Wendy's 2014 Annual Report Download - page 92

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
As a result of the refinancings described above, the Company incurred losses on the early extinguishment of debt
as follows:
Year End
2013 2012
Unaccreted discount on Term B Loans .................................. $ 9,561 $ —
Deferred costs associated with the Credit Agreement ....................... 11,458 —
Unaccreted fair value adjustment associated with the 6.20% Senior Notes ....... 3,168 —
Benefit from cumulative effect of the fair value hedges ...................... (4,063) —
Premium payment to redeem/purchase the 6.20% Senior Notes and the Senior
Notes, respectively ............................................... 8,439 43,151
Unaccreted discount on the Senior Notes ................................ — 9,272
Deferred costs associated with the Senior Notes ........................... — 12,433
Unaccreted discount on the 2010 Term Loan ............................. — 1,695
Deferred costs associated with the 2010 Term Loan ........................ — 8,525
Loss on early extinguishment of debt ............................... $28,563 $75,076
The affirmative and negative covenants in the Restated Credit Agreement include, among others, preservation of
corporate existence; payment of taxes; maintenance of insurance; and limitations on: indebtedness (including
guarantee obligations of other indebtedness); liens; mergers, consolidations, liquidations and dissolutions; sales of
assets; dividends and other payments in respect of capital stock; investments; payments of certain indebtedness;
transactions with affiliates; changes in fiscal year; negative pledge clauses and clauses restricting subsidiary
distributions; and material changes in lines of business. The financial covenants contained in the Restated Credit
Agreement are (1) a consolidated interest coverage ratio and (2) a consolidated senior secured leverage ratio.
Wendy’s was in compliance with the covenants of the Restated Credit Agreement as of December 28, 2014. The
covenants generally do not restrict The Wendy’s Company or any of its subsidiaries that are not subsidiaries of
Wendy’s.
(b) Wendy’s 7% debentures are unsecured and were reduced to fair value in connection with the Wendy’s merger
based on their outstanding principal of $100,000 and an effective interest rate of 8.6%. The fair value adjustment
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 28, 2014.
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 28, 2014.
At December 28, 2014, 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 28, 2014.
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