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http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
70
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
by a first priority security interest in all of our assets and our material subsidiaries, including a pledge of 100% of our interest in all shares of
capital stock (or other ownership or equity interests) of each material subsidiary. The Second Lien Term Loan and the related guarantees are
secured by a second priority security interest in all our assets and our material subsidiaries, including a pledge of 100% of our interest in all shares
of capital stock (or other ownership or equity interests) of each material subsidiary. The Subordinated Term Loan is unsecured.
As a result of this refinancing, and based upon LIBOR rates in effect as of February 28, 2006, our average cash interest rate is expected to
improve to approximately 10.2% as compared with 13.0% on the debt it replaced.
71
NEW WORLD RESTAURANT GROUP, INC.
Schedule II—Valuation and Qualifying Accounts
(in thousands of dollars)
Balance at Balance at
beginning end
of period Additions(a) Deductions(b) of period
For the fiscal year ended December 30, 2003:
Allowance for doubtful accounts
$ 4,611
1,815
(3,116)
$ 3,310
Restructuring reserve
$ 2,768
2,420
(1,115)
$ 4,073
Valuation allowance for deferred taxes
$ 49,368
17,506
—
$ 66,874
For the fiscal year ended December 28, 2004:
Allowance for doubtful accounts
$ 3,310
177
(1,012)
$ 2,475
Restructuring reserve
$ 4,073
(869)
(3,183)
$ 21
Valuation allowance for deferred taxes
$ 66,874
7,140
—
$ 74,014
For the fiscal year ended January 3, 2006:
Allowance for doubtful accounts
$ 2,475
(158)
(1,837)
$ 480
Restructuring reserve
$ 21
5
(26)
$ —
Valuation allowance for deferred taxes
$ 74,014
4,591
—
$ 78,605
Notes:
(a) Amounts charged to costs and expenses.
(b) Bad debt write-offs and charges to reserves.
See accompanying report of independent registered public accounting firm
72
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
ITEM 9A. CONTROLS AND PROCEDURES
An evaluation was carried out under the supervision and with the participation of company management, including our chief executive officer
and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-
15(e) under the Securities Exchange Act of 1934, as amended) as of January 3, 2006. Based upon that evaluation, our chief executive officer and