Lynn M. Liddle - Executive Vice President, Communications and Investor Relations David A. Brandon - Chairman and Chief Executive Officer Wendy Beck - Chief Financial Officer William E. Kapp - Interim Chief Financial Officer

Joseph Buckley - Bank of America Jeffrey Bernstein - Lehman Brothers John Glass - Morgan Stanley John Ivankoe - J.P. Morgan

Welcome to the 2008 second quarter earnings conference call. (Operator Instructions) I would now like to turn the conference over to Lynn Liddle, Executive Vice President, Communications and Investor Relations. Lynn M. Liddle: With me today I have David Brandon, our Chairman and CEO, and Wendy Beck, our Chief Financial Officer. Dave and Wendy, you have some prepared remarks and, as Julie said, we’ll follow up with a Q&A. Before that, a couple of housekeeping issues. We generally do not make forward-looking statements in these conference calls, but to the extent that that does occur during the call, I would have you reference our Safe Harbor statement that is in our press and 8-K. And then also, the media that is on the line, if you would today remain in a listen-only mode, we would appreciate that. So with that, I’d like to turn it over to Dave Brandon, CEO. David A. Brandon: Before we begin today I’d like to take the opportunity to introduce our new Chief Financial Officer, Wendy Beck, who started with us in mid-May. Wendy is a restaurant industry veteran, joining us from Whataburger, a leading regional hamburger chain with 700 outlets located in Texas and 10 other states. Wendy served as CFO and before that Chief Accounting Officer of Whataburger since 2001. Prior to that experience, Wendy was Chief Financial Officer, Vice President and Treasurer of Checkers Drive-In Restaurants, which also includes Rally’s Hamburgers, a chain with over 800 units in 28 states. Now, as most of you know, we conducted a patient, and I want to underscore the word patient, exhaustive, national search for just the right candidate, and we’re thrilled with Wendy’s finance and strategic capabilities, her industry and public company experience, and most importantly, her great cultural fit. I’d say welcome, but she’s actually already had a full and active role on our leadership council. But I want to take this opportunity to publicly thank Bill Kapp, who’s joining us here today, for the terrific job he did as our interim Chief Financial Officer over the past several months. He performed his duties well and did a great job on behalf of our company and our shareholders. So with that, I’ll turn the call over to Wendy for a brief recap of the quarter’s financials, then I’ll follow up with a more extensive report on our progress versus the initiatives we have under way to help turn around the negative sales trend in our domestic business.

I am thrilled to be a part of Domino’s and look forward to discussing our financial results with you this quarter as well as future quarters. As you will note from our earnings release, we have several items that affected the comparability of our results to those of the second quarter prior year. I’ll cover those shortly, but first let’s start with the top line. We again ask you to remember that revenues alone do not necessarily give you the complete picture and instead consider global retail sales as a clear gauge of top-line performance. Our global retail sales increased 4.7% during the second quarter. This was driven primarily by same-store sales growth in our international business and an increase in worldwide store counts of 30 net units during the second quarter and 222 units over the trailing 4 quarters. Same-store sales. Domestically, our sales decreased 5.4% for the quarter compared with a positive 2.1% comp in the second quarter of 2007, which was our strongest quarter in the prior year. Company owned stores decreased 1.1%, rolling over a positive 4.4% in Q2 2007, while franchised same-store sales decreased 5.9%, rolling over a positive 1.8% in Q2 2007. International same-store sales, however, increased a healthy 7% over last year’s comp of a positive 3.9%. As a result of our global retail sales, our total revenues for the second quarter were $334.3 million or a $6 million, 1.7% decrease from prior year. Company owned stores and domestic franchise revenues declined due to lower same-store sales and domestic supply chain revenues declined due to lower volume, which was offset in part by higher revenues due to higher pass-through commodity costs. Our consolidated operating margin as a percentage of revenue decreased 0.8% in the second quarter versus the prior year period. I will now cover operating margins for each of our three operating divisions. First, our international franchise business, which has no cost of sales, grew as a percentage of total revenue, thus improving our overall consolidated margin in the quarter. Second, our company owned store operating margin declined 3.9% from the prior year period. This cost accounted for about three-quarters of the decline, with labor and delivery costs accounting for the remainder. Third, our supply chain margins declined 0.1% from the prior year quarter. Higher cheese prices in 2008 caused a 0.4% decline in the margins. This decline was offset in part by lower variable labor and operating efficiencies. Dollar margin was negatively impacted due to reduced volume from lower same-store sales and traffic declines. Turning to G&A expenses, G&A decreased $14.4 million or 29.6% in the quarter versus the prior year. $14.3 million of the decrease is nonrecurring, consisting of $6.9 million of gain on the sale of 27 stores sold, which I will discuss in a moment, a $5 million legal reserve recorded in the second quarter of 2007, and $2.4 million of recap expenses incurred during the second quarter of 2007. These details are also outlined in the items affecting comparability tables in the earnings release. G&A would have been flat in total dollars excluding these nonrecurring activities. We continue to aggressively manage G&A in this challenging environment. As we have previously announced, we are in the process of selling approximately 60 company owned stores in California and Georgia. We sold 27 during second quarter, bringing the year-to-date total to 56 stores. We recognized a net pre-tax gain of approximately $6.9 million as I just mentioned in the second quarter related to those store sales. The divestiture of these stores will not have a material impact on ongoing net income. Next, we’ll cover bottom line earnings. Our diluted EPS as reported on a GAAP basis was $0.32 or $0.22 when adjusted for items affecting comparability in the second quarter. These items affecting comparability are found in detail in the earnings release. This is a $0.06 decrease from the as-adjusted amount of $0.28 in 2007. Our operating results negatively impacted us by $0.04 for the quarter. This is all driven by the lower domestic sales and traffic that we have experienced. Our share repurchase program benefited us by $0.02. Our recapitalization impacted the comparison by $0.03 due to increased interest expense. The recap was completed during the second quarter of 2007, making this the last quarter we will have comparability differences due to our debt structure. Our effective tax rate was 34.6% in the second quarter. We recorded approximately $1.7 million of tax reserve reversals related to certain state income tax matters. This reduced our effective rate for the quarter. However, as previously indicated, we do anticipate approximately a 40% normalized rate in the foreseeable future. As stated in our earnings release, we repurchased approximately 753,000 shares of our common stock under the share repurchase program for $9.8 million during the quarter or $13.06 per share. Additionally, we repurchased 750,000 shares subsequent to the quarter on June 24 in a block trade for $11.50 per share or $8.6 million. We will continue to be opportunistic buyers in the market as we believe the current traded prices are clearly below the long-term value of our stock. Including the most recent block trade, we have now completed 46% of our repurchase authorization. Turning to our leverage, this quarter marks the one-year anniversary of our new capital structure. We have reviewed our capital structure in light of the current market conditions and the provisions outlined in the debt facilities, and we continue to be very comfortable with our debt level, which remains fixed for another four years and provides for two, one-year extension options. Given the uncertainty of today’s debt markets, we are likely to take advantage of the full six years this credit facility still affords us unless the debt markets change dramatically over the next several years. Now let’s look at our liquidity. As of the second quarter we had $37 million of unrestricted cash. In addition, we have a $150 million revolver, of which 35.6 is pledged in letters of credit against the revolver. This gives us $151.4 million of readily available cash. In closing, despite a challenging year we have generated $36.6 million in free cash flow year-to-date. This clearly shows the resiliency of our business model. We have proven that we will utilize this in a manner that is most beneficial to our company and shareholders. I want to reiterate my commitment and enthusiasm with joining Domino’s. While this isn’t the most pleasant first financial update, I stand firm with the leadership team in our commitment to turn around the domestic side of our business and drive shareholder value. This concludes our financial update. I’d now like to turn it back over to Dave. David A. Brandon: We knew going into the second quarter that our domestic sales comparison would be more difficult than any other quarter in 2008 as this was the quarter where we had a strong positive sales result in 2007. Generally, in a top-line fashion during the quarter we experienced the following: First of all, continued economic pressure and weak sales on the domestic front - that’s pretty clear - the benefit of continued success internationally, which mitigated some of the domestic shortfall and provided strong growth, and last but not least, significant free cash flow generation, which has become a hallmark of our business model, which we use primarily for share repurchases during and subsequent to the quarter. Let me review some of the things that are happening relative to our domestic growth initiatives. Last quarter I spent considerable time sharing the specific details of the plans and initiatives we have underway to get our domestic business back into a more traditional growth mode. Rather than making excuses for our sales shortfall by whining about economic woes affecting the broader restaurant industry and high commodity costs, we just continue to work hard at everything we can control and we are making progress against these initiatives. First in the whole area of franchise store growth management, as you recall we divided our franchisees into three categories: The As and the Bs, which is the vast majority of our system who are feeling the pinch of today’s economic reality, are primarily strong operators who continue to run good viable, profitable businesses. And then we have the Fs, the bottom 14% who are dragging the system down through either bad operations, economic failure or both. Now we’ve been taking corrective action with the Fs to either remove them from the system or get them back into acceptable shape. Of these 247 F franchisees, 114 of them have committed to fixing their stores, and we’re watching that process and managing that process carefully. Ninety-three are currently in the process of selling their stores and 40 of those have already been terminated or otherwise removed from the system. Now for those who are committed to the future, we have accelerated our management store visits, we’ve put specific training programs in place, and we have taken very aggressive approaches to driving local marketing and local promotional event participation and execution. Additionally, we launched a national program in May addressing brand image, the physical appearance of our stores, and our overall retail presence and image. We have made some improvements with the committed Fs, who we consider to be the Bs and As of tomorrow, by narrowing the gap between the Fs and the As and Bs both in terms of sales comps and service. Specifically, the sales gap has narrowed slightly in the last two months and service times have improved versus the full year 2007 among that group of franchisees. So we’re making progress. As it relates to those we’ve dubbed exits, we’re working hard to create an extensive list of qualified high potential franchisees to take over those stores. We’re offering turnaround programs and incentives for A and B franchisees to buy those stores. A and B franchisees have purchased 88 of those stores, representing 32 F franchisees who have exited the system to date. Now in the area of store growth, certainly it’s tough to drive robust domestic store growth during a time when we are attempting to improve our system by selling weaker stores to stronger owners. Many of our As and Bs are buying more than they are building right now and we believe that’s important for the long term. Even many of our strong operators are running negative sales comps in today’s difficult consumer environment so, needless to say, they are preserving capital and are being somewhat conservative and they’re less apt to take risks in this environment. That said, we’re still opening stores in what I consider to be a very lousy environment. In fact, we’ve opened 139 domestic stores in the last 12 months. Now, it’s likely we’ll end the year with a negative domestic store count versus last year and we think that looks like the possibility on the downside of somewhere between a net negative 50 to 70 stores and they would be our weaker stores, obviously, that would close. We’ve seen a recent slowing of store closures over the past few weeks which may indicate the rate of closures are slowing. Now we still expect to achieve our stated range of worldwide store growth of between 200 and 250 net new stores in 2008, so we’re still going to stay on track but obviously that mix will be much higher skewed in the international side of the business. Next I want to talk about our marketing initiatives, at least to the degree I’m prepared in this public setting. We continue to work on our pricing. We’ve implemented the barbell approach that we discussed with you at our last call last quarter. We’ve introduced the value platform with the $4 $4 $4 promotion, which as you recall is a ten-inch pizza at $4. We’re working on testing a line of premium pizzas that we’re excited about. We’re using our vast consumer database to test different price points and promotional packages, and we’re working to encourage more rational pricing practices throughout our franchise system. I want to point out in this whole area of pricing we’re taking a very considered approach to this initiative and making sure that our moves here are strategic as opposed to knee-jerk because there’s a lot of sensational reports in the news about consumer behavior and cost inflation and we want to make sure that we’re being very, very strategic in the way we approach pricing. I want to talk about day part expansion. We’re putting more emphasis on our day part expansion strategy as we build our capability at the lunch hour. Over 85% of our stores are now open for lunch and we recently made this a standard for all of our U.S. stores. As I mentioned earlier, we now have our ten-inch pizza offering which lends itself well to lunch both in terms of pricing and portion and we’re in test right now with a line of oven baked sandwiches and we’ll have more specific news to report on that initiative as we learn more. In the advertising area we continue to be confident in our choice of Crispin Porter and Bogusky as our agency of record. They’ve earned their reputation as one of the hottest agencies in the business today and we believe their talent and creativity is beyond repair and it’s a great fit and a great partnership as we work on the issues of the day. We’re continuing to learn from each other and develop our ad campaign using our core “You Got 30” messaging along with strong retail and product seams. I want to talk a minute about the new product pipeline. We’ve had a lot of activity happening in this area of our business. We understand that those in our broader competitive set who have grown domestic sales during the recent past have done so by offering new choices for consumers, both in terms of menu variety and day part. If we want those same customers to turn to us more often and create positive traffic in our stores again, we’ve got to do more in the area of menu variety and news. We are committed to our tradition of keeping our operations as simple as possible, to facilitate customer service performance that will reinforce our earned reputation as the Pizza Delivery Experts and we are being strategic about new products rather than creating a “product of the club month”. In addition to those things I’ve already mentioned, we have other pizza and non-pizza choices in various levels of test and could potentially make the main stage in the near future and we’ll be talking about more of that in greater detail later. Lastly in the area of marketing as it relates to our chief marketing officer search, we have an aggressive search underway for our new CMO and we’re happy to say that the Domino’s brand attracts some very strong candidates. We have those candidates in various stages of the interviewing and selection process and we’ll update you on this search as we find just the right fit. In the meantime, Patrick Doyle continues to lead our marketing efforts and initiatives and he’s doing a great job. In the area of technology I want to comment on Domino’s Pulse. We have a single point of sale in general management computer tool installed in the vast majority of our domestic stores. As we sit here today about 4,300 stores are equipped with this technology platform. It’s given us a great online ordering tool. It’s given us theft prevention, labor scheduling, operations tracking and training. It’s given us the opportunity to improve our service, have tighter inventory controls in our stores and provide a higher level of consumer and business intelligence for our marketing decisions and our business decisions. Now that we’ve officially passed the mandated deadline for installation, we expect any of our franchisees who still don’t have Domino’s Pulse installed to quickly jump onboard and take advantage of this important technology advancement. We’re pleased that the vast majority of our franchisees have embraced the Pulse system and that we’re so close to full compliance by our deadline. We’ve recently received an important legal decision confirming our ability to mandate technology upgrades for our franchisees, validating our belief and the belief that we’ve had all along that one technology solution for all of our stores is a reasonable business requirement. We now just need to complete the installation of a few hundred stores who are not yet converted and then we will get the full benefit of this important competitive advantage for all of our stores. Let’s turn to international. As we mentioned in our press release our international division hit an important milestone this quarter as we celebrated their 25th year in business. Now with over 40% of our global retail sales and over 25% of our total operating income, our international division is larger than our second largest competitor. That would be Papa John’s. It’s larger than their entire business, both in terms of total stores and total global retail sales. It’s a big business. It started out in Canada and Australia back in 1983 and we now do business in 60 markets around the world with a strong track record of robust sales and store growth. In fact, we’re continuing our quarterly same-store sales record by marking our 58th consecutive quarter positive same-store sales comp in 2008 Q2. Although I would characterize our international division as being positive in almost every country in which we do business, I’d like to call out a few of the particular success stories. We’ve recently signed a new master franchise agreement for Indonesia with a leading Indonesian company that has extensive retailing and marketing experience. They also have the Burger King and Starbucks brands in Indonesia and have a great track record. Their first store in Jakarta is going to open in August and several more could open this year. We’re excited about this new growth opportunity in Asia. We continue to do well in Europe, especially in France where we’re seeing double digit sales increases and exceptional store growth. The market has finally gotten to the critical mass necessary to advertise on television and that has really helped promote the brand. Although sales in France were doing great even before they went on TV, they will only get better with the visibility and awareness that is created by national advertising. Another strong performer continues to be India where we’ve already opened 22 stores year-to-date and expect to open over 50 for the full year. They should also hit the 200 store milestone mark in 2008. Their sales have been in the double digits due to the solid marketing efforts and exceptional operating strength of our master franchisee in that market. I just want to talk for a minute about our recapitalization, our capital structure as Wendy mentioned earlier. We rolled over the first anniversary of our new capital structure at the beginning of the quarter and although we constantly evaluate various uses of free cash flow, this milestone caused us to take an even deeper dive into our balance sheet. Essentially the exercise simply reinforced for us that what we’ve always believed, our business models characteristics of strong and steady free cash flow even in the worst of times, I might add, once again indicates that a more leverage balanced sheet yields the best potential returns for our shareholders. We’ve always said that our first use of cash would be to invest in the growth of our business and should a creative opportunity arise we would always have an open mind to it. However, our business only requires $20 million to $30 million in normalized CAPEX spending so it doesn’t take a large amount of our cash flow to service the ongoing growth needs of this business. We took a detailed look at share repurchases versus debt repayment and we continue to believe that, particularly in the low stock price levels where our stock is currently trading, share repurchase should remain a primary use of our cash. Our continued buy backs in Q2 coupled with a large block trade, which Wendy referenced, which happened right after the end of the quarter, indicate our continued commitments to this program which is now nearly 50% completed through it’s $200 million authorization limit. Wendy also discussed our debt, and as you can see we continue to feel very comfortable with the amount of leverage our company has and our ability to work within the terms and covenants of our debt structure. In ending on the appropriate note that our investment profile is truly all about free cash flow, I’ll open it up for your questions.

(Operator Instructions) Your first question comes from Joe Buckley – Bank of America. Joseph Buckley – Bank of America: Are there advantages to having Pulse system wide? Is that an important [flexion] plan as you get there over the next couple of weeks or months or however long it will take? David A. Brandon: Well, ultimately in terms of just the maintenance of one system, the training of one system and having 100% of our stores taking full advantage of one system, that’s all important, Joe, and we’re going to keep the pedal to the metal until the last store is wired. Having said that, once a store comes online they immediately get all that benefit so the vast majority of our system is getting full benefit from Pulse today and it will just get better as we wire the rest of the stores. Joseph Buckley – Bank of America: A question on the company store performance, company operated performance versus the franchise performance; again you’re markedly different markedly better at the company stores. Are there two or three or however many identifiable factors you can point to behind the performance of the company stores versus the franchise and then if there are, what’s being done to converge the two? David A. Brandon: Yes, it’s a great question and it’s the primary focus of this team and this company right now because, as you point out, our second quarter Team USA results was a 1.1%, but they were comping up against a positive 4.4% a year ago. The franchise system had a weaker comp a year ago and obviously struggled more during this period and that GAAP which is typically flipped the other way is the primary focus of our team. If I were to boil it down to, you know, three topics one would be just operations execution. We have not as a Team USA unit cut labor and tried to cut costs to the point where we have hurt the growth prospects of the business. We’re continuing to invest in marketing. We’re continuing to invest in labor which ultimately translates to a better service for our customers. Those fundamentals need to continue to be stressed and I, as I’ve said before I think many of our small operators when they got into this very kind of difficult circumstance to a large degree unchartered waters in terms of cost inflation, we took some short term measures that created difficulties in terms of customer count sales. The second thing I would point to is pricing. I don’t think there’s any question about the fact that centrally we’ve managed the pricing decisions in this environment in a highly centralized sophisticated fashion better than many of our independent operators have managed it at the local level and as you know we’ve put tools in place and we’re rolling out tools to address that to further try to bring rational pricing to our franchisees in some cases where the good news is they’ve maintained the margin they would like to have, the bad news is they’ve priced the product beyond where the customer’s willing to pay. And so pricing and that whole issue of making sure we have the right price out there would be the second thing that I would point to. And then the last thing is the power of technology and Team USA has the longest experience with Pulse. We’ve implemented it. It’s become, you know, the fabric of the operations of the store. It’s helped us in many areas not just order entry but reducing theft. It’s helped us tremendously in terms of speeding up our operations and providing better customer service. It’s helped us manage our labor more efficiently through the labor scheduler component and online ordering continues to be a very important growing segment of how customers want to order and we’ve been positioned to do that at a higher level and have outpaced the franchisees in that area because of our early adoption of Pulse. I could talk more about differences but I think those are three of the big ones and the ones we’re most focused on.

Your next question comes from Jeffrey Bernstein – Lehman Brothers. Jeffrey Bernstein – Lehman Brothers: First is on the commodities we saw briefly and further significant domestic COG pressure seems like an acceleration from 1Q yet it seems like sales trends stabilized from a comp perspective. Just wondering if you could talk about your outlook going forward for cheese and wheat and whatnot, wondering whether we could see a significant reduction [inaudible] in coming quarters. It seems like costs have moderated to a certain degree in terms of the public market. David A. Brandon: Well from the last time that I spoke with you, we keep a ten year chart called the Domino’s Commodity Index which is a weighting of all the commodities that we buy to operate our business that translates to the store level and our ten year commodity index has continued to increase from the last time I whined about it and it’s been on a pretty steady trend so we’re in a situation where costs fundamentally continue to be significant. You know cheese during the recent past has gone back up to historically high levels. We have continued to have a lot of inflation pressure and here’s the way we’re approaching it. We’re approaching it from the standpoint that it’s never going to get better. Our attitude is as opposed to sitting back and waiting for commodity prices to come down which we all fundamentally believe they will but when and how that happens is not something that we can necessarily get a lot of productive results from. What we’re going to do is focus on the cost structure that we have today, where do we need to go with our traffic and order counts and pricing strategies to make the kind of returns that we need to make at the store level to keep our franchisees happy and our corporate unit happy and that’s our focus. So it’s tough and everybody knows it’s tough and I’m sure everybody in my line of work is talking about how tough it is but we’re operating on the basis it’s going to be there for awhile and we’ve got to figure it out. Jeffrey Bernstein – Lehman Brothers: If we were to assume at least cheese and wheat prices remain stable here would you not start to see [inaudible] to turning more favorable over the next quarter or two and see that index [inaudible] come down or? David A. Brandon: Yes, again I mean speculating on commodities which is a dangerous line of work for me to enter if commodity markets react and behave the way they should and the way they have historically, and I’m talking about for tens of years, at some point in time with the margin levels that for instance exist in wheat farmers are going to start planting a lot of wheat and you should see correction and my understanding is that some of the crop forecasts look that they’re may be some relief in sight in that particular area. Same thing with dairy and milk and the cheese commodity, we believe that there’s probably some relief out there but we’re not going to sit around wait for it. Jeffrey Bernstein – Lehman Brothers: Then just kind of on a different front, the industry revenue and cost pressures that you’ve talked about I believe in the past you’ve mentioned you’ve seen some independent store closures and I just wondered if you could talk about that and perhaps more just the rational versus irrational promotional environment by both your national peers and your independents. David A. Brandon: Yes I wish I could be more crisp with an answer here. I can’t. We’re just going to have to let some time pass because the only monitor we really have is the share tracking that’s done by third parties in this industry and they’re directional at best. When you have an industry that’s comprised of nearly 70,000 retail outlets and the vast majority of them are private and small it’s very difficult to come up with some kind of a tracking that would be more of a CPG kind of a tracking where you have more specific numbers and you can identify trends quicker. Our belief and it’s more anecdotal than it is statistical is that the pressure that’s happening out there is clearly creating closures. I mean we’re seeing a few of them and we’re stronger and we can buy cheaper and we’ve got a better brand and a 47 year track record. You know we’re in a position where we feel the pressure with our weaker operators. We can only conclude and we’re witnessing that same pressure translating in an even bigger way to a number of the smaller operators out there. But it’ll take a couple of quarters for that to show up in some of the data that we can share with you and certainly when it’s available we’ll be talking about it. Jeffrey Bernstein – Lehman Brothers: Lastly the ability to transfer ownership to these stronger franchisees that you’ve spoken about. Any impact from the credit markets or any trouble from the franchisee perspective or it seems to be going smoothly? David A. Brandon: Well listen the credit markets are very, very tough. There’s no question about it. It’s not as easy to go out and obtain capital financing as it once was for all the reasons that we understand but having said that when you identify particularly our A franchisees and many of our B franchisees these are, to a large degree, franchisees who own their businesses, their stores are paid for. They are credit worthy. They have businesses that are generating cash and they’re also very smart business people and when they find somebody who’s in trouble that’s got a store that hasn’t been operated properly and they can buy that asset for $0.20, $0.30, $0.40 on the dollar in terms of replacement cost they’ll come up with a way to finance it. They’ll turn that store around and very quickly it’ll become a credo to their income statement. So we’re seeing a lot of activity out there as I’ve already given you in very specific terms about how our franchisees are reacting and we continue to believe that good operators will find the capital they need to continue to build their business and we’re helping them in every way we can.

Your next question comes from John Glass – Morgan Stanley. John Glass – Morgan Stanley: David, you had mentioned there were roughly 247 of these F franchisees out there which I think is the same number you quoted last time so what’s the feasible time frame to get them to graduate from F’s to higher grades or is it 247 but the composition is different, some have come down and others have gone up? David A. Brandon: Yes and we’re trying to keep this simple enough that people can understand it. It’s a little more of a dynamic process but what I will tell you is that the F franchisees that we’ve identified that were operating in an unacceptable fashion who have committed to us that they’re prepared to turn that around, they’re on a short leash. We are inspecting them regularly. We are micromanaging the operations of those stores. We’re going to protect the brand and we’re going to walk the talk and so we’re getting immediate feedback on whether these guys and gals are in fact stepping up their game as they promised they would and to the extent we determine that’s not the case we’ll have a different conversation. So it is a daily activity here. Our area leaders and the folks that we have out in the marketplace are responsible for monitoring those situations carefully. We’ve seen some significant success stories, people who have turned it around and really have regained momentum and we’re pleased about that. We obviously need more of them but I like where we are today. John Glass – Morgan Stanley: In the closures this quarter you reported 43 closures I guess is similar to last quarter. Were those the terminations that you referenced and if that’s the case should we expect another 90 or so to come in the balance of the year or are these closures maybe voluntary closures? David A. Brandon: First of all, it would be all of the above, the people that have basically been invited to leave and have chosen to leave. Certainly some of those stores that have not yet been re-sold reopened would be in that category. Those would also be people who have just financially failed in that territory that they had would now become available for us to re-franchise so that is the number. If you look historically, we’re always going to have more closures in the first half of the year than we do the second half of the year. That certainly is the normal trend and although we’re not in normal times I would tell you that our sense of things as I mentioned earlier closures are somewhat on the decline. I think there’s more hope and optimism in our system right now with a variety of the initiatives we have under way and the traction that we’re starting to see from those and so I think the energy level is up a little bit and people are hanging in there in terms of wanting to participate in the next wave of growth that we all believe is out there waiting to happen for us. I’m not one to give a lot of projections going forward but what I did mention is on a net basis, this is opens minus closes I believe the downside for calendar year 2008 is somewhere between a negative 50 to 70 stores domestically so to me that’s as bad as it gets. If we continue to slug it out in a really tough environment we could see on a net store basis domestically a negative 50 to 70 stores which as you know across the population of nearly 5,000 stores doesn’t make me happy but since those are our lowest volume and most troubled stores I also don’t look at that as a situation that’s intolerable. I also want to point out that we are ramping up our activity and doing a great job international and that’s why I feel confident saying we’re going to be able to hit that 200 to 250 net number even in light of the fact that we’ve got some struggles domestically. John Glass – Morgan Stanley: Wendy, you had mentioned that the distribution margin had improved and there was some pressure from cheese but you mentioned something else you had done related to labor. Is there something new this quarter, something program in place improved margins that they should stay above 10% from here on in?

We have gained some operating efficiencies on the transportation side and also labor as a percentage is lower due to the higher prices. John Glass – Morgan Stanley: And that took effect this quarter as it relates to transportation or is that something that’s been ongoing? David A. Brandon: We’re basically ramping up that initiative. Frankly, we’re taking a look at some of our stores in terms of the number of deliveries that was required to service those stores appropriately. We’ve also played around and tested some formulations with our dough products, which is primarily the driver of the windows of use for our products and we’ve come up with some formulas that give us a little more room so we’ve done a good job. David Mounts and his team have done a very good job of coming up with some cost savings initiatives in supply chain particularly as it relates to transportation. There are other things they’re doing, but that’s one of the primary things and we feel comfortable that kind of the margins that we’re maintaining today are something that potentially we can sustain.

Your next question comes from John Ivankoe – J.P. Morgan John Ivankoe – J.P. Morgan: As we are able to calculate G&A by segment those numbers actually look like they’re staying a little bit higher than I would have thought in the second quarter given some of your cost savings initiatives. Was that the case and maybe as you would be pulling back in other areas you’re investing in others, you know, to keep the G&A spending relatively healthy in the company? David A. Brandon: We’re all looking at one another a little puzzled, John, so maybe that’s something we should talk about offline. John Ivankoe – J.P. Morgan: For example, even in domestic stores we kind of back into a G&A number by the way that you report your costs of goods sold and you report your DNA and you report operating and comp and that’s fine we can talk about that offline. Let me maybe with that same line of question how do you comment in terms of what your spending is at the field level, I mean for example on corporate stores if that’s something that we should see a noticeable decline in as you know are beginning to sell those 60 stores for example over the first half and also on the corporate side as well. David A. Brandon: Well, advertising is obviously a big component of G&A so maybe when we have our conversation that’s going to be something that we’ll talk about. Selling those stores in California, you know, fundamentally what we’ve done is we’ve taken a market that we were performing pretty well in. We’ve franchised those stores. We will be collecting 5.5% royalty as opposed to the EBITDA that was being generated by those stores and the most significant issue for us financially over time is really not how that’s going to impact the income statement. It’s just going to be several dozen less stores for us to have to invest capital in because now that capital requirement will shift over to the franchisee. But also the marketing spend at the local level will shift with those stores. So that will create some noise in our financials that we’ll be talking about over the next few quarters because we’ve obviously reduced the size of that corporate store portfolio. John Ivankoe – J.P. Morgan: I know and certainly I do remember last year there was some market-to-market accounting that actually helped your company’s store margins in the second quarter last year. I guess the cheese prices rose relative to where your hedges were and I think you did mention that as a [lap] that you were facing versus the first half in 2007. Is there a way to quantify what that meant to margins and how that may have contributed to some of the margin decline for company stores? David A. Brandon: Since Bill was in the saddle during that period I’m going to let him comment on that. William E. Kapp: Yes, the number we reported the number it’s a $1.6 million benefit one year ago in Team USA or in corporate margins so the benefits of food costs, John, a year ago was the $1.6 million. John Ivankoe – J.P. Morgan: Okay, and so that’s okay I mean that’s pretty big I mean it’s something like 170 basis points or so. William E. Kapp: Yes, it’s a big number. Correct. Yes. John Ivankoe – J.P. Morgan: Was that just a benefit I mean was there any benefits in the third quarters and the fourth quarters that we should be sensitive to? William E. Kapp: There was a small benefit in Q1 and a but the biggest mark-to-market occurred in Q2. So everything else no there’s no margin impact. There’s some nickels and dimes in Q3, but no margin impact there. So will return to normal run levels. Yes. John Ivankoe – J.P. Morgan: Thank you and David Brandon you mentioned being very strategic on pricing and I just want to see if I can you know understand that now. Obviously you don’t want to take pricing to the extent that you run customers away but inflation expectations are clearly going up at the consumer level and one of your largest competitors was talking about taking pricing as well so I mean, could you kind of allow us to give us a little more color in terms of what you think the future direction of pricing would be at U.S. stores? David A. Brandon: First though everyone has to take pricing up. You know, I’ve been saying that for a year and everybody’s been taking pricing up if you look at all the data ticket ramp in this category has gone up significantly for all the reasons we understand. So that has happened and frankly will continue to happen if we continue to see the kind of cost pressures both in terms of minimum wage increases and their impact, gasoline prices at the pump and then all the commodities that drive our stores. So we’re in a situation where we have a lot of cost pressure and so how do we react to it? When you have a category that’s driven by 85% deal pricing as we’ve discussed in the past that means that somebody in those local independent businesses is waking up every morning, every week, every month and deciding what they want to do with their pricing strategies. So we entered this, and this is a big learning for us and shame on us, I wish we could’ve gotten ahead of this curve, but what happened is our operators started getting pounded with these cost pressures coming at them at once in virtually every segment of their cost structure and it was a totally uncharacteristic environment for them. It was unprecedented and so they began freelancing in terms of what do we do with our pricing to reflect the realities of today’s cost. And what we’ve done is we’ve gone back and looked at what they did and in many instances it was just irresponsibly done. Not that it was irresponsible to raise prices, but how we did it, where we did it, when we did it in many cases had a very debilitating impact on consumer reaction and ultimately in traffic in our stores. The best evidence of that, and we don’t share specifics in terms of traffic versus ticket trends in our business because we think it’s proprietary but I will tell you this, over the last two years what Team USA has done is fundamentally increase prices higher than the franchise system while at the same time experiencing a lower rate of traffic decline. And to me that means we’ve done a better job of increasing pricing where we can, how we can without it being at the expense as much as the expense of traffic whereas our franchisees, and I hate to use the world reckless because that’s pejorative and I’m not being pejorative. In many instances they’re just getting hit with cost increases everywhere and probably to a degree hitting the panic button. We start making these highly de-centralized pricing decisions and before you know it, we’ve taken value out of the product and out of the experience for our customers and our traffic goes away. And so we’re going back and we’re fixing that and it’s all about promotional price points, bundling, menu pricing, it’s a lot of different moving parts but it’s an important initiative and it’s one that, as we get it right, we’re going to feel it in a better improved traffic performance among our franchise system. John Ivankoe – J.P. Morgan: Okay, and it sounds like you’re even further along today than you were three months ago for example, and moving that along. David A. Brandon: Absolutely. John Ivankoe – J.P. Morgan: Is that something that would be noticeable at the store level? I mean are there franchisee, in other words at the franchisee level I mean, are they saying “Wow. We’re really pricing differently now than we were six months ago”, for example? David A. Brandon: I think you’ve seen among our bigger operators the answer would be absolutely “yes” because they were the first ones to kind of get to this issue and they’re the first ones we go to. You know, we put tools together and we’ve got test markets in place with all kinds of pricing ideas in mind in terms of how we can approach different markets in different situations cause remember, you know, it’s not one size fits all out there and some markets were the clear market leader and pricing leader and other markets were weaker and those circumstances require a different set of strategies. So I don’t want to go a lot deeper here because, frankly, there’s nothing more proprietary than our pricing strategies and what we have planned. I’ll just tell you this is a high area of intensity for us and there’s a lot of opportunity when we get it right.

Your next question is a follow-up question from Joe Buckley – Bank of America. Joseph Buckley – Bank of America: I had a question on the marketing front. First I know you’re sponsoring the Batman movie and I guess I’m curious if you could talk a little bit about that and maybe past experiences with movies if you’ve done this before and then looking forward with the Olympics around the corner anything as much as you’re willing to discuss, any marking plans around the Olympics, you know, something there is high TV viewer ship. David A. Brandon: First of all, the release of Batman. In my ten years here, if we did another movie I don’t remember it or if we did it was at a much smaller scale. We have not particularly been active in that space because it’s pretty risky. You have to make the commitment long before you know whether the movie’s any good or whether it’s going to sell any tickets, so we waited until the movie came along that we knew was going to be the biggest box-office hit of all time and then we decided to tie in with that. No, actually we’re very lucky with Batman. We thought it was a good property and our friends at Crispin and our other promotional agency partners identified this as an opportunity and we felt good about the movie. Obviously it’s turned out to be something far more sensational than we could have ever predicted. We’re happy to be tying in with it. We have a really creative online opportunity for those zealots who love this movie and love the story and go online. You really need to visit The Vault and see kind of how we’ve translated our tie in with the movie to something that we think creates a lot of buzz in that community. We’ve got a commercial on the air with a special product and a special package. We’ve done, I think, a very nice job. I’m very proud of our marketing team for putting together a turnkey promotion with a consumer overlay in the form of a sweepstakes. A lot of PR buzz. Great online presence and something that works really well on TV and oh, by the way, we were really helped by the fact that the movie’s a big sensational hit. Having said all that, you’ll have to find out later how sales are going cause I can’t talk about that. As it relates to the Olympics, any time people are sitting in front of a television set, glued to things that are happening that’s good for our business. It’s good for pizza delivery and it’s good for Domino’s so as it relates to the Olympics without going any further in terms of any of our plans and programs during that timeframe, I can tell you we’re looking forward to it because usually that’s a great opportunity for us. Joseph Buckley – Bank of America: Thank you. Will you have something, I mean not to throw it around necessarily, but will you be stepping up your promotional activities during that timeframe, is it fair to say? David A. Brandon: We have a lot of news around the corner, Joe. That’s all I’m going to say.

There are no further questions, I would now like to send the conference back over to David A. Brandon. David A. Brandon: Listen, I just want to thank you for your time, all of you. I’m sure it’s tough listening to some of the recurring issues in our domestic business that we continue to work on. We’d always like these turnarounds to be faster than they are. It’s been tough for us, too, but if nothing else, I want you to know I’ve got a committed team here of passionate folks who are highly incentivized to work with me and work with our franchisees to get things turned around and add all of our domestic success that’s around the corner to what’s happening in our international business, fix what’s broken and be successful. So we’re fast at work, hard at work and I’m going to look forward to talking to you at the end of the third quarter to give you an update on these initiatives and some of the other things that will be happening in our business. Thank you all for your attention today.