UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þx QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~April~~June 129, ~~2007~~ 2008

o¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-8116

WENDY’S INTERNATIONAL, INC.

(Exact name of Registrant as specified in its charter)

Ohio		31-0785108
(State or other jurisdiction of		(I.R.S. Employer
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
incorporation or organization)		Identification Number)

P.O. Box 256, 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256 ~~(Address~~ ~~of principal executive offices) (Zip code)~~

(Address of principal executive offices) (Zip code)

(Registrant’s telephone number, including area code) 614-764-3100

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has ~~been~~ been subject to such filing requirements for the past 90 days. Yes þ x No o ¨.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and ~~large~~“smaller ~~accelerated~~reporting ~~filer~~company” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated filer þ x Accelerated filer o ¨ Non-accelerated filer ¨ Smaller oreporting company ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o ¨ No þ x.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at ~~May~~August 74, ~~2007~~2008
Common shares, $.10 stated value		87,253,000 shares
Common shares, $.10 stated value Exhibit index on page 29		88,104,000 shares
Exhibit index on page 27.

WENDY’STable INTERNATIONAL,of INC. AND SUBSIDIARIES INDEX Contents

	Pages
PART I: Financial Information
Item 1. Financial Statements (Unaudited):
Consolidated Condensed Statements of Income for the quarters ended April 1, 2007 and April 2, 2006		3
Consolidated Condensed Balance Sheets as of April 1, 2007 and December 31, 2006		4-5
Consolidated Condensed Statements of Cash Flows for the quarters ended April 1, 2007 and April 2, 2006		6
Notes to the Consolidated Condensed Financial Statements		7-14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15-22
Item 3. Quantitative and Qualitative Disclosures about Market Risk		23
Item 4. Controls and Procedures		23
PART II: Other Information
Item 1. Legal Proceedings		24
Item 1A. Risk Factors		24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 4. Submission of Matters to a Vote of Security Holders		24-25
Item 6. Exhibits		25
Signature		26
Index to Exhibits		27
Exhibit 10	28-43
Exhibit 31(a)		44
Exhibit 31(b)		45
Exhibit 32(a)		46
Exhibit 32(b)		47
Exhibit 99	48-49
EX-10
EX-31(A)
EX-31(B)
EX-32(A)
EX-32(B)
EX-99

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX


		Pages
PART I: Financial Information

Item 1.	Financial Statements (Unaudited):

Consolidated Condensed Statements of Income for the quarter and year-to-date periods ended June 29, 2008 and July 1, 2007		3 - 4

Consolidated Condensed Balance Sheets as of June 29, 2008 and December 30, 2007		5 - 6

Consolidated Condensed Statements of Cash Flows for the year-to-date periods ended June 29, 2008 and July 1, 2007		7

Notes to the Consolidated Condensed Financial Statements		8 -15

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16 - 25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	25

PART II: Other Information

Item 1.	Legal Proceedings	25 - 26

Item 1A.	Risk Factors	26 - 27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 6.	Exhibits	27

Signatures		28

Index to Exhibits		29

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

	(In thousands, except per share data)
	Quarter Ended			Quarter Ended
	Quarter EndedJune 29, 2008			Quarter EndedJuly 1, 2007
	April 1, 2007			April 2, 2006
Revenues
Sales	$	~~522~~556,~~944~~085		$	~~513~~558,~~435~~312
Franchise revenues		6775,~~220~~838			6574,~~243~~600
		590,164			578,678
		631,923			632,912
Costs and expenses
Cost of sales		~~324~~345,~~061~~373			~~329~~337,~~724~~177
Company restaurant operating costs		~~152~~156,~~388~~205			~~149~~152,~~917~~405
Operating costs		38,~~935~~076			194,~~811~~852
Depreciation of property and equipment		2829,~~052~~886			3128,~~109~~749
General and administrative expenses		5045,~~822~~310			5551,~~297~~391
Other (income) expense, net		2,349			(6,602	)
Restructuring and Special Committee related charges		10,053			10,605
Total costs and expenses		561,607			579,256
Other income, net		(2,005	)		(8,011	)
Operating income (loss)		28,557			(578	)
Total costs and expenses		592,898			577,168
Interest expense		(12,207	)		(9,033	)
Operating income		39,025			55,744
Interest income		5,416			2,033
Interest expense		(8,998	)		(10,898	)
Income (loss) from continuing operations before income taxes		21,766			(7,578	)
Interest income		1,837			2,551
Income tax expense (benefit)		7,285			(1,681	)
Income from continuing operations before income taxes		31,864			47,397
Income (loss) from continuing operations		14,481			(5,897	)
Income tax expense		11,948			18,115
Income from discontinued operations		206			57,129
Income from continuing operations		19,916			29,282
Net income	$	14,687		$	51,232
Loss from discontinued operations		0			(49	)
Basic earnings (loss) per common share from continuing operations	$	.15		$	.(05	)
Net income	$	19,916		$	29,233
Diluted earnings (loss) per common share from continuing operations	$	.15		$	(.05	)
Basic earnings per common share from continuing operations	$	.23		$	.34
Basic earnings per common share from discontinued operations	$	.00		$	.50
Diluted earnings per common share from continuing operations	$	.22		$	.33
Diluted earnings per common share from discontinued operations	$	.00		$	.50
Basic earnings (loss) per common share from discontinued operations	$	.00		$	(.00	)
Basic earnings per common share	$	.15		$	.45
Diluted earnings (loss) per common share from discontinued operations	$	.00		$	(.00	)
Diluted earnings per common share	$	.15		$	.45
Basic earnings per common share	$	.23		$	.34
Dividends declared and paid per common share	$	.085		$	.17
Diluted earnings per common share	$	.22		$	.33
Basic shares		94,605			114,722
Dividends declared and paid per common share	$	0.125		$	0.125
Diluted shares		95,706			116,397
Basic shares		87,766			87,216
Diluted shares		88,540			88,316

The accompanying Notes are an integral part of the Consolidated Condensed Financial Statements.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

~~CONSOLIDATED~~PART ~~CONDENSED~~I: ~~BALANCE~~FINANCIAL ~~SHEETS (Unaudited)~~INFORMATION

	(Dollars in thousands)
	April 1, 2007			December 31, 2006
ASSETS
Current assets
Cash and cash equivalents	$	196,149		$	457,614
Accounts receivable, net		74,265			84,841
Deferred income taxes		25,167			29,651
Inventories and other		28,848			30,252
Advertising fund restricted assets		53,006			36,207
Assets held for disposition		12,034			15,455
Current assets of discontinued operations		3,879			2,712
		393,348			656,732
Property and equipment		2,039,836			2,024,715
Accumulated depreciation		(814,888	)		(798,387	)
		1,224,948			1,226,328
Goodwill		85,384			85,353
Deferred income taxes		4,552			4,316
Intangible assets, net		3,454			3,855
Other assets		86,178			82,738
Non current assets of discontinued operations		1,075			1,025
	$	1,798,939		$	2,060,347

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)


	(In thousands, except per share data)
	Year-to-Date Ended June 29, 2008			Year-to-Date Ended July 1, 2007
Revenues
Sales	$	1,069,102		$	1,081,256
Franchise revenues		145,012			141,820

		1,214,114			1,223,076

Costs and expenses
Cost of sales		665,203			661,238
Company restaurant operating costs		307,449			304,793
Operating costs		14,920			8,787
Depreciation of property and equipment		58,692			56,801
General and administrative expenses		98,546			102,213
Restructuring and Special Committee related charges		16,916			11,636
Other income, net		(551	)		(6,693	)

Total costs and expenses		1,161,175			1,138,775

Operating income		52,939			84,301
Interest expense		(18,105	)		(23,105	)
Interest income		3,991			7,967

Income from continuing operations before income taxes		38,825			69,163
Income tax expense		14,766			25,400

Income from continuing operations		24,059			43,763
Income from discontinued operations		0			157

Net income	$	24,059		$	43,920

Basic earnings per common share from continuing operations	$	.27		$	.48

Diluted earnings per common share from continuing operations	$	.27		$	.48

Basic earnings per common share from discontinued operations	$	.00		$	.00

Diluted earnings per common share from discontinued operations	$	.00		$	.00

Basic earnings per common share	$	.27		$	.48

Diluted earnings per common share	$	.27		$	.48

Dividends declared and paid per common share	$	0.25		$	0.21

Basic shares		87,586			90,910

Diluted shares		88,412			92,011

The accompanying Notes are an integral part of the Consolidated Condensed Financial Statements.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES ~~CONSOLIDATED~~ ~~CONDENSED BALANCE SHEETS (Unaudited)~~

	(Dollars in thousands)
	April 1, 2007			December 31, 2006
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	82,743		$	93,465
Accrued expenses:
Salaries and wages		31,378			47,329
Taxes		24,198			46,138
Insurance		58,232			57,353
Other		55,380			32,199
Advertising fund restricted liabilities		53,006			28,568
Current portion of long-term obligations		89,206			87,396
Current liabilities of discontinued operations		1,590			2,218
		395,733			394,666
Long-term obligations
Term debt		521,296			537,139
Capital leases		19,017			18,963
		540,313			556,102
Deferred income taxes		30,123			30,220
Other long-term liabilities		87,746			66,163
Non current liabilities of discontinued operations		1,445			1,519
Commitments and contingencies
Shareholders’ equity
Preferred stock, Authorized: 250,000 shares
Common stock, $.10 stated value per share,
Authorized: 200,000,000 shares,
Issued: 129,730,000 and 129,548,000 shares, respectively		12,973			12,955
Capital in excess of stated value		1,095,963			1,089,825
Retained earnings		1,247,955			1,241,489
Accumulated other comprehensive income (loss):
Cumulative translation adjustments and other		10,146			9,100
Pension liability		(21,776	)		(22,546	)
		2,345,261			2,330,823
Treasury stock at cost:
42,844,000 and 33,844,000 shares, respectively		(1,601,682	)		(1,319,146	)
		743,579			1,011,677
	$	1,798,939		$	2,060,347

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)


	(Dollars in thousands)
	June 29, 2008			December 30, 2007
ASSETS
Current assets
Cash and cash equivalents	$	221,916		$	211,200
Accounts receivable, net		73,195			72,069
Deferred income taxes		9,876			7,304
Inventories and other		32,034			29,590
Advertising fund restricted assets		52,337			42,665
Assets held for disposition		4,566			3,338

Total current assets		393,924			366,166

Property and equipment		2,138,102			2,119,140
Accumulated depreciation		(903,458	)		(872,255	)

Property and equipment, net		1,234,644			1,246,885

Goodwill		83,923			84,001
Deferred income taxes		5,269			4,899
Intangible assets, net		2,982			2,704
Other assets		81,062			84,742

Total assets	$	1,801,804		$	1,789,397

The accompanying Notes are an integral part of the Consolidated Condensed Financial Statements.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED ~~STATEMENTS~~BALANCE OFSHEETS ~~CASH FLOWS (Unaudited)~~

	(In thousands)
	Quarter Ended			Quarter Ended
	April 1, 2007			April 2, 2006
Net cash provided by (used in) operating activities from continuing operations	$	55,120		$	(15,941	)
Net cash provided by (used in) operating activities from discontinued operations		(204	)		(9,670	)
Net cash provided by (used in) operating activities		54,916			(25,611	)
Cash flows from investing activities
Proceeds from property dispositions		5,228			37,716
Capital expenditures		(23,972	)		(41,125	)
Other investing activities		(738	)		(1,608	)
Net cash used in investing activities from continuing operations		(19,482	)		(5,017	)
Net cash used in investing activities from discontinued operations		(55	)		(34,178	)
Net cash used in investing activities		(19,537	)		(39,195	)
Cash flows from financing activities
Proceeds from issuance of debt, net of issuance costs		0			34,996
Excess stock-based compensation tax benefits		734			11,098
Proceeds from employee stock options exercised		2,572			48,741
Repurchase of common stock		(282,524	)		(220,063	)
Principal payments on debt obligations		(8,348	)		(35,635	)
Dividends paid on common shares		(8,136	)		(19,744	)
Net cash used in financing activities from continuing operations		(295,702	)		(180,607	)
Net cash provided by financing activities from discontinued operations		0			1,159,947
Net cash provided by (used in) financing activities		(295,702	)		979,340
Effect of exchange rate changes on cash from continuing operations		82			(21	)
Effect of exchange rate changes on cash from discontinued operations		0			(328	)
Net increase (decrease) in cash and cash equivalents		(260,241	)		914,185
Cash and cash equivalents at beginning of period		457,614			230,560
Add: Cash and cash equivalents of discontinued operations at beginning of period		2,273			162,681
Net (decrease) increase in cash and cash equivalents		(260,241	)		914,185
Less: Cash and cash equivalents of discontinued operations at end of period		(3,497	)		(839,887	)
Cash and cash equivalents at end of period	$	196,149		$	467,539
Supplemental disclosures:
Interest paid from continuing operations	$	508		$	708
Interest paid from discontinued operations		0			5,869
Income taxes (refunded) paid		(10,579	)		62,615
Capitalized lease obligations incurred from continuing operations		543			1,432
Capitalized lease obligations incurred from discontinued operations		0			982

(Unaudited)


	(Dollars in thousands)
	June 29, 2008			December 30, 2007
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	77,058		$	85,662
Accrued expenses:
Salaries and wages		26,881			39,157
Taxes		33,849			31,033
Insurance		62,722			57,190
Other		55,126			45,612
Advertising fund restricted liabilities		52,337			35,760
Current portion of long-term obligations		922			26,591

Total current liabilities		308,895			321,005

Long-term obligations
Term debt		521,426			521,343
Capital leases		21,663			21,680

Total long-term obligations		543,089			543,023

Deferred income taxes		53,048			45,351
Other long-term liabilities		77,538			75,887
Commitments and contingencies
Shareholders’ equity
Preferred stock, Authorized: 250,000 shares
Common stock, $.10 stated value per share, Authorized: 200,000,000 shares, Issued: 130,940,000 and 130,241,000 shares, respectively		13,094			13,024
Capital in excess of stated value		1,125,038			1,110,363
Retained earnings		1,290,042			1,287,963
Accumulated other comprehensive income (loss):
Cumulative translation adjustments		25,431			28,949
Pension liability		(17,193	)		(18,990	)

		2,436,412			2,421,309
Treasury stock at cost: 42,844,000 shares		(1,617,178	)		(1,617,178	)

Total shareholders’ equity		819,234			804,131

Total liabilities and shareholders’ equity	$	1,801,804		$	1,789,397

The accompanying Notes are an integral part of the Consolidated Condensed Financial Statements.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

~~NOTES~~CONSOLIDATED TOCONDENSED ~~THE~~STATEMENTS ~~CONSOLIDATED~~OF ~~CONDENSED~~CASH ~~FINANCIAL~~FLOWS ~~STATEMENTS (Unaudited)~~

(Unaudited)


	(In thousands)
	Year-to-Date Ended June 29, 2008			Year-to-Date Ended July 1, 2007
Net cash provided by operating activities from continuing operations	$	96,463		$	123,488
Net cash provided by operating activities from discontinued operations		0			39

Net cash provided by operating activities		96,463			123,527

Cash flows from investing activities
Proceeds from property dispositions		4,209			10,137
Proceeds from insurance settlements		2,995			6,266
Capital expenditures		(58,964	)		(44,969	)
Acquisitions of franchisees		(2,553	)		0
Other investing activities		143			(417	)

Net cash used in investing activities from continuing operations		(54,170	)		(28,983	)
Net cash used in investing activities from discontinued operations		0			(174	)

Net cash used in investing activities		(54,170	)		(29,157	)

Cash flows from financing activities
Excess stock-based compensation tax benefits		3,758			4,786
Proceeds from employee stock options exercised		6,380			5,897
Repurchase of common stock		0			(298,032	)
Principal payments on debt obligations		(19,203	)		(30,736	)
Dividends paid on common shares		(21,880	)		(19,042	)

Net cash used in financing activities		(30,945	)		(337,127	)

Effect of exchange rate changes on cash from continuing operations		(632	)		1,519
Net increase (decrease) in cash and cash equivalents		10,716			(241,238	)

Cash and cash equivalents at beginning of period		211,200			457,614
Add: Cash and cash equivalents of discontinued operations at beginning of period		0			2,273
Net increase (decrease) in cash and cash equivalents		10,716			(241,238	)
Less: Cash and cash equivalents of discontinued operations at end of period		0			(2,557	)

Cash and cash equivalents at end of period	$	221,916		$	216,092

Supplemental disclosures:
Interest paid from continuing operations	$	17,807		$	19,602
Income taxes paid (refunded), net		1,575			(8,690	)
Capitalized lease obligations incurred from continuing operations		400			543

The accompanying Notes are an integral part of the Consolidated Condensed Financial Statements.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 MANAGEMENT’S STATEMENT

In the opinion of management, the accompanying Consolidated Condensed Financial Statements contain all adjustments (all of which are normal and recurring in nature) necessary for a fair statement of the consolidated condensed financial position of Wendy’s International, Inc. and subsidiaries (the “Company”) as of ~~April~~June 129, ~~2007~~2008 and December 3130, ~~2006~~2007, and the consolidated condensed results of operations and comprehensive income (see Note 7) for the quarters and year-to-date periods ended ~~April~~June 129, ~~2007~~2008 and ~~April~~July 21, ~~2006~~2007 and consolidated condensed cash flows for the ~~quarters~~year-to-date periods ended ~~April~~June 129, ~~2007~~2008 and ~~April~~July 21, ~~2006~~2007. All of these financial statements are unaudited. These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s ~~2006~~2007 Form 10-K. The December 3130, ~~2006~~ 2007 Consolidated Condensed Balance Sheet was derived from the audited Consolidated Financial Statements contained in the Company’s ~~2006~~2007 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

On ~~September~~July 29, ~~2006~~2007, the Company completed the ~~spin-off~~sale of ~~its~~Cafe ~~remaining~~Express ~~82.75% ownership in Tim Hortons Inc. (“THI”)~~and, ~~the parent company of the business previously reported as the Hortons segment. Accordingly~~accordingly, ~~the~~its results of operations ~~of THI~~ are reflected as discontinued operations ~~for~~ ~~all~~for ~~periods presented. In addition, on November 28, 2006,~~ the ~~Company~~quarter ~~completed the sale of Baja Fresh~~ and, ~~accordingly,~~year-to-date ~~its results of operations are reflected as discontinued operations for all~~ periods ~~presented.~~ended ~~On October~~July 91, ~~2006,~~2007 the Company’s Board of Directors approved the future sale of Cafe Express and, accordingly, the results of operations and assets and liabilities of Cafe Express are reflected as discontinued operations for all periods presented (see Note 6). ~~Baja Fresh and~~ Cafe Express ~~were~~was previously reported asin the Developing ~~Brands~~Brand segment.

NOTE 2 NET INCOME PER SHARE

Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Diluted computations are based on the treasury stock method and include assumed conversions of stock options and restricted stock and restricted stock units ~~(together “restricted shares”)~~, when outstanding and dilutive. There were no options excluded from the computation of diluted earnings per common share for the quarters ended April 1, 2007 and April 2, 2006 as they were all dilutive. Due to the loss from continuing operations for the quarter ended April 2, 2006, basic shares are used for both basic and diluted earnings per share calculations.

The computation of diluted earnings per common share excludes options to purchase 3.2 million shares for the second quarter of 2008 and 2.0 million shares for the year-to-date periods ended June 29, 2008, because the exercise price of these options was greater than the average market price of the common shares, and therefore, they were antidilutive. There were no options excluded from the computation of diluted earnings per common share for the quarter and year-to-date periods of 2007 as they were all dilutive.

The computations of basic and diluted earnings per common share are shown below:

(In thousands, except per share data)	Quarter Ended						Year-to-Date Ended
	April 1, 2007			April 2, 2006
	June 29, 2008		July 1, 2007				June 29, 2008		July 1, 2007
Income (loss) from continuing operations for computation of basic and diluted earnings per common share	$	14,481		$	(5,897	)
Income from continuing operations for computation of basic and diluted earnings per common share	$	19,916	$	29,282			$	24,059	$	43,763
Income from discontinued operations for computation of basic and diluted earnings per common share	$	206		$	57,129
Income (loss) from discontinued operations for computation of basic and diluted earnings per common share		0		(49	)			0		157
Net income for computation of basic and diluted earnings per common share	$	1419,~~687~~916	$	$29,233	~~51,232~~		$	24,059	$	43,920
Weighted average shares for computation of basic earnings per common share		9487,~~605~~766		87,216	~~114,722~~			87,586		90,910
Effect of dilutive stock options and restricted shares		1,101			1,675
Effect of dilutive stock options & restricted shares		774		1,100				826		1,101
Weighted average shares for computation of diluted earnings per common share		9588,~~706~~540		88,316	~~116,397~~			88,412		92,011
Basic earnings (loss) per common share from continuing operations	$	.15		$	(.05	)
Basic earnings per common share from continuing operations	$	0.23	$	0.34			$	0.27	$	0.48
Basic earnings per common share from discontinued operations	$	.00		$	.50
Basic earnings (loss) per common share from discontinued operations	$	0.00	$	(0.00	)		$	0.00	$	0.00
Total basic earnings per common share	$	0.1523	$	$0.34	~~.45~~		$	0.27	$	0.48
Diluted earnings (loss) per common share from continuing operations	$	.15		$	(.05	)
Diluted earnings per common share from continuing operations	$	0.22	$	0.33			$	0.27	$	0.48
Diluted earnings per common share from discontinued operations	$	.00		$	.50
Diluted earnings (loss) per common share from discontinued operations	$	0.00	$	(0.00	)		$	0.00	$	0.00
Total diluted earnings per common share	$	0.1522	$	$0.33	~~.45~~		$	0.27	$	0.48

7 8

NOTE 3 STOCK-BASED COMPENSATION

The Company recorded the following stock compensation expense:

	Quarter Ended
(In thousands)	Quarter Ended					Year-to-Date Ended
(In thousands)	April 1, 2007			April 2, 2006
	June 29, 2008		July 1, 2007			June 29, 2008		July 1, 2007
Continuing operations:
Before-tax	$	23,~~720~~585	$	$3,895	~~604~~	$	7,061	$	6,615
After-tax	$	12,~~692~~274	$	2,574	~~376~~	$	4,479	$	4,340
Discontinued operations:
Before-tax	$	400	$	151	~~1,041~~	$	0	$	191
After-tax	$	250	$	96	~~648~~	$	0	$	121
Total:
Before-tax	$	23,~~760~~585	$	$4,046	~~1,645~~	$	7,061	$	6,806
After-tax	$	12,~~717~~274	$	2,670	~~1,024~~	$	4,479	$	4,461
In May 2008, the Company granted 2.4 million stock options to key employees at a weighted average price of $28.71. One-third of the options vest on each of the first three anniversaries of the grant date. In calculating the fair value of options issued to employees that received grants in May 2008, the Company used the following assumptions.
Assumption	2008
Dividend yield									1.7	%
Expected volatility									26	%
Risk-free interest rate									2.6	%
Expected lives									4.3 years
Per share weighted average fair value of options granted								$	6.05

~~The~~NOTE ~~increase~~4 inOTHER ~~stock compensation expense recognized in continuing operations in the quarter ending April 1~~INCOME, ~~2007~~NET compared to the quarter ending April 2, 2006 is primarily attributed to a pretax adjustment of $1.7 million ($1.1 million after tax) to correct cumulative compensation expense recorded in the first quarter of 2006 as well as additional awards granted after the first quarter of 2006. The decrease in stock compensation expense recognized in discontinued operations in the quarter ending April 1, 2007 compared to the quarter ending April 2, 2006 is primarily due to the absence of expense related to THI and Baja Fresh in 2007.

OnThe ~~April 26,~~following ~~2007,~~represents the ~~Company’s~~components ~~shareholders~~of ~~approved~~Other ~~the 2007 Stock Incentive Plan (the “2007 Plan”)~~income, ~~which~~net ~~provides~~on ~~for equity compensation awards in~~ the ~~form~~Consolidated ofCondensed ~~stock~~Statements options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalent rights, performance shares, performance units and share awards (collectively, “Awards”) to eligible employees and directors of ~~the~~Income ~~Company or its subsidiaries. The 2007 Plan authorizes up to six million common shares~~ for ~~grants~~each of ~~Awards. The common shares offered under~~ the ~~2007~~periods ~~Plan~~presented: may be authorized but unissued shares, treasury shares or any combination thereof. The Company intends to use the 2007 Plan to issue annual stock option grants and long-term performance unit awards beginning in 2007. The Company expects that approximately 50% of the value of Awards made in 2007 and subsequent years will be comprised of stock options, with the remaining 50% of the value comprised of performance awards.

NOTE 4 OTHER (INCOME) EXPENSE, NET


	Quarter Ended						Year-to-Date Ended
(In thousands)	June 29, 2008			July 1, 2007			June 29, 2008			July 1, 2007
Store closure costs	$	(143	)	$	494		$	3,178		$	4,315
Equity investment income		(3,038	)		(2,747	)		(5,202	)		(5,055	)
Net gain from the sale of property		(50	)		(916	)		(634	)		(1,389	)
Legal reserves		617			(697	)		2,012			335
Investment distribution		(1,027	)		0			(1,053	)		0
Gain from insurance proceeds		0			(4,526	)		0			(4,526	)
Other, net		1,636			381			1,148			(373	)

Other income, net	$	(2,005	)	$	(8,011	)	$	(551	)	$	(6,693	)

~~The~~Store ~~following~~closure costs include asset impairments, asset write-offs and lease termination costs. Equity investment income primarily represents ~~the~~Wendy’s ~~components~~share of ~~other~~a ~~(income) expense,~~50/50 ~~net~~Canadian onrestaurant ~~the~~real ~~Consolidated~~estate joint venture between Wendy’s and Tim Hortons. The gain from insurance proceeds primarily represents reimbursements related to property damaged by ~~Condensed~~Hurricane ~~Statements~~Katrina. ofThe ~~Income~~change ~~for~~in ~~each~~other, ofnet for the comparative quarter and year-to-date periods ~~presented:~~ primarily reflects higher store asset write-offs.

	Quarter Ended
(In thousands)	April 1, 2007			April 2, 2006
Restructuring costs	$	1,031		$	0
Store closure costs		3,821			775
Equity investment income		(2,308	)		(152	)
Rent revenue		0			(4,283	)
Net gain from property dispositions		(473	)		(4,077	)
Other, net		278			1,135
Other (income) expense, net	$	2,349		$	(6,602	)

Rent revenues for the quarter ended April 2, 2006 represent rent paid by THI to a 50/50 restaurant real estate joint venture between Wendy’s and THI. After the spin-off of THI and in accordance with accounting principles generally accepted in the United States, this joint venture is no longer consolidated in the Company’s financial statements and Wendy’s 50% share of the joint venture income is included in other (income) expense, net as equity investment income for the quarter ended April 1, 2007. See Notes 10 and 11 for discussion of store closure costs and restructuring costs, respectively.

NOTE 5 INCOME TAXES

InThe ~~June 2006,~~effective ~~the~~income ~~Financial~~tax ~~Accounting~~rate ~~Standards~~for ~~Board~~the ~~(“FASB”)~~quarter ~~issued~~and ~~FASB~~year-to-date ~~Interpretation~~periods ~~No.~~ended June 4829, ~~“Accounting~~ ~~for~~2008 ~~Uncertainty~~was in37.5% ~~Income~~and ~~Taxes¾an interpretation of FASB Statement No~~38. ~~109~~0%, respectively, ~~Accounting~~compared ~~for~~to ~~Income~~38.2% ~~Taxes”~~and ~~(“FIN 48”)~~36.7% ~~FIN~~for ~~48 addresses~~ the ~~determination~~respective ofcomparative ~~whether~~periods ~~tax benefits~~ended ~~claimed~~July 1, or2007. ~~expected~~The year-to-date beperiod ~~claimed~~ended onJuly 1, a2007 benefited from tax ~~return~~refund ~~should~~claim bediscrete ~~recorded~~events. in

8The Company has identified approximately $19 million in fees to certain advisors to the Special Committee of the Board of Directors that are directly associated with the proposed transaction, which will be deemed as non-deductible, resulting in approximately $7 million in additional tax expense for the period in which the transaction would occur.

the financial statements. Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The Company adopted the provisions of FIN 48 on January 1, 2007. There was no cumulative effect adjustment to retained earnings required related to the adoption of FIN 48. However, certain amounts have been reclassified in the Consolidated Condensed Balance Sheets in order to comply with the requirements of the statement. The amount of unrecognized tax benefits at January 1, 2007 was approximately $23.1 million, all of which would impact the Company’s effective tax rate, if recognized.

The Internal Revenue Service (“IRS”) is conducting an examination of the Company’s U.S. federal income tax returns for the year 2005 and the 2006 and 2007 years as part of the IRS’s Compliance Assurance Process program. The Company is before the IRS Appeals Division for the years 1998 through 2004 as it relates to a refund claim for the work-opportunity tax credit. The Company is before the U.S. Competent Authority for the years 1999 through 2001 as it relates to transfer pricing on royalties and fees between U.S. and Canada. Amounts related to IRS examinations of federal income tax returns for 2004 and prior years have been settled and paid.

State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The Company has various state income tax returns in the process of examination, administrative appeals or litigation.

The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of the income tax provision. As of January 1, 2007, the Company had approximately $7.1 million of accrued interest and penalties.

There was no material change in the amount of unrecognized tax benefits in the quarter ended April 1, 2007. The Company expects that approximately $1.4 million of its liability for unrecognized tax benefits will be settled in the next 12 months. It is possible that the amount of unrecognized tax benefits could change in the next 12 months; however the Company does not expect the change to have a significant impact on its results of operations or financial position.

The effective income tax rate from continuing operations for the quarter ended April 1, 2007 was 33.5%, compared to 22.2% for the comparative period ended April 2, 2006. Income tax expense for both periods was impacted by several discrete items that reduced the effective rate.

NOTE 6 DISCONTINUED OPERATIONS

THI

On September 29, 2006, the Company completed the distribution of its remaining 82.75% ownership in THI. The distribution took place in the form of a pro rata common stock dividend to Wendy’s shareholders whereby each shareholder received 1.3542759 shares of THI common stock for each share of Wendy’s common stock held.

The table below presents the significant components of THI operating results included in income from discontinued operations for the quarter ended April 2, 2006. THI represented the Hortons segment prior to the spin-off.

	Quarter Ended
(In thousands)	April 2, 2006
Revenues	$	319,023
Income before income taxes		72,239
Income tax expense		10,725
Minority interest expense		494
Income from discontinued operations, net of tax	$	61,020

Income tax expense for THI in the first quarter of 2006 was lowered primarily by $7.0 million due to the release of deferred Canadian withholding taxes and state income taxes on unremitted foreign earnings and $3.8 million due to permanent differences for fair value losses on certain foreign currency contracts that were deductible for tax purposes but not for book purposes.

~~Developing~~NOTE ~~Brands~~ 6 DISCONTINUED OPERATIONS

On ~~November~~July 2829, ~~2006~~2007, the Company completed the sale of ~~Baja Fresh and also in the fourth quarter of 2006, the Company’s Board of Directors approved the future sale of~~ Cafe Express. ~~Both of these businesses historically comprised the Developing Brands segment.~~ Accordingly, the results of operations of ~~Baja Fresh and~~ Cafe Express are reflected as discontinued operations for ~~all periods presented. In addition,~~ the ~~assets~~quarter and ~~liabilities~~year-to-date ofperiods ~~Cafe Express were held for sale at April~~ended July 1, 2007. ~~and~~According ~~December 31,~~to ~~2006~~the ~~and~~terms ~~are~~of ~~presented~~the assale ~~current~~agreements, ~~and~~the ~~non-current~~disposition ~~assets and liabilities from discontinued operations. The sale~~ of ~~Baja~~Cafe ~~Fresh~~Express iswas subject to certain working capital and other adjustments which have not ~~yet~~ been finalized. The impact of any such adjustments is not expected to have a a material impact on the results of operations of the Company.

The following table ~~below~~ presents the significant components of ~~Baja Fresh and~~ Cafe Express operating ~~results~~ results included in income (loss) from discontinued operations for the quarter and year-to-date periods ended ~~April~~July 1, 2007 ~~and April 2, 2006~~.

	Quarter Ended
(In thousands)	Quarter EndedJuly 1, 2007			Year-to-Date EndedJuly 1, 2007
(In thousands)	April 1, 2007			April 2, 2006
Revenues	$	8,835		$	17,185
Revenues	$	8,350		$	48,024
Income (loss) before income taxes		(78	)		253
Income (loss) before income taxes		331			(6,280	)
Income tax (benefit) expense		(29	)		96
Income tax expense (benefit)		125			(2,389	)
Income (loss) from discontinued operations, net of tax	$	(49	)	$	157
Income (loss) from discontinued operations, net of tax	$	206		$	(3,891	)

~~The~~NOTE ~~assets~~7 ~~and~~CONSOLIDATED ~~liabilities~~CONDENSED ofSTATEMENTS ~~Cafe~~OF ~~Express~~COMPREHENSIVE ~~are~~INCOME ~~reflected as discontinued operations in the Consolidated Condensed Balance Sheets as of April 1, 2007 and December 31, 2006 and are comprised of the following:~~

(In thousands)	April 1, 2007		December 31, 2006
Cash	$	3,497	$	2,273
Accounts receivable, net		117		124
Inventories and other		265		315
Total current assets	$	3,879	$	2,712
Property and equipment, net	$	408	$	350
Intangible assets, net		180		180
Other non-current assets		487		495
Total non-current assets	$	1,075	$	1,025
Accounts payable	$	910	$	1,476
Accrued liabilities		680		742
Total current liabilities	$	1,590	$	2,218
Other non-current liabilities	$	1,445	$	1,519
Total non-current liabilities	$	1,445	$	1,519

The components of other comprehensive income (loss) and total comprehensive income are shown below:

On February 28, 2007, in accordance with the terms of the partnership agreement, Wendy’s acquired, at no cost, the remaining 30% of equity of Cafe Express. The Company now owns 100% of Cafe Express.


	Quarter Ended				Year-to-Date Ended
(In thousands)	June 29, 2008		July 1, 2007		June 29, 2008			July 1, 2007
Net income	$	19,916	$	29,233	$	24,059		$	43,920

Other comprehensive income (loss):
Translation adjustments,		1,368		8,627		(3,518	)		9,673
Pension liability (net of tax of $827 and $2,670 for the quarters ended June 29, 2008 and July 1, 2007, respectively and $1,092 and $2,670 for the year-to-date periods ended June 29, 2008 and July 1, 2007, respectively).		1,362		3,625		1,797			4,395

Total other comprehensive income (loss)		2,730		12,252		(1,721	)		14,068

Total comprehensive income	$	22,646	$	41,485	$	22,338		$	57,988

Other comprehensive income (loss) is comprised of translation adjustments related to fluctuations in the Canadian dollar and changes in the Company’s pension liability. There was a strengthening in the Canadian dollar during the second quarter and a weakening during the year-to-date periods of 2008, as well as a strengthening in the Canadian dollar during the second quarter and year-to-date periods of 2007. At the end of the second quarter 2008, the Canadian exchange rate was $1.01 versus $1.02 at March 30, 2008 and $0.98 at December 30, 2007. At the end of the second quarter 2007, the Canadian exchange rate was $1.07 versus $1.15 at April 1, 2007 and $1.17 at December 31, 2006.

NOTE 8 DEBT

On February 29, 2008, the Company negotiated a renewal of its $200 million revolving credit facility which expires on September 1, 2008. This amended revolving credit facility contains various covenants which, among other things: require the maintenance of certain ratios, including indebtedness to total capitalization and a fixed charge coverage ratio; limits the amounts of assets that can be sold, shares that can be repurchased, liens that can be placed on the Company’s assets, indebtedness of subsidiaries to third parties (excluding indebtedness of the Wendy’s National Advertising Program, Inc.) and contingent and off balance sheet liabilities that can exist; eliminate the Company’s ability to perform asset securitizations and sale and leaseback transactions; and establish the maintenance of minimum on-hand balances of cash and cash equivalents of $50.0 million. The Company was in compliance with these covenants as of June 29, 2008. The Company is charged interest on advances that varies based on the type of advance utilized by the Company, which is either an alternate base rate (greater of prime or Federal funds plus 0.5%) or a rate based on LIBOR plus a margin that varies based on the Company’s debt rating at the time of the advance. The Company is also charged a facility fee based on the total credit facility. This fee varies from 0.15% to 0.40% based on the Company’s debt rating. As of June 29, 2008, no amounts under this revolving credit facility were drawn. If the Company consummates the Merger Agreement (see Note 18) the revolving credit facility would not be available to the Company.

~~NOTE~~In 7the ~~CONSOLIDATED~~fourth ~~CONDENSED~~quarter ~~STATEMENTS~~of OF2006, ~~COMPREHENSIVE~~the ~~INCOME~~Company entered into an agreement to sell approximately 40% of the Company’s U.S. royalty stream for a 14-month period to a third party in return for a cash payment in 2006 of $94.0 million. The cash received in 2006 was classified as debt which was fully repaid in the second quarter of 2008.

The components of other comprehensive income and total comprehensive income are shown below:

	Quarter Ended
(In thousands)	April 1, 2007		April 2, 2006
Net income	$	14,687	$	51,232
Other comprehensive income:
Translation adjustments, net of tax		1,046		(20	)
Cash flow hedges:
Net change in fair value of derivatives, net of tax		0		(6,112	)
Amounts realized in earnings during the period, net of tax		0		6,801
Total cash flow hedges		0		689
Pension liability (net of tax of $467 for the quarter ended April 1, 2007)		770		0
Total other comprehensive income		1,816		669
Total comprehensive income	$	16,503	$	51,901

There was a slight strengthening in the Canadian dollar from the beginning of the first quarter of 2007 to the end of the first quarter of 2007 and a slight weakening in the Canadian dollar from the beginning of the first quarter of 2006 to the end of the first quarter of 2006. Offsetting the first quarter 2006 weakening in the Canadian dollar was a $2.3 million gain, net of taxes of $1.3 million, related to the Company’s hedge of certain net investment positions. This gain was included in the first quarter 2006 translation adjustments component of other comprehensive income. At the end of the first quarter 2007, the Canadian exchange rate was $1.15 versus $1.17 at December 31, 2006. At the end of the first quarter 2006, the Canadian exchange rate was $1.17 versus $1.16 at January 1, 2006.

NOTE 8 CASH FLOWS

In order to maintain comparability between periods, intercompany cash flows have been eliminated from the appropriate cash flow lines in the Company’s Consolidated Condensed Statements of Cash Flows. During first quarter 2007, intercompany cash flows included net cash payments of $1.5 million from Wendy’s to Cafe Express for intercompany trade payables and taxes. These payments have been eliminated as a cash outflow from continuing operations’ operating activities and as a cash inflow from discontinued operations’ operating activities, respectively.

During first quarter 2006, intercompany cash flows were comprised of $427.4 million in net cash payments made by THI to Wendy’s for payment of an intercompany note from Wendy’s. The $427.4 million payment has been eliminated as a cash outflow from discontinued operations’ financing activities and as a cash inflow from continuing operations’ financing activities, respectively. Intercompany cash flows also included payments made by THI to Wendy’s totaling $13.4 million in intercompany interest and intercompany trade payables. These payments have been eliminated as a cash outflow from discontinued operations’ operating activities and as a cash inflow from continuing operations’ operating activities, respectively.

Intercompany cash flows for first quarter 2006 also included net cash payments from Wendy’s to Baja Fresh for $2.2 million for intercompany trade payables. These payments have been eliminated as a cash outflow from continuing operations’ operating activities and as a cash inflow from discontinued operations’ operating activities, respectively.

NOTE 9 GOODWILL AND OTHER INTANGIBLE ASSETS

The table below presents amortizable intangible assets as of ~~April~~June 129, ~~2007~~2008 and December 3130, ~~2006~~2007:

	April 1, 2007											December 31, 2006
	June 29, 2008									December 30, 2007
	Gross							Net				Gross							Net
(In thousands)	GrossCarryingAmount		AccumulatedAmortization				NetCarryingAmount			GrossCarryingAmount			AccumulatedAmortization				NetCarryingAmount
	Carrying			Accumulated				Carrying				Carrying				Accumulated			Carrying
Amortizable intangible assets:
(In thousands)	Amount			Amortization				Amount				Amount				Amortization			Amount
Patents and trademarks	$	452	$	(452	)		$	0		$	452		$	(452	)		$	0
Amortizable intangible assets:
Other		5,454		(2,472	)			2,982			4,985			(2,281	)			2,704
Patents and trademarks	$	452		$	(452	)		$	0			$	452			$	(424	)	$	28
	$	5,906	$	(2,924	)		$	2,982		$	5,437		$	(2,733	)		$	2,704
Purchase options		7,500			(6,973	)			527				7,500				(6,680	)		820
Other		4,958			(2,031	)			2,927				4,956				(1,949	)		3,007
	$	12,910		$	(9,456	)		$	3,454			$	12,908			$	(9,053	)	$	3,855

Included in the net carrying amount in Other above is $2.4 million and $2.6 million as of June 29, 2008 and December 30, 2007, respectively, net of accumulated amortization of $2.4 million and $2.2 million, respectively, related to the use of the name and likeness of Dave Thomas, the late founder of Wendy’s.

Total intangibles amortization expense was $0.1 million and $0.2 million for the quarter and year-to-date periods ended June 29, 2008, respectively, and $0.2 million and $0.6 million for the quarter and year-to-date periods ended July 1, 2007, respectively. The estimated annual intangibles amortization expense for the years 2009 through 2013 is approximately $0.4 million.

The changes in the carrying amount of goodwill for the year-to-date period ended June 29, 2008 are as follows:


(In thousands)	Total
Balance at December 30, 2007	$	84,001
Goodwill recorded in connection with acquisitions		825
Goodwill related to dispositions and write-offs		(329	)
Translations adjustments and other		(574	)

Balance at June 29, 2008	$	83,923

NOTE 10 ACQUISITIONS

During the six months ended June 29, 2008, the Company acquired three restaurants from a franchisee for $2.6 million, including $0.8 million of goodwill. No acquisitions occurred during the six months ended July 1, 2007.

NOTE 11 FIXED ASSET DISPOSITIONS AND IMPAIRMENTS

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company has classified assets with a net book value of $4.6 million and $3.3 million as Assets held for disposition in the Consolidated Condensed Balance Sheets as of June 29, 2008 and December 30, 2007, respectively. Assets classified as held for disposition are no longer depreciated and are classified as held for disposition based on the Company’s intention to sell these assets within 12 months.

The following is a progression of Assets held for disposition.


(In thousands, except number of sites)	Number of Sites		Net Book Value			Gain on Sale
Balance at December 30, 2007	7		$	3,338
Sold	(2	)		(1,194	)	$	584
Transferred to property and equipment	(2	)		(775	)
Transferred from property and equipment	6			3,345
Impairments recorded				(148	)

Balance at June 29, 2008	9		$	4,566

~~Included~~At inJune 29, ~~other~~2008, ~~above~~the isnet ~~$2.8 million~~book ~~and~~value ~~$2.9 million as~~ of ~~April 1,~~Assets ~~2007~~held ~~and~~for ~~December 31, 2006,~~disposition ~~respectively,~~included ~~net of accumulated amortization of~~ $2.0 9 million of land and $1.~~9 million,~~7 ~~respectively,~~million ~~primarily related to the use~~ of ~~the~~buildings ~~name~~ and ~~likeness~~leasehold ~~of Dave Thomas, the late founder of Wendy’s~~improvements.

~~Total~~The ~~intangibles~~2008 ~~amortization~~net ~~expense~~gain ~~was~~of $0.4 6 million ~~and~~is $0classified as Other income, net on the Consolidated Condensed Statements of Income.~~3 million~~ ~~for~~During the ~~quarters~~six months ended ~~April~~ July 1, 2007, ~~and~~the ~~April~~Company sold 12 sites classified as held for disposition at December 231, 2006, ~~respectively.~~with ~~The~~a ~~estimated~~net ~~annual~~book ~~intangibles~~value ~~amortization expense~~of $4.5 million, for ~~the~~a ~~years~~net ~~2008~~gain ~~through~~of ~~2012~~$1.6 million, of which $1.3 million is ~~less~~classified as ~~than~~Other income, net and $0.5 3 million is classified in Franchise revenues on the Consolidated Condensed Statements of Income.

~~Goodwill~~As ~~was~~shown ~~$85~~above,~~384~~ ~~and~~in ~~$85~~2008,~~353~~ attwo sites ~~April 1,~~which ~~2007~~were previously classified as held for disposition were reclassified to Property and ~~December 31~~equipment, ~~2006,~~net ~~respectively~~because these sites are no longer being actively marketed for sale. The ~~change~~effect on the Consolidated Statements of Income related to the inreclassification ~~goodwill~~of ~~represents~~these ~~translation~~sites ~~adjustments~~from onAssets ~~Canadian~~held ~~dollar~~for ~~denominated~~disposition ~~goodwill~~was limited to depreciation expense and was not material.

~~NOTE~~During 10the ~~FIXED~~six ~~ASSET~~months ~~DISPOSITIONS~~ended June 29, ~~AND~~2008, ~~IMPAIRMENTS~~the Company sold 13 sites not classified as held for disposition with a net book value of $2.0 million for a net gain of $0.2 million, which is classified as Franchise revenues on the Consolidated Condensed Statements of Income. During the six months ended July 1, 2007, the Company sold 12 sites not classified as held for disposition with a net book value of $2.4 million. The Company recognized a gain of $1.4 million from these sales, of which $.01 million is classified as Other income, net and $1.3 million is classified as Franchise revenues on the Consolidated Condensed Statements of Income.

InDuring ~~accordance~~the ~~with~~second quarter ~~Statement~~and ofyear-to-date ~~Financial~~periods ~~Accounting~~ended ~~Standards (“SFAS”) No.~~June ~~144~~29, ~~“Accounting~~2008 ~~for~~ the ~~Impairment~~Company orrecorded ~~Disposal~~$0.1 million of ~~Long-Lived~~income ~~Assets”~~and $3.2 million of expense, ~~the~~respectively, ~~Company~~related ~~has~~to ~~classified~~store ~~assets~~closings, ~~with~~compared ato ~~net~~store ~~book value~~closing charges of $~~12.~~0 .5 million and $154.5 3 million ~~as assets held~~ for ~~disposition in~~ the ~~Consolidated~~ ~~Condensed~~second ~~Balance~~quarter ~~Sheets~~and asyear-to-date ofperiods ~~April~~ended July 1, 2007 ~~and December 31~~, ~~2006,~~ respectively. ~~The~~Store ~~assets~~closing costs are ~~no longer~~included ~~being~~in ~~depreciated~~Other ~~and~~income, ~~have~~net ~~been classified as held for disposition based~~ on the ~~Company’s intention~~Consolidated toCondensed ~~sell~~Statements ~~these~~of ~~assets within the next 12 months~~Income. AtTotal ~~April 1,~~store ~~2007,~~closing ~~the~~costs ~~net~~included ~~book~~asset ~~value~~impairments ofand ~~assets~~write-offs ~~held for disposition includes $8.5 million of land~~ and ~~$3.5 million~~lease oftermination ~~buildings and leasehold improvements~~costs.

~~During~~NOTE ~~the~~12 ~~quarter~~RESTRUCTURING ~~ended~~RESERVES April 1, 2007, the Company sold nine sites classified as held for disposition at December 31, 2006, with a net book value of $3.8 million, for a net gain of $1.4 million, of which $1.1 million is classified as other (income) expense, net and $0.3 million is classified in franchise revenues on the Consolidated Condensed Statements of Income. During the first quarter of 2007, one additional site with a net book value of $0.5 million was designated as held for disposition.

~~During~~The ~~the~~table ~~first~~below ~~quarter~~presents ofa ~~2007~~reconciliation ~~and~~of ~~2006,~~ the ~~Company~~beginning ~~incurred $3.8 million~~ and ~~$0.8 million, respectively,~~ending ofrestructuring ~~store~~liabilities ~~closing and asset impairment charges, which are~~ (included in ~~other~~Accrued ~~(income~~expenses—Other) ~~expense,~~ ~~net~~at onDecember 30, ~~the~~2007 ~~Consolidated~~and ~~Condensed~~June 29, ~~Statements~~2008, ofrespectively, ~~Income.~~related ~~Store~~to ~~closing costs primarily~~the ~~consist~~Company’s ofcost ~~lease~~reduction ~~termination~~plan ~~costs~~initiated ~~and~~in ~~equipment write-offs~~2006.

NOTE 11 RESTRUCTURING RESERVES


(In thousands)	Reduction in Force			Professional Fees			Total
Balance at December 30, 2007	$	701		$	10		$	711
Expensed during the period		212			0			212
Paid during the period		(917	)		0			(917	)
Adjustments		4			(10	)		(6	)

Balance at June 29, 2008	$	0		$	0		$	0

In ~~2006,~~ the ~~Company~~ ~~accrued~~second ~~restructuring~~quarter ~~costs~~and ~~related~~the year-to-date ~~its~~periods ~~voluntary~~ended ~~enhanced~~June 29, ~~retirement~~2008 ~~plan~~ and ~~reduction in~~July 1, ~~force~~2007, ~~and~~respectively, the ~~accrued~~Company ~~professional~~recognized ~~fees~~severance and ~~other~~related benefit costs. asAs ~~part~~ of aDecember 30, 2007, all amounts associated with the cost reduction plan. ~~Most of~~are ~~these~~classified ~~costs~~as ~~were~~current liabilities. The Company has paid inall ~~2006.~~remaining restructuring liabilities as of June 29, 2008.

~~The~~In ~~table~~addition ~~below~~to ~~presents~~the arestructuring ~~reconciliation~~liabilities, ofin the ~~beginning~~second quarter and ~~ending~~year-to-date ~~restructuring~~periods ~~liabilities~~ended June 29, 2008 and July 1, ~~(included~~2007, inthe ~~accrued~~Company ~~expenses~~recognized –pretax ~~other)~~pension atsettlement ~~December 31,~~charges ~~2006~~of $1.5 million and ~~April 1,~~$5.4 ~~2007~~million, respectively:, related to the cost reduction plan (see also Note 14). All of these restructuring costs and pretax pension settlement charges are included in the Restructuring and Special Committee related charges line on the Consolidated Condensed Statements of Income.

	Enhanced			Reduction			Professional
(In thousands)	Retirement			in Force			Fees			Total
Balance at December 31, 2006	$	18		$	6,498		$	141		$	6,657
Expensed during the period		0			463			585			1,048
Paid during the period		0			(3,819	)		(711	)		(4,530	)
Adjustments		(18	)		998			0			980
Balance at April 1, 2007	$	0		$	4,140		$	15		$	4,155

In the second quarter and year-to-date 2008, the Company recognized $8.6 million and $15.2 million, respectively, of Special Committee related charges, compared to $4.7 million for the quarter and year-to-date periods in 2007, respectively. These costs are primarily financial, legal advisory and due diligence fees related to the activities of the Special Committee formed by the Company’s Board of Directors.

InIncluded ~~addition~~on to the Consolidated ~~restructuring~~Condensed ~~liabilities~~Balance ~~accrued~~Sheets inas ~~2006~~of June 29, 2008 and December 30, 2007 in the ~~first~~Accrued ~~quarter~~expenses-Other ofline ~~2007, the~~are ~~Company~~expenses ~~accrued~~related anto ~~additional~~Special ~~$0.5 million~~Committee activities of ~~severance~~$21.1 ~~costs~~million and $015.6 million, ofrespectively. ~~professional fees~~The ~~primarily~~Special ~~related~~Committee was toformed ~~relocation~~in ~~costs~~April ~~and~~2007 ~~outplacement~~to ~~services.~~investigate ~~The~~strategic ~~adjustments~~options inincluding, ~~the~~among ~~table above~~other ~~primarily~~things, ~~reflect~~revisions to the ~~reclassification~~Company’s ofstrategic ~~certain~~plan, ~~severance~~changes ~~liabilities from long-term~~ to ~~current~~ ~~liabilities.~~its Ascapital ~~of April 1~~structure, ~~2007,~~or ~~all~~a ~~amounts~~possible ~~related~~sale, tomerger ~~this cost~~or ~~reduction~~other ~~plan~~business ~~are~~combination ~~classified~~(see asNote ~~current liabilities~~18).

~~The~~NOTE ~~2007~~13 ~~restructuring~~GUARANTEES ~~costs~~AND ~~are~~INDEMNIFICATIONS ~~presented in the other (income) expense, net line on the Consolidated Condensed Statements of Income (see also Note 4).~~

~~NOTE~~The 12Company has ~~CHANGES~~guaranteed INcertain ~~SHAREHOLDERS’~~lease ~~EQUITY~~and debt payments, primarily related to franchisees, amounting to $159.6 million. In the event of default by a franchise owner, the Company generally retains the right to acquire possession of the related restaurants. The Company is contingently liable for certain leases amounting to $18.1 million. These leases have been assigned to unrelated third

In March 2007, 9.0 million common shares were repurchased under an accelerated share repurchase (“ASR”) transaction for an initial value of $282.5 million. The initial price paid as part of the ASR transaction was $31.33 per share plus certain other costs. The repurchased shares are also subject to a future contingent-purchase price adjustment based upon the weighted average price during the period from the repurchase date until settlement, which is expected to occur in the second or third quarter of 2007. The price adjustment is subject to a cap and a floor. The ASR agreement included the option to settle the contract in cash or

~~shares~~ parties, ofwho have agreed to indemnify the Company’s ~~common~~against ~~stock~~future ~~and,~~liabilities ~~accordingly,~~arising under the ~~contract~~leases. ~~was~~These ~~treated~~leases asexpire anon ~~equity transaction~~various dates through 2022. The Company ~~initial~~is ~~purchase~~also ~~price~~the ofguarantor on $~~282~~2.5 6 million ~~was~~in ~~reflected~~letters inof ~~the~~credit ~~treasury~~with ~~stock component~~various ofparties; ~~shareholders’~~however, ~~equity~~management indoes ~~the~~not ~~first~~expect ~~quarter~~any ofmaterial ~~2007.~~loss ~~Any~~to ~~additional~~result ~~amounts~~from ~~paid~~these ~~due~~instruments ~~to the~~because ~~future~~it ~~contingent-purchase~~does ~~price~~not ~~adjustment~~believe performance will ~~not~~be ~~impact~~required. The length of the ~~income~~lease, ~~statement~~loan ~~but~~and ~~will~~other ~~be reflected~~arrangements inguaranteed by the ~~treasury~~Company ~~stock~~or ~~component~~for ofwhich ~~shareholders’~~the ~~equity~~Company is contingently liable varies, but generally does not exceed 20 years.

NOTE 13 GUARANTEES AND INDEMNIFICATIONS

The Company has guaranteed certain lease and debt payments primarily related to franchisees, amounting to $166.6 million for the continuing Wendy’s business. In the event of default by a franchise owner, the Company generally retains the right to acquire possession of the related restaurants. The Company is contingently liable for certain leases amounting to $20.8 million. These leases have been assigned to unrelated third parties, who have agreed to indemnify the Company against future liabilities arising under the leases. These leases expire on various dates through 2022. The Company is also the guarantor on $6.5 million in letters of credit with various parties; however, management does not expect any material loss to result from these instruments because it does not believe performance will be required. The length of the lease, loan and other arrangements guaranteed by the Company or for which the Company is contingently liable varies, but generally does not exceed 20 years.

In addition to the guarantees described above, the Company is party to many agreements executed in the ordinary course of business that provide for indemnification of third parties under specified circumstances, such as lessors of real property leased by the Company, distributors, service providers for various types of services (including commercial banking, investment banking, tax, actuarial and other services), software licensors, marketing and advertising firms, securities underwriters and others. Generally, these agreements obligate the Company to indemnify the third parties only if certain events occur or claims are made, as these contingent events or claims are defined in each of these agreements. The Company believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the earnings or financial condition of the Company.

NOTE 14 RETIREMENT PLANS

The Company has two domestic defined benefit plans, the account balance defined benefit pension plan (the “ABP Plan”) and the Crew defined benefit plan (the “Crew Plan”), together referred to as the “Plans”, covering all eligible employees of the Company.

The Crew Plan discontinued employee participation and accruing additional employee benefits in 2001. In February 2006, the Company announced that it would freeze the ABP Plan as of December 31, 2006. Beginning January 1, 2007, no new participants ~~will~~entered ~~enter~~ the ABP Plan, although participant account balances ~~will~~ continue to receive interest credits of approximately 6% ~~in 2007~~ on existing account balances. Beginning January 1, 2007, Company benefits credited to ABP Plan participant accounts which were historically made based on a percentage of participant salary and years of service ~~will~~are no longer be made ~~beginning January 1, 2007~~. ~~Freezing~~In of the ~~ABP~~fourth ~~Plan was accounted for as a curtailment in the first~~ quarter of 2006 ~~under SFAS No. 88~~, ~~“Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, and during~~ the ~~first quarter 2006, the~~ Company ~~recorded~~decided ~~a $0.1 million curtailment charge related~~ to ~~service~~terminate ~~cost unrecognized prior to freezing~~ the ~~ABP Plan~~Plans. InThe ~~the~~Company ~~fourth~~has ~~quarter~~received approval of ~~2006,~~ the ~~Company~~termination ~~decided~~by ~~to terminate~~ the ~~Plans.~~Pension ~~The~~Benefit ~~Company~~Guaranty ~~has~~Corporation, requested termination determination letters on the Plans from the IRS and, ~~approval~~during ofJuly, 2008, received the ~~termination~~requested byIRS ~~the~~determination ~~Pension~~letter ~~Benefit~~on ~~Guaranty~~the ~~Corporation~~Crew Plan. Once approved by the IRS, the Company intends to distribute ~~individual~~lump ~~account~~sum ~~balances~~payments or purchase annuities to settle ~~the account~~all ~~balances~~Plan benefits. The Company ~~makes~~expects ~~contributions~~ to recognize ~~the~~future ~~Plans~~pretax insettlement ~~amounts~~charges ~~sufficient,~~up onto ~~an actuarial~~$40 ~~basis~~million, including up to ~~fund~~$20 atmillion ain ~~minimum,~~cash contributions to fund the Plans’ ~~normal~~obligations ~~cost~~when onthe aPlans ~~current~~are ~~basis,~~terminated. ~~and~~In ~~to fund~~ the ~~actuarial~~ ~~liability~~second ~~for~~quarter ~~past~~of ~~service~~2008, ~~costs~~the inCompany ~~accordance~~recognized ~~with~~$1.5 ~~Department~~million of ~~Treasury regulations.~~ ~~The~~pretax ~~Company~~non-cash ~~may~~pension ~~make~~settlement ~~contributions~~charges, ofwhich upreflected toapproximately $10 5 million toof ~~its~~cash ~~pension~~distributions ~~plans~~made in ~~2007~~the ~~unless approval~~first tohalf ~~terminate~~of the ~~Plans~~year. isThere ~~received,~~were inno ~~which~~settlement ~~case~~charges ~~the~~recognized ~~Company~~in ~~may~~the befirst ~~required~~quarter toof ~~make contributions~~2008. toIn the ~~Plans~~second quarter of up2007, the toCompany recognized $25 5.5 million ~~(including~~in ~~the~~pretax ~~$10 million~~non-cash ~~previously~~pension ~~described)~~settlement ~~in order~~charges, toof ~~make~~which ~~the~~$4.0 ~~required~~million ~~distributions~~consisted toof ~~settle~~a ~~plan~~non-cash ~~participant~~adjustment ~~account~~identified ~~balances.~~in ~~When~~ the ~~Plans~~ ~~are~~second ~~terminated,~~quarter ~~the~~of ~~Company~~2007 ~~would~~that ~~expect~~relates to ~~recognize~~the ~~pretax~~first ~~settlement~~quarter ~~charges~~2007. ~~of approximately~~This ~~$33 million~~adjustment towas ~~$50 million.~~not material.

Net periodic pension cost ~~(credit)~~ for the Plans for the ~~quarters~~quarter and year-to-date periods ended ~~April~~June 129, ~~2007~~2008 and ~~April~~July 21, ~~2006~~ 2007 consisted of the following:

	Quarter Ended						Year-to-Date Ended
(In thousands)	~~April~~June 129, ~~2007~~2008			~~April~~July 21, ~~2006~~2007			June 29, 2008			July 1, 2007
Service cost	$	0		$	1,550
Interest cost	$	960		$	1,367		$	1,926		$	2,667
Interest cost		1,301			1,355
Expected return on plan assets		(897	)		(1,244	)		(1,810	)		(2,488	)
Expected return on plan assets		(1,244	)		(2,039	)
Amortization of net loss		604			713			1,202			1,427
Amortization of prior service cost		0			(100	)
Net periodic pension cost	$	667		$	836		$	1,318		$	1,606
Amortization of net loss		713			940
Net periodic pension cost	$	770		$	1,706

NOTE 15 REVENUES

Revenues consisted of the following:

	Quarter Ended					Year-to-Date Ended
(In thousands)	~~April~~June 129, ~~2007~~2008		July 1, 2007	~~April 2, 2006~~		June 29, 2008		July 1, 2007
Sales:
Retail sales:
Sales from company operated restaurants	$	~~500~~529,~~339~~905	$	$532,497	~~490,940~~	$	1,020,354	$	1,032,836
Product sales to franchisees		22,605			22,495
Product sales to franchises		26,180		25,815			48,748		48,420
		522,944			513,435
		556,085		558,312			1,069,102		1,081,256
Franchise revenues:
Rents and royalties		6675,~~534~~287		72,629	~~64,730~~		143,829		139,163
Franchise fees		~~369~~464		666	~~180~~		962		1,035
Net gains on sales of properties to franchisees		~~317~~87		1,305	~~333~~		221		1,622
		67,220			65,243
		75,838		74,600			145,012		141,820
Total revenues	$	~~590~~631,~~164~~923	$	$632,912	~~578,678~~	$	1,214,114	$	1,223,076

NOTE 16 ~~RECENTLY~~FAIR ~~ISSUED~~VALUE ~~ACCOUNTING PRONOUNCEMENTS~~

InAt ~~February~~June ~~2007~~29, ~~the~~2008 ~~FASB~~and ~~issued SFAS No.~~December ~~159~~30, ~~“The~~2007, ~~Fair~~cash ~~Value Option for Financial Assets~~ and ~~Financial~~ ~~Liabilities~~cash ~~Including~~equivalents anincluded ~~Amendment of SFAS No~~$158. ~~115”.~~8 ~~This~~million ~~statement allows entities to measure certain assets~~ and ~~liabilities~~$156.5 atmillion, ~~fair value~~respectively, ~~with~~of ~~changes~~institutional inmoney ~~the~~market ~~fair~~fund ~~value recognized in earnings~~investments. ~~The~~These ~~statement’s~~investments ~~objective~~are ismeasured toat ~~mitigate~~fair ~~volatility~~value inusing ~~reported earnings caused by~~quoted ~~measuring~~market ~~related~~prices ~~assets and liabilities differently without applying complex hedge accounting provisions. This statement is effective~~ for ~~fiscal~~identical ~~years~~assets ~~beginning~~(the ~~after~~highest ~~November 15,~~Level ~~2007.~~1 ~~The Company~~fair isvalue ~~currently~~measure ~~evaluating~~identified ~~the~~by ~~impact~~Statement of ~~the~~Financial ~~adoption~~Accounting ofStandards (“SFAS”) No. ~~159~~157, “Fair Value Measurements”).

NOTE 17 RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 creates consistency and comparability in fair value measurements among the many accounting pronouncements that require fair value measurements, but does not require any new fair value measurements. The Company adopted SFAS No. 157 in 2008 for financial assets and liabilities and the adoption did not have a material impact on the Company. The effective date of this statement for nonfinancial assets and nonfinancial liabilities was deferred by FASB Staff Position FAS 157, “Effective date of FASB Statement No. 157”, and is now effective for fiscal years beginning after November 15, 2008. The adoption of SFAS No. 157 for nonfinancial assets and liabilities is not expected to have a material impact on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement requires an acquirer to recognize the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date measured at fair values as of that date. This Statement changes the accounting for acquisition-related costs and restructuring costs, now requiring those costs to be recognized separately from the acquisition. This Statement also makes various other amendments to the authoritative literature intended to provide additional guidance or to conform the guidance in that literature to that provided in this Statement. SFAS No. 141(R) shall be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS No. 141(R) but does not expect it to have a material impact on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”. This Statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as minority interest) and for the deconsolidation of a subsidiary. This Statement will be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements, which will be applied retrospectively for all periods presented. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, with early adoption prohibited. The Company is currently evaluating the impact of the adoption of SFAS No. 160.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133”. This Statement requires enhanced disclosures about an entity’s derivative and hedging activities in order to provide adequate information about how those activities affect the entity’s financial position, financial performance and cash flows. This Statement is effective for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of the adoption of SFAS No. 161 but does not expect it to have a material impact on the Company’s financial statements.

NOTE 18 MERGER

In April 2007, the Company announced that its Board of Directors, acting unanimously, had formed a Special Committee of independent directors to investigate strategic options for the Company. These options, among other things, included revisions to the Company’s strategic plan, changes to its capital structure, or a possible sale, merger or other business combination. On April 23, 2008, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Triarc Companies, Inc., a Delaware corporation (“Triarc”), and Green Merger Sub, Inc., an Ohio corporation and a wholly-owned subsidiary of Triarc (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Triarc (the “Merger”). The Merger has been approved by the board of directors of both the Company and Triarc.

Pursuant to the terms of the Merger Agreement, each common share of the Company will be converted into the right to receive 4.25 (the “Exchange Ratio”) shares of Class A Common Stock, par value $0.10 per share, of Triarc (the “Triarc Class A Common Stock”). The Company’s employee stock options and other equity awards will generally convert upon consummation of the Merger and without any action on the part of the holder into stock options and equity awards with respect to the Triarc Class A Common Stock, after giving effect to the Exchange Ratio. Cash will be paid to the Company’s shareholders in lieu of fractional shares of Triarc’s Class A Common Stock.

Each party’s obligation to consummate the Merger is subject to customary conditions, including shareholder approval of both companies. On May 28, 2008, The United States Federal Trade Commission granted the Company’s and Triarc’s request for early termination of the Hart-Scott-Rodino Act waiting period.

In connection with the Merger Agreement, the Company amended its Amended and Restated Rights Agreement (as amended, the “Rights Agreement”). The amendment makes the Rights Agreement inapplicable to the Merger, the Merger Agreement and the associated voting agreements and provides for the expiration of the Rights (as defined in the Rights Agreement) immediately prior to the effective time of the Merger if the Rights have not otherwise expired. Also, the Merger Agreement provides that the Company will deliver or cause to be delivered, such officers certificates, opinions of counsel and supplemental indentures, if any, required by the indentures governing the Company’s 6.25% Senior Notes due 2011, 6.20% Senior Notes due 2014 and 7.00% Debentures due 2025, necessary to effect the Merger without any default or event of default arising as a result of the Merger.

Since the announcement of the execution of the Merger Agreement on April 24, 2008, several purported class action lawsuits have been filed by shareholders of the Company in Ohio and New York state courts. The plaintiffs assert claims of breach of fiduciary duty against the Company and against certain of its officers and directors in connection with the Merger and failure to disclose material information related to the Merger in the S-4 that Triarc filed with the SEC. The complaints seek, among other things, injunctive relief against consummation of the Merger, declaratory judgments for breach of fiduciary duties, attorney’s fees and damages in an unspecified amount. The Company believes the claims are without merit and intends to vigorously defend against them. The Company is unable to reliably estimate the range of possible dollar claims that may result from these lawsuits. However, it is the opinion of the Company that the ultimate resolution of these matters will not materially affect the earnings or financial condition of the Company.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL ~~CONDITION~~ ~~AND RESULTS OF OPERATIONS~~

CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW

Wendy’s International, Inc. and subsidiaries (the “Company ”) completed the ~~spin-off~~sale of ~~Tim~~Cafe ~~Hortons Inc.~~Express ~~(“THI ”)~~ on ~~September~~July 29, ~~2006 and the sale of Baja Fresh on November 28, 2006~~2007. ~~During the fourth quarter 2006, the Company also approved the prospective disposition of Cafe Express.~~ Accordingly, the after-tax operating results of ~~THI, Baja Fresh and~~ Cafe Express now appear in the income (loss) from discontinued operations line on the ~~income~~Consolidated ~~statement~~Condensed Statements of Income for all periods presented.

The Company’s reported net income ofwas $1419.7 9 million for ~~first~~second quarter ~~2007~~2008 compared to $5129.2 million for ~~first~~second quarter ~~2006~~2007. ~~Income~~Year-to-date, ~~from~~the ~~continuing~~Company’s ~~operations~~net income was $1424.5 1 million ~~for first quarter 2007~~ compared to ~~a loss of~~ $543.9 million in ~~first quarter 2006~~2007. ~~Reported~~Income ~~operating income~~ from continuing operations ~~improved~~decreased ~~$29~~32.~~2 million~~0% in ~~2007,~~the ~~from~~second aquarter ~~loss~~2008, offrom $029.6 3 million toin ~~income~~2007 ofto $2819.6 9 million~~. The~~ ~~improved~~in ~~operating~~2008 ~~income~~and ~~results~~decreased 45.0% from ~~continuing~~$43.8 ~~operations~~million ~~were~~in ~~driven~~2007 byto ~~higher company~~$24.1 ~~operated~~million ~~restaurant~~in ~~margins,~~2008. ~~higher~~The ~~royalty~~year ~~revenues~~over ~~and~~year ~~lower~~decline ~~general~~was ~~and~~driven ~~administrative~~by ~~expenses. Total~~lower ~~company~~operating ~~operated~~income, ~~restaurant~~which ~~margins~~decreased ~~increased from 6~~30.0% in the ~~first~~second quarter of2008 ~~2006~~and ~~to 8~~37.62% in ~~the~~year-to-date ~~first~~compared ~~quarter~~to 2007. ~~due~~Both to2008 ~~positive~~and ~~average~~2007 ~~same-store sales, including~~second ~~the~~quarter ~~impact~~results ofwere ~~the~~impacted ~~Company’s~~by ~~new market-based pricing~~restructuring ~~approach,~~ charges and ~~lower~~also ~~costs.~~impacted ~~Royalties~~by ~~also increased~~costs inassociated ~~2007~~with ~~due~~the toBoard ~~positive~~of ~~average~~Director’s ~~same-store~~Special ~~sales~~Committee, atwhich ~~franchised~~was ~~restaurants.~~formed Ato ~~reduction of~~investigate ~~$4.5 million~~strategic inoptions ~~general~~for ~~and~~the ~~administrative~~Company ~~expenses~~(see in“Management’s ~~the~~Outlook” ~~first~~section ~~quarter~~below). ~~2007~~Without ~~versus~~the ~~2006~~Restructuring ~~reflected~~and ~~the~~Special ~~impact~~Committee ofrelated ~~2006~~charges ~~cost~~as ~~saving~~shown ~~initiatives.~~on ~~Other~~the ~~significant~~Consolidated ~~items~~Condensed ~~impacting~~Statements ~~the operating~~of ~~income~~Income, ~~comparison~~second ~~between~~quarter ~~first~~2008 ~~quarter~~adjusted ~~2006~~operating ~~and~~income ~~the~~was ~~first~~lower ~~quarter~~than 2007 ~~included~~by $1517.0 3 million, inor ~~2006~~26.0%, ~~incremental~~and ~~contributions~~$26.1 tomillion, ~~the~~or ~~Wendy’s~~27.2%, ~~National~~for ~~Advertising~~the ~~Program~~year-to-date. (“The Company ~~WNAP~~uses ~~”) that~~adjusted ~~did~~operating ~~not~~income ~~recur~~as inan ~~2007,~~internal ~~partially~~measure ~~offset~~of byoperating $3performance.6 ~~million~~Management inbelieves ~~higher~~adjusted ~~asset~~operating ~~gains~~income inprovides ~~2006,~~a ~~$3.0 million~~meaningful inperspective ~~higher~~of ~~store~~the ~~closing~~underlying ~~charges~~operating ~~in 2007, higher~~ performance~~-based~~ ~~bonus accruals~~ of ~~$3.2 million~~the ~~and higher stock compensation expense of $2~~business.~~1 million.~~

~~Average~~The ~~same-store~~operating ~~sales~~income results from continuing operations for ~~domestic~~the ~~Wendy’s~~second asquarter a2008 ~~percentage~~were ~~change~~due ~~for~~to ~~the~~lower ~~first~~company ~~quarter~~operated restaurant margins (see below), higher franchisee ~~2007~~breakfast ~~versus~~advertising ~~prior~~support ~~year~~of ~~are~~$2.6 ~~listed~~million inand ~~the~~higher ~~table~~legal ~~below~~reserves of $1.3 million, partially offset by lower general and ~~show~~administrative ~~average~~expenses ~~same-store~~of ~~sales~~$6.1 ~~improved~~million. Company operated restaurant margins in the ~~first~~second quarter 2008 decreased by 250 basis points over 2007., ~~One~~primarily ofreflecting ~~the~~higher ~~key~~commodity ~~indicators~~costs, intransaction ~~the~~declines ~~restaurant~~and ~~industry~~higher ~~that~~breakfast ~~management~~losses, partially offset by menu price increases and labor efficiencies. Second quarter 2008 U.S. company operated restaurant margins ~~monitors~~decreased toby ~~assess~~270 ~~the~~basis ~~health~~points offrom 2007 due primarily to the ~~Company~~factors isdescribed ~~average~~above. ~~same-store~~Rising ~~sales~~commodity costs negatively impacted U.S. ~~Franchisee~~company ~~operations are~~operated ~~not~~margins ~~included~~by 220 basis points in the ~~Company’s~~second ~~financial~~quarter ~~statements;~~compared ~~however,~~to ~~franchisee~~2007. ~~sales~~The ~~result~~decrease in ~~royalties~~ general and administration ~~rental~~expenses ~~income~~resulted primarily from lower product testing costs of $3.1 million, ~~which~~lower ~~are~~legal ~~included~~and inprofessional ~~the~~fees ~~Company’s~~of ~~franchise~~$1.8 ~~revenues~~million and lower bonus expense of $1. 5 million for the quarter.

	Quarter Ended
	April 1, 2007			April 2, 2006
Wendy’s U.S. Company		3.8	%		(4.8	)%
Wendy’s U.S. Franchise		3.7	%		(5.2	)%

The lower operating income results from continuing operations year-to-date 2008 were due primarily to the same factors described above for the second quarter. Year-to-date 2008 company operated restaurant margins were lower than 2007 by 180 basis points due primarily to higher commodity costs, transaction declines, higher breakfast losses and unfavorable product mix, partially offset by menu price increases and labor efficiencies. Year-to-date 2008 also included higher franchisee breakfast advertising support of $3.4 million, higher franchisee remodel incentives of $1.6 million and higher legal reserves of $1.7 million. General and administrative expenses were $3.7 million below 2007, resulting primarily from lower bonus expense of $5.3 million and lower product testing costs of $3.3 million, partially offset by higher salaries and benefits.

AThe ~~summary~~second quarter and year-to-date periods in 2008 were also impacted by the absence of ~~systemwide~~gains ~~restaurants~~from isinsurance ~~included~~proceeds onin ~~page~~2007 22of $4.5 million related to damages incurred due to Hurricane Katrina.

Average same-store sales results for U.S. company and franchised restaurants as a percentage change for the second quarter and year-to-date 2008 versus prior year are listed in the table below. One of the key indicators in the restaurant industry that management monitors to assess the health of the Company is average same-store sales. Franchisee operations are not included in the Company’s financial statements; however, franchisee sales result in royalties and rental income, which are included in the Company’s franchise revenues.


	Quarter Ended				Year-to-Date Ended
	June 29, 2008		July 1, 2007		June 29, 2008		July 1, 2007
U.S. company	0.1	%	0.7	%	(0.8	)%	2.3	%
U.S. franchise	1.1	%	0.4	%	0.5	%	2.0	%

A summary of systemwide restaurants is included on page 24.

Company Operated Restaurant Margins

The Company’s restaurant margins are computed as sales from company operated restaurants less cost of sales from company operated restaurants and company restaurant operating costs, divided by sales from company operated restaurants. Depreciation is not included in the calculation of company operated restaurant margins. Company operated restaurant margins ~~improved~~declined to 89.63% in ~~first~~the second quarter ~~2007~~ and 8.5% year-to-date, compared to 611.08% in ~~first~~the second quarter ~~2006~~and 10.3% year-to-date periods in 2007, primarily reflecting ~~improvements~~higher incommodity ~~cost~~costs, oflower ~~sales~~transactions and higher breakfast losses, partially offset by menu price increases and labor efficiencies.

~~Sales~~ 16

The Company’s sales are comprised of sales from company operated restaurants, sales of kids’ meal toys to franchisees and sales of sandwich buns from the Company’s bun baking facilities to franchisees. Franchisee sales are not included in reported sales. Of total sales, sales from U.S. company operated restaurants comprised approximately 88% in each period presented, while the remainder primarily represented sales from Canadian company operated restaurants.

The $9.5 million increase in sales in 2007 versus 2006 primarily included the impact of positive average same-store sales at company operated restaurants, including the impact of the Company’s new market-based pricing approach, partially offset by 31, or 2.4%, fewer average U.S. company operated restaurants open versus the prior year. Total company operated restaurants open at April 1, 2007 were 1,455 versus 1,468 at April 2, 2006.

The following table summarizes various restaurant statistics for U.S. company operated restaurants for the quarters ended April 1, 2007 and April 2, 2006, respectively:

	Quarter Ended
	April 1, 2007			April 2, 2006
Average same-store sales increase (decrease)		3.8	%		(4.8	)%
Company operated restaurants open		1,308			1,313

Sales

The Company’s sales are comprised of sales from company operated restaurants, sales of kids’ meal toys to franchisees and sales of sandwich buns from the Company’s bun baking facilities to franchisees. Franchisee sales are not included in reported sales. Of total sales, sales from U.S. company operated restaurants comprised approximately 85% in each period presented, while the remainder primarily represented sales from Canadian company operated restaurants.

The $2.2 million decrease in sales in the second quarter of 2008 versus 2007 is attributable to a decline in the number of company operated restaurants, partially offset by an increase in U.S. average same-store sales of 0.1% in the second quarter of 2008 versus a 0.7% increase in the second quarter of 2007, higher sales in Canada and a stronger Canadian dollar. The $12.2 million decrease in sales year-to-date is due to a decrease of 0.8% in U.S. average same-store sales in 2008 versus a 2.3% increase in 2007 and a decline in the number of company operated restaurants, partially offset by higher sales in Canada and a stronger Canadian dollar. Total company operated restaurants open at June 29, 2008 declined 3% to 1,402 versus 1,444 at July 1, 2007. The decline in company operated stores is due primarily to the sale of stores to franchisees.

The following table presents information for U.S. company operated restaurants for the quarter and year-to-date periods ended June 29, 2008 and July 1, 2007, and includes additional sales derived from the Company’s new breakfast program.


	Quarter Ended				Year-to-Date Ended
	June 29, 2008		July 1, 2007		June 29, 2008		July 1, 2007
U.S. average same-store sales increase (decrease)	0.1	%	0.7	%	(0.8	)%	2.3	%
U.S. company operated restaurants open	1,263		1,297		1,263		1,297

Franchise Revenues

The Company’s franchise revenues include royalty income from franchisees, rental income from properties leased to franchisees, gains from the sales of properties to franchisees and franchise fees. Franchise fees cover ~~charges for~~ various costs and expenses related to establishing a franchisee’s business.

The $21.0 2 million increase in franchise revenues in ~~2007~~the second quarter versus ~~2006~~2007 was primarily ~~included~~driven ~~the~~by ~~impact~~ higher royalties of ~~positive~~$2.0 ~~average~~million, reflecting higher franchisee same-store sales atin both the U.S. ~~franchised~~and ~~restaurants~~Canada, ~~partially~~an ~~offset~~8% bystronger ~~29,~~Canadian ~~or 0.6%,~~dollar ~~fewer~~and ~~average~~a ~~U.S.~~greater ~~franchisee~~number of franchise stores open. ~~versus~~Franchise ~~the~~rents ~~prior~~were ~~year~~$0.6 ~~Total~~million ~~franchise restaurants~~higher ~~open~~in atthe ~~April 1~~second quarter, ~~2007~~driven primarily by an increase in franchise leased properties. These increases were ~~5,203~~partially ~~versus~~offset ~~5,277~~by atlower ~~April~~ gains on sales of properties to franchisees of $1.2, ~~2006~~million.

The ~~following~~$3.2 ~~table~~million ~~summarizes~~increase ~~various~~in ~~restaurant~~year-to-date ~~statistics~~franchise ~~for~~revenues versus 2007 primarily reflects higher royalties of $3.1 million due to higher U.S. ~~franchised~~and ~~restaurants~~Canadian ~~for~~franchisee ~~the~~average ~~quarters~~same-store, ~~ended~~an ~~April~~ 11% stronger Canadian dollar and a greater number of franchise stores open. Franchise rents were $1.5 million higher year-to-date, ~~2007~~driven ~~and~~primarily ~~April~~by an increase in franchise leased properties. These increases were partially offset by lower gains on sales of properties to franchisees of $1.4 million. Total franchise restaurants open at June 229, ~~2006~~2008 were 5,223 ~~respectively:~~ versus 5,217 at July 1, 2007.

	Quarter Ended
	April 1, 2007			April 2, 2006
Average same-store sales increase (decrease)		3.7	%		(5.2	)%
Franchise restaurants open		4,641			4,704

The following table presents information for U.S. franchised restaurants for the quarters and year-to-date periods ended June 29, 2008 and July 1, 2007, respectively:


	Quarter Ended				Year-to-Date Ended
	June 29, 2008		July 1, 2007		June 29, 2008		July 1, 2007
U.S. average same-store sales increase	1.1	%	0.4	%	0.5	%	2.0	%
U.S. company operated restaurants open	4,655		4,661		4,655		4,661

Cost of Sales

Cost of sales includes food, paper and labor costs for company operated restaurants, and the cost of goods sold to franchisees related to kids’ meal toys and from the Company’s bun baking facilities. Of the total cost of sales, U.S. company operated restaurant cost of sales comprised approximately 88% in each period presented, while the remainder primarily represented Canadian company operated restaurants. Overall, cost of sales as a percent of sales ~~improved~~increased ~~220~~170 basis points in the ~~first~~second quarter ~~2007~~and 100 basis points year-to-date 2008, from 6460.24% in ~~2006~~2007 to 62.01% in 2008 for the quarter and 61.2% in 2007 to 62. 2% in 2008 year-to date, respectively.

U.S. 2008 company operated restaurant cost of sales ~~were~~as ~~60.1%~~a percent of U.S. company operated restaurant ~~gross~~ sales were 60.9% in ~~2007~~the quarter and 60.9% year to date, compared ~~with~~to 6259.70% in ~~2006~~second quarter 2007 and 59.6% year-to-date 2007. U.S. food and paper costs in 2008 were 3233.25% of U.S. company operated restaurant ~~gross~~ sales infor ~~2007~~the quarter and 33.1% year-to-date, compared with 3432.03% in ~~2006~~second quarter 2007 and 32.3% year-to-date. The ~~improvement~~increase in ~~2007~~ 2008 versus ~~2006~~ 2007 primarily reflects ~~the~~increased ~~leverage~~commodity ~~impact~~costs, ~~from~~partially ~~positive~~offset ~~average~~by ~~same-store~~menu ~~sales,~~price ~~lower~~ increases. Rising commodity ~~costs,~~prices ~~including~~negatively animpacted ~~approximate~~U.S. ~~11%~~company ~~decline~~operated instore ~~beef,~~margins a220 ~~favorable~~basis ~~change~~points in ~~product~~the ~~mix toward~~second ~~higher-margin~~quarter ~~products,~~2008 ~~and~~compared ~~improved~~to ~~food~~the ~~cost~~second ~~management~~quarter ~~resulting~~2007 and in210 ~~lower~~basis ~~food~~points ~~waste~~for the year-to-date.

~~U.S.~~17 labor costs were 27.9% of U.S. company operated restaurant gross sales in 2007, compared with 28.7% in 2006. The improvement in 2007 versus 2006 primarily reflects the leverage impact from positive average same-store sales and labor cost-saving initiatives, partially offset by an average wage increase of 1.9%.

U.S. 2008 labor costs were 27.4% of U.S. company operated restaurant sales for the quarter and 27.8% year-to-date, compared with 26.7% in 2007 for the quarter and 27.3% for the year-to-date in 2007. The increase in 2008 versus 2007 primarily reflects an average wage increase of approximately 2.7%, less labor sales leverage and incremental breakfast labor, substantially offset by menu price increases and labor cost-saving initiatives.

Company Restaurant Operating Costs

Company restaurant operating costs include costs necessary to manage and operate company restaurants, except cost of sales and depreciation. Of the total company restaurant operating costs, U.S. company stores comprised approximately 90% in each period presented, while the remainder primarily represented Canadian company stores. As a percent of sales, company restaurant operating costs ~~improved~~increased to 2928.1% ~~in first quarter 2007 from 29~~and 28.28% in ~~first quarter 2006. The improvement from 2006 primarily reflects~~ the ~~leverage~~second ~~impact~~quarter ~~from~~and ~~positive average same~~year-~~store sales,~~to-date asperiods ~~well~~in as2008, ~~the~~respectively, ~~impact~~ from ~~the~~27.3% ~~2006~~and ~~cost savings initiatives~~28.2% ~~Prior~~for to the ~~spin-off~~quarter ofand ~~THI~~year-to-date 2007, ~~the~~ ~~Company~~respectively. ~~consolidated~~The ~~its~~2008 ~~50/50~~increase ~~Canadian~~for ~~restaurant~~the ~~real~~quarter ~~estate~~primarily ~~joint~~reflects ~~venture~~higher ~~with~~store ~~THI.~~bonus ~~In accordance with accounting principles generally accepted in the United States~~accruals, athigher ~~the time of the~~costs ~~THI~~related ~~spin-off~~to the Company’s ~~began~~new ~~accounting~~breakfast ~~for~~program ~~this~~and ~~investment~~other ~~under~~cost ~~the~~increases, ~~equity~~partially ~~method~~offset ~~of accounting.~~by ~~This~~lower ~~resulted~~costs indue ~~higher~~to ~~rent~~fewer ~~expense~~company-operated ~~of $1~~stores.~~3 million~~ Year-to-date, orthe a2008 ~~0.2%~~ increase asprimarily areflects ~~percent~~higher ofbreakfast ~~sales, in~~costs ~~2007~~and ~~company~~general ~~restaurant~~cost increases, ~~operating~~partially ~~costs~~offset ~~that~~by ~~previously~~lower ~~eliminated~~costs ~~when~~due ~~the~~to ~~joint~~fewer ~~venture~~company-operated ~~was consolidated~~stores.

Operating Costs

Operating costs include rent expense and other costs related to properties subleased to franchisees, other franchisee related costs and costs related to operating and maintaining the Company’s bun baking facilities.

The $153.9 2 million ~~decrease~~increase in operating costs in ~~2007~~the ~~versus~~second ~~2006~~quarter 2008 compared to 2007 primarily reflects ahigher breakfast advertising costs to support franchisees of $152.3 million and higher franchisee incentives of $0 .8 million. ~~special~~The ~~contribution~~$6.1 tomillion ~~WNAP~~increase in ~~2006~~year-to-date ~~that~~operating ~~did~~costs ~~not~~reflects ~~recur~~higher inbreakfast ~~2007,~~advertising ascosts ~~well~~to assupport franchisees of $13.8 3 million inand higher ~~rent~~franchisee ~~expense~~incentives ~~recorded~~of in$2.2 ~~2006~~million. ~~related~~Spending to support franchisee breakfast advertising began in the ~~Company’s~~ second half of 2007.

50/50 Canadian restaurant real estate joint venture with THI. Subsequent to the spin-off of THI, this 50/50 joint venture is no longer consolidated and is instead accounted for under the equity method of accounting. As a result, rent expense incurred by the joint venture of $1.8 million is no longer included in operating costs.

Depreciation of Property and Equipment

The $3.1 million reduction in consolidated depreciation of property and equipment in 2007 versus 2006 includes the absence of depreciation related to the 50/50 Canadian joint venture with THI which was consolidated prior to the spin-off of THI.

General and Administrative Expenses

General and administrative expenses decreased $46.5 1 million, or 811.18%, to $5045.8 3 million ~~versus~~in ~~2006~~the second quarter 2008 and $3.7 million, or 3.6%, to $98.5 million for the year-to-date. As a percent of revenues, general and administrative expenses for the second quarter 2008 were 90 basis points lower incompared to prior year at 7.2% versus 8.1% for the second quarter 2007 and 30 basis points lower for the year-to-date at 8.61% versus 9 8.64% in ~~2006~~2007. The ~~dollar~~$6.1 ~~and~~million ~~percent~~ decrease infor ~~2007~~the ~~primarily~~quarter ~~reflects~~includes lower ~~salaries~~product ~~and benefits~~testing costs of $6.3 .1 million, lower ~~consulting~~legal and professional fees of $21.9 8 million, and lower ~~insurance~~bonus ~~premiums~~expense of $1.1 5 million. ~~These~~The ~~decreases~~$3.7 ~~were~~million ~~partially~~decrease ~~offset~~year-to-date byprimarily ~~incremental expense~~includes inlower ~~2007~~bonuses ~~for~~of ~~performance-based~~$5.3 ~~incentive~~million ~~compensation~~and lower product testing costs of $3.2 3 million, partially offset by higher salaries and ~~incremental~~benefits ~~stock compensation~~due ~~expense~~to ofhigher $2headcounts.~~1 million.~~

~~Other~~Restructuring ~~(Income)~~and ~~Expense,~~Special ~~Net~~ Committee Related Charges

~~Other~~In second ~~(income) expense~~quarter and year-to-date 2008, ~~net~~the ~~includes~~Company ~~amounts~~recognized ~~that~~$1.5 ~~are~~million ~~not~~and ~~directly~~$1.7 million, respectively, of restructuring costs, compared to $5.9 million and $6.9 million for the quarter and year-to-date periods in 2007, respectively. These restructuring costs primarily included non-cash pension settlement costs as well as other costs related to the Company’s ~~primary business~~2006 voluntary enhanced retirement plan and reduction in force as part of a cost reduction plan. ~~These~~As ~~include~~part ~~expenses~~of ~~related~~the 2006 plan, the Company decided to ~~store~~terminate ~~closures~~its defined benefit plans. In the second quarter of 2007, ~~restructuring~~the ~~costs~~Company recognized $5.5 million in pretax non-cash pension settlement charges, ~~sales~~of which $4.0 million consisted of ~~properties~~ toa non-~~franchisees,~~cash ~~joint~~adjustment ~~venture~~identified ~~income~~in ~~and~~the second ~~reserves~~quarter ~~for~~of ~~legal~~2007 ~~issues~~that relates to the first quarter 2007. This adjustment was not material.

~~The~~In ~~following~~the issecond aquarter ~~summary~~and year-to-date 2008, the Company recognized $8.6 million and $15.2 million, respectively, of ~~other~~Special ~~(income) expense~~Committee related charges, ~~net~~compared to $4.7 million for the quarter and year-to-date periods ~~indicated:~~in 2007, respectively. These costs are primarily financial, legal advisory and due diligence fees related to the activities of the Special Committee formed by the Company’s Board of Directors (see “Management’s Outlook” section for a further description.)

	Quarter Ended
	April 1, 2007			April 2, 2006
Restructuring costs	$	1,031		$	0
Store closure costs		3,821			775
Equity investment income		(2,308	)		(152	)
Rent revenue		0			(4,283	)
Net gain from property dispositions		(473	)		(4,077	)
Other, net		278			1,135
Other (income) expense, net	$	2,349		$	(6,602	)

RestructuringTable costsof Contents

InOther ~~2006~~income, ~~the Company~~net accrued restructuring costs related to its voluntary enhanced retirement plan, reduction in force and professional fees as part of a cost reduction plan. In addition to the restructuring liabilities accrued in 2006, in the first quarter of 2007 the Company accrued an additional $1.0 million of expense related to severance and professional fees.

Other income, net, includes amounts that are not directly related to the Company’s primary business. These include expenses related to store closures, sales of properties to non-franchisees, joint venture income and reserves for legal issues.

The following is a summary of Other income, net for the periods indicated:


	Quarter Ended						Year-to-Date Ended
(In thousands)	June 29, 2008			July 1, 2007			June 29, 2008			July 1, 2007
Store closure costs	$	(143	)	$	494		$	3,178		$	4,315
Equity investment income		(3,038	)		(2,747	)		(5,202	)		(5,055	)
Net gain from the sale of property		(50	)		(916	)		(634	)		(1,389	)
Legal reserves		617			(697	)		2,012			335
Investment distribution		(1,027	)		0			(1,053	)		0
Gain from insurance proceeds		0			(4,526	)		0			(4,526	)
Other, net		1,636			381			1,148			(373	)

Other income, net	$	(2,005	)	$	(8,011	)	$	(551	)	$	(6,693	)

Store closure costs

~~The~~Store ~~Company recorded store~~ closure charges offor ~~$3.8 million~~both ~~and $0.8 million, in first~~ quarter ~~2007~~ and ~~2006,~~year-to-date ~~respectively,~~include ~~including~~ asset impairments and write-offs and lease termination costs.

Equity investment income

Equity investment income inprimarily ~~2007~~ includes ~~equity~~ income ~~recorded~~ from the Company’s 50/50 Canadian restaurant real estate joint venture with ~~THI. Prior to the spin-off of THI on September 29, 2006,~~ ~~this~~Tim ~~joint~~Hortons ~~venture was consolidated~~Inc.

~~Rent~~Investment ~~revenue~~distribution

~~Rent revenue in 2006 represents rent paid by THI to the 50/50 Canadian restaurant real estate joint~~The ~~venture~~investment ~~between~~distribution ~~the~~was ~~Company~~received ~~and~~from ~~THI. After~~ the ~~spin-off of THI in September 2006, this joint venture is no longer consolidated in the~~ Company’s ~~financial~~cost ~~statements~~investment ~~and only the Company’s 50% share of the joint venture income is included~~ in ~~other~~Catterton ~~(income) expense, net, under the equity method of accounting~~Partners.

Net gain from property dispositions

The $4.1 million net gain from property dispositions in the first quarter 2006 primarily reflects the Company’s sale in first quarter 2006 of properties previously leased to franchisees.

Interest Expense

The ~~$3.2 million~~decrease ~~increase~~ in interest expense inof ~~2007~~$1.9 ~~versus~~million ~~2006~~for ~~primarily~~the ~~reflects~~second ~~interest~~quarter ~~on debt~~and ~~that~~$5.0 ~~was~~million ~~established~~year-to-date in2008 versus 2007 reflects the ~~fourth~~pay ~~quarter~~down ~~2006~~of ~~through~~the debt associated with the sale of aproximately ~~portion~~40% of the Company’s 2007 royalty stream. This debt was fully repaid in the second quarter of 2008. (For further information on this transaction, see the “Liquidity and Capital Resources” section below).

Interest Income

The decrease in interest income of $30.4 7 million ~~increase~~for inthe ~~interest~~second ~~income~~quarter inand ~~2007~~$4.0 million year-to-date 2008 versus ~~2006~~2007, primarily reflects ~~higher~~a ~~average 2007~~decrease ~~cash~~in ~~balances~~interest ~~and~~rates aas ~~higher~~well ~~rate~~as ofa ~~interest~~reduction ~~earnings~~in oncash ~~those~~and cash equivalent balances.

Income Taxes

The effective income tax rate ~~from continuing operations~~ for the second quarter and year-to-date periods ended ~~April~~June 129, ~~2007~~2008 was 33 37.5% and 38.0%, respectively, compared to 2238.2% and 36.7% for the ~~comparative~~comparable ~~period~~periods ended ~~April~~July 21, ~~2006~~2007. ~~Income~~The ~~tax~~year-to-date ~~expense~~period ~~for both~~ended ~~periods~~July 1, ~~was~~2007 ~~impacted~~benefited byfrom ~~several~~tax refund claim discrete ~~items that reduced the effective rate~~events.

~~Income~~The ~~from~~Company ~~Discontinued~~has ~~Operations~~identified approximately $19 million in fees to certain advisors to the Special Committee of the Board of Directors that are directly associated with the proposed transaction, which will be deemed as non-deductible, resulting in approximately $7 million in additional tax expense for the period in which the transaction would occur.

The Company completed its spin-off of THI on September 29, 2006 and completed its sale of Baja Fresh on November 28, 2006. During the fourth quarter 2006, the Company also approved the prospective sale of Cafe Express. Accordingly, the after-tax operating results of THI, Baja Fresh and Cafe Express now appear in the income from discontinued operations line on the income statement. Income ~~from~~(Loss) ~~discontinued operations, net of tax, was $0.2 million and $57.1 million for first quarter 2007 and 2006, respectively. The results~~ from ~~discontinued~~Discontinued ~~operations~~Operations for first quarter 2007 only include Cafe Express, while first quarter 2006 includes THI, Baja Fresh and Cafe Express. THI net income included in the first quarter 2006 income from discontinued operations was $61.0 million. See also Note 6 to the Consolidated Condensed Financial Statements.

The Company completed its sale of Cafe Express on July 29, 2007. Accordingly, the after-tax operating results of Cafe Express now appear as Income (loss) from discontinued operations on the Consolidated Condensed Statements of Income. Income from discontinued operations, net of tax, was zero for year-to-date 2008 and $0.2 million for year-to-date 2007.

COMPREHENSIVE INCOME

Comprehensive income was higher than net income by $12.8 7 million for the ~~first~~second quarter of2008 ~~2007~~ and lower than net income by $01.7 million for year-to-date 2008, and higher than net income by $12.3 million and $14.1 million for the ~~first~~second quarter ~~2006~~and year-to-date 2007, respectively. The ~~increase~~changes in comprehensive income in ~~2007~~the ~~was~~ second quarter and year-to-date 2008 were comprised of a $1.0 4 million ingain ~~favorable~~and a $3.5 million loss, respectively, in Canadian foreign translation adjustments ~~and $0~~.~~8 million related~~ toBoth the ~~Company’s~~2008 ~~pension~~second ~~liability.~~quarter ~~The~~and ~~increase~~year-to-date incomprehensive ~~2006~~income ~~was~~included ~~comprised~~recognition of $01.7 4 million ~~in activity~~and $1.8 million, respectively, related to the Company’s ~~cash~~pension ~~flow hedges~~liability. ~~Offsetting~~The ~~the~~second ~~first~~ quarter ~~2006~~and ~~weakening in~~year-to-date ~~the~~2007 ~~Canadian~~increases ~~dollar~~in ~~was~~comprehensive aincome included $28.3 6 million ~~gain,~~and ~~net of taxes of~~ $19.3 7 million, ~~related~~respectively, toin ~~the~~favorable ~~Company’s hedge~~Canadian offoreign ~~certain~~translation ~~net~~adjustments, ~~investment~~and ~~positions~~$3.6 ~~This~~million ~~gain~~and ~~was~~$4.4 ~~included~~million, inrespectively, ~~the~~related ~~first~~to ~~quarter~~the ~~2006 translation~~Company’s ~~adjustments~~pension ~~component of other comprehensive income~~liability. At the end of the ~~first~~second quarter ~~2007~~ 2008, the Canadian exchange rate was $1.1501 versus $1.1702 at March 30, 2008 and $.98 December 3130, ~~2006~~2007. At the end of the ~~first~~ second quarter ~~2006~~2007, the Canadian exchange rate was $1.1707 versus $1.1615 at ~~January~~April 1, 2007 and $1.17 at December 31, 2006.

FINANCIAL POSITION

Overview

The Company generates considerable cash flow each year from operating income excluding depreciation and amortization. The sale of properties has also provided significant cash to continuing operations over the last three years. The main recurring requirement for cash is capital expenditures. The Company generally generates cash from continuing operating activities in excess of capital expenditure spending.

Share repurchases ~~are~~have been a part of the ~~ongoing~~ financial strategy utilized by the Company, and ~~normally~~ normally these repurchases come from cash on hand, ~~and~~including the cash provided by option exercises. InDue to the ~~first quarter~~execution of ~~2007,~~ the ~~Company~~Merger ~~also~~Agreement ~~used~~(see a“Special ~~portion~~Committee ofand the ~~funds~~Announced ~~received~~Definitive ~~from~~Merger ~~THI~~Agreement” ~~after~~section ~~its~~below), ~~initial~~share ~~public~~repurchases ~~offering~~in ~~(“IPO”)~~2008 toare ~~repurchase~~not 9expected.~~0 million~~ ~~shares for $282.5 million.~~ In the short term, the Company expects cash provided by stock option exercises to decrease asbecause the Company ~~has~~did not ~~granted~~ grant stock options ~~over~~for the ~~last~~ two years ~~and~~prior ~~only~~to 2007 and approximately ~~1.6~~4 million options were ~~are~~ outstanding as of ~~April~~June 129, ~~2007~~2008. ~~The Company plans to grant stock options in the second quarter of 2007 under the 2007 Stock Incentive Plan (the “2007 Plan”) that was approved at its shareholders’ meeting on April 26, 2007.~~

~~During~~The ~~the~~Company ~~first~~currently ~~quarter,~~has ~~the~~a ~~Company’s~~$500 ~~Board~~million ofshelf ~~Directors~~registration ~~approved~~and a $~~0.085~~200 ~~quarterly~~million ~~dividend~~revolving credit facility, both of ~~paid~~which towere ~~shareholders~~unused onas ~~February~~of June 2729, ~~2007~~2008. InAs ~~February~~of June ~~2007~~29, 2008, the Company ~~announced~~was in compliance with the covenants under its ~~intention~~revolving tocredit facility and the limits of its Senior Notes and Debentures. The Company currently anticipates that it ~~increase~~will allow its ~~annual~~revolving ~~cash~~credit ~~dividend~~facility ~~from~~to $0expire on September 1, 2008.34 ~~per~~

18The Company maintains a strong balance sheet. Standard & Poor’s and Moody’s rate the Company’s senior unsecured debt BB- and Ba3, respectively. Standard & Poor’s has stated that the Company’s debt ratings remain on credit watch with negative implications. Moody’s has stated that it has placed the Company’s debt ratings on review for possible downgrade (see discussion under “Liquidity and Capital Resources” below).

share to $0.50 per share beginning with the quarterly dividend to be paid in May 2007. In April 2007, the Company’s Board of Directors approved a $0.125 quarterly dividend to be paid to shareholders on May 21, 2007. The Company currently has a $500 million shelf registration and $200 million line of credit, both of which are unused as of April 1, 2007.

The Company maintains a strong balance sheet. Standard & Poor’s and Moody’s rate the Company’s senior unsecured debt BB+ and Ba2, respectively.

Comparative Cash Flows

Cash flows from operations provided by continuing operations were $5596.1 5 million compared to ~~cash~~ ~~used of~~ $15123.9 5 million for the prior year. The ~~2007~~2008 ~~increase~~decrease was primarily due to ~~higher~~lower income from continuing operations in ~~2007~~2008 versus ~~2006,~~2007 aand $101.6 million net tax ~~refund~~payments in ~~the~~2008 ~~first quarter of 2007~~ versus net tax ~~payments~~refunds inof ~~the~~$8.7 ~~first~~million ~~quarter~~in ~~of 2006~~2007, ~~and~~partially ~~increases~~offset by changes in working capital related to the timing of cash receipts and disbursements.

Net cash used in investing activities from continuing operations totaled $1954.5 2 million in ~~the~~2008 ~~first quarter of 2007~~ compared to $529.0 million in ~~2006~~2007. The $1425.5 2 million increase in net cash used in ~~2007~~ 2008 primarily reflects aan ~~decrease~~increase in ~~proceeds~~capital ~~from~~expenditures ~~property dispositions~~ of $3214.5 0 million, ~~due~~higher toacquisitions ~~the disposition~~ of ~~nine~~franchisees ~~company operated Wendy’s restaurants and the sale~~ of ~~other~~$2.6 ~~properties~~million, ~~to third~~lower ~~parties~~proceeds ~~and~~from ~~franchisees~~property indispositions ~~the first quarter~~ of ~~2007~~$5.9 ~~compared~~million ~~to the sale of 37 company operated Wendy’s restaurants~~ and ~~other~~lower ~~properties~~proceeds tofrom ~~third~~insurance ~~parties and franchisees in the first quarter~~ of ~~2006.~~ ~~Partially offsetting the decrease in property disposition proceeds was a~~ $173.~~2 million decrease~~3 ~~in capital expenditures in 2007 due to lower Wendy’s store development~~million.

Financing activities from continuing operations used cash of $~~295~~30.7 9 million in ~~the~~2008 ~~first quarter of 2007~~ compared to $~~180~~337.6 1 million in ~~2006~~2007. The $~~115~~306.1 2 million ~~increase~~decrease in ~~2007~~2008 ~~outflows~~net ~~includes~~financing ~~a $62.5 million~~outflows ~~increase~~primarily ~~relating~~reflects to the ~~repurchase~~absence of 9$298.0 million ~~shares~~ of ~~the~~share ~~Company’s~~repurchases ~~common stock~~ in ~~2007~~2008 ~~compared~~and ~~to 3.8 million shares in 2006, a decrease of $46.2 million related to a~~ lower ~~number~~2008 ofprincipal ~~2007~~payments ~~employee~~on ~~stock option exercises compared to 2006, $10.4 million less in 2007~~debt ~~stock-based~~obligations ~~compensation tax benefits due to the lower number~~ of ~~2007 employee stock option exercises and~~ $711.7 5 million, ~~in additional 2007 net debt payments. These 2007 net higher outflows were~~ partially offset by ~~lower~~higher ~~2007~~2008 dividend payments of $112.6 8 million. ~~The Company adjusted its annual dividend rate subsequent to the spin-off of THI to reflect the reduced earnings of the Company excluding THI.~~

Discontinued operations cash flows for operating, investing and financing activities included THI, Baja Fresh and Cafe Express for 2006, while for 2007, discontinued operations cash flows include only Cafe Express. Cash provided by financing activities from discontinued operations of $1.2 billion in the first quarter of 2006 included proceeds of $722.3 million related to the THI IPO and THI proceeds from the issuance of debt, net of issuance costs, of $438.6 million.

Liquidity and Capital Resources

Cash flow from operations, cash and investments on hand, possible asset sales, cash available through existing revolving credit agreements and the possible issuance of securities should provide for the Company’s projected short-term and long-term cash requirements, including cash for capital expenditures, authorized share repurchases, dividends, repayment of debt, future acquisitions of restaurants from franchisees and other corporate purposes. The anticipated expiration of its revolving credit agreement on September 1, 2008 is not expected to impact the Company’s ability to meet its cash requirements prior to the consummation of the Merger Agreement (see “Special Committee and the Announced Definitive Merger Agreement” section below). As of June 29, 2008, the Company had $221.9 million of cash and cash equivalents on its balance sheet.

In20 the first quarter of 2007, the Company completed an accelerated share repurchase (“ASR”) of 9.0 million shares for $282.5 million at an initial price of $31.33 plus certain other costs. The repurchased shares in the ASR are subject to a future contingent-purchase price adjustment expected to be settled in the second or third quarter of 2007. Since 1998 through April 1, 2007, the Company has repurchased 77.6 million common and other shares exchangeable into common shares for $2.4 billion.

In the fourth quarter of 2006, the Company entered into an agreement to sell approximately 40% of the Company’s U.S. royalty stream for a 14-month period to a third party in return for a cash payment in 2006 of $94.0 million. Royalties subject to the agreement relate to royalties payable to a subsidiary of the Company for both company operated and franchised stores. The cash received in 2006 is classified as debt and as of April 1, 2007, the recorded debt is $87.9 million. This recorded debt amount is expected to be repaid through May 2008 as royalties are received. The agreement related to this transaction will conclude in May 2008.

In February 2007, the Company announced that based on its strong cash position and strategic direction, it intended to increase its annual common stock dividend by 47%, from the $0.34 rate established in the fourth quarter of 2006 to $0.50, beginning with the May 2007 payment. The $0.50 annual dividend was established with an intended dividend yield of 1.4% to 1.6%. Prior to the spin-off of THI in the third quarter of 2006, the Company’s annual dividend rate was $0.68.

In 2006 and 2005, the Company issued only restricted stock shares, restricted stock units and performance shares (together “restricted shares”) under its existing equity plans. The issuance of restricted shares combined with significant option exercises over the last two years have reduced “overhang” (all approved but unexercised options and shares divided by shares outstanding plus all approved but unexercised options and shares). The Company obtained shareholder approval for the 2007 Plan at its

~~shareholders’~~On ~~meeting~~February 29, 2008, the Company negotiated a renewal of its $200 million revolving credit facility which expires on ~~April~~September 261, ~~2007~~2008. ~~The~~This ~~2007~~amended ~~Plan~~revolving ~~provides~~credit ~~for~~facility ~~equity~~contains ~~compensation~~various ~~awards~~covenants in which, among other things: require the ~~form~~maintenance of ~~stock~~certain ~~options~~ratios, ~~restricted~~including ~~stock,~~indebtedness ~~restricted~~to ~~stock~~total ~~units,~~capitalization ~~stock~~and ~~appreciation~~a ~~rights,~~fixed charge coverage ratio; ~~dividend~~limit ~~equivalent~~the ~~rights,~~amounts ~~performance~~of ~~shares,~~assets ~~performance~~that ~~units~~can ~~and~~be ~~share~~sold, ~~awards~~shares ~~(collectively~~that can be repurchased, ~~“Awards”)~~ toliens ~~eligible~~that ~~employees~~can ~~and~~be ~~directors~~placed ofon the Company’s orassets, ~~its~~indebtedness of subsidiaries. to third parties (excluding indebtedness of The ~~Company~~Wendy’s National Advertising ~~intends~~Program, toInc.) ~~use~~and contingent and off balance sheet liabilities that can exist; eliminate the ~~2007~~Company’s ~~Plan~~ability to ~~issue~~perform ~~annual~~asset ~~stock~~securitizations ~~option~~and ~~grants~~sale and ~~long~~leaseback transactions; and establish the maintenance of minimum on-~~term~~hand ~~performance~~balances ~~unit~~of ~~awards~~cash ~~beginning~~and incash ~~2007.~~equivalents ~~The~~of ~~2007~~$50.0 ~~Plan~~million. ~~authorizes~~The upCompany towas ~~six~~in ~~million~~compliance ~~common~~with ~~shares~~these ~~for~~covenants ~~grants~~as of ~~Awards~~ June 29, 2008. The ~~common~~Company ~~shares~~is ~~offered~~charged ~~under~~interest ~~the~~on ~~2007~~advances, ~~Plan~~that ~~may~~varies bebased ~~authorized~~on ~~but~~the ~~unissued~~type ~~shares~~of advance utilized by the Company, which is either ~~treasury~~an ~~shares~~alternate base rate (greater of prime or ~~any~~Federal ~~combination~~funds ~~thereof~~plus 0.5%) ~~The~~or ~~Company~~a ~~expects~~rate based on LIBOR plus a margin that ~~approximately~~varies ~~50%~~based on the Company’s debt rating at the time of the advance. The Company is also charged a facility fee based on the total ~~value~~credit offacility. ~~equity~~This ~~awards~~fee ~~made~~varies infrom ~~2007~~0.15% ~~and~~to ~~subsequent~~0.40% ~~years~~based ~~will~~on bethe ~~comprised~~Company’s debt rating. As of ~~stock~~June 29, ~~options~~2008, no amounts under this revolving credit facility were drawn. If the Company consummates the Merger Agreement with Triarc (see “Special Committee and the ~~remaining~~Announced ~~50%~~Definitive ofMerger Agreement” section below), the ~~value~~revolving ~~comprised~~credit offacility ~~performance~~would ~~awards~~not be available to the Company. The Company does not intend to renew its revolving credit facility.

In ~~2003~~the fourth quarter of 2006, the Company ~~filed~~entered ainto ~~shelf~~an ~~registration~~agreement ~~statement~~to onsell ~~Form~~approximately ~~S-3~~40% ~~with~~of the ~~SEC~~Company’s toU.S. ~~issue~~royalty upstream ~~to $500 million~~for ofa ~~securities.~~14-month Asperiod ofto ~~April 1,~~a ~~2007,~~third party ~~the~~in ~~Company~~return ~~was~~for ina ~~compliance~~cash ~~with~~payment ~~its~~in ~~covenants under~~2006 ~~its~~of $~~200~~ 94.0 million. ~~revolving~~Royalties ~~credit~~subject ~~facility~~to ~~and~~ the ~~limits~~agreement ofrelate ~~its~~to ~~Senior~~royalties ~~Notes~~payable ~~and~~to ~~debentures. As~~a subsidiary of ~~April 1,~~the ~~2007,~~Company nofor ~~amounts~~both ~~under~~company ~~the~~operated ~~$200 million~~and ~~credit~~franchised ~~facility~~stores. ~~were~~The ~~drawn~~cash ~~and~~received ~~all~~in of2006 ~~the $500 million~~was ofclassified ~~securities~~as debt ~~available~~which ~~under~~was ~~the~~fully ~~above-mentioned~~repaid ~~Form~~in ~~S-3~~the ~~filing~~second ~~remained~~quarter ~~unused~~of 2008.

~~Standard & Poor’s and Moody’s rate the Company’s senior unsecured debt as BB+ and Ba2, respectively.~~ The ~~ratings were reduced in 2006 and are considered below investment grade. Following the~~ Company’s ~~announcement on April 25,~~ 2007 ~~that~~Stock ~~its~~Incentive ~~Board~~Plan ~~of Directors had formed a special committee to investigate all strategic options for~~ (the ~~Company (see~~ “~~Formation~~2007 ~~of Special Committee~~Plan” ~~below~~), ~~Standard & Poor’s issued a statement that it had placed the Company’s debt~~provides ~~ratings~~for onequity ~~credit~~compensation ~~watch~~awards ~~with~~in ~~negative implications and Moody’s issued a statement that it had placed~~ the ~~Company’s~~form ~~debt ratings on review for possible downgrade. As a result~~ of ~~the~~stock ~~lower~~options, ~~debt~~restricted ~~ratings~~stock, ~~the~~restricted ~~Company~~stock ~~could~~units, ~~incur~~stock anappreciation ~~increase~~rights, individend ~~borrowing~~equivalent ~~costs~~rights, ifperformance itshares, ~~were~~performance tounits ~~enter into new borrowing arrangements~~ and ~~can~~share noawards ~~longer access the capital markets through its commercial paper~~(collectively, ~~program.~~“Awards”) ~~If the ratings should continue~~ to ~~decline,~~eligible itemployees isand ~~possible~~directors ~~that~~of the Company ~~would~~or ~~not~~its ~~be able to borrow on acceptable terms~~subsidiaries. ~~Factors~~The ~~that~~2007 ~~could~~Plan beauthorizes ~~significant~~up to ~~the~~6 million ~~determination~~common ofshares ~~the Company’s~~for ~~credit~~grants ~~ratings include, among other things, sales and cost trends, the Company’s cash position, cash flow, capital expenditures and stability~~ of ~~earnings~~Awards. The ~~Company~~common ~~does~~shares ~~not~~offered ~~have significant~~under ~~term-debt~~the ~~maturities~~2007 ~~until~~Plan ~~2011.~~may ~~The~~be authorized ~~Company~~but ~~believes~~unissued itshares, ~~will~~treasury beshares ~~able to pay~~ or ~~refinance~~ ~~its~~any ~~debt~~combination ~~obligations~~thereof. asEquity ~~they~~awards ~~become~~granted ~~due~~in ~~based~~2008 onwere ~~its~~comprised ~~strong~~primarily ~~financial condition and sources~~ of ~~cash~~stock ~~described above~~options.

~~The~~In 2003, the Company ~~expects~~filed ~~that~~a ~~approximately~~shelf ~~$1.4 million~~registration ofstatement ~~its~~on ~~unrecognized~~Form ~~tax~~S-3 ~~benefits~~with ~~will~~the ~~be settled~~Securities ~~within~~and ~~one~~Exchange ~~year~~Commission ~~and~~(“SEC”) ~~that~~to ~~approximately~~issue up to $~~22.1~~ 500 million of ~~its~~securities. ~~unrecognized~~As ~~tax~~of ~~benefits~~June 29, ~~will be~~2008, ~~settled~~all inof ~~periods~~the ~~later~~$500 ~~than~~million ~~one~~of ~~year~~securities available ~~from~~under ~~April 1,~~this ~~2007~~Form S-3 remained unused.

InStandard & Poor’s and Moody’s rate the Company’s senior unsecured debt as BB- and ~~first~~Ba3, ~~quarter~~respectively. ofStandard & ~~2007~~Poor’s has stated that the Company’s debt ratings remain on credit watch with negative implications. Moody’s has stated that it has placed the Company’s debt ratings on review for possible downgrade. On April 24, ~~two~~2008, ~~put~~both ~~options~~Standard & ~~were~~Poor’s ~~exercised~~and byMoody’s ~~landlords~~reaffirmed these ratings following the Company’s announcement of its Merger Agreement with Triarc (see “Special Committee and the Announced Definitive Merger Agreement” section below). As a result of the lower debt ratings, the Company could incur an increase in borrowing costs if it were to enter into new borrowing arrangements and can no longer access the ~~second~~capital ~~quarter~~markets through its commercial paper program. If the ratings should continue to decline, it is possible that the Company would not be able to borrow on acceptable terms. Factors that could be significant to the determination of ~~2007~~the Company’s credit ratings include, among other things, sales and cost trends, the Company’s ~~will~~cash ~~purchase~~position, 18cash flow, capital expenditures, stability of earnings, decisions reached by the Special Committee and the consummation of the Merger Agreement with Triarc (see ~~buildings~~“Special ~~for~~Committee ~~$12~~and the Announced Definitive Merger Agreement” section below).~~4 million~~ The Company does not have significant debt maturities until 2011.

The Company expects it is reasonably possible that approximately $10.1 million of its unrecognized tax benefits will be settled or refund claims will be received in the next 12 months.

MANAGEMENT’S OUTLOOK

~~New~~ Comprehensive Plan to Focus on the Wendy’s Brand

In October 2006, the Company announced a new plan to drive restaurant-level economic performance focused on product innovation, targeted marketing and operations excellence. ~~Components~~Although some portions of the plan and the below specific initiatives could change under new management, which is currently anticipated if the announced definitive merger agreement is approved (see below), the components of the plan include:

• Revitalize Wendy’s Core Brand—The Company will ~~re-~~focus on its brand essence, “Quality Made Fresh,” centered on Wendy’s core strength, its hamburger business. • Streamline and improve operations—Includes a new restaurant services group to improve system-wide restaurant operations standards, while emphasizing improved store profits and operating margins. • Reclaim Innovation Leadership—Development of new products that reinforce Wendy’s “Quality Made Fresh” brand essence and drive new consumers to its restaurants. The Company believes its new product pipeline is now robust. • Investing approximately $60 million per year over the next five years into the upgrade and renovation of its company-operated restaurants. • Strengthen Franchisee Commitment—Providing up to $25 million per year of incentives to franchisees for reinvestments in their restaurants over the next five years, and require franchisees to meet store remodel standards. • Selling up to 50 in 2007 and targeting to sell up to 300 to 400 of its company operated restaurants to franchisees beginning in 2008, while improving store level profitability first. • Capture New Opportunities—Seeking to drive growth beyond its existing business. The Company is expanding breakfast and is following a disciplined process for product development and operations, as well as analyzing consumer feedback. With the QSR breakfast market estimated at $30 billion, breakfast is a high priority for the Company that could generate significant sales and profits. Also, the Company believes it has considerable opportunity to expand in the U.S. over the long-term and is making infrastructure investments to grow its international business. The Company will continue to moderate its short-term North American development until restaurant revenues and operating cash flows improve. • Embrace a Performance-Driven Culture—A redesign of its incentive compensation plan to drive future performance to better reward individual employee performance and to better align compensation with business performance in the short and longer term. • Maintaining its strong corporate culture based on the values established by Wendy’s founder Dave Thomas.

•

Streamline and improve operations—Includes a new restaurant services group to improve system-wide restaurant operations performance, while driving improved store profits and operating margins.

•

Reclaim Innovation Leadership—Development of new products that reinforce Wendy’s “Quality Made Fresh” brand essence and drive new consumers to its restaurants. The Company believes its new product pipeline is now robust.

•

Investing—approximately $60 million per year over the next five years into the upgrade and renovation of its company operated restaurants.

•

Strengthen Franchisee Commitment—Providing up to $25 million per year of incentives to franchisees for reinvestments in their restaurants over the next four years, and require franchisees to meet store remodel standards. The Company anticipates spending significantly less than $25 million in 2008.

•

Franchising of Restaurants—The Company also intends to sell up to approximately 300 – 400 of its company operated restaurants to franchisees beginning in 2008, but focusing on improving store level profitability first.

•

Capture New Opportunities—Seeking to drive growth beyond its existing business. The Company’s breakfast program is following a disciplined process for product development and operations, as well as analyzing consumer feedback. With the quick-service restaurant breakfast market estimated at $30 billion, breakfast is a priority for the Company that could generate significant long-term sales and profits. Also, the Company believes it has considerable opportunity to expand in the U.S. over the long-term and is making infrastructure investments to grow its international business. The Company will continue to moderate its short-term North American development until restaurant revenues and operating cash flows improve.

•

Embrace a Performance-Driven Culture—The Company is executing a redesigned incentive compensation plan to drive future performance to better reward individual employee performance and to better align compensation with business performance in the short and longer term.

•

The Company is also prioritizing its strong culture based on the values established by Wendy’s founder Dave Thomas.

As part of its comprehensive plan, in the fourth quarter of 2007 the Company renewed its commitment to quality and innovation in all that it does and announced specific initiatives which focus on driving growth, creating efficiencies and improving returns. These initiatives include:

•

Core Hamburger—Continuing to improve the Company’s premium hamburger market share by increasing consumer appeal and building transactions. The Company intends to build on its core strength with distinctive national advertising, by leveraging the success of the Baconator and indulgent sandwiches and by emphasizing the brand’s unique competitive advantage of “fresh, never frozen” beef.

•

Value Menu proposition—Introducing an updated and effective value strategy to capture a growing share of the critical 18-34 year-old customer.

•

Beverage Plan—Establishing beverages as a “destination,” as well as a meal accompaniment. There are plans to expand several beverage programs.

•

Late Night / Snacking—Re-energizing the Company’s Late Night business and capturing afternoon and evening snack opportunities. Introducing innovative products that will appeal to frequent users of “snack” items.

•

Breakfast—Continuing to leverage the Company’s brand and optimize its facilities by offering a new daypart to consumers who exhibit a demand for a better, high quality breakfast. This component meets consumer needs in the fast-growing breakfast market and is focused on improving store margins.

•

Customer Service—Introducing a “total customer feedback system” for improved customer service.

•

Reinvestment—Re-imaging restaurants by using a systematic capital reinvestment process and a disciplined approach. Reinvesting is critical to meeting consumer needs and driving long-term sales improvement.

•

People Quality—Elevating the customer experience by improving the hiring and retention of the Company’s employees while reducing turnover, improving training and generating savings at the store level.

•

Re-franchising—Improving the overall health of the Company’s system by re-franchising, as well as acquiring and re-imaging franchise restaurants with potential for future re-franchising.

•

Store Margins—Focusing on food, labor, paper, general and administrative and indirect costs to achieve store margin objectives.

Authorization of up to 35.4 million shares for repurchase

InAt ~~October~~June ~~2006~~29, ~~the~~2008, ~~Company’s~~approximately ~~Board of Directors approved a share repurchase program of up to 35.~~4 .0 million shares toremained beunder ~~implemented over~~ the ~~next 18 to 24~~October ~~months.~~9, ~~The Company utilized the majority of this authorization by conducting a modified “Dutch Auction” tender offer under which in the fourth quarter of~~ 2006 itshare ~~purchased~~repurchase 22authorization.~~4 million~~ ~~common shares at a purchase~~

20 Special Committee and the Announced Definitive Merger Agreement

In April 2007, the Company announced that its Board of Directors, acting unanimously, had formed a Special Committee of independent directors to investigate strategic options for the Company. On April 23, 2008, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Triarc Companies, Inc., a Delaware corporation (“Triarc”), and Green Merger Sub, Inc., an Ohio corporation and a wholly-owned subsidiary of Triarc (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Triarc (the “Merger”). The Merger has been approved by the board of directors of both the Company and Triarc.

~~price~~ and ofwithout ~~$35.75.~~any ~~The~~action ~~Company~~on ~~purchased~~ the ~~shares~~part ~~tendered~~of in the ~~offer~~holder ~~using~~into ~~existing~~stock ~~cash~~options onand ~~its balance~~equity ~~sheet.~~awards Inwith ~~the~~respect ~~first~~to ~~quarter of 2007,~~ the ~~Company~~Triarc ~~purchased 9.0~~Class ~~million~~A ~~common~~Common ~~shares~~Stock, inafter angiving ~~ASR~~effect ~~transaction~~to atthe anExchange ~~initial price of $31~~Ratio.33 ~~per~~Cash ~~share~~will ~~plus~~be ~~certain~~paid ~~other~~to ~~costs.~~the AsCompany’s ashareholders ~~result,~~in as lieu of ~~April 1,~~fractional ~~2007, 4.0 million~~ shares ~~remained under the Board~~ of ~~Directors~~Triarc’s ~~share~~Class A ~~repurchase authorization~~Common Stock.

~~2007~~In ~~Guidance~~connection with the Merger Agreement, the Company amended its Amended and Restated Rights Agreement (as amended, the “Rights Agreement”). The amendment makes the Rights Agreement inapplicable to the Merger, the Merger Agreement and the associated voting agreements and provides for the expiration of the Rights (as defined in the Rights Agreement) immediately prior to the effective time of the Merger if the Rights have not otherwise expired. Also, the Merger Agreement provides that the Company will deliver or cause to be delivered, such officers certificates, opinions of counsel and supplemental indentures, if any, required by the indentures governing the Company’s 6.25% Senior Notes due 2011, 6.20% Senior Notes due 2014 and 7.00% Debentures due 2025, necessary to effect the Merger without any default or event of default arising as a result of the Merger.

InEach ~~April 2007,~~party’s ~~the~~obligation ~~Company~~to ~~reaffirmed~~consummate ~~its~~the ~~2007~~Merger ~~guidance~~is ofsubject ~~$330~~ to ~~$340 million~~customary ~~in continuing income before interest~~conditions, ~~taxes,~~including ~~depreciation~~shareholder ~~and~~approval ~~amortization (“EBITDA”) based on operating income~~ of ~~$215 million~~ toboth ~~$225 million~~companies and ~~depreciation~~the ~~and~~expiration ~~amortization~~or termination of ~~$115 million.~~the ~~EBITDA~~waiting isperiod ~~used~~under bythe ~~management~~Hart-Scott-Rodino asAntitrust aImprovements ~~performance~~Act ~~measure~~of ~~for benchmarking against its peers and competitors~~1976. ~~The~~On ~~Company believes~~May 28, ~~EBITDA is a useful measure because it is frequently used by securities analysts~~2008, ~~investors and~~the ~~other~~United ~~interested~~States ~~parties~~Federal toTrade ~~evaluate~~Commission ~~companies~~granted in the ~~restaurant industry. The~~ Company’s ~~2007 projected~~and ~~earnings~~Triarc’s ~~per~~request ~~share~~for ~~from~~early ~~continuing~~termination ~~operations~~ of ~~$1.26 to $1.32 reflects~~ the ~~impact~~Hart-Scott-Rodino ~~of the~~Act ~~9.0 million~~waiting ~~shares repurchased in the first quarter of 2007~~period.

~~Ongoing~~In ~~Initiatives~~connection with the proposed merger, Triarc filed a Registration Statement on Form S-4 on June 2, 2008 with the SEC (Registration No. 333-151336) that includes a preliminary joint proxy statement of Triarc and Wendy’s and that also constitutes a preliminary prospectus of Triarc. Triarc filed Amendment No. 1 and Amendment No. 2 to the Form S-4 with the SEC on July 11, 2008 and August 4, 2008, respectively.

~~The~~Change ~~Company~~in ~~continues~~Control to implement its strategic initiatives. These initiatives include leveraging the Company’s core assets, growing average same-store sales, improving store-level productivity to enhance margins, improving operations, developing profitable new restaurants and implementing new technology initiatives. Management intends to allocate resources to improve returns on assets and invested capital, and monitors its progress by tracking various metrics, including return on average assets, return on average equity and return on invested capital, as well as comparing to historical performance, the Company’s peers and other leading companies.

The ~~Company~~consummation ~~also~~of the ~~continues~~Merger toAgreement ~~focus~~will onconstitute ~~its~~a ~~dividend~~change ~~policy,~~in ~~continued~~control ~~share~~for ~~repurchases,~~the anpurposes of the Company’s equity~~-based~~ ~~compensation~~and ~~program~~other ~~for~~benefit ~~employees~~plans. ~~and~~As ~~directors~~a ~~and~~result, ~~stock~~all ~~ownership~~outstanding, ~~guidelines~~unvested ~~for~~equity ~~Company~~awards ~~officers. The~~will ~~stock~~vest ~~ownership~~and ~~guidelines~~become ~~were~~vested ~~revised~~equity byof ~~the~~Triarc, ~~Compensation~~(except ~~Committee~~for certain stock options awarded in April and July 2008, ~~2007~~which ~~and~~will ~~call~~remain ~~for~~unvested ~~officers~~equity toof ~~hold~~Triarc) and the Company ~~stock,~~will ~~in-the-money~~recognize ~~vested~~compensation ~~stock~~expense ~~options~~under ~~and~~SFAS ~~other~~No. 123R ~~vested~~for ~~equity~~that ~~awards~~portion inof ~~the~~award ~~following~~value ~~amounts:~~ not previously expensed.

Position		Multiple of Annual Base Salary
Chief Executive Officer		5X
Chief Operations Officer and Executive Vice Presidents		3X
Other Officers		1X

Under the terms of certain of the Company’s annual incentive plans, the minimum amount payable to each participant for the year in which the change in control occurs will be the greatest of (i) the amount paid to the participant for the prior year, (ii) the amount payable assuming the target level of the performance objectives is achieved, and (iii) the amount that would be payable based on the Company’s actual performance through the date of the change in control.

~~The~~In ~~Company~~addition, ~~intends~~under tothe ~~remain~~annual ~~focused~~incentive onplans, ~~established~~following ~~long-term~~a ~~operational~~change ~~strategies~~in control ofand ~~exceeding customer~~prior ~~expectations,~~to ~~fostering~~the apayment ~~performance-driven~~of ~~culture,~~amounts ~~delivering~~for athe ~~balanced~~fiscal ~~message~~year ~~of brand~~in ~~equity~~which ~~plus~~the ~~value~~change in ~~marketing~~control occurs, ~~and~~if ~~growing~~ a ~~healthy~~participant’s ~~restaurant~~employment ~~system.~~is ~~The~~terminated by the Company ~~believes its~~without ~~success~~“cause” ~~depends~~or onby ~~providing~~the ~~everyday~~participant ~~value,~~for ~~quality~~“good reason” ~~and~~(as ~~variety,~~such ~~not~~terms ~~price~~are ~~discounting.~~defined Asin ~~a result~~the plans), the ~~Company~~participant ~~provides~~will abe ~~variety~~entitled ofto ~~menu~~the ~~choices~~amount ~~and~~otherwise ~~will~~payable ~~continue~~for tothe ~~evaluate~~fiscal ~~and~~year ~~introduce new~~had ~~products~~the toparticipant ~~meet~~remained ~~the~~employed ~~trends~~with ~~and~~the ~~desires~~Company ofthrough ~~its~~the ~~customers.~~incentive ~~Management~~payment ~~believes~~date infor ~~reinvesting in~~such ~~its~~year. ~~restaurants~~Further, toif ~~maintain~~ a ~~fresh~~participant’s ~~image,~~employment ~~providing~~is ~~convenience~~terminated ~~for~~without ~~its~~cause ~~customers~~prior ~~and~~to ~~increasing the~~a ~~overall~~change ~~efficiency~~in ofcontrol, ~~restaurant~~but ~~operations.~~the ~~The~~participant ~~goal~~can ofreasonably ~~these~~demonstrate ~~strategies~~that isthe totermination ~~increase average~~arose ~~sales~~in ~~over~~connection ~~time~~with, ~~primarily~~or ~~through~~in ~~greater~~anticipation ~~customer~~of, ~~traffic~~a change in control, then the ~~restaurants.~~termination ~~The~~will ~~Company intends~~be totreated ~~effectively~~as ~~manage~~if ~~corporate~~it ~~and~~occurred ~~field-level~~after ~~costs~~a tochange in control, ~~overall~~if ~~general~~a ~~and administrative~~change ~~expense~~in control actually occurs.

~~New~~Under ~~restaurant~~the ~~development~~terms ~~will~~of ~~continue to be an important opportunity for~~ the Company~~. Wendy~~’s ~~is under~~non-qualified ~~penetrated~~supplemental inexecutive ~~key~~retirement ~~markets.~~plans ~~The~~and ~~Company~~its ~~intends~~non-qualified todeferred ~~grow~~compensation ~~responsibly~~plan, ~~focusing~~prior onto ~~the markets with the best potential for sales and return on investment. A total of 122 new restaurants were opened in 2006. Current plans call for~~ a ~~total~~change ~~of 80 to 110 new company and franchise restaurant units to open~~ in ~~2007.~~control ~~The~~the ~~primary~~Company ~~focus~~ will be onobligated ~~core~~to ~~operations~~fund ofamounts ~~Wendy’s~~payable inunder ~~North~~those ~~America, with~~plans ~~the~~into ~~majority~~a ofrabbi ~~units being standard sites~~trust.

~~Another~~The ~~element~~Company ofhad ~~the~~previously ~~Company’s~~entered ~~strategic~~into ~~plan~~employment isagreements ~~the~~with ~~evaluation~~each of ~~potential~~its ~~acquisitions~~Executive ofOfficers as well as certain other Officers. The Company had also ~~franchised~~previously ~~restaurants,~~entered ~~the~~into ~~sale~~a revised form of ~~company~~agreement ~~stores~~with toits ~~franchisees~~Executive ~~and~~Vice ~~vertical~~President ~~integration opportunities~~and ~~that~~Chief ~~could~~Financial ~~add~~Officer. Prior to a change in control the Company’s ~~long-term~~will ~~earnings~~be ~~growth~~obligated to fund amounts payable under these agreements into the rabbi trust.

~~Formation~~The ofCompany ~~Special~~presently ~~Committee~~estimates that the aggregate amount that will be funded into the rabbi trust for the non-qualified supplemental executive retirement plans, the non-qualified deferred compensation plan and the employment agreements prior to the consummation of the Merger Agreement will be between $34 million to $39 million.

In ~~April 2007,~~addition ~~the Company announced that its Board of Directors, acting unanimously, had formed a special committee of independent directors~~ to ~~investigate~~the ~~all~~above ~~strategic options for Wendy’s. These options~~costs, ~~among~~ other ~~things,~~additional ~~may~~costs ~~include~~will ~~revisions~~be toincurred ~~the~~related ~~Company’s strategic plan, changes~~ to ~~its capital~~employee ~~structure,~~retention oras a ~~possible~~result ~~sale,~~of ~~merger or other business combination. There is no specific timeframe to complete~~ the ~~review~~change ~~and there is no assurance that the process will result~~ in ~~any changes to the Company’s current plans~~control. ~~Certain alternatives could affect the Company’s 2007 guidance.~~

The Merger Agreement requires the Company, prior to consummation of the Merger, to take such actions as are necessary (including making cash contributions into a trust related to the ABPP Plan and the Crew Plan) to reduce the aggregate amount of underfunding of those Plans, as measured on the applicable plan termination basis, to $10 million or less. The Company has not yet determined the amount of the cash contribution, if any, that will be needed to comply with this provision of the Merger Agreement.

Off-Balance Sheet Arrangements

The Company has no “off-balance sheet” arrangements as of ~~April~~June 129, ~~2007~~2008 and December 3130, ~~2006~~2007 as that term is described by the SEC., other than those described in Note 13 to the Consolidated Condensed Financial Statements.

MARKET RISK

The Company’s exposure to various market risks remains substantially the same as reported as of December 3130, ~~2006~~2007. The Company’s disclosures about market risk are incorporated herein by reference ~~from~~ from pages 3639 through 3841 of the Company’s ~~2006~~2007 Annual Report on Form 10-K filed with the SEC on ~~March~~ February 127, ~~2007~~2008.

~~WENDY’S~~23 ~~INTERNATIONAL, INC. AND SUBSIDIARIES SYSTEMWIDE RESTAURANTS~~

					Increase/					Increase/
					(Decrease)					(Decrease)
	As of		As of		From Prior			As of		From Prior
	April 1, 2007		April 2, 2006		Quarter			December 31, 2006		Year
Wendy’s
U.S
Company		1,308		1,313		(5	)		1,317		(9	)
Franchise		4,641		4,704		(63	)		4,638		3
		5,949		6,017		(68	)		5,955		(6	)
Canada
Company		145		150		(5	)		146		(1	)
Franchise		231		230		1			231		0
		376		380		(4	)		377		(1	)
Other International
Company		2		5		(3	)		2		0
Franchise		331		343		(12	)		339		(8	)
		333		348		(15	)		341		(8	)
Total Wendy’s
Company		1,455		1,468		(13	)		1,465		(10	)
Franchise		5,203		5,277		(74	)		5,208		(5	)
		6,658		6,745		(87	)		6,673		(15	)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of SFAS No. 115”. This statement allows entities to measure certain assets and liabilities at fair value, with changes in the fair value recognized in earnings. The statement’s objective is to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without applying complex hedge accounting provisions. This statement is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of SFAS No. 159.

SAFE HARBOR STATEMENT

Certain information contained in this Form 10-Q, particularly information regarding future economic performance and finances, plans and objectives of management, is forward looking. In some cases, information regarding certain important factors that could cause actual results to differ materially from any such forward-looking statement appears together with such statement. In addition, the following factors, in addition to other possible factors not listed, could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include: competition within the quick-service restaurant industry, which remains extremely intense, both domestically and internationally, with many competitors pursuing heavy price discounting; changes in economic conditions; changes in consumer perceptions of food safety; harsh weather, particularly in the first and fourth quarters; changes in consumer tastes; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations and financing for new restaurant development; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; changes in applicable accounting rules; the ability of the Company to successfully complete transactions designed to improve its return on investment; or other factors set forth in Exhibit 99 attached hereto.

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

SYSTEMWIDE RESTAURANTS


	As of June 29, 2008	As of March 30, 2008	Increase/ (Decrease) From Prior Quarter		As of July 1, 2007	Increase/ (Decrease) From Prior Year
Wendy’s
U.S
Company	1,263	1,267	(4	)	1,297	(34	)
Franchise	4,655	4,650	5		4,661	(6	)

	5,918	5,917	1		5,958	(40	)

Canada
Company	139	140	(1	)	145	(6	)
Franchise	236	237	(1	)	231	5

	375	377	(2	)	376	(1	)

Other
International
Company	0	0	0		2	(2	)
Franchise	332	328	4		325	7

	332	328	4		327	5

Total Wendy’s
Company	1,402	1,407	(5	)	1,444	(42	)
Franchise	5,223	5,215	8		5,217	6

	6,625	6,622	3		6,661	(36	)

RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 creates consistency and comparability in fair value measurements among the many accounting pronouncements that require fair value measurements, but does not require any new fair value measurements. The Company adopted SFAS No. 157 in 2008 for financial assets and liabilities and the adoption did not have a material impact on the Company. The effective date of this statement for nonfinancial assets and nonfinancial liabilities was deferred by FASB Staff Position FAS 157-2, “Effective Date of FASB Statement No. 157”, and is now effective for fiscal years beginning after November 15, 2008. The adoption of SFAS No. 157 for nonfinancial assets and liabilities is not expected to have a material impact on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement requires an acquirer to recognize the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date measured at their fair values as of that date. This Statement changes the accounting for acquisition-related costs and restructuring costs, now requiring those costs to be recognized separately from the acquisition. This Statement also makes various other amendments to the authoritative literature intended to provide additional guidance or to conform the guidance in that literature to that provided in this Statement. SFAS No. 141(R) shall be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS No. 141(R) but does not expect it to have a material impact on the Company’s financial statements.

This Statement is effective for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. The Company is currently evaluating the impact of the adoption of SFAS No. 161 but does not expect it to have a material impact on the Company’s financial statements.

SAFE HARBOR STATEMENT

Certain information contained in this Form 10-Q, particularly information regarding future economic performance and finances, plans and objectives of management, is forward looking. In some cases, information regarding certain important factors that could cause actual results to differ materially from any such forward-looking statement appears together with such statement. In addition, the following factors, in addition to other possible factors not listed, could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include: competition within the quick-service restaurant industry, which remains extremely intense, both domestically and internationally, with many competitors pursuing heavy price discounting; changes in economic conditions; changes in consumer perceptions of food safety; harsh weather, particularly in the first and fourth quarters; changes in consumer tastes; increases in inflation and food, labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations and financing for new restaurant development; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; changes in applicable accounting rules; the ability of the Company to successfully complete transactions designed to improve its return on investment; risks related to the execution of the Merger Agreement with Triarc or other factors set forth in Exhibit 99 attached hereto.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information is incorporated by reference from the section titled “Market Risk” on page 2223 of this Form 10-Q.

ITEM 4.

CONTROLS AND PROCEDURES

(a) The Company, under the supervision, and with the participation, of its management, including its Chief Executive Officer and Chief Financial Officer, performed an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as contemplated by ~~Securities~~ Exchange Act Rule 13a-15(b). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this report, that such disclosure controls and procedures were effective.

(b) No change was made in the Company’s internal control over financial reporting during the Company’s ~~most~~last ~~recent~~ fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

OnThe ~~September 26,~~Company ~~2006,~~and aits ~~minority~~subsidiaries ofare ~~noteholders~~parties ~~filed~~to various alegal ~~lawsuit~~proceedings arising in ~~New~~the ~~York~~ordinary ~~seeking~~course ~~to enjoin the spin-off~~ of ~~THI~~business. ~~Following~~Many aof ~~hearing~~these onare ~~September 28,~~covered ~~2006,~~by the ~~U.S.~~Company’s ~~District~~self-insurance ~~Court~~or inother ~~New~~insurance ~~York City~~programs. ~~denied~~Reserves inrelated ~~all~~to ~~respects~~ the ~~plaintiff~~resolution ~~noteholders’~~of ~~motion~~legal ~~for~~proceedings aare ~~temporary~~included ~~restraining~~in ~~order and~~Accrued ~~a preliminary injunction~~expenses—Other. OnIt ~~October 10,~~is ~~2006,~~ the ~~noteholders~~opinion ~~voluntarily dismissed their lawsuit and some (but not all)~~ of the ~~same~~Company ~~noteholders~~ that ~~had filed~~ the ~~lawsuit~~ultimate ~~issued~~resolution ~~a purported notice~~ of ~~default~~such ~~asserting~~matters ~~that~~will ~~the~~not ~~spin-off~~materially ofaffect ~~THI on September 29, 2006 violated~~ the ~~terms of one of the indentures governing the~~ Company’s ~~public~~financial ~~debt.~~condition Onor ~~October 11, 2006, the Company filed a declaratory judgment in the U~~earnings.S. ~~District Court in New York City seeking a ruling from the Court that no violation of the indenture has occurred.~~

~~In February 2007~~On April 25, 2008, a putative class action complaint was filed by Ethel Guiseppone, on behalf of herself and others similarly situated, against the Company, ~~reached~~its adirectors, ~~settlement~~and ~~with~~Triarc and Trian Partners, in the ~~noteholders~~Franklin ~~pursuant~~County, Ohio Court of Common Pleas. A motion for leave to ~~which~~file an amended complaint was filed on June 19, 2008. The proposed amended complaint alleged breach of fiduciary duties arising out of the ~~notice~~board of ~~default~~directors’ ~~has~~search for a ~~been~~merger ~~withdrawn~~partner and out of its approval of the ~~case~~Merger ~~has~~Agreement ~~been~~on ~~dismissed.~~April ~~The~~23, ~~settlement~~2008, ~~was~~and ~~not~~failure to disclose material information related to the ~~financial condition~~Merger orin ~~earnings~~the ofForm S-4 that Triarc filed with the ~~Company~~SEC. The proposed amended complaint sought certification of the proceeding as a class action; preliminary and permanent injunctions against disenfranchising the purported class and consummating the Merger; a declaration that the defendants breached their fiduciary duties; costs and attorneys fees; and any other relief the court deems proper and just.

Also on April 25, 2008, a putative class action and derivative complaint was filed by Cindy Henzel, on behalf of herself and others similarly situated, and derivatively on behalf of the Company, against the Company and its directors in the Franklin County, Ohio Court of Common Pleas. A motion for leave to file an amended complaint was filed on June 16, 2008. The proposed amended complaint alleges breach of fiduciary duties arising out of the board of directors’ search for a merger partner and out of its approval of

the Merger Agreement on April 23, 2008, and failure to disclose material information related to the Merger in the Form S-4 that Triarc filed with the SEC. The proposed amended complaint seeks certification of the proceeding as a derivative and class action; an injunction against consummating the Merger and requiring the defendants to promptly hold an annual meeting and to seek another merger partner; rescission of any part of the Merger Agreement already implemented; a declaration that the defendants breached their fiduciary duties; costs and attorneys fees; and any other relief the court deems proper and just.

On May 22, 2008, a putative class action complaint was filed by Ronald Donald Smith, on behalf of himself and others similarly situated, against the Company and its directors in the Franklin County, Ohio Court of Common Pleas. A motion for leave to file an amended complaint was filed on June 30, 2008. The proposed amended complaint alleged breach of fiduciary duties arising out of the board of directors’ search for a merger partner and out of its approval of the Merger Agreement on April 23, 2008, and failure to disclose material information related to the Merger in the Form S-4 that Triarc filed with the SEC. The proposed amended complaint sought certification of the proceeding as a derivative and class action; an injunction against consummating the Merger and requiring the defendants to promptly hold an annual meeting and to seek another merger partner; rescission of any part of the Merger Agreement already implemented; a declaration that the defendants breached their fiduciary duties; costs and attorneys fees; and any other relief the court deems proper and just.

On June 13, 2008, a putative class action complaint was filed by Peter D. Ravanis and Dorothea Ravanis, on behalf of themselves and others similarly situated, against the Company, its directors, and Triarc in the Supreme Court of the State of New York, New York County. An amended complaint was filed on June 20, 2008. The amended complaint alleges breach of fiduciary duties arising out of the board of directors’ search for a merger partner and out of its approval of the Merger Agreement on April 23, 2008, and failure to disclose material information related to the Merger in the Form S-4 that Triarc filed with the SEC. The amended complaint seeks certification of the proceeding as a class action; preliminary and permanent injunctions against consummating the Merger; other equitable relief; attorneys fees; and any other relief the court deems proper and just. All parties to the Ravanis case have jointly requested that the court stay the action pending resolution of the Ohio cases.

On July 9, 2008, the parties to the three Ohio actions described above filed a stipulation and proposed order that would consolidate the cases, provide for the proposed amended complaint in the Henzel case to be the operative complaint in each of the cases, designate one law firm as lead plaintiffs’ counsel, and establish an answer date for the defendants in the consolidated case. The court entered the order as proposed in all three cases on July 9, 2008.

The Company believes that the above proceedings are without merit and intends to vigorously defend them. While the Company does not believe that any such claims, lawsuits or regulations will have a material adverse effect on its financial condition or results of operations, unfavorable rulings could occur. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on net income for the period in which the ruling occurs or for future periods or a delay in the consummation of the Merger Agreement.

ITEM 1A.

RISK FACTORS

~~There~~In ~~have~~addition ~~been~~to ~~no material changes in~~ the ~~risk~~other ~~factors~~information ~~disclosed~~set forth in this ~~Part I~~report, ~~“Item 1A.~~including ~~Risk Factors”~~information inunder the ~~Company’s~~heading ~~Annual~~“Special ~~Report~~Committee onand ~~Form 10-K for~~ the ~~year~~Announced ~~ended~~Definitive ~~December 31,~~Merger ~~2006.~~Agreement” Inin ~~addition~~Part ~~to the~~I, ~~other~~Item 2 ~~information set forth in this report~~above, ~~you~~the reader should carefully consider the factors discussed in the Company’s Annual Report on Form 10-K, which could materially affect the Company’s business, financial condition or future results. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its business, financial condition and/or operating results.

~~ITEM~~In 2.addition, ~~UNREGISTERED~~the ~~SALES~~execution OFof ~~EQUITY~~the ~~SECURITIES~~Merger ~~AND~~Agreement ~~USE~~may OFgive ~~PROCEEDS~~ rise to other risk factors, including:

~~The~~Failure ~~following~~to ~~table~~complete ~~presents~~ the ~~Company’s~~Merger ~~repurchases~~for ofany ~~its~~reason ~~common~~could ~~stock~~adversely ~~for~~affect ~~each of~~ the ~~three periods~~Company’s ~~included~~stock inprice and the ~~first~~Company’s ~~quarter~~future ~~ended~~business ~~April 1,~~and ~~2007:~~ financial results.

~~Issuer~~Completion ~~Purchases~~of the Merger is conditioned upon, among other things, the receipt of ~~Equity~~certain ~~Securities~~regulatory and antitrust approvals, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval of the Company’s and Triarc’s shareholders. On May 28, 2008, the United States Federal Trade Commission granted the Company’s and Triarc’s request for early termination of the Hart-Scott-Rodino Act waiting period. There is no assurance that the Company will receive the necessary approvals or satisfy the other conditions necessary for completion of the Merger. Failure to complete the Merger would prevent the Company from realizing its anticipated benefits. The Company will also incur transaction costs, whether or not the Merger is completed (including the incurrence of additional compensation expense to retain employees) and, under certain circumstances, may be required to pay an amount equal to $10 million to Triarc if the Merger Agreement is terminated. In addition, the current market price of the Company’s common shares may reflect a market assumption that the Merger will occur, and a failure to complete the Merger could result in the decline in the market price of the Company’s common shares.

							(d) Maximum Number
							(or Approximate
					(c) Total Number		Dollar Value) of
					of Shares Purchased		Shares that May Yet
					as Part of Publicly		be Purchased Under
	(a) Total Number		(b) Average Price		Announced Plans or		the Plans
Period	of Shares Purchased		Paid Per Share		Programs		or Programs (1)
Period 1 (January 1, 2007 — February 4, 2007)		0	$	0		0		12,986,722
Period 2 (February 5, 2007 — March 4, 2007)		0	$	0		0		12,986,722
Period 3 (March 5, 2007 — April 1, 2007)		9,000,000	$	31.33		9,000,000		3,986,722
Total		9,000,000	$	31.33		9,000,000		3,986,722

(1) On October 9, 2006 the Company’s Board of Directors authorized the repurchase of up to 35.4 million common shares of the Company to be implemented over 18-24 months from the date of authorization. This authorization replaced all prior authorizations, including the $907.3 million authorization remaining at October 1, 2006. The nine million shares repurchased in the quarter were repurchased pursuant to an ASR transaction as further described in Part I of this Form 10-Q.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) The Annual Meeting of the Company’s shareholders was held April 26, 2007.

(b) The following table sets forth the name of each director elected at the meeting and the number of votes for or withheld from each director:

Director	For		Withheld
Janet Hill		79,063,466		7,777,599
John R. Thompson		80,951,694		5,889,371
J. Randolph Lewis		80,155,335		6,685,730
Stuart I. Oran		84,913,590		1,927,475

The ~~following directors did not stand for reelection at the meeting (the year in which each director~~Company’s ~~term~~business ~~expires~~could isbe ~~indicated~~adversely inimpacted ~~parenthesis):~~by ~~Kerrii~~uncertainty B.related ~~Anderson~~to ~~(2008),~~the ~~William~~proposed ~~E. Kirwan (2008)~~Merger, ~~Ann~~whether ~~B. Crane (2008), Jerry W. Levin (2008), James V. Pickett (2009), Thomas F. Keller~~or ~~(2009),~~not ~~David~~the P.Merger ~~Lauer~~is ~~(2009), James F~~completed. ~~Millar (2009) and Peter H. Rothschild (2009).~~

~~(c) The~~Whether ~~following~~or ~~table~~not ~~sets~~the ~~forth~~Merger is completed, the ~~brief~~announcement ~~description~~and pendency of the ~~other~~Merger ~~matters~~could ~~voted~~impact onor atcause ~~the~~disruptions ~~Annual~~in ~~Meeting~~the ~~and~~Company’s ~~the~~business, ~~number~~which ofcould ~~votes~~have ~~cast~~an ~~for,~~adverse ~~against~~effect oron ~~abstaining~~the ~~from~~Company’s results of operations, asfinancial ~~well~~condition asand ~~broker nonvotes~~success ~~on,~~of the ~~matter~~merger, including:

							Broker
	For		Against		Abstain		Nonvotes
Ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2007		84,834,838		1,406,807		599,413		—
Approval of the Company’s new Senior Executive Annual Performance Plan		78,874,788		7,172,874		793,386		—
Approval of the Company’s 2007 Stock Incentive Plan		66,294,928		5,188,460		756,679		14,600,998
Adoption of a shareholder proposal regarding a policy to identify and label all food products containing genetically-engineered ingredients or products of animal cloning		8,406,755		57,436,398		6,396,906		14,601,006
Adoption of a shareholder proposal to have the Company issue a report regarding its policies and practices related to long-term social and environmental sustainability		21,865,837		44,176,013		6,198,214		14,601,001
Adoption of a shareholder proposal regarding a report on the feasibility of controlled-atmosphere killing of chickens by suppliers		9,212,604		55,438,129		7,589,338		14,600,994

•

the Company’s employees may experience uncertainty about their future roles with the current and/or combined company, which might adversely affect the Company’s ability to retain and hire managers and other employees;

•

the attention of the Company’s management may be directed toward the completion of the Merger and transaction-related considerations and may be diverted from the day-to-day business operations of the Company’s business;

•

the Company’s franchisees may experience uncertainty about their relationship with the Company or the combined company following the Merger and these uncertainties may harm the Company’s relationships with its franchisees and may impair the Company’s ability to retain or attract franchisees; and

•

existing and potential litigation in connection with the Merger.

The anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.

The Merger involves the integration of two companies that have previously operated independently. Prior to announcement, the Company did not conduct any integration planning for the two companies. The two companies are devoting and will continue to devote significant management attention and resources to integrating the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition and stock price. Even if the business operations are integrated successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that we currently expect from this integration or that these benefits will be achieved within the anticipated time frame.

Additional Information About the Merger and Where to Find It

In connection with the proposed merger, Triarc filed a Registration Statement on Form S-4 on June 2, 2008 with the SEC (Registration No. 333-151336) that includes a preliminary joint proxy statement of Triarc and Wendy’s and that also constitutes a preliminary prospectus of Triarc. Triarc filed Amendment No. 1 and Amendment No. 2 to the Form S-4 with the SEC on July 11, 2008 and August 4, 2008, respectively. Before making any voting decision, Triarc and the Company urge shareholders to read the definitive joint proxy statement/final prospectus regarding the proposed Merger when it becomes available because it will contain important information. Triarc and the Company each will mail the definitive proxy statement/final prospectus to its shareholders. Shareholders and others may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). Shareholders and others may also obtain these documents, free of charge, from Triarc’s website (www.triarc.com) under the heading “Investor Relations” and then under the item “SEC Filings and Annual Reports.” Shareholders and others may also obtain these documents, free of charge, from the Company’s website (www.wendys.com) under the tab “Investors” and then under the heading “SEC Filings.”

Proxy Solicitation

Triarc, the Company and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Triarc and the Company’s shareholders in favor of the shareholder approvals required in connection with the Merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Triarc and the Company’s shareholders in connection with the shareholder approvals required in connection with the proposed Merger is set forth in the proxy statement/prospectus contained in the above-referenced Registration Statement on Form S-4, as amended. Shareholders and others can find information about Triarc’s executive officers and directors in its Amendment No. 2 to its Form 10-K filed with the SEC on April 25, 2008. Shareholders and others can find information about the Company’s executive officers and directors in its Amendment No. 1 to its Form 10-K filed with the SEC on April 28, 2008. Additional information about Triarc’s executive officers and directors and the Company’s executive officers and directors can be found in the above-referenced Registration Statement on Form S-4, as amended. Shareholders and others can print copies of these documents from www.wendys-invest.com and www.triarc.com.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no repurchases of common stock for the second quarter and year-to-date periods ended June 29, 2008.

ITEM 6.

EXHIBITS

(a) Index to Exhibits on Page 2729.

25 27

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~WENDY’S INTERNATIONAL, INC. (Registrant)~~	WENDY’S INTERNATIONAL, INC. (Registrant)
Date: May 10, 2007	/s/ Kerrii B. Anderson
Date: August 6, 2008		/s/ Kerrii B. Anderson
	~~Kerrii B. Anderson~~	Kerrii B. Anderson
	~~Chief Executive Officer and President~~	Chief Executive Officer and President
Date: May 10, 2007	/s/ Joseph J. Fitzsimmons
Date: August 6, 2008		/s/ Joseph J. Fitzsimmons
	~~Joseph J. Fitzsimmons~~	Joseph J. Fitzsimmons
	Executive Vice President and Chief Financial Officer
		Executive Vice President, Chief Financial Officer and Treasurer
Date: May 10, 2007	/s/ Brendan P. Foley, Jr.
	Brendan P. Foley, Jr.
	Senior Vice President, General Controller and Assistant Secretary

26 28

WENDY’S INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX TO EXHIBITS

Exhibit
Exhibit Number		Description	PageNo.
Number			Description	Page No.
10(a)		Sample Stock Option Award Letter	30
	10		Sample Change in Control Agreement		28-43
10(b)		Sample First Amendment to Indemnification Agreement between the Company and its directors and certain officers and employees	31 - 32
	31	(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer		44
31(a)		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	33
	31	(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer		45
31(b)		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	34
	32	(a)	Section 1350 Certification of Chief Executive Officer		46
32(a)		Section 1350 Certification of Chief Executive Officer	35
	32	(b)	Section 1350 Certification of Chief Financial Officer		47
32(b)		Section 1350 Certification of Chief Financial Officer	36
99	99	Safe Harbor Under the Private Securities Litigation Reform Act of 1995	~~Safe~~37 ~~Harbor~~- ~~Under the Private Securities Litigation Reform Act of 1995~~38		~~48-49~~

The Company and its subsidiaries are parties to instruments with respect to long-term debt for which securities authorized under each such ~~instrument~~instruments do not exceed ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. Copies of these instruments will be furnished to the Commission upon request.

27 29

Table of Contents

WENDY’STable INTERNATIONAL,of INC. AND SUBSIDIARIES INDEX Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

RestructuringTable costsof Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · WENDYS INTERNATIONAL INC