Wendy's International (WEN)

Investment Income, Net

The following table summarizes and compares the major components of investment income, net:

Interest income increased $26.4 million principally due to higher average outstanding balances of our interest-bearing investments due to the use of leverage in the Opportunities Fund. In addition, average rates on our investments increased from 2.5% in 2004 to 4.0% in 2005. The increase in the average rates was principally due to our investing through the use of leverage in the Opportunities Fund in some higher yielding, but more risk-inherent, debt securities with the objective of improving the overall return on our interest-bearing investments, and the general increase in the money market and short-term interest rate environment. Despite the higher outstanding balances of our interest-bearing investments, these balances, net of related leveraging liabilities, decreased principally due to the liquidation of some of those investments to provide cash for the Deerfield Acquisition in July 2004 and the RTM Acquisition in July 2005. Our other than temporary unrealized losses, as discussed in more detail in the comparison of 2006 with 2005, decreased $5.4 million reflecting the recognition of $6.9 million of impairment charges in 2004 based on significant declines in market values of some of our higher yielding, but more risk-inherent, debt investments, as well as declines in three of our available-for-sale investments in publicly-traded companies, compared with $1.5 million of other than temporary unrealized losses in 2005 related to various securities, including a large publicly-traded company which represented $0.7 million of these losses. Our recognized net gains, as discussed in more detail in the comparison of 2006 with 2005, increased $2.1 million principally due to an increase in realized gains on sales of available-for-sale securities and an unrealized gain on put and call option combinations on an equity security in 2005, both partially offset by lower gains realized on the sales of several investment limited partnerships and other cost-method investments in 2005 compared with 2004. During 2004 and 2005, our recognized net gains included $2.4 million and $2.0 million, respectively, of realized gains from the sale of certain cost- method investments in the Deferred Compensation Trusts, as explained in more detail below under “Loss from Continuing Operations Before Income Taxes and Minority Interests.”

(19) Investment Income, Net

       Investment income, net consisted of the following components (in thousands):

       The Other Than Temporary Losses in 2004 of $6,943,000 related primarily to the recognition of (1) $5,157,000 of impairment charges based on significant declines in the market values of some of the Company's higher yielding, but more risk-inherent, debt securities that were entered into with the objective of improving the overall return on the Company's interest-bearing investments and (2) $1,383,000 of impairment charges based on significant declines in the market values of three of the Company's available-for-sale investments in publicly-traded companies. The Other Than Temporary Losses in 2005 of $1,460,000 related primarily to the recognition of (1) $1,085,000 of impairment charges based on significant declines in the market values of four of the Company's available-for-sale investments in publicly-traded companies and (2) $156,000 of impairment charges related to certain CDO preferred stock investments resulting from a decrease in the projected cash flows of the underlying CDOs.

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Triarc Companies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
January 1, 2006