Wendy's 2008 Annual Report Download - page 132

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(c) The sale-leaseback obligations (the “Sale-Leaseback Obligations”), which extend through 2028, relate to
capitalized restaurant leased assets with an aggregate net book value of $120,377 as of December 28, 2008
(see Note 25).
(d) The capitalized lease obligations (the “Capitalized Lease Obligations”), which extend through 2036, relate
to Arby’s capitalized restaurant leased assets and software with aggregate net book values of $66,690 and
$6,390 respectively, as of December 28, 2008 and Wendy’s capitalized leased buildings and land with
aggregate net book values of $28,223 and $8,840 respectively (see Note 25).
(e) Wendy’s 7% Debentures (the “Debentures”) are unsecured and were adjusted to fair value at the date of
and in connection with the Wendy’s Merger based on their outstanding principal of $97,135 and an
effective interest rate of 8.6% (see Note 3). These Debentures contain covenants that restrict the incurrence
of indebtedness secured by liens and sale-leaseback transactions. The Company was in compliance with
these covenants as of December 28, 2008.
(f) During 2008 we entered into a new $20,000 financing facility for one of our existing aircraft (the “Bank
Term Loan”). The facility requires monthly payments, including interest, of approximately $180 through
August 2013 with a final balloon payment of approximately $15,180 due September 2013. This loan is
secured by an airplane with a net book value of $12,467 as of December 28, 2008.
(g) The notes payable (the “Notes Payable”) were assumed as part of the California Restaurant Acquisition (see
Note 3).
(h) The 5% convertible notes (the “Convertible Notes”) are convertible into 160,000 shares of our common
stock, as adjusted due to the dividend of DFR common stock distributed to our stockholders in April 2008
(see Note 8). The Convertible Notes are redeemable at our option commencing May 20, 2010 and at the
option of the holders on May 15, 2010, 2015 and 2020 or upon the occurrence of a fundamental change, as
defined, relating to us, in each case at a price of 100% of the principal amount of the convertible notes
plus accrued interest.
A significant number of the underlying leases in the Arby’s restaurants segment for the Sale-Leaseback
Obligations and the Capitalized Lease Obligations, as well as operating leases, require or required periodic
financial reporting of certain subsidiary entities within ARG or of individual restaurants, which in many cases
has not been prepared or reported. The Company has negotiated waivers and alternative covenants with its
most significant lessors which substitute consolidated financial reporting of ARG for that of individual
subsidiary entities and which modify restaurant level reporting requirements for more than half of the affected
leases. Nevertheless, as of December 28, 2008, the Company was not in compliance, and remains not in
compliance, with the reporting requirements under those leases for which waivers and alternative financial
reporting covenants have not been negotiated. However, none of the lessors has asserted that the Company is in
default of any of those lease agreements. The Company does not believe that such non-compliance will have a
material adverse effect on its consolidated financial position or results of operations.
On January 14, 2009, Wendy’s executed a new $200,000 revolving credit facility (the “Wendy’s
Revolver”), borrowings under which were secured by substantially all of Wendy’s current assets, intangibles,
stock of Wendy’s subsidiaries and a portion of their real and personal property. The Wendy’s Revolver was
terminated effective March 11, 2009, in connection with the execution of the amended and restated Credit
Agreement described above.
AFA Service Corporation (“AFA”), an independently controlled advertising cooperative in which we have
voting interests of less than 50% has a $3,500 line of credit. The availability under the AFA line of credit as of
December 28, 2008 was $3,000.
Wendy’s U.S. advertising fund has a revolving line of credit of $25,000 with a fee of 0.35% on the
unused portion. Neither the Company, nor Wendy’s, is the guarantor of the debt. The advertising fund facility
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)