Wendy's 2008 Annual Report Download - page 125

The DFR Investments represented compensation granted to us in consideration of the Company’s
management of DFR. The DFR Investments were initially recorded at fair value, which was $6,058 and $263
for the restricted stock and stock options, respectively, with an equal offsetting credit to deferred income and
were adjusted for any subsequent changes in their fair value. Such deferred income was amortized to revenues as
“Asset management and related fees” ratably over the three-year vesting period of the DFR Investments and
amounted to $163 and $2,406 for the years ended 2007 and 2006, respectively. During 2007 and 2006, the
Company recorded its ($4) and $54, respectively, equity (reduction in equity) in the value of the DFR
Investments recognized by DFR as a change to the Company’s equity in the net earnings of DFR with an equal
offsetting increase in “Additional paid-in capital.”
Prior to the Deerfield Sale, the Company had been accounting for its vested DFR common stock under
the Equity Method due to the Company’s significant influence over the operational and financial policies of
DFR, principally reflecting the Company’s representation on DFR’s board of directors and the management of
DFR by the Company. As discussed below, after the Deerfield Sale, as well as after the distribution of the
1,000 shares of common stock of DFR acquired prior to 2006 discussed below, the Company continued to
account for its investment in the common shares of DFR under the Equity Method. The Company received
$4,171 and $1,818 of distributions with respect to its aggregate investment in DFR during 2007 and 2006
respectively, which, in accordance with the Equity Method, reduced the carrying value of this investment.
Presented below is summary financial information of DFR as of and for the year ended December 31,
2007 and for the year ended December 31, 2006, DFR’s year ends. As we held our equity investment in DFR
for less than one quarter in 2008, we are not required to present any data for that year. The company’s actual
ownership in DFR Common Stock was 0.3% in 2007 and 2.6% in 2006. The summary financial information
is taken from balance sheets which do not distinguish between current and long-term assets and liabilities and
is as follows:
Year End
2007
Balance sheet information:
Cash and cash equivalents ............................................ $ 113,733
Investments in securities.............................................. 6,342,477
Other investments . .................................................. 738,404
Other assets ......................................................... 593,355
$7,787,969
Accounts payable and accrued liabilities................................ $ 66,028
Securities sold under agreements to repurchase.......................... 5,303,865
Long-term debt...................................................... 775,368
Other liabilities...................................................... 1,057,972
Convertible preferred stock ........................................... 116,162
Stockholders’ equity.................................................. 468,574
$7,787,969
2007 2006
Income statement information:
Revenues ....................................................... $92,536 $84,683
(Loss) income before income taxes ................................ (95,256) 71,581
Net (loss) income ............................................... (96,591) 71,575
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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)