Wendy's 2014 Annual Report Download - page 23

We rely on computer systems and information technology to run our business. Any material failure, interruption
or security breach of our computer systems or information technology may result in adverse publicity and
adversely affect the operation of our business and results of operations.
We are significantly dependent upon our computer systems and information technology to properly conduct
our business. A failure or interruption of computer systems or information technology could result in the loss of data,
business interruptions or delays in business operations. Also, despite our considerable efforts and technological
resources to secure our computer systems and information technology, security breaches, such as unauthorized access
and computer viruses, may occur resulting in system disruptions, shutdowns or unauthorized disclosure of
confidential information. A significant security breach of our computer systems or information technology could
require us to notify customers, employees or other groups, result in adverse publicity, loss of sales and profits, and
incur penalties or other costs that could adversely affect the operation of our business and results of operations.
Failure to comply with laws, regulations and third-party contracts regarding the collection, maintenance and
processing of information may result in adverse publicity and adversely affect the operation of our business and
results of operations.
We collect, maintain and process certain information about customers and employees. Our use and protection
of this information is regulated by various laws and regulations, as well as by third-party contracts. If our systems or
employees fail to comply with these laws, regulations or contract terms, it could require us to notify customers,
employees or other groups, result in adverse publicity, loss of sales and profits, increase fees payable to third parties,
and incur penalties or remediation and other costs that could adversely affect the operation of our business and results
of operations.
We may be required to recognize additional asset impairment and other asset-related charges.
We have significant amounts of long-lived assets, goodwill and intangible assets and have incurred impairment
charges in the past with respect to those assets. In accordance with applicable accounting standards, we test for
impairment generally annually, or more frequently, if there are indicators of impairment, such as:
• significant adverse changes in the business climate;
• current period operating or cash flow losses combined with a history of operating or cash flow losses or a
projection or forecast that demonstrates continuing losses associated with long-lived assets;
• a current expectation that more-likely-than-not (i.e., a likelihood that is more than 50%) long-lived assets
will be sold or otherwise disposed of significantly before the end of their previously estimated useful life; and
• a significant drop in our stock price.
Based upon future economic and capital market conditions, as well as the operating performance of our
reporting units, future impairment charges could be incurred. Further, as a result of the system optimization initiative,
the Company has recorded losses on remeasuring long-lived assets to fair value upon determination that the assets will
be leased and/or subleased to franchisees in connection with the sale or anticipated sale of restaurants, and may incur
further losses as the Company continues to sell restaurants under the system optimization initiative.
We enter into swaps and other derivative contracts, which expose us to potential losses in the event of
nonperformance by counterparties.
We have entered into interest rate swaps and other derivative contracts as described in Note 11 of the Financial
Statements and Supplementary Data included in Item 8 herein, and we may enter into additional swaps in the future.
We are exposed to potential losses in the event of nonperformance by counterparties on these instruments, which
could adversely affect our results of operations, financial condition and liquidity.
Wendy’s and its subsidiaries are subject to various restrictions, and substantially all of their non-real estate
assets are pledged and subject to certain restrictions, under a credit agreement.
On May 16, 2013, Wendy’s amended and restated its credit agreement, dated May 15, 2012 (the “Restated
Credit Agreement”). The Restated Credit Agreement is comprised of a $350.0 million senior secured term loan
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