Wendy's International (WEN)

Acquisition of RTM in 2005

On July 25, 2005, the Company completed the acquisition (the “RTM Acquisition”) of substantially all of the equity interests or the assets of the entities comprising RTM. RTM was the largest franchisee of Arby’s restaurants with 775 Arby’s restaurants in 22 states as of the date of acquisition. The Company acquired RTM with the expectation of strengthening and increasing the value of its Arby’s brand, growing RTM’s restaurant business and improving operating efficiencies of the Company’s previously existing restaurants through implementing RTM’s more effective operational procedures and economies of scale.

The total consideration in connection with the RTM Acquisition is currently estimated to be $363,575,000, subject to a post-closing adjustment, consisting of (1) $175,000,000 in cash, (2) 9,684,000 shares of the Company’s Class B Common Stock issued from treasury with a fair value of $145,265,000 as of July 25, 2005 based on the closing price of the Company’s Class B Common Stock on such date and the two prior days of $15.00 per share, (3) the payment of $21,817,000 of debt, including related accrued interest and prepayment penalties, that was not an obligation of the entities included in the RTM Acquisition, (4) the vested portion of stock options to purchase 774,000 shares of the Company’s Class B Common Stock, with a fair value of $4,127,000 as of July 25, 2005, issued in exchange for existing RTM stock options and (5) $17,366,000 of related expenses. The $145,265,000 fair value of the stock issued reduced “Common stock held in treasury” by $81,542,000 representing the average cost of the Company’s treasury shares as of July 25, 2005 and increased “Additional paid-in capital” by the remaining $63,723,000. The total consideration represents $17,024,000 for the settlement loss from unfavorable franchise rights and $346,551,000 for the aggregate purchase price for RTM. The settlement loss included in “Loss on settlements of unfavorable franchise rights” in the accompanying consolidated statement of operations for the year ended January 1, 2006, was recognized in accordance with GAAP that require that any preexisting business relationship between the parties to a business combination be evaluated and accounted for separately. Under this accounting guidance, the franchise agreements acquired in the RTM Acquisition with royalty rates below the current 4% royalty rate that the Company receives on new franchise agreements were required to be valued and recognized as an expense and excluded from the purchase price paid for RTM. The amount of the settlement loss represents the present value of the estimated amount of future royalties by which the royalty rate is unfavorable over the remaining life of the franchise agreements. The closing price on July 25, 2005 of the Company’s Class B Common Stock and the two prior days was used to value the 9,684,000 shares since July 25, 2005 was the date that the final terms of the RTM Acquisition were agreed to and announced. The value of the vested portion of the options to purchase 774,000 shares represents the fair value of the total options calculated using the Black-Scholes Model less the intrinsic value of the nonvested portion of the options related to future service of the employees. A registration statement filed by the Company with the SEC covering the resale of a substantial portion of the 9,684,000 shares of the Class B Common Stock that were issued by the Company as a portion of the purchase price for RTM became effective in December 2006.

In connection with the RTM Acquisition, the Company refinanced all of the $268,381,000 existing indebtedness of its restaurant segment and $211,974,000 of then existing RTM debt (see Note 11).

The allocation of the purchase price of RTM, which remains subject to the resolution of a purchase price adjustment, if any, to the assets acquired and liabilities assumed was finalized during the year ended December

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Triarc Companies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
December 31, 2006

31, 2006 and is presented below in the table at the end of this footnote under “Purchase Price Allocations of Acquisitions.” The RTM Acquisition resulted in $403,240,000 of goodwill, of which $154,059,000 will be fully deductible for income tax purposes, and was assigned entirely to the Company’s restaurant segment. Such goodwill reflected the substantial value of RTM’s historically profitable restaurant business and the Company’s expectation of being able to grow RTM’s restaurant business and to improve operating efficiencies of the Company’s previously existing restaurants through implementing RTM’s more effective operational procedures and economies of scale. The acquired identifiable intangible assets, aggregating $44,443,000, principally include (1) favorable leases of $25,202,000 and (2) reacquired rights under franchise agreements of $18,161,000, and are all amortizable. Each of those amounts represents the fair value of the respective intangible asset, as determined in accordance with an independent appraisal. Favorable leases were valued using a market value approach based on the present value of the difference between current market rents for similar properties and the contractual rents in effect as of the acquisition date projected over the lease term, including option periods. Reacquired rights under franchise agreements were valued using a cost savings approach based on the price that the Company currently receives for franchise rights from new franchisees. The acquired identifiable intangible assets have a weighted average amortization period of approximately 17 years, reflecting a weighted average of approximately 15 years for the favorable leases and 20 years for the reacquired rights under franchise agreements.

A reconciliation of the change in goodwill from the estimated preliminary allocation of the purchase price of RTM as reflected in the accompanying consolidated balance sheet as of January 1, 2006 to the final allocation as reflected in the accompanying consolidated balance sheet as of December 31, 2006 and as set forth in the table below under “Purchase Price Allocations of Acquisitions” is summarized as follows (in thousands):

RTM’s results of operations and cash flows have been included in the accompanying consolidated statements of operations and cash flows commencing after the July 25, 2005 date of the RTM Acquisition. Following the RTM Acquisition, royalties and franchise and related fees from RTM have been eliminated in consolidation.