Wendy's 2010 Annual Report Download - page 112

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)
(f) On June 17, 2010, Wendy’s/Arby’s repurchased the remaining 5% convertible notes for $2,100, including
accrued interest. The convertible notes were repurchased at a price of 100% of their principal amount plus
accrued interest.
A significant number of the Arby’s sale-leaseback obligations, capitalized lease obligations, and operating leases,
require or required periodic financial reporting of certain subsidiary entities within Arby’s or of individual restaurants,
which in many cases have not been prepared or reported. Arby’s has negotiated waivers and alternative covenants with
their most significant lessors which substitute consolidated financial reporting of Arby’s for that of individual
subsidiary entities and which modify restaurant level reporting requirements for more than half of the affected
leases. Nevertheless, as of January 2, 2011, Arby’s 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 Arby’s is in default of any of those lease agreements.
The Companies do not believe that such non-compliance will have a material adverse effect on their consolidated
financial position or results of operations.
Wendy’s U.S. advertising fund has a revolving line of credit of $25,000. Neither the Companies, nor Wendy’s,
is the guarantor of the debt. The advertising fund facility was established to fund the advertising fund operations. The
full amount of the line was available under this line of credit as of January 2, 2011.
At January 2, 2011, one of Wendy’s Canadian subsidiaries had a revolving credit facility of C$6,000 which
bears interest at the Bank of Montreal Prime Rate. Wendy’s guarantees this debt. The availability under this facility as
of January 2, 2011 was C$5,745.
(12) Fair Value of Financial Instruments
The carrying amounts and estimated fair values of the Companies’ financial instruments for which the
disclosure of fair values is required were as follows:
Year End 2010
Wendy’s/Arby’s
Restaurants Corporate Wendy’s/Arby’s
Financial assets
Carrying Amount:
Cash and cash equivalents ...................... $198,686 $313,822 $512,508
Restricted cash equivalents:
Current ................................ 1,068 — 1,068
Non-current ............................ 3,562 685 4,247
Non-current cost investments ................... 3,775 4,817 8,592
Interest rate swaps ............................ 9,623 — 9,623
Fair Value:
Cash and cash equivalents (a) ................... $198,686 $313,822 $512,508
Restricted cash equivalents (a):
Current ................................ 1,068 — 1,068
Non-current ............................ 3,562 685 4,247
Non-current cost investments (b) ................ 5,555 14,540 20,095
Interest rate swaps (c) ......................... 9,623 — 9,623
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