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WEN » Topics » Pro Forma Adjustments

This excerpt taken from the WEN 8-K filed Jan 16, 2009.
Pro Forma Adjustments” means, as of any date of determination, in connection with the calculation of the Leverage Ratio or the Coverage Ratio for any applicable four fiscal quarter period (such period, the “Reference Period”), the following adjustments, to the extent applicable:
 
 
(i)
(x) if the Borrower or any Restricted Subsidiary has incurred any Indebtedness in excess of $5,000,000 in the aggregate during such Reference Period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Leverage Ratio or Coverage Ratio is an incurrence of Indebtedness and the Borrower or any Restricted Subsidiary has incurred Indebtedness in excess of $5,000,000 during such Reference Period, Consolidated EBITDAR, Adjusted EBITDA, Consolidated Interest Expense and Consolidated Rental Expense for such Reference Period will be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been incurred on the first day of such Reference Period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be deemed to be (i) the average daily balance of such Indebtedness during such Reference Period or such shorter period for which the revolving loans were incurred under such facility were outstanding or (ii) if such facility was created after the end of such Reference Period, the average daily balance of such Indebtedness during the period from the date such revolving loans were incurred under such facility to the date of such calculation) and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such Reference Period; or
 
   
(y) if the Borrower or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness in excess of $5,000,000 during such Reference Period that is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Leverage Ratio or Coverage Ratio involves a discharge of Indebtedness, Consolidated EBITDAR, Adjusted EBITDA, Consolidated Interest Expense and Consolidated Rental Expense for such Reference Period will be calculated after giving effect on a pro forma basis to such discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such discharge had occurred on the first day of such Reference Period;
 
   (ii)  if during such Reference Period the Borrower or any Restricted Subsidiary has made any Disposition for gross proceeds in excess of $5,000,000 in the aggregate or disposed of any company, division, operating unit, segment, business, group of related assets or line of business for gross proceeds in excess of $5,000,000 in the aggregate or if the transaction giving rise to the need to calculate the Leverage Ratio or Coverage Ratio is such a Disposition:
 
(x) the Consolidated EBITDAR and Adjusted EBITDA for such Reference Period will be reduced by an amount equal to the Consolidated EBITDAR or Adjusted EDITDA, as applicable, (if positive) directly attributable to the assets which are the subject of such disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDAR or Adjusted EBITDA, as applicable, (if negative) directly attributable thereto for such Reference Period; and
 
(y) Consolidated Interest Expense and Consolidated Rental Expense for such Reference Period will be reduced by an amount equal to the Consolidated Interest Expense or Consolidated Rental Expenses, as applicable, directly attributable to any Indebtedness of the Borrower or any Restricted Subsidiary repaid,
 
repurchased, defeased or otherwise discharged with respect to the Borrower and its continuing Restricted Subsidiaries in connection with such Disposition for such Reference Period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense or Consolidated Rental Expense, as applicable, for such Reference Period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Borrower and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);
 
 
(iii)
 if during such Reference Period the Borrower or any Restricted Subsidiary (by merger or otherwise) has made an Investment in an amount in excess of $5,000,000 in the aggregate in any Restricted Subsidiary or the Borrower (or any Person which becomes a Restricted Subsidiary or is merged with or into the Borrower or any Restricted Subsidiary) or an acquisition of assets in excess of $5,000,000 in the aggregate, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of business, Consolidated EBITDAR, Adjusted EBITDA, Consolidated Interest Expense and Consolidated Rental Expense for such Reference Period will be calculated after giving pro forma effect thereto (including the incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such Reference Period; and
   (iv)
if during such Reference Period (x) any Person that was not the Borrower or a Restricted Subsidiary that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary during such Reference Period and (y) has incurred any Indebtedness or has discharged any Indebtedness, has made any Disposition or any Investment or Acquisition of assets that would have required an adjustment pursuant to clause (i), (ii) or (iii) above if made by the Borrower or a Restricted Subsidiary during such Reference Period, Consolidated EBITDAR, Adjusted EBITDA, Consolidated Interest Expense and Consolidated Rental Expense for such Reference Period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such Reference Period.
 
For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by an Authorized Financial Officer (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act).  If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Rate Management Transaction applicable to such Indebtedness if such Rate Management Transaction has a remaining term in excess of 12 months).  If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Borrower, the interest rate shall be calculated by applying such optional rate chosen by the Borrower.
 
“
This excerpt taken from the WEN 8-K filed Dec 27, 2007.

Pro Forma Adjustments

      (a)   

To eliminate the results of operations of Deerfield, including related income taxes and minority interests, to reflect the completion of the Deerfield Sale as if it were consummated on January 2, 2006.
 
  (b)

To reflect dividend income on the Preferred Shares received in the Deerfield Sale. The Preferred Shares provide for quarterly dividends per share equal to those paid by the REIT on its common stock, but not less than $.12 per share. The dividends per share on the REIT common stock exceeded the $.12 per share with respect to each quarter during the year ended December 31, 2006 and the nine-months ended September 30, 2007 and aggregated $1.56 per share and $1.26 per share, respectively. However, pro forma dividend availability for the REIT’s common and preferred stock would have been only $1.45 per share and $1.11 per share for the year ended December 31, 2006 and the nine months ended September 30, 2007, respectively, assuming each share of the REIT’s common and preferred stock shared equally in the pro forma cash available for distribution of the combined REIT and Deerfield entities. Such pro forma dividend availability has been used for purposes of calculating this entry (b).
 
  (c)

To reflect interest income on the Notes received in the Deerfield Sale, including accretion of the difference between the principal amount and the estimated fair value of the Notes described in entry (b) to the accompanying unaudited pro forma condensed consolidated balance sheet. Such Notes bear annual interest at the three-month London Interbank Offered Rate (“LIBOR”), plus 5%. The annual rate for the calculation of the pro forma interest, other than the accretion which was determined using the interest rate method, was 10.23% based on the LIBOR rate of 5.23% as of September 30, 2007. Each 1/8% increase or decrease in the LIBOR rate would respectively positively or negatively affect pro forma income (loss) from continuing operations before income taxes and minority interests by $60,000 and $45,000 for the year ended December 31, 2006 and the nine months ended September 30, 2007, respectively.

 
  (d)

To reflect the increase in the Company’s equity in the earnings of the REIT resulting from the Company’s continuing interest in Deerfield consisting of the effect of the REIT consolidating the results of Deerfield less the effect of the distribution of approximately 120,000 REIT common shares from the Company to minority interest owners of Deerfield in connection with the Deerfield Sale.
 
  (e)

To reflect the minority interest effect of entries (b) through (d).
 
  (f)

To reflect the income tax effect of entries (b) through (d), net of the effect of entry (e), at Triarc’s incremental Federal and state income tax rate of 36%.

EXCERPTS ON THIS PAGE:

8-K
Jan 16, 2009
8-K
Dec 27, 2007

RELATED TOPICS for WEN:

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