Wendy's Announces 2007 Full Year and 4th Quarter Results



    
    2007 income from continuing operations increased 134% to $86.6 million

    2007 adjusted EBITDA from continuing operations increased 38% to $305.4
    million
    

    DUBLIN, Ohio, Feb. 4 /CNW/ -- Wendy's International, Inc. (NYSE:   WEN)
today announced its preliminary, unaudited financial results for the full year
and fourth quarter of 2007, reflecting same-store sales increases for the
year, cost controls and improving restaurant margins.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20080104/CLF020LOGO )
    
    Including full-year pre-tax expenses related to the Board of Director's
Special Committee of $24.7 million and $9.8 million of pre-tax restructuring
charges (as used throughout, restructuring charges include pension settlement
charges), the Company reported for the full year of 2007:
    
    --  Income from continuing operations of $86.6 million, up 134.0% compared
        to $37.0 million in 2006;
    --  Diluted earnings per share (EPS) from continuing operations of $0.96,
        up 200.0% from $0.32 per share in 2006; and
    --  Earnings before interest, taxes, depreciation and amortization
        (EBITDA) from continuing operations of $270.9 million, up 65.2% from
        $164.0 million in 2006.
    
    Excluding 2007 expenses related to the Board's Special Committee and
restructuring charges and excluding 2006 restructuring charges, incremental
advertising expenses and lost joint venture income, the Company reported for
the full year of 2007:
    
    --  Adjusted income from continuing operations of $108.0 million, up 50.0%
        from $72.0 million in 2006;
    --  Adjusted diluted EPS from continuing operations of $1.20, up 93.5%
        from $0.62 per share in 2006; and
    --  Adjusted EBITDA from continuing operations of $305.4 million, up 38.4%
        from $220.7 million in 2006.
    

    The Company met its revised 2007 full-year EBITDA guidance of $295
million to $315 million, and its revised 2007 full-year EPS guidance of $1.09
to $1.23, which excluded expenses related to the Board's Special Committee and
restructuring charges.



    
                          Including expenses           Excluding expenses (i)
                        Full-year     Full-year       Full-year      Full-year
                          2007          2006            2007           2006
    Income from
     continuing
     operations     $86.6 million $37.0 million  $108.0 million  $72.0 million
    Diluted EPS
     from continuing
     operations             $0.96         $0.32           $1.20          $0.62
    EBITDA from
     continuing            $270.9        $164.0          $305.4         $220.7
     operations           million       million         million        million
    

    
    (i) See reconciliations below.  For 2007, adjusted income from continuing
        operations, EBITDA and EPS excludes expenses related to the Board's
        Special Committee and restructuring charges.  For 2006, adjusted
        income from continuing operations, EBITDA and EPS excludes
        restructuring charges, incremental advertising expenses and lost joint
        venture income.
    



    
    2007 Full-Year Highlights - U.S. EBITDA store margins up 210 basis points
    --  U.S. company-operated restaurant EBITDA margins improved 210 basis
        points to 11.0% in 2007, reflecting slightly positive full-year sales,
        improved menu management (menu price increases and favorable shifts in
        product mix) and labor efficiencies. The 210 basis point improvement
        was achieved despite higher commodity costs which negatively impacted
        U.S. margins by 90 basis points.
    --  Total company-operated restaurant EBITDA margins improved 180 basis
        points to 10.7% in 2007, compared to 8.9% one year ago.  This includes
        U.S., Canada and International operations.
    --  As previously announced, annual same-store sales at U.S. franchise
        restaurants increased 1.4%, compared to a 0.6% increase in 2006.
        Wendy's franchisees have produced seven consecutive quarters of
        positive same-store sales. Annual same-store sales at U.S. company-
        operated restaurants increased 0.9%, compared to a 0.8% increase in
        2006.
    --  The total number of system-wide Wendy's(R) restaurants as of December
        30, 2007, was 6,645, compared to 6,673 at year-end 2006.  This
        reflects the opening of 92 restaurants and the closure of 120
        restaurants.
    Company made significant progress in 2007
    
    "I am proud of our restaurant crews, franchisees and company employees
for what we accomplished in 2007," said Chief Executive Officer and President
Kerrii Anderson.  "We executed our strategic plan, implemented many
initiatives to drive the business and made tough decisions to position Wendy's
for future growth.
    "We produced significantly improved company store operating margins and
earnings growth in the face of an incredibly challenging environment, with
rising commodities and the distraction of the Special Committee process.  Our
goal was to deliver EBITDA in the range of $295-$315 million for the year, and
we achieved that objective with EBITDA of $305 million, up 38% over the
previous year," Anderson said.
    Chief Financial Officer Jay Fitzsimmons said:  "Our improved financial
performance reflected modest same-store sales growth, higher average check and
excellent expense control by our employees.  There is no question that our
business is stronger today than a year ago."
    
    Company executing Phase 2 of its Strategic Plan
    
    The Company recently launched Phase 2 of its strategic plan, which
focuses on further growth in same-store sales and earnings in 2008.
    "We have a powerful brand, and our objective in 2008 is to re-ignite
sales growth and drive quality and innovation throughout our business,"
Anderson said.  "In addition to a strong new product lineup for 2008 and a
re-energized focus on restaurant operations, we are excited about our new
advertising that highlights Wendy's unique competitive advantage of quality.
Today, we are launching our 'Waaaay Better' campaign, and the hero of our new
advertising will be our quality food."
    The Company's evolution of its advertising approach is based on extensive
consumer research over the last eight months, working in close collaboration
with its agency partners and franchise advertising committee.
    "Our new campaign leverages Wendy's red-hair iconography, but does so in
a way that is more genuine and true to our brand," said Anderson.  "Each
television spot opens and closes with an animated version of our familiar logo
- the enduring image of Wendy, a red-headed, little girl.  Our Wendy icon
stands for wholesome authenticity and honest quality. It's one of the most
powerful, under-used assets in the consumer world today."
    2007 4th Quarter Financial Highlights - U.S. EBITDA store margins up 120
basis points
    Including fourth-quarter pre-tax expenses related to the Board's Special
Committee of $6.5 million and $0.4 million of pre-tax restructuring charges,
the Company reported for the fourth-quarter of 2007:
    
    --  Income from continuing operations of $14.1 million, up 42.4% from $9.9
        million in the fourth quarter of 2006;
    --  Diluted EPS from continuing operations of $0.16, up 77.8% from $0.09
        per share in the fourth quarter of 2006; and
    --  EBITDA from continuing operations of $50.1 million, up 64.3% from
        $30.5 million in the fourth quarter of 2006.
    
    Excluding expenses related to the Board's Special Committee and
restructuring charges, the Company reported for the fourth-quarter of 2007:
    
    --  Adjusted income from continuing operations of $18.4 million, up 24.3%
        from $14.8 million in the fourth quarter of 2006;
    --  Adjusted diluted EPS from continuing operations of $0.21 in the fourth
        quarter of 2007, up 50.0% from $0.14 per share for the fourth quarter
        of 2006; and
    --  Adjusted EBITDA from continuing operations of $57.0 million, up 48.4%
        from $38.4 million in the fourth quarter of 2006.
    
    U.S. company-operated restaurant EBITDA margins improved 120 basis points
to 10.1% in the fourth quarter of 2007, compared to 8.9% a year ago. The 120
basis point improvement was achieved despite higher commodity costs which
negatively impacted U.S. margins by 180 basis points.
    Company-operated restaurant EBITDA margins improved 140 basis points to
9.8% in the fourth quarter of 2007, compared to 8.4% in the fourth quarter of
2006.  This includes U.S., Canada and International operations.
    As previously announced, fourth-quarter same-store sales at U.S.
franchise restaurants increased 0.2%, compared to an increase of 2.7% a year
ago, and fourth-quarter same-store sales at U.S. company-operated restaurants
decreased 0.8%, compared to an increase of 3.1% in the fourth quarter of 2006.



    
                           Including expenses           Excluding expenses (i)
                         4Q 2007       4Q 2006          4Q 2007       4Q 2006
    Income from
     continuing
     operations    $14.1 million  $9.9 million    $18.4 million $14.8 million
    Diluted EPS from
     continuing
     operations            $0.16         $0.09            $0.21         $0.14
    EBITDA from
     continuing
     operations    $50.1 million $30.5 million    $57.0 million $38.4 million
    

    
    (i) See reconciliations below.  Adjusted income from continuing
        operations, EBITDA and EPS excludes expenses related to the Board's
        Special Committee and restructuring charges.
    Board approves 120th consecutive quarterly dividend
    
    The Board of Directors approved a quarterly dividend of 12.5 cents per
share, payable February 29, 2008 to shareholders of record as of February 14,
2008.  The dividend payment will represent the Company's 120th consecutive
quarterly dividend.
    
    Company plans 2007 conference call for February 4 at 9:00 a.m. ET
    
    The Company will hold a conference call and webcast to discuss the
Company's 2007 and fourth quarter results at 9:00 a.m. ET today.  The Company
does not plan to discuss its 2008 outlook during this event and has suspended
guidance until completion of the Board's Special Committee process.
    The dial-in number is (877) 572-6014 (U.S. and Canada) or (706) 679-4852
(International). A simultaneous webcast of the conference call will be
available at www.wendys-invest.com. The call will be archived at that site.
    
    Safe Harbor statement
    
    Certain information in this news release, particularly information
regarding future economic performance and finances, and plans, expectations
and objectives of management, is forward looking.  Factors set forth in our
Safe Harbor under the Private Securities Litigation Reform Act of 1995, 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.
    Please review the Company's Safe Harbor statement at
http://www.wendys-invest.com/safeharbor.
    
    Wendy's International, Inc. overview
    
    Wendy's International, Inc. is one of the world's largest and most
successful restaurant operating and franchising companies.  More information
about the Company is available at www.wendys-invest.com.
    
    Appendix
    2007 Full-Year Financial and Income Statement Information
    
    The Company's full-year 2007 reported results from continuing operations
include the impact of:
    
    --  Cost of sales - $1.32 billion, or 61.2% of sales, in 2007, compared to
        $1.35 billion, or 62.8% of sales, in 2006. The year-over-year
        improvement as a percent of retail sales is due primarily to improved
        menu management (menu price increases and favorable shifts in product
        mix) and labor efficiencies realized in company-operated restaurants.
        These improvements were partially offset by higher commodity costs
        which negatively impacted U.S. margins by 90 basis points.
    --  Company restaurant operating costs - $597.3 million, or 27.7% of
        sales, in 2007, compared to $602.3 million, or 28.0% of sales, in
        2006.  The year-over-year improvement as a percent of sales primarily
        includes lower expenses as a result of the Company's 2006 cost saving
        initiatives and lower bonuses. These improvements were partially
        offset by the change in accounting for the Canadian real estate joint
        venture with Tim Hortons(R) (see explanation below for Wendy's joint
        venture with Tim Hortons). As a result of this change in accounting,
        full-year 2007 company restaurant operating costs included rental
        expense paid to the joint venture by Wendy's, which prior to the spin-
        off of Tim Hortons was eliminated in consolidation. Without this
        change in accounting for the joint venture, reported full-year 2007
        company-operated restaurant EBITDA margins would have been 20 basis
        points higher.
    --  Operating costs - $22.7 million in 2007, compared to $46.7 million in
        2006.  The year-over-year decrease is due primarily to $25.0 million
        in incremental advertising costs in 2006 that the Company did not
        incur in 2007 and a $5.7 million decline in rent expense in 2007 as a
        result of the change in accounting for Wendy's Canadian real estate
        joint venture with Tim Hortons, which is no longer consolidated by the
        Company.  These declines were partially offset by higher incentive
        payments to franchisees for remodeling of $5.4 million in 2007.
    --  General and administrative expense - $212.4 million, or 8.7% of
        revenue, in 2007, compared to $237.6 million, or 9.7% of revenue, in
        2006.  The year-over-year improvement is due primarily to lower
        salaries and benefits as a result of the elimination of positions in
        2006, as well as lower insurance costs and bonuses.
    --  Restructuring costs - $9.8 million in 2007, which includes $7.4
        million in pension settlement charges.  This compares to $38.9 million
        in restructuring costs in 2006.
    --  Special Committee related charges - $24.7 million in expenses in 2007
        related to the Board's Special Committee, which was formed in April
        2007.  These charges did not occur in 2006.
    --  Other income/expense - $9.0 million of income in 2007, which includes
        equity investment income of $9.4 million, related primarily to the
        Company's 50/50 Canadian real estate joint venture with Tim Hortons,
        $5.7 million in income from the amendment of the Company's tax sharing
        agreement with Tim Hortons, gains on property dispositions of $5.0
        million and insurance gains of $9.0 million, partially offset by store
        closure charges of $7.3 million, $5.0 million in impairment charges on
        the Company's Pasta Pomodoro investment, and other asset write-offs.
        In 2006, other income/expense was $1.4 million of income, which
        includes store closure costs of $16.7 million, gains on sales of
        properties of $6.8 million and rent income paid by Tim Hortons to the
        Canadian real estate joint venture of $14.0 million.  The
        corresponding rent expense is classified in discontinued operations.
        Since the spin-off of Tim Hortons, this joint venture is no longer
        consolidated and the Company now records its 50% share of the joint
        venture income in other income/expenses.
    --  Interest - The $9.3 million increase in interest expense in 2007 is
        primarily due to the sale of approximately 40% of the U.S. royalty
        stream for a 14-month period entered into in the fourth quarter of
        2006 that was recorded as debt. The $24.1 million decrease in interest
        income reflects a reduction in cash balances as a result of the
        completion of a modified "Dutch Auction" tender offer in the fourth
        quarter of 2006, using approximately $800 million, and the completion
        of an accelerated share repurchase in the first quarter of 2007 for
        approximately $298.0 million.
    --  Taxes - The Company's effective tax rate was 31.1% in 2007.  The rate
        was impacted by favorable settlements of Federal and state tax
        examinations.
    --  Shares outstanding - A lower share count of 90.2 million average
        shares in 2007, compared to 115.3 million average shares in 2006.  The
        Company repurchased 22.4 million shares in a modified "Dutch Auction"
        tender offer in the fourth quarter of 2006, and repurchased 9.0
        million shares in an accelerated share repurchase in the first quarter
        of 2007.
    4th Quarter Financial and Income Statement Information
    
    The Company's fourth-quarter 2007 reported results from continuing
operations include the impact of:
    
    --  Cost of sales - $326.1 million, or 62.2% of retail sales, in the
        fourth quarter of 2007, compared to $331.0 million, or 62.8% of retail
        sales, in the fourth quarter of 2006, which was a 60 basis point
        improvement as a percentage of sales. The year-over-year improvement
        is due primarily to improved menu management (menu price increases and
        favorable shifts in product mix) and labor efficiencies realized in
        company-operated restaurants.
    --  Company restaurant operating costs - $143.9 million, or 27.5% of
        sales, in the fourth quarter of 2007, compared to $149.5 million, or
        28.4% of sales, in the fourth quarter of 2006.  The year-over-year
        improvement as a percent of sales includes lower expenses as a result
        of the Company's cost saving initiatives implemented in 2006 and lower
        bonuses.
    --  Operating costs - $7.6 million in the fourth quarter of 2007, compared
        to $4.2 million in the fourth quarter of 2006.  The year-over-year
        increase is due primarily to incentives paid to franchisees for
        remodeling of $1.8 million during the quarter, and breakfast
        advertising costs to support franchisees of $1.0 million.
    --  General and administrative expense - $61.0 million, or 10.2% of
        revenue, in the fourth quarter of 2007, compared to $67.4 million, or
        11.3% of revenue, in the fourth quarter of 2006.  The year-over-year
        improvement is due primarily to a reduction in salaries and benefits
        as a result of the elimination of positions in 2006, and lower bonus
        accruals.
    --  Restructuring costs - $0.4 million in the fourth quarter of 2007.
        This compares to $7.9 million in restructuring costs in the fourth
        quarter of 2006.
    --  Special Committee related charges - $6.5 million in the fourth quarter
        of 2007 in expenses related to the Special Committee.  These charges
        did not occur in 2006.
    --  Other income/expense - $0.5 million of expense in the fourth quarter
        of 2007, which includes $5.7 million in income from the amendment of
        Wendy's tax sharing agreement with Tim Hortons, insurance gains of
        $2.2 million and gains on property dispositions of $0.7 million,
        partially offset by $5.0 million in impairment charges on the
        Company's Pasta Pomodoro investment, store closure charges of $1.5
        million, and other asset write-offs.
    --  Interest - The $2.6 million increase in interest expense in the fourth
        quarter of 2007 includes interest expense related to the sale of
        approximately 40% of the U.S. royalty stream for a 14-month period
        entered into in the fourth quarter of 2006 that was recorded as debt.
        The $7.3 million decrease in interest income reflects a reduction in
        cash balances as a result of the completion of a modified "Dutch
        Auction" tender offer in the fourth quarter of 2006, using
        approximately $800 million, and the completion of an accelerated share
        repurchase in the first quarter of 2007 for approximately $298.0
        million.
    --  Taxes - The Company's effective tax rate for the fourth quarter of
        2007 was a benefit of approximately 8.4% and was due primarily to the
        settlement of tax examinations which yielded a benefit of
        approximately $5.4 million.
    --  Shares outstanding - A lower share count of 88.3 million average
        shares in the fourth quarter of 2007, compared to 108.8 million
        average shares in the fourth quarter of 2006.  The Company repurchased
        22.4 million shares in a modified "Dutch Auction" tender offer in the
        fourth quarter of 2006, and repurchased 9.0 million shares in an
        accelerated share repurchase in the first quarter of 2007.
    Discontinued operations
    
    Wendy's completed its spinoff of Tim Hortons in the third quarter of 2006
and completed the sale of Baja Fresh(R) Mexican Grill during the fourth
quarter of 2006. During the third quarter of 2007, the Company completed the
sale of Cafe Express.  Accordingly, the after-tax operating results of Tim
Hortons, Baja Fresh and Cafe Express appear in the "Discontinued Operations"
line on the income statement.
    
    Wendy's joint venture with Tim Hortons
    
    Wendy's and Tim Hortons continue to operate approximately 100 combination
restaurants in Canada as part of the joint venture.  The Company refers to the
entity that controls the real estate of these combination restaurants as its
Canadian restaurant real estate joint venture with Tim Hortons.  Wendy's and
Tim Hortons also operate approximately 40 combination restaurants in the U.S.,
which are not included in the joint venture.
    As a result of its 2006 spinoff of Tim Hortons, the Company, in
accordance with generally accepted accounting principles (GAAP), now accounts
for its 50% share of the Canadian restaurant real estate joint venture with
Tim Hortons under the equity method of accounting, rather than consolidating
the results of the joint venture in the Company's financial statements.
    Without this change, company-operated restaurant EBITDA margins would
have been 10.9% for the full year.  This change in accounting for the
Company's joint venture with Tim Hortons impacts several lines on the
Company's statement of income and resulted in an overall reduction to
full-year 2007 operating income of $7.2 million compared to the full-year of
2006.
    
    Disclosure regarding non-GAAP financial measures
    
    The Company uses adjusted income and adjusted EPS from continuing
operations as internal measures of operating performance.  Management believes
adjusted income and adjusted EPS from continuing operations provide a
meaningful perspective of the underlying operating performance of the
business.
    EBITDA is used by management as a performance measure for benchmarking
against its peers and competitors. The Company believes EBITDA is useful to
investors because it is frequently used by securities analysts, investors and
other interested parties to evaluate companies in the restaurant industry.
EBITDA is not a recognized term under GAAP.
    The Company also uses adjusted EBITDA, which accounts for certain items
unrelated to ongoing operations, as an internal measure of business operating
performance.   Management believes adjusted EBITDA provides a meaningful
perspective of the underlying operating performance of the business.
    Company EBITDA margins from continuing operations consist of operating
income plus depreciation and amortization divided by revenue.
    Company-operated restaurant EBITDA margins consist of sales from company-
operated restaurants minus cost of sales from company-operated restaurants
minus company restaurant operating costs divided by sales from company-
operated restaurants.


    EBITDA and Adjusted EBITDA Reconciliations

    
    The following is a reconciliation of 2007 estimated operating income to
    2007 estimated EBITDA used to arrive at the Company's revised 2007
    earnings outlook previously announced:  As previously announced, the
    following estimated amounts exclude expenses related to the Special
    Committee activities and any potential restructuring charges.
    

    
    2007 estimated operating income            $ 186 million to $206 million
    2007 estimated depreciation and
     amortization                              $ 109 million
    -------------------------------            -----------------------------
    2007 estimated adjusted EBITDA from
     continuing ops:                           $ 295 million to $315 million
    


    
    The following are reconciliations for full-year 2007 and 2006 reported
    operating income to full-year EBITDA from continuing operations and
    adjusted EBITDA:
                                               2007 Year         2006 Year
                                               ---------         ---------
    Reported operating income               $157.0 million    $ 40.3 million
    Depreciation and amortization           $113.9 million    $123.7 million
    -------------------------------         --------------    --------------
        EBITDA from continuing ops          $270.9 million    $164.0 million
    Restructuring charges                   $  9.8 million    $ 38.9 million
    Special Committee expenses              $ 24.7 million
    Incremental advertising expense                           $ 25.0 million
    Joint venture impact                                      $ (7.2)million
    --------------------                    --------------    --------------
        Adjusted EBITDA from continuing ops $305.4 million    $220.7 million
                                            ==============    ==============
    


    
    The following are reconciliations of 2007 and 2006 fourth-quarter reported
    operating income to fourth-quarter EBITDA from continuing operations
    and adjusted EBITDA:
                                              4th Quarter      4th Quarter
                                                  2007             2006
                                                  ----             ----
    Reported operating income               $ 21.6 million    $  1.8 million
    Depreciation and amortization           $ 28.5 million    $ 28.7 million
    -----------------------------           --------------    --------------
        EBITDA from continuing ops          $ 50.1 million    $ 30.5 million
    Restructuring charges                   $  0.4 million    $  7.9 million
    Special Committee expenses              $  6.5 million
    --------------------------              --------------    --------------
        Adjusted EBITDA from continuing ops $ 57.0 million    $ 38.4 million
                                            ==============    ==============
    


    Income and EPS Reconciliations

    
    The following are reconciliations of 2007 and 2006 income from continuing
    operations to full-year adjusted income from continuing operations:
    

    
                                                2007 Year        2006 Year
                                                ---------        ---------
    Income from continuing operations       $ 86.6 million    $ 37.0 million
    Restructuring charges, net of tax(1)    $  6.1 million    $ 24.1 million
    Special Committee expenses, net of
     tax (1)                                $ 15.3 million
    Incremental advertising expense, net                      $ 15.5 million
     of tax (1)
    Joint venture impact, net of tax (1)                      $ (4.6)million
    -----------------------------------     --------------    --------------
       Adjusted income from continuing ops  $108.0 million    $ 72.0 million
                                            ==============    ==============
    

    
    Diluted shares                            90.2 million     115.3 million
    Adjusted diluted EPS from continuing
     ops                                    $ 1.20            $ 0.62
    


    
    The following are reconciliations of 2007 and 2006 fourth-quarter income
    from continuing operations to fourth-quarter adjusted income from
    continuing operations:
                                              4th Quarter      4th Quarter
                                                  2007             2006
    Income from continuing operations       $ 14.1 million    $  9.9 million
    Restructuring charges, net of tax (1)   $  0.3 million    $  4.9 million
    Special Committee expenses, net of
     tax (1)                                $  4.0 million
    ----------------------------------      --------------    --------------
       Adjusted income from continuing ops  $ 18.4 million    $ 14.8 million
                                            ==============    ==============
    

    
    Diluted shares                            88.3 million     108.8 million
    Adjusted diluted EPS from continuing
     ops                                    $ 0.21            $ 0.14
    

    (1) After tax amounts are generally computed using a tax rate of 38%.



    
                 WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
    

    (Unaudited)

    
                                      Fourth Quarter Ended
                                     12/30/2007 12/31/2006 $ Change % Change
                                     ---------- ---------- -------- --------
    

    
    REVENUES
    Sales                              $523,961   $526,720  ($2,759)   -0.5%
    Franchise revenues                   72,060     69,658    2,402     3.4%
                                     ---------- ---------- -------- --------
    TOTAL REVENUES                      596,021    596,378     (357)   -0.1%
                                     ---------- ---------- -------- --------
    

    
    COSTS & EXPENSES
    Cost of sales                       326,097    331,034   (4,937)   -1.5%
    Company restaurant operating costs  143,915    149,517   (5,602)   -3.7%
    Operating costs                       7,615      4,177    3,438    82.3%
    Depreciation of property &
     equipment                           28,337     28,437     (100)   -0.4%
    General & administrative expenses    60,959     67,413   (6,454)   -9.6%
    Restructuring and special
     committee related charges            6,929      7,914     (985)  -12.4%
    Other (income) expense, net             551      6,070   (5,519)  -90.9%
                                     ---------- ---------- -------- --------
    TOTAL COSTS & EXPENSES              574,403    594,562  (20,159)   -3.4%
                                     ---------- ---------- -------- --------
    OPERATING INCOME                     21,618      1,816   19,802     n/m
    

    
    Interest expense                    (11,550)    (8,958)  (2,592)   28.9%
    Interest income                       2,911     10,222   (7,311)  -71.5%
                                     ---------- ---------- -------- --------
    INCOME FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES                 12,979      3,080    9,899   321.4%
    

    
    INCOME TAX BENEFIT                   (1,087)    (6,869)   5,782     n/m
                                     ---------- ---------- -------- --------
    INCOME from continuing operations   $14,066     $9,949   $4,117    41.4%
    

    
    LOSS from discontinued operations        $0    ($6,922)   6,922  -100.0%
                                     ---------- ---------- -------- --------
    NET INCOME                          $14,066     $3,027  $11,039   364.7%
                                     ========== ========== ======== ========
    Diluted earnings per common share
     from continuing operations           $0.16      $0.09    $0.07    77.8%
                                     ========== ========== ======== ========
    Diluted earnings per common share
     from discontinued operations         $0.00     ($0.06)   $0.06  -100.0%
                                     ========== ========== ======== ========
    Total diluted earnings per common
     share                                $0.16      $0.03    $0.13   433.3%
                                     ========== ========== ======== ========
    Diluted shares                       88,334    108,795  (20,461)  -18.8%
                                     ========== ========== ======== ========
    n/m - not meaningful
    



    
                 WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
    

    (Unaudited)

    
                                       Year-to-Date Ended
                                     12/30/2007 12/31/2006 $ Change % Change
                                     ---------- ---------- -------- --------
    REVENUES
    Sales                            $2,160,025 $2,154,607   $5,418     0.3%
    Franchise revenues                  290,219    284,670    5,549     1.9%
                                     ---------- ---------- -------- --------
    TOTAL REVENUES                    2,450,244  2,439,277   10,967     0.4%
                                     ---------- ---------- -------- --------
    COSTS & EXPENSES
    Cost of sales                     1,322,264  1,352,312  (30,048)   -2.2%
    Company restaurant operating
     costs                              597,285    602,298   (5,013)   -0.8%
    Operating costs                      22,725     46,674  (23,949)  -51.3%
    Depreciation of property &
     equipment                          113,127    122,636   (9,509)   -7.8%
    General & administrative
     expenses                           212,425    237,575  (25,150)  -10.6%
    Restructuring and special
     committee related charges           34,427     38,914   (4,487)  -11.5%
    Other (income) expense, net          (9,006)    (1,446)  (7,560)    n/m
                                     ---------- ---------- -------- --------
    TOTAL COSTS & EXPENSES            2,293,247  2,398,963 (105,716)   -4.4%
                                     ---------- ---------- -------- --------
    OPERATING INCOME                    156,997     40,314  116,683   289.4%
    

    
    Interest expense                    (45,010)   (35,711)  (9,299)   26.0%
    Interest income                      13,769     37,876  (24,107)  -63.6%
                                     ---------- ---------- -------- --------
    INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME TAXES     125,756     42,479   83,277   196.0%
    

    
    INCOME TAX EXPENSE                   39,131      5,433   33,698     n/m
                                     ---------- ---------- -------- --------
    INCOME from continuing
     operations                          86,625     37,046   49,579   133.8%
    

    
    INCOME from discontinued
     operations                           1,271     57,266  (55,995)  -97.8%
                                     ---------- ---------- -------- --------
    NET INCOME (1)                       87,896     94,312   (6,416)   -6.8%
                                     ========== ========== ======== ========
    Diluted earnings per common
     share from continuing
     operations                           $0.96      $0.32    $0.64   200.0%
                                     ========== ========== ======== ========
    Diluted earnings per common
     share from discontinued
     operations (1)                       $0.01      $0.50   ($0.49)  -98.0%
                                     ========== ========== ======== ========
    Total diluted earnings per
     common share (1)                     $0.97      $0.82    $0.15    18.3%
                                     ========== ========== ======== ========
    Diluted shares                       90,190    115,325  (25,135)  -21.8%
                                     ========== ========== ======== ========
    n/m - not meaningful
    

    
    (1) Discontinued operations includes the results of Tim Hortons(R), which
        was spun-off in September 2006, Baja Fresh(R) Mexican Grill, which was
        sold in November 2006, and Cafe Express, which was sold in July 2007.
        Because these three businesses are no longer owned by Wendy's
        International, Inc., the Company believes including the results of
        these businesses in a comparison of results between years does not
        provide a reasonable comparison of ongoing business results between
        years. In particular, income from discontinued operations and net
        income for full-year 2006 included $159.8 million of income from Tim
        Hortons prior to its spin-off in September 2006.
    



    
                 WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
    

    
                                              December 30,      December 31,
                                                  2007              2006
                                              ------------      ------------
                                                       (Unaudited)
                                                  (Dollars in thousands)
    ASSETS
    

    
    Current assets
      Cash and cash equivalents                   $205,200          $457,614
      Accounts receivable, net                      72,069            84,841
      Deferred income taxes                          7,304            29,651
      Inventories and other                         35,590            30,252
      Advertising fund restricted assets            42,665            36,207
      Assets held for disposition                    3,338            15,455
      Current assets of discontinued
       operations                                        0             2,712
                                                ----------        ----------
                                                   366,166           656,732
                                                ----------        ----------
    Property and equipment                       2,119,140         2,024,715
      Accumulated depreciation                    (872,255)         (798,387)
                                                ----------        ----------
                                                 1,246,885         1,226,328
                                                ----------        ----------
    Goodwill                                        84,001            85,353
    

    Deferred income taxes                            4,899             4,316

    Intangible assets, net                           2,704             3,855

    Other assets                                    84,742            82,738

    
    Non current assets of discontinued
     operations                                          0             1,025
                                                ----------        ----------
                                                $1,789,397        $2,060,347
                                                ==========        ==========
    



    
                 WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
    

    
                                              December 30,      December 31,
                                                  2007              2006
                                              ------------      ------------
                                                        (Unaudited)
                                                   (Dollars in thousands)
    LIABILITIES AND SHAREHOLDERS' EQUITY
    

    
    Current liabilities
      Accounts payable                             $85,662           $93,465
      Accrued expenses:
        Salaries and wages                          39,157            47,329
        Taxes                                       31,033            46,138
        Insurance                                   57,190            57,353
        Other                                       45,612            32,199
      Advertising fund restricted liabilities       35,760            28,568
      Current portion of long-term obligations      26,591            87,396
      Current liabilities of discontinued
       operations                                        0             2,218
                                                ----------        ----------
                                                   321,005           394,666
                                                ----------        ----------
    Long-term obligations
      Term debt                                    521,343           537,139
      Capital leases                                21,680            18,963
                                                ----------        ----------
                                                   543,023           556,102
                                                ----------        ----------
    

    
    Deferred income taxes                           45,351            30,220
    Other long-term liabilities                     75,887            66,163
    Non current liabilities of discontinued
     operations                                          0             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:  130,241,000 and
         129,548,000 shares, respectively           13,024            12,955
      Capital in excess of stated value          1,110,363         1,089,825
      Retained earnings                          1,287,963         1,241,489
      Accumulated other comprehensive
       income (expense):
      Cumulative translation adjustments
       and other                                    28,949             9,100
      Pension liability                            (18,990)          (22,546)
                                                ----------        ----------
                                                 2,421,309         2,330,823
      Treasury stock, at cost:
      42,844,000 and 33,844,000 shares,
       respectively                             (1,617,178)       (1,319,146)
                                                ----------        ----------
                                                   804,131         1,011,677
                                                ----------        ----------
                                                $1,789,397        $2,060,347
                                                ==========        ==========
    



    
                 WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                            SYSTEMWIDE RESTAURANTS
    

    
                                                 Increase/           Increase/
                                As of    As of  (Decrease)  As of   (Decrease)
                               December September  From    December    From
                                  30       30     Prior       31      Prior
                                 2007     2007   Quarter     2006      Year
                              ------------------------------------------------
    U.S.
        Company                 1,274    1,288    (14)      1,317     (43)
        Franchise               4,662    4,644     18       4,638      24
                              ------------------------------------------------
                                5,936    5,932      4       5,955     (19)
    Canada
        Company                   140      141     (1)        146      (6)
        Franchise                 236      235      1         231       5
                              ------------------------------------------------
                                  376      376      0         377      (1)
    Other International
        Company                     0        2     (2)          2      (2)
        Franchise                 333      323     10         339      (6)
                              ------------------------------------------------
                                  333      325      8         341      (8)
    Total
        Company                 1,414    1,431    (17)      1,465     (51)
        Franchise               5,231    5,202     29       5,208      23
                              ------------------------------------------------
                                6,645    6,633     12       6,673     (28)
                              ================================================
    



    
                        WENDY'S INTERNATIONAL, INC.
                        Income Statement Definitions
    

    
    Sales               Includes sales from company operated restaurants.
                        Also included are sales of kids' meal toys and the
                        sales to franchisees from Wendy's bun baking
                        facilities.
    

    
    Franchise Revenues  Consists primarily of royalties, rental income, gains
                        from the sales of properties to franchisees and
                        franchise fees.  Franchise fees include charges for
                        various costs and expenses related to establishing a
                        franchisee's business.
    

    
    Cost of Sales       Includes food, paper and labor costs for restaurants.
                        Also included are the cost of kids' meal toys and cost
                        of goods sold to franchisees from Wendy's bun baking
                        facilities.
    

    
    Company Restaurant  Consists of all costs necessary to manage and operate
                        restaurants, Operating Costs except cost of sales and
                        depreciation.  These include advertising, insurance,
                        maintenance, rent, etc., as well as support costs for
                        personnel directly related to restaurant operations.
    

    
    Operating Costs     Includes rent expense related to properties leased to
                        franchisees and other franchisee related costs such as
                        remodel incentives.  Also includes costs to operate
                        and maintain Wendy's bun baking facilities.
    

    
    General and
    Administrative
    Expenses            Costs that cannot be directly related to generating
                        revenue.
    

    
    Restructuring and
    Special Committee
    Related Charges     Includes restructuring costs and costs related to the
                        Special Committee of the Board of Directors, which was
                        formed to explore strategic alternatives for the
                        Company.
    

    
    Other Income
    and Expense         Includes expenses (income) that are not directly
                        derived from the Company's primary businesses.   This
                        includes income from the Company's investments in
                        joint ventures and other minority investments.
                        Expenses include store closures, other asset write-
                        offs, and sales of properties to non-franchisees.
    

    
    Income from
    Discontinued
    Operations          Reflects net income from Tim Hortons Inc., Baja Fresh
                        and Cafe Express.
    




For further information:

For further information: Investor contacts, John Barker,
+1-614-764-3044,  john_barker@wendys.com, Marsha Gordon, +1-614-764-3019, 
marsha_gordon@wendys.com, Kim Messner, +1-614-764-6796, 
kim_messner@wendys.com; Media contacts, Denny Lynch, +1-614-764-3553, 
denny_lynch@wendys.com, Bob Bertini, +1-614-764-3327,  bob_bertini@wendys.com,
all of Wendy's International, Inc. Web Site: http://www.wendys-invest.com/

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WENDY'S INTERNATIONAL, INC.

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