Wendy's 2013 Annual Report Download - page 115

Download and view the complete annual report

Please find page 115 of the 2013 Wendy's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
The Wendy’s Company, through a wholly-owned subsidiary, is party to a three-year aircraft management and
lease agreement, which expires in March 2014, with CitationAir, a subsidiary of Cessna Aircraft Company,
pursuant to which the Company leases a corporate aircraft to CitationAir to use as part of its Jet Card program
fleet. The Company has no plans to extend or renew the lease upon expiration. The Company entered into the
lease agreement as a means of offsetting the cost of owning and operating the corporate aircraft by receiving
revenue from third parties’ use of such aircraft. Under the terms of the lease agreement, the Company pays
annual management and flight crew fees to CitationAir and reimburses CitationAir for maintenance costs and
fuel usage related to the corporate aircraft. In return, CitationAir pays a negotiated fee to the Company based on
the number of hours that the corporate aircraft is used by Jet Card members. This fee is reduced based on the
number of hours that (1) the Company uses other aircraft in the Jet Card program fleet and (2) Jet Card
members who are affiliated with the Company use the corporate aircraft or other aircraft in the Jet Card program
fleet. The Company’s participation in the aircraft management and lease agreement reduces the aggregate costs
that the Company would otherwise incur in connection with owning and operating the corporate aircraft. Under
the terms of the lease agreement, the Company’s directors have the opportunity to become Jet Card members and
to use aircraft in the Jet Card program fleet at the same negotiated fee paid by the Company as provided for
under the lease agreement. During the years ended December 29, 2013, December 30, 2012 and January 1,
2012, the Former Executives and a director, who was our former Vice Chairman, and members of their
immediate families, used their Jet Card agreements for business and personal travel on aircraft in the Jet Card
program fleet. The Management Company paid CitationAir directly, and the Company received credit from
CitationAir for charges related to such travel of approximately $1,420, $1,217 and $490 during the years ended
December 29, 2013, December 30, 2012 and January 1, 2012, respectively.
(e) In July 2008 and July 2007, The Wendy’s Company entered into agreements under which the Management
Company subleased (the “Subleases”) office space on two of the floors of the Company’s former New York
headquarters. During the second quarter of 2010, The Wendy’s Company and the Management Company
entered into an amendment to the sublease, effective April 1, 2010, pursuant to which the Management
Company’s early termination right was canceled in exchange for a reduction in rent. Under the terms of the
amended sublease, which expired in May 2012, the Management Company paid rent to the Company in an
amount that covered substantially all of the Company’s rent obligations under the prime lease for the subleased
space. The Company recognized income of $683 and $1,631 from the Management Company under such
subleases in 2012 and 2011, respectively, which has been recorded as a reduction of “General and
administrative.”
(f) The Wendy’s Company entered into a services agreement (the “Services Agreement”) with the Management
Company which commenced on July 1, 2009 and expired on June 30, 2011. Under the Services Agreement, the
Management Company assisted us with strategic merger and acquisition consultation, corporate finance and
investment banking services and related legal matters. The Wendy’s Company paid the Management Company a
service fee of $250 per quarter, in connection with the Services Agreement until it expired on June 30, 2011. The
Wendy’s Company incurred service fees of $500 in 2011, which are included in “General and administrative.”
(g) On June 10, 2009, The Wendy’s Company and the Management Company entered into a liquidation services
agreement (the “Liquidation Services Agreement”) pursuant to which the Management Company assisted us in
the sale, liquidation or other disposition of our cost investments and the series A senior notes that we received
from Deerfield Capital Corp. The Liquidation Services Agreement required The Wendy’s Company to pay the
Management Company a fee of $900 in two installments in June 2009 and 2010, which was deferred and
amortized through its June 30, 2011 expiration date. Related amortization of $220 was recorded in “General and
administrative” in 2011.
111