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Gain on sale of investments, net (a) | $ | 27,769 | $ | 250 | $ | 179 | ||||||
Distributions, including dividends (b) | 8,463 | 234 | 248 | |||||||||
Gain on DFR Notes | — | — | 4,909 | |||||||||
Other, net | 11 | — | (77 | ) | ||||||||
$ | 36,243 | $ | 484 | $ | 5,259 |
(a) | In 2012, we recorded a gain on the sale of our investment in Jurlique of $27,407, which included a loss of $2,913 on the settlement of the derivative transaction discussed in Note 8. |
(b) | During 2012, we received a $4,625 dividend from our investment in Arby's. |
Pension Protection Act Zone Status (a) | Funding Improvement Plan/Rehabilitation Plan Status | Wendy’s Contributions (b) | Surcharge Imposed | Expiration Date of Collective Bargaining Agreement | ||||||||||||||||
Pension Fund | EIN | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||
Union Pension Fund | 52-6118572 | Red | Green | Green | Implemented | $785 | $781 | $766 | Yes | 3/31/2013 |
(a) | The Union Pension Fund elected an expanded asset smoothing period of 10 years for the investment loss incurred in the plan year ended December 31, 2008 and an increase in the limits on the actuarial value of the assets to 130% of market value for the plan years beginning January 1, 2009 and 2010, as permitted under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. The Union Pension Plan certified its zone status after making this election. |
(b) | In accordance with the terms of the New CBA, Wendy’s is required to make minimum contributions of $3.00 per hour of employment for each employee covered under the Union Pension Fund. As of December 30, 2012, based on approximately 281,000 hours of expected employment, Wendy’s minimum annual contribution to the Union Pension Fund would be $843, inclusive of the 10% surcharge discussed above. |
Year Ended | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Minimum rentals | $ | 70,525 | $ | 70,478 | $ | 68,849 | ||||||
Contingent rentals | 10,971 | 10,468 | 10,033 | |||||||||
81,496 | 80,946 | 78,882 | ||||||||||
Less sublease income | (13,317 | ) | (15,084 | ) | (14,275 | ) | ||||||
$ | 68,179 | $ | 65,862 | $ | 64,607 |
Rental Payments | Rental Receipts | ||||||||||||||||||
Fiscal Year | Capital Leases | Operating Leases | Capital Leases | Operating Leases | Owned Properties | ||||||||||||||
2013 | $ | 4,393 | $ | 66,426 | $ | 598 | $ | 5,953 | $ | 4,547 | |||||||||
2014 | 4,625 | 58,486 | 605 | 5,664 | 4,487 | ||||||||||||||
2015 | 4,715 | 54,651 | 605 | 5,258 | 4,457 | ||||||||||||||
2016 | 4,158 | 50,735 | 635 | 4,985 | 4,422 | ||||||||||||||
2017 | 3,999 | 49,149 | 631 | 4,527 | 4,462 | ||||||||||||||
Thereafter | 43,804 | 642,458 | 5,866 | 32,412 | 54,290 | ||||||||||||||
Total minimum payments | $ | 65,694 | $ | 921,905 | $ | 8,940 | $ | 58,799 | $ | 76,665 | |||||||||
Less amounts representing interest, with interest rates between 3% and 33% | (33,100 | ) | |||||||||||||||||
Present value of minimum lease payments | $ | 32,594 |
Year End | ||||||||
2012 | 2011 | |||||||
Land | $ | 28,989 | $ | 24,211 | ||||
Buildings and improvements | 64,286 | 58,505 | ||||||
Office, restaurant and transportation equipment | 4,337 | 4,377 | ||||||
97,612 | 87,093 | |||||||
Accumulated depreciation and amortization | (26,905 | ) | (20,019 | ) | ||||
$ | 70,707 | $ | 67,074 |
Year Ended | |||||||||||
2012 | 2011 | 2010 | |||||||||
Transactions with Purchasing Cooperatives: | |||||||||||
Wendy’s Co-Op (a) | $ | (2,464 | ) | $ | (2,033 | ) | $ | (1,238 | ) | ||
SSG agreement (b) | — | (2,275 | ) | 5,145 | |||||||
Lease income (c) | (191 | ) | (203 | ) | (137 | ) | |||||
Transactions with the Management Company: | |||||||||||
Advisory fees (d) | $ | — | $ | 500 | $ | 3,465 | |||||
Sublease income (e) | (683 | ) | (1,631 | ) | (1,632 | ) | |||||
Use of company-owned aircraft (f) | (92 | ) | (138 | ) | (120 | ) | |||||
Liquidation services agreement (g) | — | 220 | 441 | ||||||||
Distributions of proceeds to noncontrolling interests (h) | $ | 3,667 | $ | — | $ | — |
(a) | During the fourth quarter of 2009, Wendy’s entered into a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees to establish QSCC. QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national contracts with pricing based upon total system volume. |
(b) | On April 5, 2010, QSCC and the Arby’s independent purchasing cooperative (“ARCOP”) in consultation with Wendy’s Restaurants, established Strategic Sourcing Group Co-op, LLC (“SSG”). SSG was formed to manage and operate purchasing programs for certain non-perishable goods, equipment and services. Wendy’s Restaurants had committed to pay approximately $5,145 of SSG expenses, which were expensed in 2010 and included in “General and administrative,” and were to be paid over a 24 month period through March 2012. However, in anticipation of the sale of Arby’s, effective April 2011, SSG was dissolved and its activities were transferred to QSCC and ARCOP and the remaining accrued commitment of $2,275 was reversed and credited to “General and administrative.” |
(c) | Effective January 4, 2010, QSCC leased 9,333 square feet of office space from Wendy’s. Effective January 1, 2011, Wendy’s and QSCC entered into a lease amendment which increased the office space leased to QSCC to 14,333 square feet for a one year period for a revised annual base rental of $176 with five one-year renewal options, three of which are currently remaining. During the period from April 2010 to April 2011, SSG leased 2,300 square feet of office space from a subsidiary of Wendy’s Restaurants. The Wendy’s Company received $191, $180 and $113 of lease income from QSCC during 2012, 2011 and 2010, respectively, and $23 and $24 of lease income from SSG during 2011 and 2010, respectively, both of which have been recorded as reductions of “General and administrative.” |
(d) | The Wendy’s Company entered into a services agreement (the “Services Agreement”) with a management company formed by the Former Executives and a director, who was our former Vice Chairman (the “Management Company”), which commenced on July 1, 2009 and expired on June 30, 2011. Under the Services Agreement, the Management Company assisted us with strategic merger and acquisition consultation, corporate finance and investment banking services and related legal matters. The Wendy’s Company paid approximately $2,465 in 2010 in fees for corporate finance advisory services under the Services Agreement in connection with the negotiation and execution of the $650,000 credit agreement in 2010 and the issuance of the Senior Notes in 2009. |
(e) | In July 2008 and July 2007, The Wendy’s Company entered into agreements under which the Management Company subleased (the “Subleases”) office space on two of the floors of the Company’s former New York headquarters. During the second quarter of 2010, The Wendy’s Company and the Management Company entered into an amendment to the sublease, effective April 1, 2010, pursuant to which the Management Company’s early termination right was canceled in exchange for a reduction in rent. Under the terms of the amended sublease, which expired in May 2012, the Management Company paid rent to the Company in an amount that covered substantially all of the Company’s rent obligations under the prime lease for the subleased space. The Company recognized income of $683, $1,631, and $1,632 from the Management Company under such subleases in 2012, 2011 and 2010, respectively, which has been recorded as a reduction of “General and administrative.” |
(f) | In June 2009, The Wendy’s Company and TASCO, LLC (an affiliate of the Management Company) (“TASCO”) entered into an aircraft lease agreement (the “Aircraft Lease Agreement”) to lease a company-owned aircraft. The Aircraft Lease Agreement originally provided that The Wendy’s Company would lease such company-owned aircraft to TASCO from July 1, 2009 until June 30, 2010. On June 24, 2010, The Wendy’s Company and TASCO renewed the Aircraft Lease Agreement for an additional one year period (expiring on June 30, 2011). Under the Aircraft Lease Agreement, TASCO paid $10 per month for such aircraft plus substantially all operating costs of the aircraft including all costs of fuel, inspection, servicing and certain storage, as well as operational and flight crew costs relating to the operation of the aircraft, and all transit maintenance costs and other maintenance costs required as a result of TASCO’s usage of the aircraft. The Wendy’s Company continued to be responsible for calendar-based maintenance and any extraordinary and unscheduled repairs and/or maintenance for the aircraft, as well as insurance and other costs. |
(g) | On June 10, 2009, The Wendy’s Company and the Management Company entered into a liquidation services agreement (the “Liquidation Services Agreement”) pursuant to which the Management Company assisted us in the sale, liquidation or other disposition of our cost investments and DFR Notes. The Liquidation Services Agreement required The Wendy’s Company to pay the Management Company a fee of $900 in two installments in June 2009 and 2010, which was deferred and amortized through its June 30, 2011 expiration date. Related amortization of $220 and $441 was recorded in “General and administrative” in 2011 and 2010, respectively. |
(h) | Jurl, a 99.7% owned subsidiary, completed the sale of our investment in Jurlique in February 2012. Prior to 2009, when our predecessor entity was a diversified company active in investments, we had provided our Former Executives, and certain other former employees, equity and profit interests in Jurl. In connection with the sale of Jurlique, we distributed, based on the related agreement, approximately $3,667 to Jurl’s minority shareholders, including approximately $2,296 to the Former Executives during 2012. |
Year End | ||||||||
2012 | 2011 | |||||||
Cash and cash equivalents | $ | 21,086 | $ | 27,590 | ||||
Accounts and notes receivable | 38,359 | 37,025 | ||||||
Other assets | 6,332 | 5,932 | ||||||
Total assets | $ | 65,777 | $ | 70,547 | ||||
Accounts payable | $ | 3,729 | $ | 2,972 | ||||
Accrued expenses and other current liabilities | 63,073 | 73,870 | ||||||
Member’s deficit | (1,025 | ) | (6,295 | ) | ||||
Total liabilities and deficit | $ | 65,777 | $ | 70,547 |
U.S. | Canada | Other International | Total | |||||||||||||
2012 | ||||||||||||||||
Revenues | $ | 2,231,270 | $ | 257,750 | $ | 16,222 | $ | 2,505,242 | ||||||||
Properties | 1,186,879 | 63,412 | 47 | 1,250,338 |
2011 | ||||||||||||||||
Revenues | $ | 2,161,281 | $ | 254,683 | $ | 15,394 | $ | 2,431,358 | ||||||||
Properties | 1,132,796 | 59,379 | 25 | 1,192,200 |
2010 | ||||||||||||||||
Revenues | $ | 2,117,000 | $ | 244,654 | $ | 13,785 | $ | 2,375,439 | ||||||||
Properties | 1,490,064 | 61,178 | 19 | 1,551,261 |
2012 Quarter Ended | ||||||||||||||||
April 1 (a)(b) | July 1 (a)(c) | September 30 (a)(c)(d) | December 30 (a)(d) | |||||||||||||
Revenues | $ | 593,187 | $ | 645,868 | $ | 636,308 | $ | 629,879 | ||||||||
Cost of sales | 455,467 | 483,080 | 478,425 | 464,276 | ||||||||||||
Operating profit | 20,916 | 38,391 | 31,183 | 32,257 | ||||||||||||
Income (loss) from continuing operations | 14,734 | (5,493 | ) | (26,692 | ) | 25,409 | ||||||||||
Income from discontinued operations | — | — | 530 | 979 | ||||||||||||
Net income attributable to noncontrolling interests | (2,384 | ) | — | — | — | |||||||||||
Net income (loss) attributable to The Wendy’s Company | 12,350 | (5,493 | ) | (26,162 | ) | 26,388 | ||||||||||
Basic and diluted income (loss) per share attributable to The Wendy’s Company (e): | ||||||||||||||||
Continuing operations | $ | .03 | $ | (.01 | ) | $ | (.07 | ) | $ | .07 | ||||||
Discontinued operations | — | — | — | — | ||||||||||||
Net income (loss) | $ | .03 | $ | (.01 | ) | $ | (.07 | ) | $ | .07 |
2011 Quarter Ended | ||||||||||||||||
April 3 (f) | July 3 (f) | October 2 (f) | January 1, 2012 (f) | |||||||||||||
Revenues | $ | 582,465 | $ | 622,459 | $ | 611,416 | $ | 615,018 | ||||||||
Cost of sales | 438,871 | 464,798 | 458,000 | 454,440 | ||||||||||||
Operating profit | 28,017 | 47,434 | 32,390 | 29,280 | ||||||||||||
(Loss) income from continuing operations | (296 | ) | 11,374 | 2,544 | 4,290 | |||||||||||
Loss from discontinued operations | (1,113 | ) | (108 | ) | (6,510 | ) | (306 | ) | ||||||||
Net (loss) income | (1,409 | ) | 11,266 | (3,966 | ) | 3,984 | ||||||||||
Basic and diluted income (loss) per share (e): | ||||||||||||||||
Continuing operations | $ | — | $ | .03 | $ | .01 | $ | .01 | ||||||||
Discontinued operations | — | — | (.02 | ) | — | |||||||||||
Net (loss) income | $ | — | $ | .03 | $ | (.01 | ) | $ | .01 |
(a) | Operating profit in 2012 was materially affected by facilities relocation costs and other transactions and impairment of long-lived assets. The impact of facilities relocation costs and other transactions on net income (loss) attributable to The Wendy’s Company for the first, second, third and fourth quarters of 2012 was $3,808, $6,164, $7,066 and $8,311, respectively, after income tax benefits of $2,335, $3,824, $4,364 and $5,159, respectively (see Note 17 for additional information). The impact of the impairment of long-lived assets on net income (loss) attributable to The Wendy’s Company during the first, second and fourth quarters of 2012 was $2,783, $2,018 and $8,216, respectively, after income tax benefits of $1,728, $1,252 and $5,100, respectively (see Note 18 for additional information). |
(b) | Net income attributable to The Wendy’s Company was materially affected during the first quarter of 2012 by a $17,978 gain on the sale of our investment in Jurlique. As a result of the sale, we have reflected net income attributable to noncontrolling interests of $2,384. See Note 8 for additional information. |
(c) | Net loss attributable to The Wendy’s Company was materially affected during the second and third quarters of 2012 by losses on the early extinguishment of debt of $15,621 and $30,926, respectively, after income tax benefits of $9,574 and $18,955, respectively. See Note 12 for additional information. |
(d) | (Loss) income from continuing operations was materially affected during the third and fourth quarters of 2012 by corrections related to prior years’ tax matters which had an effect of increasing our benefit from income taxes by $2,181 and $5,439, respectively. Income from discontinued operations was also affected during the third quarter of 2012 by such corrections which had an effect of increasing our benefit from income taxes by $580. See Notes 2 and 14 for additional information. |
(e) | Basic and diluted income (loss) per share are being presented together since diluted income (loss) per share was the same as basic income (loss) per share for all periods presented. See Note 5 for additional information. |
(f) | The operating profit was materially affected by facilities relocation costs and other transactions in each of the 2011 quarters and impairment of long-lived assets in the first and fourth quarters of 2011. The impact of facilities relocation costs and other transactions on net (loss) income for the first, second, third and fourth quarters of 2011 was $1,178, $3,149, $14,899 and $9,288, respectively, after income tax benefits of $706, $1,890, $8,940 and $5,661, respectively. The impact of the impairment of long-lived assets on net (loss) income for the first and fourth quarters of 2011 was $4,865 and $2,847, respectively, after income tax benefits of $3,032 and $1,774, respectively. |
2. | Financial Statement Schedules: |
3. | Exhibits: |
EXHIBIT NO. | DESCRIPTION |
2.1 | Agreement and Plan of Merger, dated as of April 23, 2008, by and among Triarc Companies, Inc., Green Merger Sub, Inc. and Wendy's International, Inc., incorporated herein by reference to Exhibit 2.1 to Triarc's Current Report on Form 8-K dated April 29, 2008 (SEC file no. 001-02207). |
2.2 | Side Letter Agreement, dated August 14, 2008, by and among Triarc Companies, Inc., Green Merger Sub, Inc. and Wendy's International, Inc., incorporated herein by reference to Exhibit 2.3 to Triarc's Registration Statement on Form S-4, Amendment No.3, filed on August 15, 2008 (Reg. no. 333-151336). |
2.3 | Purchase and Sale Agreement, dated as of June 13, 2011, by and among Wendy's/Arby's Restaurants, LLC, ARG Holding Corporation and ARG IH Corporation, incorporated herein by reference to Exhibit 2.1 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Current Reports on Form 8-K filed on June 13, 2011 (SEC file nos. 001-02207 and 333-161613, respectively). |
2.4 | Closing letter dated as of July 1, 2011 by and among Wendy's/Arby's Restaurants, LLC, ARG Holding Corporation, ARG IH Corporation, and Roark Capital Partners II, LP, incorporated by reference to Exhibit 2.2 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Current Reports on Form 8-K filed on July 8, 2011 (SEC file nos. 001-02207 and 333-161613, respectively). |
2.5 | Asset Purchase Agreement by and among Wendy's International, Inc., Pisces Foods, L.P., Near Holdings, L.P., David Near and Jason Near dated as of June 5, 2012, incorporated herein by reference to Exhibit 2.1 of The Wendy's Company Current Report on Form 8-K filed on June 12, 2012 (SEC file no. 001-02207). |
3.1 | Restated Certificate of Incorporation of The Wendy's Company, as filed with the Secretary of State of the State of Delaware on May 24, 2012, incorporated herein by reference to Exhibit 3.1 of The Wendy's Company Current Report on Form 8-K filed on May 25, 2012 (SEC file no. 001-02207). |
3.2 | By-Laws of The Wendy's Company (as amended and restated through May 24, 2012), incorporated herein by reference to Exhibit 3.2 of The Wendy's Company Current Report on Form 8-K filed on May 25, 2012 (SEC file no. 001-02207). |
4.1 | Indenture, dated as of November 13, 2001, between Wendy's International, Inc. and Bank One, National Association, incorporated herein by reference to Exhibit 4(i) of the Wendy's International, Inc. Form 10-K for the year ended December 30, 2001 (SEC file no. 001-08116). |
10.1 | Triarc Companies, Inc. Amended and Restated 1998 Equity Participation Plan, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on May 19, 2005 (SEC file no. 001-02207).** |
10.2 | Form of Non-Incentive Stock Option Agreement under the Triarc Companies, Inc. Amended and Restated 1998 Equity Participation Plan, incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on May 13, 1998 (SEC file no. 001-02207).** |
10.3 | Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.4 | Form of Non-Incentive Stock Option Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 99.6 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.5 | Form of Restricted Stock Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.6 | Form of Non-Employee Director Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, incorporated herein by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-Q for the quarter ended June 28, 2009 (SEC file no. 001-02207).** |
10.7 | Form of Non-Incentive Stock Option Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.8 | Form of Restricted Share Unit Award Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.9 | Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Annex A of the Wendy's/Arby's Group, Inc. Definitive 2010 Proxy Statement (SEC file no. 001-02207).** |
10.10 | Form of Non-Incentive Stock Option Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.11 | Form of Long Term Performance Unit Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.6 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.12 | Form of Long Term Performance Unit Award Agreement for 2011 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.1 to The Wendy's Company and Wendy's Restaurants, LLC Group's Form 10-Q for the quarter ended July 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.13 | Form of Restricted Stock Unit Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated herein by reference to Exhibit 10.1 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.14 | Form of Restricted Stock Unit Award Agreement for 2011 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.15 | Form of Non-Employee Director Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.16 | Form of Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.16 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-K for the year ended January 1, 2012 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.17 | Form of Non-Incentive Stock Option Award Agreement for 2012 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.3 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.18 | Form of Long Term Performance Unit Award Agreement for 2012 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.4 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.19 | 1999 Executive Bonus Plan, incorporated herein by reference to Exhibit A to The Triarc Companies, Inc. 1999 Proxy Statement (SEC file no. 001-02207).** |
10.20 | Amendment to the Triarc Companies, Inc. 1999 Executive Bonus Plan, dated as of June 22, 2004, incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on June 1, 2005 (SEC file no. 001-02207).** |
10.21 | Amendment to the Triarc Companies, Inc. 1999 Executive Bonus Plan effective as of March 26, 2007, incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on June 6, 2007 (SEC file no. 001-02207).** |
10.22 | Wendy's International, Inc. 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-Q for the quarter ended April 2, 2006 (SEC file no. 001-08116).** |
10.23 | Amendments to the Wendy's International, Inc. 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.12 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.24 | Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Annex C to the Wendy's International, Inc. Definitive 2007 Proxy Statement, dated March 12, 2007 (SEC file no. 001-08116).** |
10.25 | First Amendment to the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10(d) of the Wendy's International, Inc. Form 10-Q for the quarter ended September 30, 2007 (SEC file no. 001-08116).** |
10.26 | Amendments to the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.15 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.27 | Form of Stock Option Award Letter for U.S. Grantees under the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.3 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.28 | Form of Stock Unit Award Agreement under the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.4 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.29 | Form of letter amending non-qualified stock options granted under the Wendy's International, Inc. 2007 Stock Incentive Plan on May 1, 2007 and May 1, 2008 to certain former directors of Wendy's International, Inc. incorporated herein by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.30 | Wendy's International, Inc. Supplemental Executive Retirement Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-K for the year ended December 29, 2002 (SEC file no. 001-08116).** |
10.31 | First Amendment to the Wendy's International, Inc. Supplemental Executive Retirement Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-K for the year ended December 31, 2006 (SEC file no. 001-08116).** |
10.32 | Amended and Restated Wendy's International, Inc. Supplemental Executive Retirement Plan No. 2, incorporated herein by reference to Exhibit 10.24 to Wendy's/Arby's Group's Form 10-K for the year ended January 3, 2010 (SEC file no. 001-02207).** |
10.33 | Amended and Restated Wendy's International, Inc. Supplemental Executive Retirement Plan No. 3, incorporated herein by reference to Exhibit 10.25 to Wendy's/Arby's Group's Form 10-K for the year ended January 3, 2010 (SEC file no. 001-02207).** |
10.34 | Wendy's/Arby's Group, Inc. 2009 Directors' Deferred Compensation Plan, effective as of May 28, 2009, incorporated herein by reference to Exhibit 10.6 to Wendy's/Arby's Group's Form 10-Q for the quarter ended June 28, 2009 (SEC file no. 001-02207).** |
10.35 | Amendment No. 1 to the Wendy's/Arby's Group, Inc. 2009 Directors' Deferred Compensation Plan, effective as of May 27, 2010, incorporated by reference to Exhibit 10.9 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.36 | Credit Agreement, dated as of May 15, 2012, among Wendy's International, Inc., as borrower, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, National Association, as syndication agent, and Fifth Third Bank, The Huntington National Bank , and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as co-documentation agents, and the lenders and issuers party thereto, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on May 15, 2012 (SEC file no. 001-02207). |
10.37 | Amendment No. 1 and Waiver, dated as of October 22, 2012, to the Credit Agreement, dated as of May 15, 2012, among Wendy's International, Inc., as borrower, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, National Association, as syndication agent, and Fifth Third Bank, The Huntington National Bank , and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as co-documentation agents, and the lenders and issuers party thereto, incorporated by reference to Exhibit 10.1 of The Wendy's Company Form 10-Q for the quarter ended September 30, 2012 (SEC file no. 001-02207). |
10.38 | Security Agreement, dated as of May 15, 2012, among Wendy's International, Inc., the guarantors from time to time party thereto, as pledgors, and Bank of America, N.A., as administrative agent, incorporated herein by reference to Exhibit 10.2 of The Wendy's Company Current Report on Form 8-K filed on May 15, 2012 (SEC file no. 001-02207). |
10.39 | Assignment of Rights Agreement between Wendy's International, Inc. and Mr. R. David Thomas, incorporated herein by reference to Exhibit 10(c) of the Wendy's International, Inc. Form 10-K for the year ended December 31, 2000 (SEC file no. 001-08116). |
10.40 | Form of Guaranty Agreement dated as of March 23, 1999 among National Propane Corporation, Triarc Companies, Inc. and Nelson Peltz and Peter W. May, incorporated herein by reference to Exhibit 10.30 to Triarc's Annual Report on Form 10-K for the fiscal year ended January 3, 1999 (SEC file no. 001-02207). |
10.41 | Indemnity Agreement, dated as of October 25, 2000 between Cadbury Schweppes plc and Triarc Companies, Inc., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on November 8, 2000 (SEC file no. 001-02207). |
10.42 | Amended and Restated Investment Management Agreement, dated as of April 30, 2007, between TCMG-MA, LLC and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207). |
10.43 | Withdrawal Agreement dated June 10, 2009 between TCMG-MA, LLC and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.3 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.44 | Separation Agreement, dated as of April 30, 2007, between Triarc Companies, Inc. and Nelson Peltz, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.45 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Nelson Peltz., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207).** |
10.46 | Separation Agreement, dated as of April 30, 2007, between Triarc Companies, Inc. and Peter W. May, incorporated herein by reference to Exhibit 10.4 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207).** |
10.47 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Peter W. May, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207).** |
10.48 | Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.49 | Liquidation Services Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.50 | Letter from Trian Fund Management, L.P. (“Trian Partners”) dated as of March 31, 2011 regarding the Agreement and the Liquidation Services Agreement each dated as of June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Partners, incorporated herein by reference to Exhibit 10.2 of the Wendy's/Arby's Group, Inc. Form 10-Q for the quarter ended April 3, 2011 (SEC file no. 001-02207). |
10.51 | Acknowledgement letter dated as of March 31, 2011 from Wendy's/Arby's Group, Inc. to Trian Fund Management, L.P. (“Trian Partners”) regarding the Agreement and the Liquidation Services Agreement each dated as of June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Partners, incorporated herein by reference to Exhibit 10.3 of the Wendy's/Arby's Group, Inc. Form 10-Q for the quarter ended April 3, 2011 (SEC file no. 001-02207). |
10.52 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207). |
10.53 | Assignment and Assumption of Lease, dated as of June 30, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.54 | Bill of Sale dated July 31, 2007, by Triarc Companies, Inc. to Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.55 | Agreement of Sublease between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.4 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.56 | First Amendment to Agreement of Sublease between Wendy's/Arby's Group, Inc. (f/k/a Triarc Companies, Inc.) and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.10 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207). |
10.57 | Form of Aircraft Time Sharing Agreement between Triarc Companies, Inc. and each of Trian Fund Management, L.P., Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.5 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.58 | Aircraft Lease Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.4 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.59 | Amendment No. 1 to Aircraft Lease Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.11 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207). |
10.60 | Amendment No. 2 to Aircraft Lease Agreement dated June 29, 2011 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.2 to The Wendy's Company Form 10-Q for the quarter ended July 3, 2011 (SEC file no. 001-02207). |
10.61 | Extension and Amendment No. 3 to Aircraft Lease Agreement dated as of June 30, 2012 by and between The Wendy's Company and TASCO, LLC, incorporated by reference to Exhibit 10.6 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207). |
10.62 | Amended and Restated Aircraft Lease Agreement between The Wendy's Company and TASCO, LLC dated as of August 1, 2012, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on August 3, 2012 (SEC file no. 001-12207). |
EXHIBIT NO. | DESCRIPTION |
10.63 | Registration Rights Agreement dated as of April 23, 1993, between DWG Corporation and DWG Acquisition Group, L.P., incorporated herein by reference to Exhibit 10.36 to Wendy's/Arby's Group's Annual Report on Form 10-K for the fiscal year ended December 28, 2008 (SEC file no. 001-02207). |
10.64 | Letter Agreement dated August 6, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.7 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.65 | Agreement dated November 5, 2008 by and between Wendy's/Arby's Group, Inc. and Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Parallel Fund II, L.P., Trian Fund Management, L.P., Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Current Report on Form 8-K filed on November 12, 2008 (SEC file no. 001-02207). |
10.66 | Amendment No. 1 to Agreement, dated as of April 1, 2009, among Wendy's/Arby's Group, Inc., Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Parallel Fund II, L.P., Trian Fund Management, L.P., Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on April 2, 2009 (SEC file no. 001-02207). |
10.67 | Agreement dated December 1, 2011 by and between The Wendy's Company and Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners GP, L.P., Trian Fund Management, L.P., the general partner of which is Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden, who, together with Nelson Peltz and Peter W. May, are the controlling members of Trian GP, Trian Partners Strategic Investment Fund, L.P. and Trian Partners Strategic Investment Fund-A, L.P., incorporated herein by reference to Exhibit 10.1 to The Wendy's Company Current Report on Form 8-K filed on December 2, 2011 (SEC file no. 001-02207). |
10.68 | Consulting and Employment Agreement dated July 25, 2008 between Triarc Companies, Inc. and J. David Karam, incorporated herein by reference to Exhibit 99.1 to Triarc's Current Report on Form 8-K filed on July 25, 2008 (SEC file no. 001-02207).** |
10.69 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Sharron Barton and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.70 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Nils H. Okeson and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.3 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.71 | Letter Agreement dated as of March 22, 2011, between Nils H. Okeson and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 10.5 of the Wendy's/Arby's Group and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.72 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Stephen E. Hare and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.4 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.73 | Letter Agreement dated as of March 22, 2011, between Stephen E. Hare and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 10.4 of the Wendy's/Arby's Group and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.74 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Roland C. Smith and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.5 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 28, 2008 (SEC file no. 001-02207).** |
10.75 | Letter from Roland C. Smith to The Wendy's Company dated as of September 1, 2011, incorporated herein by reference to Exhibit 10.4 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.76 | Letter Agreement dated as of December 18, 2008 by and between Wendy's/Arby's Group, Inc. and John D. Barker, incorporated by reference to Exhibit 10.75 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
10.77 | Letter Agreement dated as of January 28, 2009 by and between Wendy's/Arby's Group, Inc. and Darrell van Ligten, incorporated by reference to Exhibit 10.76 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
10.78 | Amendment to Letter Agreement dated March 23, 2012 by and between The Wendy's Company and Darrell van Ligten, incorporated by reference to Exhibit 10.2 of The Wendy's Company Form 10-Q for the quarter ended April 1, 2012 (SEC file no. 001-02207).** |
10.79 | Employment Agreement effective September 12, 2011 by and between The Wendy's Company and Emil J. Brolick, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on September 2, 2011 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.80 | Special Executive Deferred Compensation Plan by and between The Wendy's Company and Emil J. Brolick, incorporated herein by reference to Exhibit 10.2 of The Wendy's Company Current Report on Form 8-K filed on September 2, 2011 (SEC file no. 001-02207).** |
10.81 | Letter Agreement dated as of January 17, 2012 by and between The Wendy's Company and R. Scott Toop, incorporated by reference to Exhibit 10.79 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
10.82 | Letter Agreement dated as of March 16, 2012 by and between The Wendy's Company and Craig S. Bahner, incorporated by reference to Exhibit 10.1 of The Wendy's Company Form 10-Q for the quarter ended April 1, 2012 (SEC file no. 001-02207).** |
10.83 | Letter Agreement dated as of April 23, 2012 by and between The Wendy's Company and Scott Weisberg, incorporated by reference to Exhibit 10.5 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.84 | Form of Indemnification Agreement, between Wendy's/Arby's Group, Inc. and certain officers, directors, and employees thereof, incorporated herein by reference to Exhibit 10.47 to Wendy's/Arby's Group's Annual Report on Form 10-K for the fiscal year ended December 28, 2008 (SEC file no. 001-02207).** |
10.85 | Form of Indemnification Agreement of The Wendy's Company, incorporated herein by reference to Exhibit 10.5 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.86 | Form of Indemnification Agreement between Arby's Restaurant Group, Inc. and certain directors, officers and employees thereof, incorporated herein by reference to Exhibit 10.40 to Triarc's Annual Report on Form 10-K for the fiscal year ended December 30, 2007 (SEC file no. 001-02207).** |
10.87 | Form of Indemnification Agreement for officers and employees of Wendy's International, Inc. and its subsidiaries, incorporated herein by reference to Exhibit 10 of the Wendy's International, Inc. Current Report on Form 8-K filed on July 12, 2005 (SEC file no. 001-08116).** |
10.88 | Form of First Amendment to Indemnification Agreement between Wendy's International, Inc. and its directors and certain officers and employees, incorporated herein by reference to Exhibit 10(b) of the Wendy's International, Inc. Form 10-Q for the quarter ended June 29, 2008 (SEC file no. 001-08116).** |
21.1 | Subsidiaries of the Registrant.* |
23.1 | Consent of Deloitte & Touche LLP.* |
23.2 | Consent of PricewaterhouseCoopers LLP.* |
31.1 | Certification of the Chief Executive Officer of The Wendy's Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
31.2 | Certification of the Chief Financial Officer of The Wendy's Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
32.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished as an exhibit to this Form 10-K.* |
99.1 | Audited Financial Statements of TimWen Partnership.* |
101.INS | XBRL Instance Document*** |
101.SCH | XBRL Taxonomy Extension Schema Document*** |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document*** |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document*** |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document*** |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document*** |
* | Filed herewith |
** | Identifies a management contract or compensatory plan or arrangement. |
*** | In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.” |
Instruments defining the rights of holders of certain issues of long-term debt of the Company and its consolidated subsidiaries have not been filed as exhibits to this Form 10-K because the authorized principal amount of any one of such issues does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of each of such instruments to the Commission upon request. |
THE WENDY’S COMPANY (Registrant) | |
Date: February 28, 2013 | By: /s/ EMIL J. BROLICK |
Emil J. Brolick | |
President and Chief Executive Officer |
Signature | Titles | |
/s/ EMIL J. BROLICK | President, Chief Executive Officer and Director | |
(Emil J. Brolick) | (Principal Executive Officer) | |
/s/ STEPHEN E. HARE | Senior Vice President and Chief Financial Officer | |
(Stephen E. Hare) | (Principal Financial Officer) | |
/s/ STEVEN B. GRAHAM | Senior Vice President and Chief Accounting Officer | |
(Steven B. Graham) | (Principal Accounting Officer) | |
/s/ NELSON PELTZ | Chairman and Director | |
(Nelson Peltz) | ||
/s/ PETER W. MAY | Vice Chairman and Director | |
(Peter W. May) | ||
/s/ CLIVE CHAJET | Director | |
(Clive Chajet) | ||
/s/ EDWARD P. GARDEN | Director | |
(Edward P. Garden) | ||
/s/ JANET HILL | Director | |
(Janet Hill) | ||
/s/ JOSEPH A. LEVATO | Director | |
(Joseph A. Levato) | ||
/s/ J. RANDOLPH LEWIS | Director | |
(J. Randolph Lewis) | ||
/s/ PETER H. ROTHSCHILD | Director | |
(Peter H. Rothschild) | ||
/s/ DAVID E. SCHWAB II | Director | |
(David E. Schwab II) | ||
/s/ ROLAND C. SMITH | Director | |
(Roland C. Smith) | ||
/s/ RAYMOND S. TROUBH | Director | |
(Raymond S. Troubh) | ||
/s/ JACK G. WASSERMAN | Director | |
(Jack G. Wasserman) |
December 30, 2012 | January 1, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 102,652 | $ | 128,441 | |||
Amounts due from subsidiaries | 71,688 | 86,965 | |||||
Other current assets | 26,328 | 9,876 | |||||
Total current assets | 200,668 | 225,282 | |||||
Investments in consolidated subsidiaries | 1,839,344 | 1,814,310 | |||||
Properties | 6,102 | 4 | |||||
Deferred income tax benefit and other | 42,692 | 64,088 | |||||
Total assets | $ | 2,088,806 | $ | 2,103,684 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Amounts due to subsidiaries | $ | 92,384 | $ | 88,531 | |||
Current portion of long-term debt (a) | — | 1,460 | |||||
Deferred income taxes and other current liabilities | 2,067 | 2,456 | |||||
Total current liabilities | 94,451 | 92,447 | |||||
Long-term debt (a) | — | 9,843 | |||||
Other liabilities | 8,500 | 5,325 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued | 47,042 | 47,042 | |||||
Additional paid-in capital | 2,782,765 | 2,779,871 | |||||
Accumulated deficit | (467,007 | ) | (434,999 | ) | |||
Common stock held in treasury, at cost | (382,926 | ) | (395,947 | ) | |||
Accumulated other comprehensive income | 5,981 | 102 | |||||
Total stockholders’ equity | 1,985,855 | 1,996,069 | |||||
Total liabilities and stockholders’ equity | $ | 2,088,806 | $ | 2,103,684 |
(a) | Consisted of a 6.54% term loan on our company-owned aircraft in the amount of $11,303 at January 1, 2012. |
Year Ended | ||||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | ||||||||||
Income: | ||||||||||||
Equity in income from continuing operations of subsidiaries | $ | 29,708 | $ | 21,115 | $ | 20,261 | ||||||
Investment income | — | — | 4,913 | |||||||||
29,708 | 21,115 | 25,174 | ||||||||||
Costs and expenses: | ||||||||||||
General and administrative | 10,911 | 10,476 | 8,087 | |||||||||
Depreciation and amortization | 1,975 | 627 | 1,863 | |||||||||
Impairment of long-lived assets | 1,628 | — | — | |||||||||
Facilities relocation costs and other transactions | 5,327 | 1,234 | — | |||||||||
Other expense (income), net | 953 | 960 | (517 | ) | ||||||||
20,794 | 13,297 | 9,433 | ||||||||||
Income from continuing operations before income taxes | 8,914 | 7,818 | 15,741 | |||||||||
(Provision for) benefit from income taxes | (3,340 | ) | 10,094 | 2,370 | ||||||||
Income from continuing operations | 5,574 | 17,912 | 18,111 | |||||||||
Equity in income (loss) from discontinued operations of subsidiaries | 1,509 | (8,037 | ) | (22,436 | ) | |||||||
Net income (loss) | $ | 7,083 | $ | 9,875 | $ | (4,325 | ) |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Net income (loss) | $ | 7,083 | $ | 9,875 | $ | (4,325 | ) | ||||
Other comprehensive income (loss), net: | |||||||||||
Foreign currency translation adjustment | 6,096 | (6,869 | ) | 12,666 | |||||||
Change in unrecognized pension loss, net of income tax benefit (provision) of $127, $(21), and $(54), respectively | (217 | ) | (46 | ) | 95 | ||||||
Change in unrealized gain on available-for-sale securities, net of income tax benefit of $41 | — | — | (59 | ) | |||||||
Other comprehensive income (loss), net | 5,879 | (6,915 | ) | 12,702 | |||||||
Comprehensive income | $ | 12,962 | $ | 2,960 | $ | 8,377 |
Year Ended | |||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 7,083 | $ | 9,875 | $ | (4,325 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Equity in (income) loss from operations of subsidiaries | (31,217 | ) | (13,078 | ) | 2,175 | ||||||
Other operating transactions with Wendy’s Restaurants, LLC | 28,733 | 6,031 | 8,032 | ||||||||
Depreciation and amortization | 3,078 | 627 | 1,863 | ||||||||
Impairment of long-lived assets | 1,628 | — | — | ||||||||
Share-based compensation | 944 | 1,021 | 914 | ||||||||
Tax sharing payments received from subsidiaries | 37 | 13,078 | — | ||||||||
Amortization of deferred financing costs | 21 | — | — | ||||||||
Deferred income tax | (4,118 | ) | (10,094 | ) | (4,027 | ) | |||||
Income on collection of notes receivable | — | — | (4,909 | ) | |||||||
Tax sharing receivable from subsidiaries, net | — | (2,437 | ) | (1,052 | ) | ||||||
Dividends from subsidiaries | — | — | 443,700 | ||||||||
Other, net | 1,753 | (1,547 | ) | 8 | |||||||
Changes in operating assets and liabilities: | |||||||||||
Other current assets | (472 | ) | 491 | 231 | |||||||
Other current liabilities | 8,643 | (2,332 | ) | (4,033 | ) | ||||||
Net cash provided by operating activities | 16,113 | 1,635 | 438,577 | ||||||||
Cash flows from investing activities: | |||||||||||
Net repayments from subsidiaries | — | 377 | 987 | ||||||||
Proceeds from repayment of DFR notes | — | — | 30,752 | ||||||||
Other, net | 686 | — | 205 | ||||||||
Net cash provided by investing activities | 686 | 377 | 31,944 | ||||||||
Cash flows from financing activities: | |||||||||||
Repayments of long-term debt | (11,303 | ) | (1,368 | ) | (8,330 | ) | |||||
Repurchases of common stock | — | (157,556 | ) | (173,537 | ) | ||||||
Dividends | (39,043 | ) | (32,366 | ) | (27,621 | ) | |||||
Proceeds from stock option exercises | 7,806 | 6,359 | 1,444 | ||||||||
Other, net | (48 | ) | (2,262 | ) | (828 | ) | |||||
Net cash used in financing activities | (42,588 | ) | (187,193 | ) | (208,872 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (25,789 | ) | (185,181 | ) | 261,649 | ||||||
Cash and cash equivalents at beginning of year | 128,441 | 313,622 | 51,973 | ||||||||
Cash and cash equivalents at end of year | $ | 102,652 | $ | 128,441 | $ | 313,622 |
EXHIBIT NO. | DESCRIPTION |
2.1 | Agreement and Plan of Merger, dated as of April 23, 2008, by and among Triarc Companies, Inc., Green Merger Sub, Inc. and Wendy's International, Inc., incorporated herein by reference to Exhibit 2.1 to Triarc's Current Report on Form 8-K dated April 29, 2008 (SEC file no. 001-02207). |
2.2 | Side Letter Agreement, dated August 14, 2008, by and among Triarc Companies, Inc., Green Merger Sub, Inc. and Wendy's International, Inc., incorporated herein by reference to Exhibit 2.3 to Triarc's Registration Statement on Form S-4, Amendment No.3, filed on August 15, 2008 (Reg. no. 333-151336). |
2.3 | Purchase and Sale Agreement, dated as of June 13, 2011, by and among Wendy's/Arby's Restaurants, LLC, ARG Holding Corporation and ARG IH Corporation, incorporated herein by reference to Exhibit 2.1 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Current Reports on Form 8-K filed on June 13, 2011 (SEC file nos. 001-02207 and 333-161613, respectively). |
2.4 | Closing letter dated as of July 1, 2011 by and among Wendy's/Arby's Restaurants, LLC, ARG Holding Corporation, ARG IH Corporation, and Roark Capital Partners II, LP, incorporated by reference to Exhibit 2.2 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Current Reports on Form 8-K filed on July 8, 2011 (SEC file nos. 001-02207 and 333-161613, respectively). |
2.5 | Asset Purchase Agreement by and among Wendy's International, Inc., Pisces Foods, L.P., Near Holdings, L.P., David Near and Jason Near dated as of June 5, 2012, incorporated herein by reference to Exhibit 2.1 of The Wendy's Company Current Report on Form 8-K filed on June 12, 2012 (SEC file no. 001-02207). |
3.1 | Restated Certificate of Incorporation of The Wendy's Company, as filed with the Secretary of State of the State of Delaware on May 24, 2012, incorporated herein by reference to Exhibit 3.1 of The Wendy's Company Current Report on Form 8-K filed on May 25, 2012 (SEC file no. 001-02207). |
3.2 | By-Laws of The Wendy's Company (as amended and restated through May 24, 2012), incorporated herein by reference to Exhibit 3.2 of The Wendy's Company Current Report on Form 8-K filed on May 25, 2012 (SEC file no. 001-02207). |
4.1 | Indenture, dated as of November 13, 2001, between Wendy's International, Inc. and Bank One, National Association, incorporated herein by reference to Exhibit 4(i) of the Wendy's International, Inc. Form 10-K for the year ended December 30, 2001 (SEC file no. 001-08116). |
10.1 | Triarc Companies, Inc. Amended and Restated 1998 Equity Participation Plan, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on May 19, 2005 (SEC file no. 001-02207).** |
10.2 | Form of Non-Incentive Stock Option Agreement under the Triarc Companies, Inc. Amended and Restated 1998 Equity Participation Plan, incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on May 13, 1998 (SEC file no. 001-02207).** |
10.3 | Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.4 | Form of Non-Incentive Stock Option Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 99.6 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.5 | Form of Restricted Stock Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.6 | Form of Non-Employee Director Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, incorporated herein by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-Q for the quarter ended June 28, 2009 (SEC file no. 001-02207).** |
10.7 | Form of Non-Incentive Stock Option Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.8 | Form of Restricted Share Unit Award Agreement under the Wendy's/Arby's Group, Inc. Amended and Restated 2002 Equity Participation Plan, as amended, incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.9 | Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Annex A of the Wendy's/Arby's Group, Inc. Definitive 2010 Proxy Statement (SEC file no. 001-02207).** |
10.10 | Form of Non-Incentive Stock Option Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.11 | Form of Long Term Performance Unit Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.6 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.12 | Form of Long Term Performance Unit Award Agreement for 2011 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.1 to The Wendy's Company and Wendy's Restaurants, LLC Group's Form 10-Q for the quarter ended July 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.13 | Form of Restricted Stock Unit Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated herein by reference to Exhibit 10.1 of the Wendy's/Arby's Group, Inc. and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.14 | Form of Restricted Stock Unit Award Agreement for 2011 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.15 | Form of Non-Employee Director Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.7 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.16 | Form of Restricted Stock Award Agreement under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.16 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-K for the year ended January 1, 2012 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.17 | Form of Non-Incentive Stock Option Award Agreement for 2012 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.3 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.18 | Form of Long Term Performance Unit Award Agreement for 2012 under the Wendy's/Arby's Group, Inc. 2010 Omnibus Award Plan, incorporated by reference to Exhibit 10.4 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.19 | 1999 Executive Bonus Plan, incorporated herein by reference to Exhibit A to The Triarc Companies, Inc. 1999 Proxy Statement (SEC file no. 001-02207).** |
10.20 | Amendment to the Triarc Companies, Inc. 1999 Executive Bonus Plan, dated as of June 22, 2004, incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on June 1, 2005 (SEC file no. 001-02207).** |
10.21 | Amendment to the Triarc Companies, Inc. 1999 Executive Bonus Plan effective as of March 26, 2007, incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on June 6, 2007 (SEC file no. 001-02207).** |
10.22 | Wendy's International, Inc. 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-Q for the quarter ended April 2, 2006 (SEC file no. 001-08116).** |
10.23 | Amendments to the Wendy's International, Inc. 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.12 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.24 | Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Annex C to the Wendy's International, Inc. Definitive 2007 Proxy Statement, dated March 12, 2007 (SEC file no. 001-08116).** |
10.25 | First Amendment to the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10(d) of the Wendy's International, Inc. Form 10-Q for the quarter ended September 30, 2007 (SEC file no. 001-08116).** |
10.26 | Amendments to the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.15 to Wendy's/Arby's Group's Form 10-K for the year ended December 28, 2008 (SEC file no. 001-02207).** |
10.27 | Form of Stock Option Award Letter for U.S. Grantees under the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.3 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.28 | Form of Stock Unit Award Agreement under the Wendy's International, Inc. 2007 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.4 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
10.29 | Form of letter amending non-qualified stock options granted under the Wendy's International, Inc. 2007 Stock Incentive Plan on May 1, 2007 and May 1, 2008 to certain former directors of Wendy's International, Inc. incorporated herein by reference to Exhibit 10.5 to Wendy's/Arby's Group's Form 10-Q for the quarter ended September 27, 2009 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.30 | Wendy's International, Inc. Supplemental Executive Retirement Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-K for the year ended December 29, 2002 (SEC file no. 001-08116).** |
10.31 | First Amendment to the Wendy's International, Inc. Supplemental Executive Retirement Plan, incorporated herein by reference to Exhibit 10(f) of the Wendy's International, Inc. Form 10-K for the year ended December 31, 2006 (SEC file no. 001-08116).** |
10.32 | Amended and Restated Wendy's International, Inc. Supplemental Executive Retirement Plan No. 2, incorporated herein by reference to Exhibit 10.24 to Wendy's/Arby's Group's Form 10-K for the year ended January 3, 2010 (SEC file no. 001-02207).** |
10.33 | Amended and Restated Wendy's International, Inc. Supplemental Executive Retirement Plan No. 3, incorporated herein by reference to Exhibit 10.25 to Wendy's/Arby's Group's Form 10-K for the year ended January 3, 2010 (SEC file no. 001-02207).** |
10.34 | Wendy's/Arby's Group, Inc. 2009 Directors' Deferred Compensation Plan, effective as of May 28, 2009, incorporated herein by reference to Exhibit 10.6 to Wendy's/Arby's Group's Form 10-Q for the quarter ended June 28, 2009 (SEC file no. 001-02207).** |
10.35 | Amendment No. 1 to the Wendy's/Arby's Group, Inc. 2009 Directors' Deferred Compensation Plan, effective as of May 27, 2010, incorporated by reference to Exhibit 10.9 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207).** |
10.36 | Credit Agreement, dated as of May 15, 2012, among Wendy's International, Inc., as borrower, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, National Association, as syndication agent, and Fifth Third Bank, The Huntington National Bank , and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as co-documentation agents, and the lenders and issuers party thereto, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on May 15, 2012 (SEC file no. 001-02207). |
10.37 | Amendment No. 1 and Waiver, dated as of October 22, 2012, to the Credit Agreement, dated as of May 15, 2012, among Wendy's International, Inc., as borrower, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, National Association, as syndication agent, and Fifth Third Bank, The Huntington National Bank , and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as co-documentation agents, and the lenders and issuers party thereto, incorporated by reference to Exhibit 10.1 of The Wendy's Company Form 10-Q for the quarter ended September 30, 2012 (SEC file no. 001-02207). |
10.38 | Security Agreement, dated as of May 15, 2012, among Wendy's International, Inc., the guarantors from time to time party thereto, as pledgors, and Bank of America, N.A., as administrative agent, incorporated herein by reference to Exhibit 10.2 of The Wendy's Company Current Report on Form 8-K filed on May 15, 2012 (SEC file no. 001-02207). |
10.39 | Assignment of Rights Agreement between Wendy's International, Inc. and Mr. R. David Thomas, incorporated herein by reference to Exhibit 10(c) of the Wendy's International, Inc. Form 10-K for the year ended December 31, 2000 (SEC file no. 001-08116). |
10.40 | Form of Guaranty Agreement dated as of March 23, 1999 among National Propane Corporation, Triarc Companies, Inc. and Nelson Peltz and Peter W. May, incorporated herein by reference to Exhibit 10.30 to Triarc's Annual Report on Form 10-K for the fiscal year ended January 3, 1999 (SEC file no. 001-02207). |
10.41 | Indemnity Agreement, dated as of October 25, 2000 between Cadbury Schweppes plc and Triarc Companies, Inc., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on November 8, 2000 (SEC file no. 001-02207). |
10.42 | Amended and Restated Investment Management Agreement, dated as of April 30, 2007, between TCMG-MA, LLC and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207). |
10.43 | Withdrawal Agreement dated June 10, 2009 between TCMG-MA, LLC and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.3 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.44 | Separation Agreement, dated as of April 30, 2007, between Triarc Companies, Inc. and Nelson Peltz, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207).** |
10.45 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Nelson Peltz., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207).** |
10.46 | Separation Agreement, dated as of April 30, 2007, between Triarc Companies, Inc. and Peter W. May, incorporated herein by reference to Exhibit 10.4 to Triarc's Current Report on Form 8-K filed on April 30, 2007 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.47 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Peter W. May, incorporated herein by reference to Exhibit 10.3 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207).** |
10.48 | Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.49 | Liquidation Services Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.50 | Letter from Trian Fund Management, L.P. (“Trian Partners”) dated as of March 31, 2011 regarding the Agreement and the Liquidation Services Agreement each dated as of June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Partners, incorporated herein by reference to Exhibit 10.2 of the Wendy's/Arby's Group, Inc. Form 10-Q for the quarter ended April 3, 2011 (SEC file no. 001-02207). |
10.51 | Acknowledgement letter dated as of March 31, 2011 from Wendy's/Arby's Group, Inc. to Trian Fund Management, L.P. (“Trian Partners”) regarding the Agreement and the Liquidation Services Agreement each dated as of June 10, 2009 between Wendy's/Arby's Group, Inc. and Trian Partners, incorporated herein by reference to Exhibit 10.3 of the Wendy's/Arby's Group, Inc. Form 10-Q for the quarter ended April 3, 2011 (SEC file no. 001-02207). |
10.52 | Letter Agreement dated as of December 28, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on January 4, 2008 (SEC file no. 001-02207). |
10.53 | Assignment and Assumption of Lease, dated as of June 30, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.1 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.54 | Bill of Sale dated July 31, 2007, by Triarc Companies, Inc. to Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.2 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.55 | Agreement of Sublease between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.4 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.56 | First Amendment to Agreement of Sublease between Wendy's/Arby's Group, Inc. (f/k/a Triarc Companies, Inc.) and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.10 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207). |
10.57 | Form of Aircraft Time Sharing Agreement between Triarc Companies, Inc. and each of Trian Fund Management, L.P., Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.5 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
10.58 | Aircraft Lease Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.4 to Wendy's/Arby's Group's Current Report on Form 8-K filed on June 11, 2009 (SEC file no. 001-02207). |
10.59 | Amendment No. 1 to Aircraft Lease Agreement dated June 10, 2009 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.11 to Wendy's/Arby's Group's Form 10-Q for the quarter ended July 4, 2010 (SEC file no. 001-02207). |
10.60 | Amendment No. 2 to Aircraft Lease Agreement dated June 29, 2011 between Wendy's/Arby's Group, Inc. and TASCO, LLC., incorporated herein by reference to Exhibit 10.2 to The Wendy's Company Form 10-Q for the quarter ended July 3, 2011 (SEC file no. 001-02207). |
10.61 | Extension and Amendment No. 3 to Aircraft Lease Agreement dated as of June 30, 2012 by and between The Wendy's Company and TASCO, LLC, incorporated by reference to Exhibit 10.6 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207). |
10.62 | Amended and Restated Aircraft Lease Agreement between The Wendy's Company and TASCO, LLC dated as of August 1, 2012, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on August 3, 2012 (SEC file no. 001-12207). |
10.63 | Registration Rights Agreement dated as of April 23, 1993, between DWG Corporation and DWG Acquisition Group, L.P., incorporated herein by reference to Exhibit 10.36 to Wendy's/Arby's Group's Annual Report on Form 10-K for the fiscal year ended December 28, 2008 (SEC file no. 001-02207). |
10.64 | Letter Agreement dated August 6, 2007, between Triarc Companies, Inc. and Trian Fund Management, L.P., incorporated herein by reference to Exhibit 10.7 to Triarc's Current Report on Form 8-K filed on August 10, 2007 (SEC file no. 001-02207). |
EXHIBIT NO. | DESCRIPTION |
10.65 | Agreement dated November 5, 2008 by and between Wendy's/Arby's Group, Inc. and Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Parallel Fund II, L.P., Trian Fund Management, L.P., Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.1 to Wendy's/Arby's Group's Current Report on Form 8-K filed on November 12, 2008 (SEC file no. 001-02207). |
10.66 | Amendment No. 1 to Agreement, dated as of April 1, 2009, among Wendy's/Arby's Group, Inc., Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Parallel Fund II, L.P., Trian Fund Management, L.P., Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden, incorporated herein by reference to Exhibit 10.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on April 2, 2009 (SEC file no. 001-02207). |
10.67 | Agreement dated December 1, 2011 by and between The Wendy's Company and Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners GP, L.P., Trian Fund Management, L.P., the general partner of which is Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden, who, together with Nelson Peltz and Peter W. May, are the controlling members of Trian GP, Trian Partners Strategic Investment Fund, L.P. and Trian Partners Strategic Investment Fund-A, L.P., incorporated herein by reference to Exhibit 10.1 to The Wendy's Company Current Report on Form 8-K filed on December 2, 2011 (SEC file no. 001-02207). |
10.68 | Consulting and Employment Agreement dated July 25, 2008 between Triarc Companies, Inc. and J. David Karam, incorporated herein by reference to Exhibit 99.1 to Triarc's Current Report on Form 8-K filed on July 25, 2008 (SEC file no. 001-02207).** |
10.69 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Sharron Barton and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.2 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.70 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Nils H. Okeson and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.3 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.71 | Letter Agreement dated as of March 22, 2011, between Nils H. Okeson and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 10.5 of the Wendy's/Arby's Group and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.72 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Stephen E. Hare and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.4 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 22, 2008 (SEC file no. 001-02207).** |
10.73 | Letter Agreement dated as of March 22, 2011, between Stephen E. Hare and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 10.4 of the Wendy's/Arby's Group and Wendy's/Arby's Restaurants, LLC Form 10-Q for the quarter ended April 3, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.74 | Amended and Restated Letter Agreement dated as of December 18, 2008 between Roland C. Smith and Wendy's/Arby's Group, Inc., incorporated herein by reference to Exhibit 99.5 to Wendy's/Arby's Group's Current Report on Form 8-K filed on December 28, 2008 (SEC file no. 001-02207).** |
10.75 | Letter from Roland C. Smith to The Wendy's Company dated as of September 1, 2011, incorporated herein by reference to Exhibit 10.4 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.76 | Letter Agreement dated as of December 18, 2008 by and between Wendy's/Arby's Group, Inc. and John D. Barker, incorporated by reference to Exhibit 10.75 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
10.77 | Letter Agreement dated as of January 28, 2009 by and between Wendy's/Arby's Group, Inc. and Darrell van Ligten, incorporated by reference to Exhibit 10.76 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
10.78 | Amendment to Letter Agreement dated March 23, 2012 by and between The Wendy's Company and Darrell van Ligten, incorporated by reference to Exhibit 10.2 of The Wendy's Company Form 10-Q for the quarter ended April 1, 2012 (SEC file no. 001-02207).** |
10.79 | Employment Agreement effective September 12, 2011 by and between The Wendy's Company and Emil J. Brolick, incorporated herein by reference to Exhibit 10.1 of The Wendy's Company Current Report on Form 8-K filed on September 2, 2011 (SEC file no. 001-02207).** |
10.80 | Special Executive Deferred Compensation Plan by and between The Wendy's Company and Emil J. Brolick, incorporated herein by reference to Exhibit 10.2 of The Wendy's Company Current Report on Form 8-K filed on September 2, 2011 (SEC file no. 001-02207).** |
10.81 | Letter Agreement dated as of January 17, 2012 by and between The Wendy's Company and R. Scott Toop, incorporated by reference to Exhibit 10.79 of The Wendy's Company Form 10-K for the year ended January 1, 2012 (SEC file no. 001-02207).** |
EXHIBIT NO. | DESCRIPTION |
10.82 | Letter Agreement dated as of March 16, 2012 by and between The Wendy's Company and Craig S. Bahner, incorporated by reference to Exhibit 10.1 of The Wendy's Company Form 10-Q for the quarter ended April 1, 2012 (SEC file no. 001-02207).** |
10.83 | Letter Agreement dated as of April 23, 2012 by and between The Wendy's Company and Scott Weisberg, incorporated by reference to Exhibit 10.5 of The Wendy's Company Form 10-Q for the quarter ended July 1, 2012 (SEC file no. 001-02207).** |
10.84 | Form of Indemnification Agreement, between Wendy's/Arby's Group, Inc. and certain officers, directors, and employees thereof, incorporated herein by reference to Exhibit 10.47 to Wendy's/Arby's Group's Annual Report on Form 10-K for the fiscal year ended December 28, 2008 (SEC file no. 001-02207).** |
10.85 | Form of Indemnification Agreement of The Wendy's Company, incorporated herein by reference to Exhibit 10.5 of The Wendy's Company and Wendy's Restaurants, LLC Form 10-Q for the quarter ended October 2, 2011 (SEC file nos. 001-02207 and 333-161613, respectively).** |
10.86 | Form of Indemnification Agreement between Arby's Restaurant Group, Inc. and certain directors, officers and employees thereof, incorporated herein by reference to Exhibit 10.40 to Triarc's Annual Report on Form 10-K for the fiscal year ended December 30, 2007 (SEC file no. 001-02207).** |
10.87 | Form of Indemnification Agreement for officers and employees of Wendy's International, Inc. and its subsidiaries, incorporated herein by reference to Exhibit 10 of the Wendy's International, Inc. Current Report on Form 8-K filed on July 12, 2005 (SEC file no. 001-08116).** |
10.88 | Form of First Amendment to Indemnification Agreement between Wendy's International, Inc. and its directors and certain officers and employees, incorporated herein by reference to Exhibit 10(b) of the Wendy's International, Inc. Form 10-Q for the quarter ended June 29, 2008 (SEC file no. 001-08116).** |
21.1 | Subsidiaries of the Registrant.* |
23.1 | Consent of Deloitte & Touche LLP.* |
23.2 | Consent of PricewaterhouseCoopers LLP.* |
31.1 | Certification of the Chief Executive Officer of The Wendy's Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
31.2 | Certification of the Chief Financial Officer of The Wendy's Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
32.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished as an exhibit to this Form 10-K.* |
99.1 | Audited Financial Statements of TimWen Partnership.* |
101.INS | XBRL Instance Document*** |
101.SCH | XBRL Taxonomy Extension Schema Document*** |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document*** |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document*** |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document*** |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document*** |
* | Filed herewith |
** | Identifies a management contract or compensatory plan or arrangement. |
*** | In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.” |
Instruments defining the rights of holders of certain issues of long-term debt of the Company and its consolidated subsidiaries have not been filed as exhibits to this Form 10-K because the authorized principal amount of any one of such issues does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of each of such instruments to the Commission upon request. |
SUBSIDIARY | STATE OR JURISDICTION UNDER WHICH ORGANIZED |
Wendy’s Restaurants, LLC | Delaware |
Wendy’s International, Inc. | Ohio |
Wendy’s Holdings, LLC | Delaware |
Wendy’s Support Center, LLC | Delaware |
Scioto Insurance Company | Vermont |
Wendy’s Global Restaurants, LLC | Delaware |
Wendy’s Global Holdings CV | Netherlands |
Wendy’s Global Financing Partner, LLC | Delaware |
Wendy’s Global Financing LP | Ontario |
Wendy’s Singapore Pte. Ltd. | Singapore |
Wendy’s Restaurants (Asia) Limited | Hong Kong |
Wendy’s Old Fashioned Hamburger Restaurants Pty. Ltd. | Australia |
Wendy’s Netherlands BV | Netherlands |
Wendy’s Restaurants of Canada Inc. | Ontario |
Wendy’s Canadian Advertising Program, Inc. | Ontario |
TIMWEN Partnership (1) | Ontario |
Wendy’s Global Holdings Partner, LLC | Delaware |
Wendy’s Global, Inc. | Delaware |
Wendy’s Eurasia, Inc. | Ohio |
Wendy’s Global Services, Inc. | Delaware |
BDJ 71112, LLC | Ohio |
The New Bakery Co. of Ohio, Inc. | Ohio |
Wendy’s Old Fashioned Hamburgers of New York, Inc. | Ohio |
Wendy’s Restaurants of New York, LLC | Delaware |
Wendy’s of Denver, Inc. | Colorado |
Wendy’s of N.E. Florida, Inc. | Florida |
Oldemark LLC | Vermont |
Restaurant Finance Corporation | Ohio |
Café Express, LLC | Delaware |
Wendy Restaurant, Inc. | Delaware |
The Wendy’s National Advertising Program, Inc. | Ohio |
256 Gift Card Inc. | Colorado |
SEPSCO, LLC | Delaware |
TXL Corp. | South Carolina |
Home Furnishing Acquisition Corporation | Delaware |
Triarc Acquisition, LLC | Delaware |
Jurl Holdings, LLC | Delaware |
RCAC, LLC | Delaware |
Madison West Associates Corp. | Delaware |
280 BT Holdings LLC (2) | New York |
Citrus Acquisition Corporation | Florida |
Adams Packing Association, Inc. | Delaware |
(1) | 50% owned by Wendy’s Restaurants of Canada, Inc. |
(2) | 80.1% owned by Madison West Associates Corp. (“Madison West”), 11.3% owned by former affiliates of the Company and 8.6% owned by unaffiliated third parties. |
1. | I have reviewed this annual report on Form 10-K of The Wendy’s Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K of The Wendy’s Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
TIMWEN PARTNERSHIP | ||||||||
Financial Statements | ||||||||
December 30, 2012 | ||||||||
Report of Independent Registered Public Accounting Firm To the Partners of TIMWEN Partnership We have audited the accompanying balance sheets of TIMWEN Partnership as of December 30, 2012 and January 1, 2012, and the related statements of income and comprehensive income, partners’ equity and cash flows for each of the years in the three-year period ended December 30, 2012. The Partnership's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of TIMWEN Partnership as of December 30, 2012 and January 1, 2012 and the results of its operations and its cash flows for each of the years in the three-year period ended December 30, 2012 in conformity with accounting principles generally accepted in the United States of America. /s/ PricewaterhouseCoopers LLP Chartered Accountants, Licensed Public Accountants Mississauga, Ontario February 27, 2013 |
TIMWEN Partnership | ||||||||||||||||||||||||||
Balance Sheet | ||||||||||||||||||||||||||
December 30, 2012 | January 1, 2012 | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Revenue-producing properties | $ | 72,786,727 | $ | 75,030,290 | ||||||||||||||||||||||
Cash | 3,526,513 | 2,679,439 | ||||||||||||||||||||||||
Accounts receivable | 3,264,393 | 4,325,054 | ||||||||||||||||||||||||
Investment in Grimsby Food Court Ltd. | 1,890,989 | 1,999,690 | ||||||||||||||||||||||||
Prepaid rent | 618,234 | 622,059 | ||||||||||||||||||||||||
$ | 82,086,856 | $ | 84,656,532 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 3,205,345 | $ | 2,332,277 | ||||||||||||||||||||||
Deferred lease inducements | 3,081,818 | 3,374,891 | ||||||||||||||||||||||||
Straight-line rent | 5,453,185 | 5,472,756 | ||||||||||||||||||||||||
11,740,348 | 11,179,924 | |||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||
Partners' equity | 70,346,508 | 73,476,608 | ||||||||||||||||||||||||
$ | 82,086,856 | $ | 84,656,532 | |||||||||||||||||||||||
See accompanying notes to the financial statements. |
TIMWEN Partnership | ||||||||||||||||||||||||||
Statements of Income and Comprehensive Income | ||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Rental income | $ | 39,691,604 | $ | 38,927,175 | $38,361,003 | |||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Rental expense - net of lease inducements | 7,689,481 | 7,542,975 | 8,216,495 | |||||||||||||||||||||||
Operating expenses | 438,131 | 484,586 | 579,556 | |||||||||||||||||||||||
Depreciation and amortization | 4,367,219 | 4,280,186 | 4,794,250 | |||||||||||||||||||||||
12,494,831 | 12,307,747 | 13,590,301 | ||||||||||||||||||||||||
Operating income for the year | 27,196,773 | 26,619,428 | 24,770,702 | |||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Interest income | 72,733 | 55,109 | 16,886 | |||||||||||||||||||||||
Equity in income of Grimsby Food Court Ltd. | 96,299 | 366,221 | 180,933 | |||||||||||||||||||||||
Other income | 4,095 | 5,926 | 7,179 | |||||||||||||||||||||||
173,127 | 427,256 | 204,998 | ||||||||||||||||||||||||
Net income and comprehensive income | $ | 27,369,900 | $ | 27,046,684 | $24,975,700 |
TIMWEN Partnership | ||||||||||||||||||||||||||||
Statement of Partners' Equity | ||||||||||||||||||||||||||||
Year ended December 30, 2012 | Year ended January 1, 2012 | Year ended January 2, 2011 | ||||||||||||||||||||||||||
Wendy's | Barhav | |||||||||||||||||||||||||||
Restaurants of | Developments | |||||||||||||||||||||||||||
Canada Inc. | Limited | Total | Total | Total | ||||||||||||||||||||||||
Partners' equity - Beginning of year | $ | 36,738,304 | $ | 36,738,304 | $ | 73,476,608 | $ | 76,429,924 | $79,954,224 | |||||||||||||||||||
Distributions to partners | (15,250,000) | (15,250,000) | (30,500,000) | (30,000,000) | (28,500,000) | |||||||||||||||||||||||
Net income for the year | 13,684,950 | 13,684,950 | 27,369,900 | 27,046,684 | 24,975,700 | |||||||||||||||||||||||
Partners' equity - End of year | $ | 35,173,254 | $ | 35,173,254 | $ | 70,346,508 | $ | 73,476,608 | $76,429,924 |
TIMWEN Partnership | ||||||||||||
Statement of Cash Flows | ||||||||||||
Year ended | Year ended | Year ended | ||||||||||
December 30, 2012 | January 1, 2012 | January 2, 2011 | ||||||||||
Cash provided by (used in) | ||||||||||||
Operating activities | ||||||||||||
Net income for the year | $27,369,900 | $27,046,684 | $24,975,700 | |||||||||
Add: Items not affecting cash | ||||||||||||
Depreciation and amortization | 4,367,219 | 4,280,186 | 4,794,250 | |||||||||
Straight-line rent | 12,022 | (166,528) | 551,382 | |||||||||
Amortization of deferred lease inducements | (293,073) | (293,073) | (293,073) | |||||||||
Distributions received from Grimsby Food Court Ltd. | 205,000 | 741,120 | 320,000 | |||||||||
Equity in earnings of investment in Grimsby Food Court Ltd. | (96,299) | (366,221) | (180,932) | |||||||||
Loss on retirement of revenue-producing properties | - | - | 59,312 | |||||||||
31,564,769 | 31,242,168 | 30,226,639 | ||||||||||
Change in operating assets and liabilities | ||||||||||||
Accounts receivable | 1,060,661 | 204,031 | 459,825 | |||||||||
Prepaid rent | 3,825 | 3,898 | 11,198 | |||||||||
Accounts payable and accrued liabilities | (161,603) | 163,188 | (88,377) | |||||||||
32,467,652 | 31,613,285 | 30,609,285 | ||||||||||
Investing activities | ||||||||||||
Additions to revenue-producing properties | (1,120,578) | (572,901) | (545,106) | |||||||||
Financing activities | ||||||||||||
Distributions to partners | (30,500,000) | (30,000,000) | (28,500,000) | |||||||||
Change in cash | 847,074 | 1,040,384 | 1,564,179 | |||||||||
Cash - Beginning of year | 2,679,439 | 1,639,055 | 74,876 | |||||||||
Cash - End of year | $3,526,513 | $2,679,439 | $1,639,055 |
1. | Nature of operations |
3. | Revenue-producing properties |
December 30, 2012 | January 1, 2012 | ||||||||||||||
Accumulated | |||||||||||||||
depreciation and | |||||||||||||||
Cost | amortization | Net | Net | ||||||||||||
Land | $ | 21,231,151 | $ - | $ | 21,231,151 | $ | 21,231,151 | ||||||||
Buildings | 36,184,620 | 16,055,939 | 20,128,681 | 19,289,734 | |||||||||||
Leasehold improvements | 64,698,454 | 34,335,000 | 30,363,454 | 32,912,405 | |||||||||||
Deferred design costs and other | 2,305,185 | 1,241,744 | 1,063,441 | 1,219,827 | |||||||||||
124,419,410 | 51,632,683 | 72,786,727 | 74,653,117 | ||||||||||||
Construction-in-progress | - | - | - | 377,173 | |||||||||||
$ | 124,419,410 | $ | 51,632,683 | $ | 72,786,727 | $ | 75,030,290 |
4. | Related party transactions and balances |
December 30, 2012 | January 1, 2012 | January 2, 2011 | ||||||||||||
Rental income | ||||||||||||||
TDL | $ | 24,998,367 | $ | 24,520,534 | $ | 24,017,601 | ||||||||
WROC | 14,693,237 | 14,406,641 | 14,343,402 | |||||||||||
$ | 39,691,604 | $ | 38,927,175 | $ | 38,361,003 | |||||||||
Management fee | ||||||||||||||
WROC - included in operating expenses | $ | 275,000 | $ | 275,000 | $ | 275,000 | ||||||||
Related party rental expense | ||||||||||||||
TDL | $ | 231,184 | $ | 225,734 | $ | 227,422 | ||||||||
Management fee | ||||||||||||||
TDL - included in revenue-producing properties | $ | 91,400 | $ | 91,400 | ||||||||||
Amounts included in accounts receivable | ||||||||||||||
TDL | $ | 2,253,164 | $ | 2,561,575 | ||||||||||
WROC | 1,011,229 | 1,763,479 | ||||||||||||
$ | 3,264,393 | $ | 4,325,054 | |||||||||||
Amounts included in accounts payable | ||||||||||||||
TDL | $ | 537,491 | $ | 320,703 |
5. | Deferred lease inducements |
December 30, 2012 | January 1, 2012 | |||||||||||||||
Accumulated | ||||||||||||||||
Cost | amortization | Net | Net | |||||||||||||
Deferred lease inducements | $ | 6,679,525 | $ | 3,597,707 | $ | 3,081,818 | $ | 3,374,891 |
6. | Leases |
2013 | $ | 7,446,000 | |||||
2014 | 7,484,000 | ||||||
2015 | 7,491,000 | ||||||
2016 | 7,192,000 | ||||||
2017 | 6,906,000 | ||||||
2018 and thereafter | 24,290,000 | ||||||
Total | $ | 60,809,000 |
7. | Financial instruments |
8. | Commitments and contingencies |
9. | Subsequent events |
Acquisitions and Dispositions Acquisitions and Disposals (Tables)
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Dec. 30, 2012
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Acquisitions and Dispositions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The unaudited pro forma revenue and earnings of the combined companies had the acquisition date been January 3, 2011 are as follows:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date.
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Retirement Benefit Plans Defined Benefit Plans (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 1 Months Ended | 12 Months Ended | |||||
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Dec. 30, 2012
Pension Plans, Defined Benefit [Member]
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Jan. 01, 2012
Pension Plans, Defined Benefit [Member]
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Dec. 30, 2012
Pension Plans, Defined Benefit [Member]
General and Administrative Expense [Member]
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Jan. 01, 2012
Pension Plans, Defined Benefit [Member]
General and Administrative Expense [Member]
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Jan. 02, 2011
Pension Plans, Defined Benefit [Member]
General and Administrative Expense [Member]
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Jul. 31, 2011
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Arby’s Restaurant Group, Inc [Member]
Pension Plans, Defined Benefit [Member]
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Jan. 02, 2011
Arby’s Restaurant Group, Inc [Member]
Pension Plans, Defined Benefit [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined Benefit Plan, Proceeds Received from Buyer for Unfunded Liability | $ 400 | |||||||
Defined Benefit Plan, Accumulated Benefit Obligation | 4,211 | 3,926 | ||||||
Defined Benefit Plan, Fair Value of Plan Assets | 2,706 | 2,557 | ||||||
Pension Expense | $ 42 | $ 303 | $ 157 | $ 47 | $ 64 |
Investment Income, Net (Tables)
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Dec. 30, 2012
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Investment Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Income, Net |
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Fair Value Measurements (Tables)
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Dec. 30, 2012
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Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] |
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Fair value of assets and liabilities (other than cash and cash equivalents) measure at fair value on a nonrecurring basis |
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Guarantees and Other Commitments and Contingencies Insurance (Details) (Insurance Claims [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
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Insurance Claims [Member]
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Guarantor Obligations [Line Items] | |
Loss Contingency, Range of Possible Loss per Occurrence, Maximum | $ 500 |
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Sep. 30, 2012
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Jul. 01, 2012
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Apr. 01, 2012
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Jan. 01, 2012
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Oct. 02, 2011
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Jul. 03, 2011
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Apr. 03, 2011
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Dec. 30, 2012
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Jan. 01, 2012
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Jan. 02, 2011
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Jul. 31, 2011
Arby’s Restaurant Group, Inc [Member]
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Dec. 30, 2012
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Arby’s Restaurant Group, Inc [Member]
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Jan. 02, 2011
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Income (Loss) from Discontinued Operations [Member]
Arby’s Restaurant Group, Inc [Member]
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Dec. 30, 2012
Other Liabilities [Member]
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Deferred Bonus [Member]
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Type of Deferred Compensation, All Types [Domain]
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Other Expense [Member]
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Other Income (Expense), Net [Member]
Arby’s Restaurant Group, Inc [Member]
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Jan. 01, 2012
Deferred taxes and other assets [Member]
Arby’s Restaurant Group, Inc [Member]
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations | $ 979 | [1],[2] | $ 530 | [1],[2],[3] | $ 0 | [1],[3] | $ 0 | [1],[4] | $ (306) | [5] | $ (6,510) | [5] | $ (108) | [5] | $ (1,113) | [5] | $ 1,509 | $ (8,037) | $ (22,436) | |||||||||||||||||||||
Date of Disposal | 7/4/2011 | |||||||||||||||||||||||||||||||||||||||
Percentage of Stock Divested | 100.00% | |||||||||||||||||||||||||||||||||||||||
Proceeds from sale of Arby's, net | 0 | 97,925 | 0 | 130,000 | ||||||||||||||||||||||||||||||||||||
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received | 18.50% | |||||||||||||||||||||||||||||||||||||||
Noncash or Part Noncash Divestiture, Amount of Consideration Received | 19,000 | |||||||||||||||||||||||||||||||||||||||
Noncash or Part Noncash Acquisition, Debt Assumed | 190000 | |||||||||||||||||||||||||||||||||||||||
Gains (Losses) on Sales of Assets | 1,044 | (930) | 13,114 | |||||||||||||||||||||||||||||||||||||
Discontinued Operations Net Income (Loss) From Discontinued Operations | 1,951 | 762 | (22,436) | 1,951 | 762 | (22,436) | ||||||||||||||||||||||||||||||||||
Transaction related costs | 11,500 | |||||||||||||||||||||||||||||||||||||||
Revenues | 0 | 546,453 | 1,040,975 | |||||||||||||||||||||||||||||||||||||
Discontinued Operation, Amount of Other Income (Loss) from Disposition of Discontinued Operations, before Income Tax | 907 | |||||||||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of income taxes: | ||||||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations before income taxes | 1,692 | (35,550) | 4,279 | (2,112) | (704) | 529 | (300) | |||||||||||||||||||||||||||||||||
Loss on disposal of discontinued operations, net of income taxes | (442) | (8,799) | 0 | (442) | (8,799) | 0 | ||||||||||||||||||||||||||||||||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 5,227 | |||||||||||||||||||||||||||||||||||||||
Post Closing Purchase Price Adjustments | 14,800 | |||||||||||||||||||||||||||||||||||||||
Discontinued Operation, Tax Effect of Income (Loss) from Disposal of Discontinued Operation | $ 3,572 | $ 5,524 | $ 1,952 | |||||||||||||||||||||||||||||||||||||
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Guarantees and Other Commitments and Contingencies Capital Expenditures (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
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Guarantees and Other Commitments and Contingencies [Abstract] | |
Outstanding Commitment for Capital Expenditure, Expected Cash Outflow Within Next 12 Months | $ 22,109 |
Outstanding Commitment for Capital Expenditures for Image Activation Within Next 12 Months | $ 13,867 |
Retirement Benefit Plans (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Retirement Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Multiemployer Plans [Table Text Block] | Further information about the Union Pension Fund is presented in the table below:
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Accrued Expenses and Other Current Liabilities (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Accrued Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] |
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Advertising Costs and Funds
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Advertising Costs and Funds [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs and Funds [Text Block] | Advertising Costs and Funds We currently participate in two national advertising funds (the “Advertising Funds”) established to collect and administer funds contributed for use in advertising and promotional programs. Contributions to the Advertising Funds are required from both company-owned and franchised restaurants and are based on a percentage of restaurant sales. In addition to the contributions to the various Advertising Funds, company-owned and franchised restaurants make additional contributions to other local and regional advertising programs. Restricted assets and related liabilities of the Advertising Funds at December 30, 2012 and January 1, 2012 were as follows:
Our advertising expenses in 2012, 2011 and 2010 totaled $103,147, $106,658 and $99,023, respectively. |
Investments (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2012
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Jan. 01, 2012
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Dec. 30, 2012
Japan JV [Member]
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Jan. 01, 2012
Japan JV [Member]
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Jan. 02, 2011
Japan JV [Member]
|
Dec. 30, 2012
TimWen [Member]
|
Jan. 01, 2012
TimWen [Member]
|
Jan. 02, 2011
TimWen [Member]
|
Jan. 03, 2010
TimWen [Member]
|
Dec. 30, 2012
Arby’s Restaurant Group, Inc [Member]
|
Jan. 01, 2012
Arby’s Restaurant Group, Inc [Member]
|
Dec. 30, 2012
Jurlique International Pty Ltd [Member]
|
Jan. 01, 2012
Jurlique International Pty Ltd [Member]
|
Dec. 28, 2008
Jurlique International Pty Ltd [Member]
|
Dec. 30, 2012
Other Cost Investment [Member]
|
Jan. 01, 2012
Other Cost Investment [Member]
|
Dec. 30, 2012
Guarantee of Indebtedness of Others [Member]
Japan JV [Member]
|
Dec. 30, 2012
Additional Guarantees Expected [Member]
Japan JV [Member]
|
Jul. 31, 2011
Arby’s Restaurant Group, Inc [Member]
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Schedule of Investments | ||||||||||||||||||||||||||||||
Equity investments | $ (1,750) | [1],[2] | $ 77 | [1] | $ 0 | $ 89,370 | [3] | $ 91,742 | [3] | $ 98,631 | [3] | $ 97,476 | ||||||||||||||||||
Cost investments | 19,000 | 19,000 | 0 | 325 | 8,500 | 4,913 | 8,127 | |||||||||||||||||||||||
Long-term Investments, Net of Negative Equity Investments | 111,533 | |||||||||||||||||||||||||||||
Investments | 113,283 | 119,271 | ||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 49.00% | 50.00% | ||||||||||||||||||||||||||||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | 54,088 | 55,805 | ||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage of Majority Owners | 51.00% | |||||||||||||||||||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | 3,000 | 3,000 | ||||||||||||||||||||||||||||
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received | 18.50% | |||||||||||||||||||||||||||||
Noncash or Part Noncash Divestiture, Amount of Consideration Received | 19,000 | |||||||||||||||||||||||||||||
Proceeds from Dividends Received | $ 4,625 | |||||||||||||||||||||||||||||
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Guarantees and Other Commitments and Contingencies Japan Joint Venture (Details) (Japan JV [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
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Guarantor Obligations [Line Items] | |
Equity Method Investment, Ownership Percentage of Majority Owners | 51.00% |
Equity Method Investment, Ownership Percentage | 49.00% |
Guarantee of Indebtedness of Others [Member]
|
|
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | 3,000 |
Additional Guarantees Expected [Member]
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|
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | 3,000 |
Total Guarantee Obligations, Including Anticipated Future Cash Requirements [Member]
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Guarantor Obligations [Line Items] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | 8,000 |
Advertising Costs and Funds (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Dec. 30, 2012
funds
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Jan. 01, 2012
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Jan. 02, 2011
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Restricted Assets and Liabilities [Line Items] | |||
Number of Advertising Funds | 2 | ||
Advertising funds restricted assets | $ 65,777 | $ 70,547 | |
Accounts payable | (70,826) | (81,301) | |
Accrued expenses and other current liabilities | (137,348) | (178,298) | |
Member's deficit | 467,007 | 434,999 | |
Advertising funds restricted liabilities | 65,777 | 70,547 | |
Advertising Expense | 103,147 | 106,658 | 99,023 |
Advertising Fund [Member]
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Restricted Assets and Liabilities [Line Items] | |||
Cash and cash equivalents | 21,086 | 27,590 | |
Accounts and notes receivable | 38,359 | 37,025 | |
Other assets | 6,332 | 5,932 | |
Advertising funds restricted assets | 65,777 | 70,547 | |
Accounts payable | (3,729) | (2,972) | |
Accrued expenses and other current liabilities | (63,073) | (73,870) | |
Member's deficit | 1,025 | 6,295 | |
Advertising funds restricted liabilities | $ 65,777 | $ 70,547 |
DFR Notes (Details) (Notes Receivable [Member], USD $)
In Thousands, unless otherwise specified |
0 Months Ended | 12 Months Ended |
---|---|---|
Jun. 09, 2010
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Jan. 02, 2011
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Notes Receivable [Member]
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Proceeds from Colection of Notes Receivable, Including Interest | $ 31,330 | |
Notes Receivable Percentage of Aggregate Principal Amount Received | 64.10% | |
Notes, Loans and Financing Receivable, Gross, Noncurrent | 47,986 | |
Notes, Loans and Financing Receivable, Net, Noncurrent | 24,983 | |
Nonoperating Gains (Losses) | $ 4,909 |
Long-Term Debt Maturities of long-term debt (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
|
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Debt Instrument [Line Items] | |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 12,911 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 237,990 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 15,397 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 12,396 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 12,588 |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 1,192,018 |
Long-term Debt, Gross | $ 1,483,300 |
Transactions with Related Parties (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Transactions with Related Parties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions by Related Party | The following is a summary of ongoing transactions between the Company and its related parties, which are included in continuing operations:
___________________ Transactions with Purchasing Cooperatives
QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. Prior to 2010, the system’s purchasing function was performed and paid for by Wendy’s. In order to facilitate the orderly transition of the 2010 purchasing function for operations in the U.S. and Canada, Wendy’s transferred certain contracts, assets and certain Wendy’s purchasing employees to QSCC in 2010. Pursuant to the terms of the Wendy’s Co-op, Wendy’s expensed $15,500 in 2009 for payments to QSCC required over an 18 month period through May 2011 in order to provide funding for start-up costs, operating expenses and cash reserves. Wendy’s made such payments of $305 and $15,195 in 2011 and 2010, respectively. In connection with the ongoing operations of QSCC during 2010, QSCC reimbursed Wendy’s $913 for amounts Wendy’s had paid primarily for payroll-related expenses for certain Canadian QSCC purchasing employees. Since the third quarter of 2010, all QSCC members (including Wendy’s) pay sourcing fees to third party vendors on products which are sourced through QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $2,464, $2,033 and $325 in 2012, 2011 and 2010, respectively, which are included as a reduction of “Cost of sales.”
Transactions with the Management Company
In addition, The Wendy’s Company paid the Management Company a service fee of $250 per quarter, in connection with the Services Agreement until it expired on June 30, 2011. The Wendy’s Company incurred service fees of $500 and $1,000 in 2011 and 2010, respectively, which are included in “General and administrative.”
On June 29, 2011, The Wendy’s Company and TASCO entered into an agreement to extend the Aircraft Lease Agreement for an additional one year period (expiring on June 30, 2012) and an increased monthly rent of $13. On June 30, 2012, The Wendy’s Company and TASCO entered into an extension of that lease agreement that extended the lease term to July 31, 2012 and effective as of August 1, 2012, entered into an amended and restated aircraft lease agreement (the “2012 Lease”) that will expire on January 5, 2014. Under the 2012 Lease, all expenses related to the ownership, maintenance and operation of the aircraft will be paid by TASCO, subject to the limitation that if the amount of annual ongoing maintenance, hangar, insurance and other expenses, or the estimated amount of other scheduled maintenance expenses, exceeds the amounts stated in the 2012 Lease, then TASCO can either pay such amounts or terminate the 2012 Lease. In addition, if extraordinary and/or unscheduled repairs and/or maintenance for the aircraft become necessary and the estimated cost thereof exceeds the amount stated in the 2012 Lease, then TASCO can either pay such amounts or terminate the 2012 Lease. In the event of termination, TASCO will not be obligated to perform or pay for such repairs and/or maintenance following the date of termination. Under the previous Aircraft Lease Agreement, the Company recorded lease income of $92, $138 and $120 during 2012, 2011 and 2010, respectively, as a reduction of “General and administrative.”
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Parent Financial Statements Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
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Dec. 30, 2012
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Sep. 30, 2012
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Jul. 01, 2012
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Apr. 01, 2012
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Jan. 01, 2012
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Oct. 02, 2011
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Jul. 03, 2011
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Apr. 03, 2011
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Dec. 30, 2012
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Jan. 01, 2012
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Jan. 02, 2011
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Parent Financial Statements | |||||||||||||||||||||||||||||
Net Income (loss) attributable to The Wendy's Company | $ 26,388 | [1],[2] | $ (26,162) | [1],[2],[3] | $ (5,493) | [1],[3] | $ 12,350 | [1],[4] | $ 3,984 | [5] | $ (3,966) | [5] | $ 11,266 | [5] | $ (1,409) | [5] | $ 7,083 | $ 9,875 | $ (4,325) | ||||||||||
Other comprehensive income (loss), net: | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | 6,096 | (6,869) | 12,666 | ||||||||||||||||||||||||||
Change in unrecognized pension loss, net of income tax benefit (provision) of $127, $(21) and $(54), respectively | (217) | (46) | 95 | ||||||||||||||||||||||||||
Change in unrealized gain on available-for-sale securities, net of income tax benefit of $41 | 0 | 0 | (59) | ||||||||||||||||||||||||||
Other comprehensive income (loss), net | 5,879 | (6,915) | 12,702 | ||||||||||||||||||||||||||
Comprehensive income attributable to The Wendy's Company | 12,962 | 2,960 | 8,377 | ||||||||||||||||||||||||||
Parent Company [Member]
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Parent Financial Statements | |||||||||||||||||||||||||||||
Net Income (loss) attributable to The Wendy's Company | 7,083 | 9,875 | (4,325) | ||||||||||||||||||||||||||
Other comprehensive income (loss), net: | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | 6,096 | (6,869) | 12,666 | ||||||||||||||||||||||||||
Change in unrecognized pension loss, net of income tax benefit (provision) of $127, $(21) and $(54), respectively | (217) | (46) | 95 | ||||||||||||||||||||||||||
Change in unrealized gain on available-for-sale securities, net of income tax benefit of $41 | 0 | 0 | (59) | ||||||||||||||||||||||||||
Other comprehensive income (loss), net | 5,879 | (6,915) | 12,702 | ||||||||||||||||||||||||||
Comprehensive income attributable to The Wendy's Company | $ 12,962 | $ 2,960 | $ 8,377 | ||||||||||||||||||||||||||
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Cash and Receivables Accounts and Notes Receivable (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
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Jan. 01, 2012
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Jan. 02, 2011
|
Jan. 03, 2010
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Accounts Receivable, Gross, Current | $ 65,132 | $ 70,963 | ||||||||
Accounts, Notes, Loans And Financing Receivable, Gross, Current | 67,485 | 72,402 | ||||||||
Allowance for Doubtful Accounts Receivable, Current | (6,321) | (4,053) | (7,321) | (6,540) | ||||||
Accounts, Notes, Loans and Financing Receivable, Net, Current | 61,164 | 68,349 | ||||||||
Allowance for Doubtful Accounts Receivable, Noncurrent | (2,881) | (963) | (3,778) | (22,566) | ||||||
Franchisees [Member]
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Accounts Receivable, Gross, Current | 56,494 | 57,965 | ||||||||
Notes, Loans and Financing Receivable, Gross, Current | 2,353 | [1] | 1,439 | [1] | ||||||
Notes, Loans and Financing Receivable, Gross, Noncurrent | 10,227 | [1],[2] | 13,393 | [1],[2] | ||||||
Allowance for Doubtful Accounts Receivable, Noncurrent | (2,881) | [2] | (963) | [2] | ||||||
Accounts, Notes, Loans and Financing Receivable, Net, Noncurrent | 7,346 | [2] | 12,430 | [2] | ||||||
Other Receivables [Member]
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Accounts Receivable, Gross, Current | 8,638 | 12,998 | ||||||||
Fully Reserved [Member] | Breakfast expansion [Member]
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Notes, Loans and Financing Receivable, Gross, Current | 1,687 | [2] | ||||||||
Notes, Loans and Financing Receivable, Gross, Noncurrent | $ 1,857 | [1],[2] | ||||||||
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Long-Term Debt (Details)
In Thousands, unless otherwise specified |
12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
USD ($)
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Jan. 01, 2012
USD ($)
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Jan. 02, 2011
USD ($)
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May 15, 2012
Senior Notes, 10.0% [Member]
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Jan. 02, 2011
Term Loan, 2010 [Member]
USD ($)
|
Sep. 30, 2008
Senior Notes, 6.25% [Member]
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Sep. 30, 2008
Senior Notes, 6.20% [Member]
USD ($)
|
Dec. 30, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Swap [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
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Jan. 01, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Swap [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
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Dec. 30, 2012
Canadian Subsidiary [Member]
CAD
|
Dec. 30, 2012
Unsecured Debt [Member]
Senior Notes, 10.0% [Member]
USD ($)
|
Jan. 01, 2012
Unsecured Debt [Member]
Senior Notes, 10.0% [Member]
USD ($)
|
Dec. 30, 2012
Unsecured Debt [Member]
Other Debt Obligations [Member]
USD ($)
|
Jan. 01, 2012
Unsecured Debt [Member]
Other Debt Obligations [Member]
USD ($)
|
Sep. 30, 2008
Unsecured Debt [Member]
Senior Notes, 6.25% [Member]
|
Dec. 30, 2012
Unsecured Debt [Member]
Senior Notes, 6.20% [Member]
USD ($)
|
Jan. 01, 2012
Unsecured Debt [Member]
Senior Notes, 6.20% [Member]
USD ($)
|
Dec. 30, 2012
Unsecured Debt [Member]
Debentures, 7% [Member]
USD ($)
|
Jan. 01, 2012
Unsecured Debt [Member]
Debentures, 7% [Member]
USD ($)
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Sep. 30, 2008
Unsecured Debt [Member]
Debentures, 7% [Member]
USD ($)
|
Dec. 30, 2012
Capital Lease Obligations [Member]
USD ($)
|
Jan. 01, 2012
Capital Lease Obligations [Member]
USD ($)
|
Dec. 30, 2012
Secured Debt [Member]
Term Loan, 2012 [Member]
USD ($)
|
May 15, 2012
Secured Debt [Member]
Term Loan, 2012 [Member]
USD ($)
|
Jan. 01, 2012
Secured Debt [Member]
Term Loan, 2012 [Member]
USD ($)
|
Dec. 30, 2012
Secured Debt [Member]
Aircraft Term Loan [Member]
USD ($)
|
Jan. 01, 2012
Secured Debt [Member]
Aircraft Term Loan [Member]
USD ($)
|
Dec. 30, 2012
Secured Debt [Member]
Term Loan, 2010 [Member]
USD ($)
|
Jan. 01, 2012
Secured Debt [Member]
Term Loan, 2010 [Member]
USD ($)
|
May 24, 2010
Secured Debt [Member]
Term Loan, 2010 [Member]
USD ($)
|
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Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | $ 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 6,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | 225,000 | 100,000 | 1,125,000 | 650,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum Interest Coverage Ratio | 3.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Derivative Assets, at Fair Value | 8,169 | [1] | 11,695 | [1] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Lease Obligations | 1,457,562 | 1,356,999 | 0 | [2] | 554,901 | [2] | 706 | 1,060 | 225,940 | [3] | 224,643 | [3] | 83,496 | [4] | 82,342 | [4] | 32,594 | 16,688 | 1,114,826 | [2] | 0 | [2] | 0 | [5] | 11,303 | [5] | 0 | [2] | 466,062 | [2] | ||||||||||||||||||||||||
Less amounts payable within one year | (12,911) | (6,597) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | 1,444,651 | 1,350,402 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.00% | 8.60% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 6.25% | 6.20% | 6.25% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | $ (75,076) | $ 0 | $ (26,197) | $ 26,197 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Long-Term Debt Credit Agreements (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
Dec. 30, 2012
Term Loan, 2012 [Member]
|
May 15, 2012
Term Loan, 2012 [Member]
Secured Debt [Member]
|
Jul. 16, 2012
Senior Notes, 10.0% [Member]
|
May 15, 2012
Senior Notes, 10.0% [Member]
|
Sep. 30, 2008
Senior Notes, 6.25% [Member]
|
Jul. 01, 2012
Aircraft Term Loan [Member]
|
Apr. 01, 2012
Aircraft Term Loan [Member]
|
May 15, 2012
Credit Agreement [Member]
|
May 15, 2012
Credit Agreement, Revolver [Member]
Revolving Credit Facility [Member]
|
Dec. 30, 2012
Credit Agreement, Revolver [Member]
Letter of Credit [Member]
|
May 15, 2012
Credit Agreement, Revolver [Member]
Letter of Credit [Member]
|
Dec. 30, 2012
Eurodollar Rate [Member]
Term Loan, 2012 [Member]
|
May 15, 2012
Eurodollar Rate [Member]
Term Loan, 2012 [Member]
|
Dec. 30, 2012
Base Rate [Member]
Term Loan, 2012 [Member]
|
May 15, 2012
Base Rate [Member]
Term Loan, 2012 [Member]
|
Dec. 30, 2012
Interest Expense [Member]
Term Loan, 2012 [Member]
|
|
Debt Instrument [Line Items] | |||||||||||||||||||
Long-term Debt | $ 1,113,750 | ||||||||||||||||||
Debt Instrument, Unamortized Discount | 11,250 | ||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 200,000 | 70,000 | |||||||||||||||||
Uncommitted Available Increase in Borrowing Capacity | 275,000 | ||||||||||||||||||
Foreign Subsidiary Stock Securing Debt, Percentage | 65.00% | ||||||||||||||||||
Original Issue Discount, Percentage | 1.00% | ||||||||||||||||||
Percentage of Initial Principal Outstanding, Quarterly Principal Installment | 1.00% | ||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | ||||||||||||||||||
Issuance Amount, Percent of Principal | 99.00% | ||||||||||||||||||
Debt Agreement Requirement, Oustanding Principle Percentage, Maximum | 85.00% | ||||||||||||||||||
Letters of Credit Outstanding, Amount | 20,601 | 20,348 | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | Eurodollar Rate | Base Rate | |||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum | 1.25% | ||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | 2.50% | |||||||||||||||||
Debt Instrument, Interest Rate at Period End | 4.75% | ||||||||||||||||||
Deferred Finance Costs, Noncurrent, Gross | 15,566 | ||||||||||||||||||
Debt Instrument, Repurchase Amount | 124,225 | ||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 6.25% | |||||||||||||||||
Debt Instrument, Redemption Amount | 440,775 | ||||||||||||||||||
Debt Instrument, Redemption Price, Percentage | 107.50% | ||||||||||||||||||
Repayments of Long-term Debt | $ 1,044,310 | $ 38,702 | $ 474,791 | $ 6,656 | $ 3,911 | ||||||||||||||
Debt Instrument, Repurchase Price, Percentage | 108.125% |
Cash and Receivables Allowance for Doubtful Accounts (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
Jan. 03, 2010
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|||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Allowance for Doubtful Accounts Receivable, Current | $ 6,321 | $ 4,053 | $ 7,321 | $ 6,540 | ||||
Allowance for Doubtful Accounts Receivable, Noncurrent | 2,881 | 963 | 3,778 | 22,566 | ||||
Valuation Allowances And Reserves, Transfer Of Reserves Of Business Disposal | 0 | (5,504) | 0 | |||||
Valuation Allowances And Reserves, Uncollectible Accounts Written Off, Net Of Recoveries | (28) | (843) | (6,474) | |||||
Valuation Allowances and Reserves, Balance | 9,202 | 5,016 | 11,099 | |||||
Franchisees [Member]
|
||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Allowance for Doubtful Accounts Receivable, Noncurrent | 2,881 | [1] | 963 | [1] | ||||
Valuation Allowances and Reserves, Charged to Cost and Expense | 670 | 264 | 9,694 | |||||
Notes Receivable [Member]
|
||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Valuation Allowances and Reserves, Charged to Cost and Expense | 0 | 0 | (21,227) | |||||
Breakfast expansion [Member]
|
||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Valuation Allowances And Reserves, Breakfast Notes Receivable Fully Reserved | $ 3,544 | $ 0 | $ 0 | |||||
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Acquisitions and Dispositions (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
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Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
Dec. 30, 2012
Sale of Company-Owned Restaurants to Franchiees [Member]
stores
|
Jan. 01, 2012
Sale of Company-Owned Restaurants to Franchiees [Member]
stores
|
Jan. 02, 2011
Sale of Company-Owned Restaurants to Franchiees [Member]
stores
|
Jan. 01, 2012
Property, Plant and Equipment [Member]
|
Jan. 02, 2011
Property, Plant and Equipment [Member]
|
Dec. 30, 2012
Sale of Restaurant to Unrelated Third Party [Member]
|
Dec. 30, 2012
Franchisees Exercising Options to Purchase Previously Subleased Properties [Member]
|
Dec. 30, 2012
Surplus Properties [Member]
|
Jan. 01, 2012
Surplus Properties [Member]
|
Jan. 02, 2011
Surplus Properties [Member]
|
Dec. 30, 2012
Other Dispositions [Member]
|
Jan. 01, 2012
Other Dispositions [Member]
|
Jan. 02, 2011
Other Dispositions [Member]
|
Jun. 11, 2012
Pisces Acquisition [Member]
years
stores
Restaurants
|
Jun. 11, 2012
Pisces Acquisition [Member]
Ground Lease [Member]
Restaurants
|
Jun. 11, 2012
Pisces Acquisition [Member]
Building Lease [Member]
Restaurants
|
Jul. 13, 2012
Double Cheese Acquisition [Member]
years
stores
|
Jul. 13, 2012
Double Cheese Acquisition [Member]
Building Lease [Member]
Restaurants
|
Dec. 30, 2012
Franchised Units [Member]
stores
|
Jan. 01, 2012
Franchised Units [Member]
stores
|
Dec. 30, 2012
Depreciation and Amortization [Member]
|
Jan. 02, 2011
Depreciation and Amortization [Member]
|
|||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||||||||||||||||||||||||||
Number of Restaurants | 30 | 24 | |||||||||||||||||||||||||||||||
Consideration for acquisition before post-closing adjustments | $ 18,915 | $ 19,181 | |||||||||||||||||||||||||||||||
Number of restaurants with lease agreements attached | 23 | ||||||||||||||||||||||||||||||||
Number of restaurants with lease assumption | 5 | 2 | 12 | ||||||||||||||||||||||||||||||
Cash | 55 | 27 | 66 | ||||||||||||||||||||||||||||||
Inventories | 149 | 163 | |||||||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 12,485 | 12,753 | |||||||||||||||||||||||||||||||
Deferred taxes and other assets | 1,773 | ||||||||||||||||||||||||||||||||
Other assets | 190 | ||||||||||||||||||||||||||||||||
Acquired territory rights | 18,390 | [1] | 2,640 | [1] | |||||||||||||||||||||||||||||
Favorable ground leases | 222 | 1,147 | |||||||||||||||||||||||||||||||
Capitalized lease obligations | (14,394) | (948) | |||||||||||||||||||||||||||||||
Deferred vendor incentives | (382) | [2] | (248) | [2] | |||||||||||||||||||||||||||||
Unfavorable leases | (992) | (531) | |||||||||||||||||||||||||||||||
Other liabilities | (952) | (727) | |||||||||||||||||||||||||||||||
Total identifiable net assets | 16,354 | 14,466 | |||||||||||||||||||||||||||||||
Weighted average amortization period, acquired territory rights | 13 | 13 | |||||||||||||||||||||||||||||||
Goodwill (preliminary) | 876,201 | 870,431 | 883,644 | 2,561 | [3] | 4,715 | [3] | 485 | 5,620 | ||||||||||||||||||||||||
Significant Changes, Franchises Assumed During Period | 4 | ||||||||||||||||||||||||||||||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 2,689 | ||||||||||||||||||||||||||||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | 1,659 | ||||||||||||||||||||||||||||||||
Acquisition, cash paid | 40,608 | 11,210 | 3,123 | 11,210 | |||||||||||||||||||||||||||||
Significant changes, franchises purchased during period | 2 | 19 | |||||||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price | 2,594 | 12,270 | |||||||||||||||||||||||||||||||
Acquisition, note payable issued | 1,060 | ||||||||||||||||||||||||||||||||
Significant Changes, Franchises Sold | 30 | 5 | 2 | ||||||||||||||||||||||||||||||
Proceeds from Sale of Property, Plant, and Equipment | 21,023 | 6,113 | 3,405 | 14,059 | 3,275 | 821 | 1,075 | 1,231 | 1,874 | 3,550 | 941 | 909 | 1,123 | 599 | 854 | 230 | |||||||||||||||||
Gain (Loss) on Sale of Property Plant Equipment | $ 885 | $ (22) | $ 1,411 | ||||||||||||||||||||||||||||||
|
Facilities Relocation and Other Transactions
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Consolidation of Facilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Facilities Relocation and Other Transition Costs | Facilities Relocation Costs and Other Transactions
Facilities Relocation and Other Transition Costs As announced in December 2011, we commenced the relocation of the Company’s Atlanta restaurant support center to Ohio. The Company expects to record costs aggregating approximately $4,800 in 2013 related to its relocation and other transition activities which were substantially completed during 2012. The costs expected to be expensed in 2013 primarily relate to relocation, severance and consulting and professional fees.
The tables below present a rollforward of our accruals for facility relocation costs, which are included in “Accrued expenses and other current liabilities” and “Other liabilities.”
Breakfast Discontinuation During the fourth quarter of 2012, the Company reflected costs totaling $10,569 resulting from the discontinuation of the breakfast daypart at certain restaurants consisting primarily of (1) the remaining net carrying value of $5,277 for certain breakfast equipment and (2) amounts advanced to franchisees of $3,544 for breakfast equipment which will not be reimbursed. Arby’s Transaction Related Costs As a result of the sale of Arby’s in July 2011, we expensed costs related to the Arby’s transaction during 2012 and 2011 as detailed in the table below.
_____________________
The tables below present a rollforward of our accrual for Arby’s transaction related costs, which is included in “Accrued expenses and other current liabilities.”
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Stockholders' Equity (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | There were 470,424 shares of common stock issued at the beginning and end of 2012, 2011 and 2010. Treasury stock activity for 2012, 2011 and 2010 was as follows:
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Pledged Assets (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2012
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Pledged Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Pledged Assets, Not Separately Reported, Other [Table Text Block] | The following is a summary of the Company’s assets pledged as collateral for certain debt:
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Cash and Receivables Cash and Cash Equivalents (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
Jan. 03, 2010
|
||||||
---|---|---|---|---|---|---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||||||||
Cash | $ 188,436 | $ 471,110 | ||||||||
Cash Equivalents, at Carrying Value | 264,925 | 4,121 | ||||||||
Cash and cash equivalents | 453,361 | 475,231 | 512,508 | 591,719 | ||||||
Deferred Costs and Other Assets [Member] | Trust for Benefit of Employees [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Noncurrent | 3,295 | [1] | 3,372 | [1] | ||||||
Prepaids and Other Current Assets [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Current | 320 | [2] | 339 | [2] | ||||||
Prepaids and Other Current Assets [Member] | Trust for Benefit of Employees [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Current | 168 | [2] | 190 | [2] | ||||||
Prepaids and Other Current Assets [Member] | Other Restricted Cash Equivalents [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Current | 152 | [2] | 149 | [2] | ||||||
Deferred Costs and Other Assets [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Noncurrent | 3,295 | [1] | 4,058 | [1] | ||||||
Deferred Costs and Other Assets [Member] | Collateralized Debt Obligations [Member]
|
||||||||||
Cash and Cash Equivalents [Line Items] | ||||||||||
Restricted Cash and Cash Equivalents, Noncurrent | $ 0 | [1] | $ 686 | [1] | ||||||
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Stockholders' Equity (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 14 Months Ended | 29 Months Ended | ||
---|---|---|---|---|---|
Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
Dec. 29, 2013
|
Jan. 01, 2012
|
|
Number of Shares, beginning of year | 470,424 | 470,424 | 470,424 | ||
Number of Shares, end of year | 470,424 | 470,424 | 470,424 | 470,424 | |
Increase (Decrease) in Stockholders' Equity | |||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | $ 495,000 | |||
Stock repurchase program purchase price | 157,014 | 167,101 | |||
Stock Repurchase Program, Purchase Commissions | 542 | 642 | |||
Preferred Stock, Shares Authorized | 100,000 | 100,000 | 100,000 | 100,000 | |
Preferred Stock, Shares Issued | 0 | 0 | 0 | 0 | |
Amount of Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries | 1,100,000 | ||||
Restricted Net Asssts as Percentage of Consolidated Equity | 55.00% | ||||
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries | $ 0 | $ 0 | $ 443,700 | ||
Treasury Stock [Member]
|
|||||
Increase (Decrease) in Stockholders' Equity | |||||
Number of Shares at beginning of year | 80,700 | 52,050 | 17,492 | ||
Repurchase of common stock | 0 | 30,983 | 35,406 | ||
Common shares issued, stock options, net | (2,079) | (1,461) | (383) | ||
Common shares issued, restricted stock | (211) | (693) | (266) | ||
Common shares issued, Director fees | (45) | (42) | (47) | ||
Common shares issued, director fees | (314) | (137) | (152) | ||
Number of Shares at end of year | 78,051 | 80,700 | 52,050 | 80,700 |
Summary of Significant Accounting Policies (Policies)
|
12 Months Ended |
---|---|
Dec. 30, 2012
|
|
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company participates in two national advertising funds established to collect and administer funds contributed for use in advertising and promotional programs for company-owned and franchised restaurants. The revenue, expenses and cash flows of such advertising funds are not included in the Company’s consolidated statements of operations or consolidated statements of cash flows because the contributions to these advertising funds are designated for specific purposes and the Company acts as an agent, in substance, with regard to these contributions. The assets and liabilities of these funds are reported as “Advertising funds restricted assets” and “Advertising funds restricted liabilities.” |
Use of Estimates, Policy [Policy Text Block] | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Reclassifications, Policy [Text Block] | In our consolidated balance sheet as of January 1, 2012, we have corrected and reclassified $32,400 from “Accrued expenses and other current liabilities” to “Other liabilities” to properly present the non-current portion of certain self-insurance liabilities and $12,414 from “Deferred income tax benefit” included in current assets to “Deferred income taxes” included in non-current liabilities for the related tax effect. The advertising funds restricted assets and liabilities as of January 1, 2012 have been updated to reflect an $875 correction in one of the fund’s presentation of its current assets and liabilities. Certain other reclassifications have been made to prior year presentation to conform to the current year presentation. |
Accounting Changes and Error Corrections [Text Block] | ur consolidated statement of operations and consolidated balance sheet for the year ended and as of December 30, 2012, include adjustments which reflect corrections to prior years’ income taxes and depreciation of properties. Corrections to prior years’ tax matters recorded in our 2012 fiscal year had the effect of increasing our benefit from income taxes and decreasing our deferred income tax liability by $7,620 and $580 for income from continuing operations and discontinued operations, respectively. |
Fiscal Period, Policy [Policy Text Block] | Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended December 30, 2012” or “2012,” (2) “the year ended January 1, 2012” or “2011,” and (3) “the year ended January 2, 2011” or “2010,” all of which consisted of 52 weeks. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts. |
Receivables, Policy [Policy Text Block] | Accounts and Notes Receivable Accounts and notes receivable consist primarily of royalties, franchise fees, rents due principally from franchisees and credit card receivables. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor. |
Inventory, Policy [Policy Text Block] | Inventories The Company’s inventories are stated at the lower of cost or market, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. |
Investment, Policy [Policy Text Block] | Investments Investments in which the Company has significant influence over the investees include (1) a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with Tim Hortons Inc. (“THI”) and (2) a 49% share in a joint venture for the operation of Wendy’s restaurants in Japan (the “Japan JV”). Such investments are accounted for using the equity method, under which results of operations include our share of the income or loss of the investees. Investments in limited partnerships and other non-current investments in which the Company does not have significant influence over the investees, which includes our indirect 18.5% interest in Arby’s Restaurant Group, Inc. (“Arby’s”), are recorded at cost with related realized gains and losses reported as income or loss in the period in which the securities are sold or otherwise disposed. The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. The Company reviews investments with unrealized losses and recognizes investment losses for any unrealized losses deemed to be other than temporary. These investment losses are recognized as a component of “Net income (loss).” The Company considers such factors as the length of time the market value of an investment has been below its carrying value, the severity of the decline, the financial condition of the investee and the prospect for future recovery in the market value of the investment, including the Company’s ability and intent to hold the investments for a period of time sufficient for a forecasted recovery. The cost-basis component of investments represents original cost less a permanent reduction for any unrealized losses that were deemed to be other than temporary. |
Properties and Depreciation and Amortization, Policy [Policy Text Block] | Properties and Depreciation and Amortization Properties are stated at cost, including internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 5 to 20 years for office and restaurant equipment, 5 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leased assets capitalized and leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. Asset groups are primarily comprised of our individual restaurant properties. |
Goodwill, Policy [Policy Text Block] | Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our company-owned restaurants is reduced as a result of restaurant dispositions and is included in the carrying value of the restaurant in determining the gain or loss on disposal. For goodwill impairment testing purposes, we include two reporting units comprised of our (1) North America company-owned and franchise restaurants and (2) international franchise restaurants. Substantially all goodwill at December 30, 2012 and January 1, 2012 was associated with our North America restaurants. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. If the Company determines that impairment may exist, the amount of the impairment loss is measured as the excess, if any, of the carrying amount of the goodwill over its implied fair value. In determining the implied fair value of the reporting unit’s goodwill, the Company allocates the fair value of a reporting unit to all of the assets and liabilities of that unit as if the unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The excess of the fair value of the unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. |
Impairment of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets For impairment test purposes, long-lived assets include our company-owned restaurant assets and their definite-lived intangible assets, which include franchise agreements, favorable leases and reacquired rights under franchise agreements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by our individual company-owned restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our restaurant impairment losses principally reflect impairment charges resulting from the deterioration in operating performance of certain company-owned restaurants. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. |
Other Intangible Assets and Deferred Costs, Policy [Policy Text Block] | Other Intangible Assets and Deferred Costs Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising; 2 to 5 years for computer software; 3 to 20 years for reacquired rights under franchise agreements and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually by comparing their carrying value to fair value; any excess of carrying value over fair value is recognized as an impairment loss. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of company-owned and franchised restaurants and the resulting cash flows. Deferred financing costs are amortized as interest expense over the term of the respective debt using the effective interest rate method. |
Derivative Instruments, Policy [Policy Text Block] | Derivative Instruments The Company’s derivative instruments consist of fair value hedges and are recorded at fair value. Changes in the fair value of our fair value hedging instruments are recorded as an adjustment to the underlying debt balance being hedged to the extent of the effectiveness of such hedging instruments. Any ineffective portion of the change in fair value of the designated hedging instruments is included in results of operations. |
Share-based Compensation, Policy [Policy Text Block] | Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans. The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case they recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”) unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. |
Foreign Currency Translation, Policy [Policy Text Block] | Foreign Currency Translation Substantially all of the Company’s foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation adjustment are charged or credited directly to the “Foreign currency translation adjustment” component of “Accumulated other comprehensive income (loss).” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” |
Income Taxes, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50 percent likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at company-owned restaurants and upon shipment of bakery items and kids’ meal promotional items to our franchisees and others. During the first quarter of 2011, Wendy’s purchasing cooperative, Quality Supply Chain Co-op, Inc. (“QSCC”) began managing the operations for kids’ meal promotion items sold to franchisees. Our sales of kids’ meal promotion items during 2011 were made from inventory on hand prior to QSCC’s management of this process. “Sales” excludes taxes collected from the Company’s customers. “Franchise revenues” includes royalties, franchise fees and rental income. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened as all material services and conditions related to the franchise fee have been substantially performed upon the restaurant opening. Renewal franchise fees are recognized as revenue when the license agreements are signed and the fee is paid since there are no material services and conditions related to the renewal franchise fee. Franchise commitment fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. Rental income from properties owned and leased by the Company and leased or subleased to franchisees is recognized on a straight-line basis over the respective operating lease terms. |
Cost of Sales, Policy [Policy Text Block] | Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. |
Vendor Incentives, Policy [Policy Text Block] | Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are generally classified as a reduction of “Cost of sales.” |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs The Company incurs various advertising costs, including contributions to certain advertising cooperatives based upon a percentage of net sales by company-owned restaurants. All advertising costs are expensed as incurred, with the exception of media development costs that are expensed beginning in the month that the advertisement is first communicated, and are included in “Cost of sales.” |
Self Insurance Policy [Policy Text Block] | Self-insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. |
Leases, Policy [Policy Text Block] | Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. At inception, each lease is evaluated to determine whether the lease will be accounted for as an operating or capital lease based on its terms. When determining the lease term, we include option periods for which failure to renew the lease imposes a significant economic detriment. The primary penalty to which we may be subject is the economic detriment associated with the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight line basis (“Straight-Line Rent”) over the applicable lease terms. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. The term used for Straight-Line Rent is calculated initially from the date we obtain possession of the leased premises through the expected lease termination date. We expense rent from the possession date to the restaurant opening date. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis consistent with the Straight-Line Rent method. For leases that contain rent escalations, we record the rent payable during the lease term, as determined above, on the straight-line basis over the term of the lease (including the Rent Holiday beginning upon possession of the premises), and record the excess of the Straight-Line Rent over the minimum rents paid as a deferred lease liability included in “Other liabilities.” Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is expensed each period as the liability is incurred. Favorable and unfavorable lease amounts, when we purchase restaurants, are recorded as components of “Other intangible assets” and “Other liabilities,” respectively, and are amortized to “Cost of sales” both on a straight-line basis over the remaining term of the leases. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term. Management makes certain estimates and assumptions regarding each new lease agreement, lease renewal and lease amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease as capital or operating, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of favorable and unfavorable leases. The amount of depreciation and amortization, interest and rent expense reported would vary if different estimates and assumptions were used. |
Concentration of Risk, Policy [Text Block] | Concentration of Risk Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2012, 2011 or 2010. As of December 30, 2012, Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding produce and breads, that serviced approximately 56% of its company-owned and franchised restaurants and three additional in-line distributors that, in the aggregate, serviced approximately 36% of its company-owned and franchised restaurants. We believe that our vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. Wendy’s franchised restaurants are principally located throughout the U.S. and to a lessor extent, in 27 foreign countries and U.S. territories with the largest number in Canada. Company-owned restaurants are located in 29 states, with the largest number in Florida, Ohio, Texas, Georgia, Michigan, California, Pennsylvania and North Carolina. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U. S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, poultry, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. However, our exposure to Canadian dollar foreign currency risk is mitigated by the fact that less than 10% of our restaurants are in Canada. |
New Accounting Standards Adopted, Policy [Policy Text Block] | New Accounting Standards Adopted In July 2012, the Financial Accounting Standards Board (the “FASB”) issued an amendment that permits a company to make an qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The Company adopted this amendment during the third quarter of 2012; however the Company determined that it was required to perform the quantitative assessment in 2012. In May 2011, the FASB issued amendments which provide additional guidance about how fair value should be determined under existing standards and expands existing disclosure requirements for certain fair value measurements. The purpose of these amendments is to improve and converge International Financial Reporting Standards and GAAP. The Company adopted these amendments on January 2, 2012 and the adoption did not have a material impact on its consolidated financial statements. In June 2011, as amended in December 2011, the FASB issued an amendment that requires companies to present comprehensive income in either a single statement or two consecutive statements that report net income and other comprehensive income. The purpose of this amendment is to increase the prominence of other comprehensive income in financial statements. The Company adopted this amendment on January 2, 2012 using the two consecutive statement presentation. The adoption affected only the presentation of comprehensive income and did not change the composition or calculation of comprehensive income. |
Facilities Relocation and Other Transactions (Tables)
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Schedule of Restructuring and Related Costs [Table Text Block] | As a result of the sale of Arby’s in July 2011, we expensed costs related to the Arby’s transaction during 2012 and 2011 as detailed in the table below.
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The tables below present a rollforward of our accruals for facility relocation costs, which are included in “Accrued expenses and other current liabilities” and “Other liabilities.”
The tables below present a rollforward of our accrual for Arby’s transaction related costs, which is included in “Accrued expenses and other current liabilities.”
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Summary of Significant Accounting Policies Other Intangible Assets and Deferred Costs (Details)
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Dec. 30, 2012
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Franchise Rights [Member]
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Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Computer Software, Intangible Asset [Member] | Minimum [Member]
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Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Computer Software, Intangible Asset [Member] | Maximum [Member]
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Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Reacquired rights under franchise agreements [Member] | Minimum [Member]
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Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Reacquired rights under franchise agreements [Member] | Maximum [Member]
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Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Retirement Benefit Plans Defined Contribution Plan (Details) (Defined Contribution Pension [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Dec. 30, 2012
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Jan. 01, 2012
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Jan. 02, 2011
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Defined Contribution Pension [Member]
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Schedule of Defined Contribution Plans [Line Items] | |||
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percent | 75.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 4.00% | ||
Defined Contribution Plan, Cost Recognized | $ 8,887 | $ 7,944 | $ 10,179 |
Summary of Significant Accounting Policies Corporate Structure (Details)
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Dec. 30, 2012
Restaurants
countries
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Franchised Units [Member]
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Summary of Significant Accounting Policies [Abstract] | |
Number of Foreign Countries Entity Operates | 26 |
Franchisor Disclosure [Line Items] | |
Number of Foreign Countries Entity Operates (Including Canada) | 27 |
Number of Restaurants | 5,133 |
Entity Operated Units [Member]
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Franchisor Disclosure [Line Items] | |
Number of Restaurants | 1,427 |
Long-Term Debt (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2012
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Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term debt consisted of the following:
Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, discounts and interest rate swaps, as of December 30, 2012 were as follows:
_____________________
The Term Loan was issued at 99.0% of the principal amount, representing an original issue discount of 1.0% resulting in net proceeds of $1,113,750. The discount of $11,250 is being accreted and the related charge included in “Interest expense” through the maturity of the Term Loan. The Term Loan is due not later than May 15, 2019 and amortizes in an amount equal to 1% per annum of the total principal amount outstanding, payable in quarterly installments which commenced on December 31, 2012, with the remaining balance payable on the maturity date. In addition, the Term Loan requires prepayments of principal amounts resulting from certain events and excess cash flow on an annual basis from Wendy’s as defined under the Credit Agreement. An excess cash flow payment was not required for fiscal 2012. The revolving credit facility expires not later than May 15, 2017. An unused commitment fee of 50 basis points per annum is payable quarterly on the average unused amount of the revolving credit facility until the maturity date. As of December 30, 2012, there were no amounts outstanding under the revolving credit facility, except for $20,348 of letters of credit issued in the normal course of business. The interest rate on the Term Loan and amounts borrowed under the revolving credit facility is based on the Eurodollar Rate as defined in the Credit Agreement (but not less than 1.25%), plus 3.50%, or a Base Rate, as defined in the Credit Agreement plus 2.50%. Since the inception of the Term Loan, we have elected to use the Eurodollar Rate, which resulted in an interest rate on the Term Loan of 4.75% as of December 30, 2012. Wendy’s incurred $15,566 in costs related to the Credit Agreement, which are being amortized to “Interest expense” through the maturity of the Term Loan utilizing the effective interest rate method. Proceeds from the Term Loan were used (1) to repay all amounts outstanding under the 2010 Term Loan, (2) to redeem the Wendy’s Restaurants 10.00% Senior Notes due 2016 (the “Senior Notes”) in the amounts of $440,775 aggregate principal at a redemption price of 107.5% of the principal amount in July 2012 and to purchase $124,225 aggregate principal at a purchase price of 108.125% of the principal amount in May 2012, both plus accrued and unpaid interest and (3) to pay substantially all of the Credit Agreement fees and expenses. As a result of the transactions described above, the Company incurred a loss on the early extinguishment of debt as follows:
The affirmative and negative covenants in the Credit Agreement include, among others, preservation of corporate existence; payment of taxes; maintenance of insurance; and limitations on: indebtedness (including guarantee obligations of other indebtedness); liens; mergers, consolidations, liquidations and dissolutions; sales of assets; dividends and other payments in respect of capital stock; investments; payments of certain indebtedness; transactions with affiliates; changes in fiscal year; negative pledge clauses and clauses restricting subsidiary distributions; and material changes in lines of business. The financial covenants contained in the Credit Agreement are (1) a consolidated interest coverage ratio and (2) a consolidated senior secured leverage ratio. Wendy’s was in compliance with the covenants of the Credit Agreement as of December 30, 2012 including the consolidated interest coverage ratio, our most restrictive financial covenant, which requires that we maintain a minimum consolidated interest coverage ratio of 3.00. The covenants generally do not restrict The Wendy’s Company or any of The Wendy’s Company’s subsidiaries that are not subsidiaries of Wendy’s.
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Schedule of Maturities of Long-term Debt [Table Text Block] | Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, discounts and interest rate swaps, as of December 30, 2012 were as follows:
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Schedule of extinguishment of debt | As a result of the transactions described above, the Company incurred a loss on the early extinguishment of debt as follows:
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Summary of Significant Accounting Policies
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12 Months Ended |
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Dec. 30, 2012
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Basis of Presentation [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Corporate Structure The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is the parent company of its 100% owned subsidiary holding company, Wendy’s Restaurants, LLC (“Wendy’s Restaurants”). Wendy’s Restaurants is the parent company of Wendy’s International, Inc. (“Wendy’s”), which franchises and operates company-owned Wendy’s® quick service restaurants specializing in hamburger sandwiches throughout North America (defined as the United States of America (“U.S.”) and Canada). Wendy’s also has franchised restaurants in 26 foreign countries and U.S. territories. At December 30, 2012, Wendy’s operated and franchised 1,427 and 5,133 restaurants, respectively. The Company manages and internally reports its business geographically. The operation and franchising of Wendy’s restaurants in North America comprises virtually all of our current operations and represents a single reportable segment. The revenues and operating results of Wendy’s restaurants outside of North America are not material. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company participates in two national advertising funds established to collect and administer funds contributed for use in advertising and promotional programs for company-owned and franchised restaurants. The revenue, expenses and cash flows of such advertising funds are not included in the Company’s consolidated statements of operations or consolidated statements of cash flows because the contributions to these advertising funds are designated for specific purposes and the Company acts as an agent, in substance, with regard to these contributions. The assets and liabilities of these funds are reported as “Advertising funds restricted assets” and “Advertising funds restricted liabilities.” The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. In our consolidated balance sheet as of January 1, 2012, we have corrected and reclassified $32,400 from “Accrued expenses and other current liabilities” to “Other liabilities” to properly present the non-current portion of certain self-insurance liabilities and $12,414 from “Deferred income tax benefit” included in current assets to “Deferred income taxes” included in non-current liabilities for the related tax effect. The advertising funds restricted assets and liabilities as of January 1, 2012 have been updated to reflect an $875 correction in one of the fund’s presentation of its current assets and liabilities. Certain other reclassifications have been made to prior year presentation to conform to the current year presentation. Our consolidated statement of operations and consolidated balance sheet for the year ended and as of December 30, 2012, include adjustments which reflect corrections to prior years’ income taxes and depreciation of properties. Corrections to prior years’ tax matters recorded in our 2012 fiscal year had the effect of increasing our benefit from income taxes and decreasing our deferred income tax liability by $7,620 and $580 for income from continuing operations and discontinued operations, respectively. Corrections to prior years’ depreciation of properties had the effect of increasing our 2012 fiscal year “Depreciation and amortization” and decreasing “Properties” by $4,000. Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended December 30, 2012” or “2012,” (2) “the year ended January 1, 2012” or “2011,” and (3) “the year ended January 2, 2011” or “2010,” all of which consisted of 52 weeks. Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts. Accounts and Notes Receivable Accounts and notes receivable consist primarily of royalties, franchise fees, rents due principally from franchisees and credit card receivables. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor. Inventories The Company’s inventories are stated at the lower of cost or market, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. Investments Investments in which the Company has significant influence over the investees include (1) a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with Tim Hortons Inc. (“THI”) and (2) a 49% share in a joint venture for the operation of Wendy’s restaurants in Japan (the “Japan JV”). Such investments are accounted for using the equity method, under which results of operations include our share of the income or loss of the investees. Investments in limited partnerships and other non-current investments in which the Company does not have significant influence over the investees, which includes our indirect 18.5% interest in Arby’s Restaurant Group, Inc. (“Arby’s”), are recorded at cost with related realized gains and losses reported as income or loss in the period in which the securities are sold or otherwise disposed. The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. The Company reviews investments with unrealized losses and recognizes investment losses for any unrealized losses deemed to be other than temporary. These investment losses are recognized as a component of “Net income (loss).” The Company considers such factors as the length of time the market value of an investment has been below its carrying value, the severity of the decline, the financial condition of the investee and the prospect for future recovery in the market value of the investment, including the Company’s ability and intent to hold the investments for a period of time sufficient for a forecasted recovery. The cost-basis component of investments represents original cost less a permanent reduction for any unrealized losses that were deemed to be other than temporary. Properties and Depreciation and Amortization Properties are stated at cost, including internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 5 to 20 years for office and restaurant equipment, 5 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leased assets capitalized and leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. Asset groups are primarily comprised of our individual restaurant properties. Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our company-owned restaurants is reduced as a result of restaurant dispositions and is included in the carrying value of the restaurant in determining the gain or loss on disposal. For goodwill impairment testing purposes, we include two reporting units comprised of our (1) North America company-owned and franchise restaurants and (2) international franchise restaurants. Substantially all goodwill at December 30, 2012 and January 1, 2012 was associated with our North America restaurants. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. If the Company determines that impairment may exist, the amount of the impairment loss is measured as the excess, if any, of the carrying amount of the goodwill over its implied fair value. In determining the implied fair value of the reporting unit’s goodwill, the Company allocates the fair value of a reporting unit to all of the assets and liabilities of that unit as if the unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The excess of the fair value of the unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. Impairment of Long-Lived Assets For impairment test purposes, long-lived assets include our company-owned restaurant assets and their definite-lived intangible assets, which include franchise agreements, favorable leases and reacquired rights under franchise agreements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by our individual company-owned restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our restaurant impairment losses principally reflect impairment charges resulting from the deterioration in operating performance of certain company-owned restaurants. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. Other Intangible Assets and Deferred Costs Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising; 2 to 5 years for computer software; 3 to 20 years for reacquired rights under franchise agreements and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually by comparing their carrying value to fair value; any excess of carrying value over fair value is recognized as an impairment loss. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of company-owned and franchised restaurants and the resulting cash flows. Deferred financing costs are amortized as interest expense over the term of the respective debt using the effective interest rate method. Derivative Instruments The Company’s derivative instruments consist of fair value hedges and are recorded at fair value. Changes in the fair value of our fair value hedging instruments are recorded as an adjustment to the underlying debt balance being hedged to the extent of the effectiveness of such hedging instruments. Any ineffective portion of the change in fair value of the designated hedging instruments is included in results of operations. Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans. The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case they recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”) unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Foreign Currency Translation Substantially all of the Company’s foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation adjustment are charged or credited directly to the “Foreign currency translation adjustment” component of “Accumulated other comprehensive income (loss).” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50 percent likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at company-owned restaurants and upon shipment of bakery items and kids’ meal promotional items to our franchisees and others. During the first quarter of 2011, Wendy’s purchasing cooperative, Quality Supply Chain Co-op, Inc. (“QSCC”) began managing the operations for kids’ meal promotion items sold to franchisees. Our sales of kids’ meal promotion items during 2011 were made from inventory on hand prior to QSCC’s management of this process. “Sales” excludes taxes collected from the Company’s customers. “Franchise revenues” includes royalties, franchise fees and rental income. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened as all material services and conditions related to the franchise fee have been substantially performed upon the restaurant opening. Renewal franchise fees are recognized as revenue when the license agreements are signed and the fee is paid since there are no material services and conditions related to the renewal franchise fee. Franchise commitment fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. Rental income from properties owned and leased by the Company and leased or subleased to franchisees is recognized on a straight-line basis over the respective operating lease terms. Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are generally classified as a reduction of “Cost of sales.” Advertising Costs The Company incurs various advertising costs, including contributions to certain advertising cooperatives based upon a percentage of net sales by company-owned restaurants. All advertising costs are expensed as incurred, with the exception of media development costs that are expensed beginning in the month that the advertisement is first communicated, and are included in “Cost of sales.” Self-insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. At inception, each lease is evaluated to determine whether the lease will be accounted for as an operating or capital lease based on its terms. When determining the lease term, we include option periods for which failure to renew the lease imposes a significant economic detriment. The primary penalty to which we may be subject is the economic detriment associated with the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight line basis (“Straight-Line Rent”) over the applicable lease terms. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. The term used for Straight-Line Rent is calculated initially from the date we obtain possession of the leased premises through the expected lease termination date. We expense rent from the possession date to the restaurant opening date. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis consistent with the Straight-Line Rent method. For leases that contain rent escalations, we record the rent payable during the lease term, as determined above, on the straight-line basis over the term of the lease (including the Rent Holiday beginning upon possession of the premises), and record the excess of the Straight-Line Rent over the minimum rents paid as a deferred lease liability included in “Other liabilities.” Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is expensed each period as the liability is incurred. Favorable and unfavorable lease amounts, when we purchase restaurants, are recorded as components of “Other intangible assets” and “Other liabilities,” respectively, and are amortized to “Cost of sales” both on a straight-line basis over the remaining term of the leases. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term. Management makes certain estimates and assumptions regarding each new lease agreement, lease renewal and lease amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease as capital or operating, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of favorable and unfavorable leases. The amount of depreciation and amortization, interest and rent expense reported would vary if different estimates and assumptions were used. Concentration of Risk Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2012, 2011 or 2010. As of December 30, 2012, Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding produce and breads, that serviced approximately 56% of its company-owned and franchised restaurants and three additional in-line distributors that, in the aggregate, serviced approximately 36% of its company-owned and franchised restaurants. We believe that our vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. Wendy’s franchised restaurants are principally located throughout the U.S. and to a lessor extent, in 27 foreign countries and U.S. territories with the largest number in Canada. Company-owned restaurants are located in 29 states, with the largest number in Florida, Ohio, Texas, Georgia, Michigan, California, Pennsylvania and North Carolina. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U. S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, poultry, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. However, our exposure to Canadian dollar foreign currency risk is mitigated by the fact that less than 10% of our restaurants are in Canada. New Accounting Standards Adopted In July 2012, the Financial Accounting Standards Board (the “FASB”) issued an amendment that permits a company to make an qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The Company adopted this amendment during the third quarter of 2012; however the Company determined that it was required to perform the quantitative assessment in 2012. In May 2011, the FASB issued amendments which provide additional guidance about how fair value should be determined under existing standards and expands existing disclosure requirements for certain fair value measurements. The purpose of these amendments is to improve and converge International Financial Reporting Standards and GAAP. The Company adopted these amendments on January 2, 2012 and the adoption did not have a material impact on its consolidated financial statements. In June 2011, as amended in December 2011, the FASB issued an amendment that requires companies to present comprehensive income in either a single statement or two consecutive statements that report net income and other comprehensive income. The purpose of this amendment is to increase the prominence of other comprehensive income in financial statements. The Company adopted this amendment on January 2, 2012 using the two consecutive statement presentation. The adoption affected only the presentation of comprehensive income and did not change the composition or calculation of comprehensive income. |
Lease Committments Capital Leased Assets (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 30, 2012
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Jan. 01, 2012
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Capital Leased Assets [Line Items] | ||
Property Leased To Other Under Capital Leases And Operating Leases | $ 97,612 | $ 87,093 |
Property Leased To Other Under Capital Leases And Operating Leases, Accumulated Depreciation | (26,905) | (20,019) |
Property Leased To Other Under Capital Leases And Operating Leases, Net | 70,707 | 67,074 |
Land
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Capital Leased Assets [Line Items] | ||
Property Leased To Other Under Capital Leases And Operating Leases | 28,989 | 24,211 |
Buildings and improvements
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Capital Leased Assets [Line Items] | ||
Property Leased To Other Under Capital Leases And Operating Leases | 64,286 | 58,505 |
Office, restaurant and transportation equipment
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Capital Leased Assets [Line Items] | ||
Property Leased To Other Under Capital Leases And Operating Leases | $ 4,337 | $ 4,377 |
Summary of Significant Accounting Policies Reclassifications (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended |
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Dec. 30, 2012
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Other Liabilities Noncurrent [Member] | Accrued Expenses and Other Current Liabilities [Member] | Fiscal Year 2011 Statement of Position [Member]
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Prior Period Reclassification Adjustment | $ 32,400 |
Deferred Income Taxes [Member] | Deferred iIncome Tax Benefit [Member] | Fiscal Year 2011 Statement of Position [Member]
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Prior Period Reclassification Adjustment | 12,414 |
Advertising Fund's Presentation of Current Assets and Liabilities [Member]
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Prior Period Reclassification Adjustment | $ 875 |
Geographic Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2012
|
Sep. 30, 2012
|
Jul. 01, 2012
|
Apr. 01, 2012
|
Jan. 01, 2012
|
Oct. 02, 2011
|
Jul. 03, 2011
|
Apr. 03, 2011
|
Dec. 30, 2012
|
Jan. 01, 2012
|
Jan. 02, 2011
|
|||||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||||||||||||||||||
Revenues | $ 629,879 | [1],[2] | $ 636,308 | [1],[2],[3] | $ 645,868 | [1],[3] | $ 593,187 | [1],[4] | $ 615,018 | [5] | $ 611,416 | [5] | $ 622,459 | [5] | $ 582,465 | [5] | $ 2,505,242 | $ 2,431,358 | $ 2,375,439 | ||||||||||
Property, Plant and Equipment, Net | 1,250,338 | 1,192,200 | 1,250,338 | 1,192,200 | 1,551,261 | ||||||||||||||||||||||||
UNITED STATES
|
|||||||||||||||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||||||||||||||||||
Revenues | 2,231,270 | 2,161,281 | 2,117,000 | ||||||||||||||||||||||||||
Property, Plant and Equipment, Net | 1,186,879 | 1,132,796 | 1,186,879 | 1,132,796 | 1,490,064 | ||||||||||||||||||||||||
CANADA
|
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Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||||||||||||||||||
Revenues | 257,750 | 254,683 | 244,654 | ||||||||||||||||||||||||||
Property, Plant and Equipment, Net | 63,412 | 59,379 | 63,412 | 59,379 | 61,178 | ||||||||||||||||||||||||
Other International [Member]
|
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Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||||||||||||||||||
Revenues | 16,222 | 15,394 | 13,785 | ||||||||||||||||||||||||||
Property, Plant and Equipment, Net | $ 47 | $ 25 | $ 47 | $ 25 | $ 19 | ||||||||||||||||||||||||
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