Good morning everyone, and welcome to Wendy’s/Arby’s Group’s fourth quarter and full year 2009 conference call. Our hosts today are John Barker, Chief Communications Officer; Roland Smith, President and Chief Executive Officer; and Steve Hare, Chief Financial Officer. (Operator instructions) I would now like to turn the call over to John Barker, you may begin sir.

Thanks, good morning everyone. Today’s conference call and web cast is accompanied by a PowerPoint presentation, which can be found on our Investor Relations page, our corporate website that is wendysarbys.com. For those of you listening by the phone, be sure to make sure that you select the appropriate web cast player option from our website to ensure that the slides and the audio are in sync. The agenda for today’s conference call, the web cast will begin with remarks from our President and CEO, Roland Smith, who will discuss a business overview, and our fourth quarter and full year 2009 highlights. Then our Chief Financial Officer, Steve Hare, will review financial results in greater detail. Steve will provide a financial outlook for 2010, and Roland will update you on initiatives to drive performance at our brands, before we open up the line for questions. Our main focus on today’s call will be to discuss our financial performance as well as our plans to grow the business profitably and generate shareholder value. I’d like to take a moment to summarize what is included in the financial statements, which are attached to today’s earnings release. There’s a P&L with consolidated fourth quarter and full year 2009 results. Please note that the results for the full year 2008 reflect Triarc for the full year, and results of Wendy’s only from the date of the merger on September 29, 2008. You need to understand this difference, when looking at the comparisons between 2009 and 2008, as they are not meaningful. Also included with today’s news release are key balance sheet items, and a table that shows for the fourth quarter and full year 2009 EBITDA, a reconciliation of EBITDA to the reported net income or loss, and adjusted EBITDA, which excludes integration related…

Good afternoon everyone, and thanks for joining us today. First, I’d like to take a few minutes to highlight the results from 2009. I'm very pleased to report that in 2009 we made significant progress. We produced strong earnings growth in an extremely challenging economic climate, and adjusted EBITDA growth was 16% as compared to our pro forma results in 2008. We made outstanding progress in Wendy's company-operated restaurant margins, and improved 330 basis points in 2009, which was significantly ahead of our target 160 to 180 basis points of improvement for the year. After only one year, we are well over halfway to 500 basis points of improvement, which we plan to achieve by the end of 2011. We produced significant costs savings through the integration, and we are ahead of schedule on our G&A savings goal of $60 million on an annualized basis by the end of 2011. We repositioned the Wendy's brand, and introduced our new Wendy's advertising campaign You Know When It’s Real. We strengthened our focus on product innovation, and provided our customers with exciting new premium products. At Arby's we introduced a premium sandwich line called Roastburger, which included the all-American Bacon & Blue, and Bacon & (inaudible) sandwiches. And at Wendy's, we introduced Boneless Wings, the Bacon Deluxe Cheeseburger, and Spicy Chicken Nuggets. We also introduced more effective value strategies at both brands. We formed a new purchasing co-op at Wendy's to focus on cost savings for the entire system, and ensure high product quality. And finally, we enhanced our financial flexibility in 2009. Our free cash flow of almost $200 million and the net proceeds from our senior notes offering provided us with approximately $600 million of cash on the balance sheet to support strategic growth initiatives. In 2010, we will continue…

Thanks, Roland and good morning. I would like to update you on our fourth quarter and full year 2009 consolidated P&L, and give you a snapshot of our brand profitability. I will also provide a review of our capitalization and cash flow for 2009, and I will update you on our stock repurchase program and dividends. And finally, I will review our financial outlook as part of our overview for 2010. Slide 13 highlights the fourth quarter results and the special expense items in the quarter. Consolidated revenues were $901 million during the fourth quarter of 2009. Cost of sales was $682 million or 84.9% of sales and reflected continued improvement in Wendy’s restaurant margins partially offset by a decline in Arby’s margins. Included in our cost of sales was an expense related to the termination of our bakery pension plan, which we have since replaced with our companywide 401(k) plan. Additionally cost of sale included a one-time benefit of $3.9 million from vacation policy standardization, Arby's previously used an anniversary approach, and Wendy's used a calendar year approach to calculating vacation days and expense. We chose to standardize the policies across the company using the calendar method, which is simpler to administer, and resulted in a one-time benefit in cost of sales as well as G&A. As a one-time benefit, we have excluded this gain from adjusted EBITDA. G&A expense was approximately $132.2 million, including $5.4 million of merger related integration costs, and $15.5 million related to our start-up financing of the Wendy's co-op, partially offset by a benefit to $3.3 million from vacation policy standardization. Depreciation and amortization was approximately $47 million, and has remained relatively consistent throughout the year. Impairment charges of $51 million related to the write-down of fixed assets through underperforming Arby's and Wendy's restaurants.…

Thanks Steve. First, I would like to update you on the Wendy's brand. For 2010, we are focused on five key initiatives at the Wendy's brand. Driving positive same-store sales, continued margin improvement, optimizing the Wendy's purchasing co-operative, relaunching our breakfast program and expanding it into additional markets, and executing a significant remodeling program. Wendy's continued to focus on value in January with the promotion of our new $0.99 Spicy Chicken Nuggets, and as I have already mentioned we saw a significant improvement in North America company-operated same-store sales in January, which rose to 0.3%. Unfortunately as you all know, exceptionally severe weather and snow in the central and eastern portions of the US have negatively impacted February sales trends at Wendy's and throughout the industry. In February, we reintroduced our popular Premium Fish Sandwich. Also in February, we introduced a new premium hamburger, the Bacon & Blue. That reinforces Wendy's quality position, and brings news to our premium hamburger lineup. The new Bacon & Blue hamburger features fresh never frozen beef, seasoned sauteed onions, fresh lettuce and tomato, and premium Applewood smoked bacon. During March and through Easter, we are advertising our Premium Fish Sandwich Wednesday through Friday, and advertising the Bacon & Blue hamburger throughout the week. The Wendy's real quality fresh brand positioning that we launched last year continues to be the foundation that drives our product innovation, including the launch of Boneless Wings, Bacon Deluxe Cheeseburger, Bacon & Blue, extensions of our Frosty brand, and new value products. We are also very excited about several new high-quality products that we have recently developed, some of which you will see later this year. But for obvious competitive reasons we are not comfortable talking about them yet. We are also investing in a strategic pricing initiative that we…

Thanks Roland. We like to open up the call for questions now. We have a large number of participants on the call and web cast. So, we ask if you have a question, try to limit those so we can get everybody in. Operator, we would like you now to open the lines for questions.

(Operator instructions) Your first question comes from Matt DiFrisco of Oppenheimer.

Thank you. I guess, can you address behind the 2010 outlook and EBITDA outlook what type of growth you expect from the franchisees of both Arby's and Wendy's, or is it a year of contraction again for the brands?

Are you asking from a unit standpoint?

Exactly, sorry. Yes.

From the unit standpoint, both at Wendy's and Arby's as we presented in our 10-Q this morning, we don't expect contraction or expansion to have a significant impact on our results.

Okay, and then also looking at the outlook for what you're doing right now as a comp basis, the improvement at Arby's, is the brand also, are you having cost savings that were you don't need positive same-store sales to hold margins or see the margin, directionally your margin contractions is not happening as much even though the comps were not that great on the company owned side, but if you get in – if you sustain these current comp trends, are you able to sustain margins or do you need positive comps at Arby's?

As you know, Arby's has, historically has very significant high margins at the store level, and as I mentioned in my comments today a significant amount of our margin reduction has been deleveraging based on our sales trends. The good news is that we expect our sales trends to improve in 2010, and with that improvement we expect that we'll be able to you know, improve our margins as we go forward.

Okay, and then the last question is for keeping that $9 million that you are tagging for breakfast investment, that is the only all marketing and ad dollars?

No, the predominant of it is in advertising dollars, but there is some of the dollars also that will go into further consumer testing, so that we can validate the new products that I mentioned to you today.

Okay. Thank you very much.

Welcome.

Your next question comes from David Palmer of UBS.

Yes, hi, Stephen Carlson here for David Palmer. Just, could you talk a little bit about what's some of your early learnings have been, since you've taken more direct control over Arby's, and are there any insights there that are making you more optimistic about gaining sales traction, thanks.

Yes, Stephen I certainly can. You know, I've been significantly involved in the brand for the last 60 days as I mentioned, and I'll just highlight a couple of things that we have learned that we think are significant to the improvement. Probably, the most significant thing as I shared with you from a result standpoint today was the significant low rating that Arby's received from the standpoint of worth what you pay for. We believe that's the major barrier to turning around the transactions and the sales decline at Arby's, and certainly that has been exacerbated over the last year or so as our high check average that we've always enjoyed seems even higher to consumers as many of them are out of work and disposable income has declined, and our competitors have significantly kind of raised the price of poker, so to speak with this value menu price war. And so a key learning is that we are going to need to complete in this dollar value menu kind of area of our business. Fortunately, we began testing that a little over a year ago. We built that menu so that we could you know, live with the margins that it would produce. We just didn't take our products that we currently were selling at full price and discount, because we knew that that would certainly not have beneficial same-store sales results. And so we're excited about the opportunity to launch our national, or launch our dollar menu value nationally. I mentioned we're going to do that in April, and we're going to back that up with some significant national TV advertising. So I think value is clearly one of the key learnings. Secondly, we know that we have to complete from a share voice standpoint, and to…

Your next question comes from John Glass of Morgan Stanley.

Hi, thanks. I first just wanted to clarify your EBITDA guidance. It seems that you are suggesting that EBITDA will probably contract by you know, 2% to 4% next year, the numbers I get is $410 million to $420 million, excluding next week and including the incremental costs and breakfast. Is that math right?

Yes, John, what we're saying is you take the reported adjusted EBITDA this year, I think for comparison purposes going forward take out the extra week, which is about $40 million. That gives you your base and that we are saying from that number we'll see an increase in the low to mid-single-digits, and from our standpoint, you know, we've got about $9 million of incremental breakfast spend that really will not produce an EBITDA benefit during the year.

Got you, but it will result in down EBITDA, I just want to be clear. That's what your forecast is.

Well, no, we're showing – I'm saying, we're taking an increase from that you know, from the $425 million less the $14 million. We'll see an increase over that level.

Okay, but the number you report will be down year-over-year? The broader question is in 2011, you're talking about going back to mid teens, but you know, lot of – you initially talked about the mid teens growth that was a lot of the cost savings you could implement, so you didn't really need sales improvement to get there, and Steve you talked today about reaching your G&A targets early and you talked about putting a lot of those benefits to margins, particularly to Wendy's brand forward. So what does it require then to get mid teens growth out of this business in 2011? Is it more than sales or you're saying you think you can actually exceed those targets in EBITDA and see you know, in the flattish sales environment you're able to get to mid teens again in ‘11.

John, let me talk about both 2010 and 2011 from an EBITDA standpoint. First, you know, from Steve's review and you didn't need Steve's review obviously to understand this that you know, the economy was really soft in 2009. The economy, unemployment and customer confidence remained weak in 2010, and while some of the economists talk about that improving in the second half of the year. You know, we're not necessarily planning for that from a standpoint of a guidance that we are providing. Clearly, in 2009 this put an awful lot of pressure on top line sales not only in our brands, but every brand across the industry saw you know, kind of you know, a similar issue. So in 2009 as you just mentioned and as Steve certainly talked about to compensate for this sales pressure, we overachieved those things that we talked about, you know, being able to deliver over a couple year period, which were clearly in the area of improving Wendy's margins and showing significant G&A efficiencies, and so certainly by moving that more into 2009 we will not get as much benefit as we had planned to get in 2010. But even with the economy in 2010 from our comments today, you know, we expect positive Wendy's same-store sales, and we expect that by the end of the year that Wendy's will clearly be one of the leaders of the industry from the standpoint of how we're performing sales wise and we also, you know, expect it will continue to improve our margins at Wendy's. We have a very solid plan to turn around Arby's in 2010, but we know after you know, kind of 40 plus years of being you know, the high check average brand without a value menu that had a…

Thank you.

Your next question comes from Steven Kron of Goldman Sachs. Neil – Goldman Sachs: Thanks. This is Neil [ph] for Steven. Could you quantify February sales and approximate impact from weather. Also has the competitive environment become more rationale and what does your marketing schedule look like for value versus premium messaging at both Wendy's and Arby's. Thank you.

Well, Neil, I will start with the last question. At both brands, we are clear that we are going to need to post value and premium products throughout the year, and again for competitive reasons I'm not going to go beyond that because I certainly don't want to highlight when and how we're going to do things to our competitors that will use it to their advantage. From the standpoint of February, as you probably heard from every single brand as they talked about results, you know, the central and the east portions of the country have had, you know, kind of a more severe weather, and in some states, you know, record snowfalls which is you know, kind of kept people out of our stores. And so as I mentioned it has had a negative impact on same-store sales, however, we don't talk about that typically on a month by month basis, and so we're not going to quantify that. We'll give you more update on that as we report our first quarter numbers here in the next couple of months. Neil – Goldman Sachs: Competitive environment.

I'm sorry. Neil – Goldman Sachs: Third question?

Which is? Neil – Goldman Sachs: Competitive environment.

I am sorry. Thank you. Sorry Neil. Yes, the competitive environment, I will tell you has not slowed down a whole lot. We continue to see significant discounting by all our competitors, and probably is as aggressive as I seen it you know, throughout most of 2009 as you know, because you've read about it as have we. It sounds like Burger King is going to move off their dollar double cheeseburger, which certainly is going to have an impact on their own sales, I would expect. And I would also expect that they'll try to replace that with something else that is a value message, because I think it's pretty clear in this economy and this unemployment situation you need to have a strong value position or you'll lose the bottom end of your consumer base. Next question?

Your next question comes from Sara Senatore of Sanford Bernstein.

Can you hear me?

Yes.

Okay, great. So, I have a sort of big picture question. It sounds like lot of what you are doing, as you echoed [ph] so everybody is sort of giving or modeling there is a lot of – certainly value is pervasive, you know, the pricing architecture is changing, and even breakfast is obviously attracting a lot of interest. So big picture, should we assume that the business going forward is probably going to be less attractive, I mean, overall for everybody. Higher investment spending, lower margins, it doesn't sound like a great recipe for returns. So I just want to get your thoughts on how you think about the industry.

Well, Sara, I don't know that I could give you guidance on what you should think about our competitors, but I can certainly give you a little bit of an insight on how we see it. Certainly, this is the most difficult marketing situation that I think any of us have seen in our careers from the standpoint of what's going on in the food industry. That being said I don't see that it gets worse than 2009. As me mentioned, we think it will continue to be soft in the first part of 2010. Many of the economists are talking about you know, improvement in the later part of 2010, and some of the weaker brands I think will struggle as this continues. However, from where we set two brands that have very strong positionings from the standpoint of quality products, we believe as the economy begins to improve, and we get the benefit of some of the initiatives and the investments that we spoken about today that we're going to be able to take, you know, full advantage of the market kind of returning to a more normal situation, and thus growing probably more quickly than many of the other brands and so from that standpoint I think that we are probably a pretty interesting and a pretty inviting stock from that standpoint assuming that, you don't think that the economy is going to melt down any further than it has, which I don't think anyone would suggest that that's going to be the case.

And Sara, what I would also say is in terms of your comments around the higher Capex, for us in terms of our guidance for next year, we are ramping up Capex not because we think that indicates a weakening fundamental, we think it's a vote in the future. We want to play a little offense. While we certainly expect the economy to continue to be pretty soft here, we think it's time to make a significant investment in both brands that we think will have an attractive payoff in the future. So it's a matter of while we were very disappointed in our Capex in 2009. I think we have found a number of strategic growth opportunities that we think are worth spending on this year.

Steve, and I would just kind of build on that a little bit. I think the brands that are looking at the current situation and saying, you know what in all chaos there is great opportunity which I built you know, kind of a long career on, and do – it is going to do the right things. We're going to come out of this you know much, much stronger than the brands that are trying to hunker down and just kind of wait through it, and that's why, you know, we have chosen to provide some significant investments in both of our brands, because again as I said as the economy starts to strengthen as Arby's starts to get you know, a better positioning from a value standpoint, I think both of our brands will respond with significant same-store sales, and margins will expand accordingly.

Thank you.

Your next question comes from Michael Gallo of C.L. King.

Hi good morning. My question is on the Arby's side of the business, you have rolled out now here in January the value menu. I was wondering if you could provide us any color on what you've seen in terms of traffic versus ticket to what degree it has cannibalized other products versus driven new traffic and what kind of margin impact if any it has had on the results. Thank you.

Sure Michael. I'd be happy to address that. Let me first of all say that in January it was not a national roll out. We have rolled it out to about 2,500 of our stores and as I mentioned earlier, while we had some advertising to introduce it to our customers, it was local advertising and quite honestly some of it was minimized by the fact that you know, when one of the weeks we had some significant you know, kind of negative weather. What we're seeing however, is a significant increase in transactions as consumers kind of realize that they can come into Arby's, and they can get products that are much less expensive than what they have used to. From a usage standpoint, we've been pleasantly surprised. Most of our customers are not coming in and just buying three items for $0.99 or three items for a dollar. Most of our customers quite honestly are walking out with a check average around $5.50, which kind of averages what the industry is and that's because they're using this as an add-on or a build on where they buy more than just three items and so you know, that's having a positive impact. From a check standpoint, certainly we've seen some check erosions because you know, our average check is typically higher than $5.50, however, as I mentioned transactions have more than made up for the check erosion and so same-store sales, you know, have improved dramatically over the trends. Over just that three week period in January as I mentioned where you know, we had some local advertising in our company stores, we saw the trends to improve to you know, minus 3.9% which is very encouraging. From a margin standpoint, clearly it has some impact on our margins. It has been roughly about 500 basis points or half a point but we believe that the sales improvement 50 basis points. They are looking like I mean, like I'm crazy. 50 basis points or half a point, but we believe that that, you know, is clearly covered by the increase in sales that this program generates. So net-net we are excited about it and we think it's going to continue to drive sales and profitability.

And then just sort of a follow-up question to that. Obviously, you're emphasizing value now as you launch that. It seems like one of the things that's been I wouldn’t say missing, but not as strong as some of your competitors has been, the new product innovation at the Arby's brand, and I think if we go back to really since the launch of market fresh. We haven't been able to really sustain any meaningful innovation in new lines that have driven a lot of new customers. So I was wondering if you could speak to what we should expect to see on relaunch of market fresh, relaunch of the chicken products which I think as, you know, you tried a few years ago but didn't really, haven't been able to build much traction or just some other areas where you think things can be improved like you know, for example toasted subs, I think which were done a couple of years ago didn't quite grow the way you thought they'd be. So just help me out on what we should expect to see from Arby's getting back from an innovation standpoint. Thank you.

Michael, I think you make a very good point from the standpoint of product innovation. Any brand certainly in our space, which is all about high-quality food needs to continue to innovate and provide new products so that consumers are interested in coming in and participating. So you've got to balance that, you know, kind of a new product innovation with value as I mentioned we're doing. Certainly, you know, one of the biggest launches in the Arby's history was market fresh a number of years ago. I don't know of any other brands that have actually successfully launched a whole new line of products like market fresh. So I think that is a significant unusual thing. That being said, last March we introduced a line of sandwiches called Roast Burgers that have continued to mix very well, and I would say that's a very successful introduction in our brand. Where we've lost our traffic in sales Michael has been in the area of the lower end consumer that's looking to come in from more of a value, but I do think we will continue to balance that. You mentioned the chicken, which is something we are clearly working on. You mentioned market fresh, which is also clearly something we are working on, but again for competitive reasons, I would like not to go into more detail because doing that will give our competitors a heads-up on some of the new and exciting product innovation launches that we do plan for Arby's later on this year.

Just a follow up, conclude from that, [ph] we should expect to see some new product innovation from Arby's later this year?

Absolutely. It is a hallmark of how businesses or brands continue to be kind of interesting to the consumer.

Thank you.

Your next question comes from Jeffrey Bernstein of Barclays Capital.

Great. Thank you. One person perhaps two questions. Just first the specifics in terms of the remodels. It sounds like a more significant push this year and next, I am just wondering the remodels you have already done, it sounds like they drove improved results. I'm wondering whether there is any details in terms of the cost per unit or the comp lift you are seeing in tests. Any color on either brand just to kind of give comfort around the 100 new that you are doing at both brands, and is the franchisee push at a similar level?

Jeff, let me try to address that. I think on the Wendy's side, we have had a pretty good track record there when we look at the remodels as a whole that we have seen, where we have gone in and freshened the exterior and interiors of the buildings that we have seen as a group though sales and margins tend to improve, and provide a reasonable return on the investment. You know, a typical cost of a remodel on the Wendy's side can go as low as $100,000, but more likely I think going ahead, where we see it have more of a significant impact is when you spend about $250,000 a unit. On the Arby's side, again we really are kicking up and launching a market by market program to try to get to this 75% pinnacle image. The results as we stratify them are pretty – that is a pretty significant difference in profitability and sales performance of the pinnacle image restaurants we have in the Arby's system versus some of the older models. And so we do believe we will get an attractive return on that investment if we can get our system to look more consistently, especially market by market where we have had good penetration that we think we can get a good return. Again, the investment we are looking there will probably be $250,000 to maybe $300,000 per unit on the Arby's side.

Okay, and then just more broadly speaking in terms of 2009 being a very strong year in terms of achieving a good portion of your three year target, 2010 more of an investment year. Just wondering, now that you are ahead on both G&A and margins, is there anything you discovered on either end that should lead us to believe that those targets can now far be exceeded or should we just expect still not much more than $60 million in G&A and not much more than 500 basis points in margins, and therefore much slower ramp on the back half?

Well, I will address those both Jeffrey, one at a time. From a G&A standpoint, and we consistently look at ways where we can significantly improve our G&A, and I think quite honestly as we continue to build stores and expand our penetration, the G&A will become more and more efficient, but we do think that there are some additional savings that we can enjoy, but we have gotten certainly the majority would know that in 2009 as we pointed out. From a margin standpoint, we were over 300 basis points. That is well over half our way to 500. I hope that gives you a sense of confidence that we actually understand, you know how to improve margins in the stores, specifically in light of the fact that 330 that we reported for 2009 had no commodity impact, because you know the commodities were more expensive in the first-half and less expenses in the second half. You know, I don't think no earth-shattering learnings. We pretty much knew what it took to drive margins from the standpoint of the right metrics, the right tools, the right bonus plans, and the right kind of focus from the standpoint of how are store managers going about the process of making that come to fruition. I give them all and full credit for the significant improvement that they have made, and probably even as impressively, while doing that we have improved the level of company operation significantly from as I mentioned about 38% of our stores being AMV [ph] when we took this on to well over 60% being AMV by the end of 2009. So we feel very good about our ability to operate stores, our ability to continue margin expansion as we go forward. Is there upside to the 500 basis points? Absolutely. I think the upside is in two forms. The first is as we grow sales, we come out of this economic environment, we certainly think that that will expand margins because the drop to the bottom line, certainly with companies like we have proven that know how to manage the bottom line will probably be more quicker. And secondly, as we get the benefit of both our purchasing cooperative, and also the third cooperative that we are putting into place, we believe that there will be savings there that we have not baked into the 500 points that will allow us to kind of enjoy improvements beyond that as those things start to come to fruition.

Great. Thank you.

You are welcome. Thank you all for participating today, and thank you for your questions. Let me just conclude with just a brief kind of overview, and in that overview of what I like to remind you is last time, or last year this time, as we were talking with you, we made five key commitments. We said we were going to improve Wendy's company store operating margins, we said we were going to achieve significant G&A savings at the parent company, we said that we were going to re-energize the Wendy's brand, we said that we were going to form a Wendy's purchasing cooperative, and probably most importantly, we said that we were going to achieve mid-teens adjusted EBITDA growth. I'm very pleased to relay that we achieved or we overachieved on all five of these commitments. I'm very proud of what the team has been able to do over the last year. And maybe more importantly, we look forward to delivering on our commitments in the same way in 2010 and 2011 and beyond. Thanks again for your time today. Look forward to speaking to you all in person.

Just one last thing I like to share with everybody is a little housekeeping. We will post these slides on our websites. You will have a chance to take a look at those more closely afterwards. We ask you to take a look at that in conjunction with our 10-K that was filed this morning and the release. And Steve Hare, (inaudible) and myself have a number of follow up calls with several of the analysts this afternoon, but we will be available tomorrow as well. And then lastly, next week Roland and Steve will be presenting at the BoA conference in New York, and the following week Steve Hare will be presenting in the JP Morgan conference. So, hope to see you on the road. Thank you.

Thank you. This concludes your conference. You may now disconnect.