Wendy's 2012 Annual Report Download - page 89

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
is being accreted and the related charge included in “Interest expense” until the debentures mature. These
debentures contain covenants that restrict the incurrence of indebtedness secured by liens and certain capitalized
lease transactions. Wendy’s was in compliance with these covenants as of December 30, 2012.
(d) During the first quarter of 2012, the Company made a $3,911 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 $6,656.
The loss on early extinguishment of debt in 2010 of $26,197 related to the repayment of debt from the
proceeds of the 2010 Term Loan. This loss consisted of (1) a $14,953 premium payment required to redeem Wendy’s
6.25% senior notes, (2) $5,477 for the write-off of the unaccreted discount on Wendy’s 6.25% senior notes and
(3) $5,767 for the write-off of deferred costs associated with the repayment of Wendy’s Restaurants 2009 senior
secured term loan.
Wendy’s U.S. advertising fund has a revolving line of credit of $25,000. Neither the Company, 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 December 30, 2012.
At December 30, 2012, 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. The debt is guaranteed by Wendy’s. The full amount of the line
was available under this line of credit as of December 30, 2012.
(13) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Valuation techniques under the accounting
guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs
reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions.
These inputs are classified into the following hierarchy:
Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets.
Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or
similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are
observable or whose significant value drivers are observable.
Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is
little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require
significant management judgment or estimation.
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