Wendy's 2013 Annual Report Download - page 48

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Prior to 2009 when our predecessor entity was a diversified company active in investments, we had provided
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 during the year ended December 30,
2012.
Outlook for 2014
Sales
We expect that sales will be favorably impacted primarily by improving our North America business through
continuing core menu improvement, product innovation and focused execution of operational excellence and brand
positioning. We will support these growth opportunities through our Image Activation program which includes our
new restaurants and the reimaging of approximately 200 restaurants during 2014. The impact of Wendy’s restaurants
sold or expected to be sold under our system optimization initiative in 2013 and 2014 will continue to have a negative
impact on sales.
Franchise Revenues
We expect that the sales trends for franchised restaurants will continue to be generally impacted by factors
described above under “Sales” related to the improvements in the North America business. The impact of franchisees
purchasing company-owned restaurants under our system optimization initiative will continue to result in increased
franchise royalties and rental income.
Cost of Sales
We expect cost of sales, as a percent of sales, will be favorably impacted by the same factors described above for
sales. The impact of commodities costs on cost of sales, as a percentage of sales, is expected to be flat, with higher beef
costs offset by lower chicken costs.
Depreciation and Amortization
We expect our depreciation and amortization will decrease in 2014 primarily from reducing our mix of
company-owned restaurants to franchise restaurants through our system optimization initiative, despite an increase in
accelerated depreciation resulting from our Image Activation program.
Interest Expense
We expect that our interest expense will decrease in 2014 due to the full year effect of the debt refinancing
initiatives completed during 2013.
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