Wendy's 2011 Annual Report Download - page 99

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)
Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments,
discounts and interest rate swaps, as of January 1, 2012 were as follows:
Fiscal Year
Wendy’s
Restaurants Corporate
The Wendy’s
Company
2012 ........................................... $ 5,137 $ 1,460 $ 6,597
2013 ........................................... 5,967 9,843 15,810
2014 ........................................... 231,011 — 231,011
2015 ........................................... 5,637 — 5,637
2016 ........................................... 570,430 — 570,430
Thereafter ....................................... 557,442 — 557,442
$1,375,624 $11,303 $1,386,927
(a) In June 2009, Wendy’s Restaurants issued $565,000 principal amount of Senior Notes (the “Senior Notes”). The
Senior Notes will mature in July 2016 and accrue interest at 10.00% per annum, payable semi-annually on
January 15 and July 15, the first payment of which was made on January 15, 2010. The Senior Notes were issued
at 97.533% of the principal amount, representing a yield to maturity of 10.50% and resulting in net proceeds of
$551,061. The $13,939 discount is being accreted and the related charge included in “Interest expense” until the
Senior Notes mature. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an
unsecured basis by certain direct and indirect domestic subsidiaries of Wendy’s Restaurants (collectively, the
“Guarantors”). Wendy’s Restaurants incurred approximately $21,599 in costs related to the issuance of the
Senior Notes which are being amortized to “Interest expense” over the term of the Senior Notes utilizing the
effective interest rate method.
An indenture for the Senior Notes (the “Indenture”) among Wendy’s Restaurants, the Guarantors and U.S. Bank
National Association, as trustee (the “Trustee”), includes certain customary covenants that, subject to a number
of important exceptions and qualifications, limit the ability of Wendy’s Restaurants and its restricted subsidiaries
to, among other things, incur debt or issue preferred or disqualified stock, pay dividends on equity interest,
redeem or repurchase equity interests or prepay or repurchase subordinated debt, make some types of investments
and sell assets, incur certain liens, engage in transactions with affiliates (except on an arms-length basis), and
consolidate, merge or sell all or substantially all of their assets. The covenants generally do not restrict The
Wendy’s Company or any of The Wendy’s Company’s subsidiaries which are not subsidiaries of Wendy’s
Restaurants.
(b) In May 2010, Wendy’s Restaurants entered into a $650,000 Credit Agreement (the “Credit Agreement”), which
includes a $500,000 senior secured term loan facility (the “Term Loan”) and a $150,000 senior secured revolving
credit facility (the “Credit Facility”). The Credit Agreement contains provisions for an uncommitted increase of
up to $300,000 principal amount in the aggregate in the Credit Facility and/or Term Loan subject to the
satisfaction of certain conditions. The Credit Facility includes a sub-facility for the issuance of up to $70,000 of
letters of credit. The obligations under the Credit Agreement are secured by substantially all of the non-real estate
assets of Wendy’s Restaurants and its domestic subsidiaries (other than certain unrestricted subsidiaries), the stock
of its domestic subsidiaries (other than certain unrestricted subsidiaries), 65% of the stock of certain of its foreign
subsidiaries, and mortgages on certain restaurant properties.
The Term Loan was issued at 99.5% of the principal amount, which represented an original issue discount of
0.5% and resulted in net proceeds of $497,500. The $2,500 discount is being accreted and the related charge
included in “Interest expense” through the maturity of the Term Loan. The Term Loan will mature in May 2017
and requires quarterly principal installments, which commenced on September 30, 2010, equal to 1% per annum
of the initial principal amount outstanding, with the balance payable on the maturity date. In addition, the Term
Loan requires prepayments of principal amounts resulting from certain events and excess cash flow on an annual
basis from Wendy’s Restaurants as defined under the Term Loan. An excess cash flow payment for fiscal 2010 of
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