Wendy's 2011 Annual Report Download - page 116

THE WENDY’S COMPANY AND SUBSIDIARIES
WENDY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
In connection with the matching and profit sharing contributions, the Companies recognized compensation
expense in 2011, 2010 and 2009 as follows:
2011 2010 2009
Wendy’s Restaurants ....................................... $7,944 $10,179 $ 9,743
Corporate ............................................... — — 898
The Wendy’s Company ..................................... $7,944 $10,179 $10,641
Pension Plans
Wendy’s had two domestic defined benefit plans (the “Wendy’s Pension Plans”), the benefits under which were
frozen in 2008. Wendy’s obtained an actuarial valuation of the unfunded pension liability as of September 29, 2008
and received approval for the termination of the Wendy’s Pension Plans by the Pension Benefit Guaranty
Corporation and the Internal Revenue Service by the fourth quarter of 2008. We made lump sum distributions and
purchased annuities for the approved termination of the Wendy’s Pension Plans in 2008 and paid $304 for certain
plan settlements in 2009. In 2010, a final payment of $296 was made to the Pension Benefit Guaranty Corporation
for one of the pension plans.
(The Wendy’s Company)
The Wendy’s Company maintains two domestic defined benefit plans, the benefits under which were frozen in
1988 and for which The Wendy’s Company has no unrecognized prior service cost. Arby’s employees who were
eligible to participate through 1988 (the “Eligible Arby’s Employees”) are covered under one of these plans. Pursuant
to the terms of the Arby’s sale agreement, liabilities related to the Eligible Arby’s Employees under these plans were
retained by Wendy’s Restaurants. In addition, Wendy’s Restaurants received $400 from Buyer for the unfunded
liability related to the Eligible Arby’s Employees under the plans as of July 4, 2011. In conjunction with the sale of
Arby’s, Wendy’s Restaurants transferred the liabilities related to the Eligible Arby’s Employees to The Wendy’s
Company. The measurement date used by The Wendy’s Company in determining amounts related to its defined
benefit plans is the same as the Company’s fiscal year end.
The balance of the accumulated benefit obligations and the fair value of the plans’ assets at January 1, 2012 was
$3,926 and $2,557, respectively. As of January 2, 2011, the balance of the accumulated benefit obligations and the
fair value of the plans’ assets was $3,983 and $2,669, respectively, of which $1,227 and $839, respectively, was
recorded by Wendy’s Restaurants related to the Eligible Arby’s Employees. As of January 1, 2012 and January 2,
2011, each of the plans had accumulated benefit obligations in excess of the fair value of the assets of the respective
plan. The Wendy’s Company recognized $303, $157, and $175 in benefit plan expenses included in “General and
administrative” in 2011, 2010, and 2009, respectively. In addition, the Companies recognized $47, $64 and $68 in
benefit plan expenses related to the Eligible Arby’s Employees in 2011, 2010, and 2009, respectively, which is
included in discontinued operations. The Wendy’s Company’s future required contributions to the plan are expected
to be insignificant.
Multiemployer Pension Plan
The unionized employees at The New Bakery Co. of Ohio, Inc. (the “Bakery”), a 100% owned subsidiary of
Wendy’s, are covered by the Bakery and Confectionery Union and Industry International Pension Fund (the “Union
Pension Fund”), a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to
certain employees covered by a collective bargaining agreement (the “CBA”). The cost of this pension plan is
determined in accordance with the provisions of the CBA.
In 2009, the Bakery terminated its participation in the Union Pension Fund and formally notified the plan’s
trustees of its withdrawal from that plan. This decision required Wendy’s to assume a withdrawal liability of $4,975
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