Wendy's International, Inc.

NTRODUCING

2004

Summary Annual Report to Shareholders

i n n o v a t i o n

Wendy’s International, Inc.

Corporate Overview . . . inside cover

Chairman’s Letter. . . . . . . . . . . . . 2

CFO’s Letter . . . . . . . . . . . . . . . . 8

Our Brands . . . . . . . . . . . . . . . 10

This Summary Annual Report should be read in conjunction with the audited consolidated financial statements in the Financial

Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

Tim Hortons. . . . . . . . . . . . . . . 10

Wendy’s . . . . . . . . . . . . . . . . . . 16

Baja Fresh. . . . . . . . . . . . . . . . . 22

Corporate Responsibility . . . . 24

Franchise Partnership . . . . . . . . . . 27

Corporate Information . . . . . . 28

Financial Statements . . . . . . . . 30

11-Year Selected Financial Data. . . 33

Contents

WENDY’S

Year Founded: 1969

Founder: Dave Thomas

Headquarters: Dublin, Ohio

Brand President/COO (North America): Tom Mueller

EVP (International): Brion Grube

Industry Niche: Quick-Service Hamburger

Number of Units: 6,671

Revenues: $2.4 billion

Average Annual Sales

per Domestic Restaurant: $1.3 million

Market Share (U.S. QSR Hamburger): 14%

Domestic Company Average Check: $5.00 - $5.25

www.wendys.com

Wendy’s

innovative menu appeals to a wide variety

of consumer tastes, with offerings such as our Garden

Sensations

™

salads, our Chicken Temptations

sandwiches

and our everyday Super Value Menu.

™

Consumers can

also now substitute a small chili, baked potato, Caesar side

salad or regular side salad for French fries with any

combo meal at no additional charge. Our Kids’ Meals

offer similar options: Families can order reduced-fat

white milk or low-fat chocolate milk in place of soft

drinks and Mandarin oranges instead of fries.

Along with these menu innovations,we’re renovating our

restaurants with a new upscale look and feel. We expect

to begin remodeling our restaurants to one of three new

styles designed to encourage more consumers to relax

and enjoy their meals inside our stores.

Wendy’s Bakery

Wendy’s owns and operates two bakeries in Zanesville, Ohio, that

supply more than half of Wendy’s restaurants in the United States

with consistently fresh, high-quality sandwich buns.The Bakery is

part of the Company’s vertical integration strategy, which enables us

to achieve efficiencies throughout our supply chain.

BAJA FRESH

Year Founded: 1990

Founders: Jim and Linda Magglos

Headquarters: Thousand Oaks, California

Brand CEO: Bill Moreton

Industry Niche: Fast-Casual, Fresh Mexican

Number of Units: 295

Revenues: $176 million

Average Annual Sales

per Domestic Restaurant: $1.2 million

Systemwide Average Check: $7.00 - $8.00

www.bajafresh.com

TIM HORTONS

Year Founded: 1964

Founders: Tim Horton and Ron Joyce

Headquarters: Oakville, Ontario

Brand President/COO: Paul House

Industry Niche: Coffee, Lunch, Fresh Baked Goods

Number of Units: 2,721

Revenues: $996 million

Average Annual Sales

per Canadian Restaurant: $1.7 million (Canadian)

Market Share (Canadian

Coffee and Baked Goods): 70%

Canadian Average Check: $2.50 - $3.00 (Canadian)

www.timhortons.com

Founded more than 40 years ago as a coffee and donut

shop,Tim Hortons

has grown into today’s “fast-casual with

a drive thru” format, which offers convenient, great-tasting

options for breakfast, lunch and dinner. In addition to the

original coffee-and-donut cornerstone products, our

menu today consists of a delicious variety of sandwiches,

such as our new BLT and Egg Salad; soups and stews,

including our new Beef Stew in a Bread Bowl; and a wide

assortment of baked goods, such as TimBits,

muffins and

cookies, to name just a few.

Maidstone Bakery

Our 50/50 joint venture with Cuisine de France, a subsidiary of

IAWS Group plc, has enabled us to build a world-class, 300,000-

square-foot par-baking facility in Brantford, Ontario, known as

Maidstone Bakery.The launch of Maidstone Bakery at the end of

2003 transformed our business, as we can now produce fresh baked

goods in just a few minutes at our Tim Hortons restaurants. For

more information about IAWS Group and Cuisine de France, see

www.iaws.com.

Maidstone Coffee

Our Rochester, NewYork-based coffee-roasting facility is part of our

vertical integration strategy to ensure quality products. The plant

roasts coffee for our Tim Hortons restaurants and produces a sepa-

rate blend for Wendy’s company-owned restaurants.

Founded 15 years ago,

Baja Fresh

continues to

build on its reputation

of expert preparation

and flavorful and fresh

ingredients, distinguish-

ing us from our compe-

tition in the fast-casual,

Fresh Mexican market.

All our menu offerings,

including new items

such as our Chile Lime

Chicken salad and our

kids’ taquitos, are pre-

pared only after the

customer orders them.

We’re also redesign-

ing our store interiors,

with easy-to-read menu

boards, warmer colors

and new family-friendly

seating options.

Operations (in millions) 2004

(1)(2)

2003 2002 2001 2000

(1)

1999 1998

(1)(2)

1997

(1)

1996 1995

(1)

1994

(1)

Revenues $ 3,635 3,149 2,730 2,391 2,237 2,067 1,942 2,031 1,890 1,739 1,585

Wendy’s $ 2,433 2,191 2,010 1,819 1,712 1,603 1,543 1,695 1,625 1,501 1,397

Tim Hortons $ 996 807 651 572 525 464 399 336 265 238 188

Developing Brands

(3) (7)

$20615169––––––––

Retail sales $ 2,936 2,534 2,187 1,925 1,808 1,666 1,580 1,646 1,560 1,455 1,359

Income before income taxes $ 184 378 346 307 271 269 208 219 255 165 150

Net income $ 52 236 219 194 170 167 123 130 156 110 97

Capital expenditures $ 341 342 331 301 276 248 242 295 307 218 172

Financial Position (in millions)

Total assets $ 3,198 3,133 2,723 2,084 1,958 1,884 1,838 1,942 1,781 1,509 1,215

Property and equipment, net $ 2,350 2,154 1,845 1,648 1,497 1,389 1,281 1,266 1,208 1,007 865

Long-term obligations $ 594 693 682 451 248 249 246 250 242 337 145

Shareholders’ equity $ 1,716 1,759 1,449 1,030 1,126 1,065 1,068 1,184 1,057 819 702

Per Share Data

Net income – diluted $ .45 2.05 1.89 1.65 1.44 1.32 .95 .97 1.19 .88 .79

Dividends $ .48 .24 .24 .24 .24 .24 .24 .24 .24 .24 .24

Shareholders’ equity $ 15.26 15.33 12.63 9.79 9.86 9.01 8.61 8.95 8.16 6.81 5.94

Market price at year-end $ 39.26 39.24 27.07 29.17 26.25 20.81 21.81 22.88 20.88 21.25 14.38

Ratios

Pretax profit margin % 5.1 12.0 12.7 12.9 12.1 13.0 10.7 10.8 13.5 9.5 9.5

Return on average assets

(4)

% 1.7 8.4 9.2 9.7 9.2 9.1 6.7 7.0 9.9 8.1 8.5

Return on average equity % 2.9 14.9 17.0 16.9 15.9 15.4 11.0 11.5 16.6 14.5 14.7

Long-term debt to equity

(5)

%3539474422232321234121

Debt to total capitalization

(5)

%2628323018191917192917

Price to earnings

(6)

%8719141818162324182418

Restaurant Data

North American Wendy’s open at year-end

Company 1,482 1,460 1,316 1,223 1,148 1,082 1,021 1,186 1,306 1,305 1,264

Franchise 4,837 4,668 4,587 4,431 4,271 4,079 3,922 3,634 3,292 3,095 2,911

International Wendy’s open at year-end

Company 5 5 4 5 5 30 15 16 9 6 –

Franchise 347 348 346 384 368 336 375 371 326 261 236

Total Wendy’s 6,671 6,481 6,253 6,043 5,792 5,527 5,333 5,207 4,933 4,667 4,411

Tim Hortons U.S. open at year-end

Company 67 25 40 57 58 74 84 59 7 – –

Franchise 184 159 120 83 62 34 16 20 15 17 13

Tim Hortons Canada open at year-end

Company 31 32 31 40 47 42 70 65 58 38 22

Franchise 2,439 2,311 2,157 1,983 1,813 1,667 1,497 1,434 1,304 1,142 908

Total Tim Hortons 2,721 2,527 2,348 2,163 1,980 1,817 1,667 1,578 1,384 1,197 943

Baja Fresh open at year-end

(3)

Company 144 132 98 – – – – – – – –

Franchise 151 151 112 – – – – – – – –

Total Baja Fresh 295 283 210 – – – – – – – –

Cafe Express open at year-end

(7)

19––––––––––

Total Units 9,706 9,291 8,811 8,206 7,772 7,344 7,000 6,785 6,317 5,864 5,354

Average net sales per domestic

Wendy’s restaurant (in thousands)

Company $ 1,416 1,389 1,387 1,337 1,314 1,284 1,174 1,111 1,049 1,014 1,001

Franchise $ 1,291 1,268 1,251 1,164 1,130 1,102 1,031 1,017 978 974 982

Total domestic $ 1,319 1,294 1,280 1,199 1,167 1,138 1,062 1,042 998 986 988

Average net sales per Canadian

Tim Hortons standard restaurant

(in thousands of Canadian dollars) $ 1,730 1,625 1,555 1,458 1,354 1,216 1,091 986 908 878 854

Average net sales per

Baja Fresh restaurant

(3)

(in thousands) $ 1,205 1,369 1,500 – – – – – – – –

Average net sales per

Cafe Express restaurant

(7)

(in thousands) $ 1,745 – – – – – – – – – –

(1)Includes unusual pretax charges of $190.0 million ($186.6 million after tax), $18.4 million

($11.5 million after tax), $33.9 million ($25.2 million after tax) and $72.7 million

($50.0 million after tax) for 2004, 2000, 1998 and 1997, respectively. Includes special

pretax charges of $49.7 million and $28.9 million for 1995 and 1994, respectively, primarily

all related to special profit-sharing contributions made at Tim Hortons.

(2)Fiscal year includes 53 weeks.

(3)Baja Fresh was acquired by the Company on June 19, 2002.

Information prior to that date is not included.

(4)Return on average assets is computed by dividing net income by average assets,

excluding restricted assets.

(5)Excludes company-obligated mandatorily redeemable preferred securities.

(6)Price to earnings is computed using the year-end stock price divided

by the diluted earnings per share for the year.

(7)Cafe Express became a consolidated entity of the Company in February

2004. Prior to that date, the Company accounted for its investment

in Cafe Express using the equity method.

NTRODUCING

2004

Summary Annual Report to Shareholders

i n n o v a t i o n

Wendy’s International, Inc.

Corporate Overview . . . inside cover

Chairman’s Letter. . . . . . . . . . . . . 2

CFO’s Letter . . . . . . . . . . . . . . . . 8

Our Brands . . . . . . . . . . . . . . . 10

This Summary Annual Report should be read in conjunction with the audited consolidated financial statements in the Financial

Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

Tim Hortons. . . . . . . . . . . . . . . 10

Wendy’s . . . . . . . . . . . . . . . . . . 16

Baja Fresh. . . . . . . . . . . . . . . . . 22

Corporate Responsibility . . . . 24

Franchise Partnership . . . . . . . . . . 27

Corporate Information . . . . . . 28

Financial Statements . . . . . . . . 30

11-Year Selected Financial Data. . . 33

Contents

North America

International

Wendy’s Bakery

Canada

Maidstone Bakery

Maidstone Coffee

Cafe Express

Pasta Pomodoro

INVESTMENTS

Wendy’s International, Inc.

U.S.

Cafe Express

Founded in 1984, Cafe Express

combines high-quality food with the

convenience of self-service.The exten-

sive menu features traditional American

favorites, each with a unique gourmet

twist.The distinct “Oasis Table

™

” offers

garnishes such as sun-dried tomatoes,

roasted garlic, capers, extra virgin olive

oils, fine olives and freshly grated

Parmesan cheese. Cafe Express oper-

ates 19 upscale fast-casual restaurants in

Dallas and Houston that generate an

average check of about $10 and average

unit volumes of $1.7 million.Wendy’s

owns 70 percent of Cafe Express.

www.cafe-express.com

Pasta Pomodoro

serves innovative

and traditional fresh Italian cuisine in a

fast-casual format. A select wine list

complements our delicious seafood,

pasta, grilled fish, chicken, salads, sand-

wiches and homemade desserts. With

its contemporary Italian décor, Pasta

Pomodoro is a perfect place for busi-

ness or social dining.

Founded in 1994, Pasta Pomodoro

operates 45 restaurants in California and

Arizona, which average about $1.4 mil-

lion in annual sales per restaurant and

$11 to $13 per guest check.Wendy’s now

owns approximately 29 percent (fully

diluted) of Pasta Pomodoro.

www.pastapomodoro.com

Welcome to theWendy’s International, Inc. 2004 Annual

Report to Shareholders.

The past year was a remarkable period with many chal-

lenges. It was one of the most dynamic and unpre-

dictable years I can recall in my three decades with our

Company. Our entire system of franchisees, operators

and employees focused on consistently delivering quali-

ty food and outstanding service to our customers – and

they did an outstanding job.

However, rising commodity costs, severe weather and

competitive convergence posed significant challenges

for ourWendy’s brand.These challenges, plus a non-cash

goodwill write-down for our Baja Fresh Mexican Grill

business impacted both sales and profitability in 2004. Quite

simply, we are not pleased with our overall performance.

In this Letter to Shareholders, I will review our overall

2004 performance. I will discuss each of our brands and

the progress we made over the past year. Our manage-

ment team is optimistic about many initiatives under way

to improve our performance as we focus on “Leadership

Through Innovation.” I will also discuss the key elements

of our Strategic Plan – including our Vision and Mission.

And, our Chief Financial Officer Kerrii Anderson will dis-

cuss in more detail our 2004 results and the progress

we’ve made on our integrated Financial Strategy. We

are focused on delivering 11-13% EPS growth over the

long term and a solid total return to our shareholders.

The Company produced mixed results in 2004 due to

an uncommon number of challenges during the second

half of the year.These included hurricanes that hit the

Southeast United States in September and October, first

affecting sales at our Wendy’s restaurants and then lead-

ing to tomato shortages and increased commodity costs.

We also faced significantly higher average beef costs (up

15%) that negatively affected earnings. Throughout the

year, we also faced competitive discounting in the

quick-service hamburger industry.

Even with these issues, our Wendy’s company-operated

restaurants in the U.S.produced positive same-store sales

for the 17th consecutive year, a record that is unparal-

leled in the restaurant industry. Tim Hortons delivered

another excellent year, both in Canada and the U.S.,

with strong same-store sales growth. Baja Fresh strug-

gled through a year of negative same-store sales, but we

took decisive action to improve our results in the future.

Overall, our total revenues increased 15.5% to a record

$3.6 billion, and we reported net income of $52.0 mil-

lion, or $0.45 per diluted share (EPS).

Our 10-year strategic plan (see page 5) focuses on com-

mitting most of our resources to our core businesses – Wendy’s

North America and Tim Hortons Canada – as well as

our emerging growth driver – Tim Hortons U.S. At the

same time, we continue to develop our investments in

Baja Fresh, Cafe Express and Pasta Pomodoro, and sup-

port our International Wendy’s business.

Let’s take a closer look at these businesses and their per-

formances during 2004:

Tim Hortons flourished in 2004, with record revenues

of $996 million, up 23.4% compared to 2003. Equally

($ millions)

2,237

2,391

2,730

3,149

3,635

7,772

8,206

8,811

9,291

9,706

($ millions)

170

194

219

236

239

(dollars)

1.44

1.65

1.89

2.05

2.06

before goodwill impairment before goodwill impairment

0.45

impressive is the chain’s 10-year compounded annual

growth rate of 17.2% for revenue, from a base of $238

million in 1995.Tim Hortons’ restaurants grew to 2,721,

with 2,470 stores in Canada and 251 in the United States.

Tim Hortons continues to expand its overall importance

to our Company. Tim’s accounted for about half of the

Company’s segment operating income in 2004, exclud-

ing our Developing Brands segment. In Canada, Tim

Hortons controls 27% of the overall quick-service restau-

rant market share, as well as 70% of the coffee and baked

goods market. Our strong performance and consistent

growth received recognition from two publications.

Canadian Business magazine in June namedTim Hortons as

Canada’s best-managed brand in a survey of Canadian-

founded companies. In early 2005, Marketing magazine,

a Canadian weekly marketing and advertising publica-

tion, awarded Tim Hortons with its 2004 “Marketer of

theYear” honor.

Tim Hortons achieved excellent results in 2004 due in

large part to an exceptional number of new product

offerings, including the Chicken and Roasted Red Pepper

sandwich, which represented our first hot sandwich. In

2004 we also introduced our Egg Salad Sandwich, Beef

Stew in a Bread Bowl,Toffee Glazed Donut and Steeped

Tea. New product offerings rolling out at Tim Hortons

in the current year include our Lemon Cranberry Muffin,

Twelve-Grain Bagel, Toasted Chicken Club, Toasted

Ham and Cheese, and Creamy Mushroom Soup.

Along with this stable of new product offerings, we will be

upgrading the interiors of many of our restaurants. New

café-style seating, product showcases and digital menu

boards are just a few of the enhancements designed to

enhance the consumer dining experience and drive sales.

As strong as our performance at Tim Hortons was in

2004,we have high expectations for the future.We believe

we still have a significant opportunity for new restaurant

growth in Canada, with the focus on underdeveloped

regions such as the Western provinces, Quebec and urban

centers such as Toronto. Because we have a variety of

store formats, including standard units, double drive-

thrus, kiosks, carts, and combo units with Wendy’s, we

are very confident in our ability to achieve our long-term

development goal of 3,500 to 4,000 stores in Canada.

Our Tim Hortons U.S. business is emerging as a growth

driver for our Enterprise.We completed the acquisition

of 42 Bess Eaton stores in May, which gave us a signifi-

cant presence in the New England region – Rhode

Island, Connecticut and Massachusetts. We have estab-

lished a strong operations team in the U.S. and are con-

fident that the many competitive advantages we have

established – including lower coffee prices, modern

restaurants,24-hour operations, drive-thru windows and

varied menu offerings – will pay dividends as we con-

tinue our expansion in the U.S.

In the U.S., where the business has been profitable since

2002, we plan to add more stores in our existing markets

of Rochester and Buffalo, N.Y.,New England and in the

states of Ohio, Michigan, Maine, Kentucky and West

Virginia. We are also developing new markets in Erie,

Pennsylvania and Lansing, Michigan. Acquisitions may

play a role in our expansion. Looking ahead, we believe

thatTim Hortons can reach its goal of 500 restaurants in

the United States by the end of 2007.

Tim Hortons also continues to grow with an excellent

vertical integration strategy that is producing outstand-

ing returns on invested capital:

Maidstone Bakery is a 50/50 joint venture with IAWS

Group’s Cuisine de France division that produces par-

Jack Schuessler

Schuessler was named Chairman in May 2001. He became Chief Execu-

tive Officer and President in March 2000. Previously, he was President

and Chief Operating Officer, Wendy’s U.S. Operations (1997-2000),

and ExecutiveVice President, U.S.Operations (1995-97).He started his

career withWendy’s more than 30 years ago and has worked in operations

at the state, regional and divisional levels.

baked goods forTim Hortons’ restaurants in Canada and

the U.S. A 300,000-square-foot plant based in Brantford,

Ontario, provides fresh products all day in our stores, eases

development into new markets and enables expansion into

non-traditional sites. The JV produces income for our

Company and a good return on investment.

We will open a new distribution center in Canada to

handle dry and frozen goods to our stores,and the expect-

ed return on invested capital is outstanding.

Maidstone Coffee is our coffee roasting plant in

Rochester, N.Y. that supplies about one-third of the

Tim Hortons system and a special blend for our Wendy’s

company restaurants.

Our Wendy’s business continued to grow with revenues

of $2.4 billion in 2004, up 11.1% compared to $2.2 bil-

lion last year.Total systemwide restaurants reached an

all-time high of 6,671, including 5,935 in the United

States, 384 in Canada and 352 International stores.

Our innovation pipeline produced several new products

in 2004, including our Chicken Temptations sandwiches,

Spinach Chicken Salad and Homestyle Chicken Strips

Salad. We also introduced our new Kids’ Meals, which

allow the substitution, at no extra charge, of Mandarin

oranges for fries, and milk for a soft drink.

We saw many of our product and service innovations

such as salads, premium sandwiches, chicken strips,

healthy menu options and late-night hours being imitat-

ed by our QSR competitors in 2004. Our plan is to raise

the bar even higher in 2005 and heighten our execution.

Among the new products that we either have already

introduced or will introduce include our proprietary

Combo Choices meal, which offers consumers an option-

al substitution of a small chili, baked potato, Caesar salad

or side salad for French fries at no extra charge. Others

include our Fresh Fruit Bowl and Cup,Mozzarella Cheese-

burger and Mozzarella Chicken Supreme Sandwich, and

our Mediterranean Chicken Salad.

In addition,new products that we will be testing in 2005

include our Frescata

™

sandwich line, featuring Roasted

Turkey with Basil Pesto, Sundried Tomato Chicken,

Black Forest Ham and Swiss Cheese, and RoastedTurkey

and Swiss Cheese sandwiches, all of which are served on

fresh-baked bread. Other new products in test are our

new Fix ’n Mix Frosty

™

, with M&Ms

, Butterfinger

and

Oreo

cookie toppings, as well as low-fat strawberry

yogurt with granola. Our research and development

team remains focused on the latest trends to ensure that

we remain responsive to consumer needs as their expec-

tations continue to evolve.

Our Service Excellence initiative paid dividends once

again during 2004, as we garnered our sixth consecutive

No. 1 ranking among quick-service hamburger chains

for pick-up window performance – as rated by QSR

Magazine. The publication’s time study also ranked

Wendy’s the No. 1 overall quick-service chain in drive-

thru speed. Our average service time of 125 seconds was

nearly seven seconds faster than the next-fastest chain.

Our operational focus will continue during 2005 with

the rollout of the double-sided grill, which offers com-

petitive advantages in improved product safety, enhanced

product quality, faster cooking times and labor savings.

We expect the double-sided grill to be implemented

systemwide by 2007.

Along with the double-sided grill rollout, we are mov-

ing forward with the implementation of new technology

in our Wendy’s restaurants. Electronic payment, which is

now in nearly all of our stores, is a convenience for our

customers and results in a higher average check.As part of

our store automation program, we have also implement-

ed demand forecasting, labor scheduling and computer-

based training to improve our store-level efficiencies.

From a store design perspective, we are very excited

about our new “Simple” and “Fresh” models, which we

created in response to consumers who requested more

privacy, attractive furnishings and a relaxing overall

atmosphere.All new stores will feature one of these two

designs or a third option, the Founder’s Package. Our

long-term store development goal at Wendy’s is 8,500 to

9,500 total units by 2013. This includes a combination

of standard units, drive-thru only, new designs and

combo units with Tim Hortons.

In 2004 we took decisive action regarding Baja Fresh to

improve our performance. Specifically, we wrote down

$190 million in goodwill associated with the acquisition

of Baja Fresh.We also closed 20 underperforming stores

and impaired others during the year, resulting in a

charge of about $22 million.

One change we made at Baja Fresh is in the leadership

team. Our team now includes Chief Operating Officer

Themes

Vision

Mission

Core Values

Operational

Excellence

Technology

Process

Change

Financial

Reporting

Planning &

Analysis

Innovation

of Core

Business

People

Focus

Customer

Satisfaction

Leadership

M&A and

Integration

Evolving

Businesses

Supply Chain

Management

Understanding

the Consumer

People

Integrity

Community

Involvement

Continuous

Improvement

Commitment to

Stakeholders

Quality

To deliver superior quality products

and services for our customers and

communities through leadership,

innovation and partnerships

Strategic Plan Provides Long-Term Direction

Wendy’s International, Inc. four years ago formed a

Strategic Planning Council consisting of executives from

key operational and support functions across our organi-

zation. Under the guidance of our Board of Directors, the

Strategic Planning Council developed a 10-year strategic

plan that articulates our Enterprise-wide mission and

vision for the future, as well as our core values and

themes. Management continues to update the plan and

implement strategies to grow the Company profitably.

Quality is integral to both our mission and our vision:

■ Our Mission is to deliver superior quality products

and services for our customers and communities

through leadership, innovation and partnerships.

■ Our Vision is to be the quality leader in everything

we do.

Guiding our behavior as we strive to carry out our mis-

sion and vision are eight timeless core values exemplified

by founders Dave Thomas and Ron Joyce as they devel-

oped Wendy’s and Tim Hortons, respectively.These core

values are:

■ Quality – Quality in products and service is our pas-

sion; consistent excellence is our goal.

■ Integrity – Absolute honesty, fairness and respect for

every individual are the principles that guide our actions

and decisions.

■ People Focus – We believe our people are the key to

our success.We value all members of our diverse family

for their individual contributions and for their team

achievements.

■ Customer Satisfaction – Meeting or exceeding the

expectations of our internal and external customers is

the focus of everything we do.

■ Continuous Improvement – Continuous improve-

ment is how we think; innovative change provides com-

petitive opportunities.

■ Community Involvement – We believe in giving

back to the communities where we do business through

the many corporate programs and local community

efforts we sponsor.

■ Leadership – We are an Enterprise that strives to take

a leadership position in everything from new product

innovation to customer service to employee relations.

■ Commitment to Stakeholders – By balancing

responsibilities to our constituents, we maximize value

to all our stakeholders: customers, employees,

chisees, shareholders and suppliers.

Sally Abshire, a 29-year veteran of the Wendy’s system

who has extensive experience in operations, training and

development. Executive Vice President of Research and

Development Kathie Chesnut, a 14-year veteran of the

Company, is overseeing the Baja Fresh menu and ensur-

ing that it evolves to meet consumer trends and tastes.

Also strengthening the leadership team are the additions

of BonitaWilliams,Vice President of Human Resources,

and John Butcher, SeniorVice President of Marketing.

We made many significant changes to improve the unit-

level economics at Baja Fresh during 2004. We have

implemented a shared-services strategy that leverages the

Company’s resources by consolidating supply chain man-

agement and accounting at corporate headquarters in

Dublin,Ohio.We have implemented theoretical food costs

and labor controls, which are already yielding margin im-

provements.We have also reduced building costs by $75,000

per unit, which should improve future profitability.

Improving the customer dining experience is a priority.

We have replaced the menu boards in all stores with a

better organized, easier-to-read version. We have also

started the first phase of a store redesign program that

features softer lighting, a warmer décor and booth seat-

ing that is more family friendly.

fran-

From a food perspective, we have evolved the menu to

further differentiate our high-quality, made-to-order food

from our competition. Recent menu additions such as

our Chipotle Glazed and Chile Lime Chicken salads, as

well as four new kids’ meals (taquitos, burritos, nachos

and quesadillas), our Fajita Burrito and our Tortilla Soup

enable our consumers to “taste the flavors of freshness.”

As we have made these operational changes, we made

the decision to slow the unit growth of Baja Fresh,

opening 40 stores – 19 company and 21 franchise – ver-

sus our original 2004 plan of 69.We believe that a meas-

ured approach to store development is prudent as we

attempt to stabilize the business and ensure that its foun-

dation is strong enough to support future growth.

In summary, we believe we have a solid business strategy

in place at Baja Fresh, including the initiatives that are

currently under way. Consumers like the concept because

of our outstanding food, and we remain optimistic that

Baja Fresh can produce improved results during 2005.

In February 2004, we made a $5 million equity invest-

ment to assume a majority interest in Cafe Express,

increasing our ownership to 70%.This is in addition to

the $9 million we initially invested in 2002. We named

Brion Grube, a 15-year veteran of Wendy’s and most

recently Executive Vice President of our International

business, as Chief Executive Officer of the chain.

Founders Robert Del Grande and Lonnie Schiller

remained on as advisors.

Cafe Express now operates 19 restaurants in Houston

and Dallas. It has a high-quality menu, average unit sales

of $1.7 million and an extremely loyal customer base.We

are focused on implementing improved systems through-

out the chain and positioning it for future growth.

During the year we said goodbye to some Wendy’s vet-

erans whose careers extend back to our Company’s

early days.

In our finance group, Ron Musick retired at the end of

the year.Ron joined theWendy’s family in 1973 as Secre-

tary,Treasurer and Controller, and most recently served

Wendy’s International, Inc. d & Poor’s 500 Peer Group

(Performance ResultsThrough 12/31/04)

1999 2000 2001 2002 2003 2004

$100.00

$200.00

$78.14

$59.88

$75.68

$82.49

$96.64

$89.22

$69.27

$100.47

$142.01

$198.90

$196.20

$134.26

$128.09

*Assumes $100 invested at the close of trading on 12/99 in Wendy’s International, Inc. common stock, Standard & Poor’s 500 and Peer Group. Source: Value Line, Inc.

Cumulative total return assumes reinvestment of dividends.

The Peer Group Index has been computed by the Company, and is comprised of the following 10 companies: Brinker International, Inc.; CBRL Group; CKE Restaurants, Inc.;

Darden Restaurants, Inc.; Denny’s Corporation; Jack in the Box Inc.; McDonald’s Corporation; Outback Steakhouse, Inc.; Starbucks Corporation; and YUM! Brands, Inc.

This Index has been weighted by market capitalization of each component company.

$143.66

Wendy’s has outperformed the S&P 500 and Peer Group

We also increased our stake in Pasta Pomodoro during

2004, with an incremental $4 million investment in

October.We now own an approximate 29% (fully dilut-

ed) stake in the California-based Italian casual dining

chain. We had initially invested $12 million for a 25%

stake (fully diluted) in Pasta Pomodoro during 2002.

Pasta Pomodoro operates a total of 45 restaurants in

California and Arizona. We believe the moderately

priced, fresh Italian cuisine and contemporary restaurant

design has the potential to flourish outside of California,

where the concept has already proven very successful.

We are supporting CEO Adriano Paganini and his team

as they expand the chain and are optimistic that the

concept will continue to grow.

as Executive Vice President, Bakery and

Special Products. He was Founder Dave

Thomas’ first accountant in Columbus,

Ohio, and guided our finance group for

many years. SeniorVice President, General

Controller and Assistant Secretary Larry

Laudick, whose career with Wendy’s dates

back to 1976, announced his retirement effective June

2005.And John Brownley announced his retirement after

a 24-year career with the Company asTreasurer.We thank

Ron, Larry and John for their years of dedicated leader-

ship and wish them all the best in the future.

Dan Boone, who has worked closely with Ron and

Larry since joining the Company in 1984 as Director of

Financial Reporting, has been promoted to SeniorVice

President, General Controller and Assistant Secretary for

the Enterprise.Vice President of Technical Compliance

Brendan Foley, who joined us in 2003, will take on the

additional role of Assistant Controller. Our ability to

fill these two critical positions with strong internal

candidates is not only a tribute to our Leadership

Development and Succession Planning processes (see

below), but it also helps ensure continuity as we achieve

the vision of our integrated Financial Strategy.

Also taking on a new role in our Finance group this year

is Jonathan Catherwood, whom we hired in 2001 as our

Executive Vice President of Mergers and Acquisitions.

In 2004, Jonathan took on the added role of Treasurer,

succeeding John Brownley.

In August 2004, Executive Vice President of Marketing

Don Calhoon, a 26-year veteran of the Wendy’s system,

announced his intent to move into a semi-retirement capa-

city. Don is now focused on Enterprise marketing oppor-

tunities.We announced in December that Ian Rowden

had joined us as our new Executive Vice President and

Chief Marketing Officer of the Wendy’s brand. Ian

brings to Wendy’s a wealth of experience from Callaway

Golf

and Coca-Cola

. He will oversee all of Wendy’s

brand marketing strategies and will manage Wendy’s

advertising, research, product marketing and field mar-

keting functions. We are excited to have an executive

with his background and qualifications on our team.

Finally, we welcomed two new members to our Board

of Directors in 2004: John Thompson, Senior Vice

President and General Manager of BestBuy.com

,and

J. Randolph Lewis, SeniorVice President ofWalgreens

Both were appointed to our board, succeeding Ernest

Hayeck and True Knowles. Ernest and True served on

our board for 11 and seven years, respectively, and we

thank them for their many contributions.

During the year, we introduced a new process to help

identify leaders, develop them and leverage talent with-

in each business across our Enterprise.This process con-

sists of two major components, Succession Planning and

Leadership Development.

Succession Planning identifies a diverse pool of poten-

tial talent to draw upon to meet our business needs as

we grow. Leadership Development is the process we are

using to develop our people to perform in various lead-

ership roles for the Enterprise. This process is already

beginning to pay dividends, as evidenced by the internal

promotions to key positions.

We have implemented many initiatives to position our

Company and brands for success in 2005 and beyond.

We have a solid strategic plan for the entire Enterprise

and we are focused on innovation in our menus, build-

ings, marketing, technology and operations.We plan to

heighten execution in every area of our business - and

to build on our competitive advantages.

Our goal is to improve our financial performance,which

we expect will translate into stock price improvement

and greater value for shareholders. Our stock perform-

ance was flat in 2004, but it has been very strong over

the past five years, as we outperformed our peers and the

S&P 500 (see chart). Our Board and Management team

believe that growing the Company’s long-term earnings

at an 11-13% rate, while paying a dividend with a yield

in the 1.1% to 1.2% range, will provide good return to

our shareholders.

Thank you for your ongoing support as shareholders

and customers. I look forward to sharing the results of

our progress in the future.

Sincerely,

John T. Schuessler

Chairman and Chief Executive Officer

Ron Musick

I am pleased to update you on our financial results for

2004 and our integrated Financial Strategy.

We produced excellent top-line growth with sys-

temwide sales and revenue reaching all-time records in

2004. However, the past year was challenging as we took

decisive action with our Baja Fresh business and faced a

number of issues such as competitive convergence in

the quick-service restaurant industry, very high beef

costs and hurricanes that affected Wendy’s sales in the

Southeast U.S.These factors pressured our earnings per-

formance for the year, especially in the second half.

Our 2004 financial results include:

■ Total revenues increased 15.5% to a record $3.6 billion.

■ We opened 552 restaurants across the entire enter-

prise.This included 263 Wendy’s North America stores,

24 InternationalWendy’s stores,155 Tim Hortons Canada

stores, 69 Tim Hortons U.S. stores, 40 Baja Fresh stores

and one Cafe Express store.

■ Wendy’s posted a 2.9% increase in same-store sales at

company-owned stores and 1.8% at franchise stores.Tim

Hortons had an excellent year, with same-store sales

growth of 7.4% at Canadian stores and 9.8% at stores in

the United States. Baja Fresh posted a same-store sales

decline of 6.3%.

■ The Company reported 2004 full-year pretax income

of $184.1 million, net income of $52.0 million and

diluted earnings per share (EPS) of $0.45.These results

include a pretax charge of $190 million ($187 million after

tax), or $1.61 per share, for the impairment of goodwill

related to Baja Fresh incurred during the fourth quarter.

■ Excluding the impact of the goodwill charge, the

Company produced 2004 full-year diluted pro forma

EPS of $2.06, compared to diluted EPS of $2.05 a year

ago.We believe that providing financial results excluding

the non-cash charge for the reduction in the goodwill of

Baja Fresh provides our investors with a meaningful per-

spective of the current underlying operating perform-

ance of the Enterprise.We use EPS excluding the good-

will charge as an internal measure of business operating

performance. The following table provides a reconcilia-

tion from our pro forma EPS of $2.06 to our reported

EPS of $0.45.

Reconciliation of 2004 Net Income and EPS

Net (Loss)/

income earnings

(loss)/ per share

millions (after-tax)

Pro forma results $ 238.6 $ 2.06

Goodwill charge $ (186.6) $ (1.61)

Reported results $ 52.0 $ 0.45

■ The reported results stated above include the effect of

a correction of our lease accounting, which negatively

impacted earnings by $9.1 million ($5.8 million after

tax), or $0.05 per share. Many companies in the restau-

rant and retail industries have recently corrected their

accounting for leases and leasehold improvements.

■ General and administrative expenses were 7.8% of

revenue, compared to 8.3% in 2003.

■ We ended the year with $177 million of cash on our

balance sheet, compared to $171 million at year-end

2003.We also generated free cash flow, which we define

as operating cash flow minus total capital expenditures,

of $161 million ($502 million minus $341 million) in

2004, compared to $88 million ($430 million minus

$342 million) in 2003.

Company making progress on integrated

Financial Strategy

We introduced our integrated Financial Strategy at the

beginning of 2004 and continue to implement key ele-

ments of the plan. Our goal is to deliver long-term value

to our shareholders through a number of integrated ele-

ments, including our dividend policy, our share repur-

chase strategy, our equity-based compensation program

and our long-term growth rate.

Company increases annual dividend rate by 12.5%

One year ago, we announced a 100% increase in our

dividend,which enabled the Company to meet a target-

ed dividend payout ratio of 18% to 22% and a dividend

yield of 1.1% to 1.2%. Because we are confident about

our business and our strong cash flow, we announced in

February 2005 an additional 12.5% increase in our div-

idend, which was approved by our Board of Directors.

On March 4, 2005, shareholders received a dividend

payment of $0.135 per share, compared to $0.12 per

share in 2004.The annual dividend rate is now $0.54

per share.

CFO’s Message to Shareholders:

The main goal of our share repurchase program is to off-

set dilution from outstanding stock options.We accom-

plished this goal in 2004 and utilized our strong cash

position to repurchase 3.6 million additional shares of

stock totaling $138 million.This amount included a 1.4

million-share accelerated buyback in December 2004.

Since 1998, we have bought back more than $1 billion

in common stock, and we have more than $200 million

remaining under the current authorization from our

Board of Directors.

The goal of our equity-based compensation program is

to remain competitive in attracting and retaining talent-

ed employees while minimizing EPS dilution from stock

grants. In April 2004, our shareholders approved a new

Stock Incentive Plan that will enable us to transition

from stock options to a combination of restricted stock,

restricted stock units and cash in 2005.

We will begin to expense stock options in the first quar-

ter of 2005, which is six months earlier than required by

Statement of Financial Accounting Standards No. 123R

(SFAS 123R). We believe this will help provide a clear

comparison to prior and future years, and we will restate

prior periods to aid comparability. We have also incor-

porated the expected costs associated with equity

compensation in our long-term earnings model.

The total estimated expense associated with equity-

based compensation in 2005 is $31 million to $33 mil-

lion.We expect our equity compensation overhang (all

approved but unexercised options and shares divided by

shares outstanding plus all approved but unexercised

options and shares) to decrease to less than 3% by 2008.

The primary driver of our integrated Financial Strategy

is our long-term growth, and we remain confident in

our ability to grow the Company’s EPS at a 11% to 13%

rate over the long-term.

This growth will result from continued innovation and

new restaurant development in our core businesses of

Wendy’s andTim Hortons, vertical integration initiatives

such as our joint venture par-baking facility with IAWS

Group-Cuisine de France, increased expansion at Tim

Hortons U.S., improved profitability at Baja Fresh and

additional share repurchases.

Certainly,this past year was a challenging one,but we are

optimistic about our prospects for 2005, as well as our

long-term outlook. We continue to implement our

Strategic Plan, which is supported by our integrated

Financial Strategy, and our brands are focused on inno-

vation to drive their business results.

We have outstanding talent at every level in our organ-

ization – with talented employees and franchisees – and

we are confident in our ability to deliver an excellent

total return to our shareholders.

Sincerely,

Kerrii B. Anderson

Chief Financial Officer

Kerrii B.Anderson

Anderson joined the Company in 2000 as Executive Vice President and

Chief Financial Officer. She was appointed toWendy’s Board of Directors

in November 2000. Anderson previously held the position as CFO for

14 years at M/I Schottenstein Homes, Inc. in Columbus, Ohio.

Anderson, who is a certified public accountant, graduated from Elon

College in North Carolina. She has an M.B.A. from the Fuqua School

of Business at Duke University. Anderson directs the Company’s account-

ing and finance functions, as well as strategic planning, treasury, tax, inter-

nal audit, investor relations and information technology.

i n o v

Tim Hortons has a 40-year history of providing consumers

with high-quality baked goods, and our Maidstone Bakery

par-baking facility has enhanced our product offering and

strengthened our ability to innovate.Today we can easily add

new products, like the Toffee Glazed Donut and Cinnamon

Roll, because of the flexibility the new baking process

affords us.We can also offer fresh new promotional flavors on

a regular basis, resulting in our “Donut of the Month”

promotion. And our single-serve dessert program, which is

targeted toward individual purchases, gives us greater variety

and helps differentiate us from the traditional pies and cakes

served in most bakeries. Most importantly, the par-baking

technology means that fresh donuts, bagels,Timbits and other

baked goods are just a few minutes away, any time of day.

a t o n

in baked goods

TIM HORTONS

i n o

in premium coffee and hot beverages

TIM HORTONS

v a t o n

Innovation can take the form of a simple idea, implemented

with such perfection that it becomes a competitive advan-

tage.Take “Always Fresh,” the promise we make to our con-

sumers. It is a basic concept that relies on flawless operations

... a philosophy we fortify with standards to ensure the con-

sumer experience is exactly what the slogan implies. For

example, we make our coffee from premium Arabica beans,

roasted and blended to precise specifications, then brewed and

served within 20 minutes – or we don’t serve it at all.That’s

one of the reasons why 68 percent of consumers in Canada

identify Tim Hortons as their “most often” coffee brand, and

why 45 percent of our customers visit our stores five to ten times

per week. Quite simply, “Always Fresh” is more than just a

saying – it’s precisely what draws millions of customers to

Tim Hortons ... and it’s what keeps them coming back every day.

i n o v

As part of our commitment to enhancing the customer

experience, we are adding a number of innovative features to

our Tim Hortons restaurants. One example is our interactive

digital menu board that identifies hot products when they’re

fresh out of the oven. Another is what we call our “Baking

Theater” – baking out front, in full view – along with our

new product showcase that prominently displays multiple

tiers of delicious baked goods at the front counter. Our

updated seating layout, with café-style tables, high-backed

chairs and booths, together with our new lighting fixtures,

lend a softer and more comfortable feel to our stores.These

changes encourage our customers to dine in and enjoy their

meals in a relaxing environment, enhancing their overall in-

store experience and driving incremental purchases.

a t o n

in restaurant design

TIM HORTONS

in customer-driven new products

WENDY’S

i n n o

Wendy’s new Innovation Center, which houses a state-of-the-

art culinary kitchen for recipe development,is evidence of our

commitment to new product development. Our process is

guided by disciplined research methods and testing approaches.

We thoroughly analyze current consumer and marketplace

trends, which have directly resulted in successful new product

introductions.Examples include our new Fresh Fruit Bowl and

Cup, and Mediterranean Chicken salad, which meet the need

for healthier options.OurWild Mountain Bacon Cheeseburger

and Spicy Chicken Sandwiches both provide for distinctive and

proprietary tastes. And Kids’ Meal Choices appeal to children

while receiving parental approval. As expectations continue

to rise and the marketplace continues to change, we are

committed to keep listening to our consumers and develop-

ing innovative new products that respond to their needs.

a t i o

i n n o

Today about 20 percent of Wendy’s sales come from our

dining rooms, so we have a significant opportunity to draw

more customers to dine inside our restaurants. Enter our

innovative new Fresh and Simple store designs, created with

that goal in mind.These designs are a direct response to cus-

tomer requests for privacy, attractive furnishings, pleasing

lighting, a relaxing atmosphere, a place where they can take

their time to eat,and an overall upscale look and feel. Equally

important to customers is the appearance of the people on

the front line of our business, so we have developed a new

line of career apparel that is both attractive and functional.

The new apparel was designed to work with the looks of

both our current and redesigned stores.

a t i o

in restaurant evolution

WENDY’S

in consumer-focused technology

WENDY’S

i n n o

Consumer-focused technology means implementing new sys-

tems that improve the products and the service that we provide

to ourWendy’s customers.Programs such as electronic payment,

which provides for both debit and credit card purchases, has

proven to be not only a customer convenience, but also a

driver of average check. Pick-up window order confirmation

screens ensure accuracy and improve speed of service. The

recent implementation of our New Stores Systems program,

which includes a manager’s workstation and a computer-based

training station for crew, among other functions, has enabled

demand forecasting and labor scheduling while enhancing

training. And our new double-sided grill, which will help

ensure the highest standards of food safety, reduces cooking

times, simplifies grill operating procedures and, most impor-

tantly, enables us to serve a quality hamburger every single time.

a t i o

i n n o v

At Baja Fresh, our made-to-order food – prepared from the

finest quality ingredients – helps us stand apart from our com-

petition in the fast-casual, Fresh Mexican segment. Recent

menu improvements include several new products, such as

the Chipotle Glazed Charbroiled Chicken salad and the

Chile Lime Chicken salad, as well as four new kids’ meals –

taquitos, burritos, nachos and quesadillas – all of which come

with apple sauce and rice as side dishes, and a choice of juice,

milk or soda.We have started phase one of a redesign program

in our restaurants, with new in-store marketing focused on

highlighting our high-quality food as our point of difference.

The redesign also features easier-to-read menu boards, softer

lighting, a warmer décor, and family-friendly seating, with

booths and lower tables.We are confident that these changes are

the right ones to ensure the future success of Baja Fresh.

a t i o n

in fast-casual, Fresh Mexican

BAJA FRESH

Corporate Responsibility

Corporate governance and ethics

We believe in promoting fairness, transparency and account-

ability throughout our organization.This involves com-

plying with the guidelines set forth by the Securities and

Exchange Commission for publicly held companies and

by the NewYork Stock Exchange

for its listed compa-

nies. It also entails establishing and abiding by our own

demanding principles and standards of corporate gov-

ernance, including selected guidelines and procedures

described below.

The Board of Directors began work to formalize its cor-

porate governance practices in 1999, with a focus on

independence and best practices. In 2004, the Board

amended its Principles of Governance and Governance

Guidelines, which address Board structure, membership

(including nominee qualifications), performance, opera-

tions, and management oversight. The Principles and

Guidelines are posted on the Company’s Web site at

www.wendys-invest.com.

Our Board has adopted and reaffirmed a Code of

Business Conduct for our directors to help ensure ethi-

cal behavior and compliance with regulations and our

other governing documents. This Code reaffirms the

Board’s responsibility in maximizing long-term share-

holder value, ensuring that we conduct our business in

an ethical manner, creating a work environment that

respects and values all employees and promoting corpo-

rate responsibility.

The Board has also approved our Standards of Business

Practices. These values and ethics derive from the culture

of integrity that our founders and leaders have built and

uphold, and they serve as the compass that guides our

employees in their daily decision making. For the full

text of our Standards of Business Practices, please click

on the “Standards of Business Practices (PDF)” link on

the corporate governance section of our Web site at

www.wendys-invest.com.

Along with approving the Standards of Business Prac-

tices and Code of Business Conduct, our Board has

adopted or updated written charters for its Nominating

and Corporate Governance,Audit and Compensation

Committees. A substantial majority of the Board are

independent directors, and the Audit, Compensation and

Nominating and Corporate Governance Committees are

all comprised solely of independent directors.To monitor

the independence of the Company’s independent regis-

tered public accounting firm, the Audit Committee has

adopted a Pre-Approval Policy.

The Board of Directors meets quarterly in executive ses-

sion (without management present). The Chair of the

Nominating and Corporate Governance Committee serves

as lead director, and in that capacity presides at executive

sessions, except where the principal matters to be con-

sidered are within the scope of authority of one of the

other committee chairs. The charters for each of these

committees are posted on the Company’s Web site.

ave Thomas, the founder of Wendy’s, lived by a credo to “do the

Giving back to the communities we serve

Among the values Dave Thomas embraced was a belief

in the importance of giving something back to the com-

munity. This spirit lives on today through the many

corporate programs and local community efforts that

our organization sponsors.

Wendy’s supports a number of children’s-related causes,

including the Dave Thomas Foundation for Adoption.

Since 1992, the Foundation has helped thousands of fos-

ter children find permanent homes and loving families.

TheWendy’s High School Heisman, established in 1994,

recognizes top scholars, athletes and citizens among high

school students.Wendy’s Championship for Children is an

LPGA tour event that benefits the Gordon Teter Chair in

Pediatric Cancer at Children’s Hospital in Columbus,Ohio.

And programs such as the Wendy’s Classic Achiever High

School Scholarship Program and Deletree Conmingo

a bilingual spelling bee competition and curriculum-

enhancing program, promote academic development

in children and young adults.

The Tim Horton Children’s Foundation, established in

1974 by Ron Joyce, co-founder of Tim Hortons, oper-

ates camps for children from economically disadvan-

taged homes throughout Canada and parts of the United

States.Tim Hortons also supports a multitude of youth

athletic activities through theTimbits Minor Sports pro-

gram, sponsoring more than 120,000 children who play

hockey, soccer, lacrosse, T-ball, baseball and ringette in

Canada and the United States.We have a great relation-

ship with our customers and take pride in being an inte-

gral part of the communities that support us. With the

help of donations from our customers and a $500,000

Tim Hortons operates five chil-

dren’s camps in Canada and one

in the United States that offer

thousands of disadvantaged chil-

dren a chance to attend summer

camps, day camps or winter

sessions each year, enabling

them to build leadership skills,

self-confidence and self-esteem.

[Top] Founded in 1992, the

Dave Thomas Foundation for

Adoption supports the mission

to raise public awareness about

the thousands of children

awaiting adoption and to edu-

cate potential parents so they

can better understand the

adoption process. Wendy’s

restaurants spearhead or fund

hundreds of events in support

of adoption across the country

each year. [Center] Wendy’s

High School Heisman award

recognizes top high school sen-

ior student athletes who distin-

guish themselves in academics,

athletics and community service.

Wendy’s has sponsored the

program since 1994. [Bottom]

Each year store owners across

Canada and the United States

provide sponsorship for kids’

athletic teams as part of the

Timbits Minor Sports pro-

gram. More than 120,000

children ages four through nine

participate in a variety of sports

annually through the program.

Visit our foundation Web sites:

www.davethomasfoundationforadoption.org

and www.timhortons.com/en/childrens

corporate donation from Tim Hortons, we were able

to raise more than $1 million (Canadian) for UNICEF

to help children affected by the tsunami disaster in

Southeast Asia.

Baja Fresh takes an active role in community relations.

Each year, Baja Fresh restaurants across the country host

local fund-raisers for nonprofit organizations, donating

15 percent of all profits generated during the events to

various charities. During 2004, certain Baja Fresh loca-

tions on the West Coast also served as designated drop

zones, collecting donations of food, drink and toiletries

for United States soldiers in Iraq.

Offering a wide range of consumer choices

We want our consumers to make informed choices

about our menu selections so they can determine how

the food they eat impacts their dietary lifestyles.Wendy’s

has been providing nutritional information to con-

sumers for more than 25 years.Today, all the restaurants

at each of our three major brands – as well as their

Web sites, www.wendys.com, www.timhortons.com

and www.bajafresh.com – provide nutritional informa-

tion about the products we sell.

We recognize that each of our customers has specific

dietary needs and concerns. Because our sandwiches at

Wendy’s and Tim Hortons – as well as our menu items

at Baja Fresh – are made-to-order, consumers can pick

and choose toppings and condiments according to their

preferences. Our menus are also full of options that cater

to a range of modern dietary trends, such as high pro-

tein and low carbohydrates. In particular, we provide

low-fat choices for people who want a convenient meal

that fits an active, healthy lifestyle.

Wendy’s consumers looking for a low-fat meal can

choose an Ultimate Chicken Grill sandwich, a junior

hamburger, a large Chili, or our new Fruit Bowl with

low-fat yogurt, all of which contain fewer than 10 grams

of fat. Our new Combo Choices menu innovation

enables consumers who order Combo Meals to substi-

tute low-fat sides such as a small chili, baked potato,

or side salad for French fries at no extra charge. And our

Kids’ Meal Choices allows customers to substitute reduced

fat (2%) white or low-fat (1%) chocolate milk and a

Mandarin orange fruit cup for soda and fries. For more

information about the nutrition content of the menu offer-

ings at Wendy’s, please go to www.wendys.com/food.

At Tim Hortons, options for consumers looking to

reduce the fat content of their food include choosing

any of our bagels with light cream cheese, low-fat

muffins and clear-based soups. Several of our “Tim’s

Own

” sandwiches also contain less than 10 grams of fat,

including the Harvest Turkey Breast, Black Forest Ham

and Swiss, Garden Vegetable and Turkey Bacon Club.

To view the nutrition guide for Tim Hortons, visit

www.timhortons.com/en/menu.

At Baja Fresh,reduced fat items include our Bare Burrito

with charbroiled chicken, grilled peppers, onions, rice

and beans; our “Baja Style” Wild Gulf Shrimp and

Charbroiled Chicken tacos; and our Baja Ensalada with

charbroiled chicken and fat-free Salsa Verde, among

others. For more information about the nutritional

value of specific Baja Fresh Menu items, please see

the “Fresh Food” section of the Baja FreshWeb site at

www.bajafresh.com.

As part of our product innovation process, we will con-

tinue to monitor the latest dietary recommendations

and trends to ensure that our menu appeals to a wide

range of consumer needs and preferences.

In 2004,Wendy’s introduced

two new menu innovations

designed to provide healthy

options for consumers. Combo

Choices offer an optional sub-

stitution at no extra charge

of a small chili, baked potato,

Caesar side salad or regular

side salad for French fries.

Kids’ Meal Choices enable

customers to substitute reduced

fat (2%) white or low-fat (1%)

chocolate milk and a Mandarin

orange fruit cup for soda and

fries. Both meals cater to con-

sumer requests for more varied

and nutritious food options.

Vice President of Ontario Operations John Montgomery (far left),

President and Chief Operating Officer Paul House (second from

right) and Executive Vice President of Operations Roland Walton

(far right) present a 2004 Always Fresh Award to franchisees Craig

and Rhonda Pardy of Brandon, Manitoba. Craig and Rhonda

won the award for maintaining the highest standards of cleanliness

and customer service in their region.

Franchisees: A commitment to partnership

he success of Wendy’s International, Inc.

depends on the strength of the relationships we

form with our franchisees. These partnerships

trace their roots back to the principles of mutual trust,

integrity and open communication infused by Ron

Joyce, Dave Thomas and Jim Magglos, the respective

founders of our Tim Hortons, Wendy’s and Baja Fresh

brands and pioneers in the restaurant industry. Each year,

we honor store owners who demonstrate these traits.

Among the franchisees who received recognition in

2004 are Craig and Rhonda Pardy of Tim Hortons,

Gene Carlisle of Wendy’s and Don Bleau of Baja Fresh.

Craig and Rhonda Pardy operate twoTim Hortons stores

in Brandon, Manitoba.The Pardys were one of 16 regional

Don Bleau (left) receives the Franchisee of the Year award from

Baja Fresh Chief Executive Officer Bill Moreton (center) and

Wendy’s International, Inc. Chairman and Chief Executive

Officer Jack Schuessler (right). A New Jersey-based franchisee,

Don merited the 2004 award for his commitment, his dedication,

his team-building skills and his leadership, among other attributes.

winners of a 2004 Always Fresh Award, which is an honor

bestowed on franchisees who consistently achieve out-

standing scores on the rigorous store inspections that

Tim Hortons performs.Tim Hortons store owners since

2001, Craig and Rhonda merited the 2004 honor for

their focus on product freshness, speed of service, store

cleanliness and overall quality of customer experience.

Gene Carlisle owns and operates 91 Wendy’s restaurants

in Arkansas, Louisiana, Mississippi and North Carolina.

In 2004, Gene received the Wendy’s Founder’s Award,

which is presented annually to the franchisee who best

embodies the values and common-sense business approach

of Dave Thomas. Gene attributes his success in part to his

philosophies of reinvesting in his stores and of fostering

employee loyalty by offering competitive pay, progressive

benefit packages and career development opportunities.

Don Bleau currently operates four Baja Fresh restaurants

in New Jersey. Don garnered the 2004 Baja Fresh

Franchisee of theYear award for his commitment to the

Baja Fresh brand, his dedication to growth, his team-

building skills and his leadership through the Franchise

Advisory Council. In addition to the restaurants he cur-

rently owns, Don is in the process of building three

more Baja Fresh stores in 2005.

Don, Gene, Craig and Rhonda all received recognition

in 2004 for embodying the true spirit of partnership that

makes our franchisee system work.We salute them, and

all of our store operators, for the dedication, passion and

commitment that they share with their customers and

employees each day.

Gene Carlisle (center) accepts the 2004 Founder’s Award from

Wendy’s International, Inc. Chairman and Chief Executive

Officer Jack Schuessler (left) and Wendy’s North America

President and Chief Operating OfficerTom Mueller (right).With

91 restaurants in the southeastern United States, Gene has been

a member of the Wendy’s franchisee family since 1975.

photo: Rob Eberst

Board of Directors and Senior Officers – Wendy’s International, Inc.

Board of Directors

Ann B. Crane

Janet Hill

Thomas F. Keller

William E. Kirwan

David P. Lauer

J. Randolph Lewis

James F. Millar

James V. Pickett

John R.Thompson

Senior Management

and Directors

John T. Schuessler

Chairman and

Chief Executive Officer

Kerrii B.Anderson

Chief Financial Officer

Paul D. House

President and Chief Operating

Officer,Tim Hortons

Senior Management

Corporate Officers

Jonathan F. Catherwood

Executive Vice President,

Mergers,Acquisitions and Treasurer

Jeffrey M. Cava

Executive Vice President,

Human Resources and Administration

Kathie T. Chesnut

Executive Vice President, Business

and Concept Development

John M. Deane

Executive Vice President,

Chief Information Officer

Leon M. McCorkle, Jr.

Executive Vice President,

General Counsel and Secretary

John D. Barker

Senior Vice President, Investor Relations

and Financial Communications

Daniel L. Boone

Senior Vice President, General Controller

and Assistant Secretary

Everett E. Gallagher, Jr.

Senior Vice President, Enterprise Tax

and Risk Management

Dennis L. Lynch

Senior Vice President, Communications

Our Brands

Thomas J. Mueller

President and Chief

Operating Officer

Senior Vice Presidents

Operations

Edward L.Austin

Southeast Region

Edward K. Choe

Northeast Region

Joyce L. Eufemi

Upper U.S. Region

Stephen D. Farrar

Western Region

Dennis R. Farrow

Midwest Region

Neil G. Lester

Wendy’s Restaurants

of Canada Inc.

Ian B. Rowden

Executive Vice President and

Chief Marketing Officer

James J. O’Connor

Senior Vice President and

Chief Financial Officer

Judith L. Hollis

Senior Vice President,

Supply Chain Management

Michael C.Watson

Senior Vice President,

Operations Administration

and Strategic Planning

W. Stephen Wirt

Senior Vice President,

Development

James T. Yost

Senior Vice President, Human

Resources and Training

Lori D. Estrada

Vice President, Research

and Development

Paul D. House

President and Chief

Operating Officer

David F. Clanachan

Executive Vice President,

Research and Development,

Training

Alfred Lane

Executive Vice President,

General Counsel and

Assistant Secretary

William A. Moir

Executive Vice President,

Marketing

Donald B. Schroeder

Executive Vice President,

Administration

Roland M.Walton

Executive Vice President,

Operations

Cynthia J. Devine

Senior Vice President,

Chief Financial Officer

Christian M. de Jaham

Senior Vice President,

Operations – Canada

Christos G. Laganos

Senior Vice President – U.S.

Henry J. Svazas

Senior Vice President,

Development

William W. Moreton

Chief Executive Officer

Sally J. Abshire

Chief Operating Officer

Ronald S. Biskin

Senior Vice President,

Development

John M. Butcher

Senior Vice President,

Marketing

Natascha Kogler

Senior Vice President and

Chief Information Officer

Brion G. Grube

Chief Executive Officer

Keith H. Lilley

Vice President,

Operations

Adriano S. Paganini

Founder and

Chief Executive Officer

Randall W. Niemeyer

Chief Financial Officer

Investments

International

Brion G. Grube

Executive Vice President

James C. Hartenstein

Senior Vice President

William R.Valentine

Regional Vice President

Peter J. Stephens

Vice President,

International Finance

Wendy’s International, Inc.

Stock Symbol/Exchange:

WEN (NYSE)

Corporate Offices

Wendy’s International, Inc.

One Dave Thomas Boulevard

Dublin, Ohio 43017

0256

(614) 764

3100

Tim Hortons

874 Sinclair Road

Oakville, Ontario L6K 2Y1

(905) 845

6511

Tim Hortons – U.S. Office

4150 Tuller Road, Suite 236

Dublin, Ohio 43017

5014

(614) 791

4200

Baja Fresh

100 Moody Ct., Suite 200

Thousand Oaks, California 91360

(805) 495

4704

Independent Registered

Public Accounting Firm

PricewaterhouseCoopers LLP

Columbus, Ohio

Legal Counsel

Vorys, Sater, Seymour and Pease LLP

Columbus, Ohio

Common Shares

Wendy’s shares are traded primarily

on the NewYork Stock Exchange.

Options in Wendy’s shares are traded

on the Pacific Stock Exchange.

Annual Meeting

The Annual Meeting of Share-

holders of Wendy’s International,

Inc. will be held at 8:00 a.m.,

April 28, 2005, at AMC Dublin

Village Theatres, 6700Village

Parkway, Dublin, Ohio 43017.

Shareholders are invited to attend,

but must present an admission

ticket or other evidence of stock

ownership as of March 7, 2005,

and a government-issued picture

identification to enter the meeting.

More details about the admission

requirements are described in the

Company’s 2005 Proxy Statement.

General Information

Consumer inquiries, concerns,

store locations and information

requests:

Wendy’s: (614) 764

3100

Tim Hortons: (905) 845

6511

Baja Fresh: (805) 495

4704

Media inquiries:

Wendy’s:

Denny Lynch

SeniorVice President,

Communications

(614) 764

3413

Tim Hortons:

Nick Javor

Vice President,

Corporate Affairs

(905) 845

6511

Baja Fresh:

Lorraine Kimmel

(805) 495

4704 Ext. 1113

Franchise inquiries:

Wendy’s:

U.S. – (614) 764

8434

Canada – (905) 849

7685

International – (614) 764

8434

Tim Hortons:

Canada – (905) 339

5651

U.S. – (614) 791

4200

Baja Fresh:

(805) 495

4704

Corporate Web site:

www.wendys-invest.com

Brand Web sites:

www.wendys.com

www.timhortons.com

www.bajafresh.com

www.pastapomodoro.com

www.cafe-express.com

Market Price

of Common Stock

2004 High Low Close

1Q $42.75 $37.24 $40.69

2Q $42.12 $33.94 $34.84

3Q $37.30 $32.47 $33.60

4Q $39.50 $31.74 $39.26

2003 High Low Close

1Q $29.95 $23.97 $27.51

2Q $31.50 $26.72 $28.97

3Q $33.46 $27.37 $32.30

4Q $41.55 $32.20 $39.24

Stock Split History

September 1977 4-for-3

June 1978 2-for-1

March 1981 3-for-2

November 1982 3-for-2

March 1984 4-for-3

March 1985 4-for-3

May 1986 5-for-4

(Example: 100 shares of Wendy’s

common stock purchased in 1976

equaled 1,333 at 12/31/04.)

Dividend History

Wendy’s increased its annual divi-

dend rate to shareholders by

12.5% in February 2005.The

quarterly dividend is currently

13.5 cents per share or 54 cents

per share annually.Wendy’s has

paid 108 consecutive quarterly

dividends, as of March 4, 2005.

Management targets a dividend

yield of 1.1% to 1.2%.

Debt Ratings

Standard & Poor’s BBB+

Moody’s Baa1

Investors Choice Dividend

Reinvestment, Direct Stock

Purchase and Sale Plan

Investors may elect to purchase

Common Shares of Wendy’s

International, Inc. directly

through Investors Choice.

The Investors Choice Dividend

Reinvestment & Direct Stock

Purchase and Sale Plan is admin-

istered by the Company’s transfer

agent,American Stock Transfer

& Trust Company (AST).

Minimum investment for the ini-

tial direct stock purchase is $250.

Additional investments of $25 or

more may be purchased as often

as daily.

For more information or enroll-

ment in the Investors Choice

Plan, contact AST via:

Internet: www.InvestPower.com

Telephone: (877) 681-8121

(toll free)

Mail: See address under Transfer

Agent & Registrar

Investor Contacts

Analysts, portfolio managers

and financial media:

John D. Barker

SeniorVice President,

Investor Relations and

Financial Communications

(614) 764

3044

Fax: (614) 766

3775

john_barker@wendys.com

David D. Poplar

Director of Investor Relations

(614) 764

3547

Fax: (614) 766

3775

david_poplar@wendys.com

Individual investors and brokers:

Marsha Gordon

Investor and Shareholder

Relations Specialist

(614) 764

3019

Fax: (614) 766

3775

marsha_gordon@wendys.com

Shareholder Communications

Wendy’s shareholders receive

written communication from

the Company annually. The

Summary Annual Report and

Proxy Statement are generally

mailed in late March.

For additional sources of financial

information, including quarterly

earnings,Web casts, news releases,

10-Ks, 10-Qs, current stock prices

and other information, visit

www.wendys-invest.com.

Receive investor information:

or mail at www.wendys-

invest.com or call (614) 764

3105

for mail requests only.

Shareholder Inquiries

Inquiries regarding address

corrections, lost certificates, divi-

dends, direct deposit, changes of

registration, direct stock purchase,

dividend reinvestment, and other

shareholder account matters

should be directed to Wendy’s

transfer agent,American Stock

Transfer & Trust Company.

Transfer Agent and Registrar

American Stock Transfer

& Trust Company

Shareholder Services Department

59 Maiden Lane, Plaza Level

NewYork, NY 10038

(718) 921

8200

877

681

8121 (toll free)

www.amstock.com

Corporate and Shareholder Information

Consolidated Condensed Statements of Income 2004 2003 2002

Years ended January 2, 2005, December 28, 2003 and December 29, 2002 (In thousands, except per share data)

Revenues

Retail sales $ 2,935,899 $ 2,534,135 $ 2,187,438

Franchise revenues 699,539 614,777 542,823

Total revenues 3,635,438 3,148,912 2,730,261

Costs and expenses

Cost of sales 1,920,302 1,634,562 1,383,665

Company restaurant operating costs 649,281 534,083 459,141

Operating costs 168,492 135,332 118,643

Depreciation of property and equipment 178,394 163,481 139,101

General and administrative expenses 283,721 261,070 241,438

Goodwill impairment 190,000 0 0

Other expense, net 18,644 1,942 6,905

Total costs and expenses 3,408,834 2,730,470 2,348,893

Operating income 226,604 418,442 381,368

Interest expense (46,950) (45,773) (41,454)

Interest income 4,409 4,929 5,985

Income before income taxes 184,063 377,598 345,899

Income taxes 132,028 141,599 127,118

Net income $ 52,035 $ 235,999 $ 218,781

Basic earnings per common share $.46 $2.07 $1.96

Diluted earnings per common share $.45 $2.05 $1.89

Dividends per common share $.48 $.24 $.24

Basic shares 113,832 113,866 111,900

Diluted shares 115,685 115,021 116,558

All financial data was condensed from and should be read in conjunction with the audited consolidated financial statements in the Financial Statements and Other

Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders. The Company’s 2004 results include a pretax charge

of $190 million ($187 million after tax), or $1.61 per share, for the impairment of goodwill related to Baja Fresh.

Consolidated Condensed Statements of Cash Flows 2004 2003 2002

Years ended January 2, 2005, December 28, 2003 and December 29, 2002 (In thousands)

Cash flows provided by operating activities $ 502,352 $ 430,211 $ 443,864

Cash flows from investing activities

Proceeds from property dispositions 57,404 27,126 25,122

Capital expenditures (341,052) (341,911) (330,811)

Acquisition of franchises (16,489) (97,553) (2,316)

Acquisition of Baja Fresh 0 0 (287,405)

Acquisition of Bess Eaton (44,285) 0 0

Proceeds from sale of Conference Cup 0 0 19,959

Principal payments on notes receivable 13,247 9,444 19,751

Investments in joint ventures and other investments (13,434) (7,620) (43,126)

Short-term investments 24,655 (23,043) 0

Other investing activities (2,532) (4,996) (4,630)

Net cash used in investing activities (322,486) (438,553) (603,456)

Cash flows from financing activities

Proceeds from issuance of debt, net of issuance costs 39,512 39,985 223,037

Proceeds from employee stock options exercised 31,436 46,720 77,737

Repurchase of common stock (138,132) (56,992) (49,401)

Principal payments on long-term obligations (61,761) (5,966) (4,274)

Dividends paid on common and exchangeable shares (54,708) (27,322) (27,076)

Net cash provided by (used in) financing activities (183,653) (3,575) 220,023

Effect of exchange rate changes on cash 9,330 11,179 392

Increase (decrease) in cash and cash equivalents 5,543 (738) 60,823

Cash and cash equivalents at beginning of period 171,206 171,944 111,121

Cash and cash equivalents at end of period $ 176,749 $ 171,206 $ 171,944

All financial data was condensed from and should be read in conjunction with the audited consolidated financial statements in the

Financial Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

Consolidated Condensed Balance Sheets 2004 2003

January 2, 2005 and December 28, 2003 (Dollars in thousands)

Assets

Current assets

Cash and cash equivalents $ 176,749 $ 171,206

Accounts receivable, net 127,158 109,880

Notes receivable, net 11,626 14,125

Deferred income taxes 27,280 19,776

Inventories and other 56,010 54,353

Short-term investments 0 24,648

Advertising fund restricted assets 60,021 68,677

458,844 462,665

Property and equipment, net 2,349,820 2,154,307

Notes receivable, net 12,652 18,122

Goodwill 166,998 320,959

Deferred income taxes 6,772 822

Intangible assets, net 41,787 44,547

Other assets 160,671 131,540

$3,197,544 $3,132,962

Liabilities and Shareholders’ Equity

Current liabilities

Accounts payable $ 197,247 $ 159,957

Accrued expenses 300,994 248,948

Advertising fund restricted liabilities 60,021 68,677

Current portion of long-term obligations 130,125 50,891

688,387 528,473

Long-term obligations 593,607 692,632

Deferred income taxes and other 199,861 153,251

Shareholders’ equity

Preferred stock,Authorized: 250,000 shares

Common stock, $.10 stated value per share,Authorized: 200,000,000 shares

Issued: 118,090,000 and 116,760,000 shares, respectively 11,809 11,676

Capital in excess of stated value 111,286 54,310

Retained earnings 1,700,813 1,703,488

Accumulated other comprehensive income 102,037 46,124

1,925,945 1,815,598

Treasury stock, at cost: 5,681,000 shares and 2,063,000 shares

at January 2, 2005 and December 28, 2003, respectively (195,124) (56,992)

Unearned compensation – restricted stock (15,132) 0

1,715,689 1,758,606

$3,197,544 $3,132,962

All financial data was condensed from and should be read in conjunction with the audited consolidated financial statements in the

Financial Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

John T. Schuessler, Chairman and Chief Executive Officer, and

Kerrii B. Anderson, Executive Vice President and Chief Financial

Officer, have issued the certifications required by Sections 302 and

906 of the Sarbanes-Oxley Act of 2002 and applicable Securities

and Exchange Commission (SEC) regulations with respect to the

Company’s 2004 Annual Report on Form 10-K, including the

financial statements provided in this report. Among other matters

required to be included in those certifications, Mr. Schuessler and

Mrs.Anderson have certified that, to their knowledge, the financial

statements, and other financial information included in the 2004

Annual Report on Form 10-K, fairly present in all material respects

the financial condition, results of operations and cash flows of the

Company as of, and for, the periods presented.The full text of the

certifications are set forth in Exhibits 31 and 32 to the Company’s

2004 Annual Report on Form 10-K.

In addition, Mr. Schuessler submitted his annual certification to

the NewYork Stock Exchange (NYSE) on May 10, 2004, stating

that he was not aware of any violation by the Company of the

NYSE’s corporate governance listing standards, as required by

Section 303A.12(a) of the NYSE Listed Company Manual.

Management’s Statement of Responsibility

for Financial Statements

Management is responsible for the preparation of the consolidat-

ed condensed financial statements and other related financial

information included in this Summary Annual Report.The con-

solidated condensed financial statements have been prepared in

conformity with accounting principles generally accepted in the

United States of America, incorporating management’s reasonable

estimates and judgments, where applicable. The financial state-

ments which are contained in the Financial Statements and Other

Information furnished with the Company’s Proxy Statement for

the 2005 Annual Meeting of Shareholders should be read in con-

junction with these consolidated condensed financial statements.

Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining ade-

quate internal control over financial reporting and for assessing

the effectiveness of those controls.

In the Company’s 2005 Proxy Statement, management provided

a report on internal control over financial reporting, in which

management concluded that the Company’s internal control over

financial reporting was effective as of January 2, 2005.You can

find the full text of management’s report in the Financial

Statements and Other Information furnished with the Company’s

2005 Proxy Statement.

Report of Independent Registered

Public Accounting Firm

To the Board of Directors and Shareholders of

Wendy’s International, Inc.:

We have audited, in accordance with the standards of the Public

Company Accounting Oversight Board (United States), the con-

solidated financial statements of Wendy’s International, Inc. and

Subsidiaries as of January 2, 2005 and December 28, 2003, and for

each of the years ended January 2, 2005, December 28, 2003, and

December 29, 2002, management’s assessment of the effectiveness

of the Company’s internal control over financial reporting as of

January 2, 2005 and the effectiveness of the Company’s internal

control over financial reporting as of January 2, 2005; and in our

report dated March 31, 2005, we expressed unqualified opinions

thereon. The consolidated financial statements and management’s

assessment of the effectiveness of internal control over financial

reporting referred to above appear in the Financial Statements and

Other Information furnished with the Company’s Proxy State-

ment for the 2005 Annual Meeting of Shareholders.

In our opinion, the information set forth in the accompanying

condensed consolidated financial statements is fairly stated, in all

material respects, in relation to the consolidated financial state-

ments from which it has been derived.

PricewaterhouseCoopers LLP

March 31, 2005

Columbus, Ohio

Safe Harbor Statement

Certain information contained in this summary annual report,

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 appear together with such state-

ment. In addition, the following factors, in addition to other pos-

sible 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

intense, both domestically and internationally, with many com-

petitors pursuing heavy price discounting; changes in economic

conditions; 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 inter-

national development (including currency fluctuations); the con-

tinued 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 trans-

actions designed to improve its return on investment; changes in

applicable accounting rules; and other factors set forth in Exhibit

99 to the Company’s Form 10-K filed with the Securities and

Exchange Commission and in the Financial Statements and

Other Information furnished with the Proxy Statement for the

2005 Annual Meeting of Shareholders.

®,TM – Wendy’s,Wendy’s logos, Dave Thomas’ name and image,

registered trademarks and other marks, logos, taglines and/or slo-

gans are owned by Oldemark LLC and properly licensed to

Wendy’s International, Inc.

®, TM – Tim Hortons’ Canadian trademarks, logos, taglines

and/or slogans are owned by The TDL Marks Corporation (Les

Marques deTDL Corporation) and properly licensed toThe TDL

Group Corp. Tim Hortons’ U.S.trademarks, logos, taglines and/or

slogans are owned by T.H.D. Donut (Delaware), Inc.

®,TM – Baja Fresh registered trademark and other marks, logos,

taglines and/or slogans are owned by Fresh Enterprises, Inc.

®,TM – Cafe Express and design registered trademark and other

marks, logos, taglines and/or slogans are owned by Cafe Express,

LLC.

Pasta Pomodoro is a registered trademark of Pasta Pomodoro, Inc.

®,TM – Cuisine de France and other marks and logos are owned

by Cuisine de France Limited.

WENDY’S

Year Founded: 1969

Founder: Dave Thomas

Headquarters: Dublin, Ohio

Brand President/COO (North America): Tom Mueller

EVP (International): Brion Grube

Industry Niche: Quick-Service Hamburger

Number of Units: 6,671

Revenues: $2.4 billion

Average Annual Sales

per Domestic Restaurant: $1.3 million

Market Share (U.S. QSR Hamburger): 14%

Domestic Company Average Check: $5.00 - $5.25

www.wendys.com

Wendy’s

innovative menu appeals to a wide variety

of consumer tastes, with offerings such as our Garden

Sensations

™

salads, our Chicken Temptations

sandwiches

and our everyday Super Value Menu.

™

Consumers can

also now substitute a small chili, baked potato, Caesar side

salad or regular side salad for French fries with any

combo meal at no additional charge. Our Kids’ Meals

offer similar options: Families can order reduced-fat

white milk or low-fat chocolate milk in place of soft

drinks and Mandarin oranges instead of fries.

Along with these menu innovations,we’re renovating our

restaurants with a new upscale look and feel. We expect

to begin remodeling our restaurants to one of three new

styles designed to encourage more consumers to relax

and enjoy their meals inside our stores.

Wendy’s Bakery

Wendy’s owns and operates two bakeries in Zanesville, Ohio, that

supply more than half of Wendy’s restaurants in the United States

with consistently fresh, high-quality sandwich buns.The Bakery is

part of the Company’s vertical integration strategy, which enables us

to achieve efficiencies throughout our supply chain.

BAJA FRESH

Year Founded: 1990

Founders: Jim and Linda Magglos

Headquarters: Thousand Oaks, California

Brand CEO: Bill Moreton

Industry Niche: Fast-Casual, Fresh Mexican

Number of Units: 295

Revenues: $176 million

Average Annual Sales

per Domestic Restaurant: $1.2 million

Systemwide Average Check: $7.00 - $8.00

www.bajafresh.com

TIM HORTONS

Year Founded: 1964

Founders: Tim Horton and Ron Joyce

Headquarters: Oakville, Ontario

Brand President/COO: Paul House

Industry Niche: Coffee, Lunch, Fresh Baked Goods

Number of Units: 2,721

Revenues: $996 million

Average Annual Sales

per Canadian Restaurant: $1.7 million (Canadian)

Market Share (Canadian

Coffee and Baked Goods): 70%

Canadian Average Check: $2.50 - $3.00 (Canadian)

www.timhortons.com

Founded more than 40 years ago as a coffee and donut

shop,Tim Hortons

has grown into today’s “fast-casual with

a drive thru” format, which offers convenient, great-tasting

options for breakfast, lunch and dinner. In addition to the

original coffee-and-donut cornerstone products, our

menu today consists of a delicious variety of sandwiches,

such as our new BLT and Egg Salad; soups and stews,

including our new Beef Stew in a Bread Bowl; and a wide

assortment of baked goods, such as TimBits,

muffins and

cookies, to name just a few.

Maidstone Bakery

Our 50/50 joint venture with Cuisine de France, a subsidiary of

IAWS Group plc, has enabled us to build a world-class, 300,000-

square-foot par-baking facility in Brantford, Ontario, known as

Maidstone Bakery.The launch of Maidstone Bakery at the end of

2003 transformed our business, as we can now produce fresh baked

goods in just a few minutes at our Tim Hortons restaurants. For

more information about IAWS Group and Cuisine de France, see

www.iaws.com.

Maidstone Coffee

Our Rochester, NewYork-based coffee-roasting facility is part of our

vertical integration strategy to ensure quality products. The plant

roasts coffee for our Tim Hortons restaurants and produces a sepa-

rate blend for Wendy’s company-owned restaurants.

Founded 15 years ago,

Baja Fresh

continues to

build on its reputation

of expert preparation

and flavorful and fresh

ingredients, distinguish-

ing us from our compe-

tition in the fast-casual,

Fresh Mexican market.

All our menu offerings,

including new items

such as our Chile Lime

Chicken salad and our

kids’ taquitos, are pre-

pared only after the

customer orders them.

We’re also redesign-

ing our store interiors,

with easy-to-read menu

boards, warmer colors

and new family-friendly

seating options.

Operations (in millions) 2004

(1)(2)

2003 2002 2001 2000

(1)

1999 1998

(1)(2)

1997

(1)

1996 1995

(1)

1994

(1)

Revenues $ 3,635 3,149 2,730 2,391 2,237 2,067 1,942 2,031 1,890 1,739 1,585

Wendy’s $ 2,433 2,191 2,010 1,819 1,712 1,603 1,543 1,695 1,625 1,501 1,397

Tim Hortons $ 996 807 651 572 525 464 399 336 265 238 188

Developing Brands

(3) (7)

$20615169––––––––

Retail sales $ 2,936 2,534 2,187 1,925 1,808 1,666 1,580 1,646 1,560 1,455 1,359

Income before income taxes $ 184 378 346 307 271 269 208 219 255 165 150

Net income $ 52 236 219 194 170 167 123 130 156 110 97

Capital expenditures $ 341 342 331 301 276 248 242 295 307 218 172

Financial Position (in millions)

Total assets $ 3,198 3,133 2,723 2,084 1,958 1,884 1,838 1,942 1,781 1,509 1,215

Property and equipment, net $ 2,350 2,154 1,845 1,648 1,497 1,389 1,281 1,266 1,208 1,007 865

Long-term obligations $ 594 693 682 451 248 249 246 250 242 337 145

Shareholders’ equity $ 1,716 1,759 1,449 1,030 1,126 1,065 1,068 1,184 1,057 819 702

Per Share Data

Net income – diluted $ .45 2.05 1.89 1.65 1.44 1.32 .95 .97 1.19 .88 .79

Dividends $ .48 .24 .24 .24 .24 .24 .24 .24 .24 .24 .24

Shareholders’ equity $ 15.26 15.33 12.63 9.79 9.86 9.01 8.61 8.95 8.16 6.81 5.94

Market price at year-end $ 39.26 39.24 27.07 29.17 26.25 20.81 21.81 22.88 20.88 21.25 14.38

Ratios

Pretax profit margin % 5.1 12.0 12.7 12.9 12.1 13.0 10.7 10.8 13.5 9.5 9.5

Return on average assets

(4)

% 1.7 8.4 9.2 9.7 9.2 9.1 6.7 7.0 9.9 8.1 8.5

Return on average equity % 2.9 14.9 17.0 16.9 15.9 15.4 11.0 11.5 16.6 14.5 14.7

Long-term debt to equity

(5)

%3539474422232321234121

Debt to total capitalization

(5)

%2628323018191917192917

Price to earnings

(6)

%8719141818162324182418

Restaurant Data

North American Wendy’s open at year-end

Company 1,482 1,460 1,316 1,223 1,148 1,082 1,021 1,186 1,306 1,305 1,264

Franchise 4,837 4,668 4,587 4,431 4,271 4,079 3,922 3,634 3,292 3,095 2,911

International Wendy’s open at year-end

Company 5 5 4 5 5 30 15 16 9 6 –

Franchise 347 348 346 384 368 336 375 371 326 261 236

Total Wendy’s 6,671 6,481 6,253 6,043 5,792 5,527 5,333 5,207 4,933 4,667 4,411

Tim Hortons U.S. open at year-end

Company 67 25 40 57 58 74 84 59 7 – –

Franchise 184 159 120 83 62 34 16 20 15 17 13

Tim Hortons Canada open at year-end

Company 31 32 31 40 47 42 70 65 58 38 22

Franchise 2,439 2,311 2,157 1,983 1,813 1,667 1,497 1,434 1,304 1,142 908

Total Tim Hortons 2,721 2,527 2,348 2,163 1,980 1,817 1,667 1,578 1,384 1,197 943

Baja Fresh open at year-end

(3)

Company 144 132 98 – – – – – – – –

Franchise 151 151 112 – – – – – – – –

Total Baja Fresh 295 283 210 – – – – – – – –

Cafe Express open at year-end

(7)

19––––––––––

Total Units 9,706 9,291 8,811 8,206 7,772 7,344 7,000 6,785 6,317 5,864 5,354

Average net sales per domestic

Wendy’s restaurant (in thousands)

Company $ 1,416 1,389 1,387 1,337 1,314 1,284 1,174 1,111 1,049 1,014 1,001

Franchise $ 1,291 1,268 1,251 1,164 1,130 1,102 1,031 1,017 978 974 982

Total domestic $ 1,319 1,294 1,280 1,199 1,167 1,138 1,062 1,042 998 986 988

Average net sales per Canadian

Tim Hortons standard restaurant

(in thousands of Canadian dollars) $ 1,730 1,625 1,555 1,458 1,354 1,216 1,091 986 908 878 854

Average net sales per

Baja Fresh restaurant

(3)

(in thousands) $ 1,205 1,369 1,500 – – – – – – – –

Average net sales per

Cafe Express restaurant

(7)

(in thousands) $ 1,745 – – – – – – – – – –

(1)Includes unusual pretax charges of $190.0 million ($186.6 million after tax), $18.4 million

($11.5 million after tax), $33.9 million ($25.2 million after tax) and $72.7 million

($50.0 million after tax) for 2004, 2000, 1998 and 1997, respectively. Includes special

pretax charges of $49.7 million and $28.9 million for 1995 and 1994, respectively, primarily

all related to special profit-sharing contributions made at Tim Hortons.

(2)Fiscal year includes 53 weeks.

(3)Baja Fresh was acquired by the Company on June 19, 2002.

Information prior to that date is not included.

(4)Return on average assets is computed by dividing net income by average assets,

excluding restricted assets.

(5)Excludes company-obligated mandatorily redeemable preferred securities.

(6)Price to earnings is computed using the year-end stock price divided

by the diluted earnings per share for the year.

(7)Cafe Express became a consolidated entity of the Company in February

2004. Prior to that date, the Company accounted for its investment

in Cafe Express using the equity method.

NTRODUCING

2004

Summary Annual Report to Shareholders

i n n o v a t i o n

Wendy’s International, Inc.

Corporate Overview . . . inside cover

Chairman’s Letter. . . . . . . . . . . . . 2

CFO’s Letter . . . . . . . . . . . . . . . . 8

Our Brands . . . . . . . . . . . . . . . 10

This Summary Annual Report should be read in conjunction with the audited consolidated financial statements in the Financial

Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

Tim Hortons. . . . . . . . . . . . . . . 10

Wendy’s . . . . . . . . . . . . . . . . . . 16

Baja Fresh. . . . . . . . . . . . . . . . . 22

Corporate Responsibility . . . . 24

Franchise Partnership . . . . . . . . . . 27

Corporate Information . . . . . . 28

Financial Statements . . . . . . . . 30

11-Year Selected Financial Data. . . 33

Contents

NTRODUCING

2004

Summary Annual Report to Shareholders

i n n o v a t i o n

Wendy’s International, Inc.

Corporate Overview . . . inside cover

Chairman’s Letter. . . . . . . . . . . . . 2

CFO’s Letter . . . . . . . . . . . . . . . . 8

Our Brands . . . . . . . . . . . . . . . 10

This Summary Annual Report should be read in conjunction with the audited consolidated financial statements in the Financial

Statements and Other Information furnished with the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders.

Tim Hortons. . . . . . . . . . . . . . . 10

Wendy’s . . . . . . . . . . . . . . . . . . 16

Baja Fresh. . . . . . . . . . . . . . . . . 22

Corporate Responsibility . . . . 24

Franchise Partnership . . . . . . . . . . 27

Corporate Information . . . . . . 28

Financial Statements . . . . . . . . 30

11-Year Selected Financial Data. . . 33

Contents