(Wendy’s/Arby’s)
Year Ended (1) January 2,
2011 January 3,2010 December 28,2008(2) December 30,2007(2) December 31,2006(2) (In Millions, except per share amounts)
Sales . . . $3,045.3 $3,198.3 $1,662.3 $1,113.4 $1,073.3
Franchise revenues . . . 371.1 382.5 160.5 87.0 82.0
Asset management and related fees . . . — — — 63.3 88.0
Revenues . . . 3,416.4 3,580.8 1,822.8 1,263.7 1,243.3
Operating profit (loss) . . . 132.4(5) 112.0(6) (413.6)(7) 19.9(8) 44.6
(Loss) income from continuing operations . . . (4.3)(5) 3.5(6) (482.0)(7) 15.1(8) 0.7(9)
Income from discontinued operations . . . — 1.6 2.2 1.0 —
Net (loss) income . . . (4.3)(5) 5.1(6) (479.8)(7) 16.1(8) (10.9)(9)
Basic and diluted income (loss) per share (3): Continuing operations:
Common stock . . . (.01) .01 (3.06) .15 (.13)
Class B common stock . . . N/A N/A (1.26) .17 (.13)
Discontinued operations:
Common stock . . . N/A — .01 .01 N/A
Class B common stock . . . N/A N/A .02 .01 N/A
Net (loss) income
Common stock . . . (.01) .01 (3.05) .16 (.13)
Class B common stock . . . N/A N/A (1.24) .18 (.13)
Cash dividends per share:
Common stock . . . .07 .06 .26 .32 .77
Class B common stock . . . N/A N/A .26 .36 .81
Weighted average shares outstanding (4):
Common stock . . . 426.3 466.2 137.7 28.8 27.3
Class B common stock . . . N/A N/A 48.0 63.5 59.3
January 2,
2011 January 3,2010 December 28,2008(2) December 30,2007(2) December 31,2006(2) (In Millions)
Working capital (deficiency) . . . $ 333.3 $ 403.8 $ (121.7) $ (36.9) $ 161.2
Properties . . . 1,551.3 1,619.2 1,770.4 504.9 488.5
Total assets . . . 4,732.7 4,975.4 4,645.6 1,454.6 1,560.4
Long-term debt, including current portion . . . 1,572.4 1,522.9 1,111.6 739.3 720.0
Stockholders’ equity . . . 2,163.2 2,336.3 2,383.4 449.8 492.0
(1) Wendy’s/Arby’s reports on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to December 31. Except for the 2009 fiscal year, which contained 53 weeks, each of Wendy’s/Arby’s fiscal years presented above contained 52 weeks. All references to years relate to fiscal years rather than calendar years. The financial position and results of operations of Wendy’s are included commencing with the date of the Wendy’s Merger, September 29, 2008. Immediately prior to the Wendy’s Merger, each share of our Class B common stock was converted into Class A common stock on a one for one basis. In connection with the May 28, 2009 amendment and restatement of Wendy’s/Arby’s Certificate of Incorporation, Wendy’s/Arby’s former Class A
Deerfield Opportunities Fund, LLC, which commenced on October 4, 2004 and in which our investment was effectively redeemed on September 29, 2006, and DM Fund LLC, which commenced on March 1, 2005 and in which Wendy’s/Arby’s investment was effectively redeemed on December 31, 2006, reported on a calendar year ending on December 31 through their respective sale or redemption dates.
(2) Selected financial data reflects the changes related to the adoption of the following accounting standards:
(a) As of December 29, 2008, Wendy’s/Arby’s adopted new accounting guidance related to non-controlling interests (formerly referred to as minority interests). This adoption resulted in the retrospective reclassification of minority interests from its former presentation as a liability to “Stockholders’ equity.” The reclassifications were $0.l million, $0.9 million, and $14.2 million for 2008, 2007 and 2006 respectively. Additionally, in accordance with the new guidance, the loss from continuing operations in 2006 excludes the effect of income attributable to non-controlling interests of $11.5 million. Income attributable to non-controlling interests in 2008 and 2007 was not material.
(b) As of January 1, 2007, Wendy’s/Arby’s utilized a recognition threshold and measurement attribute for financial statement recognition and measurement of potential tax benefits associated with tax positions taken or expected to be taken in income tax returns. Wendy’s/Arby’s utilized a two-step process of evaluating a tax position, whereby an entity first determines if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50 percent likely of being realized upon being effectively settled. There was no effect on the 2007 or prior period statements of operations. However, there was a net reduction of $2.3 million in stockholders’ equity as of January 1, 2007. (3) For the purposes of calculating income per share amounts for 2007, net income was allocated between the shares
of Wendy’s/Arby’s Class A common stock and Wendy’s/Arby’s Class B common stock based on the actual dividend payment ratio. For the purposes of calculating loss per share, the net loss for all years through 2008 was allocated equally between Class A common stock and Class B common stock.
(4) The number of shares used in the calculation of diluted income per share in 2009 and 2007 consist of the weighted average common shares outstanding for each class of common stock and potential shares of common stock reflecting the effect of 483 dilutive stock options and nonvested restricted shares for 2009 and 129 for Wendy’s/Arby’s Class A common stock and 759 for Wendy’s/Arby’s Class B common stock for 2007. The number of shares used in the calculation of diluted income (loss) per share is the same as basic income (loss) per share for 2010, 2008 and 2006 since all potentially dilutive securities would have had an antidilutive effect based on the loss from continuing operations for these years.
(5) Reflects certain significant charges recorded during 2010 as follows: $69.4 million charged to operating profit for impairment of long-lived assets other than goodwill; $43.0 million charged to loss from continuing operations and net loss related to these charges; and $16.2 million charged to loss from continuing operations and net loss related to costs incurred for the early extinguishment of debt, which was comprised of a premium payment required to redeem the Wendy’s 6.25% senior notes, the write-off of the unaccreted discount of the Wendy’s 6.25% senior notes, and the write-off of deferred costs associated with the repayment of the Wendy’s/Arby’s Restaurants prior senior secured term loan.
(6) Reflects significant charges recorded in 2009 of $82.1 million charged to operating profit for impairment of long- lived assets other than goodwill and $50.9 million charged to income from continuing operations and net income related to these charges.
(7) Reflects certain significant charges and credits recorded during 2008 as follows: $460.1 million charged to operating loss consisting of a goodwill impairment for the Arby’s company-owned restaurant reporting unit; $484.0 million charged to loss from continuing operations and net loss representing the aforementioned $460.1 million charged to operating loss and other than temporary losses on investments of $112.7 million partially offset by $88.8 million of income tax benefit related to the above charges.
(8) Reflects certain significant charges and credits recorded during 2007 as follows: $45.2 million charged to operating profit, consisting of facilities relocation and restructuring costs of $85.4 million less $40.2 million from the gain on sale of Wendy’s/Arby’s interest in Deerfield; $16.6 million charged to income from continuing operations and net income representing the aforementioned $45.2 million charged to operating profit offset by
$15.8 million of income tax benefit related to the above charge, and a $12.8 million previously unrecognized prior year contingent tax benefit related to certain severance obligations to certain of Wendy’s/Arby’s former executives.
(9) Reflects a significant charge recorded during 2006 as follows: $9.0 million charged to loss from continuing operations and net loss representing a $14.1 million loss on early extinguishments of debt related to conversions or effective conversions of Wendy’s/Arby’s 5% convertible notes due 2023 and prepayments of term loans under Wendy’s/Arby’s senior secured term loan facility, partially offset by an income tax benefit of $5.1 million related to the above charge.
(Wendy’s/Arby’s Restaurants)
Omitted pursuant to General Instruction I of Form 10-K.