Wendy's 2008 Annual Report Download - page 98

subsequent to September 29, 2006. Under accounting principles generally accepted in the United States of
America, the net sales (purchases) of trading securities and the net settlements of trading derivatives must
be reported in continuing operating activities, while the net proceeds from (payments to cover) securities
sold short and the payments under repurchase agreements are reported in continuing investing activities.
(b) The 2008 amount relates to other than temporary losses on investments including $68,086 for a write
down of our investment in Deerfield Capital Corp. common stock as described in Note 3, $21,227 for an
allowance for doubtful accounts on our DFR notes as described in Note 4, $8,504 for a write down of our
entire remaining investment in Jurlique International Pty Ltd. as described in Note 20, $13,109 for
reductions in the value of certain of our available for sale securities as described in Note 8, and $1,815 in a
cost investment.
Due to their non-cash nature, the following transactions are not reflected in the respective consolidated
statements of cash flows:
On September 29, 2008, the Company completed its merger with Wendy’s International, Inc.
(“Wendy’s”). Total preliminary equity consideration of $2,494,692 included $2,476,197 of Wendy’s/Arby’s
common stock issued in exchange for Wendy’s common shares and $18,495 of value for Wendy’s stock options
that have been converted into Wendy’s/Arby’s options. The accounting for this merger is preliminary and is
subject to change. In conjunction with this merger, assets were acquired and liabilities were assumed as follows
(in thousands):
Fair value of assets acquired, including cash acquired of $199,785 .......... $3,958,204
Liabilities assumed . . . .................................................. $1,463,512
During 2008, the Company acquired 41 restaurants in the California market and, included in the
consideration, was the assumption of $6,239 of debt.
See Note 3 for further disclosure of these acquisitions.
In connection with the exercise of stock options and the vesting of restricted stock, the Company
withheld from delivery to employees, the following number of shares of the Company’s class A and class B
common stock during each of the years presented to satisfy minimum statutory withholding taxes in
connection with the delivery of shares upon the exercise of stock options and the vesting of restricted stock:
2008 2007 2006
Class A common stock. . . ................................ 591 1,150 763,519
Class B common stock . . . ................................ 25 281,175 2,087,442
The aggregate value of shares withheld to satisfy minimum withholding taxes was recorded in
“Stockholders’ equity” in the following manner, all offset by an increase in “Accrued expenses and other current
liabilities,” representing the fair value of the shares withheld for taxes:
2008 2007 2006
Class B common stock ................................... $ — $ 5 $ 200
Additional paid-in capital ................................ — 682 38,776
Common stock held in treasury ........................... 2,989 4,108 17,600
Total .............................................. $2,989 $4,795 $56,576
During 2008, the Company distributed 9,835 shares of DFR common stock, which included the
conversion of the preferred stock referred to above and the 206 common shares of DFR distributed to us in
connection with the Deerfield Sale, to its stockholders.
On December 21, 2007, the Company completed the sale of its 63.6% capital interest in Deerfield &
Company, LLC (“the Deerfield Sale”), its former asset management business, to Deerfield Capital Corp.
(“DFR”), resulting in non-cash proceeds aggregating $134,608 consisting of (1) 9,629 preferred shares of a
90
Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS—CONTINUED
(In Thousands)