Wendy's 2014 Annual Report Download - page 43

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General and Administrative
Change
2014 2013
Employee compensation and related expenses ....................... $(15.0) $(12.8)
Incentive compensation ........................................ (13.9) 11.9
Franchise incentives ........................................... (4.9) 3.6
Severance expense ............................................ (3.8) 2.9
Share-based compensation ...................................... 5.9 7.0
Other, net .................................................. 1.2 (6.6)
$(30.5) $ 6.0
The decrease in general and administrative expenses during 2014 was primarily due to decreases in
(1) employee compensation and related expenses primarily as a result of the consolidation of regional and divisional
territories as part of our system optimization initiative, (2) incentive compensation accruals due to weaker operating
performance as compared to plan in 2014 versus 2013, (3) franchise incentives due to lower cash incentives offered
under our 2014 Image Activation incentive program compared to our 2013 program and (4) severance expense
primarily as a result of a separation agreement with an executive in 2013. These decreases were partially offset by an
increase in share-based compensation as a result of awards granted and timing of expense recognition.
The increase in general and administrative expenses in 2013 was primarily due to increases in (1) incentive
compensation accruals due to stronger operating performance as compared to plan in 2013 versus 2012,
(2) share-based compensation as a result of awards granted and timing of expense recognition, (3) franchise incentives
resulting from our 2013 Image Activation incentive program and (4) severance expense primarily as a result of the
terms of a separation agreement with an executive. These increases were partially offset by a decrease in employee
compensation and related expenses primarily due to changes in staffing.
Depreciation and Amortization
Change
2014 2013
Restaurants .................................................. $(18.5) $36.6
Corporate and other ........................................... (4.5) (1.2)
$(23.0) $35.4
The decrease in restaurant depreciation and amortization during 2014 was primarily due to decreases in
(1) depreciation of assets sold under our system optimization initiative of $11.7 million and (2) accelerated
depreciation on existing assets that are being replaced as part of our Image Activation program of $18.8 million.
These decreases were partially offset by an increase in restaurant depreciation and amortization of $9.0 million during
2014 on new and reimaged Image Activation restaurants. Corporate and other depreciation expense decreased
primarily due to the sale of our aircraft during 2014 and reduced depreciation on assets at our Canadian corporate
location in connection with our system optimization initiative.
Depreciation and amortization during 2013 includes accelerated depreciation of $17.5 million and
$20.7 million on existing assets that were replaced in 2013 and will be replaced in 2014, respectively, as part of our
Image Activation program. The increase in restaurant depreciation and amortization during 2013 also includes a
$6.4 million increase on new and reimaged Image Activation restaurants.
39