Good morning, everyone, and welcome to the Second Quarter 2011 Conference Call for the Wendy's Company. 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 Mr. John Barker. You may begin, sir.

Thanks and good morning, everybody. Earlier today, we issued our second quarter 2011 earnings release and we filed our Form 10-Q. The agenda for today's conference call and the webcast will begin with an introduction from our President and CEO, Roland Smith, who will discuss recent events and provide highlights about the second quarter. Our Chief Financial Officer, Steve Hare, will then review our second quarter 2011 financial results and our 2011 outlook. Following Steve's remarks, Roland will discuss Wendy's growth initiatives and he will provide an update on our international expansion, then afterwards we will open up the lines for questions. Today's conference call and webcast is accompanied by a PowerPoint presentation. You can find it on our Investors Relations page at our corporate website, which is www.aboutwendys.com. For those of you who are listening by phone today, make sure that you select the appropriate webcast player option from our website, and that will ensure that you can sync up with the slides along with our audio. Now before we begin, I'd like to refer you for just a minute to the Safe Harbor statement that is attached to today's release. Certain information that we may discuss today regarding future performance, such as financial goals, plans and development, is forward-looking. Various factors could affect the company's results and cause those results to differ materially from those expressed in our forward-looking statements. Some of those factors are referenced in the Safe Harbor statement that is attached to the news release. Also, some of the comments today will reference non-GAAP financial measures, such as earnings before interest, taxes, depreciation and amortization. Investors should refer to the reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure. Now let me turn the call over to Roland.

Thanks, John, and good morning, everyone. Before I review the second quarter results, let me give you a brief update on some recent developments. As you know, we completed the sale of Arby's to Roark Capital Group effective July 4, 2011. Following the sale of Arby's, we changed the corporation's name to The Wendy's Company, and all of our human and financial capital will be focused on growing Wendy's. However, there will be a transition period. Based on the transition services agreement with Arby's, we will provide and be reimbursed for support services for 90 days with 30-day extensions available to Arby's through the end of the year. We also recently announced plans to relocate our corporate headquarters to Dublin, Ohio. The State of Ohio and City of Dublin have offered significant long-term incentives to support this move and renovate our current facility in Dublin. Over the next 2 years, we are planning to transform the Dublin facility into a modern corporate office with significant upgrades to the main entrance, offices and common areas throughout the facility, as well as expanded meeting space for employees and franchisees. We will maintain our Atlanta office but its size will be reduced by approximately 50%. Our Atlanta-based employees will continue to provide support services for the Wendy's brand and our international operations will also remain headquartered in Atlanta. In conjunction with this Arby's sale and our company's name change, we also launched a new corporate website, aboutwendys.com, which we hope you have had a chance to visit. Now I'd like to review our second quarter results. In the second quarter, we generated revenue growth of 2.5% to $622 million. This reflects an increase in North America company-owned same-store sales of 2.3%, and importantly, this was driven by an almost 1% increase in transactions.…

Thanks, Roland and good morning. Before we dive into the financial results, I want to discuss some changes this quarter in the presentation of our financial information as a result of the Arby's sale. Because the sale of Arby's occurred on the first day of the fiscal third quarter, only certain components of the transaction are reflected in our second quarter financial statements. For the income statement, Arby's results are accounted for as discontinued operations for all periods presented. General and administrative costs that directly relate to Arby's are included in discontinued operations. Shared G&A costs that indirectly relate to Arby's are included in G&A for continuing operations. For the balance sheet, Arby's assets and liabilities as of the end of the quarter are summarized and reclassified as current and noncurrent assets and liabilities of discontinued operations. 2010 year-end balances have not been reclassified. For the cash flow statement, Arby's is included and reported in all line items. Now let's discuss the quarter's results. Total revenues increased by $15.1 million or 2.5% versus the prior year. Revenue increases were primarily a result of Wendy's same-store sales increases. Our sales have historically included Kids' Meal promotion items sold to franchisees. In the first quarter, Wendy's purchasing cooperative, QSCC, began managing the operation for Kids' Meal promotion items. On an annual basis, this change will reduce both our sales and cost by approximately $30 million and is therefore profit-neutral. Adjusted EBITDA of $89.4 million met our expectations but decreased 10% as compared to the 2010 second quarter. As Roland mentioned, this year-over-year decrease was primarily a result of higher commodity costs as well as incremental advertising to introduce Wendy's new breakfast in additional markets. Our income from continuing operations for the second quarter was $11.4 million or $0.03 per share compared to…

Thank you, Steve. As I've previously shared with you, we are focused on 7 key growth initiatives: Delivering on Wendy's real brand positioning by continuing to improve our core menu and ensuring all of our products provide superior quality, freshness and taste and by introducing exciting new products; expanding breakfast, which we believe will significantly increase sales and profitability; continuing to improve our customer experience with a focus on operational excellence; modernizing our facilities with contemporary new designs; and continuing to increase our global footprint with expansion in North America and international markets. I'd like to update you on our progress on each of these initiatives starting with our brand positioning and product introductions. As we've discussed before, our strategy at Wendy's is to grow sales and margins by ensuring we deliver our real brand positioning. Our goal is to provide superior quality freshness and taste in every product that we offer in order to differentiate Wendy's from our competitors. We believe this positions us with the quality of fast casual and the convenience and affordability of QSR. We have already made significant improvements to 3 of our core menu categories: Value, with the introduction of our My 99 Value Menu; salads, with the introduction of our new premium entrée salads; and fries, with the introduction of natural cut fries with sea salt. Some of our recent product introductions include the Berry Almond Chicken Salad in June, and the Berry Frosty Parfait and Berry Frosty Shake, which we introduced in July. In August, we added 2 new items our My 99 Everyday Value Menu: the Monterey Ranch Crispy Chicken Sandwich and a new Crispy Chicken Caesar Wrap. We are seeing the positive results in same-store sales and transactions from these recent product introductions and core menu improvements. July same-store sales…

Thanks, Roland. Now we'll get ready to open up the line for Q&A. We have a large group of participants on the call today, we ask that you limit your questions if you can. We'll have a long queue and we'll get you back in. Operator, if you could please open up the line for questions?

[Operator Instructions] Our first question comes from the line of Joe Buckley with Bank of America Merrill Lynch.

Just a question on the $330 million, $340 million of pro forma EBITDA, it's -- it read like you've lowered your margin expectations a bit for Wendy's this year. Would you maintain that $330 million or $340 million pro forma numbers? I'm curious what else changed to kind of keep you in that range? And then just a clarification, if that's the base you want us to think about for 2012 and would you expect to grow that base by 10% to 15% in 2012, is that kind of your message?

Yes, you are correct. We maintain our outlook of $330 million to $340 million of EBITDA this year. We took a careful look at everything from pricing to mix to sales to transactions to margins and G&A, and for the second half we are kind of very excited about what we think these new product introductions are going to be able to provide us. So that gives us the confidence that our EBITDA outlook will remain in the $330 million to 340 million range, and you are correct, that is the base that we would start the expectation of a 10% to 15% growth for 2012 and beyond.

Our next question comes from the line of Michael Gallo with CL King. Michael Gallo - CL King & Associates, Inc.: My question is just on the pricing. Obviously, you're starting to get some pricing. You've been able to maintain positive transaction growth. It seems that pricing within the entire industry is starting to move up. I was wondering as you get to the third quarter and beyond, at what point we should start to see less of an impact or better passing price through of some of the obvious commodity cost pressures?

Certainly, we are all experiencing the commodity cost pressures and each brand is obviously making their own decisions as to how they want to react to that. Quite honestly, we probably could have taken more price in the second quarter and that would've positively impacted our margins, but if you remember our discussion in May, the last time we had a chance to talk, we said that we had a strategic pricing model that we were very comfortable with that allowed us to kind of price throughout the product range and throughout the geography of our system, but then we were going to be very selective and very careful about taking price increases to ensure that we did not trade price for transactions. I'm very pleased to report, as I spoke about earlier, that transactions for the second quarter were up almost 1%, and so the benefit of having positive sales and positive transactions I think gives us an indication that all of our programs are beginning to take hold and we are starting to see more customers in the store, and our check was up slightly also so we're also seeing them spend more money. But Michael, we will continue to be very careful about what we expect from a pricing standpoint, and we will not strategically trade off a benefit for just one quarter for the benefit of the significant trend that we think we are seeing in consumers kind of participating in our brand more and more often. Michael Gallo - CL King & Associates, Inc.: Sounds like you feel like you still have room, is that being fair?

Yes, we think we certainly have some room and we look at this on a weekly and certainly a monthly basis, Michael, but again depending on what's happening with the economy and what we think kind of the benefits of our product promotions are, we'll take those pricings carefully so that we don't erode what has been the first time in a very long time where we can talk about positive transactions for the year.

Our next question comes from the line of Jason West with Deutsche Bank.

Just wondering, you guys had a good comp in the quarter and then it sounds like you're pretty upbeat on the second half but July did slow a little bit. Just wondering if you had any color in terms of why July was a little softer and the confidence that you have that things will pick back up?

Jason, we continue to be very confident about the third and the fourth quarters as I have mentioned not only in this call but in our previous call. We think we have an excellent line of new product introductions. Certainly the launch of Dave's Hot 'N Juicy is kind of the key that we are focusing on now. We also have a couple of introductions that we're excited about that we're not ready to talk about at this time for competitive reasons. July was up 1.7%, transactions were still positive. It was the month where quite honestly we were not advertising a center of the plate offering. We were talking about some different dessert items and what have you, and so that has given us no indication to believe that in fact the expectation of the third and the fourth quarter same-store sales increases are in jeopardy.

Our next question comes from the line of John Glass with Morgan Stanley.

Two if I could. The first is on the breakfast mix, you're talking about the 10% mix in sales. I just want to clarify so we understand as they fold in at a greater number, are you actually seeing a 10% lift in sales to those restaurants? Is it incremental or is it mix 10%? And consumers are trading breakfast occasion for lunch, so could you just clarify what you're actually seeing in those test markets in terms of the breakfast?

Yes, sure, John, I'll answer that one, and then if you have more we'll take that. Clearly, we are seeing an incremental 10%, and in some cases, slightly more than that.

Okay. That -- in my experience that's unusual so that's terrific. And then on top of that, you talked about a number of franchisee programs, if you will, financing programs, some royalty abatements. Can you maybe just provide why that was the case that you needed to do that? Did you reach an agreement with large franchisee groups that if you were to provide those programs, they would go ahead with launches of certain products whether it's agreeing to do breakfast or agreeing to do the cheeseburger or whatever it was. Is there any P&L impact that's of note because of those programs?

Let me start off with the first part of your question, John. Having been around the franchise industry for years and years, these are not unusual programs. Part of our responsibility as a franchisor is to ensure that we strategically provide the direction for the brand and thus we decide how we are going to execute that strategy, go out and verify through testing different programs, different products, different ideas that actually will benefit kind of us and our franchisees in the marketplace. Because this is a heavily franchised system, although we do have 1,400 or so hundred company stores, they're not just all in individual markets, we need franchisees to participate with us in tests so that we can have a complete market participating, and in that regard, we think it's only reasonable and fair that we assume some of the risks on some of these tests because not every test works. And so this is a very normal program. It's a program that encourages our franchisees to participate, but not something that we think that we would have to do for the benefit of the idea. At the end of the day, as you know, these ideas will either be accepted or not accepted by our system based on the results that they produce, and that's why we provide these incentives typically to the early adopters as we go, and we test these programs. We just want to give you a sense today of some of the things that we are in fact doing to ensure that we have a continued line of items coming out of our test markets so that we have a strong calendar. From a P&L standpoint, I'll turn that over to Steve.

John, in terms of the P&L impact, we do not anticipate these programs to have a significant financial impact. They would run through our G&A expenses as any franchise incentive program would, but what we're looking at is -- really I think the driver for this program from a financial standpoint is just to make sure that our franchisees have access to financing sources for these programs. I think there's a high level of excitement around these programs and we just wanted to make sure that that obstacle, sometimes even in today's market where availability of financing to especially the smaller franchisees is spotty, so we wanted to make sure that financing was available to them.

Our next question comes on the line of Jeffrey Bernstein with Barclays Capital.

Two questions as well, the first one on continuing the breakfast focus. I know you reiterated 1,000 units by the end of this year, and it seems like the sales component is there and you're getting the lift that you promised, or at least that lift. I'm just wondering if you could talk about the breakeven component of it, whether that component has been reduced or any kind of profit color on breakfast versus the other dayparts and whether you're getting any kind of -- whether there's a theme in terms of any kind of franchisee pushback if there is any, or how you think 2012 rollout will progress from the 1,000 units at the end of this year. And then I have a follow-up.

Okay, well let me first, Jeffrey, kind of address your early questions. I will reiterate that we are very pleased with the results and the customer reaction of our breakfast program to date. The products are fantastic. Many of you had the chance to taste those at our Investor Day earlier this year, and I've also referenced some of you that you've been able to actually participate in the market, which is a great thing. And for those of you that are based in New York, later on this quarter, you're going to be able to go to a couple of the stores right down there in Manhattan and kind of see it, touch it, eat it kind of yourselves. So again we are excited and we are encouraged by the results that we are seeing to date. I will also reiterate that our test market average is $150,000 of annualized sales on an annualized basis, and to get specific to your question, here's what really we expect from breakfast as we kind of look to kind of taking this national. We believe, based on what we know so far, that EBITDA will be accretive at $150,000 of sales, which is our initial target, and that margins will be accretive at a little over $200,000 of sales which we think we can reach over a period of time based on the quality of the products, some of our test market results and some of the new items that I mentioned today that we are continuing to test like Redhead Roasters, and some of the bakery items and some of the regional items that we know we will need as we expand into different geographies like bagels in the Northeast and tortillas kind of in the Southwest. And so that's what we're expecting from breakfast as we go forward.

And is there any kind of franchise pushback or do you think 2012 we will ramp up meaningfully from 2011?

I would say that the overall perception of breakfast in the franchise community is positive. We clearly need that positive perception to get to our 1,000 restaurants because I mentioned earlier, of those 1,000, fully 600 will be franchise restaurants. The franchisees clearly, intellectually understand that breakfast is a growing daypart in the QSR business that we have not participated in that and that's a big opportunity for us, and also as we get into breakfast, it expands the ability for us to get into other dayparts like 24 hours, which some of our competitors have done significant kind of openings in and we don't get to participate in at this point. Clearly, like any franchise system, they want to see a combination of what it costs to get into the daypart and what that return is. And so there are some franchisees that are skeptical, clearly, but that is not unusual and that's why as I mentioned earlier, our job as a franchisor is to bet and prove that these ideas are accretive to kind of both sales and profits in the long term. What I've promised our franchisees as a matter of fact, as I stood up and talked to them in September of 2008 when they were very unhappy with the concept of breakfast because, obviously, the previous breakfast program was ill-conceived. They committed at that point which hasn't changed, which is I will not require you to put into breakfast until I can prove to you that breakfast is going to be accretive to your sales and profits, and we believe that that's exactly what these 1,000 stores are going to show and that we are going to get our system behind us and be participants in the breakfast daypart in the not-too-distant future.

Okay. And then to Steve, should we expect with that $600 million in cash, I guess the pro forma after Arby's other than the organic growth seems like you finally started to repurchase with $120 million some odd this quarter, should we assume that that's the first use of cash beyond that organic growth and therefore use up that authorization in the near term, and is that the priority from the excess cash position?

Jeffrey, the priority for us in terms of using that cash that's on the balance sheet is to go into these reinvestments into the Wendy's brand, so I would say, as we're -- as Roland talked about, I think we're looking at obviously a significant remodel program based on these new prototypes that were out there, so I think investing in that presents some very interesting opportunities for return on that investment. I think as we've talked about putting in capital to support these new marketing initiatives around breakfast, the Gold Hamburger, including some support of franchisees as needed, our good investments for us to make the international opportunities to the extent they go towards company development or joint ventures, I think that's an attractive use of our capital as well. And again, new units. We'll open about 20 new company stores this year, our track record on new units has been quite favorable, and again I would be hopeful that we would be able to accelerate that pace a little bit depending on market conditions. So those are the priorities as first on the operational side, and then to the extent that as we generate additional positive cash flow, we have some additional cash resources, then I would expect that opportunistically, the stock buyback program is something that still is of interest in maintaining our cash dividend.

Our next question comes from the line of Sara Senatore with Sanford Bernstein. Sara Senatore - Sanford C. Bernstein & Co., Inc.: Just a quick question since you talked a lot about the existing stores and the programs that you're doing, you mentioned growing in underdeveloped North American markets. I think in the past, you talked about unit growth, one of the challenges being that real estate and some of the markets in which you're not currently penetrated is higher and you need more unit volumes. I think that was one of the explanations for possible multi-branding with Arby's. Can you just talk a little bit about whether or not that hurdle is still there and whether maybe the inclusion of breakfast is that what you're counting on to allow you to better get into some of these other markets?

I think you've probably hit the nail on the head. Certainly, in order to expand rapidly in the United States, we're going to need to have a return on that investment that makes sense for us. Clearly we have underpenetrated markets. I would say most of our large urban kind of centers, our competitors have more units than we do, and so we're looking at those as possible opportunities to obviously expand our brand. And as we expand our brand and grow sales, obviously there is a kind of a multiplying effect that it helps overall brand awareness kind of increase significantly. But clearly, as we look at those returns, 2 of the things that we think are going to be instrumental in kind of improving our same-store sales or AUVs so that those returns are strong are breakfast and also the renovation program that we mentioned earlier. I mean we're very excited about the new designs. We know that in order for your customer experience to be as positive as it needs to be, especially for us serving kind of a high-quality food that consumers are coming in to participate with, we need to going to have a physical plant that kind of is equal to that. We're very excited about the new designs. I've mentioned we opened 2 in Columbus, Ohio, the Dublin, Ohio area over the last couple of weeks. Our -- kind of our sales quite honestly quite surprised us. Consumers loved the design, they loved the interior, and while I mentioned that's not a trend or something we think we'll replicate in every store, we think we've really hit upon something from the standpoint of putting a great new contemporary design along with our great new menu which we've almost totally revamped together, which we're going to grow sales. And when you add breakfast on top of that, obviously it starts to get us into an AUV area that is pretty significant and allows us, we believe, to provide return on investment that really makes sense from the standpoint of ongoing development in North America. And I might add that kind of the current economic situation, which is certainly kind of allowed real estate prices kind of not to climb to in fact in many cases decline, is certainly not hurting that overall kind of return on investment. Sara Senatore - Sanford C. Bernstein & Co., Inc.: Great, thank you. Can I have one other follow-up and that's actually on G&A. Obviously, you're going to get some -- the service contract for which you'll [ph] reimburse, is it fair to assume that, not all of that, not all of what you've called out is sort of one-time and allocated, Arby's G&A will be reimbursed such that you still have to figure out ways to kind of cut some of the things that may have been shared cost before?

Yes, this is Steve. I think that's the right way to characterize it. I think the transition services agreement, which will run sort of a minimum of 90 days and parts of that may run to year end, will be substantially reimbursed for the cost of that effort, but then I think when the dust settles and we're completed with the transition services, I think we'll have to look again at our cost structure and make some cuts, I think, to get down to the run rate of G&A that we think is appropriate for a single brand company.

Our next question comes from the line of Phillip Juhan with BMO Capital Markets.

Just wanted to revisit the capital allocation question and particularly share repurchase. In the context -- and you mentioned you're improving leverage metrics, but your fixed insurance coverage remains fairly thin and you're below necessary credit metrics, and I wonder if you can just sort of revisit the capital allocation decision in the context of a weakening global economy today and sort of frame your comments in that respect.

Phillip, I think from a capital structure standpoint, I think we're quite comfortable with our current leverage. As I said, the net debt multiple with the proceeds that we received on the Arby's sales were down to 2.2 net debt multiple, and I think that gives us substantial flexibility I think to do what we need to do in terms of growing the Wendy's brand. I think at this point, with the cash on the balance sheet that we have, the fact that we don't have any significant debt maturities in the next couple of years allows us really to look aggressively at what we can do to grow this business, and as you mentioned, obviously the economy is an overall concern for us as we look at what kinds of returns we'll get on this investment. But I think the growth initiatives that Roland has talked about, I'm very comfortable where we sit today that we have the capital available today to make that happen, and that really looks at some of these key marketing initiatives where there's a capital component to it. I think the remodel program is a very exciting opportunity for us and I'm interested to see the kinds of returns we get from these prototype that we're testing, and I think we're fully prepared to reinvest in that program. As I said, new units is another opportunity for us and I think, based on the results we've seen so far and with the idea that we can add and improve the unit economics with a successful breakfast program, I would look forward to investing more money into new unit growth in North America and as we talked about international as well. So I think we're in good shape to handle those programs and to the extent we have excess liquidity above that, I think continuing to be opportunistic in terms of stock buyback is still something that makes sense for us. We have a $250 million program authorized, and so we've used up about half of that.

Our next question comes from the line of John Ivankoe with JPMorgan. John Ivankoe - JP Morgan Chase & Co: A couple of short ones, I think. Firstly, in terms of your notes that are outstanding, I think they're approximately $500 million. Do you have any point of view on your beginning to repay some of that? I think you can do 35% now but it can be up to 100%, if my notes are right, in July of 2012, just in the terms of reducing your book interest expense?

John, this is Steve. We've got an opportunity there, I think, to look at our refinancing at some point in time. There's a call on that which begins next year. Obviously with the volatility in the markets, we're going to have to look at that. But we'll begin to look at alternatives, I think, and if something makes sense from a balance sheet standpoint to refinance that either next year or earlier, we'd certainly be prepared to do that. So I think that is a possible opportunity for us. But the nice thing as I just said though, we're sitting in a very flexible position today in terms of financing available cash to reinvest in the business, but I think on top of that, I think refinancing opportunities is something that we certainly will be evaluating. John Ivankoe - JP Morgan Chase & Co: Okay. And in terms of -- and this would be my last one. In terms of the guidance for 2012, I mean how much -- I'll figure this out in a minute I guess, but how much restaurant margin expansion are you assuming in that number, and does restaurant margin expansion necessitate a significantly easing commodity environment from where we are now?

John, this is Roland, and obviously as we look to 2012 and we look at significant EBITDA growth, it's a combination of all the factors obviously that drives that, from same-store sales to margin expansion as you've mentioned, to what we'll ultimately spend from a G&A standpoint. And we are beginning to look right now at what we think is going to happen from a commodity standpoint in 2012, and while we're not prepared yet to kind of give you guidance on that, we believe that the rate of commodity increase that we've seen this year will begin to decline the next year. So we do certainly think that there is opportunity for margin expansion in 2012 and beyond, a combination of what happens in commodities and also as we grow sales and kind of can take advantage of expanding margins through kind of a sales growth. So as we put together our outlook for 2012, we'll come back to you with a much more kind of a clear expectation of what we expect from both same-store sales and margin expansion.

Our next question comes from the line of Mitch Speiser with Buckingham Research.

On the comp's results for the second quarter, I believe the breakfast test is within the comp's results, and just because it is -- or could you give us a sense of about 10% of the company stores to breakfast and maybe, can you maybe strip out what the breakfast comp was or how much breakfast contributed to the comp's growth in the second quarter?

Mitch, I don't have a number to break out for you but it's a relatively small component of that 2.3.

Our next question comes from the line of Joscelyn MacKay with Morning Star.

I just had a quick question on capital expenditures related to the remodeling of the Ohio headquarters. About how much do you expect those to be and is that counted within your $145 million for 2011?

First of all, over a period of 2 years, I mean we will expect to invest in capital of about $11 million to bring our facility up to the standard that we think it needs to be. We have a beautiful campus, some of you have probably visited it, but unfortunately, the facility is 35-or-so, maybe 40 years old, and unfortunately really haven't put any money into it in quite some time. So in order to kind of provide the entire environment necessary to kind of recruit and maintain high-quality talent as we move our headquarters there, certainly we think that's the right thing to do, not only from an office-based standpoint but we're adding meeting space so we can be much more efficient from the standpoint of getting our teams together, and we're also putting in, as you can imagine, a fitness center so that kind of our employees can think about kind of health and wellness. The great news is that by moving our headquarters back to the Dublin, Ohio area, the combination of the state and the city have really anteed up a significant amount of incentives and tax breaks over a period of time, and so, quite honestly, this will be kind of a better than cash flow neutral over a period of time where we actually kind of received those incentives.

Okay, thanks. And just really quick also on capital expenditures with your new store remodel plan. I know you gave quite a bit of detail earlier this year on your store remodel plans and what -- and capital expenditures related to that. How does these new plans kind of impact to that, and do you have any new targets on how many stores, how much you're going to spend?

Well, as I mentioned earlier, Joscelyn, clearly we know that kind of the quality of our physical plant has a big impact on the overall perception of the experience for the consumer, and what I'm very pleased about is our ability over the last 18 months or so to try to revamp almost our entire menu. As a matter of fact, as we complete the rollout of our hamburger -- new hamburger line and then our chicken line and then start to focus on beverages, there'll be hardly an area of our menu that we haven't made significant improvement to, and so now is the time where significant improvements to the design of the building really makes sense. If you do that before you really have a great proposition in food, you typically don't get the return. I did mention that we have seen some very good results from the first 2 stores that we've opened in Ohio. We have a number of additional stores that we will open this year that we will continue to monitor the consumer reaction and what the overall kind of costs are going to be. We know that we need to touch our stores on a basis of about every 7 years to make sure that they're contemporary and they fit the image of what the consumer is expecting, and as we kind of see the benefit from these remodels, I mean we will, I think, adapt our program accordingly based on the returns that we expect to get, and I would expect that as we get into 2012 that we will begin to ramp up the number of remodels that we do year by year to make sure that our facilities are consistent with our great menu.

Our next question comes from the line of Larry Miller with RBC.

I'm sorry if I missed this. I just wanted to get your thoughts on acquisitions. I think initially you took on all that net debt to build up a war chest, to buy other brands, and how might that have changed as you start to unwind Arby's acquisition?

Larry, I think for now, as Roland had mentioned, really the opportunity here is to focus all of our financial resources and people resources on the Wendy's brand. I think as you talk about the growth initiatives that we have on the plate for Wendy's both here in North America and internationally, I think we think we've got enough opportunities to realize this growth goal of 10% to 15% on EBITDA going forward by just focusing on the Wendy's brand, so at this point I would say there is not a strategic focus on additional acquisitions. I think first priority is to get our cost structure down to what is necessary to support a single brand, and then to reinvest the cash that we've got on the balance sheet into these growth initiatives for Wendy's that'll allow us to have that kind of EBITDA growth that I think will be -- I think provide very attractive returns here.

Our next question comes from the line of Reza Vahabzadeh of Barclays Capital.

On the food costs, I know you expect them to come off, but is it fair to assume that at least on the beef side of it, you're on the spot market as it goes up and down, and can you give us any other thoughts on whether you're locked and have visibility on other food costs?

Yes, we are -- through our purchasing co-op, we're able to hedge most of our food costs other than beef and -- but we're looking at some programs there. We're hopeful that as we go into next year, we'll also be able to reduce some of the volatility, but as you mentioned, we are exposed on about a quarter lag to spot market pricing and so that's one of the reasons why, as we've talked about our margin guidance, we do not expect to see much relief on beef costs this year.

And so the impact of food costs in margins this quarter was 180 basis points. Does your guidance assume a lower degree of impact in the coming second half?

No. I'd say -- I think right now, we -- originally, I think in terms of our guidance, we were hopeful that we'd see some relief in Q4 on beef, but right now, we're not seeing that materialize.

Yes, we're being conservative and not taking an expectation that that will come down really anytime this year, which is why we have revised slightly what we think margins to be. So I know we're at the end of our time here so I want to thank you all for taking the time to kind of talk about our results and ask questions today. We are very pleased with our results for the second quarter, especially what we were able to do on same-store sales and transactions, because we believe this clearly indicates that the initiatives that we've put in place over the past 18 months are really starting to work. We think we have a very clear focus on what we should focus our time and attention on over the next couple of years to include improving our core menu, continuing to launch exciting new products, expanding breakfast, continuing to improve the customer experience, modernizing our facilities and obviously expanding our global footprint. So all in all, we think we are very well positioned to deliver our $330 million to $340 million of EBITDA this year and EBITDA growth of 10% to 15% in 2012 and beyond. Look forward to seeing you out in the markets and thank you again.

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