Wendy's 2010 Annual Report Download - page 100

WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
WENDY’S/ARBY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
aggregate principal amount of the DFR Notes. We recognized income of $4,909 during the year ended January 2,
2011 as the repayment proceeds exceeded the carrying value of the DFR Notes. This gain is included in “Investment
income (expense), net.”
(4) Income (Loss) Per Share
(Wendy’s/Arby’s)
Basic income (loss) per share for 2010 and 2009 was computed by dividing net income (loss) by the weighted
average number of common shares outstanding. Prior to the Wendy’s Merger, the Company had Class B common
stock which was converted to Class A common stock and is now referred to as “Common Stock” as discussed in
Note 2.
The number of shares used to calculate basic and diluted income (loss) per share was as follows:
2010 2009 2008
Common Stock:
Basic shares—weighted average shares outstanding ........... 426,247 466,204 137,669
Dilutive effect of stock options and restricted shares .......... — 483 —
Diluted shares ....................................... 426,247 466,687 137,669
Class B common stock:
Basic shares—weighted average shares outstanding ........... 47,965 (a)
Dilutive effect of stock options and restricted shares .......... —
Diluted shares ....................................... 47,965
(a) Represents the weighted average for the full year even though the Class B common stock was converted into
Common Stock on September 29, 2008.
Basic loss per share for 2008 was computed by dividing the allocated loss for the Company’s Class A common
stock and the Company’s Class B common stock by the weighted average number of shares of each class. Net loss for
2008 was allocated equally among each share of our Class A common stock and Class B common stock up until the
date of the Conversion; subsequent to the Conversion, net loss was only allocated to our Common Stock since
Class B common stock no longer existed.
Diluted income per share for 2009 was computed by dividing income for our Common Stock by the weighted
average number of shares outstanding plus the potential common share effect of dilutive stock options and of
restricted shares, computed using the treasury stock method. Options and restricted shares to purchase 17,194 of
common shares were excluded from the calculation of the 2009 diluted earnings per share because they were anti-
dilutive. Diluted loss per share for 2010 and 2008 was the same as basic loss per share for each share since the
Company reported a net loss and, therefore, the effect of all potentially dilutive securities on the net loss per share
would have been antidilutive. The shares used to calculate diluted income per share exclude any effect of the
Company’s 5% convertible notes due 2023 (the “Convertible Notes”) which would have been antidilutive since the
after-tax interest on the Convertible Notes per share obtainable on conversion exceeded the reported basic income
from continuing operations per share.
As of January 2, 2011, our potential common shares consisted of the following: (1) outstanding stock options
which can be exercised into 28,074 shares of our Common Stock and (2) 3,092 restricted shares of our Common
Stock.
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