Financial Overview
Steve Hare
Chief Financial Officer
Quarterly Revenues 2010 vs. 2009
2
In Millions
Full-Year 2010 Revenues = $3.4 billion
(1)
(1) Q4 2009 includes an extra fiscal week
Quarterly Adjusted EBITDA(1) 2010 vs. 2009
3
Full-Year 2010 Adjusted EBITDA = $396.9 million, -3.6% vs. 2009
+14.7%
+3.2%
-19.6%
-6.4%
(2)
(1) See Appendix
(2) Normalized for 53rd week ($13.6 million)
In Millions
Wendy’s Systemwide Same-Store Sales
Company-owned 0.2% -2.9% -3.1% -0.9% -1.7%
Franchised 1.0% -1.4% -1.3% 0.6% -0.3%
4
2010
Wendy’s Company-Owned Restaurant Margin
(1)Excludes incremental advertising for Wendy’s new breakfast in 2010.
(2)Excludes impact of 53rd week in 2009
Q4 -120 bps
-120 bps due to
Commodities
Commodities
2010 +40 bps
-60 bps
Commodities
Commodities
5
Arby’s Systemwide Same-Store Sales
Company-owned -11.6% -8.8% -9.5% 2.9% -7.1%
Franchised -11.4% -6.7% -4.1% 1.6% -5.2%
6
2010
Arby’s Company-Owned Restaurant Margin
(1)Excludes non-recurring items and the impact of the extra week in 2009.
Q4 -10 bps
-160 bps due to
Commodities
Commodities
2010 -180 bps
-75 bps due to
Commodities
Commodities
7
Returning Value to Shareholders
• Regular quarterly dividend increased 33%
• Paid $27.6MM in dividends during 2010
Dividend Increase
• Purchased 52MM shares, or 11% of shares
outstanding, for $245MM since 2009
outstanding, for $245MM since 2009
• $250MM authorized for future purchases
Share Repurchase
Program
Program
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Returned $195 million in 2010
Capital Structure
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*See Appendix.
— Pro forma Company EBITDA of $345-$355 million
(Assumes sale of Arby’s and G&A reductions at beginning of fiscal 2011)
(Assumes sale of Arby’s and G&A reductions at beginning of fiscal 2011)
— Wendy’s same-store sales growth +1% to +3%
— Wendy’s company-operated restaurant margin*
improvement of 30 to 60 basis points
improvement of 30 to 60 basis points
10
2011 Outlook Assumptions
*Includes breakfast expense in 2010 and 2011.
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2011 Commodities Increasing Approximately 2-3%
12
2011 Development and
Capital Expenditure Plan
Capital Expenditure Plan
— Reduce corporate G&A to support a single brand
— Eliminate approximately $200 million of capital lease obligations
related to Arby’s
related to Arby’s
— Reduce future capital expenditures for Arby’s
— Proceeds from sale of Arby’s would be available for re-investment
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Benefits of Potential Sale of Arby’s
Sale would be accretive to
earnings and free cash flow
earnings and free cash flow
— Consistent same-store sales growth
— Company-operated restaurant margin improvement
— Daypart expansion
— New units - North America and International
— Franchisee royalty growth
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Long-Term EBITDA Growth Target of 10-15%
Beginning in 2012
15
16
Appendix - EBITDA and Adjusted EBITDA Reconciliations
(In Millions) | Fourth Quarter | Twelve Months | |||||
(Unaudited) | Preliminary 2010 | Actual 2009 | Preliminary 2010 | Actual 2009 | |||
EBITDA | $ 85.8 | $ 82.6 | $ 384.0 | $ 384.4 | |||
Depreciation and amortization | (44.7) | (46.9) | (182.2) | (190.3) | |||
Impairment of long-lived assets | (28.1) | (51.0) | (69.4) | (82.1) | |||
Operating profit (loss) | 13.0 | (15.3) | 132.4 | 112.0 | |||
Interest expense | (32.7) | (37.0) | (137.2) | (126.7) | |||
Loss on early extinguishment of debt | - | - | (26.2) | - | |||
Investment income (expense), net | - | 0.8 | 5.2 | (3.0) | |||
Other than temporary losses on investments | - | - | - | (3.9) | |||
Other income, net | 0.9 | 1.3 | 3.8 | 1.5 | |||
Loss before income taxes | (18.8) | (50.2) | (22.0) | (20.1) | |||
Benefit from income taxes | 8.0 | 35.5 | 17.7 | 23.6 | |||
Net (loss) income from continuing operations | $ (10.8) | $ (14.7) | $ (4.3) | $ 3.5 |
(In Millions) | Fourth Quarter | Twelve Months | |||||
(Unaudited) | Preliminary 2010 | Actual 2009 | Preliminary 2010 | Actual 2009 | |||
EBITDA | $ 85.8 | $ 82.6 | $ 384.0 | $ 384.4 | |||
Plus: Integration costs in general and administrative (G&A) | 1.2 | 5.4 | 5.5 | 16.6 | |||
SSG purchasing co-op expenses in G&A | 0.3 | - | 5.2 | - | |||
Incremental advertising for Wendy’s new breakfast | 1.7 | - | 7.2 | - | |||
Reversal of pension withdrawal expense in cost of sales | (5.0) | - | (5.0) | - | |||
Wendy’s purchasing co-op start-up costs in G&A | - | 15.5 | - | 15.5 | |||
Facilities relocation and corporate restructuring | - | 2.1 | - | 11.0 | |||
Pension withdrawal expense in cost of sales | - | 5.0 | - | 5.0 | |||
Benefit from vacation policy standardization in G&A | - | (3.4) | - | (3.4) | |||
Benefit from vacation policy standardization in cost of sales | - | (3.9) | - | (3.9) | |||
Adjusted EBITDA | 84.0 | 103.3 | 396.9 | 425.2 | |||
Less: | |||||||
EBITDA effect of additional week in 2009 | N.A. | (13.6) | N.A. | (13.6) | |||
Normalized 52 weeks adjusted EBITDA | $ 84.0 | $ 89.7 | $ 396.9 | $ 411.6 |
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Appendix -Adjusted Restaurant Margin