Wendy's 2008 Annual Report Download - page 101

Fiscal Year
Our fiscal reporting periods consist of 52 weeks ending on the Sunday closest to December 31 and are
referred to herein as (1) “the year ended December 28, 2008” or “2008” which commenced on December 31,
2007 and ended on December 28, 2008, (2) “the year ended December 30, 2007” or “2007” which commenced
on January 1, 2007 and ended on December 30, 2007, and (3) “the year ended December 31, 2006” or “2006”
which commenced on January 2, 2006 and ended on December 31, 2006 except that (a) Deerfield and the DM
Fund were included on a calendar year basis and (b) the Opportunities Fund was included from January 1,
2006 through its September 29, 2006 redemption date. Balances presented as of December 28, 2008 and
December 30, 2007 are referred to herein as “as of Year-End 2008” and “as of Year-End 2007,” respectively.
With the exception of Deerfield, the Opportunities Fund, and the DM Fund, which reported on a calendar year
basis, all references to years relate to fiscal periods rather than calendar periods. The difference in reporting
basis in 2006 is not material to our consolidated financial statements.
Cash Equivalents
All highly liquid investments with a maturity of three months or less when acquired are considered cash
equivalents. The Company’s cash equivalents principally consist of cash in bank, money market and mutual
fund money market accounts and are primarily not in Federal Deposit Insurance Corporation (FDIC) insured
accounts.
Accounts and Notes Receivable
Accounts and notes receivable consist primarily of royalty and franchise fee receivables, credit card
receivables, rent and recoverable income tax. The need for an allowance for doubtful accounts is reviewed on a
specific franchisee basis based upon past due balances and the financial strength of the franchisee.
Notes Receivable (Non-Current)
Notes receivable (non-current) consist of the (1) notes receivable (“DFR Notes”) due from Deerfield
Capital Corp. (“DFR”) received as proceeds in the Deerfield Sale (see Note 4 regarding collectability) and
(2) notes receivable for franchisee obligations. The need for an allowance for doubtful accounts is reviewed on a
specific identification basis based upon past due balances and the financial strength of the franchisee.
Inventories
The Company’s inventories are stated at the lower of cost or market with cost determined in accordance
with the first-in, first-out method, and consist primarily of restaurant food items, kids’ meal toys and paper
supplies.
Investments
Short-Term Investments
Short-term investments consist of marketable equity securities with readily determinable fair values. The
Company’s marketable equity securities are classified and accounted for as “available-for-sale” and are reported
at fair market value with the resulting net unrealized holding gains or losses, net of income taxes, reported as a
separate component of comprehensive income (loss) bypassing net income. The Company uses the specific
identification method to determine the amount reclassified out of accumulated other comprehensive income
(loss) into earnings or losses of securities sold for all marketable securities.
See Note 6 for further disclosure of the Company’s short-term investments.
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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)