Wendy's 2008 Annual Report Download - page 62

•A decrease in operating assets and liabilities of $26.9 million principally reflecting a $31.4 million
decrease in accounts payable, accrued expenses and other current liabilities primarily due to (1) the
payment of 2007 accrued bonuses in 2008, (2) significantly reduced bonus accruals in 2008 due to
weaker performance and (3) severance paid in connection with the Corporate Restructuring.
We expect positive cash flows from continuing operating activities during 2009.
Additionally, for the year ended December 28, 2008, we had the following significant sources and uses of
cash other than from operating activities:
•Proceeds of $37.8 million from long-term debt, including $20.0 million from refinancing one of our
corporate aircraft discussed further below;
•Net proceeds of $51.1 million from investments included in investing activities;
•Cash of $199.8 million acquired as part of the Wendy’s Merger;
•Repayments of long-term debt of $177.9 million which includes $143.2 million of voluntary net
principal repayments of our Arby’s Term Loan discussed further below;
•Cash capital expenditures totaling $107.0 million, including the construction of new restaurants which
amounted to approximately $43.7 million and the remodeling of existing restaurants;
•Payment of cash dividends totaling $30.5 million discussed further below;
•Capitalized transaction costs related to the Wendy’s Merger of $18.4 million and
•Cash paid for business acquisitions, other than Wendy’s, totaling $9.6 million, including $7.9 million
for the California Restaurant Acquisition.
The net cash receipts from cash flows (excluding the effect of foreign currency exchange rate adjustments
and discontinued operations) was approximately $18.0 million.
Working Capital and Capitalization
Working capital, which equals current assets less current liabilities, was a deficiency of $121.7 million at
December 28, 2008, reflecting a current ratio, which equals current assets divided by current liabilities, of
0.8:1. The working capital deficit at December 28, 2008 increased $84.8 million from a deficit of $36.9
million at December 30, 2007, primarily due to (1) an increase of $100.0 million from the additional Wendy’s
working capital deficit and (2) a decrease from net cash receipts of approximately $18.0 million as discussed
above.
Our total capitalization at December 28, 2008 was $3,497.6 million, consisting of stockholders’ equity of
$2,386.0 million and long-term debt of $1,111.6 million, including current portion. Our total capitalization
at December 28, 2008 increased $2,309.4 million from $1,188.2 million at December 30, 2007 principally
reflecting:
•The Wendy’s Merger, which increased our total capitalization by $2,991.8 million, consisting of
additional stockholder’s equity of $2,494.7 million and long-term debt of $497.1 million, including
current portion;
•Cash dividends paid of $30.5 million and the non-cash stock dividend of the DFR common shares with
a carrying value of $14.5 million discussed below;
•Net loss of $479.7 million, which includes the effect of the goodwill impairment, and losses on
investments;
•The components of “Accumulated other comprehensive loss,” that are not included in the calculation of
net loss, of $41.2 million principally reflecting the currency translation adjustment; and
•The $124.9 million net decrease in long-term debt principally due to the $143.2 voluntary net
principal prepayments on the Arby’s Term Loan discussed below.
Long-term Debt
We have the following obligations outstanding as of December 28, 2008:
54