Condensed Consolidating Financial Statements

NPC’s obligations under the 10 1/2% Senior Notes due 2020 and Senior Secured Credit Facilities are fully guaranteed by Holdings. As of the date hereof, Holdings’ only material asset is 100% of the stock of NPC. The remaining co-issuers with NPC, NPCQB and NPC Operating Company B, Inc. (“NPC Op Co B”) are 100% owned by NPC. NPCQB did not have any assets, operations or cash flows prior to completing acquisitions of Wendy’s restaurants during the third and fourth quarters of fiscal 2013. NPC Op Co B does not have any assets, operations or cash flows as of July 1, 2014. Holdings and subsidiary guarantees are joint and several, full and unconditional. The following summarizes the Company’s condensed consolidating information as of July 1, 2014 and December 31, 2013, and for each of the 13-week and 26-week periods ended July 1, 2014 and June 25, 2013 (in thousands):

Condensed Consolidating Statements of Operations




	13 Weeks Ended July 1, 2014
	Parent			Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings			Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations		Consolidated
Total sales	$	—		$	252,847		$	33,059	$	—	$	—	$	285,906
Total costs and expenses	—			247,780			31,823		—		—		279,603
Operating income	—			5,067			1,236		—		—		6,303
Interest expense	—			10,042			—		—		—		10,042
Equity in net (loss) income of subsidiary	(1,374		)	797			—		—		577		—
(Loss) income before income taxes	(1,374		)	(4,178		)	1,236		—		577		(3,739		)
Income tax (benefit) expense	—			(2,804		)	439		—		—		(2,365		)
Net (loss) income	$	(1,374	)	$	(1,374	)	$	797	$	—	$	577	$	(1,374	)




	13 Weeks Ended June 25, 2013
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	261,958	$	—	$	—	$	—		$	261,958
Total costs and expenses	—		241,044		—		—		—			241,044
Operating income	—		20,914		—		—		—			20,914
Interest expense	—		10,237		—		—		—			10,237
Equity in net income of subsidiary	8,088		—		—		—		(8,088		)	—
Income before income taxes	8,088		10,677		—		—		(8,088		)	10,677
Income tax expense	—		2,589		—		—		—			2,589
Net income	$	8,088	$	8,088	$	—	$	—	$	(8,088	)	$	8,088



	26 Weeks Ended July 1, 2014
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	519,215		$	62,944	$	—	$	—		$	582,159
Total costs and expenses	—		499,750			61,709		—		—			561,459
Operating income	—		19,465			1,235		—		—			20,700
Interest expense	—		20,204			—		—		—			20,204
Equity in net income of subsidiary	1,582		788			—		—		(2,370		)	—
Income before income taxes	1,582		49			1,235		—		(2,370		)	496
Income tax (benefit) expense	—		(1,533		)	447		—		—			(1,086		)
Net income	$	1,582	$	1,582		$	788	$	—	$	(2,370	)	$	1,582



	26 Weeks Ended June 25, 2013
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	540,927	$	—	$	—	$	—		$	540,927
Total costs and expenses	—		494,162		—		—		—			494,162
Operating income	—		46,765		—		—		—			46,765
Interest expense	—		20,477		—		—		—			20,477
Equity in net income of subsidiary	21,332		—		—		—		(21,332		)	—
Income before income taxes	21,332		26,288		—		—		(21,332		)	26,288
Income tax expense	—		4,956		—		—		—			4,956
Net income	$	21,332	$	21,332	$	—	$	—	$	(21,332	)	$	21,332

Condensed Consolidating Balance Sheet



	July 1, 2014
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	79,865	$	4,409	$	—	$	—		$	84,274
Facilities and equipment, net	—		163,188		17,429		—		—			180,617
Franchise rights, net	—		600,215		31,186		—		—			631,401
Goodwill	—		290,502		2,136		—		—			292,638
Investment in subsidiary	266,735		44,144		—		—		(310,879		)	—
Other assets, net	—		43,390		1,003		—		—			44,393
Total assets	$	266,735	$	1,221,304	$	56,163	$	—	$	(310,879	)	$	1,233,323
Liabilities and member’s equity:
Current liabilities	$	—	$	94,851	$	9,365	$	—	$	—		$	104,216
Long-term debt	—		592,302		—		—		—			592,302
Other liabilities and deferred items	—		56,436		2,289		—		—			58,725
Deferred income taxes	—		210,980		365		—		—			211,345
Member’s equity	266,735		266,735		44,144		—		(310,879		)	266,735
Total liabilities and member’s equity	$	266,735	$	1,221,304	$	56,163	$	—	$	(310,879	)	$	1,233,323



	December 31, 2013
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	53,364	$	3,740	$	—	$	—		$	57,104
Facilities and equipment, net	—		152,810		17,140		—		—			169,950
Franchise rights, net	—		607,880		32,271		—		—			640,151
Goodwill	—		290,502		2,121		—		—			292,623
Investment in subsidiary	265,326		50,978		—		—		(316,304		)	—
Other assets, net	—		44,273		1,011		—		—			45,284
Total assets	$	265,326	$	1,199,807	$	56,283	$	—	$	(316,304	)	$	1,205,112
Liabilities and member’s equity:
Current liabilities	$	—	$	100,766	$	4,302	$	—	$	—		$	105,068
Long-term debt	—		561,687		—		—		—			561,687
Other liabilities and deferred items	—		58,060		629		—		—			58,689
Deferred income taxes	—		214,081		374		—		—			214,455
Member’s equity	265,326		265,213		50,978		—		(316,304		)	265,213
Total liabilities and member’s equity	$	265,326	$	1,199,807	$	56,283	$	—	$	(316,304	)	$	1,205,112

Condensed Consolidating Statements of Cash Flows



	26 Weeks Ended July 1, 2014
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Operating activities:
Net cash flows provided by operating activities	$	—	$	31,824		$	9,459		$	—	$	—		$	41,283
Investing activities:
Capital expenditures	—		(32,895		)	(2,210		)	—		—			(35,105		)
Return of investment in NPCQB	—		7,622			—			—		(7,622		)	—
Proceeds from sale or disposition of assets	—		2,351			22			—		—			2,373
Net cash flows used in investing activities	—		(22,922		)	(2,188		)	—		(7,622		)	(32,732		)
Financing activities:
Payment of accrued purchase price to sellers	—		(10,875		)	—			—		—			(10,875		)
Net payments on debt	—		(8,665		)	—			—		—			(8,665		)
Issuance of debt	—		40,000			—			—		—			40,000
Distribution to parent	—		—			(7,622		)	—		7,622			—
Other	—		(753		)	—			—		—			(753		)
Net cash flows provided by (used in) financing activities	—		19,707			(7,622		)	—		7,622			19,707
Net change in cash and cash equivalents	—		28,609			(351		)	—		—			28,258
Beginning cash and cash equivalents	—		19,170			865			—		—			20,035
Ending cash and cash equivalents	$	—	$	47,779		$	514		$	—	$	—		$	48,293



	26 Weeks Ended June 25, 2013
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations		Consolidated
Operating activities:
Net cash flows provided by operating activities	$	—	$	66,792		$	—	$	—	$	—	$	66,792
Investing activities:
Capital expenditures	—		(22,102		)	—		—		—		(22,102		)
Proceeds from sale or disposition of assets	—		540			—		—		—		540
Net cash flows used in investing activities	—		(21,562		)	—		—		—		(21,562		)
Financing activities:
Net cash flows used in financing activities	—		(2,938		)	—		—		—		(2,938		)
Net change in cash and cash equivalents	—		42,292			—		—		—		42,292
Beginning cash and cash equivalents	—		25,493			—		—		—		25,493
Ending cash and cash equivalents	$	—	$	67,785		$	—	$	—	$	—	$	67,785