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 September 30, 2014. Holdings and subsidiary guarantees are joint and several, full and unconditional. The following summarizes the Company’s condensed consolidating information as of September 30, 2014 and December 31, 2013, and for each of the 13-week and 39-week periods ended September 30, 2014 and September 24, 2013 (in thousands):

Condensed Consolidating Statements of Income




	13 Weeks Ended September 30, 2014
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	251,827		$	47,772	$	—	$	—		$	299,599
Total costs and expenses	—		245,803			46,823		—		—			292,626
Operating income	—		6,024			949		—		—			6,973
Interest expense	—		10,344			—		—		—			10,344
Equity in net income of subsidiary	162		303			—		—		(465		)	—
Income (loss) before income taxes	162		(4,017		)	949		—		(465		)	(3,371		)
Income tax (benefit) expense	—		(4,179		)	646		—		—			(3,533		)
Net income	$	162	$	162		$	303	$	—	$	(465	)	$	162




	13 Weeks Ended September 24, 2013
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	252,798		$	8,007		$	—	$	—		$	260,805
Total costs and expenses	—		240,103			8,419			—		—			248,522
Operating income (loss)	—		12,695			(412		)	—		—			12,283
Interest expense	—		10,243			—			—		—			10,243
Equity in net income of subsidiary	2,562		—			—			—		(2,562		)	—
Income (loss) before income taxes	2,562		2,452			(412		)	—		(2,562		)	2,040
Income tax benefit	—		(427		)	(95		)	—		—			(522		)
Net income (loss)	$	2,562	$	2,879		$	(317	)	$	—	$	(2,562	)	$	2,562



	39 Weeks Ended September 30, 2014
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	771,042		$	110,716	$	—	$	—		$	881,758
Total costs and expenses	—		745,553			108,532		—		—			854,085
Operating income	—		25,489			2,184		—		—			27,673
Interest expense	—		30,548			—		—		—			30,548
Equity in net income of subsidiary	1,744		1,091			—		—		(2,835		)	—
Income (loss) before income taxes	1,744		(3,968		)	2,184		—		(2,835		)	(2,875		)
Income tax (benefit) expense	—		(5,712		)	1,093		—		—			(4,619		)
Net income	$	1,744	$	1,744		$	1,091	$	—	$	(2,835	)	$	1,744



	39 Weeks Ended September 24, 2013
	Parent		Subsidiary		Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	793,725	$	8,007		$	—	$	—		$	801,732
Total costs and expenses	—		734,265		8,419			—		—			742,684
Operating income (loss)	—		59,460		(412		)	—		—			59,048
Interest expense	—		30,720		—			—		—			30,720
Equity in net income of subsidiary	23,894		—		—			—		(23,894		)	—
Income (loss) before income taxes	23,894		28,740		(412		)	—		(23,894		)	28,328
Income tax expense (benefit)	—		4,529		(95		)	—		—			4,434
Net income (loss)	$	23,894	$	24,211	$	(317	)	$	—	$	(23,894	)	$	23,894

Condensed Consolidating Balance Sheet



	September 30, 2014
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	41,148	$	10,102	$	—	$	—		$	51,250
Facilities and equipment, net	—		164,728		31,883		—		—			196,611
Franchise rights, net	—		596,447		46,998		—		—			643,445
Goodwill	—		290,502		4,061		—		—			294,563
Investment in subsidiary	267,097		77,185		—		—		(344,282		)	—
Other assets, net	—		41,868		1,885		—		—			43,753
Total assets	$	267,097	$	1,211,878	$	94,929	$	—	$	(344,282	)	$	1,229,622
Liabilities and member’s equity:
Current liabilities	$	—	$	90,940	$	14,153	$	—	$	—		$	105,093
Long-term debt	—		591,263		—		—		—			591,263
Other liabilities and deferred items	—		54,806		3,226		—		—			58,032
Deferred income taxes	—		207,772		365		—		—			208,137
Member’s equity	267,097		267,097		77,185		—		(344,282		)	267,097
Total liabilities and member’s equity	$	267,097	$	1,211,878	$	94,929	$	—	$	(344,282	)	$	1,229,622



	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



	39 Weeks Ended September 30, 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	$	—	$	40,752		$	16,973		$	—	$	—		$	57,725
Investing activities:
Capital expenditures	—		(45,697		)	(4,810		)	—		—			(50,507		)
Acquisition of Wendy’s business, net of cash acquired	—		—			(56,803		)	—		—			(56,803		)
Investment in NPCQB	—		(57,002		)	—			—		57,002			—
Return of investment in NPCQB	—		31,886			—			—		(31,886		)	—
Proceeds from sale-leaseback transactions	—		—			19,429			—		—			19,429
Proceeds from sale or disposition of assets	—		2,843			45			—		—			2,888
Net cash flows used in investing activities	—		(67,970		)	(42,139		)	—		25,116			(84,993		)
Financing activities:
Investment from parent	—		—			57,002			—		(57,002		)	—
Payment of accrued purchase price to sellers	—		(10,875		)	—			—		—			(10,875		)
Net payments on debt	—		(9,704		)	—			—		—			(9,704		)
Issuance of debt	—		40,000			—			—		—			40,000
Distribution to parent	—		—			(31,886		)	—		31,886			—
Other	—		(553		)	—			—		—			(553		)
Net cash flows provided by financing activities	—		18,868			25,116			—		(25,116		)	18,868
Net change in cash and cash equivalents	—		(8,350		)	(50		)	—		—			(8,400		)
Beginning cash and cash equivalents	—		19,170			865			—		—			20,035
Ending cash and cash equivalents	$	—	$	10,820		$	815		$	—	$	—		$	11,635



	39 Weeks Ended September 24, 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	$	—	$	75,002		$	2,599		$	—	$	—		$	77,601
Investing activities:
Capital expenditures	—		(35,776		)	(68		)	—		—			(35,844		)
Acquisition of Wendy’s business, net of cash acquired			—			(21,505		)	—		—			(21,505		)
Investment in NPCQB	—		(21,557		)	—			—		21,557			—
Proceeds from sale or disposition of assets	—		554			—			—		—			554
Net cash flows used in investing activities	—		(56,779		)	(21,573		)	—		21,557			(56,795		)
Financing activities:
Investment from parent	—		—			21,557			—		(21,557		)	—
Other	—		(2,936		)	—			—		—			(2,936		)
Net cash flows (used in) provided by financing activities	—		(2,936		)	21,557			—		(21,557		)	(2,936		)
Net change in cash and cash equivalents	—		15,287			2,583			—		—			17,870
Beginning cash and cash equivalents	—		25,493			—			—		—			25,493
Ending cash and cash equivalents	$	—	$	40,780		$	2,583		$	—	$	—		$	43,363