Wendy's 2008 Annual Report Download - page 165

Distributions to Co-investment Shareholders
As part of its overall retention efforts, the Company provided certain of its Former Executives and current
and former employees, the opportunity to co-invest with the Company in certain investments and prior to
2006 made related loans to management. As of December 31, 2006, all of these loans have been settled and the
Company no longer makes any such loans. The Company and certain of its former management have one
remaining co-investment, 280 BT, which is a limited liability holding company principally owned by the
Company and former company management that, among other things, invested in operating companies.
During 2008, the Company received distributions of $2,014 from the liquidation of certain of the investments
owned by 280 BT. The minority portions of these distributions of $402 were further distributed to 280 BT’s
minority shareholders.
Information pertaining to the remaining co-investment is as follows:
280 BT
Ownership percentages at December 28, 2008:
Company..................................................................... 80.1%(a)
Former officers of the Company ................................................ 11.2%
Other ........................................................................ 8.7%
(a) Includes the effect of the surrender by former Company officers of portions of their respective co-investment
interests in 280 BT to the Company in settlement of non-recourse notes of $723 in 2006, which increased
the Company’s ownership percentage to 80.1% at December 31, 2006. Such settlements in 2006 resulted
in reductions of the minority interests in 280 BT of $300 as a result of the Company now owning the
surrendered interests.
In addition to 280 BT, the Company and certain of its officers, including entities controlled by them,
invested in K12 Inc. (“K12”) and Encore in prior years.
The investment in K12 was directly in the operating company and included investments by the Former
Executives. A significant portion of the Company’s investment and one third of the direct investment made by
the Former Executives in K12 were sold in connection with its initial public offering of common stock during
2007 in which the Company realized a gain of $2,389 included in “Investment income, net.” The Company
sold its remaining investment in K12 in 2008 and realized a gain of $1,467 which is included in “Investment
income, net” (see Note 20).
The Company’s direct ownership of Encore, which was 0.4% after the 2007 sale of a substantial portion of
its holdings in Encore, was contributed to and subsequently distributed by the 2007 Trusts to the Former
Executives in connection with the Contractual Settlements. As a result of the 2007 sale of a substantial portion
of our interest in Encore, we no longer had the ability to exercise significant influence over operating and
financial policies of Encore and we ceased accounting for our then remaining investment in Encore under the
equity method.
Sale of Deerfield Capital Investments
In connection with the Deerfield Sale (see Note 3), the Company sold its 63.6% capital interest in
Deerfield to DFR. The remaining Deerfield capital interests that were owned directly or indirectly by
executives of Deerfield (the “Deerfield Executives”), including one who was also a former director of the
Company (the “Deerfield Executive”), were also sold to DFR in connection with the Deerfield Sale. All related
rights that the Company had to acquire the capital interests of Deerfield owned by two Deerfield Executives
were cancelled at that time. In addition, the rights of those two executives to require the Company to acquire
their economic interests were also cancelled in connection with the Deerfield Sale (see below for the discussion
of the severance agreement with of one of these executives).
157
WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
(FORMERLY TRIARC COMPANIES, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)