Wendy's 2013 Annual Report Download - page 49

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Liquidity and Capital Resources
The Company’s discussion below regarding its liquidity and capital resources includes the discontinued
operations of Arby’s. Arby’s cash flows prior to its sale (for the period from January 3, 2011 through July 3, 2011)
have been included in and not separately reported from our cash flows. The consolidated statements of cash flows for
the years ended December 30, 2012 and January 1, 2012 also include the effects of the sale of Arby’s. The tables
included throughout Liquidity and Capital Resources present dollars in millions.
Sources and Uses of Cash
2013 Compared with 2012
Cash provided by operating activities increased $139.4 million during the year ended December 29, 2013 as
compared to the year ended December 30, 2012, primarily due to changes in our net income and non-cash items as
well as the following:
• a $55.0 million favorable impact in accrued expenses and other current liabilities for the comparable periods.
This favorable impact was primarily due to (1) decreases in interest payments due to the net effect of the
May 15, 2012 Credit Agreement and the related purchase and redemption of the Senior Notes in May and
July 2012, respectively, (2) an increase in the incentive compensation accrual for the 2013 fiscal year due to
stronger operating performance partially offset by an increase in payments for the 2012 fiscal year,
(3) decreases in payments for income taxes, net of refunds and (4) a decrease in payments for severance and
an increase in accruals, including for our system optimization initiative; and
• a $8.9 million favorable impact in accounts payable for the comparable periods. This favorable impact was
primarily due to (1) an increase in accruals for capital expenditures primarily related to our Image Activation
program and (2) changes in accounts payable due to the timing of payments between comparable periods.
Additionally, the Company received a cash dividend from our investment in Arby’s, of which $21.1 million was
recognized in income, with the remainder recorded as a reduction to the carrying value of our investment.
Cash used in investing activities decreased $112.7 million during the year ended December 29, 2013 as
compared to the year ended December 30, 2012, primarily due to the following:
• an increase of $26.7 million in capital expenditures primarily for our Image Activation program;
• an increase in restricted cash of $18.6 million related to the cash collateral for outstanding letters of credit;
• an increase of $128.1 million in proceeds from dispositions primarily related to our system optimization
initiative; partially offset by
• a decrease in cash used for acquisitions of franchised restaurants of $36.0 million.
Cash used in financing activities increased $98.8 million during the year ended December 29, 2013 as
compared to the year ended December 30, 2012, primarily due to the following:
• repurchases of common stock of $69.3 million during 2013;
• an increase in dividend payments of $31.6 million;
• a net increase in cash used for long-term debt activities of $36.4 million resulting from our 2012 and 2013
refinancings; partially offset by
• an increase in proceeds from the exercise of stock options of $34.6 million.
The net cash provided by our business before the effect of exchange rate changes on cash was approximately
$130.3 million.
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