Wendy's 2012 Annual Report Download - page 50

not later than May 15, 2017. An unused commitment fee of 50 basis points per annum is payable quarterly on the
average unused amount of the revolving credit facility until the maturity date. As of December 30, 2012, there were
no amounts outstanding under the revolving credit facility, except for $20.3 million of letters of credit issued in the
normal course of business.
The interest rate on the Term Loan and amounts borrowed under the revolving credit facility is based on the
Eurodollar Rate as defined in the Credit Agreement (but not less than 1.25%), plus 3.50%, or a Base Rate, as defined
in the Credit Agreement plus 2.50%. Since the inception of the Term Loan, we have elected to use the Eurodollar
Rate, which resulted in an interest rate on the Term Loan of 4.75% as of December 30, 2012.
Wendy’s incurred $15.6 million in costs related to the Credit Agreement, which is being amortized to “Interest
expense” through the maturity of the Term Loan utilizing the effective interest rate method.
Proceeds from the Term Loan were used (1) to repay all amounts outstanding under the 2010 Term Loan,
(2) to redeem the Senior Notes in the amounts of $440.8 million aggregate principal at a redemption price of 107.5%
of the principal amount in July 2012 and to purchase $124.2 million aggregate principal at a purchase price of
108.125% of the principal amount in May 2012, both plus accrued and unpaid interest and (3) to pay substantially
all of the Credit Agreement fees and expenses.
The Company recognized losses on the early extinguishment of debt of $75.1 million for the year ended
December 30, 2012 related to the repayment of debt from the proceeds of the Term Loan draws on July 16, 2012
and May 15, 2012.
The affirmative and negative covenants in the Credit Agreement include, among others, preservation of
corporate existence; payment of taxes; maintenance of insurance; and limitations on: indebtedness (including
guarantee obligations of other indebtedness); liens; mergers, consolidations, liquidations and dissolutions; sales of
assets; dividends and other payments in respect of capital stock; investments; payments of certain indebtedness;
transactions with affiliates; changes in fiscal year; negative pledge clauses and clauses restricting subsidiary
distributions; and material changes in lines of business. The financial covenants contained in the Credit Agreement
are (1) a consolidated interest coverage ratio and (2) a consolidated senior secured leverage ratio. Wendy’s was in
compliance with all covenants of the Credit Agreement as of December 30, 2012 and we expect to remain in
compliance with all of these covenants for the next 12 months.
6.54% Aircraft Term Loan
During the first quarter of 2012, the Company made a $3.9 million prepayment on its aircraft financing facility
to comply with a requirement that the outstanding principal balance be no more than 85% of the appraised value of
the aircraft. On June 25, 2012, the Company voluntarily repaid the remaining outstanding principal, including
accrued interest thereon related to this facility, totaling $6.7 million.
Contractual Obligations
The following table summarizes the expected payments under our outstanding contractual obligations at
December 30, 2012:
Fiscal Years
2013 2014-2015 2016-2017 After 2017 Total
Long-term debt obligations (a) ....................... $ 79.7 $381.3 $139.0 $1,297.3 $1,897.3
Capital lease obligations (b) .......................... 4.4 9.3 8.2 43.8 65.7
Operating lease obligations (c) ........................ 66.4 113.1 99.9 642.5 921.9
Purchase obligations (d) ............................ 55.7 49.6 41.1 30.0 176.4
Other .......................................... 7.4 1.5 0.9 — 9.8
Total (e) .................................... $213.6 $554.8 $289.1 $2,013.6 $3,071.1
(a) Excludes capital lease obligations, which are shown separately in the table. The table includes interest of
approximately $446.6 million. The table also reflects the effect of interest rate swaps which lowered our interest
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