Wendy's 2013 Annual Report Download - page 92

THE WENDY’S COMPANY AND SUBSIDIARIES
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, as of
December 29, 2013 were as follows:
Fiscal Year
2014 ................................................................... $ 38,543
2015 ................................................................... 54,281
2016 ................................................................... 59,408
2017 ................................................................... 66,581
2018 ................................................................... 397,757
Thereafter ............................................................... 862,592
$1,479,162
(a) On May 15, 2012, Wendy’s entered into a Credit Agreement, as amended (the “Credit Agreement”) which
included, among other instruments, a senior secured term loan facility of $1,125,000 (“Term B Loans”). The
Term B Loans were issued at 99.0% of the principal amount, representing an original issue discount of 1.0%
resulting in net proceeds of $1,113,750. The discount of $11,250 was accreted and the related charge included in
“Interest expense” through the subsequent refinancing described below. During the year ended December 30,
2012, Wendy’s incurred $15,566 in costs related to the Credit Agreement, which were amortized to “Interest
expense” through the subsequent refinancing described below utilizing the effective interest rate method. The
Credit Agreement replaced the $650,000 credit agreement and the amended senior secured term loan (the “2010
Term Loan”) executed in 2010.
On May 16, 2013, Wendy’s amended and restated the Credit Agreement (the “Restated Credit Agreement”).
The Restated Credit Agreement is comprised of (1) a $350,000 senior secured term loan facility (“Term A
Loans”) which will mature on May 15, 2018 and bears interest at the Eurodollar Rate (as defined in the Restated
Credit Agreement) plus 2.25%, (2) $769,375 Term B Loans which will mature on May 15, 2019 and bear
interest at the Eurodollar Rate plus 2.50% with a floor of 0.75% and (3) a $200,000 senior secured revolving
credit facility which will mature on May 15, 2018. The proceeds from the Term A Loans were used to refinance a
portion of our existing Term B Loans. As a result of this refinancing, Wendy’s incurred a loss on the early
extinguishment of debt of $21,019 during the second quarter of 2013 which consisted of the write-off of the
unaccreted discount on Term B Loans and the deferred costs associated with the Credit Agreement, as illustrated
in the table below. The Restated Credit Agreement also contains provisions for an uncommitted increase of up to
$275,000 principal amount of the Term B Loans subject to the satisfaction of certain conditions. The revolving
credit facility includes a sub-facility for the issuance of up to $70,000 of letters of credit and allows for liens in the
form of cash collateralized letters of credit up to an additional $40,000. The obligations under the Restated
Credit Agreement are secured by substantially all of the non-real estate assets and stock of Wendy’s and its
domestic subsidiaries (other than certain unrestricted subsidiaries) and 65% of the stock of certain of its foreign
subsidiaries in each case subject to certain limitations and exceptions.
On September 24, 2013, Wendy’s entered into an amendment (the “Amendment”) to its Restated Credit
Agreement to borrow an aggregate principal amount of up to $225,000 of additional Term A Loans
(“Incremental Term Loans”). The Amendment does not contain any material changes to existing covenants or
other terms of the Restated Credit Agreement, except as described in the preceding sentence. On October 24,
2013, Wendy’s borrowed $225,000 of Incremental Term Loans under the Amendment.
The Term B Loans, Term A Loans and Incremental Term Loans (collectively, the “Term Loans”) are payable in
quarterly installments which commenced on December 31, 2012, September 30, 2013 and December 31, 2013,
respectively, with the remaining balances payable upon maturity. In addition, the Term Loans require
prepayments of principal amounts resulting from certain events and excess cash flow on an annual basis from
Wendy’s as defined under the Restated Credit Agreement. An excess cash flow payment was not required for
fiscal 2013 or 2012. An unused commitment fee of 50 basis points per annum is payable quarterly on the average
unused amount of the revolving credit facility until the maturity date. During the third quarter of 2013, Wendy’s
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