Wendy's 2009 Annual Report Download - page 10

Merger with Wendy’s
On September 29, 2008, Triarc and Wendy’s completed their previously announced merger (the
“Wendy’s Merger”) in an all-stock transaction in which Wendy’s shareholders received 4.25 shares of
Wendy’s/Arby’s Class A common stock (the “Class A Common Stock”) for each Wendy’s common share
owned.
In the Wendy’s Merger, approximately 377,000,000 shares of Wendy’s/Arby’s Class A Common Stock
were issued to Wendy’s shareholders. The merger value of approximately $2.5 billion for financial reporting
purposes is based on the 4.25 conversion factor of the Wendy’s outstanding shares as well as previously issued
restricted stock awards both at a value of $6.57 per share which represents the average closing market price of
Triarc Class A Common Stock two days before and after the merger announcement date of April 24, 2008.
Wendy’s shareholders held approximately 80%, in the aggregate, of Wendy’s/Arby’s outstanding common
stock immediately following the Wendy’s Merger. In addition, effective on the date of the Wendy’s Merger,
our Class B common stock (the “Class B Common Stock”) was converted into Class A Common Stock. In
connection with the May 28, 2009 amendment and restatement of our Certificate of Incorporation, Class A
Common Stock was redesignated as Common Stock.
The Wendy’s and Arby’s brands continue to operate independently, with headquarters in Dublin, Ohio
and Atlanta, Georgia, respectively. A consolidated support center is based in Atlanta, Georgia and oversees all
public company responsibilities, as well as other shared service functions.
Business Strategy
Our business strategy is focused on growing same-store sales, restaurant margins and operating income at
the Wendy’s and Arby’s brands with improved marketing, menu development, restaurant operations and
customer service. We are also focused on effectively managing the integration of our brands and building a
shared services organization to achieve significant synergies and efficiencies. Our goal is to produce
consolidated revenue and operating income growth with attractive return on investment, resulting in increased
shareholder value. We will also continue to evaluate various acquisitions and business combinations in the
restaurant industry, which may result in increases in expenditures and related financing activities. See “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Unless
circumstances dictate otherwise, it is our policy to publicly announce an acquisition or business combination
only after a definitive agreement with respect to such acquisition or business combination has been reached.
Fiscal Year
We use a 52/53 week fiscal year convention whereby our fiscal year ends each year on the Sunday that is
closest to December 31 of that year. Each fiscal year generally is comprised of four 13-week fiscal quarters,
although in the years with 53 weeks, including 2009, the fourth quarter represents a 14-week period.
Business Segments
We operate in two business segments, Wendy’s and Arby’s. See Note 25 of the Financial Statements and
Supplementary Data included in Item 8 herein, for financial information attributable to our business segments.
The Wendy’s Restaurant System
Wendy’s is the 3rd largest restaurant franchising system specializing in the hamburger sandwich segment
of the quick service restaurant industry. According to Nation’s Restaurant News, Wendy’s is the 4th largest
quick service restaurant chain in the United States.
Wendy’s is primarily engaged in the business of operating, developing and franchising a system of
distinctive quick-service restaurants serving high quality food. At January 3, 2010, there were 6,541 Wendy’s
restaurants in operation in the United States and in 21 foreign countries and U. S. territories. Of these
restaurants, 1,391 were operated by Wendy’s and 5,150 by a total of 487 franchisees. See “Item 2. Properties”
for a listing of the number of Company-owned and franchised locations in the United States and in foreign
countries and U.S. territories.
The revenues from our restaurant business are derived from four principal sources: (1) sales at company-
owned restaurants; (2) sales of bakery items and kid’s meal promotional items to franchisees and others;
3