Wendy's 2012 Annual Report Download - page 37

We have reflected net income attributable to noncontrolling interests of $2.4 million, net of an income tax
benefit of $1.3 million, for the year ended December 30, 2012 in connection with the equity and profit interests
discussed below. The net assets and liabilities of the subsidiary that held the investment were not material to the
consolidated financial statements. Therefore, the noncontrolling interest in those assets and liabilities was not
previously reported separately. As a result of this sale and distributions to the minority shareholders, there are no
remaining noncontrolling interests in this consolidated subsidiary.
Prior to 2009 when our predecessor entity was a diversified company active in investments, we had provided
our Chairman, who was also our then Chief Executive Officer, and our Vice Chairman, who was our then President
and Chief Operating Officer (the “Former Executives”), and certain other former employees, equity and profit
interests in Jurl. In connection with the gain on sale of Jurlique, we distributed, based on the related agreement,
approximately $3.7 million to Jurl’s minority shareholders, including approximately $2.3 million to the Former
Executives.
Services Agreement
The Wendy’s Company and the Management Company entered into a services agreement (the “Services
Agreement”), which commenced on July 1, 2009 and expired on June 30, 2011. Under the Services Agreement, the
Management Company assisted us with strategic merger and acquisition consultation, corporate finance and
investment banking services and related legal matters. The Wendy’s Company paid approximately $2.5 million in
2010 in fees for corporate finance advisory services under the Services Agreement in connection with the negotiation
and execution of the $650.0 million credit agreement in 2010 and the issuance of the Wendy’s Restaurants 10.0%
Senior Notes (the “Senior Notes”) in 2009. In addition, The Wendy’s Company paid the Management Company a
service fee of $0.25 million per quarter, in connection with the Services Agreement until it expired on June 30, 2011.
Sublease of New York Office Space
In July 2008 and July 2007, The Wendy’s Company entered into agreements under which the Management
Company subleased (the “Subleases”) office space on two of the floors of the Company’s former New York
headquarters. During the second quarter of 2010, The Wendy’s Company and the Management Company entered
into an amendment to the sublease, effective April 1, 2010, pursuant to which the Management Company’s early
termination right was canceled in exchange for a reduction in rent. Under the terms of the amended sublease, which
expired in May 2012, the Management Company paid rent to The Wendy’s Company in an amount that covered
substantially all of the Company’s rent obligations under the prime lease for the subleased space.
Liquidation Services Agreement
On June 10, 2009, The Wendy’s Company and the Management Company entered into a liquidation services
agreement (the “Liquidation Services Agreement”) pursuant to which the Management Company assisted us in the
sale, liquidation or other disposition of our cost investments and the series A senior notes that we received from
Deerfield Capital Corp. (the “DFR Notes”). The Liquidation Services Agreement required The Wendy’s Company to
pay the Management Company a fee of $0.9 million in two installments in June 2009 and 2010, which was deferred
and amortized through its June 30, 2011 expiration date.
Aircraft Lease Agreements
In June 2009, The Wendy’s Company and TASCO, LLC (an affiliate of the Management Company)
(“TASCO”) entered into an aircraft lease agreement (the “Aircraft Lease Agreement”) to lease a company-owned
aircraft. The Aircraft Lease Agreement originally provided that The Wendy’s Company would lease such
company-owned aircraft to TASCO from July 1, 2009 until June 30, 2010. On June 24, 2010, The Wendy’s
Company and TASCO renewed the Aircraft Lease Agreement for an additional one year period (expiring on June 30,
2011). Under the Aircraft Lease Agreement, TASCO paid $10,000 per month for such aircraft plus substantially all
operating costs of the aircraft including all costs of fuel, inspection, servicing and certain storage, as well as operational
and flight crew costs relating to the operation of the aircraft, and all transit maintenance costs and other maintenance
costs required as a result of TASCO’s usage of the aircraft. The Wendy’s Company continued to be responsible for
calendar-based maintenance and any extraordinary and unscheduled repairs and/or maintenance for the aircraft, as
well as insurance and other costs.
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