Wendy's 2012 Annual Report Download - page 48

2011 Compared with 2010
Cash provided by operating activities increased $20.5 million during the year ended January 1, 2012 as
compared to the year ended January 2, 2011, primarily due to the following:
• a $40.6 million favorable impact in accrued expenses and other current liabilities for the comparable periods.
This favorable impact was primarily due to the following: (1) an increase in amounts accrued for
termination, severance and relocation costs associated with the sale of Arby’s and the related plans for the
relocation of the Company’s Atlanta restaurant support center to Ohio, (2) payments to QSCC in the first
quarter of 2010 which were accrued in 2009, (3) a decrease in amounts paid in 2011 versus 2010 under
incentive compensation plans for the 2010 and 2009 fiscal years, respectively and (4) a decrease in interest
payments in 2011 compared to 2010, partially offset by a decrease in accrued interest expense both primarily
due to the redemption of the Wendy’s 6.25% senior notes in the second quarter of 2010 and a
$190.0 million decrease in long-term debt which was assumed by Buyer on July 4, 2011. These favorable
changes were partially offset by a decrease in the current income tax provision due to variations in taxable
income of continuing operations during the same comparable periods; and
• a $27.2 million favorable impact in accounts payable resulting from an increase in accounts payable of
$11.4 million during 2011 compared to a decrease in accounts payable of $15.8 million during 2010. The
changes for 2011 and 2010 were primarily due to the following: (1) an increase in amounts payable for food
purchases at Wendy’s as a result of higher sales trends in 2011 as compared to 2010, (2) a decrease in
payments for expenses at Arby’s as a result of its sale on July 4, 2011, (3) amounts payable related to the
Wendy’s annual convention held in the 2011 fourth quarter and (4) a decrease in payments for Wendy’s
kids’ meal promotion items as the management for kids’ meal promotion items sold to franchisees was
transferred to QSCC in the first quarter of 2011.
These increases were partially offset by a $9.1 million decrease to cash related to prepaid expenses and other
current assets.
Additionally, for the year ended January 1, 2012, the Company had the following significant sources and uses
of cash other than from operating activities:
• Proceeds from the sale of Arby’s of $97.9 million, which is net of the following: Arby’s cash balance of
$7.1 million at the sale date, customary purchase price adjustments primarily related to working capital and
transaction closing costs paid through January 1, 2012;
• Repayments of long-term debt of $38.7 million, including an excess cash flow prepayment of $24.9 million
as required by the 2010 Term Loan;
• Cash capital expenditures totaling $146.8 million, which included $27.5 million for the remodeling of
restaurants, $23.9 million for the construction of new restaurants and $95.4 million for various capital
projects;
• Dividend payments of $32.4 million; and
• Repurchases of common stock of $157.6 million, including commissions of $0.6 million.
The net cash used in our business before the effect of exchange rate changes on cash was approximately
$36.1 million.
Sources and Uses of Cash for 2013
Our anticipated consolidated sources of cash and cash requirements for 2013 exclusive of operating cash flow
requirements consist principally of:
• Capital expenditures of approximately $245.0 million as discussed below in “Capital Expenditures;”
• Potential restaurant acquisitions and dispositions;
• The costs of any potential financing activities;
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