Wendy's 2009 Annual Report Download - page 93

Outstanding Wendy’s stock options were converted upon completion of the merger into stock options
with respect to Wendy’s/Arby’s common stock, based on the 4.25:1 exchange ratio. The value of Wendy’s
stock options that have been converted into Wendy’s/Arby’s stock options of $18,296 was calculated using the
Black-Scholes option pricing model as of April 24, 2008.
The acquired franchise agreements have a weighted average amortization period of approximately 21 years
and the acquired trademark has an indefinite life so there is no related amortization. The acquired favorable and
unfavorable leases have a weighted average amortization period of approximately 19 and 16 years, respectively.
The following unaudited supplemental pro forma consolidated summary operating data (the “As
Adjusted”) for 2008 and 2007 has been prepared by adjusting the historical data as set forth in the
accompanying consolidated statements of operations for the years ended December 28, 2008 and December 30,
2007 to give effect to the Wendy’s Merger and the Conversion as if they had been consummated as of the
beginning of 2007:
As Reported As Adjusted As Reported As Adjusted
2008 2007
Revenues:
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,662,291 $3,279,504 $1,113,436 $3,273,461
Franchise revenues . . . . . . . . . . . . . . . . . . . . . . . . . . 160,470 383,137 86,981 374,950
Asset management and related fees . . . . . . . . . . . —— 63,300 —
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . 1,822,761 3,662,641 1,263,717 3,648,411
Operating (loss) profit . . . . . . . . . . . . . . . . . . . . . . . . . . . (413,650) (392,854) 19,900 150,437
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (479,741) (492,026) 16,081 80,856
Basic and diluted (loss) income per share:
Common Stock ........................ (3.05) (1.05) .16 .17
Class B Common Stock................. (1.24) N/A .18 N/A
This unaudited pro forma information is provided for informational purposes only and does not purport to
be indicative of the results of operations that would have occurred if the merger had been completed on the
date set forth above, nor is it necessarily indicative of the future operating results of the combined company.
The As Reported and As Adjusted amounts for Wendy’s include (1) the effect of $84,231 of Special
Committee costs incurred before the date of the Wendy’s Merger in 2008 and $24,670 in 2007, (2) $9,757 of
facilities relocation costs in 2007, and (3) $6,750 of impairment of other long-lived assets in 2007. The As
Adjusted (loss) income per share data for 2008 and 2007 assume the conversion of all Class B Common Stock
to Common Stock occurred prior to 2007 and the As Adjusted data for 2007 excludes Deerfield.
Other Restaurant Acquisitions and Dispositions
The Company completed the acquisitions of the operating assets, net of liabilities assumed, of 45 Arby’s
franchised restaurants, including 41 restaurants in the California market, in two separate transactions during
fiscal 2008. The total net consideration for acquisitions, including deal costs, was $15,861 consisting of (1)
$9,622 of cash and (2) the assumption of $6,239 of debt.
During the year ended January 3, 2010, the Company received proceeds from dispositions of $10,882
consisting of $5,045 from the sale of twelve Wendy’s units to a franchisee, $4,529 from the sale of surplus
properties and $1,308 related to other dispositions. These sales resulted in a net gain of $1,203 which is
included in “Depreciation and amortization.”
Other restaurant acquisitions and dispositions during the periods presented were not significant.
Sale of Deerfield
Prior to 2007, the Company purchased 1,000 shares of DFR for $15,000, and certain former officers (the
“DFR Stock Purchasers”) purchased 115 shares of DFR for a cost of $1,731. Such shares were all purchased at
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)