Wendy's 2008 Annual Report Download - page 66

The availability under the amended and restated Credit Agreement is anticipated to provide sufficient
liquidity, if needed, to meet operating cash requirements.
Debt Covenants
The amended and restated Credit Agreement also contains financial covenants that, among other things,
require Wendy’s and ARG and their subsidiaries to maintain certain aggregate maximum leverage and
minimum interest coverage ratios and restrict their ability to incur debt, pay dividends or make other
distributions to Wendy’s/Arby’s, make certain capital expenditures, enter into certain fundamental transactions
(including sales of assets and certain mergers and consolidations) and create or permit liens. As of December
28, 2008, under the terms of the prior Arby’s Credit Agreement, there was no availability for the payment of
dividends to Wendy’s/Arby’s. We were in compliance with all applicable covenants as of December 28, 2008
and project that we will be in compliance with our covenants throughout 2009. Under the amended and
restated Credit Agreement we have $15.0 million immediately available for the payment of dividends to
Wendy’s/Arby’s, subject to adjustments beginning in the 2009 second quarter.
Wendy’s 6.20% and 6.25% Senior Notes and 7% Debentures contain covenants that specify limits on the
incurrence of indebtedness. We were in compliance with these covenants as of December 28, 2008 and project
that we will be in compliance with our covenants throughout 2009.
A significant number of the underlying leases in the Arby’s restaurants segment for the Sale-Leaseback
Obligations and the Capitalized Lease Obligations, as well as operating leases, require or required periodic
financial reporting of certain subsidiary entities within ARG or of individual restaurants, which in many cases
has not been prepared or reported. The Company has negotiated waivers and alternative covenants with its
most significant lessors which substitute consolidated financial reporting of ARG for that of individual
subsidiary entities and which modify restaurant level reporting requirements for more than half of the affected
leases. Nevertheless, as of December 28, 2008, the Company was not in compliance, and remains not in
compliance, with the reporting requirements under those leases for which waivers and alternative financial
reporting covenants have not been negotiated. However, none of the lessors has asserted that the Company is in
default of any of those lease agreements. The Company does not believe that such non-compliance will have a
material adverse effect on its consolidated financial position or results of operations.
Contractual Obligations
The following table summarizes the expected payments under our outstanding contractual obligations at
December 28, 2008:
2009 2010-2011 2012-2013 After 2013 Total
Fiscal Years
(in millions)
Long-term debt (a) .............................. $ 7.4 $390.8 $201.8 $ 281.0 $ 881.0
Sale-leaseback obligations (b) ..................... 3.6 7.6 12.8 99.8 123.8
Capitalized lease obligations (b) .................. 19.4 17.1 7.8 62.5 106.8
Operating leases (c) ............................. 148.7 264.0 226.0 1,199.3 1,838.0
Purchase obligations (d) ......................... 338.2 86.6 72.5 98.1 595.4
Severance obligations (e) ......................... 11.2 2.7 0.1 — 14.0
Total (f) ................................... $528.5 $768.8 $521.0 $1,740.7 $3,559.0
(a) Excludes sale-leaseback and capitalized lease obligations, which are shown separately in the table, and
interest.
(b) Excludes interest; also excludes related sublease rental receipts of $9.8 million on sale-leaseback obligations
and $5.1 million on capitalized lease obligations.
(c) Represents the present value of minimum lease cash payments. Excludes related sublease rental receipts of
$136.6 million.
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