XML 38 R86.htm IDEA: XBRL DOCUMENT v2.4.0.6
Long-Term Debt (Details)
In Thousands, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 30, 2012
USD ($)
Jan. 01, 2012
USD ($)
Jan. 02, 2011
USD ($)
May 15, 2012
Senior Notes, 10.0% [Member]
Jan. 02, 2011
Term Loan, 2010 [Member]
USD ($)
Sep. 30, 2008
Senior Notes, 6.25% [Member]
Sep. 30, 2008
Senior Notes, 6.20% [Member]
USD ($)
Dec. 30, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Swap [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Jan. 01, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Swap [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 30, 2012
Canadian Subsidiary [Member]
CAD
Dec. 30, 2012
Unsecured Debt [Member]
Senior Notes, 10.0% [Member]
USD ($)
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 ($)
Sep. 30, 2008
Unsecured Debt [Member]
Debentures, 7% [Member]
USD ($)
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 ($)
May 24, 2010
Secured Debt [Member]
Term Loan, 2010 [Member]
USD ($)
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                                                  
[1] 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.
[2] 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. 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: Year Ended 2012Premium payment to redeem/purchase Senior Notes$43,151Unaccreted discount on Senior Notes9,272Deferred costs associated with the Senior Notes12,433Unaccreted discount on 2010 Term Loan1,695Deferred costs associated with the 2010 Term Loan8,525Loss on early extinguishment of debt$75,076The 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.
[3] 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.
[4] 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 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.
[5] 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.