Wendy's 2014 Annual Report Download - page 79

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
Subsequent to December 28, 2014, the Company completed the sale of certain assets used in the operation of
nine Wendy’s Canadian restaurants for cash proceeds of approximately $3,000, subject to customary purchase price
adjustments.
Net assets held for sale consist primarily of cash, inventory, equipment and an estimate of allocable goodwill
and are included in “Prepaid expenses and other current assets” as of December 28, 2014 and December 29, 2013.
Subsequent Events
In February 2015, the Company announced plans to sell approximately 500 additional restaurants to
franchisees and reduce its ongoing company-owned restaurant ownership to approximately 5% of the total system by
the middle of 2016, as part of its ongoing system optimization initiative. As a result, the Company anticipates
recognizing additional System Optimization Remeasurement. However, the Company cannot estimate such charges
or any gains or losses resulting from future sales of its restaurants.
G&A Realignment
As announced in November 2014, the Company initiated a plan to reduce its general and administrative
expenses. The plan includes a realignment and reinvestment of resources to focus primarily on accelerated restaurant
development and consumer-facing restaurant technology to drive long-term growth. The Company expects to achieve
the majority of the expense reductions through the realignment of its U.S. field operations and savings at its
Restaurant Support Center in Dublin, Ohio. As a result, the Company recorded a $12,926 charge to “Facilities action
(income) charges, net” during the fourth quarter of 2014, which primarily included severance and related employee
costs. The Company expects to incur additional costs aggregating approximately $11,500 to $13,500 during the first
half of 2015, comprised of severance and related employee costs of $2,500, recruitment and relocation costs of $5,000
for the reinvestment in resources to drive long-term growth and share-based compensation of $4,000 to $6,000. The
Company anticipates this initiative will be substantially completed by the end of the second quarter of 2015.
The following is a summary of the activity recorded under our G&A realignment plan:
Year Ended
2014
Severance and related employee costs ............................................ $11,917
Recruitment and relocation costs ............................................... 209
Other .................................................................... 88
12,214
Share-based compensation (a) ................................................. 712
Total G&A realignment ...................................................... $12,926
(a) Represents incremental share-based compensation resulting from the modification of stock options and
performance-based awards in connection with the termination of employees under our G&A realignment plan.
The table below presents a rollforward of our accrual for our G&A realignment plan, which is included in
“Accrued expenses and other current liabilities.”
Balance
December 29,
2013 Charges Payments
Balance
December 28,
2014
Severance and related employee costs ........................ $— $11,917 $(308) $11,609
Recruitment and relocation costs ........................... — 209 (60) 149
Other ............................................... — 88 (83) 5
$— $12,214 $(451) $11,763
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