I would like to welcome everyone to the Wendy's International first quarter results conference call. (Operator Instructions) I would now like to turn today's call over to John Barker. Please go ahead, sir.

Good afternoon, everybody. The purpose of our investor call and webcast today is to discuss our first quarter results and to provide an update regarding some key initiatives. We released the first quarter numbers after the market closed yesterday and we just held our annual meeting this morning here in Dublin at our corporate headquarters. The news release and the financial statements and other information from the release are available on our website, www.wendys-invest.com. Our agenda for today, we will begin with remarks from Wendy's Chief Executive Officer and President, Kerrii Anderson. Kerrii's going to review our first quarter highlights and then share an overview of some strategic initiatives. After that, you'll have an opportunity to hear briefly from Jay Fitzsimmons, who is our new Chief Financial Officer; and then Brendan Foley, our Senior VP and Controller will walk us through the financials for the quarter and after that we'll be taking your questions. Also on the call today from management is Chief Marketing Officer, Ian Rowden; our Chief Operations Officer, Dave Near; as well as Dave Poplar, our Head of Investor Relations. Looking ahead, please note that we plan to release our second quarter sales on Friday, July 6 and our second quarter earnings date is set for Thursday, July 26. In the near term, we have some events coming up. The first one is we have an analyst day on Monday, April 30 here in Dublin and what that is, we typically bring in ten to 12 analysts and basically just take them through a day. It's not a full-blown analyst meeting, so that is something we've been working on for quite some time. That is set up. Nothing special, just standard procedure, talking about the business, nothing special. We'll then be attending two conferences coming up. The…

Thanks, Kerrii. I'll start with an overview of our key performance metrics and then walk through the income statement line by line to discuss some of the more significant items that affected the quarter. Total revenues were up 2% from about $579 million to about $590 million. Increase in revenues was driven by improved same-store sales. As Kerrii mentioned, our Wendy's U.S. company stores same-store sales in the first quarter of '07 was 3.8% compared to a negative 4.8% in 2006, an improvement of 8.6%. Our Wendy's U.S. franchise stores same-store sales were 3.7% compared to 5.2% last year, an improvement of 8.9%. Reported store operations EBITDA margins improved 260 basis points from 6% to 8.6%; and without the impact related to an accounting change for the company's Canadian 50-50 joint venture with Tim Horton’s from full consolidation to the equity method of accounting, the store EBITDA margins for the first quarter of 2007 would have been 8.9% versus the 8.6% being reported today. That 8.9% versus the 6% last year represents a 290-basis point improvement. As a result, pretax income from continuing operations improved from a loss of $7.6 million last year to $21.8 million this year. Net income from continuing operations improved from a loss of $6 million last year to net income of $14.5 million from continuing operations this year. Diluted EPS from continuing operations of negative $0.05 last year improved to $0.15 this year. EBITDA from continuing operations improved from about $31 million to $57 million, and EBITDA margins from continuing operations improved 440 basis points, 5.3% to 9.7%. Looking at the individual lines on the income statement, as I mentioned, sales and franchise revenue growth are primarily impacted by positive same-store sales. Looking at cost of sales, this is where most of the store operations…

Thanks, Brendan. I hope everybody was able to follow along with that from a P&L standpoint, because that would answer a lot of questions we were getting even last night. Let's kind of move forward to a couple of last things. First, the board of directors approved yesterday our 117th consecutive quarterly dividend, and that's going to be paid on May 21st to shareholders of record of May 7th. Quarterly payment is $0.125. This is our first payment since the board voted in February to increase our annual dividend by 47%. So the annual rate would go from approximately $0.34 to $0.50. Finally, before we open up the Q&A, I would like to address the announcement in our release yesterday that regards the special committee that the board of directors has formed to investigate strategic options for the company. As we noted in the release these options may include, among other things, revisions to the company's strategic plan, changes to our capital structure, or a possible sale, merger, or other business combination. Our Chairman, Jim Pickett -- and Jim's been on the board, I think many of you know, for 25 years -- is going to be the head of the committee and that committee is focused on driving the future value for our shareholders and stakeholders. We do not intend to provide updates regarding the committee's actions, but we will and intend to report specific developments as circumstances warrant. The committee does not have a specific timeframe to complete its review and we are not disclosing the specific members -- these are independent board members, by the way -- who will comprise the committee. We will not discuss this matter further on the conference call today. What we would rather do and what we're going to do is take your questions about the first quarter results, our '07 outlook, and operations and marketing. We have Dave Near, as I mentioned, we have Ian Rowden here. We'd like to talk about the quarter, so please focus your questions on those subjects. Cynthia, if you could now start queuing up for questions, we'd appreciate it.

(Operator Instructions) Your first question comes from Jeffrey Bernstein - Lehman Brothers. Jeffrey Bernstein - Lehman Brothers: If I have to stick with the first quarter, just a question on comps and your outlook for the rest of the year. I know you're targeting 3% to 4% in '07. I believe that's prior to any breakfast benefit. It's obviously a significant ramp up, especially looking at the year-ago period. I know you've highlighted that your comps did come in in that range in the first quarter, but that was lapping close to a down 5%. Just wondering what gives you comfort that as you move through the year and you lap actual positive comps that you will be able to deliver what will presumably have to be much stronger comps to come into that 3% to 4% range? Thanks. Kerrii Anderson: First of all, I think we feel very good about the 3% to 4% for the rest of the year, and I think what drives that performance for us as we look out first and foremost, is a really strong marketing calendar. Ian, you can pop in here at any point in time, but we have got some great new product introductions that are coming up in a lot of categories, whether it be new sandwiches from a hamburger which is our primary focus, as well as value for our customers and a great beverage strategy that's going to introduce, for us, I think some real new news to our customers. Last year at this time, we were just rolling out Vanilla Frosty and it didn't roll out until the end of July. So we are entering in a period in which we've got floats, Vanilla Frosties, a number of new products. That's number one. Number two I would…

Your next question comes from John Glass – CIBC World Markets. John Glass - CIBC World Markets: Could you help summarize just what are the one-time events or one-time items in the first quarter results that will not recur later in the year? Asked another way, comps are going to be 3% to 4%, if that's the plan, why will margins get better from here if costs are incrementally more challenging? Could you cite those things which are going to change in the next couple of quarters on the cost side, because it looks like leverage is what it is now, unless you think it gets better for some reason other than sales? Dave Near: From an operations perspective, we are continuing to work on labor initiatives, many of which we put the foundation in place in first quarter. We should start to see the benefit of that in the second quarter or beyond, both on the management and the crew side of things. From a food perspective, as was mentioned earlier, we continue the look at the menu management side of things. That helps us from a product mix perspective. Also in terms of controlling the things on the store level from a waste perspective, from a theoretical to actual variance perspective, we continue to make good progress on. So I think those are probably two of the main drivers as we look forward. John Glass - CIBC World Markets: In the first quarter, could you call out anything specifically other than the store closures that were one-time in nature?

No, not really. I think as you look at the rest of the lines on the P&L, there were no significant one-time items. John Glass - CIBC World Markets: Breakfast R&D, or extra advertising?

I mean, there's always timings of amounts between quarters but nothing unusual.

Your next question comes from Glen Petraglia - Citigroup. Glen Petraglia - Citigroup: A quick question on the share count. I thought that the share count going into the first quarter was about 96 million shares and you did the 9 million ASR, so I was a bit surprised to see the share count not really move down a great deal in the first quarter. If you could maybe comment on that? The upward move in the stock obviously today. What sort of impact from an accounting perspective does that have on how the ASR is recognized or completed by whomever was conducting that for you? Jay Fitzsimmons: Yes. I'll take those. The diluted share, you may recall we completed that ASR transaction the last half of March, so as you know, the shares are calculated on an average basis over for us a 13-week period. So you don't get the full impact of those 9 million shares; you will see that full impact in the second quarter of 2007, though. On the potential relative to the increase in share prices, our share price, any potential increase will go to the equity count for Wendy's and into treasury stock.

You may remember that we have a collar around this. I don't think the pricing on the collar has been disclosed, but we do have a collar around it and it won't make any difference to the end date for the ASR. Glen Petraglia - Citigroup: Does it have an impact in terms of maybe not the number of shares, but the cost to you?

It does, but that cost is bracketed, it's limited. Glen Petraglia - Citigroup: If we can get an update on refranchising, I believe you're targeting 50 units this year. Then if you had any breakdown of your sales between chicken and beef, that'd be helpful. Thanks. Dave Near: In first quarter, we refranchised eight restaurants and the forecast for the guidance of 50 restaurants, I believe is still very much on track as our number for 2007. Kerrii Anderson: Glen, as a part of product mix, historically we do not disclose the specifics of what our product mix are, and we've generally said chicken is about one-third and I would say not much different from that and beef's about one-third.

Your next question comes from Andy Barish - Banc of America Securities. Andy Barish - Banc of America Securities: I know there are some IRS limitations on the share repurchase related to all the stuff that went on to maintain the tax-free status. Do those limitations apply to any of other big changes in the asset base or control of those assets? Jay Fitzsimmons: When you say the asset base, can you elaborate a little bit on what you mean? Kerrii Anderson: Are you asking like the real estate, doing a sale in the leaseback of real estate? Andy Barish - Banc of America Securities: Your stock. Anything else associated with a large portion of your stock. Jay Fitzsimmons: Well, I think the limitations are relative to Wendy's stock and the company of Wendy's itself. So, I'm not sure if that answers the question or not. Kerrii Anderson: Just to make sure I'm clarifying the point here, it's relative to how much stock the company can repurchase, and that's solely the limitation. Andy Barish - Banc of America Securities: There is no control or change of control associated with that? Kerrii Anderson: With the IRS limitation? Andy Barish - Banc of America Securities: Yes. Dave Near: Not that we're really aware of right now. I mean it would be all fact and circumstances specific, but there's nothing that jumps out right now in our minds. Jay Fitzsimmons: Again, it's really more just on the company's ability to purchase Wendy's shares, that is the real limitation that we've been talking about.

Your next question comes from David Palmer - UBS. David Palmer - UBS: It seems that some of the things that you've been targeting as benefits to company restaurant margins have been more specific to the company stores and not something that would generally benefit the franchisees as much. I was wondering if you could comment on franchisee cash flow this year? Is it improving or is it set to improve or are they not really participating in the cash flow growth that the company stores are having? Dave Near: David, I think there are a couple things. The franchisees, I believe, are experiencing improvements as we are. They may not be experiencing them quite at the rate that we are, but I think that they are certainly taking advantage of our new pricing strategy. I believe that we were a little bit behind our franchisees from a pricing perspective, so there may be a little bit more on the company end there, but they will also be able to take advantage of the labor initiatives that I talked about that we laid the foundation for in first quarter. As we roll that out in second quarter that will certainly be available for our franchisees to take advantage of as we move forward, along with the entire menu management process helps the entire system there. From a cash flow perspective our analysis, our results indicate that in 2006 which is really the most recent financials we have from our franchisees, that cash flow did improve in fact over 2005, and we would certainly hope and expect that that would be the case in 2007. David Palmer - UBS: In terms of the brand and the same-store sales momentum, I think what people have been trying to get at here is…

Your next question comes from Roger Saks - Societe Generale. Roger Saks - Societe Generale: Can you just go back to I think it was Glenn's question on the share count. For second quarter, would we expect to see something closer to the high 80s as a starting point? Did you end first quarter with a high 80s share count and will we expect to see something higher, mid 80s for the full quarter? Dave Near: Yes, I think that's fair. Roger Saks - Societe Generale: When you were talking about the labor initiatives at the restaurant levels, is this strictly scheduling, is it laying off some people, what does that actually mean? Dave Near: Part of it, Roger, is we talked about at the end of last year how we were going to reduce our salaried management staffing from 3.6 salaried managers to 3.3. Our timeline for that was May 1st and we are on track to achieve that. As of May 1st, we will be down to 3.3 salaried managers per store, which is a reduction of about 430 some salaried managers from the beginning of the year. Then on the other side from a crew hour perspective, through some studies we've done over the past two quarters, we are going to be able to pull some hours out of our labor guide, which will make us more efficient, certainly from a labor percentage perspective and also the way we're doing that, we believe it will actually enhance how we operate the stores. Roger Saks - Societe Generale: From your experience to date, the store, the managers, the employees have been receptive? Dave Near: They have been. Going from 3.6 to 3.3 has gone very, very well and in studies that we've done on the crew side, it…

Your next question comes from John Ivankoe – JP Morgan. John Ivankoe - JP Morgan: The question is on the pricing for company stores. Have you put in location-based pricing already across your company system? And if so, how much is that aiding your average ticket year over year? Dave Near: We haven't put in specifically location-based pricing, but we have gone to DMA or market-based pricing. That is actually something that's on our radar screen to look at as we move forward. John Ivankoe - JP Morgan: But you have gone to the DMA-based pricing as of now? Dave Near: Yes, we have. John Ivankoe - JP Morgan: When was that put into place? Kerrii Anderson: John when we did the analyst meeting in February, we said effective beginning January, we had taken that position and put that in place. John Ivankoe - JP Morgan: Now that you put that pricing and you have had a full quarter to study it, how much is that helping your average check? Just the price piece alone? Dave Near: As you may know, the fourth quarter of last year the company stopped disclosing the details of transactions and prices and checks, and going forward that's the position the company is taking right now. Kerrii Anderson: And really for competitive reasons, we watched what else is happening out there with others.

Your next question comes from Rachael Rothman - Merrill Lynch. Rachael Rothman - Merrill Lynch: Can you talk a little bit about the remodel program and where you are this quarter with the company-operated stores? I know you guys have been planning on incentivizing some franchisees to begin with the remodels, maybe how many they've done and what reactions they're seeing. Dave Near: I don't know the exact number off the top of my head that have been done on the franchise side, but we continue to remodel company stores. We're also looking at new designs as well, which is something that we should do on an ongoing basis, and so we're really continuing to score not only new, exciting interior designs, but also exterior designs as well. But so far, the franchisees have taken advantage of the incentive program have been very pleased with it. Kerrii Anderson: From a company perspective, I think we shared this with you in our guidance. We had hoped to plan to remodel about 200 company store this year and we're on track. Rachael Rothman - Merrill Lynch: And in terms of the incentive fees that you guys planned to spend, I think it was $12 million this year, is that roughly on track as well, and maybe how much of that was baked into the first quarter? Dave Near: We continue to think that number's pretty good as far as incentives go. In the first quarter, I think we were a little slower, I think we were more closer to the $1 million number. Rachael Rothman - Merrill Lynch: Okay. As you guys think about breakfast, it seemed like I think in the annual meeting slides, you guys said you're at 160 units, which I think is the same amount that you disclosed at the February analyst day. Can you maybe talk about the pace of the rollouts since you're still targeting the 20% to 30% rollout in 2007 and any changes that you'll be making to the platform near term? Ian Rowden: I'll let Dave just weigh in on the back end of this. He and I and Kerrii have just finished a series of meetings with our franchise community and we told you at our last update that we were very happy with the progress we were making on breakfast and we continue to feel that way. We've done a lot of work optimizing the menu, getting merchandising in place, confirming the marketing at a store-by-store level and you're right, we're in 160 stores. We have a plan to expand that program to somewhere in the vicinity of 20% to 30% of our stores system-wide by the end of the year and we're marching down that track as we speak. Dave Near: I think that's sums it up very well.

Your next question comes from Joe Buckley - Bear Stearns. Joe Buckley - Bear Stearns: Could you talk a little bit about the food costs? I think you were originally targeting 160 to 180 basis points of margin improvement. The language in the release sounds a little bit onerous on that front. Beef being flat to down and chicken being up 3% to 5% doesn't sound all that bad. Is produce running up a lot on you and what are your thoughts on the 160 to 180 bips of target improvement? Dave Near: I think for the first quarter, we were pretty much on track for that. Looking forward, obviously there's going to be pressure on that number, the food cost number, but we're looking at other initiatives to hopefully try to offset that to the degree we can. Just planning for that. Kerrii Anderson: Tad, why don't you share with us your thoughts on produce. Tad Wampfler: Produce right now is certainly more expensive than it was last year, and that's our forecast for the balance of the year is that we're going to be up. But I think that the big parts are all the other initiatives that we have in place relative to keeping control of our food costs, including working with a lot of our suppliers to take costs out of the business as opposed to just squeezing them down. So we've got some of those initiatives that will start hitting the middle to the back part of year that we're very excited about. Joe Buckley - Bear Stearns: Can you give us a sense of how much produce costs are running up year over year? Tad Wampfler: Yes. It would be probably 4% to 5% right now. Joe Buckley - Bear Stearns: A question again on the IRS implications of anything you do. Is there any restriction on paying out a special dividend related to the Tim Horton’s spin-off?

There aren't any restrictions that I'm aware of. We should be able to pay a special dividend without causing a problem under our ruling. Dave Near: Everett's our head of tax, so he knows what he's saying. Joe Buckley - Bear Stearns: Just a follow-up question on a question that was asked earlier. I got the impression at the February meeting that you were going to spend a year improving the business, implementing the turnaround, and then perhaps examine the strategic alternatives. It seems to have been accelerated. What may have driven that? Kerrii Anderson: I have to be honest with you, Joe. This is something the board discussed and we're going to continue to evolve the strategic plan. That's our responsibility and in fact one of the things we have to provide the board on an annual basis is an updated evolution of the strategic plan. That doesn't mean it changes significantly, it just means it evolves with the knowledge and learning that we have. It's really a board-driven decision.

Your next question comes from Steven Kron - Goldman Sachs. Steven Kron - Goldman Sachs: As far as the balance sheet goes, we've certainly seen quite a bit of change more recently, cash coming down as you bought back a lot of stock. I guess, Kerrii, maybe you can just comment on whether you think you're at the point now where you're at the appropriate capital structure to run the business and maximizing cost of capital and certainly taking on debt is a theme here in the industry. Just wondering what your thoughts are there. Kerrii Anderson: I think from our perspective, I think everyone knows we have a very low leverage balance sheet, we're aware of that relatives to others in the industry and I believe that part of this strategic review, if you read the information by the special committee, will be to consider a recapitalization of the company, which could result in some sort of levering up. From that perspective, I can answer that question a lot more as we proceed. Steven Kron - Goldman Sachs: I listened to your shareholder meeting this morning and when you talk about breakfast and you have used this language a few times in the past, quite a bit of learning is going on. I know it's still somewhat early in the test, but can you discuss specific as far as those learnings? Is it around the menu optimization as you mentioned before? Is it a real estate selection process? Maybe you can benchmark how you're thinking about breakfast today relative to when you first talked to us about it nine months ago or so? Ian Rowden: I will just go back if you like, start a bit with the menu. One of the things we've built in the last eight…

Your next question comes from Howard Penney - Prudential. Howard Penney - Prudential : Again, just sort of on the timing of the announcement last night of this strategic committee, the system is singularly focused on the turnaround of Wendy's and growing same-store sales and growing profitability and cutting costs and all of that. If there's one thing you could have done as we have seen in the past from other companies to be more disruptive to that process is to sell the company or announce the sale of the company, because it is I would assume, very distractive to franchisees, crew members, store managers, as they are looking over their shoulder as to what their future is. Kerrii, you said earlier that this was a board decision which obviously it was, but somebody had to propose this to the board and I assume it was you. How is this or what have you done to communicate to the system that we are status quo and going forward and nothing's really changed? I know you don't want us to talk about this today, but I think given the context of how you need to keep people focused on operations and getting things going that that's an important topic to talk about. Kerrii Anderson: I guess I'll make a couple of comments. One, Howard, I wouldn't assume your assumptions are correct and from my perspective, you're exactly right. What this management team has to focus on what I am focused on is what I can control. What we can control as a team together is operations and marketing and making every customer count, quite honestly. That's the focus we have right now as a team, and it's no different than the focus we had two days ago, quite honestly. So from our perspective, that's where we are and that's what we have to do to drive the business forward.

Howard, we will be taking a lot of time. Yesterday, Kerrii and Dave and Ian spoke extensively to the leadership group in the franchise system, to our officers, we have several employee events to walk through and make sure they understand what's happening and what everybody in this system needs to stay focused on.

Our final question comes from Scott Frost - HSBC. Scott Frost - HSBC: Just to address your debt ratings. I don't want to talk about what your plans are going to be here, but is there a specific ratings context that you need to maintain in implementing some of these strategic initiatives, or is there a cost of capital you need to keep under in order to maintain the momentum that you've got in terms of your debt capital? Can you give us any color on that at all? Ian Rowden: The answer to your question is no. Options are open for us to be able to examine. Kerrii Anderson: And really none of our debt is based on any sort of rating, the rate of our debt. Ian Rowden: Exactly. And our line of credit is just on a ratings grid and it's undrawn. Scott Frost - HSBC: Are there any other metrics that you plan to maintain, or as you said, everything's on the table? Ian Rowden: Everything's on the table to be looked at in the context of what the scenario is.

That concludes the conference call for Wendy's today. If you have additional questions, please reach myself or Dave Poplar later today and on Friday. Appreciate you joining. Thanks.