Wendy's 2008 Annual Report Download - page 42

(4) The number of shares used in the calculation of diluted income (loss) per share is the same as basic income
(loss) per share for 2008, 2006 and 2005 since all potentially dilutive securities would have had an
antidilutive effect based on the loss from continuing operations for these years. The numbers of shares used
in the calculation of diluted income per share of the Company’s Class A and the Company’s Class B
Common Stock for 2007 are 28,965 and 64,282 respectively. The number of shares used in the calculation
of diluted income per share of the Company’s Class A and the Company’s Class B Common Stock for 2004
are 23,415 and 43,206, respectively. These shares used for the calculation of diluted income per share in
2007 and 2004 consist of the weighted average common shares outstanding for each class of common stock
and potential shares of common stock reflecting the effect of dilutive stock options and nonvested restricted
shares of 129 for the Company’s Class A Common Stock and 759 for the Company’s Class B Common
Stock in 2007, and 1,182 for the Company’s Class A Common Stock and 2,366 for the Company’s Class B
Common Stock in 2004.
(5) Reflects certain significant charges and credits recorded during 2008 as follows: $460.1 charged to
operating profit consisting of a goodwill impairment for the Arby’s Company-owned restaurant reporting
unit; $484.0 charged to income from continuing operations and net income representing the
aforementioned $460.1 charged to operating profit and other than temporary losses on investments of
$112.7 partially offset by $88.8 of income tax benefit related to the above charges.
(6) Reflects certain significant charges and credits recorded during 2007 as follows: $45.2 charged to operating
profit, consisting of facilities relocation and corporate restructuring costs of $85.4 less $40.2 from the gain
on sale of the Company’s interest in Deerfield; $16.6 charged to income from continuing operations and
net income representing the aforementioned $45.2 charged to operating profit offset by $15.8 of income
tax benefit related to the above charge, and a $12.8 previously unrecognized prior year contingent tax
benefit related to certain severance obligations to certain of the Company’s former executives.
(7) Reflects a significant charge recorded during 2006 as follows: $9.0 charged to loss from continuing
operations and net loss representing a $14.1 loss on early extinguishments of debt related to conversions or
effective conversions of the Company’s 5% convertible notes due 2023 and prepayments of term loans
under the Company’s senior secured term loan facility, partially offset by an income tax benefit of $5.1
related to the above charge.
(8) Reflects certain significant charges and credits recorded during 2005 as follows: $58.9 charged to operating
loss representing (1) share-based compensation charges of $28.3 representing the intrinsic value of stock
options which were exercised by the Chairman and then Chief Executive Officer and the Vice Chairman
and then President and Chief Operating Officer and subsequently replaced on the date of exercise, the
grant of contingently issuable performance-based restricted shares of the Company’s Class A and Class B
common stock and the grant of equity interests in two of the Company’s then subsidiaries, (2) a $17.2 loss
on settlements of unfavorable franchise rights representing the cost of settling franchise agreements
acquired as a component of the acquisition of RTM with royalty rates below the 2005 standard 4% royalty
rate that the Company receives on new franchise agreements and (3) facilities relocation and corporate
restructuring charges of $13.5; $67.5 charged to loss from continuing operations representing the
aforementioned $58.9 charged to operating loss and a $35.8 loss on early extinguishments of debt upon a
debt refinancing in connection with the acquisition of RTM, both partially offset by $27.2 of income tax
benefit relating to the above charges; and $64.2 charged to net loss representing the aforementioned $67.5
charged to loss from continuing operations partially offset by income from discontinued operations of $3.3
principally resulting from the release of reserves for state income taxes that were no longer required.
(9) Reflects certain significant credits recorded during 2004 as follows: $17.3 credited to income from
continuing operations representing (1) $14.6 of income tax benefit due to the release of income tax reserves
which were no longer required upon the finalization of the examination of certain of the Company’s prior
year’s Federal income tax returns, the finalization of a state income tax examination and the expiration of
the statute of limitations for the examination of certain of the Company’s state income tax returns and (2) a
$2.7 credit, net of a $1.6 income tax provision, representing the release of related interest accruals that
were no longer required; and $29.8 credited to net income representing the aforementioned $17.3 credited
to income from continuing operations and $12.5 of additional gain on disposal of the Company’s beverage
businesses that were previously sold resulting from the release of income tax reserves related to
discontinued operations which were no longer required upon finalization of an Internal Revenue Service
examination of certain prior year’s Federal income tax returns and the expiration of the statute of
limitations for examinations of certain of the Company’s state income tax returns.
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