The 2009 and 2008 first quarters referenced herein represent the twelve-week periods ended March 22, 2009 and March 23, 2008, respectively.

Overview

We are the number one pizza delivery company in the United States and have a leading international presence. We operate through a network of Company-owned stores, all of which are in the United States, and franchise stores located in all 50 states and in more than 60 countries. In addition, we operate regional dough manufacturing and supply chain centers in the United States and Canada.

Our financial results are driven largely by retail sales at our Company-owned and franchise stores. Changes in retail sales are driven by changes in same store sales and store counts. We monitor both of these metrics very closely, as they directly impact our revenues and profits, and strive to consistently increase the related amounts. Retail sales drive Company-owned store revenues, royalty payments from franchisees and supply chain revenues. Retail sales are primarily impacted by the strength of the Domino's PizzaŽbrand, the success of our marketing promotions and our ability to execute our store operating model and other business strategies.

                                             First Quarter          First Quarter
                                                of 2009                of 2008
Global retail sales growth                    (4.6 )%                 5.6 %

Same store sales growth:
Domestic Company-owned stores                 (0.1 )%                (2.4 )%
Domestic franchise stores                      1.1 %                 (5.5 )%

Domestic stores                                1.0 %                 (5.2 )%

International stores                           6.6 %                  8.8 %

Store counts (at end of period):
Domestic Company-owned stores                  489                    542
Domestic franchise stores                    4,498                  4,586

Domestic stores                              4,987                  5,128
International stores                         3,742                  3,513

Total stores                                 8,729                  8,641


Income statement data:

Total revenues                             $ 321.8      100.0 %   $ 339.0      100.0 %

Cost of sales                                233.0       72.4 %     251.0       74.0 %
General and administrative                    43.9       13.6 %      38.7       11.4 %


Income from operations                        44.9       14.0 %      49.4       14.6 %
Interest expense, net                         26.5        8.3 %      25.8        7.6 %
Other                                         21.2        6.6 %        -         0.0 %

Income before provision for income taxes      39.6       12.3 %      23.5        6.9 %
Provision for income taxes                    15.8        4.9 %       9.4        2.8 %

Net income                                 $  23.8        7.4 %   $  14.1        4.2 %

During the first quarter of 2009, we continued our trend of positive international same store sales growth and achieved positive domestic same store sales for the first time in nearly two years. However, we experienced net negative domestic store growth as a result of continued economic challenges and our continued efforts on exiting underperforming franchisees from the system. We believe this will allow us to strengthen our overall system of stores; however this will continue to negatively impact our domestic store growth in 2009.

Global retail sales, comprised of retail sales results at both our franchise and Company-owned stores worldwide, declined 4.6% in the first quarter of 2009 driven primarily by the negative impact of foreign currency on our international sales. However, when excluding foreign currency conversion impacts, global retail sales grew during the first quarter of 2009, driven primarily by same store sales growth in our domestic franchise stores and international markets as well as an increase in our worldwide store counts during the trailing four quarters. Domestic same store sales growth reflected the success of several initiatives, including the launch of two new product platforms: Domino's Oven Baked Sandwiches and Domino's American Legends TM. International same store sales growth reflects continued strong performance in the key markets where we compete.

Revenues decreased $17.2 million, or 5.1%, in the first quarter of 2009, driven by lower Company-owned store revenues resulting from the store divestitures in 2008, lower international revenues driven primarily by the negative foreign currency impacts, and to a lesser extent, lower domestic supply chain revenues, driven primarily by lower cheese prices.

Income from operations decreased $4.5 million, or 9.0%, in the first quarter of 2009. This decrease was due primarily to the negative impact of foreign currency conversions in our international operations. Additionally, during the first quarter of 2008, the Company recorded a $4.2 million gain on the sale of assets related to the sale of 29 Company-owned stores to franchisees. This gain was offset by approximately $1.4 million of separation and other costs recorded related primarily to the Company's executed restructuring action. These decreases were offset in part by higher margins in our Company-owned store and domestic supply chain businesses in 2009, as well as an increase in domestic franchise same store sales.

Net income increased $9.7 million, up 68.4% from the first quarter of 2008, due primarily to a $21.2 million pre-tax gain recorded on the extinguishment of debt during the first quarter of 2009. The impact of the gain was partially offset by the aforementioned decrease in income from operations.

Revenues



                                           First Quarter        First Quarter
                                              of 2009              of 2008
          Domestic Company-owned stores   $   81.0    25.2 %   $   93.0    27.4 %
          Domestic franchise                  36.9    11.5 %       36.4    10.7 %
          Domestic supply chain              173.5    53.9 %      176.2    52.1 %
          International                       30.4     9.4 %       33.4     9.8 %

          Total revenues                  $  321.8   100.0 %   $  339.0   100.0 %

Revenues primarily consist of retail sales from our Company-owned stores, royalties from our franchise stores, and sales of food, equipment and supplies by our supply chain centers to certain franchise stores. Company-owned store and franchise store revenues may vary significantly from period to period due to changes in store count mix while supply chain revenues may vary significantly as a result of fluctuations in commodity prices, primarily cheese and meats.

Domestic Stores Revenues



                                           First Quarter        First Quarter
                                              of 2009              of 2008
          Domestic Company-owned stores   $   81.0    68.7 %   $   93.0    71.9 %
          Domestic franchise                  36.9    31.3 %       36.4    28.1 %

          Domestic stores                 $  117.9   100.0 %   $  129.4   100.0 %

Domestic stores revenues decreased $11.5 million, or 8.9%, in the first quarter of 2009, due primarily to the reduction of Company-owned store revenues resulting from the 2008 store divestitures. These decreases were offset in part by higher domestic franchise same store sales. These changes in domestic stores revenues are more fully described below.

Domestic Company-Owned Stores Revenues

Revenues from domestic Company-owned store operations decreased $12.0 million, or 13.0%, in the first quarter of 2009, due primarily to the store divestitures in 2008 and lower same store sales. Domestic Company-owned same store sales decreased 0.1% in the first quarter of 2009, compared to a decrease of 2.4% in the first quarter of 2008. There were 489 Company-owned stores in operation at the end of the first quarter of 2009, versus 542 at the end of the first quarter of 2008.

Domestic Franchise Revenues

Revenues from domestic franchise operations increased $0.5 million, or 1.4%, in the first quarter of 2009, due primarily to higher same store sales, offset in part by a decrease in the average number of domestic franchise stores open during 2009. Domestic franchise same store sales increased 1.1% in the first quarter of 2009, compared to a decrease of 5.5% in the first quarter of 2008. There were 4,498 domestic franchise stores in operation at the end of the first quarter of 2009, versus 4,586 at the end of the first quarter of 2008.

Domestic Supply Chain Revenues

Revenues from domestic supply chain operations decreased $2.7 million, or 1.5%, in the first quarter of 2009, due primarily to a decrease in food prices, primarily cheese. The published cheese block price-per-pound averaged $1.23 in the first quarter of 2009, down from $1.93 in the comparable period in 2008. Had the 2009 average cheese prices been in effect during 2008, domestic supply chain revenues for the first quarter of 2008 would have been approximately $12.4 million lower than the reported 2008 amounts.

International Revenues



                                            First Quarter        First Quarter
                                               of 2009              of 2008
         International royalty and other   $   15.8    52.0 %   $   17.2    51.6 %
         International supply chain            14.6    48.0 %       16.2    48.4 %

         International                     $   30.4   100.0 %   $   33.4   100.0 %

Revenues from international operations decreased $3.0 million, or 8.8%, in the first quarter of 2009, comprised of a $1.4 million decrease in royalty and other revenues and a $1.6 million decrease in supply chain revenues. The decrease in international royalty and other revenues was primarily due to a $3.9 million negative impact of foreign currency conversions as a result of the strengthening of the U.S. dollar compared to the currencies in the international markets in which we compete, offset in part by higher same store sales and an increase in the average number of international stores open during 2009. The decrease in international supply chain revenues was also primarily due to the negative impact of foreign currency conversions. On a constant dollar basis, same store sales increased 6.6% in the first quarter of 2009, compared to an increase of 8.8% in the first quarter of 2008. On a historical dollar basis, same store sales decreased 15.1% in the first quarter of 2009, compared to an increase of 16.0% in the first quarter of 2008. The variance in our same store sales on a constant dollar basis versus a historical dollar basis further highlights the strengthening of the U.S. dollar. There were 3,742 international stores in operation at the end of the first quarter of 2009, compared to 3,513 at the end of the first quarter of 2008.