Wendy's 2009 Annual Report Download - page 52

Facilities Relocation and Corporate Restructuring
2009 2008
Change
(In Millions)
Restaurants, primarily Wendy’s severance costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7.1 $ 2.5
General corporate, Corporate Restructuring (completed in 2007) . . . . . . . . . . . . . . . . . — (84.0)
$7.1 $(81.5)
Interest Expense
2009 2008
Change
(In Millions)
Senior Notes............................................................... $32.0 $ —
Wendy’s debt.............................................................. 31.6 10.7
Financing cost............................................................. 6.1 1.8
Arby’s debt................................................................ 1.1 3.3
Corporate debt............................................................. 0.8 (0.2)
Senior secured term loan.................................................... (11.2) (9.2)
Other..................................................................... (0.7) (0.7)
$ 59.7 $ 5.7
The 2009 expense was principally affected by interest on the Senior Notes issued in June 2009 as
discussed below under “Liquidity and Capital Resources—Senior Notes” as well as, in both 2009 and 2008,
interest expense on debt assumed as a result of the Wendy’s Merger. Excluding the effect of the Senior Notes
issuance and the effect of the Wendy’s debt assumed, the decrease in 2009 interest expense was primarily due
to a net decrease in the senior secured term loan interest expense as a result of significant voluntary
prepayments, partially offset by the write-off of financing costs related to these prepayments and an increase in
the interest rate on such loan. See “Liquidity and Capital Resources—Senior Secured Term Loan” below for
further discussion. Excluding the effect of the Wendy’s Merger on the 2008 fourth quarter, the decrease in the
2008 expense was primarily due to a decrease in interest expense due to voluntary prepayments of the senior
secured term loan as well as a decrease in the variable interest rates as compared to 2007.
Investment (Expense) Income, Net
2009 2008
Change
(In Millions)
Recognized net gains ...................................................... $ (4.5) $(44.1)
Withdrawal Fee........................................................... (5.5) —
Interest income............................................................ (1.0) (7.8)
Other .................................................................... (1.4) (0.8)
$(12.4) $(52.7)
Our net gains include realized gains on available-for-sale securities and cost method investments and
unrealized and realized gains on derivative instruments. The change in our recognized net gains in 2009 is
primarily due to: (1) $2.8 million of net unrealized and realized losses on swap derivatives held in 2008, (2)
$2.3 million of net gains that were realized upon the Equities Sale and (3) a $2.2 million decrease in net
realized losses on available for sale securities held in 2008 as offset by (1) a $9.0 decrease in net unrealized and
realized gains on securities sold short held in 2008, (2) $1.2 million of realized losses on securities sold short in
2009, (3) $0.8 million decrease in unrealized gains on put and call option derivatives that were sold in 2009
and (4) $0.8 million decrease in gains from the sale of cost method investments. The Withdrawal Fee relates to
the fee paid to the Management Company for the Equities Sale as discussed in “Introduction and Executive
Overview—Equities Account.” The change in our recognized net gains in 2008 is primarily related to: (1)
$22.4 million decrease in realized gains in 2007 on our available-for-sale investments primarily reflecting
$15.2 million of gains on two of those investments in 2007 and the reduction in value of our investments in
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