What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-03 compared with 2020-02-26 · 28 added, 43 removed, 58 unchanged (55% of the section changed)

4 unchanged sentences

However, the Company is currently authorized to issue up to 100 million shares of preferred stock.

During the 2018 fiscal year, the Company paid quarterly cash dividends of $0.085 per share of common stock.

During the first three quarters of the 2019 fiscal year, the Company paid quarterly cash dividends of $0.10 per share of common stock.

During the fourth quarter of the 2019 fiscal year, the Company paid a quarterly cash dividend of $0.12 per share of common stock.

During the first quarter of the 2020 fiscal year, the Company paid a quarterly cash dividend of $0.12 per share of common stock.

During the second and third quarters of the 2020 fiscal year, the Company paid quarterly cash dividends of $0.05 per share of common stock.

During the fourth quarter of 2020, the Company paid a quarterly cash dividend of $0.07 per share of common stock.

During the first quarter of 2021, the Company declared a dividend of $0.09 per share of common stock to be paid on March 15, 2021 to shareholders of record as of March 5, 2021.

4 unchanged sentences

Issuer Repurchases of Equity Securities

Total Number of Shares Purchased (1)

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plan

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (2)

Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (2)

September 28, 2020

1 unchanged sentence

November 2, 2020

December 1, 2019 (3)

December 2, 2019

December 29, 2019

November 29, 2020 249,262 $ 22.56 248,033 $ 76,122,127

November 30, 2020

January 3, 2021 387,018 $ 22.28 377,359 $ 67,715,469

Total 727,933 $ 22.54 711,677 $ 67,715,469

(1) Includes 16,256 shares reacquired by the Company from holders of share-based awards to satisfy certain requirements associated with the vesting or exercise of the respective award.

The shares were valued at the average of the high and low trading prices of our common stock on the vesting or exercise date of such awards.

In February 2019, our Board of Directors authorized the repurchase of up to $225.0 million of our common stock through March 1, 2020, when and if market conditions warrant and to the extent legally permissible.

In November 2019, the Company entered into an accelerated share repurchase agreement (the “2019 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase program.

Under the 2019 ASR Agreement, the Company paid the financial institution an initial purchase price of $100.0 million in cash and received an initial delivery of 4.1 million shares of common stock, representing an estimated 85% of the total shares expected to be delivered under the 2019 ASR Agreement.

Subsequent to December 29, 2019 through February 18, 2020 , the Company repurchased 1.3 million shares with an aggregate purchase price of $28.8 million , excluding commissions.

Additionally, in February 2020, the Company completed the 2019 ASR

Agreement and received an additional 0.6 million shares of common stock.

The total number of shares of common stock ultimately purchased by the Company under the 2019 ASR Agreement was based on the average of the daily volume weighted average prices of the common stock during the term of the 2019 ASR Agreement, less an agreed upon discount.

In total, 4.7 million shares were delivered under the 2019 ASR Agreement at an average purchase price of $21.37 per share.

With the completion of the 2019 ASR Agreement, the Company completed its $225.0 million February 2019 authorization.

In February 2020, our Board of Directors authorized the repurchase of up to $100.0 million of our common stock through February 28, 2021, when and if market conditions warrant and to the extent legally permissible.

The shares were valued at the fair market value of the Company’s common stock on the vesting or exercise date of such awards, as set forth in the applicable plan document.

(2) In February 2020, our Board of Directors authorized the repurchase of up to $100.0 million of our common stock through February 28, 2021, when and if market conditions warranted and to the extent legally permissible.

As previously announced, in March 2020, the Company temporarily suspended all share repurchase activity in connection with the Company’s response to the COVID-19 pandemic.

In July 2020, our Board of Directors approved an extension of the February 2020 authorization by one year, through February 28, 2022, when and if market and economic conditions warrant and to the extent legally permissible.

The Company resumed share repurchases in August 2020.

Subsequent to January 3, 2021 through February 23, 2021, the Company repurchased 0.5 million shares with an aggregate purchase price of $9.6 million, excluding commissions.

Selected Financial Data .

2 unchanged sentences

Year Ended (1) (2)

2020 2019 2018 2017 2016

(In millions, except per share amounts)

Sales (3) $ 722.8 $ 707.5 $ 651.6 $ 622.8 $ 920.8

Franchise royalty revenue and fees (3) 444.7 429.0 409.0 410.5 371.5

1 unchanged sentence

Advertising funds revenue 333.7 339.4 326.0 — —

Revenues 1,733.8 1,709.0 1,589.9 1,223.4 1,435.4

Cost of sales (3) 614.9 597.5 548.6 517.9 752.1

5 unchanged sentences

Loss on early extinguishment of debt (8) — (8.5) (11.5) — —

Investment income, net (10)

Investment (loss) income, net (9) (0.2) 25.6 450.7 2.7 0.7

(Provision for) benefit from income taxes (10) (35.0) (34.6) (114.8) 93.0 (72.1)

Income from continuing operations

Net income from discontinued operations

Basic income per share:

Continuing operations

Discontinued operations

Diluted income per share:

Continuing operations

Discontinued operations

$ 117.8 $ 136.9 $ 460.1 $ 194.0 $ 129.6

Net income per share:

Basic $ .53 $ .60 $ 1.93 $ .79 $ .49

Diluted .52 .58 1.88 .77 .49

Dividends per share $ .29 $ .42 $ .34 $ .28 $ .245

2 unchanged sentences

Capital expenditures 69.0 74.5 69.9 81.7 150.0

December 29, 2019

December 30, 2018

December 31, 2017

January 1, 2017

January 3, 2016

January 3, 2021 December 29, 2019 December 30, 2018 December 31, 2017 January 1, 2017

(In millions)

4 unchanged sentences

_______________

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended December 29, 2019 ” or “ 2019 ,” which consisted of 52 weeks, (2) “the year ended December 30, 2018 ” or “ 2018 ,” which consisted of 52 weeks, (3) “the year ended December 31, 2017 ” or “ 2017 ,” which consisted of 52 weeks, (4) “the year ended January 1, 2017 ” or “2016,” which consisted of 52 weeks, and (5) “the year ended January 3, 2016 ” or “2015,” which consisted of 53 weeks.

In May 2015, Wendy’s completed the sale of 100% of its membership interest in The New Bakery Company, LLC and its subsidiaries (collectively, the “Bakery”).

The Bakery’s operating results through its May 2015 date of sale are classified as discontinued operations.

(1) The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended January 3, 2021” or “2020,” (2) “the year ended December 29, 2019” or “2019,” (3) “the year ended December 30, 2018” or “2018,” (4) “the year ended December 31, 2017” or “2017” and (5) “the year ended January 1, 2017” or “2016.” 2020 consisted of 53 weeks, while each of 2019, 2018, 2017 and 2016 consisted of 52 weeks.

(2) The Company applied the revenue recognition guidance effective at the beginning of 2018 using the modified retrospective method, whereby the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018.

6 unchanged sentences

See Note 3 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

Reorganization and realignment costs include the impact of (1) Wendy’s information technology (“IT”) realignment plan in 2019, (2) Wendy’s May 2017 general and administrative (“G&A”) realignment plan in 2017 through 2019, (3) costs related to Wendy’s system optimization initiative in 2015 through 2019 and (4) Wendy’s November 2014 G&A realignment plan in 2015 through 2016.

(6) Reorganization and realignment costs include the impact of (1) Wendy’s operations and field realignment plan in 2020, (2) Wendy’s information technology (“IT”) realignment plan in 2019 through 2020, (3) Wendy’s May 2017 general and administrative (“G&A”) realignment plan in 2017 through 2020, (4) costs related to Wendy’s system optimization initiative in 2016 through 2020 and (5) Wendy’s November 2014 G&A realignment plan in 2016.

See Note 5 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

Impairment of long-lived assets primarily includes impairment charges on (1) restaurant-level assets resulting from the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications, (2) restaurant-level assets resulting from the closing of Company-operated restaurants and classifying such surplus properties as held for sale and (3) restaurant-level assets resulting from the deterioration in operating performance of certain Company-operated restaurants.

(7) Impairment of long-lived assets primarily includes impairment charges on (1) restaurant-level assets resulting from the deterioration in operating performance of certain Company-operated restaurants, (2) restaurant-level assets resulting from the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications, and (3) restaurant-level assets resulting from the closing of Company-operated restaurants and classifying such surplus properties as held for sale.

See Note 17 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

1 unchanged sentence

See Note 12 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

Investment income, net includes (1) a cash settlement related to a previously held investment during 2019, (2) the gain on sale of our remaining ownership interest in Inspire Brands, Inc.

(“Inspire Brands”) (formerly Arby’s) during 2018 and (3) the effect of dividends received from our investment in Inspire Brands during 2015.

(9) Investment (loss) income, net includes (1) a cash settlement related to a previously held investment during 2019 and (2) the gain on sale of our remaining ownership interest in Inspire Brands, Inc.

(“Inspire Brands”) (formerly Arby’s) during 2018.

See Note 8 and Note 18 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

1 unchanged sentence

See Note 14 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

In connection with the adoption of the new accounting guidance for leases during the first quarter of 2019, the Company reclassified current and long-term finance lease liabilities to “ Current portion of finance lease liabilities ” and “ Long-term finance lease liabilities ,” respectively, which were previously recorded to “ Current portion of long-term debt ” and “ Long-term debt ,” respectively.

The prior periods reflect the reclassification of these liabilities to conform to the current year presentation.

See Note 1 of the Financial Statements and Supplementary Data contained in Item 8 herein for further discussion.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity