Wendy's 2011 Annual Report Download - page 104
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THE WENDY’S COMPANY AND SUBSIDIARIES
WENDY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
In connection with the redemption of the Wendy’s 6.25% senior notes, as discussed above in Note 12, we
cancelled four interest rate swaps with notional amounts totaling $175,000. Upon cancellation, we recognized a gain
of $1,875 in the second quarter of 2010, which is included in “Interest expense” for the year ended January 2, 2011.
At January 1, 2012 and January 2, 2011, the fair value of the interest rate swaps on the 6.20% Wendy’s senior
notes was $11,695 and $9,623, respectively, and has been included in “Deferred costs and other assets” and as an
adjustment to the carrying amount of the 6.20% Wendy’s senior notes.
(The Wendy’s Company)
Prior to their expiration in 2009, The Wendy’s Company also had put options on equity securities. The
Wendy’s Company did not designate these derivatives as hedging instruments, and accordingly, these derivative
instruments were recorded at fair value with changes in fair value recorded in the The Wendy’s Company’s results of
operations.
The following items were recognized by the Companies related to derivative activity during each of the periods
presented below:
2011 2010 2009
Interest income:
Interest rate swaps (a) .............................................. $(5,611) $(7,880) $(2,865)
Total Wendy’s Restaurants ..................................... (5,611) (7,880) (2,865)
Investment income, net:
Put and call option combinations on equity securities ..................... — — (286)
Total The Wendy’s Company ................................... $(5,611) $(7,880) $(3,151)
(a) 2010 includes a gain of $1,875 on the cancellation of four interest rate swaps discussed above.
(14) Income Taxes
Income (loss) from continuing operations before income taxes is set forth below:
The Wendy’s Company
2011 2010 2009
Domestic .................................................. $11,967 $ (2,244) $(30,492)
Foreign, principally Canada .................................... 12,473 15,800 14,230
$24,440 $13,556 $(16,262)
Wendy’s Restaurants
2011 2010 2009
Domestic .................................................. $25,119 $ 2,328 $ (8,772)
Foreign, principally Canada .................................... 12,473 15,800 14,230
$37,592 $18,128 $ 5,458
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