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 September 27, 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 September 27, 2016 and December 29, 2015, and for each of the 13-week and 39-week periods ended September 27, 2016 and September 29, 2015, respectively (in thousands):

Condensed Consolidating Statements of Operations




	13 Weeks Ended September 27, 2016
	Parent			Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings			Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations		Consolidated
Total sales	$	—		$	241,258		$	63,822		$	—	$	—	$	305,080
Total costs and expenses	—			240,366			60,170			—		—		300,536
Operating income	—			892			3,652			—		—		4,544
Interest expense	—			11,174			—			—		—		11,174
Equity in net (loss) income of subsidiary	(4,493		)	(614		)	—			—		5,107		—
(Loss) income before income taxes	(4,493		)	(10,896		)	3,652			—		5,107		(6,630		)
Income tax (benefit) expense	—			(6,403		)	4,266			—		—		(2,137		)
Net (loss) income	$	(4,493	)	$	(4,493	)	$	(614	)	$	—	$	5,107	$	(4,493	)




	13 Weeks Ended September 29, 2015
	Parent			Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings			Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations		Consolidated
Total sales	$	—		$	249,891		$	50,761		$	—	$	—	$	300,652
Total costs and expenses	—			245,946			49,983			—		—		295,929
Operating income	—			3,945			778			—		—		4,723
Interest expense	—			10,240			—			—		—		10,240
Equity in net (loss) income of subsidiary	(2,116		)	(1,440		)	—			—		3,556		—
(Loss) income before income taxes	(2,116		)	(7,735		)	778			—		3,556		(5,517		)
Income tax (benefit) expense	—			(5,619		)	2,218			—		—		(3,401		)
Net (loss) income	$	(2,116	)	$	(2,116	)	$	(1,440	)	$	—	$	3,556	$	(2,116	)



	39 Weeks Ended September 27, 2016
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	760,240		$	168,359	$	—	$	—		$	928,599
Total costs and expenses	—		735,473			158,065		—		—			893,538
Operating income	—		24,767			10,294		—		—			35,061
Interest expense	—		33,716			—		—		—			33,716
Equity in net income of subsidiary	4,437		6,718			—		—		(11,155		)	—
Income (loss) before income taxes	4,437		(2,231		)	10,294		—		(11,155		)	1,345
Income tax (benefit) expense	—		(6,668		)	3,576		—		—			(3,092		)
Net income	$	4,437	$	4,437		$	6,718	$	—	$	(11,155	)	$	4,437



	39 Weeks Ended September 29, 2015
	Parent		Subsidiary			Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	764,369		$	151,727	$	—	$	—		$	916,096
Total costs and expenses	—		739,355			146,480		—		—			885,835
Operating income	—		25,014			5,247		—		—			30,261
Interest expense	—		31,197			—		—		—			31,197
Equity in net income of subsidiary	2,931		3,483			—		—		(6,414		)	—
(Loss) income before income taxes	2,931		(2,700		)	5,247		—		(6,414		)	(936		)
Income tax (benefit) expense	—		(5,631		)	1,764		—		—			(3,867		)
Net income	$	2,931	$	2,931		$	3,483	$	—	$	(6,414	)	$	2,931

Condensed Consolidating Balance Sheet



	September 27, 2016
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	37,277	$	4,233	$	—	$	—		$	41,510
Facilities and equipment, net	—		156,226		74,373		—		—			230,599
Franchise rights, net	—		565,225		57,967		—		—			623,192
Goodwill	—		290,502		5,624		—		—			296,126
Investment in subsidiary	280,565		113,546		—		—		(394,111		)	—
Other assets, net	—		27,008		2,189		—		—			29,197
Total assets	$	280,565	$	1,189,784	$	144,386	$	—	$	(394,111	)	$	1,220,624
Liabilities and member’s equity:
Current liabilities	$	—	$	98,395	$	17,941	$	—	$	—		$	116,336
Long-term debt	—		576,249		—		—		—			576,249
Other liabilities and deferred items	—		54,507		9,671		—		—			64,178
Deferred income taxes	—		180,068		3,228		—		—			183,296
Member’s equity	280,565		280,565		113,546		—		(394,111		)	280,565
Total liabilities and member’s equity	$	280,565	$	1,189,784	$	144,386	$	—	$	(394,111	)	$	1,220,624



	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



	39 Weeks Ended September 27, 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	$	—	$	47,822		$	21,529		$	—	$	—		$	69,351
Investing activities:
Capital expenditures	—		(32,040		)	(13,273		)	—		—			(45,313		)
Investment in subsidiary			(44,276		)						44,276			—
Return of investment in subsidiary	—		14,232			—			—		(14,232		)	—
Acquisition of Wendy’s business, net of cash acquired	—		—			(44,783		)	—		—			(44,783		)
Proceeds from sale-leaseback transactions	—		828			6,327			—		—			7,155
Proceeds from sale or disposition of assets	—		897			355			—		—			1,252
Net cash flows used in investing activities	—		(60,359		)	(51,374		)	—		30,044			(81,689		)
Financing activities:
Net payments on debt	—		(4,326		)	—			—		—			(4,326		)
Investment from parent						44,276					(44,276		)	—
Distribution to parent			—			(14,232		)	—		14,232			—
Net cash flows (used in) provided by financing activities	—		(4,326		)	30,044			—		(30,044		)	(4,326		)
Net change in cash and cash equivalents	—		(16,863		)	199			—		—			(16,664		)
Beginning cash and cash equivalents	—		31,918			799			—		—			32,717
Ending cash and cash equivalents	$	—	$	15,055		$	998		$	—	$	—		$	16,053



	39 Weeks Ended September 29, 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	$	—	$	47,405		$	15,865		$	—	$	—		$	63,270
Investing activities:
Capital expenditures	—		(30,678		)	(11,319		)	—		—			(41,997		)
Return of investment in subsidiary	—		4,708			—			—		(4,708		)	—
Proceeds from sale-leaseback transactions	—		1,408			—			—		—			1,408
Proceeds from sale or disposition of assets	—		371			150			—		—			521
Net cash flows used in investing activities	—		(24,191		)	(11,169		)	—		(4,708		)	(40,068		)
Financing activities:
Net payments on debt	—		(3,119		)	—			—		—			(3,119		)
Distribution to parent	—		—			(4,708		)	—		4,708			—
Net cash flows used in financing activities	—		(3,119		)	(4,708		)	—		4,708			(3,119		)
Net change in cash and cash equivalents	—		20,095			(12		)	—		—			20,083
Beginning cash and cash equivalents	—		11,278			785			—		—			12,063
Ending cash and cash equivalents	$	—	$	31,373		$	773		$	—	$	—		$	32,146