Peter Koumas - The Wendy's Co. Todd A. Penegor - The Wendy's Co. Gunther Plosch - The Wendy's Co.

Matthew DiFrisco - Guggenheim Securities LLC Andrew Strelzik - BMO Capital Markets (United States) Will Slabaugh - Stephens, Inc. Jon Tower - Wells Fargo Securities LLC David Palmer - RBC Capital Markets LLC Anna Papp - Sanford C. Bernstein & Co. LLC Jason West - Credit Suisse Securities (USA) LLC Jeffrey Bernstein - Barclays Capital, Inc. John William Ivankoe - JPMorgan Securities LLC Jake Rowland Bartlett - SunTrust Robinson Humphrey, Inc. John Glass - Morgan Stanley & Co. LLC Matthew Robert McGinley - Evercore Group LLC Michael W. Gallo - C.L. King & Associates, Inc. Frederick Wightman - Citigroup Global Markets, Inc. Dennis Geiger - UBS Securities LLC Gregory R. Francfort - Bank of America Merrill Lynch

Ladies and gentlemen, thank you for standing by. Welcome to The Wendy's Company earnings results conference call. I will now turn the conference over to Peter Koumas, Director, Investor Relations. Please go ahead, sir. Peter Koumas - The Wendy's Co.: Thank you and good morning, everyone. Today's conference call and webcast includes a PowerPoint presentation, which is available on the Investors section of our website, www.aboutwendys.com. Before we begin, please take note of the Safe Harbor statement that appears at the end of our earnings release. This disclosure reminds investors that certain information we may discuss today is forward-looking. Various factors could affect our results and cause those results to differ materially from the projections set forth in our forward-looking statements. Also, some of today's comments will reference non-GAAP financial measures, such as adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate, free cash flow, and systemwide sales. Investors should refer to our reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure. Our conference call today will start with an update on key initiatives from our President and Chief Executive Officer, Todd Penegor, followed by a review of our third quarter results and full-year outlook by our Chief Financial Officer, Gunther Plosch. After that, we will open up the line for questions. With that, I will hand things over to Todd. Todd A. Penegor - The Wendy's Co.: Thanks, Peter, and good morning, everyone. Let's start by taking a look at our third quarter highlights. We have now delivered 19 consecutive quarters of positive same-restaurant sales in North America, a streak that is unmatched in the current QSR hamburger category. Same-restaurant sales increased 2% on a one-year basis and 3.4% on a two-year basis. These results include the impact from the unfortunate weather events that took place this quarter, which we estimate negatively affected our North America same-restaurant sales by approximately 30 to 40 basis points. Before moving on, I want to say that our thoughts and prayers are with those who have been impacted by the recent hurricanes. We've heard many stories from our franchisees and restaurant teams about how they have helped their local communities, and for that, we are grateful. We continue to execute towards our global expansion plans by opening 42 new restaurants in the quarter and have opened 110 restaurants year-to-date, which is almost 30 more restaurants than we had opened this time last year. Global systemwide sales growth continues to outpace same-restaurant sales behind our restaurant development achievements, with a 3.4% increase in constant currencies in the third quarter. 39% of the global system is now image activated, and we remain on track to achieve our 2017 target of approximately 42%. We continue to make progress in adjusted EBITDA margin, which highlights our improved quality of earnings, driven by higher franchise revenues and savings in G&A. We are pleased to report a year-over-year increase of 400 basis points, bringing us to 31.5% in the third quarter. In addition to adjusted EBITDA margin, free cash flow has also benefited greatly from our higher quality of earnings, and year-to-date we have generated $123 million, which is more than four times greater than a year ago. Based on the encouraging results experienced during our test, we are starting to broaden our delivery offerings throughout the U.S. With DoorDash as our partner, we are targeting to have delivery available in 48 markets by the end of the year, which would encompass approximately 2,500 restaurants. We are excited about expanding access to our brand further and continuing to find new ways to provide convenience to our customers. We continue to stick to our playbook of utilizing a balanced marketing approach and remain focused on driving profitable customer count growth. As a result, according to The NPD Group, we have held or gained traffic share in the QSR hamburger category for the past eight consecutive quarters, and our same-restaurant sales have outperformed the QSR sandwich category for 37 out of 39 weeks this year. We started off the quarter by bringing back the $0.50 Frosty promotion for a second year. This promotion continues to show the advantages of a strong price-pointed offering by driving traffic and contributing to check growth. In conjunction with the $0.05 Frosty, we introduced the Bacon Queso trio, which was a great opportunity to show off our ability to innovate with on-trend flavors and also highlight our fresh never frozen beef and our improved chicken offerings. Next up was the Giant Junior Bacon Cheeseburger $5 Meal deal. By adding this bundled offering to our menu, while still keeping the 4 for $4 active, we gave our customers the flexibility to trade up for $1 and receive double the beef, double the bacon and double the cheese. We also continued our partnership as the Official Hamburger of the NCAA by hosting highly visible tailgate events at college football games across the nation reminding fans that they should never settle for frozen beef. Moving now to restaurant development, during the third quarter, the global system opened 42 new restaurants with 29 opening in North America and 13 in our international markets. Our year-to-date progress is even more noteworthy at 110 total openings and 49 net. We're adjusting our 2017 net new unit outlook for North America and now expect to achieve between 0.5% and 1% growth which is slightly lower than our original expectations of approximately 1%. The adverse weather events experienced in the third quarter affected some of our key development areas, and at least 20 restaurant openings have shifted from 2017 to 2018. Our outlook for international net new growth remains at 14%. We continue to make progress towards our Image Activation goals with 39% of the Wendy's system now image activated. One out of six franchisees have already updated at least 60% of their restaurants, and six of our largest markets are also at least 60% image activated. We applaud our franchise partners that are leading the way with this important initiative and making our restaurants a place our customers love to go. Lastly, Image Activation provided a tailwind of 70 basis points to our North America same-restaurant sales in the quarter, and we expect IA to provide a tailwind of 70 basis points for the full year. A balanced marketing approach contributing to consistent same-restaurant sales growth, new restaurant development and the reimaging of existing restaurants are all key factors that will enable us to achieve our 2020 target of $12 billion in systemwide sales. In North America, systemwide sales growth outpaced same-restaurant sales by a full percentage point, driven by the positive benefits from our new restaurant development. Internationally, we showed great year-over-year improvement of 13.4%, driven primarily by solid net new unit growth along with organic same-restaurant sales growth. Japan, Chile, and Indonesia all recorded very strong total sales growth, and their positive contributions more than offset the suppressed sales in the Caribbean, which were impacted by this year's storms. We estimate the negative impact to be about 3% in the quarter, and we expect these headwinds to continue to impact our international business into the foreseeable future due to a long road ahead for Puerto Rico. Year to date through the third quarter, on a global basis, systemwide sales have grown 3.7%, which is 70 basis points ahead of our growth at this point last year. We continue to be excited about the great work being done by all of our restaurant teams across the globe. Buy & Flips continue to be a key strategic initiative for us, as we strengthen the system by ensuring restaurants are in the hands of strong operators that are committed to long-term growth. In the third quarter, the company did not facilitate any Buy & Flip transactions, but we have completed 410 so far this year, and are now increasing our full-year expectations to 500 to 550. Buy & Flips as well as system optimization have allowed us to add about 60 new franchisees to our North American system since to 2014. Half of these additions have come from succession planning by our legacy franchisees, and the other half are franchisees that are completely new to the Wendy's system. This healthy turnover has left us with a stronger base of franchisees that has financial and operational capabilities that will allow us for further expansion and growth. Everything at Wendy's centers around delivering on our brand promise of delighting every customer, period. In order to achieve this, we have to be focused on providing great value, investing in the quality of our food, delivering exceptional service, and elevating our restaurants. We are proud of our fresh and honest ingredients, helping create food our customers love. The launch of our new Chicken Tenders with a Side of S'Awesome sauce as well as the introduction of our fresh-baked cookies shows our dedication to continually innovating around our food. In addition to introducing new innovative products, we will always remain focused on our core offerings and are pleased with the progress being made in some of our key brand health metrics. Great tasting hamburgers, using real ingredients, and having fresh food are all metrics that are resonating with our customers more and more. As we have discussed over the past couple of quarters, we are very focused on improving our customer satisfaction scores and creating an experience that brings our customers back. After implementing our new Voice of the Customer program a little over a year ago, we have seen high single-digit improvement in our overall satisfaction scores and have also seen year-over-year improvement in our consistency gap. We are confident this program along with our customer experience evaluations and playbook will continue to help us make progress in this very important area. A lot of our future growth and success is dependent on our franchisees. So it is imperative to ensure that they are aligned behind our growth initiatives and remain optimistic about the future at Wendy's. At Investor Day in February, we shared the results of the 2016 FBR [Franchise Business Review] franchise survey and how we stacked up against our peers. The 2017 survey results are now final. And across the same five key metrics, general satisfaction, financial opportunity, a sense of community, training and support, and leadership, we are once again outperforming our peers. This year, our outperformance has increased even further, and we have been named one of FBR's Top 40 Food & Beverage Franchise Brands. We are proud of the progress we have made thus far, but we are always focused on fostering strong relationships with our franchisees, and the most compelling way to do that is by continuing to focus on the restaurant economic model. Now, I'll pass the presentation over to GP to take you through our third quarter financial highlights. Gunther Plosch - The Wendy's Co.: Thanks, Todd. Our third quarter results demonstrate the strength and resiliency of our highly franchised business model, even while facing difficult industry dynamics and uneven prior-year comparisons. We are encouraged by our systemwide sales growth, higher adjusted EBITDA margins, and significant enhanced cash flow generation, but acknowledge there's still work to be done. Starting with company restaurant margins, in the third quarter our margins decreased 170 basis points year over year to 16.7%. The decrease was primarily the result of short-term pressures from beef and bacon prices as well as our investment in chicken quality that was made earlier this year. G&A expense was $53 million in quarter three compared to $58.9 million in 2016. The 10.1% year-over-year decrease was mainly due to lower professional fees and savings from our system optimization initiatives. Adjusted EBITDA was $96.9 million in the third quarter of 2017, a 3.3% decrease compared to the third quarter of last year. Our 400-basis point improvement in adjusted EBITDA margin exemplifies our higher quality of earnings resulting from our system optimization initiatives. Adjusted earnings per share were $0.09 in the third quarter of 2017 compared to $0.11 in the third quarter of 2016. Free cash flow continues to be strong, with the year to date coming in at $123 million, which is an increase of 330.6% versus the prior year. The significant improvement was driven by a reduction in capital expenditures as well as an increase in cash flow from operations. We remain encouraged by our adjusted EBITDA margin improvement as well as the fact that we were able to overcome the sold restaurant EBITDA from system optimization through higher royalties and net rental income as well as savings in G&A. However, headwinds in franchise fees, driven by the sale of 156 company restaurants and 18 Buy & Flip transactions in 2016 as well as lower company restaurant margins caused a slight year-over-year decrease in adjusted EBITDA. Moving now to adjusted earnings per share, we ended the quarter down $0.02 when compared to 2016, driven by slightly lower adjusted EBITDA and unfavorability in the tax rate. The year-over-year increase in the tax rate was driven by a favorable change in valuation allowances in the prior year. Returning cash to shareholders remains a top priority for us. Year-to-date, we have repurchased about 6 million shares for about $91 million, with 2.5 million shares for $38.4 million occurring in the third quarter. We ended quarter three with $187 million of cash on our balance sheet which, along with continued free cash flow growth, provides us the ability to effectively and consistently return cash to shareholders. We remain confident in our capital structure, as it gives us the flexibility to accommodate all aspects of our capital allocation strategy, which includes investing in our business to drive future growth, a strong dividend and share repurchases. As you know, all of the funded debt within our capital structure is made up of fixed rate instruments and we continue to target leverage in the range of 5 to 6 times. On a trailing 12-month basis, our leverage ratio currently sits comfortably at 5.3 times. Now, let's take a look at changes to our 2017 outlook. After analyzing year-to-date results and refining our forecast for the remainder of the year, we are tightening the range for North America same-restaurant sales to approximately 2% to 2.5%. Company restaurant margins are now expected to be 17.5% to 18% for full year 2017, which is down slightly from our prior guidance of 18% to 18.5%. With commodities and labor expectations remaining unchanged, the downward pressure on margin is due to lower than expected same-restaurant sales at company restaurants. Despite the headwinds on company restaurant margins, we are reaffirming our adjusted EBITDA guidance range, which has been increased twice since our Investor Day in February and continues to reflect the positive benefits from our higher quality of earnings. Our adjusted tax rate expectations have increased from 32% to 34%, to 34% to 36%, primarily due to an unexpected state tax ruling resulting in additional deferred tax expense this year. Due to the increased tax rate, we are updating our adjusted earnings per share guidance to $0.43 to $0.45. We are also updating our ranges for capital and free cash flow. With better visibility into full-year results, we now expect capital to come in between $80 million and $85 million and free cash flow to end up between $170 million and $180 million. We look forward to finishing 2017 strong and carrying momentum into 2018. And with that, I'll hand the presentation back over to Peter before we open up for Q&A. Peter Koumas - The Wendy's Co.: Thanks, GP. I'd like to quickly review some upcoming events on our Investor Relations calendar. On Monday, November 13, GP, Lauren Cutright and I will be in Boston for a one-day road show hosted by Chris O'Cull of Stifel. And on Tuesday, November 14, we will travel to New York to participate in the Morgan Stanley Global Consumer & Retail Conference. If you're interested in meeting with us at either of these events, please contact the respective sell-side analyst or equity sales contact at the host firm. And finally, on Thursday, February 22, we plan to release our preliminary 2017 earnings along with our updated 2018 and long-term outlook and host a conference call. With that, we are now ready to take your questions.

Your first question comes from the line of Matthew DiFrisco with Guggenheim. Matthew DiFrisco - Guggenheim Securities LLC: Thank you. My question is with respect to the pipeline and how we should think about 2018 as far as early indications of sort of that 1% pace of growth. Should the extra half a point or so were those stores – the 20 or so stores that are moving into 2018, is that incremental to the 2018 pipeline or are there similar guys who are going to be opening – who are going to open up those stores are also on deck to be opening up 2018, so there's only so much they could open? So not necessarily fully incremental to shift into 2018. Todd A. Penegor - The Wendy's Co.: Yeah, Matt. The pipeline for 2018 on new unit development remains strong. As we did say on the call, we had some impacts especially in Florida and Houston with the hurricanes and some of those units shifting into 2018. Still a little early in the game to really understand are those truly incremental to 2018 or do things just shift between 2018 and 2019, when we look at the capacity from a human capital perspective to get all these projects done during the course of next year. We'll give you full visibility once we have that all locked down on our call in February. When we put 2018 guidance, we'll be in a better position with the joint capital planning with the franchise community to give you a firm estimate on that. Matthew DiFrisco - Guggenheim Securities LLC: Understood. And then can you just give us a little color on what was the improvement or I guess the narrowing of the CapEx? Was it just simply having a closer look at what the cost of things were or were there some items that perhaps in the comp environment or in the commodity cost environment you're deferring to next year as far as CapEx? Gunther Plosch - The Wendy's Co.: Hi, Matt. It's really a function of taking a closer look. As you know, we had a very wide range of $10 million in the guidance. We kind of narrowed it and no essential projects are falling off. We're doing what we need to do. It's just a matter of having more visibility. Matthew DiFrisco - Guggenheim Securities LLC: Excellent, thank you so much.

Your next question is from Andrew Strelzik with BMO Capital Markets. Andrew Strelzik - BMO Capital Markets (United States): Hey. Good morning, everyone. Just one quick housekeeping item. Given your company ownership of stores in Florida, was there a disproportionate impact on the – relative to margins? How much did the hurricanes actually impact the company on margins in the quarter? Gunther Plosch - The Wendy's Co.: Andrew, this is Gunther. We said like hurricanes from a top line point of view impacted us about 30 to 40 basis points of headwind. From a top line point of view, company was on the high end of it, about 40 basis points. There was a small impact on margin year over year, but was actually too immaterial to call out separately. The real driver of margin in the third quarter was commodities. As you know, we have 230 basis points of adverse commodity, which really translates into about 7.5% commodity inflation. We really did a good job on labor. Like, labor is 30 basis points adverse to prior year. That actually really is a net inflation of 1%. Labor inflation actually was about 4% in the quarter. Our labor mitigation strategies actually is helping us to contain the labor headwinds that we have. Andrew Strelzik - BMO Capital Markets (United States): That's very helpful. Thanks. And then if I could just add one more. The 7,500 global unit count target that you guys reiterated today implies more than 4% development from 2018 to 2020 roughly. So, what's your level of confidence in actually achieving that? And when do you anticipate we might start to see that – bigger acceleration starts to show up in numbers recognizing that the commentary around development certainly today was very positive? Gunther Plosch - The Wendy's Co.: Andrew, a couple of points on this. For the time being, you can still assume that 7,500 restaurants is the right planning number for 2020. Again, we have different levels of growth, right? So we have a little bit more of 2% CAGR in North America and we have about an 18% development CAGR international, right? So it's different component of growth. For the time being, the numbers stand and we are pushing hard to get to those objectives. We're obviously going to take the opportunity at the call in February to update those goals if we see fit. Andrew Strelzik - BMO Capital Markets (United States): Great. Thank you very much.

Your next question comes from Will Slabaugh with Stephens. Will Slabaugh - Stephens, Inc.: Yeah, thanks, guys. Wanted to ask about the impact of the $5 Giant JBC deal. How does this impact your traffic and ticket versus expectations, and maybe more importantly how did that $5 price point affect those buying the 4 for $4? And was there any notable cannibalization of your higher-priced combo meals on that? Todd A. Penegor - The Wendy's Co.: Yeah, Will, thanks for the question. The $5 Giant JBC Meal performed right to our expectations. So we had hoped to trade up some consumers from the 4 for $4, really helped us on the penny profit front. We did see that. We knew that there could be some potential trade down from premium, but it was very minimal. So net-net, it performed exactly how we would have expected. It's just part of the arsenal, right? As you think about how do we continue to make sure we have a strong barbell strategy, we continue to look at things like $0.50 Frosty, 4 for $4, introduce things like the $5 Meal, continue to move folks up and across that value menu, but we know that we got to continue to keep strong messaging on the premium too along the way which we did in the quarter with the Bacon Queso trio performance. Will Slabaugh - Stephens, Inc.: Got it. And just a follow-up if I could on the comment you made around company store margins. How much was the chicken quality investment versus beef and bacon pricing impacting the cost of goods year over year? Gunther Plosch - The Wendy's Co.: Hey, Will, the chicken impact was about 35 basis points of a headwind for us. Will Slabaugh - Stephens, Inc.: Great. Thank you.

Your next question is from Jon Tower with Wells Fargo. Jon Tower - Wells Fargo Securities LLC: Thanks for taking the question. Just curious if you could talk about what's going on with the Buy & Flips and specifically upping the number for this year. Is there a good chance that next year we see lower than the targeted 200 stores that you've talked about in the past? Todd A. Penegor - The Wendy's Co.: Yeah, Jon, as we said on the call, we didn't have any Buy & Flips in the third quarter. We've upped the number now to 500 to 550 Buy & Flips on a full-year basis, and we've got continued work where we've got franchisees that are looking at their succession planning and the timing of when they would want to move on out of the system and onto other things. That's really what drove the increase this year. And we don't see it having any impact on the continued guidance moving forward. As you know, we have a long tenured franchise system, and this is part of the healthy and natural turnover that we're seeing, so we continue to see a couple hundred Buy & Flips into the foreseeable future and that's our planning expectation as of now. Jon Tower - Wells Fargo Securities LLC: Okay. And then just a tailwind from the Image Activation came down slightly for this year. Does that have to do with the – similar to the new opening issues that you had for the year delays because of construction costs or anything like that? Todd A. Penegor - The Wendy's Co.: Not delays on construction costs, just timing of when those reimages opened during the course of the year. They just opened a little bit later than we had originally planned, but that's just working through normal zoning and work with the locals. Jon Tower - Wells Fargo Securities LLC: Okay, thank you. Gunther Plosch - The Wendy's Co.: Yeah. Getting the same lift as we always have, it's really just timing. So there's no deterioration in the program. There is no deterioration in the performance. Jon Tower - Wells Fargo Securities LLC: Thanks.

Your next question comes from the line of David Palmer with RBC Capital Markets. David Palmer - RBC Capital Markets LLC: Hey. Good morning, guys. Just a quick question, a thought question on the industry. I guess I'm disappointed with the consumer strength lately in the fast food zone. Given the fact that so many of the big chains, including Wendy's, are playing their A-game with the value, the food news, the restaurant reimaging, God knows the franchisees are spending money, and right now you have less of that deflation of food at supermarket headwind excuse. Wages are going up, so people should be able to spend. But the industry's same-store sales growth is a whopping 1% with negative traffic. So I'm just wondering if you have any thoughts about that. And then I have a follow-up on your free cash flow. Thanks. Todd A. Penegor - The Wendy's Co.: So you're finally starting to see food at home inflation start to tick up. So it actually finally went inflationary in the most recent period, as you know, David. So that gap is just starting to tighten, so you won't see the full impacts of that delta really taking impact in the third quarter. That said, with a lot of the traditional QSR folks playing a good game, you did see QSR traffic start to pick up late in the quarter, so that is an encouraging sign. But you do see across mid-scale, casual, and fine dining that traffic continues to be challenged. And I think that's just a testament to the traditional QSR guys being in the right segment for the consumer needs, speed, convenience, affordability. We continue to all up our quality games. We continue to up our asset games with the reimaging of the restaurants. We continue to up our game on the service experience in the restaurant. A lot of the growth is driven by deal, but it is driven that way because the consumer economic model continues to be under pressure, but we're seeing signs where that's starting to improve too. So that doom and gloom that you articulated, I think we're starting to see some of that pick up a little bit in the QSR segment of the restaurant space. I don't think you see it broadly across total restaurants. David Palmer - RBC Capital Markets LLC: Thanks for that. And on your free cash flow targets, they certainly through 2020 imply significant growth. I think it's something near $100 million off the midpoint. How do you see that stepping up year by year? Do you see that ramping up later in that three-year cycle or more evenly through the year? Thanks, we'll leave it there. Gunther Plosch - The Wendy's Co.: Hey, David. You're absolutely right. Between now, 2017 and 2020, we are going to add another $100 million of free cash flow. It's split basically $20 million in a gradual reduction in capital and $80 million as a result of higher earnings. And again, what is driving our earnings is still another 600 basis points in margin expansion, which is driven by G&A initiatives and obviously unit growth and SRS growth. We have not given, as you know, guidance for the years in between. I can offer a little bit of a picture for 2018 that might help. The tailwind for 2018 is clearly earnings growth, which is driven by G&A reductions, which we have disclosed the pacing on this. As I said, SRS growth and unit growth, definitely you can expect in 2018 a greater reduction in CapEx. And don't forget, we also have year two of our core working capital initiative that we are kicking off really in the fourth quarter of this year, which majority of the effect will bleed into 2018. Again, for transparency, headwinds are going to be the G&A restructuring plan is going to be an adverse effect on our cash flows in 2018. And, again we have disclosed that. It's in the range of $12 million to $13 million for 2018. So that hopefully gives you enough picture in terms of what should happen from a pacing point of view. David Palmer - RBC Capital Markets LLC: Thank you.

Your next question is from Sara Senatore with Bernstein. Anna Papp - Sanford C. Bernstein & Co. LLC: Good morning. This is actually Anna Papp, representing Sara. Can you talk about your 2020 targets in the context of this quarter's slightly lower results than what we might have anticipated? So to the extent that you're holding the line on your EBITDA margin target, what are the offsets if the restaurant margins stay lower for longer? Thank you. Gunther Plosch - The Wendy's Co.: So overall, the way we have constructed the EBITDA guidance is we clearly had a small tailwind by taking the restaurant margin guidance down and taking the SRS guidance down slightly. We were able to offset this by basically increasing our Buy & Flip activities from 475 to about 500 to 550. It's underlying construct why we remain confident that we get to our EBITDA guidance for this year. Todd A. Penegor - The Wendy's Co.: And then for longer term, off of that base, nothing has fundamentally changed at all, Ashley (sic) [Anna], so we still feel very comfortable that we have the initiatives in place to continue to expand restaurant margins. We've got the pipeline in place to continue to drive new restaurant development, as GP said earlier, across North America and international. And we have confidence that we have plans with QSR being the place to be to continue to drive that 2% to 3% sales growth for the long run. Anna Papp - Sanford C. Bernstein & Co. LLC: Okay, thank you.

Your next question is from Jason West with Credit Suisse. Jason West - Credit Suisse Securities (USA) LLC: Yes, thanks. Just going back to the company operations, did you guys break out the same-store sales for company versus franchise stores in the quarter? Todd A. Penegor - The Wendy's Co.: So from a company perspective, we were down 0.5% in the company restaurants. So if you look at it on a two-year basis, system was 3.4%, company on a two-year was 2.2%. So there's a delta of about 120 basis points. IA contributed a little bit. We had a 70-basis point tailwind for the system only, a 40 basis point system for the company, as we're much further along on our IA journey with 75% of the company restaurants now IA'd. You'll also see some differences between franchise and company on pricing and on just geography of where our restaurants are located. We're a small sample size at a little over 330 restaurants today, but we know we've got some opportunities in a couple of markets in our company restaurants and need to continue to up our game and continue to perform well in those markets too. Jason West - Credit Suisse Securities (USA) LLC: Okay, got it. And then the margin compression on the company side, mostly commodity-related. What is the expectation? You said commodity inflation was 7.5% in the third quarter. I don't remember what you had said in the last two quarters, so what does that imply for the fourth quarter then? Gunther Plosch - The Wendy's Co.: Jason, we did not change our commodity outlook, so we still expect inflation of about 3% to 4%. And it makes sense on the year-to-date basis, we're sitting at about 3.3% inflation. So you can expect quarter four about in the same range. Jason West - Credit Suisse Securities (USA) LLC: Okay, got it. And then last thing I guess, so with the industry environment being deal-oriented, you guys did take some price, I think, in the last quarter. Did you feel like there was a bit of a negative reaction to that in traffic or do you think that wasn't really the issue here with the comps? Gunther Plosch - The Wendy's Co.: Great question on pricing. No, we executed the pricing. As we look at, it's definitely performed exactly in line with expectations. You obviously had a little bit of traffic headwinds, but overall it created the net benefit that we expected to have. So on a go-forward basis, obviously pricing is an option we're continuing to look at, but for the time being, that pricing went to plan. Jason West - Credit Suisse Securities (USA) LLC: Great, thanks for the color.

Your next question is from Jeffrey Bernstein with Barclays. Jeffrey Bernstein - Barclays Capital, Inc.: Great, thank you very much, two questions. One, just as you think about the QSR burger category, I know you talked about what you claimed, I guess, was difficult industry dynamics. I'm just wondering if you could provide any color in terms of the market share change for Wendy's in the third quarter, maybe how that compares to the category. And just the ability you think for big three to all sustain comp momentum. I think, GP, you mentioned you expect to finish 2017 strong. I wasn't sure that was a reference to kind of the early part of the fourth quarter thus far. And then I had one follow-up. Gunther Plosch - The Wendy's Co.: Jeff, if you think about some of the business trends that we're seeing recently, we talked a little earlier that QSR is the place to be, so we're seeing some growth in QSR in total. And it's not all equal across each of the subsets in the QSR category. So with the work that all of the big three have been doing, you're seeing the burger category grow a little bit faster than folks like retail and subs/deli and allows us to continue to gain some share in the hamburger subset. That's in total for the industry. Relative to Wendy's, we continue to hold our own and we're very focused on category traffic share. And we just said as part of our prepared remarks that we're now eight consecutive quarters of gaining or holding our category traffic share in the burger segment. So we feel good that we continue to hold our own, continue to bring in more customers and continue to retain them for the long run. Jeffrey Bernstein - Barclays Capital, Inc.: Got it. In terms of the sequential trend through the third quarter into the fourth, is there any color you could provide on that? We've heard some talk about a reacceleration or a nice uptick going into the fourth quarter, and then more recently perhaps others saying softer in October and into November. Gunther Plosch - The Wendy's Co.: So, Jeff, the way we have thought about the guidance is, as you said, we have slightly lowered it to 2% to 2.5%. So it really is an implied guidance for the fourth quarter of about 1% to 3%. That's the range we have and that's the range we're comfortable operating in. Jeffrey Bernstein - Barclays Capital, Inc.: Got it. Todd A. Penegor - The Wendy's Co.: And, Jeff, and we've been pragmatic. As you start to look at not just two-year comps but look at three-year comps as we start to really think about what we've been building sequentially fourth quarter over fourth quarter over fourth quarter, it continues to be positive growth on positive growth on positive growth. So we're planning smartly, too. Jeffrey Bernstein - Barclays Capital, Inc.: Got it. And the other question was just on value. I'm just wondering kind of qualitatively how you think about best competing against your largest QSR burger peer that seemingly is getting more aggressive in terms of promoting value starting in coming months, especially as you're now perhaps battling elevated commodity inflation. I'm just wondering how you think about it within your barbell strategy going into 2018. Todd A. Penegor - The Wendy's Co.: It's still a critical part of making sure that we continue to make our brand accessible to our customers. And when we think about how we want to win, right, we got to continue to tell our brand story, which is all about fresh, and we continue to stay consistent with that. Now moved from 3 in 10 customers really understanding we have fresh in our restaurants to over 5 in 10 today. We know we've got to win on food. We continue to invest in the quality of our food, but we do know that we have to help our customers with value. And those three things have to work hand in hand on both the high and the low. And we need to continue to create some variety that works both for the consumer as well as the franchisees from a profitability perspective on the value side. And that's why you see a nice mixed bag of things that we continue to do around keeping 4 for $4 fresh and ownable with how we continue to evolve that during the course of the year. Bringing things in like $0.50 Frosty to drive urgency into the restaurants but drive some nice average checks. And then look at unique ways to continue to give offerings to trade folks up from those value items into things like the $5 Giant JBC. So it does take variety, it does take consistency, but it is a core part of our strategy to make sure we have a consistent high-low message out there to connect all the consumers. Jeffrey Bernstein - Barclays Capital, Inc.: Great, thank you very much.

Your next question is from John Ivankoe with JPMorgan. John William Ivankoe - JPMorgan Securities LLC: Hi. Thanks. First, just a follow-up on the value theme and then I'll go with a different direction as well. Obviously, McDonald's launching national value next year. Typically it's had a lot of reaction in the market when that has happened. Is there anything that you're doing tactically that we should be aware of to respond to that? I mean I know you have a long-term strategy and what the brand's pillars are, but should we expect some reaction and some preparation in terms of something that what could be a traffic disruptive event for the entire industry? Todd A. Penegor - The Wendy's Co.: No. I think, John, we want to continue to play our game, and it needs to be balanced on the high and the low, and you don't want to swing the pendulum one side too far to the other. We want to continue to compete in value, but we like to win on the quality of the experience, the quality of the food, then quality of the total experience in our restaurants, so the consumer says any time they come to Wendy's, it was worth what I paid. And we think we've got great tools. We've tested a lot of different things. We've got a lot in the tool box that we continue to bring forward, but we do think staying – keeping 4 for $4 fresh and ownable to Wendy's, finding some nice $5 price-pointed items like you're seeing now with the Chicken Tender $5 meal out in the marketplace, things like $0.50 Frosty, those all help, but also bringing other things that can be nice check builders like $0.99 add-on cookie is another good opportunity to provide good value to the consumer while trading folks up on checks. So I think it's the combination of all of those things and we need to stay balanced on both the high and the low moving forward. John William Ivankoe - JPMorgan Securities LLC: And do you think the industry needs to reestablish like $1 sandwiches or $2 slightly premium sandwiches? I mean does the pendulum swing back to where we're promoting $1 burgers for example on TV? Todd A. Penegor - The Wendy's Co.: I think going that low, and you think about the margin implications to the franchise community versus the consumer get and the lift that you might get, I don't know if that's the right way to go and take folks that low. What we've seen is a really nice response to bundled meals, right? We've said this for a long time, lunch is the biggest day-part in QSR business. We really need to continue to deliver solutions for a full lunch in that $4 to $6 price point. That's why we continue to bring offerings there. Our opportunity is, how do you continue to drive continued throughput at that biggest day-part to satisfy the need, speed, convenience, with that affordability at that day-part and technology can play a role to unlock more of that. John William Ivankoe - JPMorgan Securities LLC: Very helpful. Thank you. The other theme is on CapEx. $80 million to $85 million in fiscal 2017, I think the guidance for 2020 if I'm remembering correctly is $60 million to $65 million. What is the path to get there? And I mean is this kind of a fluid, active process to where you look at that CapEx number of something that could flex down to the extent that business conditions kind of present themselves or just what's your thought as you get more into being just an overall capital-light company? How much that CapEx number could come down in the out years and potentially benefit shareholder returns? Gunther Plosch - The Wendy's Co.: Hey, John, our target for 2020 is $65 million. And what we have said is it's kind of really a gradual reduction. It's not kind of step changes as we're optimizing what we're spending our capital on. Remember, there are kind of three capital buckets. The first one is development capital. So as we keep getting buildings done that cost less that will hopefully help us get that capital bucket down. The second one is IT spending. As we have actually had a lot of foundational investment in the base and we are doing a little bit more in the maintenance mode, that's a contributor to the reduction and there's a little bit more to be had on maintenance capital since we are 75% image activated in company restaurants. So think about a gradual reduction over the next three years. John William Ivankoe - JPMorgan Securities LLC: And I know at one point we were talking about build-to-suits in Canada. Is that still an active program and is that part of the $65 million in fiscal 2020? Gunther Plosch - The Wendy's Co.: That's correct. It's still an active program and it's part of the $65 million. John William Ivankoe - JPMorgan Securities LLC: Thank you.

Your next question comes from Jake Bartlett of SunTrust. Jake Rowland Bartlett - SunTrust Robinson Humphrey, Inc.: Great, thanks for taking the question. I wanted to dig in a little bit more to the third quarter and just your – in prior quarters you had really kept pace with the other larger burger competitors. And just wanted to dig in a little bit more and trying to understand why you think you stepped back a little bit, they gave some share. Maybe within that question in the context of your high-low strategy, it felt like you're really more low by the end of the quarter. And wondering whether that might have had some impact. So if you could comment, that would be helpful. Todd A. Penegor - The Wendy's Co.: If you think about within the quarter, we continued to hold share and especially traffic share in the category, which is really important. And we feel good that we had a nice balance. And I think you always got to look in the context of the two-year comps. So our two-year at 3.4% is in line with one of our competitors and slightly behind one other. But there's very few winners and a lot of losers right now in the restaurant space, and we feel good that we continue to compete and we continue to put growth on top of growth and we're very proud of putting together 19 consecutive same-restaurant sales quarter against a difficult consumer environment on many of those quarters. But we are attracting more customers more often into our restaurants over the last four years. And that's an important bellwether to continue to make sure we have a strong restaurant economic model for many years into the future. Jake Rowland Bartlett - SunTrust Robinson Humphrey, Inc.: Okay. And I think there's probably some concern among investors that all three of the larger players can't be successful at once. How do you answer that kind of question more directly in terms of your ability to compete on whatever value has to come down the road, but also kind of maintaining the high-low strategy? Todd A. Penegor - The Wendy's Co.: I know the consumer has a lot of choices out there. And if you go back in history, there are several times as you can point to where all of the big three have grown actually more than 3% in a particular quarter, and that's happened three, four times in the recent past. So, that's the first answer when you think about it. Second answer is, we're in the QSR – traditional QSR space. Speed, convenience and affordability, like I said earlier, are so important to the consumer today, and you're not just competing on price, you're competing on value – value of the food, value of the experience in the restaurant, the environment that we're creating. And we're all investing in that. And we all have scale to withstand some of the pressures that a lot of others have whether it be labor pressure or commodity pressure, to continue to make sure we create experiences that bring our customers back into our restaurants. And we feel that we're really well positioned on all of those fronts and we can really fall back onto the quality of our food. "Quality is Our Recipe" has been on our building since day one. We continue to invest back and renovate into our core food offerings. And we continue to scream from the rooftops, fresh, made-to-order, full customization are things that can set us apart. Jake Rowland Bartlett - SunTrust Robinson Humphrey, Inc.: Great. And then lastly, maybe an early look on your expectations for commodity costs in 2018. I believe 2017 is I think playing out for a number of players a little bit higher than originally expected. But what's your early read on 2018. and what do you think that will mean for the competition among value or the value end of the spectrum? Gunther Plosch - The Wendy's Co.: Hey, Jake, quarter three was definitely a spike. It's probably a one-time bubble, with 7.5% inflation that we had seen mainly behind beef and bacon. We've clearly seen in the meantime that that has come down. It's a little bit too early to actually talk about 2018. Again, we're going to watch this in the next couple of months. And when we're out end of February with our guidance for 2018, it will become a little bit clearer. But clearly, I would say what we saw in quarter three is not the norm. I think it is the exception. Jake Rowland Bartlett - SunTrust Robinson Humphrey, Inc.: Great, thank you very much.

Your next question comes from John Glass with Morgan Stanley. John Glass - Morgan Stanley & Co. LLC: Thanks very much. First just on Image Activation, would you just remind us what the year one lift you're seeing currently when you image activate a store, what the years two and three comp trajectory looks like just so I understand what the tail-off progression is? Todd A. Penegor - The Wendy's Co.: John, so it's been very consistent. We've got many years of performance, and now at 39% of the system reimaged, we consistently see less than that 7% to 10% range in year one. And then what you see in year two and beyond, now that we've got a lot of history, is those restaurants grow in line with the rest of the system. So we've attracted lapsed, we've attracted new, and then we've retained those customers into years two, three, and four. John Glass - Morgan Stanley & Co. LLC: That's helpful. Thank you. And then taking it in a totally different direction, talk about maybe just international and your confidence, for example, in 2018, the growth rate of international. Where are the markets that you're seeing greatest numbers in development? Maybe the comp trajectory, do they open at much lower average unit volumes, for example, in the U.S. and then grow faster or not? And just maybe at a high level across all markets on an average, what the economics look like to you, so we make sure we understand that as that becomes a bigger piece of your business over the next couple of years? Todd A. Penegor - The Wendy's Co.: First off, if you look at the average AUVs across international, they are much lower than what you'd have in North America. They're about $1.1 million as of the end of last year, but all markets aren't created equal. You've got some lower AUV markets across Asia. You've got some very high AUV markets across the Islands and into the Southern Cone or South America. So it's really a function of where we're growing with great partners. Where we're seeing the growth right now is in a couple of markets, and it's been really a testament to the narrow and deep strategy that the team has been executing. So in Japan, we're seeing a lot of growth and some nice same-restaurant sales growth beyond the new development growth. We're up to 24 restaurants now in Japan and that's a testament to our partner converting those First Kitchens into Wendy's First Kitchens. Then just as a reminder, there are 136 First Kitchens out there that they're working to convert over time. We're seeing some really nice growth in the beef-eating markets. So we got a great franchisee that supports us both in Argentina and Chile, and we're seeing some nice growth in Chile both from a development and same-restaurant sales basis. And then in Indonesia, we're up to 75 restaurants, so much lower AUVs, but a great economic model, and clearly the brand is resonating with our customers in those markets. So the strategy is really focused on the seven core markets that we articulated at Investor Day, and you're seeing the benefits of it because you're seeing the growth across those markets. Gunther Plosch - The Wendy's Co.: And I think it's also worth noting that we are slightly ahead on plan. Remember, at Investor Day, we said we would grow units this year by 12.5%. We actually increased that to 14% and 500 restaurants. John Glass - Morgan Stanley & Co. LLC: And the way to look at the economics from a royalty standpoint on average? Todd A. Penegor - The Wendy's Co.: Royalties on average would be in line with the 4% system. It varies, a little lower, a little higher, depending on market and how we're actually trying to work growth, but on average it's pretty darn close to the average that we have. John Glass - Morgan Stanley & Co. LLC: Thank you.

Your next question is from Matt McGinley with Evercore ISI. Matthew Robert McGinley - Evercore Group LLC: Thanks. I have a question on the margin guidance as it relates to the lower than expected comp comment that GP made. You didn't change the labor or commodity outlook, but you lowered the overall restaurant margin guide. I'm not sure if the comment on the comp was a rearview mirror comment about the margin decline that you had in the third quarter based on the comp or if that was a prospective comment about trends continue to remain tough into the fourth quarter. Todd A. Penegor - The Wendy's Co.: No, just a look at our latest outlook on our company business, and if you look at the comment we made earlier being down 0.5% on company restaurants in Q3, that was not to our plan. It provided pressure on deleveraging on our restaurants, and that just translated through into our full-year margin guidance. Matthew Robert McGinley - Evercore Group LLC: Okay. But you would expect less margin pain in the fourth quarter based on the full-year guide, right? Todd A. Penegor - The Wendy's Co.: Absolutely, Matt, and a lot of that's a function of we did get hit hard not on just the deleveraging with the sales being down, but as GP said earlier, we did see this big spike in beef and bacon in the third quarter. So you'll see that moderate into the fourth quarter. Matthew Robert McGinley - Evercore Group LLC: Got it. And on the free cash flow guidance, you're obviously well on your way to getting that guide based on your year-to-date results. You narrowed it a little bit and you raised it a little bit on a free cash flow standpoint, but there's always these year-end nuances of working capital that could add volatility, and I think you had a little bit of that last year. So I guess the question is how good is the visibility on that range, and is there upside or downside risk to that $170 million to $180 million range? Gunther Plosch - The Wendy's Co.: So, Matt, you are right. It's a little bit of volatility at year end, but the way we are thinking about this, we have strong tailwinds on earnings. With the implied guidance we have for the fourth quarter, we're going to have strong EBITDA growth and therefore income growth in the fourth quarter, and we have our core working capital initiative starting in the fourth quarter that's going to contribute and help. Clearly, we have still – if you do the year to go on capital, we have good amount of capital to spend. Net-net, we think the estimate that we have is pragmatic, and we have a very good chance and visibility to get to it. Matthew Robert McGinley - Evercore Group LLC: Okay. Great. Thank you.

Your next question is from Michael Gallo with C.L. King. Michael W. Gallo - C.L. King & Associates, Inc.: Hi, good morning. I just want to delve in a little bit on delivery. It seemed like you've really accelerated the cadence of the rollout, at least from what you conveyed last quarter where it was really just being tested in a few markets. So I was wondering if you can give us an update on what you're seeing and what makes you excited enough to put it in 2,500 restaurants by year end. Thanks. Todd A. Penegor - The Wendy's Co.: Yeah, Mike, we are excited. So what we've seen on our continued results in Columbus and Dallas really gave us the encouragement to go bigger and partner with DoorDash on delivery. As we said on the call, 48 markets here by the end of the year, almost 2,500 restaurants that will be participating in delivery, a function of seeing nice higher average checks. It's still early, so I won't give out the specifics, but we're seeing some significantly higher checks, but we're also seeing a great partner in DoorDash getting deliveries to the consumer in less than 30 minutes from the time they order. So as they deliver one order per delivery, high integrity of the food too. So the consumer's been very pleased with our food. It's prepared fresh made to order when they come to the restaurant, it's delivered quickly and you're seeing that in the results. So we're at 4.6 out of 5 stars, and I think we're one of the highest-rated QSR experiences in DoorDash. So, that gave us all the encouragement. Still see a lot of incrementality especially in the dinner and evening day-parts, but we do see a lot of transaction lifts and help and support at that busy lunch day-part too. So all of those lined us up to have the encouragement to go faster and bigger with a good partner. Michael W. Gallo - C.L. King & Associates, Inc.: And so would you think about that going most of the system sometime 2018? Todd A. Penegor - The Wendy's Co.: Really a function of making sure that we got delivery partners in all of the markets. So we'll go fast where DoorDash is today. We'll have to supplement in markets where they're not with other folks, but we will work hard to continue to expand the access to our brand and to our food wherever we can with the right partners. Michael W. Gallo - C.L. King & Associates, Inc.: Thank you.

Your next question is from Greg Badishkanian with Citi. Frederick Wightman - Citigroup Global Markets, Inc.: Hey, guys. This is actually Fred Wightman on for Greg. In that 30 to 40 basis point impact you highlighted on same-store sales, is that just from lost operating days? Does it include an estimate for disruptions? And are those markets back at a normalized run rate yet? Gunther Plosch - The Wendy's Co.: Hey, Greg (sic) [Fred], it's actually a complete analysis. It takes into account that we had the closures of one to three days depending what restaurant you looked at. And then also post reopening, we are preparing basically actual business performance with respective trends. And any incrementality we might have, it only is being netted off with a negative impact on closures.

Our next question comes from the line of Dennis Geiger with UBS. Dennis Geiger - UBS Securities LLC: Great. Thanks for the question. Wondering if you could talk a bit more about mobile kiosks, loyalty initiatives and anything new you've seen thus far including in the test, perhaps. And beyond that, anything you could share with your thoughts on ranking same-store sales drivers into 2018 or perhaps highlight what you're most excited about. Thanks. Todd A. Penegor - The Wendy's Co.: Yeah. So still in the early innings of rolling out the technology into our restaurants. So we're almost to 100 kiosks in restaurants, still on track to have 300 by the end of the year. Probably a little slower than we would have hoped, but we're seeing nice results. You do see a much higher average check than the traditional dine-in order. When you get people into a kiosk, it's easy to suggestive sell and trade folks up. It does unlock throughput at launch, and it's creating great customer experience based on the feedback that we're hearing as they order through the kiosk. What we've done is made sure that the kiosk order design is exactly the same as our mobile ordering design. We've got about 200 locations across 12 states up on mobile ordering, but still on track to have 75% of the system enabled to go on mobile ordering by the end of the year and the majority of the system ready to go by the end of Q1 next year. And still small sample size, but we do see much higher average checks on mobile ordering. And again, it can unlock more throughput in our restaurants and provide more access to the brand. As we think about going into 2018, technology needs to play a big role to better connect to the consumer, whether it's kiosk, mobile ordering, mobile offers, the work that we're doing on a loyalty program as well as delivery. I think the combination of all of those get us excited that we can continue to connect to the customers. The work that we continue to do on fresh beef and the work we continue to do on renovating our food to have the preferred quality food in the QSR segment is one that we'll continue to keep the pressure on. And we feel good that we've got the partnership with our franchise community to really help us bring the Wendy's way to life to ensure that the consumer does have food I love and it's a great place to go and it's an experience that brings me back. So all three of those elements actually drive that behavior, worth what I pay, so they continue to come back more and more. So it's a combination of all of those things that make us feel good that we've got a strong plan, we're building a stronger system and we're working as one to continue to execute to bring in more customers more often. Dennis Geiger - UBS Securities LLC: Thank you.

We have time for one additional question. Our last question will come from the line of Gregory Francfort with Bank of America. Gregory R. Francfort - Bank of America Merrill Lynch: Hey, guys. I just have two quick ones. One is just going back to the mobile ordering. Are you seeing customers use that more for in-store orders or drive-thru? I guess how are customers behaving with using mobile ordering in terms of the operational flow of the stores? Todd A. Penegor - The Wendy's Co.: Yeah. Sample size is so small and we got so few mobile orders. It is – right now, we're seeing a kind of balance between delivery and drive-thru and dine-in. But to be honest, the number of orders because we haven't created the awareness yet is quite small, so it's hard to really interpolate anything from that. Gregory R. Francfort - Bank of America Merrill Lynch: Understood. And then maybe going back to Michael's question on delivery. Maybe not necessarily what the average checks you've seen, but what average check levels do you think you need for the orders to be economical to you and also your partners? And then how do you get check up to those levels and what has traditionally been maybe a lower price point segment? How do you build that check? Is it through time bundles together? Is it through advertising? I'm just trying to think how this plays out in terms of delivery for the quick service segment. Todd A. Penegor - The Wendy's Co.: Yeah, no, that's the beauty that we like with a partner like DoorDash. Really it hasn't impacted us all operationally from the restaurant. And the structure that we have on the commissions with them is very reasonable, especially as these are highly incremental purchases that the consumers have. And so we feel good about that. We feel good about making sure we got a price point that works ultimately for the consumer. So it works for the consumer economic model, works for the restaurant-level economic model, and creates a great experience because we're delivering the food quickly with high integrity as they would expect along the way. So when you start to think about what average check it takes to actually feel good about things, we're not really focused on that. We're focused on the incrementality of the business and the overall economic equation for both the restaurant and the consumer. And that's working for us right now in test. And that's why we're rolling it out now. The opportunity is, you end up bringing more folks that are sitting around the home. So food at home is our biggest competitor, rather than just having one or one and a half orders per order, you end up having three or four orders per order because it's being delivered and you drive the economy of one delivery for a family, which is a big part of the equation. Gregory R. Francfort - Bank of America Merrill Lynch: Understood, I appreciate the thoughts.

Thank you for participating in today's conference. This does conclude the call. You may now disconnect.