<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 2, 1994
---------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------- ------------------
Commission File Number 1-8116
------
WENDY'S INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 31-0785108
- --------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 256, 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 614-764-3100
------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
----- -----
Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 4, 1994
- --------------------------------- -------------------------------
Common shares, $.10 stated value 101,541,000 shares
Exhibit index on page 13.
-1 of 15-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Pages
-----
PART I: Financial Information
Item 1. Financial Statements:
Consolidated Statement of Income for the quarters
and year-to-date periods ended
October 2, 1994 and October 3, 1993 3 - 4
Consolidated Balance Sheet as of October 2, 1994
and January 2, 1994 5 - 6
Consolidated Statement of Cash Flows for the
year-to-date periods ended October 2, 1994 and
October 3, 1993 7
Notes to the Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9 - 10
PART II: Other Information
Item 6 11
Signature 12
Index to Exhibits 13
Exhibit 11 - Computation of Net Income Per Share 14 - 15
-2-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED QUARTER ENDED
OCTOBER 2 OCTOBER 3
1994 1993
--------- ---------
<S> <C> <C>
REVENUES
Retail sales . . . . . . . . . . . . . . $322,430 $306,522
Royalties. . . . . . . . . . . . . . . . 29,314 28,522
Other. . . . . . . . . . . . . . . . . . 7,606 3,846
--------- ---------
359,350 338,890
--------- ---------
COSTS AND EXPENSES
Cost of sales. . . . . . . . . . . . . . 186,528 178,798
Company restaurant operating
costs . . . . . . . . . . . . . . . . . 83,536 81,555
General and administrative
expenses. . . . . . . . . . . . . . . . 23,464 21,401
Depreciation and amortization
of property and equipment . . . . . . . 17,068 16,071
Interest, net. . . . . . . . . . . . . . 2,247 2,810
--------- ---------
312,843 300,635
--------- ---------
INCOME BEFORE INCOME TAXES . . . . . . . . 46,507 38,255
INCOME TAXES . . . . . . . . . . . . . . . 16,743 13,771
--------- ---------
NET INCOME . . . . . . . . . . . . . . . . $ 29,764 $ 24,484
--------- ---------
--------- ---------
PRIMARY EARNINGS PER SHARE . . . . . . . . $.29 $.24
---- ----
---- ----
FULLY DILUTED EARNINGS PER SHARE . . . . . $.28 $.23
---- ----
---- ----
DIVIDENDS PER SHARE. . . . . . . . . . . . $.06 $.06
---- ----
---- ----
PRIMARY SHARES . . . . . . . . . . . . . . 104,055 102,905
--------- ---------
--------- ---------
FULLY DILUTED SHARES . . . . . . . . . . . 112,185 113,014
--------- ---------
--------- ---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-3-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR-TO-DATE ENDED YEAR-TO-DATE ENDED
OCTOBER 2 OCTOBER 3
1994 1993
------ ------
<S> <C> <C>
REVENUES
Retail sales . . . . . . . . . . . . $ 940,647 $900,654
Royalties. . . . . . . . . . . . . . 83,665 78,795
Other. . . . . . . . . . . . . . . . 22,032 14,972
--------- ---------
1,046,344 994,421
--------- ---------
COSTS AND EXPENSES
Cost of sales. . . . . . . . . . . . 547,324 530,115
Company restaurant operating
costs . . . . . . . . . . . . . . . 248,291 241,374
General and administrative
expenses. . . . . . . . . . . . . . 73,990 68,471
Depreciation and amortization
of property and equipment . . . . . 50,567 49,088
Interest, net. . . . . . . . . . . . 8,049 9,006
--------- ---------
928,221 898,054
--------- ---------
INCOME BEFORE INCOME TAXES . . . . . . 118,123 96,367
INCOME TAXES . . . . . . . . . . . . . 42,525 34,692
--------- ---------
NET INCOME . . . . . . . . . . . . . . $ 75,598 $ 61,675
--------- ---------
--------- ---------
PRIMARY EARNINGS PER SHARE . . . . . . $.72 $.60
---- ----
---- ----
FULLY DILUTED EARNINGS PER SHARE . . . $.70 $.59
---- ----
---- ----
DIVIDENDS PER SHARE. . . . . . . . . . $.18 $.18
---- ----
---- ----
PRIMARY SHARES . . . . . . . . . . . . 104,365 102,567
------- -------
------- -------
FULLY DILUTED SHARES . . . . . . . . . 112,495 110,882
------- -------
------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-4-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(IN THOUSANDS)
OCTOBER 2 JANUARY 2
1994 1994
--------- ---------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents. . . . . . $ 117,652 $ 71,698
Short-term investments, at cost
which approximates market . . . . . 18,314 40,647
Accounts receivable, net . . . . . . 25,590 27,381
Notes receivable, net. . . . . . . . 4,445 5,259
Deferred income taxes. . . . . . . . 9,273 12,244
Inventories and other. . . . . . . . 19,207 21,478
---------- ----------
194,481 178,707
---------- ----------
PROPERTY AND EQUIPMENT, AT COST
Land . . . . . . . . . . . . . . . . 217,193 203,651
Buildings. . . . . . . . . . . . . . 347,434 329,023
Leasehold improvements . . . . . . . 188,156 182,519
Restaurant equipment . . . . . . . . 322,794 289,242
Other equipment. . . . . . . . . . . 51,497 65,197
Capital leases . . . . . . . . . . . 64,732 64,148
---------- ----------
1,191,806 1,133,780
Accumulated depreciation
and amortization. . . . . . . . . . (451,581) (426,496)
---------- ----------
740,225 707,284
---------- ----------
COST IN EXCESS OF NET ASSETS
ACQUIRED, NET . . . . . . . . . . . . 30,218 24,314
DEFERRED INCOME TAXES. . . . . . . . . 14,664 15,250
OTHER ASSETS . . . . . . . . . . . . . 73,095 70,931
---------- ----------
$1,052,683 $ 996,486
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-5-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(IN THOUSANDS)
OCTOBER 2 JANUARY 2
1994 1994
--------- ---------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and drafts payable. . . . . . . . $ 52,606 $ 68,735
Accrued expenses:
Salaries and wages . . . . . . . . . . . 16,736 16,288
Taxes. . . . . . . . . . . . . . . . . . 15,875 14,935
Insurance. . . . . . . . . . . . . . . . 23,687 21,345
Other. . . . . . . . . . . . . . . . . . 16,075 11,160
Income taxes . . . . . . . . . . . . . . . 7,056 2,896
Deferred income taxes. . . . . . . . . . . 1,585 2,299
Current portion of long-term
obligations . . . . . . . . . . . . . . 56,147 5,611
---------- ----------
189,767 143,269
---------- ----------
LONG-TERM OBLIGATIONS
Term debt. . . . . . . . . . . . . . . . . 106,526 156,741
Capital leases . . . . . . . . . . . . . . 41,971 43,892
---------- ----------
148,497 200,633
---------- ----------
DEFERRED INCOME TAXES. . . . . . . . . . . . 37,835 40,859
OTHER LONG-TERM LIABILITIES. . . . . . . . . 11,307 10,930
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock,
Authorized: 250,000 shares
Common stock, $.10 stated value
Authorized: 200,000,000 shares
Issued: 101,533,000 and
100,823,000 shares, respectively . . . . 10,153 10,082
Capital in excess of stated value. . . . . 168,476 161,238
Retained earnings. . . . . . . . . . . . . 488,247 430,866
Translation adjustments. . . . . . . . . . 1,139 1,347
Pension liability adjustment . . . . . . . (2,572) (2,572)
---------- ----------
665,443 600,961
---------- ----------
Treasury stock at cost: 29,000 shares. . . (166) (166)
---------- ----------
665,277 600,795
---------- ----------
$1,052,683 $ 996,486
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-6-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
YEAR-TO-DATE ENDED YEAR-TO-DATE ENDED
OCTOBER 2 OCTOBER 3
1994 1993
------ ------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES. . . . $126,451 $111,514
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from asset dispositions . . . . . . . 23,356 13,082
Capital expenditures . . . . . . . . . . . . . (97,935) (74,516)
Acquisition of franchises. . . . . . . . . . . (11,572) (8,685)
Investment in marketable securities. . . . . . (909) (8,123)
Proceeds from marketable securities. . . . . . 23,242 -
Other investing activities . . . . . . . . . . 116 (1,560)
-------- --------
Net cash used in investing
activities. . . . . . . . . . . . . . . . . (63,702) (79,802)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common
stock . . . . . . . . . . . . . . . . . . . . 5,445 6,565
Principal payments on long-term
obligations . . . . . . . . . . . . . . . . . (4,022) (3,902)
Dividends paid . . . . . . . . . . . . . . . . (18,218) (17,834)
-------- --------
Net cash used in financing activities. . . . (16,795) (15,171)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . 45,954 16,541
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD. . . . . . . . . . . . . . . . . . . . . 71,698 77,412
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . $117,652 $93,953
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Interest paid. . . . . . . . . . . . . . . . . $ 10,945 $ 18,960
Interest received. . . . . . . . . . . . . . . 5,852 7,181
Income taxes paid. . . . . . . . . . . . . . . 36,773 30,203
Acquisition of franchises:
Fair value of assets acquired, net . . . . . . $14,685 $13,170
Cash paid. . . . . . . . . . . . . . . . . . . 11,572 8,685
-------- --------
Liabilities assumed. . . . . . . . . . . . $ 3,113 $ 4,485
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-7-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. MANAGEMENT'S STATEMENT
In the opinion of management the accompanying unaudited financial statements
contain all adjustments (all of which are normal and recurring in nature)
necessary to present fairly the financial position of Wendy's International,
Inc. and Subsidiaries (the company) at October 2, 1994, and January 2, 1994
and the results of operations for the quarters and year-to-date periods ended
October 2, 1994 and October 3, 1993 and cash flows for the year-to-date
periods ended October 2, 1994 and October 3, 1993. The Notes to the
Consolidated Financial Statements which are contained in the 1993 Form 10-K
should be read in conjunction with these Consolidated Financial Statements.
NOTE 2. ACQUISITIONS AND DISPOSITIONS
In the first quarter of 1994 and 1993, one restaurant was franchised for a net
pretax gain of $25,000 and one restaurant for a net pretax gain of $400,000,
respectively. During the second quarters of 1994 and 1993, the company
franchised 23 restaurants for a net pretax gain of $6,700,000 and 61
restaurants for a net pretax gain of $5,000,000, respectively. During the
third quarters of 1994 and 1993, 14 restaurants were franchised for a net
pretax gain of $3,700,000 and 13 restaurants for a net pretax gain of $45,000,
respectively.
During the first quarter of 1993, the company acquired 30 restaurants, 27 of
which were in the Ft. Lauderdale, Florida market for approximately $8,500,000.
During the second quarter of 1994, the company acquired 30 restaurants, 29 of
which were in the Kansas City market for approximately $11,000,000. During the
third quarters of 1994 and 1993 the company acquired one restaurant for
$164,000 and one restaurant for $153,000, respectively.
-8-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The company recorded net income of $29.8 million for the third quarter ended
October 2, 1994, while $24.5 million was reported for the third quarter ended
October 3, 1993. Net income for the year-to-date period was $75.6 million for
1994 compared with $61.7 million for 1993.
RETAIL SALES
Domestic retail sales increased 5.3% for the third quarter of 1994 compared to
the third quarter of 1993. This was primarily a result of a 4.6% increase in
average restaurants open. Year-to-date domestic retail sales increased $37.3
million in 1994 compared with 1993 reflecting a 2.7% increase in average
domestic net sales. Selling prices remained essentially constant throughout the
year.
The improvement in average domestic net sales is a result of the value menu
strategy, such as Combo Meals, Kids' Meals, and Super Value Menu, solid
restaurant operations, and effective marketing campaigns.
Average net sales per domestic Wendy's restaurant for the quarters and
year-to-date periods ended October 2, 1994 and October 3, 1993 were as follows:
<TABLE>
<CAPTION>
Third Quarter % Year-to-date %
1994 1993 Increase 1994 1993 Increase
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Company. . . . . . . . $254,450 $252,750 .7 $752,950 $733,500 2.7
Franchise. . . . . . . 253,200 249,450 1.5 737,550 720,150 2.4
Total Domestic . . . . 253,600 250,450 1.3 742,150 724,250 2.5
</TABLE>
The number of systemwide Wendy's restaurants open as of October 2, 1994 and
October 3, 1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
----- -----
<S> <C> <C>
Company. . . . . . . . . . . . 1,246 1,198
Franchise. . . . . . . . . . . 3,076 2,887
----- -----
Total Wendy's. . . . . . . . . 4,322 4,085
----- -----
----- -----
</TABLE>
COST OF SALES AND RESTAURANT OPERATING COSTS
The company restaurant operating profit margin increased in the third quarter
1994 to 16.2% versus 15.1% for 1993. The restaurant operating margin increased
to 15.4% for the year-to-date 1994 period from 14.3% in 1993. The increase
reflected an improvement in domestic cost of sales related to lower beef,
chicken and produce prices partly offset by higher labor costs. Restaurant
operating costs were reduced, as a percent of retail sales, in both the third
quarter and year-to-date periods due to lower local advertising and utility
costs.
ROYALTIES
Royalties before reserve provisions increased $2.1 million in the third quarter
1994 compared with 1993. This was primarily a result of increases in franchise
domestic average net sales of 1.5% over the third quarter of 1993 and an
increase of 149 average domestic restaurants open. Royalties before reserve
provisions increased $7.6 million for the year-to-date period of 1994 with
franchise domestic average net sales up 2.4% and 171 more average domestic
restaurants open. Reserves provided were $918,000 for the third quarter 1994 and
$2.9 million for the year-to-date 1994. This compares to a net reserve reversal
of $425,000 for the third quarter 1993 and
-9-
<PAGE>
reserves provided of $161,000 for the year to date 1993. In both 1994 and 1993
provisions include domestic and international reserves however, in 1993 the
reductions were the result of favorable developments for certain domestic
franchises.
OTHER REVENUES
Other revenues increased $3.8 million over the third quarter of 1993. This was
primarily a result of pretax gains related to franchising restaurants of $3.7
million in the third quarter 1994 versus $45,000 in 1993. For the year-to-date
periods other revenue increased $7.1 million reflecting increased gains on
franchising restaurants of $5.0 million and reserve provisions in 1993 of $1.2
million related to surplus property held for disposition and potential casualty
losses.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the third quarter of 1994 were 6.5% of
total revenues versus 6.3% in 1993. For the year-to-date 1994 general and
administrative expenses were 7.1% versus 6.9% in 1993. This was a $2.1 million
increase for the quarter comparison and a $5.5 million increase for the
year-to-date comparison which primarily reflects increases in salaries and
benefits of $828,000 for the quarter and $4.3 million for the year-to-date
periods. This was a result of annual employee merit and performance pay
increases and minimal increases in staffing of overhead personnel throughout
1993 and the year-to-date 1994 to support new restaurant development planned for
1994 and beyond. The third quarter 1994 also reflects increases in legal and
professional fees.
FINANCIAL CONDITION
The company's financial condition remains solid at the end of the third quarter
of 1994. The debt to equity and debt to total capitalization ratios were 22% and
18%, respectively, at October 2, 1994. These compare to a debt to equity ratio
and debt to total capitalization ratio of 33% and 25%, respectively, at fiscal
year-end 1993. The decline in these ratios reflects the transfer of long-term
debt to current liabilities as $50 million of 12 1/8% Notes is payable April 1,
1995. Capital expenditures amounted to $97.9 million for 1994 compared to $74.5
million for 1993. Cash generated from operating activities for the year-to-date
period of 1994 exceeded capital expenditures and dividend payments.
OUTLOOK
The company continues to employ its strategies as outlined in the company's 1993
Annual Report. As was expected, competition in the quick-service restaurant
industry has been intense and will remain so in the foreseeable future. Pressure
on retail sales appears to be continuing into the fourth quarter 1994. Emphasis
continues to be on solid restaurant operations, new products, effective
marketing, new restaurant development, and the overall financial health of the
entire system. The company anticipates that as many as 350 new restaurants will
be opened or under construction systemwide (both company and franchise) during
1994. Through October 2, 1994, the company and its franchisees opened 192 new
restaurants with another 101 under construction. Cash flow from operations, cash
and investments on hand, and possible asset sales should adequately provide for
projected cash requirements. If additional cash is needed for future
acquisitions of restaurants from franchisees, or for other corporate purposes,
the company believes it would be able to obtain additional cash through existing
revolving credit agreements, new revolving credit agreements which the company
believes it could execute, or through the issuance of debt securities.
-10-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Index to Exhibits on Page 13.
(b) No report on Form 8-K was filed during the quarter ended October 2, 1994.
-11-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WENDY'S INTERNATIONAL, INC.
---------------------------
(Registrant)
Date: 11/10/94 /s/ John K. Casey
---------------- ------------------------
John K. Casey
Vice Chairman and Chief
Financial Officer
-12-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Description Page No.
------- ----------- --------
11 Computation of Net 14 - 15
Income Per Common Share.
-13-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED QUARTER ENDED
OCTOBER 2 OCTOBER 3
1994 1993
-------- --------
<S> <C> <C>
Weighted average number
of common shares outstanding. . . . . . . . . . 101,354 99,453
Add net shares issuable pursuant
to employee stock option plans
less shares assumed repurchased
at the average market price. . . . . . . . . . 2,701 3,452
-------- --------
Number of shares for computation of
primary earnings per share. . . . . . . . . . . 104,055 102,905
Add net additional shares issuable
pursuant to employee stock option plans
at period-end market price. . . . . . . . . . 255
Add additional shares issuable
assuming conversion of
subordinated debentures . . . . . . . . . . . 8,130 9,854
-------- --------
Number of shares for computation of
fully diluted earnings per share. . . . . . . . 112,185 113,014
-------- --------
-------- --------
Net income for computation of primary
earnings per share. . . . . . . . . . . . . . . $ 29,764 $ 24,484
Add savings on assumed dilutive conversion
of subordinated debentures net of tax. . . . . 1,136 1,465
-------- --------
Net income for computation of fully diluted
earnings per share. . . . . . . . . . . . . . . $ 30,900 $ 25,949
-------- --------
-------- --------
Net income per share:
Assuming primary dilution . . . . . . . . . . . $.29 $.24
---- ----
---- ----
Assuming full dilution. . . . . . . . . . . . . $.28 $.23
---- ----
---- ----
</TABLE>
-14-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR-TO-DATE YEAR-TO-DATE
ENDED ENDED
OCTOBER 2 OCTOBER 3
1994 1993
-------- --------
<S> <C> <C>
Weighted average number
of common shares outstanding. . . . . . . . . . 101,151 99,162
Add net shares issuable pursuant
to employee stock option plans
less shares assumed repurchased
at the average market price. . . . . . . . . . 3,214 3,405
-------- --------
Number of shares for computation of
primary earnings per share. . . . . . . . . . . 104,365 102,567
Add net additional shares issuable
pursuant to employee stock option plans
at period-end market price. . . . . . . . . . 185
Add additional shares issuable
assuming conversion of
subordinated debentures . . . . . . . . . . . 8,130 8,130
-------- --------
Number of shares for computation of
fully diluted earnings per share. . . . . . . . 112,495 110,882
Add additional shares issuable
assuming conversion of
subordinated debentures (a) . . . . . . . . . 1,724
Number of shares for computation of -------- --------
fully diluted earnings per share (a). . . . . . 112,495 112,606
-------- --------
-------- --------
Net income for computation of primary
earnings per share. . . . . . . . . . . . . . . $ 75,598 $ 61,675
Add savings on assumed dilutive conversion
of subordinated debentures net of tax . . . . 3,408 3,351
-------- --------
Net income for computation of fully diluted
earnings per share. . . . . . . . . . . . . . . 79,006 65,026
Additional savings on assumed conversion
of subordinated debentures (a). . . . . . . . 1,044
-------- --------
Net income for computation of fully diluted
earnings per share (a). . . . . . . . . . . . . $ 79,006 $ 66,070
-------- --------
-------- --------
Net income per share:
Assuming primary dilution . . . . . . . . . . . $.72 $.60
---- ----
---- ----
Assuming full dilution. . . . . . . . . . . . . $.70 $.59
---- ----
---- ----
<FN>
(a) THIS CALCULATION IS SUBMITTED IN ACCORDANCE WITH REGULATION S-K ITEM
601(B)(11) ALTHOUGH IT IS CONTRARY TO PARAGRAPH 40 OF APB OPINION NO. 15 BECAUSE
IT PRODUCES AN ANTI-DILUTIVE RESULT.
</TABLE>
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and consolidated statement of income and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-01-1995
<PERIOD-START> JAN-03-1994
<PERIOD-END> OCT-02-1994
<CASH> 117,652
<SECURITIES> 18,314
<RECEIVABLES> 30,035<F1>
<ALLOWANCES> 0
<INVENTORY> 19,207
<CURRENT-ASSETS> 194,481
<PP&E> 1,191,806
<DEPRECIATION> 451,581
<TOTAL-ASSETS> 1,052,683
<CURRENT-LIABILITIES> 189,767
<BONDS> 106,526
<COMMON> 10,153
0
0
<OTHER-SE> 655,124
<TOTAL-LIABILITY-AND-EQUITY> 1,052,683
<SALES> 940,647
<TOTAL-REVENUES> 1,046,344
<CGS> 547,324
<TOTAL-COSTS> 795,615<F2>
<OTHER-EXPENSES> 124,557
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,049<F3>
<INCOME-PRETAX> 118,123
<INCOME-TAX> 42,525
<INCOME-CONTINUING> 75,598
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,598
<EPS-PRIMARY> .72
<EPS-DILUTED> .70
<FN>
<F1>Represents accounts and notes receivables, net
<F2>Cost of goods sold and company restaurant operating costs
<F3>Represents interest, net.
</FN>
</TABLE>
