Good morning. My name is Jessica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Domino's Pizza Q4 Year End Financial Results Earnings Call. [Operator Instructions] Thank you. Ms. Liddle, you may begin your conference.

Great. Thank you, Jessica, and good morning, everybody. We're very pleased to be here to review our 2013 financial results. We'll spend some time with prepared comments, but then open it up for Q&A. And a couple of housekeeping items, do look at our earnings release and refer to our Safe Harbor statement regarding forward-looking statements. And then, also as always I would ask the members of the media to please be in listen-only mode as this is primarily an investor call. So again, thanks for all of your participation. Now I'd like to introduce Mike Lawton, our Chief Financial Officer to open it up today.

Thank you, Lynn, and good morning, everyone. We're very pleased with the results for the fourth quarter and our fiscal 2013. During the quarter, we continued to build on the positive results we posted during the first 3 quarters of the year, and we delivered another solid quarter for our shareholders. We opened a significant number of new stores, both domestically and internationally. Our international and domestic divisions posted strong same-store sales growth, and our EPS grew by 21.9% over the prior-year quarter. Now I'll start my review of the quarter by looking at our system-wide sales, which are also known as global retail sales. And these are the total retail sales at franchise and company-owned stores worldwide. Global retail sales grew 7.2%. Foreign currency was the headwind again this quarter. And when you exclude the adverse impact of foreign currency, global retail sales grew by 9.9%. Drivers of this growth included domestic same-store sales, which rose 3.7% in the quarter lapping a positive 4.7% in the fourth quarter of 2012. This was comprised of franchisee same-store sales, which were up 4% and company-owned stores, which were up 1.2%. Although we don't provide specifics of order account and ticket for competitive reasons, we did drive an increase in order counts and ticket this quarter. Also we're pleased to report that we opened 47 net domestic stores in the quarter consisting of 62 store openings and 15 closures. For the year, we've opened a net 58 stores in the United States. This represents the most domestic openings we have completed in the recent past, and we plan to remain focused on growing our store count in the United States in the future. Now our international division had another solid quarter as same-store sales grew 7%, lapping a strong prior-year quarter increase…

Thanks, Mike, and thanks to all of you who attended our investor day in Florida last month, where we reported on the consistent progress we're making towards building an increasingly bigger and stronger Domino's Pizza brand. What I wasn't able to share with you in Orlando though was how well our global team performed in the fourth quarter. Mike outlined our financials in detail for you, but my headline take on our full year is simply to say that we again drove great results, and we are very happy with the progress made in 2013. We had strong global momentum in sales, store growth, and innovation, which culminated in a terrific year overall. Looking first at our domestic business, we had another strong sales quarter and year, continuing a consistent sales trend that was driven by many of the levers we've discussed in the past: Great promotions, quality products, strong service, compelling advertising and customer-friendly technology innovations. As we look back over a 20 year span, we noted that in the vast majority of these years, we posted positive sales gains with an overall average of up 2.5 -- or 2.6%. This represented a pretty wide swap of macroeconomic climates, as well as industry driven events, yet we performed pretty steadily throughout most of those 2 decades. The past few years have exceeded that average, propelled by the momentum we've experienced since relaunching the brand. This long record of consistent performance gave us the confidence to raise our long-term outlook up a point from the previous 1% to 3% to the now up 2% to 4%. Our sales success has also driven success at the store level. Store profits have been increasing every year since the 2008 trough, and we expect that when the 2013 final numbers are in from…

[Operator Instructions] Your first question comes from the line of Brian Bittner with Oppenheimer. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: So on the domestic business, you had a little bit over 1% net unit growth in 2013 and this is actually great. It's I think the best it's been since 2006, I believe. So how do you see this playing out in 2014 and beyond, given the introduction of this mandated reimaging campaign?

Yes. So I think there are kind of 2 questions in there. One is we want to build on the momentum that we've started to show. I think the most important factor in this, in addition to great work by the development team in getting this going, is that we've improved the economics of the stores. The cash flow coming out of the stores is better, which makes it a better product ultimately for our franchisees to buy and to build. So their return gets better and it's generating more interest and that's ultimately what's generated the store growth and we'd like to continue to build on that. In terms of how the reimaging may affect store growth, I think the answer is at the margin, could it affect it a little bit, probably, but the reality of it is we've got almost 1,000 franchisees in the U.S. The ability to access capital is quite good now particularly for the largest franchisees. And you're still with -- 58 stores being built last year out of nearly 1,000 franchisees, you're still looking at a relatively small minority of our franchisees who are building stores and those are being built by the franchisees, who on average are a little better capitalized, their existing stores are doing better. So ultimately, I don't see it really affecting store growth much. I don't know that I could argue that it wouldn't affect it at all, but I think the overall effect will be pretty modest because you're looking at a relatively small group of well finance-funded franchisees. The other thing that I'd point out that's important was, while we only just announced the specifics of this and the timeframe for this, our franchisees have known for at least a year now. We said quite publicly to them as we were testing this that, look, we're still working through this, but if you're wondering as you're looking at your financing and your cash flow, whether we're going to be mandating this at some point, the answer is yes. And we said that to them almost, I think almost exactly a year ago, very publicly. So they've known this was coming. You've already seen that kind of built in to what was happening in 2013. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Okay, that's very helpful. I know you addressed the reimaging a lot at the analyst day, but at the end of the day, is this really just a huge push into driving the catering business? Is that really what at the end of the day, this reimaging is meant to do?

No. It's really about opening up the kitchens, making them more inviting, making the carryout experience far more positive I think than that it has been. Catering, I mean... Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: I'm sorry, I mean carryout. If I said catering, I mean carryout. My fault.

That was why you see the quizzical look on my face through the speaker phone. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Yes. I'm sorry. I mean catering. I mean carryout.

Yes, absolutely. I mean, it's largely about carryout, but I will tell you even delivery customers want to know where their food is coming from. If they've seen the store once, they're driving by the restaurant, they want to see that it's a good-looking place. And so while this is certainly more going to be about carryout than necessarily delivery, the fact is I think it helps both. It helps the brand overall, which is ultimately going to help sales overall.

Your next question comes from the line of Michael Kelter with Goldman Sachs.

This is Ivan Holman sitting in for Michael. I was just wondering, given robust EBITDA growth, it seems reasonable that you would just naturally do well over time. And so I was hoping if you will provide a little bit of incremental color around how we should understand priorities for cash and how you're thinking about dividends versus for the share repurchases?

Well, as you can see we're continuing to do both. In terms of the use of cash, we've increased the dividend nicely. And the fact that we're continuing to buy shares both fourth quarter and as I said on the first quarter, gives you an indication of our intentions that we're going to keep doing both ends. As it relates to the deleveraging, we're currently at about 4.5x EBITDA. That's right in the middle of the range that we've talked about as being appropriate for us, which we think is somewhere up 6% on the high end and 3% on the low end, 6x -- 6x on the high end, 3x on the low end times EBITDA. And so we're very comfortable where we're at. Obviously, we'll continue to look at where that takes us over time.

Your next question comes from the line of John Ivankoe with JPMorgan. John W. Ivankoe - JP Morgan Chase & Co, Research Division: I was hoping you could shed some more color on, I mean, what's really been some exceptional performance in your supply chain or your distribution business. Even -- it looks like the U.S. is performing even better than what store growth or as you mentioned, order counts may have been on the comp side in this last quarter so, if you can explain the fourth quarter and how that might influence profit growth in the segment for 2014 and beyond?

Yes. John, I think there are couple of things. First, overall, as you heard in Mike's commentary, I think the team has done a really nice job of controlling kind of the controllable costs. But I think the other thing you are just seeing is the value of variable margin. And as volume is going up, you're leveraging fixed costs, you're leveraging capacity in our supply chain centers. And the team has done a very good job of having that flow down to the bottom line. And what I remind you of is as they're looking at initiatives for making that system more profitable, we're unique in our profit sharing model. So 1/2 of the profits out of our supply chain system are going to our franchisees, and so they're excited when we are able to bring initiatives to them that are going to make it more profitable overall for all of us. But overall, I think the answer is just simply good management of the system combined with importantly, increasing volume going through the system. John W. Ivankoe - JP Morgan Chase & Co, Research Division: Has there been -- it looks like the G&A was actually down year-over-year. I mean, was there any structural change that happened, I mean, consolidation of facilities that maybe I missed or you maybe you're distributing a little bit more product this year than you would have been last year? I don't know what that would be exactly, but just trying to get a sense if there is some kind of a change and if there is a lapping point that we should be sensitive to as we look into '14?

Yes, I think GA was pretty flat in the distribution business year-over-year. So what that means is the increased volume that we're putting through is on the contribution margin, there is pretty much flow into the bottom line, which is what gets you some increase in margin overall.

Your next question comes from the line of Jeffrey Bernstein with Barclays.

A couple of questions. Just first, this is a follow-up on the franchise investment and the remodel program. I know you talked about at the analyst day that it was long overdue. I think that the feedback from franchisees is pretty positive. I'm just wondering how you're selling them on this idea, whether it's just long overdue and if were mandated or whether you're giving them kind of sales into a profitability expectations or whether there's any of those expectations that you would be willing to share with us?

Yes. I think the answer of that is we did go out and as you say kind of sell it to them, but we do have the ability to mandate it as well contractually, given how long it's been. But I would tell you that the overall take from the system was really very positive. And frankly, I'd even go so far as to say maybe even a little more positive than one would expect when you're going out and asking people to make a pretty substantial reinvestment into their system. They get it, they understand it. Our franchise system is very engaged, I think as engaged and positive about where we are as a brand that I've seen in the 17 years I've been at Domino's. And so overall, the reaction was really quite positive and very quickly kind of moved into questions around implementation, and tell me exactly how quickly I need to do it and what this means for me and relocations and all those sorts of questions. So overall, I think it's really about talking to them about how it's going to continue the momentum in the overall brand as opposed to kind of any specific selling around it. They get it, they understand now it's driving the momentum in the business.

Got it. And just 2 quick sales questions. One, I know you don't give inter period sales, but with the unusual nature of the weather we've seen in the fourth quarter and into first quarter, just remind us whether sequentially through the fourth quarter, you saw things move when weather hits in certain markets or whether you can give us some regional color in terms of the comp? I know the company operate comp on a small base was much lower maybe they were hit harder. I'm just trying to size up your defensive nature in the increment weather environment.

Yes. Well, what I'd say, Jeff, is not kind of get into the breaking down the trends within the fourth quarter or certainly not talk about what's happening in the first quarter. What I will tell you is I think what we've said before, which is on average, bad weather, extreme weather and it actually can be also when it's particularly hot, will be at the margin somewhat more helpful for us than the opposite, but we have not in the past, seen that be a particularly materially effect in over the course of a full quarter. So 3 or 4 inches of snow, coming into a market or a lot of rain or particularly cold or particularly hot will in the short term be helpful to us because of the delivery nature of our business. But it's -- we've never seen it at the point that it is a particularly material change on a full quarter.

Got it. And then just lastly then, looking at the menu in U.S. in '14, I think you talked about it at the analyst day that it in '13, you really didn't tap into your what I think you characterized it as a fairly strong product pipeline and you were more focused on online and whatnot. So in '14, just wondering any color you can give in terms of whether we should be expecting more new product news or whether you're focused more on main items versus sides or value versus premium or any color in terms of the '14 outlook?

Yes. I guess the first thing I'd say is referencing kind of our comments at the investor day. Now you know why you we were saying some of the things we were with confidence. I mean, the fourth quarter lapping pan was still very strong, despite the fact that we didn't have new product news coming in. We knew that it was the overall momentum in our business and great advertising and execution and technology coming on the business that was driving what we knew at that point were quite good results in the fourth quarter. That said, I think it would be pretty unusual for us to go in the U.S., a full year without a new product launch. And so while I think you will continue to see far fewer new product launches from us than we may have done 5 or 10 years ago over the course of the year, I also think 0 is not going to be a particularly common outcome either.

Your next question comes from the line of Alvin Concepcion with Citi.

And I just wanted to ask more about the sales trends. There's a view out there that consumers doing more online shopping this holiday season impacted traffic and that trend will continue. That seems like a trend that should benefit you because of your leadership in digital. Did you see a difference in online ordering mix this fourth quarter year-over-year or even to date?

I think really, we've just seen continued growth on digital. So I don't know that we saw anything kind of more or less than we would have expected given what we were doing with profiles and everything else in the fourth quarter. But what I would point out is that about 10% of our business is people walking into our stores, placing an order there for carryouts. So 90% of our business is order ahead, either over the phone or over digital. And we are now basically right at the point where we are doing just about equal amounts of sales digitally versus over the phone. And so I mean, we've come a long way in just 5 or 6 years on the digital front. We're continuing to see nice robust growth out of that channel. And we think that's going to continue. So nothing particularly unusual in the fourth quarter about the growth, except that it continued to be strong.

Okay, great. And then just a follow-up on the reimaged stores. I'm just curious, if you'd be able to share anything on your tests in terms of what the comp look does, what it does to store economics and mix between carryout and delivery?

Yes. I think the answer is as you're doing individual stores, it's pretty modest. But we know what it's going to do to the overall brand. And that's really where it's more important. So it is ultimately going to be about a better customer facing experience overall, with stores that really look like the brand that people are now expecting from Domino's and the experience that they're expecting. And so even as we've put together a terrific digital experience and great service and great advertising and dramatically improved product, they're walking into our stores and they're just not having a comparable experience from entering our stores. And so it's about making that yet one more area, where we're really leading and we think doing it with this image, opening up our kitchens so that people can see the quality of the food that we're using to make their meal is a really positive step forward for us.

Your next question comes from the line of Mark Smith with Feltl.

Maybe a question for Mike. It sounds like you're standing by your guidance for commodities to be flat to negative 2%. Looking at cheese prices today, are you assuming that we see an easing from current levels?

Yes. As you're pointing out correctly, cheese prices are at very high levels. They've come down a little bit, but they're very high. We certainly do expect that to moderate and most of the other commodities that we've got we think are going to be in pretty decent shape for the year. But if cheese prices stayed where they are, my forecast of down 0 to 2% would certainly be inaccurate.

Okay. Is there a long-term opportunity as we see the big international players in pizza continue to take share from mom-and-pops and the regional guys? As we see cheese move high, is there an opportunity that maybe some of the smaller guys are pushed out of business and shut their doors, whereas you are able to withstand that a little better?

I would think that whenever you look at commodity pressures, you've got that tendency to raise prices and it's easier to not raise prices and continue to do what's right for the customer to keep your prices at the price points that they're looking for as long as possible when you're running good volume through your stores. And as you saw for the past year, each of the last 4 quarters, at least, what we've been talking about is we've had good solid order count growth. We were getting it in the prior years as well. I would certainly hope that, that puts us in a stronger position to withstand short-term commodity bumps than somebody who is being stretched out on lesser volume.

And then lastly, just looking at the strong results from your distribution business. Are there any investments that need to be made as your volume increases?

We're in pretty good shape as it relates to volume. We do continue to make some investments just because some of the plants are older in some cases, and the investments that we're making are more to maintain the productivity or in some cases, improve them. But there's enough capacity out there in general that you won't see a lot of CapEx going into supply-chain just because we need to expand capacity in the U.S. We're in pretty good shape.

Your next question comes from the line of Peter Saleh with Telsey Advisory Group.

Just wanted to ask about the media and advertising budget, how you're forecasting that for 2014, is there going to be any portion that's going to go local or is this all going to be on a national scale?

Yes, some gets spent locally, but that's relatively small now versus what we're spending at a national level. The percentage of sales is -- that goes into the national fund is going to be consistent in 2014, with what it was in 2013. But if we can continue to generate sales growth and we can continue to generate store growth, that means that the absolute amount will be up year-over-year.

Great. And just a nontraditional kind of question. I mean, there's a lot of chatter that the new iPhone this year will have a bigger screen. Have you found that bigger screens on some of these smartphones, is that helping to drive more of your digital sales?

Interestingly, I don't know that it necessarily drives more in the way of sales. I would tell you that the larger the screen, the more people can see great food photography and an appetite appeal. And so there may be some very -- I may haven't really thought about it before, but there may be some very small correlation between screen size and ticket size. I don't think it would be particularly big. Now that you've asked the question, I may go back and ask somebody to look at it, but I don't think it's going to have much effect, but at the margin, it might a little bit.

There are no further questions at this time.

Thank you for listening today, and I look forward to reporting our first quarter results to you in early May.