Introduction

In fiscal 2009 we experienced a difficult operating environment with unprecedented volatile currency markets, significant commodity inflation and 25-year-high unemployment levels. In spite of these challenging macro-economic factors, we completed our sixth consecutive year of positive comp sales growth, achieved record revenues, generated strong cash flows and completed our strongest development year in almost a decade. We accomplished this through the commitment and dedication of our people who deliver on the cornerstones of our culture pillars of Bold, Accountable, Empowered, and Fun, each and every day.

We continued to make progress across all of our business drivers: marketing, products, development and operations. And we launched our first ever Corporate Responsibility report titled BK Positive Steps®. The report details the steps we are taking in our corporate responsibility journey.

Our marketing in fiscal 2009 included creative promotional campaigns and advertising that focused on the brand’s social relevance such as WHOPPER® Virgins, FLAME™ Body Spray and the Jonas Brothers concert tour sponsorship. Recognizing our marketing efforts, Ad Week named us as one of the top three industry-changing advertisers in the last three decades along with NIKE® and Budweiser in December 2008. On the product side, we introduced BK® Fresh Apple Fries – fresh cut, skinless apples sliced to resemble French fries. More than three million servings were sold in the first five weeks alone! And we cooked up new recipes such as the SteakhouseXT™ (Extra Thick) burger line, which has been especially designed for our new Batch Broiler and offers our guests the quality of casual dining with all the convenience and value of a quick-service-restaurant.

We opened 360 net new restaurants during fiscal 2009, 28 percent higher than the prior year. And development outside of the U.S. and Canada represented over 90 percent of our net growth – the best international development year in the history of the company. Operations excellence also continued as a global priority. Our U.S. “Value for the Money” rating hit a new Best Ever score in June 2009 and our Operations Excellence Review scores reached all-time-highs across many of our key markets.

Going forward, we expect our progress to continue. Our long-term strategies remain on course and we are committed to tactically respond to an ever changing consumer dynamic.