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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 27,
2015 |
|
December 28,
2014 |
||||
|
ASSETS
|
(Unaudited)
|
||||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
175,700
|
|
|
$
|
267,112
|
|
|
Accounts and notes receivable
|
77,078
|
|
|
68,211
|
|
||
|
Inventories
|
4,204
|
|
|
6,861
|
|
||
|
Prepaid expenses and other current assets
|
178,484
|
|
|
72,258
|
|
||
|
Deferred income tax benefit
|
73,132
|
|
|
73,661
|
|
||
|
Advertising funds restricted assets
|
86,444
|
|
|
65,308
|
|
||
|
Current assets of discontinued operations
|
—
|
|
|
8,691
|
|
||
|
Total current assets
|
595,042
|
|
|
562,102
|
|
||
|
Properties
|
1,226,383
|
|
|
1,241,170
|
|
||
|
Goodwill
|
775,633
|
|
|
822,562
|
|
||
|
Other intangible assets
|
1,343,197
|
|
|
1,351,307
|
|
||
|
Investments
|
64,890
|
|
|
74,054
|
|
||
|
Other assets
|
75,637
|
|
|
56,272
|
|
||
|
Noncurrent assets of discontinued operations
|
—
|
|
|
30,132
|
|
||
|
Total assets
|
$
|
4,080,782
|
|
|
$
|
4,137,599
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
|
Current liabilities:
|
|
|
|
|
|
||
|
Current portion of long-term debt
|
$
|
23,198
|
|
|
$
|
53,202
|
|
|
Accounts payable
|
60,691
|
|
|
77,309
|
|
||
|
Accrued expenses and other current liabilities
|
134,574
|
|
|
125,880
|
|
||
|
Advertising funds restricted liabilities
|
86,444
|
|
|
65,308
|
|
||
|
Current liabilities of discontinued operations
|
—
|
|
|
18,525
|
|
||
|
Total current liabilities
|
304,907
|
|
|
340,224
|
|
||
|
Long-term debt
|
2,379,934
|
|
|
1,384,972
|
|
||
|
Deferred income taxes
|
476,513
|
|
|
493,843
|
|
||
|
Other liabilities
|
213,971
|
|
|
199,833
|
|
||
|
Noncurrent liabilities of discontinued operations
|
—
|
|
|
1,151
|
|
||
|
Total liabilities
|
3,375,325
|
|
|
2,420,023
|
|
||
|
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
|
2,876,188
|
|
|
2,826,965
|
|
||
|
Accumulated deficit
|
(426,054
|
)
|
|
(445,917
|
)
|
||
|
Common stock held in treasury, at cost; 197,090 and 104,614
shares, respectively
|
(1,728,336
|
)
|
|
(679,220
|
)
|
||
|
Accumulated other comprehensive loss
|
(63,383
|
)
|
|
(31,294
|
)
|
||
|
Total stockholders’ equity
|
705,457
|
|
|
1,717,576
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
4,080,782
|
|
|
$
|
4,137,599
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Sales
|
$
|
359,015
|
|
|
$
|
393,444
|
|
|
$
|
1,101,632
|
|
|
$
|
1,219,166
|
|
|
Franchise revenues
|
105,614
|
|
|
103,226
|
|
|
304,300
|
|
|
292,033
|
|
||||
|
|
464,629
|
|
|
496,670
|
|
|
1,405,932
|
|
|
1,511,199
|
|
||||
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales
|
291,524
|
|
|
332,645
|
|
|
911,757
|
|
|
1,031,151
|
|
||||
|
General and administrative
|
63,683
|
|
|
65,173
|
|
|
184,152
|
|
|
201,217
|
|
||||
|
Depreciation and amortization
|
36,420
|
|
|
34,873
|
|
|
111,300
|
|
|
113,451
|
|
||||
|
System optimization losses (gains), net
|
98
|
|
|
368
|
|
|
(14,751
|
)
|
|
(74,027
|
)
|
||||
|
Reorganization and realignment costs
|
5,754
|
|
|
1,389
|
|
|
16,646
|
|
|
17,376
|
|
||||
|
Impairment of long-lived assets
|
1,513
|
|
|
8,618
|
|
|
13,468
|
|
|
11,224
|
|
||||
|
Other operating expense, net
|
9,698
|
|
|
9,360
|
|
|
25,202
|
|
|
18,120
|
|
||||
|
|
408,690
|
|
|
452,426
|
|
|
1,247,774
|
|
|
1,318,512
|
|
||||
|
Operating profit
|
55,939
|
|
|
44,244
|
|
|
158,158
|
|
|
192,687
|
|
||||
|
Interest expense
|
(27,938
|
)
|
|
(13,148
|
)
|
|
(57,882
|
)
|
|
(39,173
|
)
|
||||
|
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(7,295
|
)
|
|
—
|
|
||||
|
Other income, net
|
214
|
|
|
371
|
|
|
725
|
|
|
1,748
|
|
||||
|
Income from continuing operations before income taxes
|
28,215
|
|
|
31,467
|
|
|
93,706
|
|
|
155,262
|
|
||||
|
Provision for income taxes
|
(19,892
|
)
|
|
(10,334
|
)
|
|
(42,408
|
)
|
|
(61,793
|
)
|
||||
|
Income from continuing operations
|
8,323
|
|
|
21,133
|
|
|
51,298
|
|
|
93,469
|
|
||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
|
(Loss) income from discontinued operations, net of income taxes
|
(417
|
)
|
|
1,697
|
|
|
9,171
|
|
|
4,671
|
|
||||
|
(Loss) gain on disposal of discontinued operations, net of income taxes
|
(322
|
)
|
|
—
|
|
|
14,817
|
|
|
—
|
|
||||
|
Net (loss) income from discontinued operations
|
(739
|
)
|
|
1,697
|
|
|
23,988
|
|
|
4,671
|
|
||||
|
Net income
|
$
|
7,584
|
|
|
$
|
22,830
|
|
|
$
|
75,286
|
|
|
$
|
98,140
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic and diluted income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
$
|
.03
|
|
|
$
|
.06
|
|
|
$
|
.15
|
|
|
$
|
.25
|
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
.07
|
|
|
.01
|
|
||||
|
Net income
|
$
|
.03
|
|
|
$
|
.06
|
|
|
$
|
.22
|
|
|
$
|
.26
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends per share
|
$
|
.055
|
|
|
$
|
.05
|
|
|
$
|
.165
|
|
|
$
|
.15
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
7,584
|
|
|
$
|
22,830
|
|
|
$
|
75,286
|
|
|
$
|
98,140
|
|
|
Other comprehensive loss, net:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
(17,385
|
)
|
|
(10,213
|
)
|
|
(29,879
|
)
|
|
(9,238
|
)
|
||||
|
Change in unrecognized pension loss, net of income tax benefit (provision) of $124 and $(213), respectively
|
—
|
|
|
—
|
|
|
(203
|
)
|
|
338
|
|
||||
|
Effect of cash flow hedges, net of income tax (provision) benefit of $(273) and $(549) for the three months and $1,217 and $972 for the nine months ended September 27, 2015 and September 28, 2014, respectively
|
435
|
|
|
885
|
|
|
(2,007
|
)
|
|
(1,533
|
)
|
||||
|
Other comprehensive loss, net
|
(16,950
|
)
|
|
(9,328
|
)
|
|
(32,089
|
)
|
|
(10,433
|
)
|
||||
|
Comprehensive (loss) income
|
$
|
(9,366
|
)
|
|
$
|
13,502
|
|
|
$
|
43,197
|
|
|
$
|
87,707
|
|
|
|
|
Nine Months Ended
|
||||||
|
|
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
|
|
(Unaudited)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
|
||||
|
Net income
|
|
$
|
75,286
|
|
|
$
|
98,140
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
||||
|
Depreciation and amortization
|
|
118,708
|
|
|
118,265
|
|
||
|
Share-based compensation
|
|
18,784
|
|
|
25,208
|
|
||
|
Impairment of long-lived assets
|
|
13,468
|
|
|
11,224
|
|
||
|
Deferred income tax
|
|
35,368
|
|
|
59,597
|
|
||
|
Excess tax benefits from share-based compensation
|
|
(49,870
|
)
|
|
(11,979
|
)
|
||
|
Non-cash rent expense, net
|
|
2,792
|
|
|
6,239
|
|
||
|
Net receipt of deferred vendor incentives
|
|
3,402
|
|
|
9,160
|
|
||
|
System optimization gains, net
|
|
(14,783
|
)
|
|
(74,092
|
)
|
||
|
Gain on disposal of the Bakery
|
|
(27,526
|
)
|
|
—
|
|
||
|
Gain on sales of investments, net
|
|
—
|
|
|
(690
|
)
|
||
|
Distributions received from TimWen joint venture
|
|
9,198
|
|
|
10,028
|
|
||
|
Equity in earnings in joint venture, net
|
|
(6,968
|
)
|
|
(7,659
|
)
|
||
|
Long-term debt-related activities, net (see below)
|
|
4,972
|
|
|
2,708
|
|
||
|
Other, net
|
|
307
|
|
|
(5,553
|
)
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
|
||||
|
Restricted cash
|
|
(23,686
|
)
|
|
—
|
|
||
|
Accounts and notes receivable
|
|
(29,046
|
)
|
|
(6,074
|
)
|
||
|
Inventories
|
|
203
|
|
|
925
|
|
||
|
Prepaid expenses and other current assets
|
|
(6,530
|
)
|
|
(8,889
|
)
|
||
|
Accounts payable
|
|
9,212
|
|
|
(3,347
|
)
|
||
|
Accrued expenses and other current liabilities
|
|
(14,662
|
)
|
|
(40,615
|
)
|
||
|
Net cash provided by operating activities
|
|
118,629
|
|
|
182,596
|
|
||
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||
|
Capital expenditures
|
|
(188,246
|
)
|
|
(197,886
|
)
|
||
|
Acquisitions
|
|
(1,232
|
)
|
|
(5,949
|
)
|
||
|
Dispositions
|
|
46,357
|
|
|
119,892
|
|
||
|
Proceeds from sale of the Bakery
|
|
78,408
|
|
|
—
|
|
||
|
Proceeds from sales of investments
|
|
—
|
|
|
2,189
|
|
||
|
Payments for investments
|
|
(2,082
|
)
|
|
(400
|
)
|
||
|
Notes receivable from franchisees, net
|
|
2,631
|
|
|
434
|
|
||
|
Changes in restricted cash
|
|
484
|
|
|
1,750
|
|
||
|
Other, net
|
|
88
|
|
|
—
|
|
||
|
Net cash used in investing activities
|
|
(63,592
|
)
|
|
(79,970
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
|
|
|
||
|
Proceeds from long-term debt
|
|
2,294,000
|
|
|
—
|
|
||
|
Repayments of long-term debt
|
|
(1,321,169
|
)
|
|
(28,983
|
)
|
||
|
Deferred financing costs
|
|
(42,098
|
)
|
|
—
|
|
||
|
Change in restricted cash
|
|
(5,687
|
)
|
|
—
|
|
||
|
Repurchases of common stock
|
|
(1,078,404
|
)
|
|
(291,240
|
)
|
||
|
Dividends
|
|
(55,414
|
)
|
|
(55,012
|
)
|
||
|
Proceeds from stock option exercises
|
|
22,419
|
|
|
25,254
|
|
||
|
Excess tax benefits from share-based compensation
|
|
49,870
|
|
|
11,979
|
|
||
|
Net cash used in financing activities
|
|
(136,483
|
)
|
|
(338,002
|
)
|
||
|
Net cash used in operations before effect of exchange rate changes on cash
|
|
(81,446
|
)
|
|
(235,376
|
)
|
||
|
Effect of exchange rate changes on cash
|
|
(10,130
|
)
|
|
(2,330
|
)
|
||
|
Net decrease in cash and cash equivalents
|
|
(91,576
|
)
|
|
(237,706
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
|
267,276
|
|
|
580,152
|
|
||
|
Cash and cash equivalents at end of period
|
|
$
|
175,700
|
|
|
$
|
342,446
|
|
|
|
|
Nine Months Ended
|
||||||
|
|
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
|
|
(Unaudited)
|
||||||
|
Details of cash flows from operating activities:
|
|
|
|
|
||||
|
Long-term debt-related activities, net:
|
|
|
|
|
||||
|
Loss on early extinguishment of debt
|
|
$
|
7,295
|
|
|
$
|
—
|
|
|
Accretion of long-term debt
|
|
890
|
|
|
890
|
|
||
|
Amortization of deferred financing costs
|
|
3,416
|
|
|
1,818
|
|
||
|
Payments for termination of cash flow hedges
|
|
(7,337
|
)
|
|
—
|
|
||
|
Reclassification of unrealized losses on cash flow hedges
|
|
708
|
|
|
—
|
|
||
|
|
|
$
|
4,972
|
|
|
$
|
2,708
|
|
|
|
|
|
|
|
||||
|
Supplemental cash flow information:
|
|
|
|
|
||||
|
Cash paid for:
|
|
|
|
|
|
|
||
|
Interest
|
|
$
|
55,725
|
|
|
$
|
37,507
|
|
|
Income taxes, net of refunds
|
|
16,401
|
|
|
11,231
|
|
||
|
|
|
|
|
|
||||
|
Supplemental non-cash investing and financing activities:
|
|
|
|
|
||||
|
Capital expenditures included in accounts payable
|
|
$
|
25,970
|
|
|
$
|
58,629
|
|
|
Capitalized lease obligations
|
|
25,657
|
|
|
11,223
|
|
||
|
Accrued debt issuance costs
|
|
1,653
|
|
|
—
|
|
||
|
|
Three Months Ended
|
||||||||||||||
|
|
|
|
Reclassifications
|
|
|
||||||||||
|
|
As Previously Reported (b)
|
|
Gain on dispositions, net (c)
|
|
System Optimization Remeasurement (d)
|
|
As Currently Reported
|
||||||||
|
System optimization losses, net
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
Reorganization and realignment costs (a)
|
7,520
|
|
|
(921
|
)
|
|
(5,210
|
)
|
|
1,389
|
|
||||
|
Impairment of long-lived assets
|
3,408
|
|
|
—
|
|
|
5,210
|
|
|
8,618
|
|
||||
|
Other operating expense, net
|
8,807
|
|
|
553
|
|
|
—
|
|
|
9,360
|
|
||||
|
|
$
|
19,735
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,735
|
|
|
|
Nine Months Ended
|
||||||||||||||
|
|
|
|
Reclassifications
|
|
|
||||||||||
|
|
As Previously Reported (b)
|
|
Gain on dispositions, net (c)
|
|
System Optimization Remeasurement (d)
|
|
As Currently Reported
|
||||||||
|
System optimization gains, net
|
$
|
—
|
|
|
$
|
(74,027
|
)
|
|
$
|
—
|
|
|
$
|
(74,027
|
)
|
|
Reorganization and realignment costs (a)
|
(35,630
|
)
|
|
60,490
|
|
|
(7,484
|
)
|
|
17,376
|
|
||||
|
Impairment of long-lived assets
|
3,740
|
|
|
—
|
|
|
7,484
|
|
|
11,224
|
|
||||
|
Other operating expense, net
|
4,583
|
|
|
13,537
|
|
|
—
|
|
|
18,120
|
|
||||
|
|
$
|
(27,307
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27,307
|
)
|
|
(b)
|
“As Previously Reported,” reflects adjustments to reclassify the Bakery’s other operating income, net of
$24
and
$61
for the three and nine months ended
September 28, 2014
, respectively, from “Other operating expense, net” to “(Loss) income from discontinued operations, net of income taxes.”
|
|
(d)
|
Reclassified impairment losses recorded in connection with the sale or anticipated sale of restaurants (“System Optimization Remeasurement”), previously included in “Facilities action charges (income), net” to “Impairment of long-lived assets.”
|
|
•
|
Balance sheets - As a result of our sale of the Bakery on May 31, 2015, there are no remaining Bakery assets and liabilities. The Bakery’s assets and liabilities as of December 28, 2014 have been presented as discontinued operations.
|
|
•
|
Statements of operations - The Bakery’s results of operations for the period from December 29, 2014 through May 31, 2015 and the three and nine months ended September 28, 2014 have been presented as discontinued operations. In addition, the (loss) gain on disposal of the Bakery has been included in “Net (loss) income from discontinued operations” for the three and nine months ended September 27, 2015.
|
|
•
|
Statements of cash flows - The Bakery’s cash flows prior to its sale (for the period from December 29, 2014 through May 31, 2015 and for the nine months ended September 28, 2014) have been included in, and not separately reported from, our consolidated cash flows. The consolidated statement of cash flows for the nine months ended September 27, 2015 also includes the effects of the sale of the Bakery.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27, 2015 (e)
|
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||||||
|
Revenues (a)
|
$
|
—
|
|
|
$
|
15,819
|
|
|
$
|
25,885
|
|
|
$
|
47,913
|
|
|
Cost of sales (b)
|
(207
|
)
|
|
(11,162
|
)
|
|
(7,543
|
)
|
|
(34,626
|
)
|
||||
|
|
(207
|
)
|
|
4,657
|
|
|
18,342
|
|
|
13,287
|
|
||||
|
General and administrative
|
4
|
|
|
(601
|
)
|
|
(1,093
|
)
|
|
(1,905
|
)
|
||||
|
Depreciation and amortization (c)
|
—
|
|
|
(1,401
|
)
|
|
(2,297
|
)
|
|
(4,339
|
)
|
||||
|
Other income (expense), net (d)
|
15
|
|
|
(30
|
)
|
|
(19
|
)
|
|
(89
|
)
|
||||
|
(Loss) income from discontinued operations before income taxes
|
(188
|
)
|
|
2,625
|
|
|
14,933
|
|
|
6,954
|
|
||||
|
Provision for income taxes
|
(229
|
)
|
|
(928
|
)
|
|
(5,762
|
)
|
|
(2,283
|
)
|
||||
|
(Loss) income from discontinued operations, net of income taxes
|
(417
|
)
|
|
1,697
|
|
|
9,171
|
|
|
4,671
|
|
||||
|
Gain on disposal of discontinued operations before income taxes
|
188
|
|
|
—
|
|
|
27,526
|
|
|
—
|
|
||||
|
Provision for income taxes on gain on disposal
|
(510
|
)
|
|
—
|
|
|
(12,709
|
)
|
|
—
|
|
||||
|
(Loss) gain on disposal of discontinued operations, net of income taxes
|
(322
|
)
|
|
—
|
|
|
14,817
|
|
|
—
|
|
||||
|
Net (loss) income from discontinued operations
|
$
|
(739
|
)
|
|
$
|
1,697
|
|
|
$
|
23,988
|
|
|
$
|
4,671
|
|
|
(a)
|
Includes sales of sandwich buns and related products previously reported in “Sales” as well as rental income.
|
|
(b)
|
The nine months ended September 27, 2015 include employee separation-related costs of
$791
as a result of the sale of the Bakery. In addition, the nine months ended September 27, 2015 includes a reduction to cost of sales of
$12,486
resulting from the reversal of a liability associated with the Bakery’s withdrawal from a multiemployer pension plan. See Note 15 for further discussion.
|
|
(c)
|
Included in “Depreciation and amortization” in our condensed consolidated statements of cash flows for the periods presented.
|
|
(d)
|
Includes net gains on sales of other assets. During the nine months ended
September 27, 2015
, the Bakery received cash proceeds of
$50
resulting in net gains on sales of other assets of
$32
. During the
three and nine months ended
September 28, 2014, the Bakery received cash proceeds of
$10
and
$47
, resulting in net gains on sales of other assets of
$28
and
$65
, respectively.
|
|
(e)
|
Represents post-closing adjustments recorded during the third quarter of 2015.
|
|
|
Nine Months Ended
|
||
|
|
September 27,
2015 |
||
|
Proceeds from sale of the Bakery (a)
|
$
|
78,408
|
|
|
Net working capital (b)
|
(5,655
|
)
|
|
|
Net properties sold (c)
|
(30,664
|
)
|
|
|
Goodwill allocated to the sale of the Bakery
|
(12,067
|
)
|
|
|
Other (d)
|
(2,684
|
)
|
|
|
|
27,338
|
|
|
|
Post-closing adjustments on the sale of the Bakery
|
188
|
|
|
|
|
27,526
|
|
|
|
Provision for income taxes (e)
|
(12,709
|
)
|
|
|
Gain on disposal of discontinued operations, net of income taxes
|
$
|
14,817
|
|
|
(a)
|
Represents net proceeds received, which includes the purchase price of
$78,500
less transaction closing costs paid directly by the Buyer on the Company’s behalf.
|
|
(b)
|
Primarily represents accounts receivable, inventory, prepaid expenses and accounts payable.
|
|
(c)
|
Net properties sold consisted primarily of buildings, equipment and capital leases for transportation equipment.
|
|
(d)
|
Primarily includes the recognition of the Company’s obligation, pursuant to the sale agreement, to provide health insurance benefits to the Bakery’s employees through December 31, 2015 of
$1,993
and transaction closing costs paid directly by the Company.
|
|
(e)
|
Includes the impact of non-deductible goodwill disposed of as a result of the sale.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 (f) |
|
September 27,
2015 |
|
September 28,
2014 (f)
|
||||||||
|
Number of restaurants sold to franchisees
|
9
|
|
|
12
|
|
|
109
|
|
|
190
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Proceeds from sales of restaurants
|
$
|
3,084
|
|
|
$
|
2,689
|
|
|
$
|
39,133
|
|
|
$
|
104,249
|
|
|
Net assets sold (a)
|
(1,867
|
)
|
|
(1,301
|
)
|
|
(19,247
|
)
|
|
(43,317
|
)
|
||||
|
Goodwill related to sales of restaurants
|
(483
|
)
|
|
(478
|
)
|
|
(8,346
|
)
|
|
(14,136
|
)
|
||||
|
Net (unfavorable) favorable leases (b)
|
(1,506
|
)
|
|
(1,080
|
)
|
|
5,889
|
|
|
23,901
|
|
||||
|
Other (c)
|
—
|
|
|
(84
|
)
|
|
(3,224
|
)
|
|
216
|
|
||||
|
|
(772
|
)
|
|
(254
|
)
|
|
14,205
|
|
|
70,913
|
|
||||
|
Post-closing adjustments on sales of restaurants (d)
|
(495
|
)
|
|
(421
|
)
|
|
(1,134
|
)
|
|
(1,538
|
)
|
||||
|
(Loss) gain on sales of restaurants, net
|
(1,267
|
)
|
|
(675
|
)
|
|
13,071
|
|
|
69,375
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Gain on sales of other assets, net (e)
|
1,169
|
|
|
307
|
|
|
1,680
|
|
|
4,652
|
|
||||
|
System optimization (losses) gains, net
|
$
|
(98
|
)
|
|
$
|
(368
|
)
|
|
$
|
14,751
|
|
|
$
|
74,027
|
|
|
(a)
|
Net assets sold consisted primarily of cash, inventory and equipment.
|
|
(b)
|
During the
three and nine months ended
September 27, 2015
, the Company recorded favorable lease assets of
$185
and
$25,992
, respectively, and unfavorable lease liabilities of
$1,691
and
$20,103
, respectively, as a result of leasing and/or subleasing land, buildings, and/or leasehold improvements to franchisees, in connection with sales of restaurants. During the
three and nine months ended
September 28, 2014
, the Company recorded favorable lease assets of
$1,814
and
$49,206
, respectively, and unfavorable lease liabilities of
$2,894
and
$25,305
, respectively.
|
|
(c)
|
The nine months ended
September 27, 2015
includes a deferred gain of
$2,658
related to the sale of
14
Canadian restaurants to a franchisee during the second quarter of 2015, as a result of certain contingencies related to the extension of lease terms. The deferred gain is included in “Other liabilities.” The nine months ended
September 27, 2015
also includes a note receivable of
$1,801
from a franchisee in connection with the sale of
16
Canadian restaurants, which was recognized as part of the overall loss on sale during the second quarter of 2015.
|
|
(d)
|
During the nine months ended
September 27, 2015
, notes receivable from franchisees in connection with sales of restaurants in 2014 were repaid and as a result, we recognized the related gain on sale of
$2,450
.
|
|
(e)
|
During the
three and nine months ended
September 27, 2015
, Wendy’s received cash proceeds of
$4,576
and
$7,174
, respectively, primarily from the sale of surplus properties. During the
three and nine months ended
September 28, 2014
, Wendy’s received cash proceeds of
$989
and
$15,596
, respectively, primarily from the sale of surplus properties and the sale of a company-owned aircraft.
|
|
(f)
|
Reclassifications have been made to the prior year presentation to include sales of restaurants previously reported in “Other operating expense, net” to conform to the current year presentation. Reclassifications have also been made to reflect the Bakery’s gain on sales of other assets as discontinued operations. See Note 1 for further details.
|
|
|
September 27,
2015 |
|
December 28, 2014 (a)
|
||||
|
Number of restaurants classified as held for sale
|
274
|
|
|
106
|
|
||
|
Net restaurant assets held for sale (b)
|
$
|
103,561
|
|
|
$
|
25,266
|
|
|
|
|
|
|
||||
|
Other assets held for sale (b)
|
$
|
5,144
|
|
|
$
|
13,469
|
|
|
(a)
|
Reclassifications have been made to the prior year presentation to include restaurants previously excluded from our system optimization initiative to conform to the current year presentation. See Note 1 for further details.
|
|
|
Nine Months Ended
|
||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
Restaurants acquired from franchisees
|
4
|
|
|
6
|
|
||
|
|
|
|
|
||||
|
Properties
|
$
|
1,303
|
|
|
$
|
3,870
|
|
|
Acquired franchise rights
|
760
|
|
|
2,000
|
|
||
|
Goodwill
|
127
|
|
|
720
|
|
||
|
Deferred taxes and other assets
|
(40
|
)
|
|
46
|
|
||
|
Capital leases obligations
|
(438
|
)
|
|
—
|
|
||
|
Unfavorable leases
|
(440
|
)
|
|
—
|
|
||
|
Deferred taxes and other liabilities
|
(40
|
)
|
|
(338
|
)
|
||
|
Gain on acquisition of restaurants
|
—
|
|
|
(349
|
)
|
||
|
Total consideration paid, net of cash received
|
$
|
1,232
|
|
|
$
|
5,949
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||||||
|
G&A realignment
|
$
|
1,461
|
|
|
$
|
—
|
|
|
$
|
9,996
|
|
|
$
|
—
|
|
|
System optimization initiative
|
4,293
|
|
|
1,389
|
|
|
6,650
|
|
|
17,376
|
|
||||
|
Reorganization and realignment costs
|
$
|
5,754
|
|
|
$
|
1,389
|
|
|
$
|
16,646
|
|
|
$
|
17,376
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Total
Incurred Since Inception
|
||||||
|
|
September 27,
2015 |
|
September 27,
2015 |
|
|||||||
|
Severance and related employee costs
|
$
|
513
|
|
|
$
|
3,132
|
|
|
$
|
15,049
|
|
|
Recruitment and relocation costs
|
270
|
|
|
1,254
|
|
|
1,463
|
|
|||
|
Other
|
2
|
|
|
43
|
|
|
131
|
|
|||
|
|
785
|
|
|
4,429
|
|
|
16,643
|
|
|||
|
Share-based compensation (a)
|
676
|
|
|
5,567
|
|
|
6,279
|
|
|||
|
Total G&A realignment
|
$
|
1,461
|
|
|
$
|
9,996
|
|
|
$
|
22,922
|
|
|
(a)
|
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our G&A realignment plan.
|
|
|
Balance
December 28, 2014
|
|
Charges
|
|
Payments
|
|
Balance
September 27,
2015
|
||||||||
|
Severance and related employee costs
|
$
|
11,609
|
|
|
$
|
3,132
|
|
|
$
|
(9,256
|
)
|
|
$
|
5,485
|
|
|
Recruitment and relocation costs
|
149
|
|
|
1,254
|
|
|
(1,238
|
)
|
|
165
|
|
||||
|
Other
|
5
|
|
|
43
|
|
|
(48
|
)
|
|
—
|
|
||||
|
|
$
|
11,763
|
|
|
$
|
4,429
|
|
|
$
|
(10,542
|
)
|
|
$
|
5,650
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Total
Incurred Since Inception
|
||||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
|
|||||||||||
|
Severance and related employee costs
|
$
|
225
|
|
|
$
|
715
|
|
|
$
|
854
|
|
|
$
|
6,641
|
|
|
$
|
18,112
|
|
|
Professional fees
|
242
|
|
|
38
|
|
|
393
|
|
|
3,227
|
|
|
6,206
|
|
|||||
|
Other (a)
|
337
|
|
|
511
|
|
|
292
|
|
|
3,273
|
|
|
4,833
|
|
|||||
|
|
804
|
|
|
1,264
|
|
|
1,539
|
|
|
13,141
|
|
|
29,151
|
|
|||||
|
Accelerated depreciation and
amortization (b)
|
3,489
|
|
|
—
|
|
|
5,111
|
|
|
475
|
|
|
22,525
|
|
|||||
|
Share-based compensation (c)
|
—
|
|
|
125
|
|
|
—
|
|
|
3,760
|
|
|
5,013
|
|
|||||
|
Total system optimization initiative
|
$
|
4,293
|
|
|
$
|
1,389
|
|
|
$
|
6,650
|
|
|
$
|
17,376
|
|
|
$
|
56,689
|
|
|
(a)
|
The nine months ended
September 27, 2015
includes a reversal of an accrual of
$210
as a result of a change in estimate.
|
|
(b)
|
Primarily includes accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that will be or have been sold in connection with our system optimization initiative.
|
|
(c)
|
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.
|
|
|
Balance
December 28, 2014
|
|
Charges
|
|
Payments
|
|
Balance
September 27,
2015
|
||||||||
|
Severance and related employee costs
|
$
|
2,235
|
|
|
$
|
854
|
|
|
$
|
(3,003
|
)
|
|
$
|
86
|
|
|
Professional fees
|
146
|
|
|
393
|
|
|
(488
|
)
|
|
51
|
|
||||
|
Other
|
423
|
|
|
292
|
|
|
(523
|
)
|
|
192
|
|
||||
|
|
$
|
2,804
|
|
|
$
|
1,539
|
|
|
$
|
(4,014
|
)
|
|
$
|
329
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
Balance at beginning of period
|
$
|
69,790
|
|
|
$
|
79,810
|
|
|
|
|
|
|
||||
|
Equity in earnings for the period
|
8,689
|
|
|
9,651
|
|
||
|
Amortization of purchase price adjustments (a)
|
(1,721
|
)
|
|
(1,992
|
)
|
||
|
|
6,968
|
|
|
7,659
|
|
||
|
Distributions received
|
(9,198
|
)
|
|
(10,028
|
)
|
||
|
Foreign currency translation adjustment included in “Other comprehensive loss, net”
|
(8,928
|
)
|
|
(3,187
|
)
|
||
|
Balance at end of period
|
$
|
58,632
|
|
|
$
|
74,254
|
|
|
(a)
|
Based upon an average original aggregate life of
21
years.
|
|
|
September 27,
2015 |
|
December 28, 2014
|
||||
|
Series 2015-1 Class A-2 Notes:
|
|
|
|
||||
|
Series 2015-1 Class A-2-I Notes
|
$
|
875,000
|
|
|
$
|
—
|
|
|
Series 2015-1 Class A-2-II Notes
|
900,000
|
|
|
—
|
|
||
|
Series 2015-1 Class A-2-III Notes
|
500,000
|
|
|
—
|
|
||
|
Term A Loans, repaid in June 2015
|
—
|
|
|
541,733
|
|
||
|
Term B Loans, repaid in June 2015
|
—
|
|
|
759,758
|
|
||
|
7% debentures, due in 2025
|
86,743
|
|
|
85,853
|
|
||
|
Capital lease obligations, due through 2045 (a)
|
82,763
|
|
|
59,073
|
|
||
|
Unamortized debt issuance costs (b)
|
(41,374
|
)
|
|
(8,243
|
)
|
||
|
|
2,403,132
|
|
|
1,438,174
|
|
||
|
Less amounts payable within one year (a)
|
(23,198
|
)
|
|
(53,202
|
)
|
||
|
Total long-term debt
|
$
|
2,379,934
|
|
|
$
|
1,384,972
|
|
|
(a)
|
Capital lease obligations as of December 28, 2014 and the related amounts payable within one year have been updated to exclude the Bakery’s capital lease obligations as a result of the sale of the Bakery during the second quarter of 2015 and the presentation as discontinued operations in our condensed consolidated balance sheet as of December 28, 2014.
|
|
(b)
|
During the second quarter of 2015, the Company early adopted an amendment requiring debt issuance costs be presented in the balance sheet as a direct reduction of the related debt liability rather than as an asset. The adoption of this guidance resulted in the reclassification of debt issuance costs of
$8,243
from “Other assets” to “Long-term debt” in our condensed consolidated balance sheet as of December 28, 2014. See Note 1 and Note 16 for further information.
|
|
Fiscal Year
|
|
|
||
|
2015 (a)
|
|
$
|
5,773
|
|
|
2016
|
|
23,193
|
|
|
|
2017
|
|
23,373
|
|
|
|
2018
|
|
24,482
|
|
|
|
2019
|
|
862,857
|
|
|
|
Thereafter
|
|
1,518,085
|
|
|
|
|
|
$
|
2,457,763
|
|
|
(a)
|
Represents maturities of long-term debt for the remainder of our 2015 fiscal year, from September 28, 2015 through January 3, 2016.
|
|
|
September 27,
2015 |
|
December 28,
2014 |
|
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Fair Value
Measurements
|
||||||||
|
Financial assets
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
346
|
|
|
$
|
346
|
|
|
$
|
61,450
|
|
|
$
|
61,450
|
|
|
Level 1
|
|
Non-current cost method investments (a)
|
6,176
|
|
|
169,614
|
|
|
4,264
|
|
|
147,760
|
|
|
Level 3
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
Series 2015-1 Class A-2-I Notes (b)
|
875,000
|
|
|
876,575
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
|
Series 2015-1 Class A-2-II Notes (b)
|
900,000
|
|
|
909,720
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
|
Series 2015-1 Class A-2-III Notes (b)
|
500,000
|
|
|
500,950
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
|
Term A Loans, repaid in June 2015 (b)
|
—
|
|
|
—
|
|
|
541,733
|
|
|
540,717
|
|
|
Level 2
|
||||
|
Term B Loans, repaid in June 2015 (b)
|
—
|
|
|
—
|
|
|
759,758
|
|
|
752,160
|
|
|
Level 2
|
||||
|
7% debentures, due in 2025 (b)
|
86,743
|
|
|
105,625
|
|
|
85,853
|
|
|
104,250
|
|
|
Level 2
|
||||
|
Cash flow hedges (c)
|
—
|
|
|
—
|
|
|
3,343
|
|
|
3,343
|
|
|
Level 2
|
||||
|
Guarantees of franchisee loan obligations (d)
|
979
|
|
|
979
|
|
|
968
|
|
|
968
|
|
|
Level 3
|
||||
|
(a)
|
The fair value of our indirect investment in Arby’s Restaurant Group, Inc. (“Arby’s”) is based on applying a multiple to Arby’s earnings before income taxes, depreciation and amortization per its current unaudited financial information. The carrying value of our indirect investment in Arby’s was reduced to
zero
during 2013 in connection with the receipt of a dividend. The fair values of our remaining investments are not significant and are based on our review of information provided by the investment managers or investees which was based on (1) valuations performed by the investment managers or investees, (2) quoted market or broker/dealer prices for similar investments and (3) quoted market or broker/dealer prices adjusted by the investment managers for legal or contractual restrictions, risk of nonperformance or lack of marketability, depending upon the underlying investments.
|
|
(b)
|
The fair values were based on quoted market prices in markets that are not considered active markets.
|
|
(c)
|
The fair values were developed using market observable data for all significant inputs.
|
|
(d)
|
Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for new restaurant development and equipment financing. In addition 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
|
|
Nine Months Ended
September 27, 2015
Total Losses
|
||||||||||||||
|
|
September 27, 2015
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
Held and used
|
$
|
5,060
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,060
|
|
|
$
|
12,257
|
|
|
Held for sale
|
2,663
|
|
|
—
|
|
|
—
|
|
|
2,663
|
|
|
1,211
|
|
|||||
|
Total
|
$
|
7,723
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,723
|
|
|
$
|
13,468
|
|
|
|
|
|
Fair Value Measurements
|
|
2014
Total Losses
|
||||||||||||||
|
|
December 28, 2014
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
Held and used
|
$
|
8,651
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,651
|
|
|
$
|
17,139
|
|
|
Held for sale
|
4,967
|
|
|
—
|
|
|
—
|
|
|
4,967
|
|
|
2,474
|
|
|||||
|
Total
|
$
|
13,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,618
|
|
|
$
|
19,613
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||||||
|
Restaurants leased or subleased to franchisees
|
$
|
1,235
|
|
|
$
|
5,460
|
|
|
$
|
9,491
|
|
|
$
|
7,734
|
|
|
Company-owned restaurants
|
219
|
|
|
2,027
|
|
|
2,766
|
|
|
2,027
|
|
||||
|
Surplus properties
|
59
|
|
|
1,131
|
|
|
1,211
|
|
|
1,463
|
|
||||
|
|
$
|
1,513
|
|
|
$
|
8,618
|
|
|
$
|
13,468
|
|
|
$
|
11,224
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
Common stock:
|
|
|
|
|
|
|
|
||||
|
Weighted average basic shares outstanding
|
292,256
|
|
|
366,880
|
|
|
340,869
|
|
|
371,714
|
|
|
Dilutive effect of stock options and restricted shares
|
4,695
|
|
|
5,272
|
|
|
6,032
|
|
|
6,178
|
|
|
Weighted average diluted shares outstanding
|
296,951
|
|
|
372,152
|
|
|
346,901
|
|
|
377,892
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
Balance at beginning of period
|
$
|
1,717,576
|
|
|
$
|
1,929,486
|
|
|
Comprehensive income
|
43,197
|
|
|
87,707
|
|
||
|
Dividends
|
(55,414
|
)
|
|
(55,012
|
)
|
||
|
Repurchases of common stock
|
(1,078,404
|
)
|
|
(291,240
|
)
|
||
|
Share-based compensation
|
18,784
|
|
|
25,208
|
|
||
|
Exercises of stock options
|
17,996
|
|
|
24,839
|
|
||
|
Vesting of restricted shares
|
(7,323
|
)
|
|
(3,666
|
)
|
||
|
Tax benefit from share-based compensation
|
48,897
|
|
|
11,254
|
|
||
|
Other
|
148
|
|
|
139
|
|
||
|
Balance at end of period
|
$
|
705,457
|
|
|
$
|
1,728,715
|
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges (a)
|
|
Pension
|
|
Total
|
||||||||
|
Balance at December 28, 2014
|
$
|
(28,363
|
)
|
|
$
|
(2,044
|
)
|
|
$
|
(887
|
)
|
|
$
|
(31,294
|
)
|
|
Current-period other comprehensive loss
|
(29,879
|
)
|
|
(2,007
|
)
|
|
(203
|
)
|
|
(32,089
|
)
|
||||
|
Balance at September 27, 2015
|
$
|
(58,242
|
)
|
|
$
|
(4,051
|
)
|
|
$
|
(1,090
|
)
|
|
$
|
(63,383
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at December 29, 2013
|
$
|
(9,803
|
)
|
|
$
|
744
|
|
|
$
|
(1,278
|
)
|
|
$
|
(10,337
|
)
|
|
Current-period other comprehensive (loss) income
|
(9,238
|
)
|
|
(1,533
|
)
|
|
338
|
|
|
(10,433
|
)
|
||||
|
Balance at September 28, 2014
|
$
|
(19,041
|
)
|
|
$
|
(789
|
)
|
|
$
|
(940
|
)
|
|
$
|
(20,770
|
)
|
|
(a)
|
Current-period other comprehensive (loss) income for the
nine months ended September 27, 2015
and September 28, 2014 includes the effect of changes in unrealized losses on cash flow hedges, net of tax. The three and
nine months ended September 27, 2015
also include the reclassification of unrealized losses on cash flow hedges of
$435
from “Accumulated other comprehensive loss” to our condensed consolidated statements of operations consisting of
$708
recorded to “Interest expense,” net of the related income tax benefit of
$273
recorded to “Provision for income taxes.” See Note 8 for more information.
|
|
•
|
Same-Restaurant Sales
|
|
|
Three Months Ended
|
||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
||||||
|
Revenues:
|
|
|
|
|
|
||||||
|
Sales
|
$
|
359.0
|
|
|
$
|
393.5
|
|
|
$
|
(34.5
|
)
|
|
Franchise revenues
|
105.6
|
|
|
103.2
|
|
|
2.4
|
|
|||
|
|
464.6
|
|
|
496.7
|
|
|
(32.1
|
)
|
|||
|
Costs and expenses:
|
|
|
|
|
|
|
|||||
|
Cost of sales
|
291.5
|
|
|
332.6
|
|
|
(41.1
|
)
|
|||
|
General and administrative
|
63.7
|
|
|
65.2
|
|
|
(1.5
|
)
|
|||
|
Depreciation and amortization
|
36.4
|
|
|
34.9
|
|
|
1.5
|
|
|||
|
System optimization losses, net
|
0.1
|
|
|
0.4
|
|
|
(0.3
|
)
|
|||
|
Reorganization and realignment costs
|
5.8
|
|
|
1.4
|
|
|
4.4
|
|
|||
|
Impairment of long-lived assets
|
1.5
|
|
|
8.6
|
|
|
(7.1
|
)
|
|||
|
Other operating expense, net
|
9.7
|
|
|
9.4
|
|
|
0.3
|
|
|||
|
|
408.7
|
|
|
452.5
|
|
|
(43.8
|
)
|
|||
|
Operating profit
|
55.9
|
|
|
44.2
|
|
|
11.7
|
|
|||
|
Interest expense
|
(27.9
|
)
|
|
(13.1
|
)
|
|
(14.8
|
)
|
|||
|
Other income, net
|
0.2
|
|
|
0.4
|
|
|
(0.2
|
)
|
|||
|
Income from continuing operations before income taxes
|
28.2
|
|
|
31.5
|
|
|
(3.3
|
)
|
|||
|
Provision for income taxes
|
(19.9
|
)
|
|
(10.4
|
)
|
|
(9.5
|
)
|
|||
|
Income from continuing operations
|
8.3
|
|
|
21.1
|
|
|
(12.8
|
)
|
|||
|
Discontinued operations:
|
|
|
|
|
|
||||||
|
(Loss) income from discontinued operations, net of income taxes
|
(0.4
|
)
|
|
1.7
|
|
|
(2.1
|
)
|
|||
|
(Loss) gain on disposal of discontinued operations, net of income
taxes
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
|
Net (loss) income from discontinued operations
|
(0.7
|
)
|
|
1.7
|
|
|
(2.4
|
)
|
|||
|
Net income
|
$
|
7.6
|
|
|
$
|
22.8
|
|
|
$
|
(15.2
|
)
|
|
|
Third
Quarter 2015 |
|
|
|
Third
Quarter 2014 |
|
|
||||
|
Sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
359.0
|
|
|
|
|
$
|
393.5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Third
Quarter 2015 |
|
|
|
Third
Quarter 2014 |
|
|
||||
|
Franchise revenues:
|
|
|
|
|
|
|
|
||||
|
Royalty revenue
|
$
|
80.9
|
|
|
|
|
$
|
79.7
|
|
|
|
|
Rental income
|
22.5
|
|
|
|
|
22.3
|
|
|
|
||
|
Franchise fees
|
2.2
|
|
|
|
|
1.2
|
|
|
|
||
|
Total franchise revenues
|
$
|
105.6
|
|
|
|
|
$
|
103.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Third
Quarter 2015 |
|
% of
Sales |
|
Third
Quarter 2014 |
|
% of
Sales |
||||
|
Cost of sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
|
|
|
|
|
|
|
||||
|
Food and paper
|
$
|
113.3
|
|
|
31.5%
|
|
$
|
128.8
|
|
|
32.7%
|
|
Restaurant labor
|
99.0
|
|
|
27.6%
|
|
112.7
|
|
|
28.6%
|
||
|
Occupancy, advertising and other operating costs
|
79.2
|
|
|
22.1%
|
|
91.1
|
|
|
23.2%
|
||
|
Total cost of sales
|
$
|
291.5
|
|
|
81.2%
|
|
$
|
332.6
|
|
|
84.5%
|
|
|
Third
Quarter 2015 |
|
Third
Quarter 2014 |
|
||||
|
Wendy’s restaurant margin $
|
$
|
67.5
|
|
|
$
|
60.9
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s restaurant margin %
|
18.8
|
%
|
|
15.5
|
%
|
|
||
|
|
Third
Quarter 2015 |
|
Third
Quarter 2014 |
||
|
Same-restaurant sales:
|
|
|
|
||
|
North America same-restaurant sales:
|
|
|
|
||
|
Company-owned
|
1.7
|
%
|
|
2.0
|
%
|
|
Franchised
|
3.3
|
%
|
|
0.5
|
%
|
|
Systemwide
|
3.1
|
%
|
|
0.7
|
%
|
|
|
|
|
|
||
|
Total same-restaurant sales:
|
|
|
|
||
|
Company-owned
|
1.7
|
%
|
|
2.0
|
%
|
|
Franchised (a)
|
3.1
|
%
|
|
0.4
|
%
|
|
Systemwide (a)
|
2.9
|
%
|
|
0.6
|
%
|
|
|
Company-owned
|
|
Franchised
|
|
Systemwide
|
|||
|
Restaurant count:
|
|
|
|
|
|
|||
|
Restaurant count at June 28, 2015
|
860
|
|
|
5,617
|
|
|
6,477
|
|
|
Opened
|
3
|
|
|
22
|
|
|
25
|
|
|
Closed
|
(2
|
)
|
|
(13
|
)
|
|
(15
|
)
|
|
Net (sold to) purchased by franchisees
|
(9
|
)
|
|
9
|
|
|
—
|
|
|
Restaurant count at September 27, 2015
|
852
|
|
|
5,635
|
|
|
6,487
|
|
|
Sales
|
Change
|
||
|
Wendy’s
|
$
|
(34.5
|
)
|
|
Franchise Revenues
|
Change
|
||
|
Royalty revenue
|
$
|
1.2
|
|
|
Franchise fees
|
1.0
|
|
|
|
Rental income
|
0.2
|
|
|
|
|
$
|
2.4
|
|
|
Wendy’s Cost of Sales
|
Change
|
|
|
Food and paper
|
(1.2
|
)%
|
|
Restaurant labor
|
(1.0
|
)%
|
|
Occupancy, advertising and other operating costs
|
(1.1
|
)%
|
|
|
(3.3
|
)%
|
|
General and Administrative
|
Change
|
||
|
Share-based compensation
|
$
|
(4.0
|
)
|
|
Franchise incentives
|
(1.3
|
)
|
|
|
Incentive compensation
|
3.2
|
|
|
|
Other, net
|
0.6
|
|
|
|
|
$
|
(1.5
|
)
|
|
Depreciation and Amortization
|
Change
|
||
|
Restaurants
|
$
|
1.6
|
|
|
Corporate and other
|
(0.1
|
)
|
|
|
|
$
|
1.5
|
|
|
System Optimization Losses, Net
|
Third Quarter
|
||||||
|
|
2015
|
|
2014
|
||||
|
System optimization losses, net
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
Reorganization and Realignment Costs
|
Third Quarter
|
||||||
|
|
2015
|
|
2014
|
||||
|
G&A realignment
|
$
|
1.5
|
|
|
$
|
—
|
|
|
System optimization initiative
|
4.3
|
|
|
1.4
|
|
||
|
|
$
|
5.8
|
|
|
$
|
1.4
|
|
|
Impairment of Long-Lived Assets
|
Change
|
||
|
Impairment of long-lived assets
|
$
|
(7.1
|
)
|
|
Other Operating Expense, Net
|
Third Quarter
|
||||||
|
|
2015
|
|
2014
|
||||
|
Lease expense
|
$
|
12.4
|
|
|
$
|
13.4
|
|
|
Equity in earnings in joint ventures, net
|
(2.4
|
)
|
|
(2.8
|
)
|
||
|
Other, net
|
(0.3
|
)
|
|
(1.2
|
)
|
||
|
|
$
|
9.7
|
|
|
$
|
9.4
|
|
|
Interest Expense
|
Change
|
||
|
Interest expense
|
$
|
14.8
|
|
|
Provision for Income Taxes
|
Change
|
||
|
Federal and state expense on variance in income from continuing operations before income taxes
|
$
|
1.6
|
|
|
System optimization initiative
|
8.8
|
|
|
|
Prior year tax matters, included changes to unrecognized tax benefits
|
0.2
|
|
|
|
State income taxes, net of federal benefits
|
(0.9
|
)
|
|
|
Other
|
(0.2
|
)
|
|
|
|
$
|
9.5
|
|
|
Net (Loss) Income from Discontinued Operations
|
Third Quarter
|
||||||
|
|
2015
|
|
2014
|
||||
|
(Loss) income from discontinued operations before income taxes
|
$
|
(0.2
|
)
|
|
$
|
2.6
|
|
|
Provision for income taxes
|
(0.2
|
)
|
|
(0.9
|
)
|
||
|
(Loss) income from discontinued operations, net of income taxes
|
(0.4
|
)
|
|
1.7
|
|
||
|
Gain on disposal of discontinued operations before income taxes
|
0.2
|
|
|
—
|
|
||
|
Provision for income taxes on gain on disposal
|
(0.5
|
)
|
|
—
|
|
||
|
Loss on disposal of discontinued operations, net of income taxes
|
(0.3
|
)
|
|
—
|
|
||
|
Net (loss) income from discontinued operations
|
$
|
(0.7
|
)
|
|
$
|
1.7
|
|
|
|
Nine Months Ended
|
||||||||||
|
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
||||||
|
Revenues:
|
|
|
|
|
|
||||||
|
Sales
|
$
|
1,101.6
|
|
|
$
|
1,219.2
|
|
|
$
|
(117.6
|
)
|
|
Franchise revenues
|
304.3
|
|
|
292.0
|
|
|
12.3
|
|
|||
|
|
1,405.9
|
|
|
1,511.2
|
|
|
(105.3
|
)
|
|||
|
Costs and expenses:
|
|
|
|
|
|
|
|||||
|
Cost of sales
|
911.8
|
|
|
1,031.2
|
|
|
(119.4
|
)
|
|||
|
General and administrative
|
184.1
|
|
|
201.2
|
|
|
(17.1
|
)
|
|||
|
Depreciation and amortization
|
111.3
|
|
|
113.4
|
|
|
(2.1
|
)
|
|||
|
System optimization gains, net
|
(14.8
|
)
|
|
(74.0
|
)
|
|
59.2
|
|
|||
|
Reorganization and realignment costs
|
16.6
|
|
|
17.4
|
|
|
(0.8
|
)
|
|||
|
Impairment of long-lived assets
|
13.5
|
|
|
11.2
|
|
|
2.3
|
|
|||
|
Other operating expense, net
|
25.2
|
|
|
18.1
|
|
|
7.1
|
|
|||
|
|
1,247.7
|
|
|
1,318.5
|
|
|
(70.8
|
)
|
|||
|
Operating profit
|
158.2
|
|
|
192.7
|
|
|
(34.5
|
)
|
|||
|
Interest expense
|
(57.9
|
)
|
|
(39.2
|
)
|
|
(18.7
|
)
|
|||
|
Loss on early extinguishment of debt
|
(7.3
|
)
|
|
—
|
|
|
(7.3
|
)
|
|||
|
Other income, net
|
0.7
|
|
|
1.8
|
|
|
(1.1
|
)
|
|||
|
Income from continuing operations before income taxes
|
93.7
|
|
|
155.3
|
|
|
(61.6
|
)
|
|||
|
Provision for income taxes
|
(42.4
|
)
|
|
(61.8
|
)
|
|
19.4
|
|
|||
|
Income from continuing operations
|
51.3
|
|
|
93.5
|
|
|
(42.2
|
)
|
|||
|
Discontinued operations:
|
|
|
|
|
|
||||||
|
Income from discontinued operations, net of income taxes
|
9.2
|
|
|
4.6
|
|
|
4.6
|
|
|||
|
Gain on disposal of discontinued operations, net of income taxes
|
14.8
|
|
|
—
|
|
|
14.8
|
|
|||
|
Net income from discontinued operations
|
24.0
|
|
|
4.6
|
|
|
19.4
|
|
|||
|
Net income
|
$
|
75.3
|
|
|
$
|
98.1
|
|
|
$
|
(22.8
|
)
|
|
|
Nine Months 2015
|
|
|
|
Nine Months 2014
|
|
|
||||
|
Sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
$
|
1,101.6
|
|
|
|
|
$
|
1,219.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months 2015
|
|
|
|
Nine Months 2014
|
|
|
||||
|
Franchise revenues:
|
|
|
|
|
|
|
|
||||
|
Royalty revenue
|
$
|
235.3
|
|
|
|
|
$
|
232.0
|
|
|
|
|
Rental income
|
60.5
|
|
|
|
|
50.3
|
|
|
|
||
|
Franchise fees
|
8.5
|
|
|
|
|
9.7
|
|
|
|
||
|
Total franchise revenues
|
$
|
304.3
|
|
|
|
|
$
|
292.0
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months 2015
|
|
% of
Sales |
|
Nine Months 2014
|
|
% of
Sales |
||||
|
Cost of sales:
|
|
|
|
|
|
|
|
||||
|
Wendy’s
|
|
|
|
|
|
|
|
||||
|
Food and paper
|
$
|
351.3
|
|
|
31.9%
|
|
$
|
395.8
|
|
|
32.5%
|
|
Restaurant labor
|
311.3
|
|
|
28.3%
|
|
356.1
|
|
|
29.2%
|
||
|
Occupancy, advertising and other operating costs
|
249.2
|
|
|
22.6%
|
|
279.3
|
|
|
22.9%
|
||
|
Total cost of sales
|
$
|
911.8
|
|
|
82.8%
|
|
$
|
1,031.2
|
|
|
84.6%
|
|
|
Nine Months 2015
|
|
Nine Months 2014
|
|
||||
|
Wendy’s restaurant margin $
|
$
|
189.8
|
|
|
$
|
188.0
|
|
|
|
|
|
|
|
|
||||
|
Wendy’s restaurant margin %
|
17.2
|
%
|
|
15.4
|
%
|
|
||
|
|
Nine Months 2015
|
|
Nine Months 2014
|
||
|
Same-restaurant sales:
|
|
|
|
||
|
North America same-restaurant sales:
|
|
|
|
||
|
Company-owned
|
2.2
|
%
|
|
2.4
|
%
|
|
Franchised
|
2.9
|
%
|
|
1.4
|
%
|
|
Systemwide
|
2.8
|
%
|
|
1.6
|
%
|
|
|
|
|
|
||
|
Total same-restaurant sales:
|
|
|
|
||
|
Company-owned
|
2.2
|
%
|
|
2.4
|
%
|
|
Franchised (a)
|
2.8
|
%
|
|
1.2
|
%
|
|
Systemwide (a)
|
2.7
|
%
|
|
1.4
|
%
|
|
|
Company-owned
|
|
Franchised
|
|
Systemwide
|
|||
|
Restaurant count:
|
|
|
|
|
|
|||
|
Restaurant count at December 28, 2014
|
957
|
|
|
5,558
|
|
|
6,515
|
|
|
Opened
|
9
|
|
|
51
|
|
|
60
|
|
|
Closed
|
(9
|
)
|
|
(79
|
)
|
|
(88
|
)
|
|
Net (sold to) purchased by franchisees
|
(105
|
)
|
|
105
|
|
|
—
|
|
|
Restaurant count at September 27, 2015
|
852
|
|
|
5,635
|
|
|
6,487
|
|
|
Sales
|
Change
|
||
|
Wendy’s
|
$
|
(117.6
|
)
|
|
Franchise Revenues
|
Change
|
||
|
Rental income
|
$
|
10.2
|
|
|
Royalty revenue
|
3.3
|
|
|
|
Franchise fees
|
(1.2
|
)
|
|
|
|
$
|
12.3
|
|
|
Wendy’s Cost of Sales
|
Change
|
|
|
Food and paper
|
(0.6
|
)%
|
|
Restaurant labor
|
(0.9
|
)%
|
|
Occupancy, advertising and other operating costs
|
(0.3
|
)%
|
|
|
(1.8
|
)%
|
|
General and Administrative
|
Change
|
||
|
Share-based compensation
|
$
|
(8.4
|
)
|
|
Employee compensation and related expenses
|
(4.3
|
)
|
|
|
Capitalized internal labor costs
|
(3.5
|
)
|
|
|
Franchise incentives
|
(2.0
|
)
|
|
|
Franchise tax
|
(1.2
|
)
|
|
|
Incentive compensation
|
4.5
|
|
|
|
Other
|
(2.2
|
)
|
|
|
|
$
|
(17.1
|
)
|
|
Depreciation and Amortization
|
Change
|
||
|
Restaurants
|
$
|
(3.0
|
)
|
|
Corporate and other
|
0.9
|
|
|
|
|
$
|
(2.1
|
)
|
|
System Optimization Gains, Net
|
Nine Months
|
||||||
|
|
2015
|
|
2014
|
||||
|
System optimization gains, net
|
$
|
(14.8
|
)
|
|
$
|
(74.0
|
)
|
|
Reorganization and Realignment Costs
|
Nine Months
|
||||||
|
|
2015
|
|
2014
|
||||
|
G&A realignment
|
$
|
10.0
|
|
|
$
|
—
|
|
|
System optimization initiative
|
6.6
|
|
|
17.4
|
|
||
|
|
$
|
16.6
|
|
|
$
|
17.4
|
|
|
Impairment of Long-Lived Assets
|
Change
|
||
|
Impairment of long-lived assets
|
$
|
2.3
|
|
|
Other Operating Expense, Net
|
Nine Months
|
||||||
|
|
2015
|
|
2014
|
||||
|
Lease expense
|
$
|
33.7
|
|
|
$
|
27.8
|
|
|
Equity in earnings in joint ventures, net
|
(7.0
|
)
|
|
(7.7
|
)
|
||
|
Other
|
(1.5
|
)
|
|
(2.0
|
)
|
||
|
|
$
|
25.2
|
|
|
$
|
18.1
|
|
|
Interest Expense
|
Change
|
||
|
Interest expense
|
$
|
18.7
|
|
|
Provision for Income Taxes
|
Change
|
||
|
Federal and state expense on variance in income from continuing operations before income taxes
|
$
|
(20.6
|
)
|
|
Prior year tax matters, including changes to unrecognized tax benefits
|
(1.5
|
)
|
|
|
System optimization initiative
|
2.7
|
|
|
|
State income taxes, net of federal benefits
|
0.2
|
|
|
|
Other
|
(0.2
|
)
|
|
|
|
$
|
(19.4
|
)
|
|
Net Income from Discontinued Operations
|
Nine Months
|
||||||
|
|
2015
|
|
2014
|
||||
|
Income from discontinued operations before income taxes
|
$
|
14.9
|
|
|
$
|
6.9
|
|
|
Provision for income taxes
|
(5.7
|
)
|
|
(2.3
|
)
|
||
|
Income from discontinued operations, net of income taxes
|
9.2
|
|
|
4.6
|
|
||
|
Gain on disposal of discontinued operations before income taxes
|
27.5
|
|
|
—
|
|
||
|
Provision for income taxes on gain on disposal
|
(12.7
|
)
|
|
—
|
|
||
|
Gain on disposal of discontinued operations, net of income taxes
|
14.8
|
|
|
—
|
|
||
|
Net income from discontinued operations
|
$
|
24.0
|
|
|
$
|
4.6
|
|
|
•
|
an increase of
$23.7 million
in restricted cash for the payment of interest under our securitized financing facility;
|
|
•
|
an increase of $18.2 million in interest payments resulting from the securitized financing facility;
|
|
•
|
a
$23.0 million
unfavorable impact in accounts and notes receivable for the comparable periods; and
|
|
•
|
payments of
$7.3 million
to terminate our cash flow hedges; partially offset by
|
|
•
|
a
$26.0 million
favorable
impact in accrued expenses and other current liabilities for the comparable periods primarily due to decreases in payments for incentive compensation for the 2014 fiscal year partially offset by an increase in income tax payments, net of refunds; and
|
|
•
|
a
$12.6 million
favorable
impact in accounts payable for the comparable periods due to fewer company-owned restaurants and the timing of payments.
|
|
•
|
$78.4 million
in proceeds from the sale of the Bakery;
|
|
•
|
a decrease
of
$9.6 million
in capital expenditures; and
|
|
•
|
a decrease
of
$4.7 million
in payments for restaurant acquisitions; partially offset by
|
|
•
|
a decrease
of
$73.5 million
in proceeds from dispositions related to our system optimization initiative.
|
|
•
|
a net
increase
in cash provided by long-term debt activities of
$959.7 million
primarily resulting from the securitized financing facility and the related repayment of the 2013 Restated Credit Agreement; partially offset by
|
|
•
|
an increase
in repurchases of common stock of
$787.2 million
.
|
|
•
|
capital expenditures of approximately
$51.8 million
, which would result in total cash capital expenditures for the year of approximately
$240.0 million
;
|
|
•
|
quarterly cash dividends aggregating up to approximately
$16.4 million
as discussed below in “Dividends;” and
|
|
•
|
restaurant acquisitions and dispositions under our system optimization initiative.
|
|
•
|
The issuance of the Series 2015-1 Senior Notes of
$2,275.0 million
and the resulting early principal repayment of our Term A Loans and Term B Loans totaling
$1,283.2 million
, which were due in 2018 and 2019, respectively.
|
|
•
|
As a result of the issuance of the Series 2015-1 Senior Notes, the Company expects to pay approximately
$641.3 million
in interest on our long-term debt obligations outstanding, excluding capital leases, as of
September 27, 2015
.
|
|
•
|
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, concerns regarding the ingredients in our products and/or cooking processes used in our restaurants, or concerns regarding the effects of disease outbreaks, epidemics or pandemics impacting the Company’s customers or food supplies;
|
|
•
|
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 increases in 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;
|
|
•
|
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, or security breaches of our computer systems;
|
|
•
|
the difficulty in predicting the ultimate costs associated with the sale of company-owned restaurants to franchisees, employee termination costs, the timing of payments made and received, the results of negotiations with landlords, the impact of the sale of restaurants on ongoing operations, any tax impact from the sale of restaurants and the future impact to the Company’s earnings, restaurant operating margins, cash flow and depreciation;
|
|
•
|
the difficulty in predicting the ultimate costs that will be incurred in connection with the Company’s plan to reduce its general and administrative expenses, and the future impact on the Company’s earnings;
|
|
•
|
risks associated with the Company’s recent securitized financing facility, including the ability to generate sufficient cash flow to meet increased debt service obligations, compliance with operational and financial covenants, and restrictions on the Company’s ability to raise additional capital;
|
|
•
|
risks associated with the amount and timing of share repurchases under the
$1.4 billion
share repurchase program approved by the Board of Directors; 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 December 28, 2014 (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.
|
|
•
|
making it more difficult to meet payment and other obligations under outstanding debt;
|
|
•
|
resulting in an event of default if the Company’s subsidiaries fail to comply with the financial and other restrictive covenants contained in debt agreements, which event of default could result in all of the Company’s subsidiaries’ debt becoming immediately due and payable;
|
|
•
|
reducing the availability of the Company’s cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting the Company’s ability to obtain additional financing for these purposes;
|
|
•
|
subjecting the Company to the risk of increased sensitivity to interest rate increases on indebtedness with variable interest rates;
|
|
•
|
limiting the Company’s flexibility in planning for, or reacting to, and increasing its vulnerability to, changes in the Company’s business, the industry in which it operates and the general economy; and
|
|
•
|
placing the Company at a competitive disadvantage compared to its competitors that are less leveraged.
|
|
•
|
incur or guarantee additional indebtedness;
|
|
•
|
sell certain assets;
|
|
•
|
create or incur liens on certain assets to secure indebtedness; or
|
|
•
|
consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.
|
|
Period
|
Total Number of Shares Purchased (1)
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans
|
Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans (2)
|
||||||
|
June 29, 2015
through August 2, 2015 |
74,786,636
|
|
$
|
11.44
|
|
74,224,173
|
|
$
|
564,614,109
|
|
|
August 3, 2015
through August 30, 2015 |
14,402,815
|
|
$
|
9.72
|
|
14,385,288
|
|
$
|
424,789,109
|
|
|
August 31, 2015
through September 27, 2015 |
3,552,890
|
|
$
|
6.95
|
|
3,551,101
|
|
$
|
400,114,109
|
|
|
Total
|
92,742,341
|
|
$
|
11.00
|
|
92,160,562
|
|
$
|
400,114,109
|
|
|
(1)
|
Includes
581,779
shares reacquired by The Wendy’s Company from holders of share-based awards to satisfy certain requirements associated with the vesting or exercise of the respective awards. 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.
|
|
(2)
|
In August 2014, our Board of Directors authorized the repurchase of up to
$100.0 million
of our common stock through December 31, 2015, when and if market conditions warrant and to the extent legally permissible. During the third quarter of 2015, this authorization was completed. On June 1, 2015, our Board of Directors authorized the repurchase of up to
$1,400.0 million
of our common stock through January 1, 2017, when and if market conditions warrant and to the extent legally permissible. As of September 27, 2015,
$400.1 million
remained available for repurchases under this authorization.
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
|
|
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.
|
|
|
THE WENDY’S COMPANY
(Registrant)
|
|
Date: November 4, 2015
|
By:
/s/ Todd A. Penegor
|
|
|
Todd A. Penegor
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer and International
|
|
|
(On behalf of the Company)
|
|
|
|
|
Date: November 4, 2015
|
By:
/s/ Scott A. Kriss
|
|
|
Scott A. Kriss
|
|
|
Senior Vice President,
|
|
|
Chief Accounting and Tax Officer
|
|
|
(Principal Accounting Officer)
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
|
|
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.
|
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 |
|---|
No information found
No Customers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|