I wish I could take the entire BURGER KING® family – our employees, franchisees, vendors, and you, our shareholders, on my travels around the globe. You could see the company the way I do: restaurants, products, marketing and operations that have never been stronger, a worldwide management team that has never been more confident and growth opportunities that have never been greater.

Worldwide, over 11 million guests a day visit a BURGER KING® restaurant – and those numbers are growing significantly. Guests around the world increasingly demand our hot, fresh, great-tasting food that is both convenient and reasonably priced. Since we became a publicly traded company in May 2006, our continued company-wide improvement has been impressive. From our innovative menu offerings to our operational excellence to our memorable advertising – everything we do now is being done better. And our intense focus on execution is delivering record results:

  • Our fiscal 2007 revenues climbed 9% to a record $2.2 billion; and adjusted earnings per share of $1.11 was a 31% increase over the prior year;
  • Our worldwide ARS reached $1.2 million, reflecting a new record high;
  • We are now at our 14th consecutive quarter of comp sales growth worldwide, the best level of performance in over a decade;
  • We entered four new countries, which included a return to Japan. Our global reach now encompasses 69 countries and U.S. territories;
  • We opened 441 new BURGER KING® restaurants globally, a 26% increase from the prior year. And we grew the brand by a net 154 units – six times more than the prior year;
  • Our strong and consistent cash flow gave us the flexibility to pay down $125 million in debt and declare two quarterly dividends in fiscal 2007, reflecting our commitment and ability to return value to our shareholders; and
  • Our stock price reflected our overall strong performance – up 68% for the full fiscal year.

And this is just the beginning of our global growth story, with many more chapters to come. Over the next several years, we will unleash the power of the brand to reach millions more around the world. You will see our continued commitment to expand our net restaurant count and drive comp sales growth and ARS in every region.

We expect to increase our net system-wide restaurant count significantly – expanding our presence in the U.S. and Canada while growing rapidly throughout our international markets where there are untapped opportunities. We’re focused on adding restaurants in our current markets and entering new strategic markets that are economically attractive. In fact, sometime during fiscal 2008, we expect to have more BURGER KING® restaurants operating than ever before in the brand’s history.

We also anticipate growing our comp sales and ARS by driving more guests into our restaurants through operational excellence and our innovative marketing promotions and advertising campaigns. And we will continue to offer a profitable combination of indulgent premium products and value menu items served in an attractive, clean and friendly atmosphere.

Of course, we could not achieve our ambitious growth plan without the dedication of our franchisees. Today, more than 1,200 franchisees operate almost 10,000 BURGER KING® restaurants worldwide. Our franchisees are energized and poised for continued growth. They recognize our commitment to their success and to a profitable relationship. We are committed to enhancing restaurant-level economics through innovations in team productivity, cooking platforms and analytical systems. We will also drive profitability through streamlined restaurant designs that cost less to build. We and our franchisees will continue to work together to strengthen the BURGER KING® brand and increase profitability throughout the world.

We also recognize that our guests are the real “Kings” and we value their opinions. Listening to our guests has led us to several exciting innovations and new ways of conducting business. We have installed a high-speed Internet system in our U.S. company-owned restaurants that delivers faster credit card and gift card transactions. We have rolled out our new Flexible Batch Broiler cooking platform to our U.S. and Canada company-owned restaurants, which allows for a new era of product innovation. We’re also proud of recent packaging breakthroughs that let our guests eat more conveniently, whether in the restaurant or on the go. And in the U.S., when our guests told us they wanted late-night access to their favorite BURGER KING® products, we extended our hours of operations to midnight or later. Our HAVE IT YOUR WAY® brand promise means giving our guests what they want, how they want it, when they want it.

And what makes all of this possible is the team of dedicated and hard-working employees in our restaurants, field operations and restaurant support centers who drive our business forward each and every day. Our employees set us apart by delivering exceptional service to our guests. We pride ourselves on making everyone that enters our kingdom feel welcome, included and valued. We believe our commitment to excellence will accelerate the growth of our business.

At BKC, we are writing new chapters as we seize every profitable opportunity. We will execute on our development and restaurant remodeling strategies, focus on continuous operational improvements, and sustain our reputation as a socially relevant brand with world-class marketing and product innovation. I remain confident in BKC’s future. During fiscal 2008, we will seek to accelerate the momentum we created during this past year. We expect to perform at the top of our industry, creating significant value for all of our stakeholders: our franchisees, vendors, employees, guests, and for you, our shareholders.


John W. Chidsey
Chief Executive Officer
October 22, 2007