Wendy's International (WEN)

Working Capital and Capitalization

Working capital, which equals current assets less current liabilities, was $161.2 million at December 31, 2006, reflecting a current ratio, which equals current assets divided by current liabilities, of 1.7:1. Working capital at December 31, 2006 decreased $135.2 million from $296.4 million at January 1, 2006, primarily resulting from (1) dividend payments of $70.0 million and (2) the Term Loan Prepayments of $51.0 million.

Our total capitalization at December 31, 2006 was $1,199.2 million, consisting of stockholders’ equity of $474.6 million, long-term debt of $720.0 million, including current portion, and notes payable of $4.6 million. Our total capitalization at December 31, 2006 decreased $118.0 million from $1,317.2 million at January 1, 2006 principally reflecting (1) dividends paid of $70.0 million, (2) common stock of $56.6 million withheld as payment for withholding taxes related to stock options exercised and restricted stock vested,

52

(3) $19.2 million from the net decrease of long-term debt and notes payable less the effect of the shares issued in the Convertible Notes Conversions and (4) our net loss of $11.3 million, all partially offset by (1) a $15.9 million increase in “Additional paid-in capital” resulting from the recognition of share-based compensation, (2) other comprehensive income of $9.4 million principally reflecting net unrealized gains on available-for-sale securities and (3) proceeds from stock option exercises of $8.6 million.

Working Capital and Capitalization

       Working capital, which equals current assets less current liabilities, was $296.4 million at January 1, 2006, reflecting a current ratio, which equals current assets divided by current liabilities, of 1.2:1. Working capital at January 1, 2006 decreased $167.5 million from $463.9 million at January 2, 2005, primarily attributable to (1) the $98.4 million excess of current liabilities assumed over current assets acquired in the acquisition of RTM (see “RTM Acquisition” below) and (2) the cash payment of $49.9 million of withholding taxes related to December 2005 stock compensation transactions by the Executives for which we were reimbursed by them with shares of our common stock owned by them.

       Our total capitalization at January 1, 2006 was $1,317.2 million, consisting of stockholders' equity of $395.6 million, long-term debt of $913.6 million, including current portion, and notes payable of $8.0 million. Our total capitalization at January 1, 2006 increased $515.1 million from $802.1 million at January 2, 2005 principally due to (1) the net increase of $429.9 million in long-term debt, including current portion, principally due to funding the cash portion of the purchase price and the long-term debt assumed in the acquisition of RTM and (2) the issuance from treasury of 9,684,000 shares of our class B common stock for a portion of the purchase price for RTM with a fair value aggregating $145.3 million, both partially offset by our net loss of $55.6 million.