Wendy's 2008 Annual Report Download - page 84

investments, which would limit or eliminate the effect of the indicated market risk on our results of operations
and, for cost investments, our financial position.
Our cash equivalents and restricted cash equivalents included $36.8 million and $54.8 million,
respectively, as of December 28, 2008 of bank money market accounts and interest-bearing brokerage and bank
accounts which are all investments with a maturity of three months or less when acquired and are designed to
maintain a stable value.
As of December 28, 2008, we had amounts of both fixed-rate debt and variable-rate debt. On the fixed-
rate debt, the interest rate risk presented with respect to our long-term debt, excluding capitalized lease and
sale-leaseback obligations, primarily relates to the potential impact a decrease in interest rates of one percentage
point has on the fair value of our $495.9 million of fixed-rate debt and not on our financial position or our
results of operations. On the variable-rate debt, the interest rate risk presented with respect to our long-term
debt, excluding capitalized lease and sale-leaseback obligations, represents the potential impact an increase in
interest rates of one percentage point has on our results of operations related to our $385.0 million of variable-
rate long-term debt outstanding as of December 28, 2008.
As of December 30, 2007, a majority of our debt was variable-rate debt and therefore the interest rate risk
presented with respect to our long-term debt, excluding capitalized lease and sale-leaseback obligations,
represents the potential impact an increase in interest rates of one percentage point has on our results of
operations related to our $561.1 million of variable-rate long-term debt outstanding as of December 30, 2007.
Our variable-rate long-term debt outstanding as of December 28, 2008 and December 30, 2007 had a
weighted average remaining maturity of approximately three years and four years, respectively. We had limited
our interest rate risk on a portion of this debt by the use of interest rate swap agreements during all of 2007
and through October 2008. However, in the current interest environment, we do not currently plan to enter
into new swaps.
For investments in investment limited partnerships and similar investment entities, all of which are
accounted for at cost, and other non-current investments included in “Other investments” in the tables above,
the decrease in the equity markets and the change in foreign currency were assumed for this analysis to be
other than temporary. To the extent such entities invest in convertible bonds which trade primarily on the
conversion feature of the securities rather than on the stated interest rate, this analysis assumed equity price
risk but no interest rate risk. The foreign currency risk presented excludes those investments where the
investment manager has fully hedged the risk.
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