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||||
|
(X)
|
|
QUARTERLY 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)
|
|
|
||||
|
|
Page
|
|
|
|
|
|
|
|
|
September 30,
2012 |
|
January 1,
2012 |
||||
|
ASSETS
|
(Unaudited)
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
453,592
|
|
|
$
|
475,231
|
|
|
Accounts and notes receivable
|
65,135
|
|
|
68,349
|
|
||
|
Inventories
|
12,287
|
|
|
12,903
|
|
||
|
Prepaid expenses and other current assets
|
32,125
|
|
|
27,397
|
|
||
|
Deferred income tax benefit
|
95,292
|
|
|
93,384
|
|
||
|
Advertising funds restricted assets
|
75,249
|
|
|
69,672
|
|
||
|
Total current assets
|
733,680
|
|
|
746,936
|
|
||
|
Properties
|
1,240,858
|
|
|
1,192,200
|
|
||
|
Goodwill
|
876,643
|
|
|
870,431
|
|
||
|
Other intangible assets
|
1,314,825
|
|
|
1,304,288
|
|
||
|
Investments
|
117,577
|
|
|
119,271
|
|
||
|
Deferred costs and other assets
|
56,496
|
|
|
67,542
|
|
||
|
Total assets
|
$
|
4,340,079
|
|
|
$
|
4,300,668
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
|
Current liabilities:
|
|
|
|
|
|
||
|
Current portion of long-term debt
|
$
|
10,000
|
|
|
$
|
6,597
|
|
|
Accounts payable
|
83,270
|
|
|
81,301
|
|
||
|
Accrued expenses and other current liabilities
|
175,405
|
|
|
210,698
|
|
||
|
Advertising funds restricted liabilities
|
75,249
|
|
|
69,672
|
|
||
|
Total current liabilities
|
343,924
|
|
|
368,268
|
|
||
|
Long-term debt
|
1,447,328
|
|
|
1,350,402
|
|
||
|
Deferred income
|
13,063
|
|
|
6,523
|
|
||
|
Deferred income taxes
|
452,186
|
|
|
470,521
|
|
||
|
Other liabilities
|
111,834
|
|
|
108,885
|
|
||
|
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
|
2,783,162
|
|
|
2,779,871
|
|
||
|
Accumulated deficit
|
(477,742
|
)
|
|
(434,999
|
)
|
||
|
Common stock held in treasury, at cost; 79,460 and 80,700 shares
|
(389,912
|
)
|
|
(395,947
|
)
|
||
|
Accumulated other comprehensive income
|
9,194
|
|
|
102
|
|
||
|
Total stockholders’ equity
|
1,971,744
|
|
|
1,996,069
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
4,340,079
|
|
|
$
|
4,300,668
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
|
September 30,
2012 |
|
October 2,
2011 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Sales
|
$
|
558,335
|
|
|
$
|
534,525
|
|
|
$
|
1,644,380
|
|
|
$
|
1,588,048
|
|
|
Franchise revenues
|
77,973
|
|
|
76,891
|
|
|
230,983
|
|
|
228,292
|
|
||||
|
|
636,308
|
|
|
611,416
|
|
|
1,875,363
|
|
|
1,816,340
|
|
||||
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales
|
478,425
|
|
|
458,000
|
|
|
1,416,972
|
|
|
1,361,669
|
|
||||
|
General and administrative
|
72,175
|
|
|
66,006
|
|
|
217,824
|
|
|
215,147
|
|
||||
|
Depreciation and amortization
|
41,878
|
|
|
30,816
|
|
|
110,136
|
|
|
90,972
|
|
||||
|
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
7,781
|
|
|
8,262
|
|
||||
|
Facilities relocation and other transition costs
|
11,285
|
|
|
—
|
|
|
26,242
|
|
|
—
|
|
||||
|
Transaction related costs
|
145
|
|
|
23,839
|
|
|
1,319
|
|
|
30,762
|
|
||||
|
Other operating expense, net
|
1,217
|
|
|
365
|
|
|
4,599
|
|
|
1,687
|
|
||||
|
|
605,125
|
|
|
579,026
|
|
|
1,784,873
|
|
|
1,708,499
|
|
||||
|
Operating profit
|
31,183
|
|
|
32,390
|
|
|
90,490
|
|
|
107,841
|
|
||||
|
Interest expense
|
(21,566
|
)
|
|
(28,384
|
)
|
|
(77,803
|
)
|
|
(85,915
|
)
|
||||
|
Loss on early extinguishment of debt
|
(49,881
|
)
|
|
—
|
|
|
(75,076
|
)
|
|
—
|
|
||||
|
Gain on sale of investment, net
|
—
|
|
|
—
|
|
|
27,407
|
|
|
—
|
|
||||
|
Other income, net
|
900
|
|
|
304
|
|
|
3,064
|
|
|
894
|
|
||||
|
(Loss) income from continuing operations
before income taxes and noncontrolling
interests
|
(39,364
|
)
|
|
4,310
|
|
|
(31,918
|
)
|
|
22,820
|
|
||||
|
Benefit from (provision for) income taxes
|
12,672
|
|
|
(1,766
|
)
|
|
14,467
|
|
|
(9,198
|
)
|
||||
|
(Loss) income from continuing operations
|
(26,692
|
)
|
|
2,544
|
|
|
(17,451
|
)
|
|
13,622
|
|
||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from discontinued operations, net
of income taxes
|
784
|
|
|
(1,441
|
)
|
|
784
|
|
|
1,118
|
|
||||
|
Loss on disposal of discontinued operations, net of
income taxes
|
(254
|
)
|
|
(5,069
|
)
|
|
(254
|
)
|
|
(8,849
|
)
|
||||
|
Net income (loss) from discontinued operations
|
530
|
|
|
(6,510
|
)
|
|
530
|
|
|
(7,731
|
)
|
||||
|
Net (loss) income
|
(26,162
|
)
|
|
(3,966
|
)
|
|
(16,921
|
)
|
|
5,891
|
|
||||
|
Net income attributable to noncontrolling
interests
|
—
|
|
|
—
|
|
|
(2,384
|
)
|
|
—
|
|
||||
|
Net (loss) income attributable to
The Wendy’s Company
|
$
|
(26,162
|
)
|
|
$
|
(3,966
|
)
|
|
$
|
(19,305
|
)
|
|
$
|
5,891
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic and diluted (loss) income per share
attributable to The Wendy’s Company:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
$
|
(.07
|
)
|
|
$
|
.01
|
|
|
$
|
(.05
|
)
|
|
$
|
.03
|
|
|
Discontinued operations
|
—
|
|
|
(.02
|
)
|
|
—
|
|
|
(.02
|
)
|
||||
|
Net (loss) income
|
$
|
(.07
|
)
|
|
$
|
(.01
|
)
|
|
$
|
(.05
|
)
|
|
$
|
.01
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends per share
|
$
|
.02
|
|
|
$
|
.02
|
|
|
$
|
.06
|
|
|
$
|
.06
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
|
September 30,
2012 |
|
October 2,
2011 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income
|
$
|
(26,162
|
)
|
|
$
|
(3,966
|
)
|
|
$
|
(16,921
|
)
|
|
$
|
5,891
|
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
7,920
|
|
|
(20,621
|
)
|
|
9,309
|
|
|
(12,703
|
)
|
||||
|
Change in unrecognized pension loss, net of income tax
benefit (provision) of $127 and $(21), respectively |
—
|
|
|
—
|
|
|
(217
|
)
|
|
(46
|
)
|
||||
|
Other comprehensive income (loss), net
|
7,920
|
|
|
(20,621
|
)
|
|
9,092
|
|
|
(12,749
|
)
|
||||
|
Comprehensive loss
|
(18,242
|
)
|
|
(24,587
|
)
|
|
(7,829
|
)
|
|
(6,858
|
)
|
||||
|
Comprehensive income attributable to noncontrolling
interests |
—
|
|
|
—
|
|
|
(2,384
|
)
|
|
—
|
|
||||
|
Comprehensive loss attributable to
The Wendy’s Company |
$
|
(18,242
|
)
|
|
$
|
(24,587
|
)
|
|
$
|
(10,213
|
)
|
|
$
|
(6,858
|
)
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
|
(Unaudited)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net (loss) income
|
$
|
(16,921
|
)
|
|
$
|
5,891
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
|
|
|
|
|
|
||
|
Depreciation and amortization
|
112,057
|
|
|
113,085
|
|
||
|
Loss on early extinguishment of debt
|
75,076
|
|
|
—
|
|
||
|
Distributions received from joint venture
|
10,760
|
|
|
10,784
|
|
||
|
Share-based compensation
|
8,330
|
|
|
13,756
|
|
||
|
Impairment of long-lived assets
|
7,781
|
|
|
9,820
|
|
||
|
Net receipt of deferred vendor incentives
|
6,239
|
|
|
13,876
|
|
||
|
Accretion of long-term debt
|
6,060
|
|
|
6,137
|
|
||
|
Amortization of deferred financing costs
|
3,477
|
|
|
4,863
|
|
||
|
Non-cash rent expense
|
2,934
|
|
|
6,169
|
|
||
|
Loss on disposal of Arby's
|
254
|
|
|
8,849
|
|
||
|
Equity in earnings in joint ventures, net
|
(7,836
|
)
|
|
(7,817
|
)
|
||
|
Deferred income tax
|
(19,809
|
)
|
|
4,871
|
|
||
|
Gain on sale of investment, net
|
(27,407
|
)
|
|
—
|
|
||
|
Other, net
|
5,882
|
|
|
1,987
|
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
||||
|
Accounts and notes receivable
|
3,447
|
|
|
(6,550
|
)
|
||
|
Inventories
|
965
|
|
|
(210
|
)
|
||
|
Prepaid expenses and other current assets
|
(4,219
|
)
|
|
(8,138
|
)
|
||
|
Accounts payable
|
850
|
|
|
9,365
|
|
||
|
Accrued expenses and other current liabilities
|
(43,289
|
)
|
|
(4,635
|
)
|
||
|
Net cash provided by operating activities
|
124,631
|
|
|
182,103
|
|
||
|
Cash flows from investing activities:
|
|
|
|
|
|
||
|
Capital expenditures
|
(126,325
|
)
|
|
(91,913
|
)
|
||
|
Restaurant acquisitions
|
(40,594
|
)
|
|
(6,613
|
)
|
||
|
Franchise loans, net
|
2,048
|
|
|
(1,269
|
)
|
||
|
Proceeds from sale of Arby's, net
|
—
|
|
|
103,162
|
|
||
|
Proceeds from sale of investment
|
24,374
|
|
|
—
|
|
||
|
Proceeds from other dispositions
|
6,273
|
|
|
3,799
|
|
||
|
Investment in joint venture
|
—
|
|
|
(1,183
|
)
|
||
|
Other, net
|
(374
|
)
|
|
120
|
|
||
|
Net cash (used in) provided by investing activities
|
(134,598
|
)
|
|
6,103
|
|
||
|
Cash flows from financing activities:
|
|
|
|
|
|
||
|
Proceeds from long-term debt
|
1,113,750
|
|
|
—
|
|
||
|
Repayments of long-term debt
|
(1,044,011
|
)
|
|
(36,611
|
)
|
||
|
Deferred financing costs
|
(15,511
|
)
|
|
(57
|
)
|
||
|
Premium payment on redemption/purchase of Senior Notes
|
(43,151
|
)
|
|
—
|
|
||
|
Repurchases of common stock
|
—
|
|
|
(152,681
|
)
|
||
|
Dividends paid
|
(23,406
|
)
|
|
(24,584
|
)
|
||
|
Distributions to noncontrolling interests
|
(3,667
|
)
|
|
—
|
|
||
|
Proceeds from stock option exercises
|
2,526
|
|
|
5,345
|
|
||
|
Other, net
|
52
|
|
|
(753
|
)
|
||
|
Net cash used in financing activities
|
(13,418
|
)
|
|
(209,341
|
)
|
||
|
Net cash used in operations before effect of exchange rate
changes on cash
|
(23,385
|
)
|
|
(21,135
|
)
|
||
|
Effect of exchange rate changes on cash
|
1,746
|
|
|
(2,556
|
)
|
||
|
Net decrease in cash and cash equivalents
|
(21,639
|
)
|
|
(23,691
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
475,231
|
|
|
512,508
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
453,592
|
|
|
$
|
488,817
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
|
(Unaudited)
|
||||||
|
Supplemental cash flow information:
|
|
|
|
|
|
||
|
Cash paid during the period for:
|
|
|
|
|
|
||
|
Interest
|
$
|
90,893
|
|
|
$
|
96,760
|
|
|
Income taxes, net of refunds
|
$
|
9,593
|
|
|
$
|
11,523
|
|
|
|
|
|
|
||||
|
Supplemental non-cash investing and financing activities:
|
|
|
|
|
|||
|
Non-cash capitalized lease obligations
(1)
|
$
|
16,317
|
|
|
$
|
794
|
|
|
|
|
|
|
||||
|
Indirect investment in Arby's
|
$
|
—
|
|
|
$
|
19,000
|
|
|
|
|
|
|
||||
|
(1)
Includes $15,342 of capitalized lease obligations related to the acquisition of Wendy’s franchised restaurants during the
nine months ended September 30, 2012 as further discussed in Note 3.
|
|||||||
|
•
|
Statements of operations - Arby’s income from operations for the period from January 3, 2011 through July 3, 2011 has been classified as discontinued operations. Loss from discontinued operations for the three and nine months ended October 2, 2011 also includes additional Arby's expenses which were incurred as a result of the sale and the loss on the disposal of Arby’s. Income from discontinued operations for the three and nine months ended September 30, 2012 includes certain post-closing Arby’s related transactions, as further described below.
|
|
•
|
Statements of cash flows - Arby’s cash flows for the period from January 3, 2011 through July 3, 2011 have been included in, and not separately reported from, our consolidated cash flows. The statement of cash flows for the nine months ended October 2, 2011 also includes the effects of the sale of Arby’s during the third quarter of 2011. The statement of cash flows for the nine months ended September 30, 2012 includes the effect of certain post-closing Arby’s related transactions, as further described below.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
September 30, 2012
|
|
October 2, 2011
|
|
September 30, 2012
|
|
October 2, 2011
|
||||||||
|
Revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
546,453
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from discontinued operations, net of
income taxes:
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from discontinued
operations before income taxes
|
|
$
|
341
|
|
|
$
|
(2,287
|
)
|
|
$
|
341
|
|
|
$
|
1,992
|
|
|
Benefit from (provision for) income taxes
|
|
443
|
|
|
846
|
|
|
443
|
|
|
(874
|
)
|
||||
|
|
|
784
|
|
|
(1,441
|
)
|
|
784
|
|
|
1,118
|
|
||||
|
Loss on disposal of discontinued
operations, net of income taxes
|
|
(254
|
)
|
|
(5,069
|
)
|
|
(254
|
)
|
|
(8,849
|
)
|
||||
|
Net income (loss) from discontinued
operations
|
|
$
|
530
|
|
|
$
|
(6,510
|
)
|
|
$
|
530
|
|
|
$
|
(7,731
|
)
|
|
Total purchase price paid in cash
|
|
$
|
18,956
|
|
|
Identifiable assets acquired and liabilities assumed:
|
|
|
||
|
Cash
|
|
58
|
|
|
|
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)
|
|
(332
|
)
|
|
|
Unfavorable leases
|
|
(992
|
)
|
|
|
Other liabilities
|
|
(952
|
)
|
|
|
Total identifiable net assets
|
|
16,407
|
|
|
|
Goodwill (preliminary) (c)
|
|
$
|
2,549
|
|
|
(a)
|
The acquired territory rights have a weighted average amortization period of
13
years.
|
|
(b)
|
Included in “Deferred income.”
|
|
(c)
|
This goodwill is not deductible or amortizable for income tax purposes.
|
|
Goodwill as reported at July 1, 2012
|
|
$
|
2,654
|
|
|
Changes in fair values of assets and liabilities:
|
|
|
||
|
Properties
|
|
498
|
|
|
|
Deferred taxes and other assets
|
|
(146
|
)
|
|
|
Acquired territory rights
|
|
90
|
|
|
|
Favorable ground leases
|
|
(52
|
)
|
|
|
Capitalized lease obligations
|
|
(377
|
)
|
|
|
Unfavorable leases
|
|
169
|
|
|
|
Other
|
|
(287
|
)
|
|
|
Goodwill as of September 30, 2012
|
|
$
|
2,549
|
|
|
|
Three Months Ended September 30, 2012
|
|
Three Months Ended October 2, 2011
|
||||||||||||
|
|
As Reported
|
|
As Adjusted
|
|
As Reported
|
|
As Adjusted
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Sales
|
$
|
558,335
|
|
|
$
|
558,335
|
|
|
$
|
534,525
|
|
|
$
|
545,707
|
|
|
Franchise revenues
|
77,973
|
|
|
77,973
|
|
|
76,891
|
|
|
76,442
|
|
||||
|
Total revenues
|
$
|
636,308
|
|
|
$
|
636,308
|
|
|
$
|
611,416
|
|
|
$
|
622,149
|
|
|
Operating profit
|
$
|
31,183
|
|
|
$
|
31,183
|
|
|
$
|
32,390
|
|
|
$
|
32,813
|
|
|
Net loss
|
(26,162
|
)
|
|
(26,162
|
)
|
|
(3,966
|
)
|
|
(3,688
|
)
|
||||
|
Net loss attributable to
The Wendy’s Company
|
(26,162
|
)
|
|
(26,162
|
)
|
|
(3,966
|
)
|
|
(3,688
|
)
|
||||
|
Basic and diluted
loss per share
|
$
|
(.07
|
)
|
|
$
|
(.07
|
)
|
|
$
|
(.01
|
)
|
|
$
|
(.01
|
)
|
|
|
Nine Months Ended September 30, 2012
|
|
Nine Months Ended October 2, 2011
|
||||||||||||
|
|
As Reported
|
|
As Adjusted
|
|
As Reported
|
|
As Adjusted
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Sales
|
$
|
1,644,380
|
|
|
$
|
1,664,256
|
|
|
$
|
1,588,048
|
|
|
$
|
1,622,046
|
|
|
Franchise revenues
|
230,983
|
|
|
230,186
|
|
|
228,292
|
|
|
226,934
|
|
||||
|
Total revenues
|
$
|
1,875,363
|
|
|
$
|
1,894,442
|
|
|
$
|
1,816,340
|
|
|
$
|
1,848,980
|
|
|
Operating profit
|
$
|
90,490
|
|
|
$
|
91,566
|
|
|
$
|
107,841
|
|
|
$
|
109,714
|
|
|
Net (loss) income
|
(16,921
|
)
|
|
(16,046
|
)
|
|
5,891
|
|
|
7,347
|
|
||||
|
Net (loss) income attributable to
The Wendy’s Company
|
(19,305
|
)
|
|
(18,430
|
)
|
|
5,891
|
|
|
7,347
|
|
||||
|
Basic and diluted
(loss) income per share
|
$
|
(.05
|
)
|
|
$
|
(.05
|
)
|
|
$
|
.01
|
|
|
$
|
.02
|
|
|
Total purchase price paid in cash
|
|
$
|
19,129
|
|
|
Identifiable assets acquired and liabilities assumed:
|
|
|
||
|
Cash
|
|
27
|
|
|
|
Inventories
|
|
163
|
|
|
|
Properties
|
|
12,783
|
|
|
|
Other assets
|
|
33
|
|
|
|
Acquired territory rights (a)
|
|
5,350
|
|
|
|
Favorable ground leases
|
|
1,147
|
|
|
|
Capitalized lease obligations
|
|
(948
|
)
|
|
|
Deferred vendor incentives (b)
|
|
(249
|
)
|
|
|
Unfavorable leases
|
|
(533
|
)
|
|
|
Other liabilities
|
|
(744
|
)
|
|
|
Total identifiable net assets
|
|
17,029
|
|
|
|
Goodwill (preliminary) (c)
|
|
$
|
2,100
|
|
|
(a)
|
The acquired territory rights have a weighted average amortization period of
12
years.
|
|
(b)
|
Included in “Deferred income.”
|
|
(c)
|
Goodwill is partially amortizable for income tax purposes.
|
|
|
|
Nine Months Ended
|
||||||
|
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
Balance at beginning of period
|
|
$
|
91,742
|
|
|
$
|
98,631
|
|
|
|
|
|
|
|
||||
|
Equity in earnings for the period
|
|
10,254
|
|
|
10,258
|
|
||
|
Amortization of purchase price adjustments (a)
|
|
(2,340
|
)
|
|
(2,170
|
)
|
||
|
|
|
7,914
|
|
|
8,088
|
|
||
|
|
|
|
|
|
||||
|
Distributions received
|
|
(10,760
|
)
|
|
(10,784
|
)
|
||
|
Foreign currency translation adjustment included in
“Other comprehensive income (loss), net”
|
|
3,570
|
|
|
(5,050
|
)
|
||
|
Balance at end of period (b)
|
|
$
|
92,466
|
|
|
$
|
90,885
|
|
|
(a)
|
Based upon an original average aggregate life of
21
years.
|
|
(b)
|
Included in “Investments.”
|
|
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
Balance sheet information:
|
|
|
|
|
||||
|
Properties
|
|
C$
|
72,050
|
|
|
C$
|
76,158
|
|
|
Cash and cash equivalents
|
|
3,779
|
|
|
2,644
|
|
||
|
Accounts receivable
|
|
4,244
|
|
|
4,418
|
|
||
|
Other
|
|
2,112
|
|
|
2,628
|
|
||
|
|
|
C$
|
82,185
|
|
|
C$
|
85,848
|
|
|
|
|
|
|
|
||||
|
Accounts payable and accrued liabilities
|
|
C$
|
1,232
|
|
|
C$
|
1,541
|
|
|
Other liabilities
|
|
8,412
|
|
|
8,975
|
|
||
|
Partners’ equity
|
|
72,541
|
|
|
75,332
|
|
||
|
|
|
C$
|
82,185
|
|
|
C$
|
85,848
|
|
|
|
|
Nine Months Ended
|
||||||
|
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
Income statement information:
|
|
|
|
|
||||
|
Revenues
|
|
C$
|
29,732
|
|
|
C$
|
29,131
|
|
|
Income before income taxes and net income
|
|
20,566
|
|
|
20,404
|
|
||
|
|
September 30,
2012 |
|
January 1,
2012 |
||||
|
Term Loan, due in 2019
|
$
|
1,114,415
|
|
|
$
|
—
|
|
|
Senior Notes, repaid in July 2012
|
—
|
|
|
554,901
|
|
||
|
Term Loan, repaid in May 2012
|
—
|
|
|
466,062
|
|
||
|
6.20% senior notes, due in 2014
|
226,176
|
|
|
224,643
|
|
||
|
7% debentures, due in 2025
|
83,207
|
|
|
82,342
|
|
||
|
Capitalized lease obligations, due through 2040
|
31,353
|
|
|
15,222
|
|
||
|
Sale-leaseback obligations, due through 2029
|
1,471
|
|
|
1,466
|
|
||
|
Other
|
706
|
|
|
1,060
|
|
||
|
6.54% aircraft term loan, repaid in June 2012
|
—
|
|
|
11,303
|
|
||
|
|
1,457,328
|
|
|
1,356,999
|
|
||
|
Less amounts payable within one year
|
(10,000
|
)
|
|
(6,597
|
)
|
||
|
Total long-term debt
|
$
|
1,447,328
|
|
|
$
|
1,350,402
|
|
|
|
Three Months Ended September 30, 2012
|
|
Nine Months Ended September 30, 2012
|
||||
|
Premium payment to redeem/purchase Senior Notes
|
$
|
33,058
|
|
|
$
|
43,151
|
|
|
Unaccreted discount on Senior Notes
|
7,186
|
|
|
9,272
|
|
||
|
Deferred costs associated with the Senior Notes
|
9,637
|
|
|
12,433
|
|
||
|
Unaccreted discount on prior term loan
|
—
|
|
|
1,695
|
|
||
|
Deferred costs associated with the prior term loan
|
—
|
|
|
8,525
|
|
||
|
Loss on early extinguishment of debt
|
$
|
49,881
|
|
|
$
|
75,076
|
|
|
|
September 30,
2012 |
|
January 1,
2012 |
|
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Fair Value
Measurements
|
||||||||
|
Financial assets
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-current cost method investments (a)
|
$
|
25,111
|
|
|
$
|
33,815
|
|
|
$
|
27,452
|
|
|
$
|
62,496
|
|
|
Level 3
|
|
Interest rate swaps (b)
|
9,618
|
|
|
9,618
|
|
|
11,695
|
|
|
11,695
|
|
|
Level 2
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
Term Loan, due in 2019 (c)
|
1,114,415
|
|
|
1,125,559
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
|
Senior Notes, repaid in July 2012 (c)
|
—
|
|
|
—
|
|
|
554,901
|
|
|
621,500
|
|
|
Level 2
|
||||
|
Term Loan, repaid in May 2012 (c)
|
—
|
|
|
—
|
|
|
466,062
|
|
|
466,940
|
|
|
Level 2
|
||||
|
6.20% senior notes, due in 2014 (c)
|
226,176
|
|
|
247,331
|
|
|
224,643
|
|
|
231,750
|
|
|
Level 2
|
||||
|
7% debentures, due in 2025 (c)
|
83,207
|
|
|
95,400
|
|
|
82,342
|
|
|
84,000
|
|
|
Level 2
|
||||
|
Capitalized lease obligations (d)
|
31,353
|
|
|
32,336
|
|
|
15,222
|
|
|
16,431
|
|
|
Level 3
|
||||
|
Sale-leaseback obligations (d)
|
1,471
|
|
|
1,525
|
|
|
1,466
|
|
|
1,692
|
|
|
Level 3
|
||||
|
6.54% aircraft term loan, repaid in June
2012 (d) |
—
|
|
|
—
|
|
|
11,303
|
|
|
11,367
|
|
|
Level 3
|
||||
|
Other
|
706
|
|
|
708
|
|
|
1,060
|
|
|
1,072
|
|
|
Level 3
|
||||
|
Guarantees of franchisee loans
obligations (e) |
$
|
951
|
|
|
$
|
951
|
|
|
$
|
1,275
|
|
|
$
|
1,275
|
|
|
Level 3
|
|
(a)
|
The fair value of our indirect investment in Arby’s is based on its sale in July 2011 and our subsequent review of Arby’s 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 4 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 store development and equipment financing. During the third quarter of 2012, Wendy’s provided a guarantee to a lender for a franchisee in connection with the refinancing of the franchisee’s debt (see Note 12). 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
|
|
Nine Months Ended
September 30, 2012
Total Losses
|
||||||||||||||||
|
|
September 30,
2012 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
Properties and other intangible
assets (a) |
$
|
4,771
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,771
|
|
|
$
|
6,153
|
|
|
Aircraft (b)
|
6,333
|
|
|
—
|
|
|
—
|
|
|
6,333
|
|
|
1,628
|
|
|||||
|
Total
|
$
|
11,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,104
|
|
|
$
|
7,781
|
|
|
|
Fair Value Measurements
|
|
2011 Total Losses
|
||||||||||||||||
|
|
January 1,
2012 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
Properties and other intangible
assets (a) |
$
|
575
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575
|
|
|
$
|
12,883
|
|
|
Total
|
$
|
575
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575
|
|
|
$
|
12,883
|
|
|
(a)
|
The impaired assets consist of land and buildings and other intangible assets. The fair values of impaired assets were generally estimated based on the present values of the associated cash flows and market values with respect to land.
|
|
(b)
|
The fair value of the aircraft was based on current market conditions.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
September 30,
2012 |
|
October 2,
2011 |
|
September 30,
2012 |
|
October 2,
2011 |
||||||||
|
Impairment of company-owned restaurants:
|
|
|
|
|
|
|
|
|
||||||||
|
Properties
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,150
|
|
|
$
|
6,449
|
|
|
Intangible assets
|
|
—
|
|
|
—
|
|
|
3
|
|
|
1,813
|
|
||||
|
Aircraft
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
||||
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,781
|
|
|
$
|
8,262
|
|
|
|
|
Three Months Ended September 30, 2012
|
|
Nine Months Ended September 30, 2012
|
|
Total Incurred Since Inception
|
|
Total Expected to be Incurred
|
||||||||
|
Severance, retention and other payroll costs
|
|
$
|
2,236
|
|
|
$
|
9,552
|
|
|
$
|
14,897
|
|
|
$
|
18,376
|
|
|
Relocation costs
|
|
1,776
|
|
|
3,857
|
|
|
3,857
|
|
|
7,043
|
|
||||
|
Atlanta facility closure costs
|
|
4,224
|
|
|
4,401
|
|
|
4,401
|
|
|
4,501
|
|
||||
|
Consulting and professional fees
|
|
1,676
|
|
|
4,494
|
|
|
4,494
|
|
|
6,074
|
|
||||
|
Other
|
|
752
|
|
|
2,017
|
|
|
2,002
|
|
|
2,242
|
|
||||
|
|
|
10,664
|
|
|
24,321
|
|
|
29,651
|
|
|
38,236
|
|
||||
|
Accelerated depreciation expense
|
|
621
|
|
|
1,921
|
|
|
2,118
|
|
|
2,593
|
|
||||
|
Total
|
|
$
|
11,285
|
|
|
$
|
26,242
|
|
|
$
|
31,769
|
|
|
$
|
40,829
|
|
|
|
|
Balance
|
|
|
|
|
|
Balance
|
||||||||
|
|
|
January 1,
2012 |
|
Charges
|
|
Payments and Adjustments
|
|
September 30,
2012 |
||||||||
|
Severance, retention and other payroll costs
|
|
$
|
5,345
|
|
|
$
|
9,552
|
|
|
$
|
(9,020
|
)
|
|
$
|
5,877
|
|
|
Relocation costs
|
|
—
|
|
|
3,857
|
|
|
(2,780
|
)
|
|
1,077
|
|
||||
|
Atlanta facility closure costs (a)
|
|
—
|
|
|
4,401
|
|
|
661
|
|
|
5,062
|
|
||||
|
Consulting and professional fees
|
|
—
|
|
|
4,494
|
|
|
(3,462
|
)
|
|
1,032
|
|
||||
|
Other
|
|
—
|
|
|
2,017
|
|
|
(1,823
|
)
|
|
194
|
|
||||
|
|
|
$
|
5,345
|
|
|
$
|
24,321
|
|
|
$
|
(16,424
|
)
|
|
$
|
13,242
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
September 30,
2012 |
|
October 2,
2011 |
|
September 30,
2012 |
|
October 2,
2011 |
||||||||
|
Amounts attributable to The Wendy’s Company:
|
|
|
|
|
|
|
|
|
||||||||
|
(Loss) income from continuing operations
|
|
$
|
(26,692
|
)
|
|
$
|
2,544
|
|
|
$
|
(19,835
|
)
|
|
$
|
13,622
|
|
|
Net income (loss) from discontinued operations
|
|
530
|
|
|
(6,510
|
)
|
|
530
|
|
|
(7,731
|
)
|
||||
|
Net (loss) income
|
|
$
|
(26,162
|
)
|
|
$
|
(3,966
|
)
|
|
$
|
(19,305
|
)
|
|
$
|
5,891
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
|
September 30,
2012 |
|
October 2,
2011 |
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
Common stock:
|
|
|
|
|
|
|
|
|
||||
|
Weighted average basic shares outstanding
|
|
390,406
|
|
|
395,677
|
|
|
390,028
|
|
|
410,624
|
|
|
Dilutive effect of stock options and restricted shares
|
|
—
|
|
|
2,222
|
|
|
—
|
|
|
1,619
|
|
|
Weighted average diluted shares outstanding
|
|
390,406
|
|
|
397,899
|
|
|
390,028
|
|
|
412,243
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
Balance, beginning of year
|
$
|
1,996,069
|
|
|
$
|
2,163,174
|
|
|
Comprehensive loss
|
(10,213
|
)
|
|
(6,858
|
)
|
||
|
Share-based compensation
|
8,330
|
|
|
13,756
|
|
||
|
Exercises of stock options
|
1,955
|
|
|
5,199
|
|
||
|
Dividends paid
|
(23,406
|
)
|
|
(24,584
|
)
|
||
|
Tax charge from share-based compensation
|
(676
|
)
|
|
—
|
|
||
|
Repurchases of common stock for treasury
|
—
|
|
|
(152,681
|
)
|
||
|
Other
|
(315
|
)
|
|
(653
|
)
|
||
|
Balance, end of the period
|
$
|
1,971,744
|
|
|
$
|
1,997,353
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
2012 |
|
October 2,
2011 |
||||
|
SSG agreement (a)
|
$
|
—
|
|
|
$
|
(2,275
|
)
|
|
Subleases with related parties (b)
|
(145
|
)
|
|
(157
|
)
|
||
|
Transactions with the Management Company (c):
|
|
|
|
||||
|
Advisory fees
|
$
|
—
|
|
|
$
|
500
|
|
|
Sublease income
|
(683
|
)
|
|
(1,225
|
)
|
||
|
Use of company-owned aircraft (d)
|
(92
|
)
|
|
(100
|
)
|
||
|
Liquidation services agreement
|
—
|
|
|
220
|
|
||
|
Distributions of proceeds to noncontrolling interests (see Note 4)
|
3,667
|
|
|
—
|
|
||
|
(a)
|
In anticipation of the sale of Arby’s, effective April 2011, the activities of Strategic Sourcing Group Co-op, LLC (“SSG”) were transferred to Quality Supply Chain Co-op, Inc. (“QSCC”) and Arby’s independent purchasing cooperative (“ARCOP”). Wendy’s Restaurants had committed to pay approximately
$5,145
of SSG expenses, which were expensed in 2010 and included in “General and administrative.” During the first quarter of 2011, the remaining accrued commitment of
$2,275
was reversed and credited to “General and administrative.”
|
|
(b)
|
The Company received
$145
and
$134
of sublease income from QSCC during the first
nine
months of 2012 and 2011, respectively, and
$23
of sublease income from SSG during the first
nine
months of 2011, both of which have been recorded as reductions of “General and administrative.”
|
|
(c)
|
The Company had the following transactions with a management company that was formed by the Former Executives and a director, who was our former Vice Chairman (the “Management Company”): (1) paid service fees of
$500
in connection with a services agreement that expired on June 30, 2011, and recorded amortization of
$220
related to fees paid for assistance in the sale, liquidation or other disposition of certain of our investments under a liquidation services agreement, which also expired on June 30, 2011, both of which are included in “General and administrative” in the first
nine
months of 2011, and (2) recorded income of
$683
and
$1,225
during the first
nine
months of 2012 and 2011, respectively, under an office sublease agreement, which expired in May 2012 and has been recorded as a reduction of “General and administrative.”
|
|
(d)
|
A company-owned aircraft was being leased under an aircraft lease agreement with TASCO, LLC (an affiliate of the Management Company) (“TASCO”), which expired on June 30, 2012. The 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 lease agreement (the “Lease”) that will expire on January 5, 2014. Under the 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 Lease, then TASCO can either pay such amounts or terminate the 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 Lease, then TASCO can either pay such amounts or terminate the 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
and
$100
during the first
nine
months of 2012 and 2011, respectively, as a reduction of “General and administrative.”
|
|
•
|
Same-Store Sales
|
|
•
|
Restaurant Margin
|
|
|
Three Months Ended
|
|||||||||||||
|
|
September 30, 2012
|
|
October 2, 2011
|
|
$ Change
|
|
% Change
|
|||||||
|
Revenues:
|
|
|
|
|
|
|
|
|||||||
|
Sales
|
$
|
558.3
|
|
|
$
|
534.5
|
|
|
$
|
23.8
|
|
|
4.5
|
%
|
|
Franchise revenues
|
78.0
|
|
|
76.9
|
|
|
1.1
|
|
|
1.4
|
|
|||
|
|
636.3
|
|
|
611.4
|
|
|
24.9
|
|
|
4.1
|
|
|||
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
|
Cost of sales
|
478.4
|
|
|
458.0
|
|
|
20.4
|
|
|
4.5
|
|
|||
|
General and administrative
|
72.2
|
|
|
66.0
|
|
|
6.2
|
|
|
9.4
|
|
|||
|
Depreciation and amortization
|
41.9
|
|
|
30.8
|
|
|
11.1
|
|
|
36.0
|
|
|||
|
Facilities relocation and other transition costs
|
11.3
|
|
|
—
|
|
|
11.3
|
|
|
n/m
|
|
|||
|
Transaction related costs
|
0.1
|
|
|
23.8
|
|
|
(23.7
|
)
|
|
n/m
|
|
|||
|
Other operating expense, net
|
1.2
|
|
|
0.4
|
|
|
0.8
|
|
|
n/m
|
|
|||
|
|
605.1
|
|
|
579.0
|
|
|
26.1
|
|
|
4.5
|
|
|||
|
Operating profit
|
31.2
|
|
|
32.4
|
|
|
(1.2
|
)
|
|
(3.7
|
)
|
|||
|
Interest expense
|
(21.6
|
)
|
|
(28.4
|
)
|
|
6.8
|
|
|
(23.9
|
)%
|
|||
|
Loss on early extinguishment of debt
|
(49.9
|
)
|
|
—
|
|
|
(49.9
|
)
|
|
n/m
|
|
|||
|
Other income, net
|
0.9
|
|
|
0.3
|
|
|
0.6
|
|
|
n/m
|
|
|||
|
(Loss) income from continuing operations before
income taxes
|
(39.4
|
)
|
|
4.3
|
|
|
(43.7
|
)
|
|
n/m
|
|
|||
|
Benefit from (provision for) income taxes
|
12.7
|
|
|
(1.8
|
)
|
|
14.5
|
|
|
n/m
|
|
|||
|
(Loss) income from continuing operations
|
(26.7
|
)
|
|
2.5
|
|
|
(29.2
|
)
|
|
n/m
|
|
|||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|||||||
|
Income (loss) from discontinued operations, net
of income taxes
|
0.8
|
|
|
(1.4
|
)
|
|
2.2
|
|
|
n/m
|
|
|||
|
Loss on disposal of discontinued operations,
net of income taxes
|
(0.3
|
)
|
|
(5.1
|
)
|
|
4.8
|
|
|
n/m
|
|
|||
|
Net income (loss) from discontinued operations
|
0.5
|
|
|
(6.5
|
)
|
|
7.0
|
|
|
n/m
|
|
|||
|
Net loss
|
$
|
(26.2
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(22.2
|
)
|
|
n/m
|
|
|
|
Third Quarter
|
|
|
|
Third Quarter
|
|
|
||||
|
|
2012
|
|
|
|
2011
|
|
|
||||
|
Sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
542.4
|
|
|
|
|
$
|
515.4
|
|
|
|
|
Bakery and other
|
15.9
|
|
|
|
|
19.1
|
|
|
|
||
|
Total sales
|
$
|
558.3
|
|
|
|
|
$
|
534.5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
% of
Sales |
|
|
|
% of
Sales |
||||
|
Cost of sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
|
|
|
|
|
|
|
||||
|
Food and paper
|
$
|
179.8
|
|
|
33.1%
|
|
$
|
174.3
|
|
|
33.8%
|
|
Restaurant labor
|
162.7
|
|
|
30.0%
|
|
150.6
|
|
|
29.2%
|
||
|
Occupancy, advertising and other operating costs
|
124.3
|
|
|
23.0%
|
|
120.1
|
|
|
23.3%
|
||
|
Total cost of sales
|
466.8
|
|
|
86.1%
|
|
445.0
|
|
|
86.3%
|
||
|
Bakery and other
|
11.6
|
|
|
n/m
|
|
13.0
|
|
|
n/m
|
||
|
Total cost of sales
|
$
|
478.4
|
|
|
85.7%
|
|
$
|
458.0
|
|
|
85.7%
|
|
|
Third Quarter
|
|
|
|
Third Quarter
|
|
|
||||
|
|
2012
|
|
|
|
2011
|
|
|
||||
|
Margin $:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
75.6
|
|
|
|
|
$
|
70.4
|
|
|
|
|
Bakery and other
|
4.3
|
|
|
|
|
6.1
|
|
|
|
||
|
Total margin
|
$
|
79.9
|
|
|
|
|
$
|
76.5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s restaurant margin %
|
13.9
|
%
|
|
|
|
13.7
|
%
|
|
|
||
|
|
|
New Method
|
|
Old Method
|
||||||||
|
|
|
Third Quarter
|
|
Third Quarter
|
|
Third Quarter
|
|
Third Quarter
|
||||
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
|
Wendy’s restaurant statistics:
|
|
|
|
|
|
|
|
|
||||
|
North America same-store sales:
|
|
|
|
|
|
|
|
|
||||
|
Company-owned restaurants
|
|
2.7
|
%
|
|
1.8
|
%
|
|
2.7
|
%
|
|
1.8
|
%
|
|
Franchised restaurants
|
|
2.9
|
%
|
|
0.7
|
%
|
|
2.8
|
%
|
|
0.7
|
%
|
|
Systemwide
|
|
2.8
|
%
|
|
1.0
|
%
|
|
2.8
|
%
|
|
0.9
|
%
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total same-store sales:
|
|
|
|
|
|
|
|
|
||||
|
Company-owned restaurants
|
|
2.7
|
%
|
|
1.8
|
%
|
|
2.7
|
%
|
|
1.8
|
%
|
|
Franchised restaurants (a)
|
|
2.8
|
%
|
|
0.9
|
%
|
|
2.8
|
%
|
|
0.9
|
%
|
|
Systemwide (a)
|
|
2.8
|
%
|
|
1.1
|
%
|
|
2.7
|
%
|
|
1.1
|
%
|
|
Restaurant count:
|
Company-owned
|
|
Franchised
|
|
Systemwide
|
|||
|
Restaurant count at July 1, 2012
|
1,425
|
|
|
5,122
|
|
|
6,547
|
|
|
Opened
|
2
|
|
|
23
|
|
|
25
|
|
|
Closed
|
(2
|
)
|
|
(27
|
)
|
|
(29
|
)
|
|
Net purchased from (sold by) franchisees
|
22
|
|
|
(22
|
)
|
|
—
|
|
|
Restaurant count at September 30, 2012
|
1,447
|
|
|
5,096
|
|
|
6,543
|
|
|
Sales
|
Change
|
||
|
Wendy’s
|
$
|
27.0
|
|
|
Bakery and other
|
(3.2
|
)
|
|
|
|
$
|
23.8
|
|
|
Wendy's Cost of Sales
|
Change
|
||
|
Food and paper
|
(0.7
|
)%
|
points
|
|
Restaurant labor
|
0.8
|
%
|
points
|
|
Occupancy, advertising and other operating costs
|
(0.3
|
)%
|
points
|
|
|
(0.2
|
)%
|
points
|
|
General and Administrative
|
Change
|
||
|
Transition Service Agreement
|
$
|
5.9
|
|
|
Other, net
|
0.3
|
|
|
|
|
$
|
6.2
|
|
|
Depreciation and Amortization
|
Change
|
||
|
Restaurants
|
$
|
10.7
|
|
|
Other
|
0.4
|
|
|
|
Total
|
$
|
11.1
|
|
|
Facilities Relocation and Other Transition Costs
|
Change
|
||
|
Atlanta facility closure costs
|
$
|
4.2
|
|
|
Severance, retention and other payroll costs
|
2.2
|
|
|
|
Consulting and professional fees
|
1.7
|
|
|
|
Relocation costs
|
1.8
|
|
|
|
Accelerated depreciation expense
|
0.6
|
|
|
|
Other
|
0.8
|
|
|
|
|
$
|
11.3
|
|
|
Interest Expense
|
Change
|
||
|
Senior Notes
|
$
|
(13.5
|
)
|
|
Term loans
|
6.8
|
|
|
|
Other
|
(0.1
|
)
|
|
|
|
$
|
(6.8
|
)
|
|
|
Three Months Ended September 30, 2012
|
||
|
Premium payment to redeem Senior Notes
|
$
|
33.1
|
|
|
Unaccreted discount on Senior Notes
|
7.2
|
|
|
|
Deferred costs associated with the Senior Notes
|
9.6
|
|
|
|
Loss on early extinguishment of debt
|
$
|
49.9
|
|
|
Benefit from (Provision for) Income Taxes
|
Change
|
||
|
Federal and state benefit on variance in (loss) income
from continuing operations before income taxes
|
$
|
14.4
|
|
|
Corrections related to prior year tax matters
|
3.4
|
|
|
|
Net reduction in deferred state taxes related to the Company’s debt refinancing and related corporate activities
|
(2.5
|
)
|
|
|
Other
|
(0.8
|
)
|
|
|
|
$
|
14.5
|
|
|
|
Nine Months Ended
|
|||||||||||||
|
|
September 30, 2012
|
|
October 2, 2011
|
|
$ Change
|
|
% Change
|
|||||||
|
Revenues:
|
|
|
|
|
|
|
|
|||||||
|
Sales
|
$
|
1,644.4
|
|
|
$
|
1,588.0
|
|
|
$
|
56.4
|
|
|
3.6
|
%
|
|
Franchise revenues
|
231.0
|
|
|
228.3
|
|
|
2.7
|
|
|
1.2
|
|
|||
|
|
1,875.4
|
|
|
1,816.3
|
|
|
59.1
|
|
|
3.3
|
|
|||
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
|
Cost of sales
|
1,417.0
|
|
|
1,361.7
|
|
|
55.3
|
|
|
4.1
|
|
|||
|
General and administrative
|
217.8
|
|
|
215.1
|
|
|
2.7
|
|
|
1.3
|
|
|||
|
Depreciation and amortization
|
110.1
|
|
|
91.0
|
|
|
19.1
|
|
|
21.0
|
|
|||
|
Impairment of long-lived assets
|
7.8
|
|
|
8.3
|
|
|
(0.5
|
)
|
|
(6.0
|
)
|
|||
|
Facilities relocation and other transition costs
|
26.3
|
|
|
—
|
|
|
26.3
|
|
|
n/m
|
|
|||
|
Transaction related costs
|
1.3
|
|
|
30.8
|
|
|
(29.5
|
)
|
|
n/m
|
|
|||
|
Other operating expense, net
|
4.6
|
|
|
1.6
|
|
|
3.0
|
|
|
n/m
|
|
|||
|
|
1,784.9
|
|
|
1,708.5
|
|
|
76.4
|
|
|
4.5
|
|
|||
|
Operating profit
|
90.5
|
|
|
107.8
|
|
|
(17.3
|
)
|
|
(16.0
|
)
|
|||
|
Interest expense
|
(77.8
|
)
|
|
(85.9
|
)
|
|
8.1
|
|
|
(9.4
|
)%
|
|||
|
Loss on early extinguishment of debt
|
(75.1
|
)
|
|
—
|
|
|
(75.1
|
)
|
|
n/m
|
|
|||
|
Gain on sale of investment, net
|
27.4
|
|
|
—
|
|
|
27.4
|
|
|
n/m
|
|
|||
|
Other income, net
|
3.1
|
|
|
0.9
|
|
|
2.2
|
|
|
n/m
|
|
|||
|
(Loss) income from continuing operations
before income taxes and noncontrolling
interests
|
(31.9
|
)
|
|
22.8
|
|
|
(54.7
|
)
|
|
n/m
|
|
|||
|
Benefit from (provision for) income taxes
|
14.4
|
|
|
(9.2
|
)
|
|
23.6
|
|
|
n/m
|
|
|||
|
(Loss) income from continuing operations
|
(17.5
|
)
|
|
13.6
|
|
|
(31.1
|
)
|
|
n/m
|
|
|||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|||||||
|
Income from discontinued operations, net
of income taxes
|
0.8
|
|
|
1.1
|
|
|
(0.3
|
)
|
|
n/m
|
|
|||
|
Loss on disposal of discontinued operations,
net of income taxes
|
(0.3
|
)
|
|
(8.8
|
)
|
|
8.5
|
|
|
n/m
|
|
|||
|
Net income (loss) from discontinued
operations
|
0.5
|
|
|
(7.7
|
)
|
|
8.2
|
|
|
n/m
|
|
|||
|
Net (loss) income
|
(17.0
|
)
|
|
5.9
|
|
|
(22.9
|
)
|
|
n/m
|
|
|||
|
Net income attributable to noncontrolling
interests
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
n/m
|
|
|||
|
Net (loss) income attributable to The
Wendy’s Company
|
$
|
(19.3
|
)
|
|
$
|
5.9
|
|
|
$
|
(25.2
|
)
|
|
n/m
|
|
|
|
Nine Months
|
|
|
|
Nine Months
|
|
|
|
||||
|
|
2012
|
|
|
|
2011
|
|
|
|
||||
|
Sales:
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
1,592.1
|
|
|
|
|
$
|
1,531.4
|
|
|
|
|
|
Bakery and other
|
52.3
|
|
|
|
|
56.6
|
|
|
|
|
||
|
Total sales
|
$
|
1,644.4
|
|
|
|
|
$
|
1,588.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
% of
Sales |
|
|
|
% of
Sales |
|
||||
|
Cost of sales:
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
|
|
|
|
|
|
|
|
||||
|
Food and paper
|
$
|
529.9
|
|
|
33.3%
|
|
$
|
507.9
|
|
|
33.2%
|
|
|
Restaurant labor
|
480.2
|
|
|
30.2%
|
|
457.1
|
|
|
29.8%
|
|
||
|
Occupancy, advertising and other operating
costs
|
370.1
|
|
|
23.2%
|
|
357.3
|
|
|
23.3%
|
|
||
|
Total cost of sales
|
1,380.2
|
|
|
86.7%
|
|
1,322.3
|
|
|
86.3%
|
|
||
|
Bakery and other
|
36.8
|
|
|
n/m
|
|
39.4
|
|
|
n/m
|
|
||
|
Total cost of sales
|
$
|
1,417.0
|
|
|
86.2%
|
|
$
|
1,361.7
|
|
|
85.7%
|
|
|
|
Nine Months
|
|
|
|
Nine Months
|
|
|
||||
|
|
2012
|
|
|
|
2011
|
|
|
||||
|
Margin $:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
211.9
|
|
|
|
|
$
|
209.1
|
|
|
|
|
Bakery and other
|
15.5
|
|
|
|
|
17.2
|
|
|
|
||
|
Total margin
|
$
|
227.4
|
|
|
|
|
$
|
226.3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s restaurant margin %
|
13.3
|
%
|
|
|
|
13.7
|
%
|
|
|
||
|
|
|
New Method
|
|
Old Method
|
||||||||
|
|
|
Nine Months
|
|
Nine Months
|
|
Nine Months
|
|
Nine Months
|
||||
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
|
Wendy’s restaurant statistics:
|
|
|
|
|
|
|
|
|
||||
|
North America same-store sales:
|
|
|
|
|
|
|
|
|
||||
|
Company-owned restaurants
|
|
2.3
|
%
|
|
1.1
|
%
|
|
2.1
|
%
|
|
1.1
|
%
|
|
Franchised restaurants
|
|
2.3
|
%
|
|
1.1
|
%
|
|
2.3
|
%
|
|
1.1
|
%
|
|
Systemwide
|
|
2.3
|
%
|
|
1.1
|
%
|
|
2.2
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total same-store sales:
|
|
|
|
|
|
|
|
|
||||
|
Company-owned restaurants
|
|
2.3
|
%
|
|
1.1
|
%
|
|
2.1
|
%
|
|
1.1
|
%
|
|
Franchised restaurants (a)
|
|
2.3
|
%
|
|
1.3
|
%
|
|
2.3
|
%
|
|
1.2
|
%
|
|
Systemwide (a)
|
|
2.3
|
%
|
|
1.2
|
%
|
|
2.3
|
%
|
|
1.2
|
%
|
|
Restaurant count:
|
Company-owned
|
|
Franchised
|
|
Systemwide
|
|
|||
|
Restaurant count at January 1, 2012
|
1,417
|
|
|
5,177
|
|
|
6,594
|
|
|
|
Opened
|
4
|
|
|
46
|
|
|
50
|
|
|
|
Closed
|
(27
|
)
|
|
(74
|
)
|
|
(101
|
)
|
|
|
Net purchased from (sold by) franchisees
|
53
|
|
|
(53
|
)
|
|
—
|
|
|
|
Restaurant count at September 30, 2012
|
1,447
|
|
|
5,096
|
|
|
6,543
|
|
|
|
Sales
|
Change
|
||
|
Wendy’s
|
$
|
60.7
|
|
|
Bakery and other
|
(4.3
|
)
|
|
|
|
$
|
56.4
|
|
|
Wendy's Cost of Sales
|
Change
|
||
|
Food and paper
|
0.1
|
%
|
points
|
|
Restaurant labor
|
0.4
|
%
|
points
|
|
Occupancy, advertising and other operating costs
|
(0.1
|
)%
|
points
|
|
|
0.4
|
%
|
points
|
|
General and Administrative
|
Change
|
||
|
Transition Service Agreement
|
$
|
5.9
|
|
|
Purchasing co-op start-up costs
|
2.3
|
|
|
|
Professional services
|
(4.4
|
)
|
|
|
Atlanta restaurant support center lease
|
(0.5
|
)
|
|
|
Other, net
|
(0.6
|
)
|
|
|
|
$
|
2.7
|
|
|
Depreciation and Amortization
|
Change
|
||
|
Restaurants
|
$
|
18.7
|
|
|
Other
|
0.4
|
|
|
|
|
$
|
19.1
|
|
|
Impairment of Long-Lived Assets
|
Change
|
||
|
Properties
|
$
|
(0.3
|
)
|
|
Intangible assets
|
(1.8
|
)
|
|
|
Aircraft
|
1.6
|
|
|
|
|
$
|
(0.5
|
)
|
|
Facilities Relocation and Other Transition Costs
|
Change
|
||
|
Severance, retention and other payroll costs
|
$
|
9.6
|
|
|
Consulting and professional fees
|
4.5
|
|
|
|
Atlanta facility closure costs
|
4.4
|
|
|
|
Relocation costs
|
3.9
|
|
|
|
Accelerated depreciation expense
|
1.9
|
|
|
|
Other
|
2.0
|
|
|
|
|
$
|
26.3
|
|
|
Interest Expense
|
Change
|
||
|
Senior Notes
|
$
|
(15.1
|
)
|
|
Term loans
|
7.3
|
|
|
|
Deferred financing costs
|
(0.6
|
)
|
|
|
Other, net
|
0.3
|
|
|
|
|
$
|
(8.1
|
)
|
|
|
Nine Months Ended September 30, 2012
|
||
|
Premium payment to redeem/purchase Senior Notes
|
$
|
43.2
|
|
|
Unaccreted discount on Senior Notes
|
9.3
|
|
|
|
Deferred costs associated with the Senior Notes
|
12.4
|
|
|
|
Unaccreted discount on prior term loan
|
1.7
|
|
|
|
Deferred costs associated with the prior term loan
|
8.5
|
|
|
|
Loss on early extinguishment of debt
|
$
|
75.1
|
|
|
Benefit from (Provision for) Income Taxes
|
Change
|
||
|
Federal and state benefit on variance in (loss) income from continuing
operations before income taxes and noncontrolling interests
|
$
|
19.5
|
|
|
Corrections related to prior year tax matters
|
3.6
|
|
|
|
Net reduction in deferred state taxes related to the Company's debt refinancing and related corporate activities
|
(0.2
|
)
|
|
|
Other
|
0.7
|
|
|
|
|
$
|
23.6
|
|
|
•
|
a net decrease in income of
$47.5 million
including the effect of the change in deferred taxes;
|
|
•
|
a
$27.4 million
gain on sale of our cost investment in Jurlique included in the 2012 net loss;
|
|
•
|
a
$8.8 million
loss on the sale of Arby's included in 2011 net income; and
|
|
•
|
a
$38.7 million
decrease
in cash provided by operating activities resulting from changes in accrued expenses for the comparable periods primarily due to (1) payments in 2011 related to the sale of Arby's for termination, severance and retention costs and (2) a decrease in interest expense accruals partially offset by a decrease in interest payments related to the change in the Credit Agreement, as described below.
|
|
•
|
Cash capital expenditures totaling
$126.3 million
, which included $31.3 million for Image Activation restaurants, $12.8 million for other restaurants, $25.5 million for restaurant point-of-sale equipment, $12.9 million for the construction and renovation of our corporate headquarters, in part related to the relocation of our Atlanta restaurant support center and $43.8 million for various capital projects;
|
|
•
|
Proceeds from the sale of our cost investment in Jurlique of
$24.4 million
; and
|
|
•
|
a
$40.6 million
decrease in cash due to the acquisition of franchised restaurants.
|
|
•
|
Capital expenditures of approximately $99 million, which would result in total cash capital expenditures for the year of approximately $225 million;
|
|
•
|
Payments for severance, retention and facilities relocation costs;
|
|
•
|
Quarterly cash dividends aggregating up to approximately $15.6 million as discussed below in “Dividends;”
|
|
•
|
Potential stock repurchases of up to $100 million; and
|
|
•
|
Other potential restaurant acquisitions and dispositions.
|
|
•
|
The completion of a new $1,125.0 million Term Loan, due May 15, 2019, which resulted in the following early principal reductions of our long-term debt obligations:
|
|
◦
|
$467.8 million for the repayment of our prior term loan;
|
|
◦
|
$565.0 million for the redemption/purchase of the outstanding Senior Notes.
|
|
•
|
The acquisition of 30 Wendy’s franchised restaurants from Pisces Foods, L.P., which resulted in the recording of $14.4 million of capitalized lease obligations.
|
|
•
|
The Company repaid the principal and interest on the 6.54% aircraft term loan, which primarily consisted of the following:
|
|
◦
|
$3.9 million prepayment during the first quarter of 2012; and
|
|
◦
|
$6.7 million repayment of the remaining outstanding principal and interest on June 25, 2012.
|
|
•
|
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”;
|
|
•
|
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 reimages 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, accounting standards, payment card industry rules, overtime rules, minimum wage rates, wage and hour laws, government-mandated health care benefits, tax legislation and menu-board labeling requirements;
|
|
•
|
the costs, uncertainties and other effects of legal, environmental and administrative proceedings;
|
|
•
|
the effects of charges for impairment of goodwill, other intangible assets 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 our Annual Report on Form 10-K for the fiscal year ended January 1, 2012 (the “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.
|
|
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
|
||||||
|
July 2, 2012
through August 5, 2012 |
67,366
|
|
$
|
4.68
|
|
—
|
|
$
|
—
|
|
|
August 6, 2012
through September 2, 2012 |
3,641
|
|
$
|
4.56
|
|
—
|
|
$
|
—
|
|
|
September 3, 2012
through September 30, 2012 |
34,051
|
|
$
|
4.49
|
|
—
|
|
$
|
—
|
|
|
Total
|
105,058
|
|
$
|
4.62
|
|
—
|
|
$
|
—
|
|
|
(1)
|
Represents shares reacquired by the Company from holders of share-based awards to satisfy certain requirements associated with the vesting or exercise of the respective award. The shares were valued at the average of the high and low trading prices of our common stock on the vesting or exercise date of such awards.
|
|
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 herein 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).
|
|
10.1
|
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.*
|
|
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-Q.*
|
|
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
|
|
**
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”
|
|
|
THE WENDY’S COMPANY
(Registrant)
|
|
Date: November 8, 2012
|
By:
/s/Stephen E. Hare
|
|
|
Stephen E. Hare
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|
(On behalf of the Company)
|
|
|
|
|
Date: November 8, 2012
|
By:
/s/Steven B. Graham
|
|
|
Steven B. Graham
|
|
|
Senior Vice President and
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
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 herein 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).
|
|
10.1
|
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.*
|
|
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-Q.*
|
|
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
|
|
**
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|---|---|---|
Mr. Lundgren has extensive Marketing experience, including merchandising, digital and in-store execution, as well as Leadership, Strategy, and Risk Management experience, which he garnered from over 35 years working in the retail Consumer Industry, including 20 combined years as CEO of Neiman Marcus and subsequently Federated Department Stores, which was later named Macy’s, Inc. This experience enables him to contribute his deep knowledge of the evolving consumer and Retail landscape, along with his broad experience with dynamic marketing practices, including digital marketing, to the Board. In addition, during his tenure at Macy’s Inc., Mr. Lundgren managed the company’s sustainability committee, which focused on early adoption of solar energy and strategies for carbon-footprint reduction through transportation efficiency. He also oversaw the creation and development of “The Workshop,” a program that helped launch numerous diverse-, women-, LGBTQ- and veteran-owned small businesses and has served as an important aspect of Macy’s strategic plan for supplier diversity for more than a decade. Further, as long-standing Chair of the Company’s Compensation & Leadership Development Committee and through his service on multiple public-company boards during his career, Mr. Lundgren also brings valued Corporate Governance experience, particularly as it relates to policies and practices for executive compensation. | |||
Ms. Bonini is Senior Vice President of Private Sector Engagement for World Wildlife Fund (nonprofit conservation organization), a role she has held since 2016. Previously, she served as Chief Executive Officer of The Sustainability Consortium, a global nonprofit organization focused on making consumer products more sustainable, from 2014 to 2016. Prior to this role, Ms. Bonini spent more than fifteen years with McKinsey & Company (consulting) in roles in the United States, Europe, and South America, including serving as a Senior Expert Consultant in the firm’s Sustainability and Resource Productivity Practice, as co-leader of its Sustainability Transformation Service, and as a Senior Expert Consultant in its Strategy Practice focusing on Regulatory and Business in Society. Ms. Bonini holds a degree in Applied Mathematics from Harvard University and an MBA from Stanford University Graduate School of Business and began her career working in investment banking with Goldman Sachs Group and Merrill Lynch. She currently serves on the boards of The Sustainability Consortium and the High Meadows Institute, a policy institute focused on the role of business leadership in creating a sustainable society. | |||
Mr. Portman is a former United States Senator, having represented the State of Ohio from 2011 until his retirement in 2023. He previously served in cabinet-level positions in the executive branch, first as U.S. Trade Representative from 2005 to 2006 and then as Director of the Office of Management and Budget (“OMB”) from 2006 to 2007. From 1993 to 2005, he served as a Congressman in the U.S. House of Representatives. Mr. Portman, who holds a Juris Doctor from the University of Michigan School of Law, began his career in private legal practice and later worked as Associate Counsel and then Director of Legislative Affairs under President George H. W. Bush from 1989 to 1991. He currently serves as a Distinguished Visiting Fellow in the Practice of Public Policy at the American Enterprise Institute and is the founder of the Portman Center for Policy Solutions within the University of Cincinnati’s School of Public and International Affairs, which focuses on fostering civility and bipartisanship among future public service leaders. | |||
Mr. Subramaniam is President and Chief Executive Officer at FedEx Corporation (transportation and business services), a position he has held since June 2022. He previously served as President and Chief Operating Officer of FedEx from March 2019 to May 2022, as President and Chief Executive Officer of Federal Express Corporation (“FedEx Express”) from January 2019 to March 2019, and as Executive Vice President – Chief Marketing & Communications Officer of FedEx from January 2017 to December 2018. Prior to these roles, Mr. Subramaniam held various leadership positions in operations and marketing across the FedEx portfolio of operating companies, including as a Senior Vice President and Vice President in the company’s Canada and Asia Pacific businesses. Originally from India, he holds master’s degrees in chemical engineering and business administration and began his career with FedEx in 1991. He also serves as a board member with the U.S.-India Strategic Partnership Forum, as a member of the U.S.-India CEO Forum, and as Vice Chair of the U.S.-China Business Council. Mr. Subramaniam was appointed to the President’s Export Council, the principal national advisory committee on international trade, in 2023. | |||
Ms. Woertz is the former Chairman of the Board and Chief Executive Officer of Archer Daniels Midland Company (“ADM”) (agricultural origination and processing), where she joined in 2006 as Chief Executive Officer and President and was named Chairman in 2007. Ms. Woertz retired as Chief Executive Officer of ADM in 2015 and as Chairman in 2016. Prior to joining ADM, Ms. Woertz was with Chevron Corp. for 29 years, serving in several executive roles, including President, Chevron International and Executive Vice President, Global Downstream. She began her career as a certified public accountant with Ernst & Ernst. Ms. Woertz is currently a senior advisor to Tanium, a cybersecurity and network operations company, and is a member of the Board of Directors of Northwestern Memorial HealthCare. She previously served as a member of the President’s Export Council, the principal national advisory committee on international trade. | |||
Jon R. Moeller Chairman of the Board, President and Chief Executive Officer | |||
Mr. Kempczinski’s considerable experience in Consumer Industry/Retail, as a leader in both the consumer packaged food and the dynamic quick-service restaurant industries, enable him to bring relevant and actionable insights, including valuable Marketing and brand building perspective, to the Board. As Chairman and CEO of McDonald’s, which has significant Global operations, Mr. Kempczinski brings meaningful insight into the operating, regulatory, and cultural complexities associated with the Company’s global footprint and extensive experience in Corporate Governance. He has further demonstrated his skills and expertise in Technology and Innovation in his leadership of global strategy and innovation at McDonald’s, where business transactions increasingly occur through digital channels, and has played a key role in accelerating growth through innovation at the company by prioritizing these areas within its strategy. Further, Mr. Kempczinski’s recognized Leadership, Strategy, and Risk Management abilities have allowed him to guide McDonald’s through the dynamic challenges and opportunities posed by current global operating conditions, including with respect to key Environmental Sustainability strategies, which have been highly valuable to the Board as it oversees the Company’s long-term growth and operating strategy. | |||
Mr. Biggs is the former Executive Vice President and Chief Financial Officer of Walmart, Inc. (global retailer), a role he held from 2016 until June 2022, when he assumed the position of Executive Advisor until his retirement in January 2023. Prior to his time as CFO of Walmart, Inc., Mr. Biggs served as Chief Financial Officer of Walmart International from 2014 to 2016 and of Walmart U.S. from 2012 to 2014. He also served as Senior Vice President Operations for Sam’s Club from 2010 to 2012. During his more than 20-year career with Walmart, Mr. Biggs held several other leadership roles, including Chief Financial Officer of Sam’s Club, Senior Vice President-Corporate Finance and Assistant Treasurer, and Senior Vice President-International Strategy and Mergers and Acquisitions. Prior to joining Walmart in 2000, Mr. Biggs worked in roles related to corporate finance and mergers and acquisitions with Leggett & Platt (manufacturing), Phillips Petroleum Co., and Price Waterhouse. He also currently serves as Senior Advisor at Blackstone (asset management). In addition to his private sector work, Mr. Biggs previously served on the American Red Cross Board of Governors, on the Board of Regents at Pepperdine University, and on the Board of Trustees of the National Urban League. | |||
Ms. McEvoy is the former Executive Vice President, Worldwide Chairman of MedTech at Johnson & Johnson (healthcare), a position she held from 2018 to 2023. In this role, Ms. McEvoy had responsibility for the company’s surgery, orthopaedics, interventional solutions, and eye health businesses. She previously served as Company Group Chairman, Consumer Medical Devices from 2014 to 2018 and as Company Group Chairman, Vision Care from 2012 to 2014. Ms. McEvoy also led J&J’s global suture products business as Worldwide President, Ethicon Products from 2009 to 2011, served as President, McNeil Consumer Healthcare from 2006 to 2009, and served as Vice President, Marketing and General Manager, McNeil Labs from 2003 to 2006. She joined J&J in 1996 as an Assistant Brand Manager, having previously worked in advertising at both Grey Advertising and J. Walter Thompson (now Wunderman Thompson). In addition to her professional work, Ms. McEvoy previously served on the Board of Trustees of the Children’s Hospital of Philadelphia. |
|
Name and Principal Position |
Year |
Salary ($) |
Bonus 1 ($) |
Stock
Awards 2 ($) |
Option
Awards 3 ($) |
Non-Equity
($) |
Change in
($) |
All Other
Comp. 5 ($) |
Total ($) |
||||||||||||||||||||||||||||||||||||
|
Jon R. Moeller Chairman of the Board, President, and CEO |
|
2023-24 |
|
|
1,600,000 |
|
|
4,086,400 |
|
|
11,301,824 |
|
|
5,600,006 |
|
|
0 |
|
|
0 |
|
|
375,651 |
|
|
22,963,881 |
|
||||||||||||||||||
|
|
2022-23 |
|
|
1,600,000 |
|
|
4,712,000 |
|
|
11,372,562 |
|
|
3,625,001 |
|
|
0 |
|
|
0 |
|
|
406,062 |
|
|
21,715,625 |
|
|||||||||||||||||||
|
|
2021-22 |
|
|
1,466,667 |
|
|
3,955,968 |
|
|
8,684,664 |
|
|
3,360,006 |
|
|
0 |
|
|
0 |
|
|
248,710 |
|
|
17,716,015 |
|
|||||||||||||||||||
|
Andre Schulten Chief Financial Officer |
|
2023–24 |
|
|
980,000 |
|
|
1,468,550 |
|
|
4,569,186 |
|
|
1,406,270 |
|
|
0 |
|
|
143,000 |
|
|
108,831 |
|
|
8,675,837 |
|
||||||||||||||||||
|
|
2022–23 |
|
|
895,000 |
|
|
1,557,905 |
|
|
3,564,955 |
|
|
1,125,013 |
|
|
0 |
|
|
1,000 |
|
|
95,936 |
|
|
7,239,809 |
|
|||||||||||||||||||
|
|
2021–22 |
|
|
802,500 |
|
|
1,295,305 |
|
|
2,528,746 |
|
|
1,350,000 |
|
|
0 |
|
|
0 |
|
|
87,630 |
|
|
6,064,181 |
|
|||||||||||||||||||
|
Shailesh Jejurikar Chief Operating Officer |
|
2023-24 |
|
|
1,106,250 |
|
|
1,867,613 |
|
|
3,477,569 |
|
|
3,150,023 |
|
|
0 |
|
|
280,000 |
|
|
76,632 |
|
|
9,958,087 |
|
||||||||||||||||||
|
|
2022-23 |
|
|
1,037,500 |
|
|
1,932,656 |
|
|
3,911,800 |
|
|
1,250,008 |
|
|
0 |
|
|
0 |
|
|
74,083 |
|
|
8,206,047 |
|
|||||||||||||||||||
|
|
2021-22 |
|
|
952,500 |
|
|
1,661,143 |
|
|
2,292,712 |
|
|
2,000,002 |
|
|
0 |
|
|
0 |
|
|
131,916 |
|
|
7,038,273 |
|
|||||||||||||||||||
|
Ma. Fatima D. Francisco CEO - Baby, Feminine, and Family Care |
|
2023-24 |
|
|
975,000 |
|
|
1,490,688 |
|
|
2,317,734 |
|
|
2,027,011 |
|
|
0 |
|
|
370,000 |
|
|
112,275 |
|
|
7,292,708 |
|
||||||||||||||||||
|
|
2022-23 |
|
|
885,000 |
|
|
1,743,638 |
|
|
2,007,494 |
|
|
1,825,015 |
|
|
0 |
|
|
37,000 |
|
|
115,868 |
|
|
6,614,015 |
|
|||||||||||||||||||
|
|
2021-22 |
|
|
825,000 |
|
|
1,348,439 |
|
|
2,104,274 |
|
|
1,790,011 |
|
|
0 |
|
|
0 |
|
|
88,921 |
|
|
6,156,645 |
|
|||||||||||||||||||
|
R. Alexandra Keith 6 CEO - Beauty |
|
2023-24 |
|
|
1,047,500 |
|
|
1,430,801 |
|
|
2,191,099 |
|
|
1,886,032 |
|
|
0 |
|
|
0 |
|
|
284,476 |
|
|
6,839,908 |
|
||||||||||||||||||
|
|
2022-23 |
|
|
985,000 |
|
|
1,270,428 |
|
|
2,626,813 |
|
|
1,455,938 |
|
|
0 |
|
|
0 |
|
|
300,171 |
|
|
6,638,350 |
|
|||||||||||||||||||
|
|
2021-22 |
|
|
885,000 |
|
|
996,596 |
|
|
4,714,986 |
|
|
1,428,381 |
|
|
0 |
|
|
0 |
|
|
323,785 |
|
|
8,348,748 |
|
|||||||||||||||||||
No Customers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|---|---|---|
| Moeller Jon R | - | 269,967 | 22,217 |
| Moeller Jon R | - | 263,537 | 35,422 |
| Pritchard Marc S. | - | 172,814 | 602 |
| Davis Jennifer L. | - | 51,965 | 14,838 |
| Schulten Andre | - | 37,208 | 6,183 |
| Coombe Gary A | - | 36,738 | 1,295 |
| Schulten Andre | - | 36,460 | 5,647 |
| Raman Sundar G. | - | 29,915 | 7,688 |
| Aguilar Moses Victor Javier | - | 25,182 | 429 |
| Keith R. Alexandra | - | 24,589 | 7,410 |
| Coombe Gary A | - | 22,051 | 1,295 |
| Raman Sundar G. | - | 19,037 | 7,063 |
| Keith R. Alexandra | - | 13,783 | 3,488 |
| Purushothaman Balaji | - | 13,101 | 3,928 |
| Aguilar Moses Victor Javier | - | 12,800 | 429 |
| Whaley Susan Street | - | 11,742 | 5,329 |
| Purushothaman Balaji | - | 11,595 | 4,538 |
| Jejurikar Shailesh | - | 10,135 | 12,823 |
| Jejurikar Shailesh | - | 9,739 | 11,171 |
| Allen Bertrand Marc | - | 9,281 | 0 |
| McEvoy Ashley | - | 3,434 | 0 |
| Francisco Ma. Fatima | - | 1,486 | 2,681 |
| Francisco Ma. Fatima | - | 962 | 8,738 |
| Janzaruk Matthew W. | - | 883 | 6,091 |
| Janzaruk Matthew W. | - | 720 | 2,734 |