Condensed Consolidating Financial Statements

NPC’s obligations under the 10 1/2% Senior Notes due 2020 and its 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. NPC Op Co B does not have any assets or operations as of March 29, 2016 and has not had any revenues, expenses or cash flows during its existence. The Holdings and subsidiary guarantees are joint and several, full and unconditional. The following summarizes the Company’s condensed consolidating information as of March 29, 2016 and December 29, 2015, and for each of the 13-week periods ended March 29, 2016 and March 31, 2015, respectively (in thousands):

Condensed Consolidating Statements of Operations




	13 Weeks Ended March 29, 2016
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	268,594		$	50,940		$	—	$	—		$	319,534
Total costs and expenses	—		253,357			48,410			—		—			301,767
Operating income	—		15,237			2,530			—		—			17,767
Interest expense	—		11,337			—			—		—			11,337
Equity in net income of subsidiary	7,659		2,965			—			—		(10,624		)	—
Income before income taxes	7,659		6,865			2,530			—		(10,624		)	6,430
Income tax benefit	—		(794		)	(435		)	—		—			(1,229		)
Net income	$	7,659	$	7,659		$	2,965		$	—	$	(10,624	)	$	7,659




	13 Weeks Ended March 31, 2015
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	260,567	$	48,641	$	—	$	—		$	309,208
Total costs and expenses	—		245,852		47,169		—		—			293,021
Operating income	—		14,715		1,472		—		—			16,187
Interest expense	—		10,465		—		—		—			10,465
Equity in net income of subsidiary	4,975		1,280		—		—		(6,255		)	—
Income before income taxes	4,975		5,530		1,472		—		(6,255		)	5,722
Income tax expense	—		555		192		—		—			747
Net income	$	4,975	$	4,975	$	1,280	$	—	$	(6,255	)	$	4,975

Condensed Consolidating Balance Sheet



	March 29, 2016
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	68,587	$	3,287	$	—	$	—		$	71,874
Facilities and equipment, net	—		152,946		51,549		—		—			204,495
Franchise rights, net	—		573,213		43,851		—		—			617,064
Goodwill	—		290,502		4,124		—		—			294,626
Investment in subsidiary	281,348		80,593		—		—		(361,941		)	—
Other assets, net	—		27,691		1,604		—		—			29,295
Total assets	$	281,348	$	1,193,532	$	104,415	$	—	$	(361,941	)	$	1,217,354
Liabilities and member’s equity:
Current liabilities	$	—	$	93,228	$	15,006	$	—	$	—		$	108,234
Long-term debt	—		576,589		—		—		—			576,589
Other liabilities and deferred items	—		56,306		8,186		—		—			64,492
Deferred income taxes	—		186,061		630		—		—			186,691
Member’s equity	281,348		281,348		80,593		—		(361,941		)	281,348
Total liabilities and member’s equity	$	281,348	$	1,193,532	$	104,415	$	—	$	(361,941	)	$	1,217,354



	December 29, 2015
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	58,620	$	4,495	$	—	$	—		$	63,115
Facilities and equipment, net	—		155,501		47,967		—		—			203,468
Franchise rights, net	—		577,097		43,421		—		—			620,518
Goodwill	—		290,502		4,124		—		—			294,626
Investment in subsidiary	273,689		76,784		—		—		(350,473		)	—
Other assets, net	—		27,233		1,736		—		—			28,969
Total assets	$	273,689	$	1,185,737	$	101,743	$	—	$	(350,473	)	$	1,210,696
Liabilities and member’s equity:
Current liabilities	$	—	$	91,472	$	16,724	$	—	$	—		$	108,196
Long-term debt	—		577,011		—		—		—			577,011
Other liabilities and deferred items	—		55,589		6,448		—		—			62,037
Deferred income taxes	—		187,976		1,787		—		—			189,763
Member’s equity	273,689		273,689		76,784		—		(350,473		)	273,689
Total liabilities and member’s equity	$	273,689	$	1,185,737	$	101,743	$	—	$	(350,473	)	$	1,210,696

Condensed Consolidating Statements of Cash Flows



	13 Weeks Ended March 29, 2016
	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	$	—	$	22,512		$	6,096		$	—	$	—		$	28,608
Investing activities:
Capital expenditures	—		(8,513		)	(2,460		)	—		—			(10,973		)
Investment in NPCQB	—		(844		)	—			—		844			—
Acquisition of Wendy’s business, net of cash acquired	—		—			(7,963		)	—		—			(7,963		)
Proceeds from sale-leaseback transactions	—		828			3,510			—		—			4,338
Proceeds from sale or disposition of assets	—		162			2			—		—			164
Net cash flows used in investing activities	—		(8,367		)	(6,911		)	—		844			(14,434		)
Financing activities:
Net payments on debt	—		(1,040		)	—			—		—			(1,040		)
Distribution from parent	—		—			844			—		(844		)	—
Net cash flows (used in) provided by financing activities	—		(1,040		)	844			—		(844		)	(1,040		)
Net change in cash and cash equivalents	—		13,105			29			—		—			13,134
Beginning cash and cash equivalents	—		31,918			799			—		—			32,717
Ending cash and cash equivalents	$	—	$	45,023		$	828		$	—	$	—		$	45,851



	13 Weeks Ended March 31, 2015
	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	$	—	$	20,689		$	3,761		$	—	$	—		$	24,450
Investing activities:
Capital expenditures	—		(7,127		)	(3,891		)	—		—			(11,018		)
Investment in NPCQB	—		(110		)	—			—		110			—
Proceeds from sale or disposition of assets	—		258			38			—		—			296
Net cash flows used in investing activities	—		(6,979		)	(3,853		)	—		110			(10,722		)
Financing activities:
Net payments on debt	—		(2,079		)	—			—		—			(2,079		)
Distribution from parent	—		—			110			—		(110		)	—
Net cash flows (used in) provided by financing activities	—		(2,079		)	110			—		(110		)	(2,079		)
Net change in cash and cash equivalents	—		11,631			18			—		—			11,649
Beginning cash and cash equivalents	—		11,278			785			—		—			12,063
Ending cash and cash equivalents	$	—	$	22,909		$	803		$	—	$	—		$	23,712