Wendy's 2008 Annual Report Download - page 180

(footnotes continued from previous page)
In connection with the Wendy’s Merger, Wendy’s/Arby’s stockholders approved a charter amendment to
convert each of the then existing Triarc Class B common stock into one share of Wendy’s/Arby’s Class A
common stock. Accordingly, commencing with the 2008 fourth quarter, there is no longer any (loss)
income per share attributable to the Class B common stock.
Diluted loss per share for all quarters of 2008 and the second quarter of 2007 was the same as basic loss
per share for each period since the Company reported a loss from continuing operations and, therefore, the
effect of all potentially dilutive securities on the loss from continuing operations per share would have
been anti-dilutive. The basic and diluted income per share for the first, third and fourth quarters of 2007
are the same since the difference is less than one cent in each quarter.
(b) The operating (loss) profit was materially affected by Goodwill impairment of $460,075 for the fourth
quarter of 2008 (see Note 18). The effect of the other than temporary losses on investments on net (loss)
income for the first, second, third and fourth quarters was ($68,086), ($2,205), ($5,103) and ($20,825),
respectively, due to other than temporary losses on investments, after income tax benefits of $0, $1,295,
$2,997 and $12,230, respectively. The effect on net (loss) income for the fourth quarter of the goodwill
impairment was $391,735, after a tax benefit of $68,340.
(c) The operating (loss) profit was materially affected by (1) corporate restructuring charges of $79,044,
$1,807 and $4,163 for the second, third and fourth quarters of 2007, respectively (see Note 17) and (2) by
the $40,193 gain related to the Deerfield Sale (see Note 3) in the fourth quarter of 2007. The effect on net
(loss) income for the second, third and fourth quarters was ($51,379), ($1,175) and $23,420, respectively,
after income tax provision (benefit) of ($27,665), ($633) and $12,610, respectively. In addition, net loss for
the second quarter of 2007 was favorably affected by a $12,800 previously unrecognized prior year
contingent tax benefit related to certain severance obligations to the Company’s Former Executives.
(d) We have reclassified Advertising into “Cost of sales” for all periods.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Senior Vice President and
Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) as of December 28, 2008. Based on that evaluation, our Chief Executive Officer
and our Senior Vice President and Chief Financial Officer have concluded that, as of December 28, 2008, our
disclosure controls and procedures were effective to provide reasonable assurance that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the Securities and
Exchange Commission (the “SEC”).
Wendy’s International, Inc.
As noted below in Management’s Report on Internal Control Over Financial Reporting, pursuant to
guidance provided by the SEC, we have excluded from our assessment of the effectiveness of internal control
over financial reporting as of December 28, 2008, Wendy’s International, Inc. (“Wendy’s”), a business we
acquired on September 29, 2008.
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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)