Wendy's 2015 Annual Report Download - page 72

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
Prior to fiscal 2015, the Company reported its system optimization initiative as a discrete event and separately
included the related gain or loss on sales of restaurants, impairment losses and other associated costs, along with other
restructuring initiatives, in “Facilities action (income) charges, net.” In February 2015, the Company announced
plans to reduce its ongoing company-owned restaurant ownership to approximately 5% of the total system and
further emphasized that restaurant dispositions and acquisitions are a continuous and integrated part of the overall
strategy to optimize its restaurant portfolio. As a result, commencing with the first quarter of 2015, all gains and losses
on dispositions are included on a separate line in our consolidated statements of operations, “System optimization
gains, net” and impairment losses recorded in connection with the sale or anticipated sale of restaurants (“System
Optimization Remeasurement”) are reclassified to “Impairment of long-lived assets.” In addition, the Company
retitled the line, “Facilities action (income) charges, net” to “Reorganization and realignment costs” in our
consolidated statements of operations to better describe the current and historical initiatives included given the
reclassifications described above. The Company believes the new presentation will aid users in understanding its
results of operations. The prior periods reflect reclassifications to conform to the current year presentation. All
amounts being reclassified in our statements of operations were separately disclosed in the notes to our consolidated
financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014. Such
reclassifications had no impact on operating profit, net income or net income per share.
The following table illustrates the reclassifications made to the consolidated statements of operations for the
years ended December 28, 2014 and December 29, 2013:
Year Ended December 28, 2014
Reclassifications
As
Previously
Reported
(b)
Gain on
dispositions, net
(c)
System
Optimization
Remeasurement
(d)
As Currently
Reported
System optimization gains, net ....................... $ — $(91,510) $ — $(91,510)
Reorganization and realignment costs (a) ............... (29,100) 69,631 (8,628) 31,903
Impairment of long-lived assets ....................... 10,985 — 8,628 19,613
Other operating expense, net ........................ 4,329 21,879 — 26,208
$(13,786) $ — $ — $(13,786)
Year Ended December 29, 2013
Reclassifications
As
Previously
Reported
(b)
Gain on
dispositions, net
(c)
System
Optimization
Remeasurement
(d)
As Currently
Reported
System optimization gains, net ........................ $ — $(51,276) $ — $(51,276)
Reorganization and realignment costs (a) ................ 10,856 46,667 (20,506) 37,017
Impairment of long-lived assets ....................... 15,879 — 20,506 36,385
Other operating expense, net ......................... 341 4,609 — 4,950
$27,076 $ — $ — $ 27,076
(a) Previously titled “Facilities action (income) charges, net.”
(b) “As Previously Reported,” reflects adjustments to reclassify the Bakery’s other operating income, net of $65 and
$96 from “Other operating expense, net” to “Income (loss) from discontinued operations, net of income taxes.”
(c) Reclassified the gain on sales of restaurants, net, previously included in “Facilities action (income) charges, net”
and the gain on disposal of assets, net, which included sales of restaurants and other assets, and was previously
reported in “Other operating expense, net” to a separate line in our consolidated statements of operations,
“System optimization gains, net.”
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