Wendy's 2008 Annual Report Download - page 109

measured at fair value and classified as a separate component of stockholders’ equity. These statements are to be
applied prospectively beginning with our 2009 fiscal year. However, upon adoption, SFAS 160 requires
entities to apply the presentation and disclosure requirements retrospectively for all periods presented. Both
standards prohibit early adoption. In addition, in April 2008, the FASB issued FASB Staff Position No. FAS
142-3, “Determination of the Useful Life of Intangible Assets” (“FSP FAS 142-3”). In determining the useful
life of acquired intangible assets, FSP FAS 142-3 removes the requirement to consider whether an intangible
asset can be renewed without substantial cost or material modifications to the existing terms and conditions
and, instead, requires an entity to consider its own historical experience in renewing similar arrangements. FSP
FAS 142-3 also requires expanded disclosure related to the determination of intangible asset useful lives. This
staff position is effective for financial statements issued for fiscal years beginning in our 2009 fiscal year and
may impact any intangible assets we acquire. The application of SFAS 160 will require reclassification of our
minority interests from a liability to a component of stockholders’ equity in our consolidated financial
statements beginning in our 2009 fiscal year. The effect of this reclassification will not be material to our
consolidated balance sheet. Further, all of the statements referred to above could have a significant impact on
the accounting for any future acquisitions starting with our 2009 fiscal year. The impact will depend upon the
nature and terms of such future acquisitions, if any. These statements will not have an effect on our accounting
for the Wendy’s Merger except for any potential adjustments to deferred taxes included in the allocation of the
purchase price after such allocation has been finalized.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities” (“SFAS 161”). SFAS 161 requires companies with derivative instruments to disclose information
that should enable financial-statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) and how these items affect a
company’s financial position, results of operations and cash flows. SFAS 161 affects only these disclosures and
does not change the accounting for derivatives. SFAS 161 is to be applied prospectively beginning with the
first quarter of our 2009 fiscal year. However, we do not expect SFAS 161 to have a material effect on
disclosures in our consolidated financial statements.
(2) Significant Risks and Uncertainties
Nature of Operations
The Company’s restaurant operations comprise two business segments: Arby’s restaurants and Wendy’s
restaurants subsequent to the Wendy’s Merger on September 29, 2008. Prior to the Deerfield Sale on
December 21, 2007, our business operations also included an asset management segment that offered a diverse
range of fixed income and credit-related strategies to institutional investors, including DFR.
The Wendy’s restaurants segment is operated through franchised and Company-owned Wendy’s quick
service restaurants specializing in hamburger sandwiches. The franchised restaurants are principally located
throughout the United States and, to a lesser extent, in 21 foreign countries and U.S. territories with the
largest number in Canada. Company-owned restaurants are located in 30 states, with the largest number in
Florida, Illinois, Ohio, Pennsylvania, Texas and Massachusetts. Wendy’s restaurants offer an extensive menu
featuring hamburgers, filet of chicken breast sandwiches, chicken nuggets, chili, side dishes, freshly prepared
salads, soft drinks, milk, Frosty威desserts, floats and kids meals. In addition, the restaurants sell a variety of
promotional products on a limited basis. The New Bakery Co. of Ohio, Inc. (“Bakery”), a wholly-owned
subsidiary of Wendy’s, is a producer of buns for Wendy’s restaurants, and to a lesser extent for outside parties.
The Arby’s restaurants segment is operated through franchised and Company-owned Arby’s威quick service
restaurants specializing in slow-roasted roast beef sandwiches. The franchised restaurants are principally located
throughout the United States, and to a much lesser extent, in four other countries; principally in Canada.
Company-owned restaurants are located in 28 states, with the largest number in Michigan, Ohio, Indiana,
Florida, Georgia and Pennsylvania. Arby’s restaurants offer an extensive menu of chicken, turkey and ham
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)