Wendy's International (WEN)

General and Administrative, Excluding Depreciation and Amortization

Our general and administrative expenses, excluding depreciation and amortization increased $87.0 million partially reflecting general and administrative expenses of $31.1 million of RTM and $11.8 million attributable to the full year effect in 2005 of the Deerfield Acquisition. Aside from the effects of the RTM Acquisition and the Deerfield Acquisition, general and administrative expenses increased $44.1 million principally due to (1) a $28.3 million increase in share-based compensation (see the discussion in the following paragraph), (2) a $12.1 million increase in other employee compensation reflecting higher incentive compensation costs, increased headcount and higher employer payroll taxes principally on the share-based compensation, (3) a $2.3 million increase in rent expense due principally to rent expense for duplicative office space in 2005 and (4) other increases of $5.0 million. Partially offsetting these increases were (1) a $2.4 million aggregate decrease in employee severance, relocation and recruiting costs, excluding those costs reported in “Facilities relocation and corporate restructuring” in 2005, (2) a $0.8 million decrease in insurance expense due principally to a non-recurring $1.5 million expense in 2004 for an environmental liability insurance policy and (3) a $0.4 million decrease in deferred compensation expense, from $2.6 million in 2004 to $2.2 million in 2005. Deferred compensation expense represents the net increase in the fair value of investments in two deferred compensation trusts for the benefit of the Executives, as explained in more detail below under “Loss From Continuing Operations Before Income Taxes and Minority Interests.”

The $28.3 million increase in share-based compensation reflects (a) a $16.4 million provision for the intrinsic value of stock options exercised in December 2005 by the Executives that were replaced by us on the date of exercise for our own tax planning reasons, (b) recognition of $6.1 million related to the grant in March 2005 of shares of our contingently issuable performance-based restricted class A and class B common stock, respectively, and (c) amortization of $5.8 million related to the grant in November 2005 of equity interests in two of our subsidiaries that hold our interests in Deerfield and Jurlique granted to certain members of our management.

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General and Administrative, Excluding Depreciation and Amortization

       Our general and administrative expenses, excluding depreciation and amortization increased $27.8 million, partially reflecting $10.4 million of general and administrative expenses of Deerfield. Aside from the effect of the Deerfield Acquisition, general and administrative expenses increased $17.4 million due to (1) a $10.4 million increase in incentive compensation costs, (2) a $3.0 million increase in employee severance, relocation and recruiting costs attributable to personnel changes, (3) a $1.5 million expense in 2004 for an environmental liability insurance policy covering unknown pre-existing and future conditions on all of our currently-owned properties as well as unknown pre-existing conditions on formerly-owned properties, (4) a $1.3 million increase in professional fees as a result of our compliance with the Sarbanes-Oxley Act of 2002 and (5) other inflationary increases. These increases were partially offset by a $0.8 million decrease in deferred compensation expense. Deferred compensation expense of $3.4 million in 2003 and $2.6 million in 2004 represents the increase in the fair value of investments in the Deferred Compensation Trusts for the benefit of the Executives, as explained in more detail below under “Loss From Continuing Operations Before Benefit From Income Taxes and Minority Interests.”