Wendy's 2010 Annual Report Download - page 110

WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
WENDY’S/ARBY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED 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,
discounts and interest rate swaps, as of January 2, 2011 were as follows:
Fiscal Year
Wendy’s/Arby’s
Restaurants Corporate Wendy’s/Arby’s
2011 ........................................... $ 17,047 $ 1,368 $ 18,415
2012 ........................................... 16,261 1,460 17,721
2013 ........................................... 15,493 9,843 25,336
2014 ........................................... 241,057 — 241,057
2015 ........................................... 17,591 — 17,591
Thereafter ....................................... 1,292,240 — 1,292,240
$1,599,689 $12,671 $1,612,360
(a) On June 23, 2009, Wendy’s/Arby’s Restaurants issued $565,000 principal amount of Senior Notes (the “Senior
Notes”). The Senior Notes will mature on July 15, 2016 and accrue interest at 10.00% per annum, payable semi-
annually on January 15 and July 15, the first payment of which was made on January 15, 2010. The Senior
Notes were issued at 97.533% of the principal amount, representing a yield to maturity of 10.50% and resulting
in net proceeds of $551,061. The $13,939 discount is being accreted and the related charge included in “Interest
expense” until the Senior Notes mature. The Senior Notes are fully and unconditionally guaranteed, jointly and
severally, on an unsecured basis by certain direct and indirect domestic subsidiaries of Wendy’s/Arby’s
Restaurants (collectively, the “Guarantors”). Wendy’s/Arby’s Restaurants incurred approximately $21,599 in
costs related to the issuance of the Senior Notes which are being amortized to “Interest expense” over the term of
the Senior Notes utilizing the effective interest rate method.
An indenture for the Senior Notes dated as of June 23, 2009 (the “Indenture”) among Wendy’s/Arby’s
Restaurants, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), includes certain
customary covenants that, subject to a number of important exceptions and qualifications, limit the ability of
Wendy’s/Arby’s Restaurants and its restricted subsidiaries to, among other things, incur debt or issue preferred or
disqualified stock, pay dividends on equity interest, redeem or repurchase equity interests or prepay or repurchase
subordinated debt, make some types of investments and sell assets, incur certain liens, engage in transactions with
affiliates (except on an arms-length basis), and consolidate, merge or sell all or substantially all of their assets. The
covenants generally do not restrict Wendy’s/Arby’s or any of Wendy’s/Arby’s subsidiaries which are not
subsidiaries of Wendy’s/Arby’s Restaurants.
(b) On May 24, 2010, Wendy’s/Arby’s Restaurants entered into a $650,000 Credit Agreement (the “Credit
Agreement”), which includes a $500,000 senior secured term loan facility (the “Term Loan”) and a $150,000
senior secured revolving credit facility (the “Credit Facility”). The Credit Agreement contains provisions for an
uncommitted increase of up to $300,000 principal amount in the aggregate in the Credit Facility and/or Term
Loan subject to the satisfaction of certain conditions. The Credit Facility includes a sub-facility for the issuance of
up to $70,000 of letters of credit. The obligations under the Credit Agreement are secured by substantially all of
the non-real estate assets of Wendy’s/Arby’s Restaurants and its domestic subsidiaries (other than certain
unrestricted subsidiaries), the stock of its domestic subsidiaries (other than certain unrestricted subsidiaries), 65%
of the stock of certain of its foreign subsidiaries, as well as by mortgages on certain restaurant properties.
The Term Loan was issued at 99.5% of the principal amount, which represented an original issue discount of
0.5% and resulted in net proceeds of $497,500. The $2,500 discount is being accreted and the related charge
included in interest expense through the maturity of the Term Loan. The Term Loan will mature on May 24,
2017 and requires quarterly principal installments which commenced on September 30, 2010 equal to 1% per
annum of the initial principal amount outstanding, with the balance payable on the maturity date.
Should our strategic alternatives for Arby’s result in a sale of the brand, we may be required to utilize a portion of
the sale proceeds to reduce the Term Loan.
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