The Company’s presentation of Adjusted EBITDA from continuing operations and Adjusted Earnings Per Share from continuing operations does not replace the presentation of the Company’s financial results in accordance with GAAP.

About The Wendy’s Company

The Wendy's Company is the world's third-largest quick-service hamburger company. The Wendy's system includes more than 6,500 franchise and Company restaurants in the United States and 27 countries and U.S. territories worldwide. For more information, visit aboutwendys.com or wendys.com.
 
 
The Wendy's Company and Subsidiaries
Consolidated Statements of Operations
Second Quarter and Six Month Periods Ended July 1, 2012 and July 3, 2011
(In Thousands Except Per Share Amounts)
             
Second Quarter Six Months
2012 2011 2012 2011
(Unaudited) (Unaudited)
Revenues:
Sales $ 566,116 $ 544,237 $ 1,086,045 $ 1,053,523
Franchise revenues   79,752     78,222     153,010     151,401  
  645,868     622,459     1,239,055     1,204,924  
Costs and expenses:
Cost of sales 483,080 464,798 938,547 903,669
General and administrative 73,345 74,456 145,649 149,141
Depreciation and amortization 35,947 29,842 68,258 60,156
Impairment of long-lived assets 3,270 365 7,781 8,262
Facilities relocation and other transition costs 9,426 - 14,957 -
Transaction related costs 562 5,039 1,174 6,923
Other operating expense, net   1,847     525     3,382     1,322  
  607,477     575,025     1,179,748     1,129,473  
Operating profit 38,391 47,434 59,307 75,451
Interest expense (28,002 ) (28,089 ) (56,237 ) (57,531 )
Loss on early extinguishment of debt (25,195 ) - (25,195 ) -
Gain on sale of investment, net - - 27,407 -
Other income, net   640     337     2,164     590  

(Loss) income from continuing operations before income taxes and  noncontrolling interests
(14,166 ) 19,682 7,446 18,510
Benefit from (provision for) income taxes   8,673     (8,308 )   1,795     (7,432 )
(Loss) income from continuing operations (5,493 ) 11,374 9,241 11,078
Discontinued operations:
Income from discontinued operations, net of income taxes - 3,672 - 2,559
Loss on disposal of discontinued operations, net of income tax benefit   -     (3,780 )   -     (3,780 )
Net loss from discontinued operations   -     (108 )   -     (1,221 )
Net (loss) income (5,493 ) 11,266 9,241 9,857
Net income attributable to noncontrolling interests   -     -     (2,384 )   -  
Net (loss) income attributable to The Wendy's Company $ (5,493 ) $ 11,266   $ 6,857   $ 9,857  
 
Basic and diluted (loss) income per share attributable to The Wendy's Company:
Continuing operations $ (0.01 ) $ 0.03 $ 0.02 $ 0.03
Discontinued operations   -     -     -     (0.01 )
Net (loss) income $ (0.01 ) $ 0.03   $ 0.02   $ 0.02  
 
Number of shares used to calculate basic (loss) income per share   389,978     417,676     389,840     418,098  
 
Number of shares used to calculate diluted (loss) income per share   389,978     419,239     392,001     419,415  
 
July 1,

2012
January 1,

2012
Balance Sheet Data: (Unaudited) (Audited)
Cash and cash equivalents $ 435,100 $ 475,231
Total assets 4,310,481 4,300,668
Long-term debt, including current portion 1,394,278 1,356,999
Total stockholders' equity 1,993,574 1,996,069
 
 
Reconciliation of Adjusted EBITDA from Continuing Operations

to Net (Loss) Income Attributable to The Wendy's Company
(In Thousands)
(Unaudited)
             
Second Quarter Six Months
2012 2011 2012 2011
 
Adjusted EBITDA from continuing operations $ 89,073 $ 89,415 $ 152,954 $ 163,140
 
(Less) plus:
 
Depreciation and amortization (35,947 ) (29,842 ) (68,258 ) (60,156 )
Impairment of long-lived assets (3,270 ) (365 ) (7,781 ) (8,262 )

Costs associated with closed restaurants in  other operating expense, net (a)
(1,477 ) - (1,477 ) -
Facilities relocation and other transition costs (9,426 ) - (14,957 ) -
Transaction related costs (562 ) (5,039 ) (1,174 ) (6,923 )

Arby's indirect corporate overhead in  general and administrative (G&A)
- (6,735 ) - (14,623 )
SSG purchasing cooperative expense reversal in G&A   -     -     -     2,275  
Operating profit 38,391 47,434 59,307 75,451
 
Interest expense (28,002 ) (28,089 ) (56,237 ) (57,531 )
Loss on early extinguishment of debt (25,195 ) - (25,195 ) -
Gain on sale of investment, net - - 27,407 -
Other income, net   640     337     2,164     590  

(Loss) income from continuing operations before  income taxes and noncontrolling interests
(14,166 ) 19,682 7,446 18,510
Benefit from (provision for) income taxes   8,673     (8,308 )   1,795     (7,432 )
(Loss) income from continuing operations (5,493 ) 11,374 9,241 11,078
Discontinued operations:
Income from discontinued operations, net of income taxes - 3,672 - 2,559
Loss on disposal of discontinued operations, net of income tax benefit   -     (3,780 )   -     (3,780 )
Net loss from discontinued operations   -     (108 )   -     (1,221 )
Net (loss) income (5,493 ) 11,266 9,241 9,857
Net income attributable to noncontrolling interests   -     -     (2,384 )   -  

Net (loss) income attributable to  The Wendy's Company
$ (5,493 ) $ 11,266   $ 6,857   $ 9,857  
 
(a) Excludes non-cash items included in impairment of long-lived assets.
 
 

Reconciliation of Adjusted Income and Adjusted Earnings per Share from Continuing Operations to Net (Loss) Income and Earnings per Share Attributable to The Wendy's Company
(In Thousands Except per Share Amounts)
(Unaudited)
                           
Second Quarter Six Months
2012 2011 2012 2011

Aftertax

Pershare (a)

Aftertax

Pershare

Aftertax

Pershare

Aftertax

Pershare
 
Adjusted income and adjusted earnings per share from continuing operations $ 19,221   $ 0.05   $ 19,016   $ 0.05   $ 22,568   $ 0.06   $ 28,292   $ 0.07  
(Less) plus:
Loss on early extinguishment of debt (15,621 ) (0.04 ) - - (15,621 ) (0.04 ) - -
Gain on sale of investment, net - - - - 17,978 0.05 - -
Impairment of long-lived assets (2,018 ) (0.01 ) (224 ) (0.00 ) (4,801 ) (0.02 ) (5,073 ) (0.01 )
Costs associated with closed restaurants in other operating expense, net (b) (911 ) (0.00 ) - - (911 ) (0.00 ) - -
Facilities relocation and other transition costs (5,817 ) (0.01 ) - - (9,246 ) (0.03 ) - -
Arby's indirect corporate overhead in general and administrative (G&A) - - (4,243 ) (0.01 ) - - (9,213 ) (0.02 )
Transaction related costs (347 ) (0.00 ) (3,175 ) (0.01 ) (726 ) (0.00 ) (4,361 ) (0.01 )
SSG purchasing cooperative expenses in G&A   -     -     -     -     -     -     1,433     0.00  
Total adjustments   (24,714 )   (0.06 )   (7,642 )   (0.02 )   (13,327 )   (0.04 )   (17,214 )   (0.04 )
 
(Loss) income from continuing operations and earnings per share (5,493 ) (0.01 ) 11,374 0.03 9,241 0.02 11,078 0.03
Discontinued operations:
Income from discontinued operations, net of income taxes - - 3,672 0.01 - - 2,559 0.00
Loss on disposal of discontinued operations, net of income tax benefit   -     -     (3,780 )   (0.01 )   -     -     (3,780 )   (0.01 )
Net loss from discontinued operations   -     -     (108 )   (0.00 )   -     -     (1,221 )   (0.01 )
Net (loss) income (5,493 ) (0.01 ) 11,266 0.03 9,241 0.02 9,857 0.02
Net income attributable to noncontrolling interests   -     -     -     -     (2,384 )   (0.00 )   -     -  
Net (loss) income and earnings per share attributable to The Wendy's Company $ (5,493 ) $ (0.01 ) $ 11,266   $ 0.03   $ 6,857   $ 0.02   $ 9,857   $ 0.02  
 
 
Reported number of shares used to calculate diluted (loss) income per share 389,978 419,239 392,001 419,415
Plus: Dilutive effect of stock options and restricted shares   1,748     -     -     -  
Adjusted number of shares used to calculate adjusted earnings per share   391,726     419,239     392,001     419,415  
 

(a)

Adjusted earnings per share amounts, for the second quarter of 2012, include the dilutive effect of stock options and restricted shares, which were excluded from the reported number of shares used to calculate basic and diluted loss per share, as the impact would have been anti-dilutive. Included above is a reconciliation of the number of shares used to calculate adjusted earnings per share amounts.
 

(b)

Excludes non-cash items included in impairment of long-lived assets.
 

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