Wendy's 2010 Annual Report Download - page 32

We rely on computer systems and information technology to run our business. Any material failure, interruption
or security breach of our computer systems or information technology may adversely affect the operation of our
business and results of operations.
We are significantly dependent upon our computer systems and information technology to properly conduct
our business. A failure or interruption of computer systems or information technology could result in the loss of data,
business interruptions or delays in business operations. Also, despite our considerable efforts and technological
resources to secure our computer systems and information technology, security breaches, such as unauthorized access
and computer viruses, may occur resulting in system disruptions, shutdowns or unauthorized disclosure of
confidential information. Any security breach of our computer systems or information technology may result in
adverse publicity, loss of sales and profits, penalties, competitive disadvantage, or loss resulting from misappropriation
of information.
We may be required to recognize additional asset impairment and other asset-related charges.
We have significant amounts of long-lived assets, goodwill and intangible assets and have incurred impairment
charges in the past with respect to those assets. In accordance with applicable accounting standards, we test for
impairment generally annually, or more frequently, if there are indicators of impairment, such as:
• significant adverse changes in the business climate;
• current period operating or cash flow losses combined with a history of operating or cash flow losses or a
projection or forecast that demonstrates continuing losses associated with long-lived assets;
• a current expectation that more-likely-than-not (e.g., a likelihood that is more than 50%) long-lived assets
will be sold or otherwise disposed of significantly before the end of their previously estimated useful life;
and
• a significant drop in our stock price.
Based upon future economic and capital market conditions, as well as the operating performance of our
reporting units, future impairment charges could be incurred.
Risks Related to Wendy’s/Arby’s
There can be no assurance regarding whether or to what extent Wendy’s/Arby’s will pay dividends on its
Common Stock in the future.
Holders of Wendy’s/Arby’s Common Stock will only be entitled to receive such dividends as its Board of
Directors may declare out of funds legally available for such payments. Any dividends will be made at the discretion of
the Board of Directors and will depend on Wendy’s/Arby’s earnings, financial condition, cash requirements and such
other factors as the Board of Directors may deem relevant from time to time.
Because Wendy’s/Arby’s is a holding company, its ability to declare and pay dividends is dependent upon cash,
cash equivalents and short-term investments on hand and cash flows from its subsidiaries. The ability of its subsidiaries to
pay cash dividends and/or make loans or advances to the holding company will be dependent upon their respective
abilities to achieve sufficient cash flows after satisfying their respective cash requirements, including subsidiary-level debt
service and revolving credit agreements, to enable the payment of such dividends or the making of such loans or
advances. The ability of any of its subsidiaries to pay cash dividends or other payments to Wendy’s/Arby’s will also be
limited by restrictions in debt instruments currently existing or subsequently entered into by such subsidiaries, including
the Credit Agreement and the Senior Notes indenture, which are described earlier in this Item 1A.
A substantial amount of Wendy’s/Arby’s Common Stock is concentrated in the hands of certain stockholders.
Nelson Peltz, Wendy’s/Arby’s Chairman and former Chief Executive Officer, and Peter May, Wendy’s/Arby’s
Vice Chairman and former President and Chief Operating Officer, beneficially own shares of Wendy’s/Arby’s
outstanding Common Stock that collectively constitute approximately 24% of its total voting power.
Messrs. Peltz and May may, from time to time, acquire beneficial ownership of additional shares of Common
Stock. On November 5, 2008, in connection with the tender offer of Trian Fund Management, L.P. and certain
affiliates thereof for up to 40 million shares of our Class A common stock, Wendy’s/Arby’s entered into an agreement
(such agreement, as amended, the “Trian Agreement”) with Messrs. Peltz and May and several of their affiliates (the
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