##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 29, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number 1-11313
  
 CKE Restaurants, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

33-0602639(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   6307 Carpinteria Ave., Ste. A
 Carpinteria, California 93013
 (Address of principal executive
    offices)
  Registrants telephone number, including area code
 (805) 745-7500
  Securities Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value

New York Stock Exchange4% Convertible Subordinated
    Notes due 2023

New York Stock Exchange   Securities Registered Pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE:




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##### 



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
    For the Fiscal Year Ended January 29, 2007
    TABLE OF CONTENTS
  PageNo.Part IItem 1.


Business


1Item 1A.


Risk
    Factors


11Item 1B.


Unresolved Staff
    Comments


15Item 2.


Properties


16Item 3.


Legal
    Proceedings


17Item 4.


Submission of
    Matters to a Vote of Security Holders


17Part IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


18Item 6.


Selected Financial
    Data


20Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


24Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


60Item 8.


Financial
    Statements and Supplementary Data


60Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


60Item 9A.


Controls and
    Procedures


61Item 9B.


Other
    Information


63Part IIIItem 10.


Directors and
    Executive Officers of the Registrant


64Item 11.


Executive
    Compensation


64Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


64Item 13.


Certain
    Relationships and Related Transactions


65Item 14.


Principal
    Accountant Fees and Services


65Part IVItem 15.


Exhibits and
    Financial Statement Schedules


66EXHIBIT 10.79EXHIBIT 10.80EXHIBIT 12.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   i




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##### Table of Contents



PART I  Item 1.
    Business  Our fiscal year ends on the last Monday in January each year.
    In this Annual Report on
    Form 10-K,
    we refer to the fiscal years by reference to the calendar year
    in which they end (e.g., the fiscal year ended January 29,
    2007, is referred to as fiscal 2007, and the fiscal
    year ended January 30, 2006, is referred to as fiscal
    2006). Fiscal 2007 and fiscal 2006 each include
    52 weeks, and fiscal 2005 includes 53 weeks. For
    clarity of presentation, we generally label all fiscal years
    presented as if the fiscal year ended January 31. All
    dollar amounts, except per share amounts, presented in this
    Annual Report on
    Form 10-K
    are in thousands, unless otherwise noted.
  Company
    Overview
  ® ® ®
  Carls Jr.


Hardees


La Salsa


Other


TotalCompany-operated


393



696



55



1



1,145Franchised and licensed


694



1,210



41



15



1,960Total


1,087



1,906



96



16



3,105   Carls Jr. ®
  Hardees. 1 3 1 2 2 3 tm best-in-class ®
  La Salsa.
  Recent
    Developments
  Restatement of Prior Period Financial
    Results. Form 8-K Form 10-K
 1




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##### Table of Contents



Amendment to Sixth Amended and Restated Credit Facility
    (Facility).
  Seventh Amended and Restated Credit Facility (Amended
    Facility).
  Repurchase of Common Stock. Rule 10b5-1 Rule 10b5-1
  Expiration of Stockholder Rights Plan.
  Purchase of Restaurant Assets.
  Termination of Franchise Agreement.
  Adoption of New Accounting Pronouncements.
 2




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##### Table of Contents



Use of
    Non-GAAP Financial Measurements
  Form 10-K, Form 10-K.
  Contact
    Information; Obtaining Copies of this Annual Report
  www.ckr.com.
  Form 10-K, Form 10-Q Form 8-K, www.ckr.com. 1-800-SEC-0330. www.sec.gov
  www.ckr.com (805) 745-7500.
    Competitive
    Strengths
    
    promotion of distinctive, premium, great tasting products such
    as the Carls Jr. line of Six Dollar
    Burgerstm,
    Hand-Scooped Ice Cream Shakes and
    Maltstm
    and Breakfast
    Burgerstm
    and burritos; as well as Hardees line of
    1/3-,
    1/2-
    and
    2/3-lb.
    Angus Beef Thickburgers, Hand-Scooped Ice Cream Shakes and
    Maltstm,
    and Made From
    Scratchtm
    breakfast biscuits;
    utilization of gas-fired charbroilers in all of our Carls
    Jr. and Hardees restaurants to improve taste, operations
    and food safety;
    implementation of a program to focus on the essentials of
    restaurant operations  quality, service and
    cleanliness; and
    initiation of a program to elevate customer service at
    Carls Jr. and Hardees to an industry-leading level.    Carls Jr. ® ® tm tm tm
 3




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##### Table of Contents



Hardees. ® tm tm tm tm
  La Salsa.
    Business
    Strategy
    
    increase revenues, average unit volumes and operating income at
    our major brands;
    remain focused on restaurant fundamentals  quality,
    service and cleanliness;
    capitalize on our unique brand positioning and cutting-edge
    advertising;
    offer premium products that compete on quality, innovation and
    taste;
    continue to capitalize on dual-branding opportunities available
    with Green Burrito and Red
    Burritotm;
    control costs and improve capital structure while increasing
    shareholder distributions;
    leverage our infrastructure and marketing presence to build out
    existing core markets;
    remodel our existing store base to remain competitive; and
    strengthen our franchise system and pursue further franchising
    opportunities, including new franchisees.    Franchise
    Strategy
   4




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##### Table of Contents



Carls Jr.
  Hardees. and/or
  La Salsa.
    
    We evolved the system-wide mix of restaurants to one that is
    primarily franchise-operated. At the end of fiscal 2007,
    approximately 64% of Carls Jr. and Hardees
    restaurants combined were franchised.
    We closed many unprofitable Hardees restaurants and
    increased our AUV for the brand.
    We believe we have improved the food quality, service and
    cleanliness at our Hardees restaurants.
    Our same-store sales trends for company-operated restaurants,
    for each brand by quarter are:  Carls Jr.

Hardees

La SalsaFiscal 2007First Quarter


5.6
%


5.6
%


1.0
%Second Quarter


4.8
%


3.0
%


2.1
%Third Quarter


6.2
%


5.6
%


2.0
%Fourth Quarter


2.8
%


4.8
%


(0.2
)%Fiscal 2006First Quarter


2.4
%


(0.1
)%


2.0
%Second Quarter


1.0
%


0.0
%


2.6
%Third Quarter


(0.1
)%


(3.5
)%


2.6
%Fourth Quarter


5.3
%


2.9
%


3.7
%  5




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##### Table of Contents




    Quarterly operating income (loss) by segment has been:  ConsolidatedOperatingCarls Jr.


Hardees


La Salsa


Other


IncomeFiscal 2007First Quarter

$
27,669


$
7,796


$
(1,701
)

$
(130
)

$
33,634Second Quarter


21,571



13,303



(1,609
)


43



33,308Third Quarter


17,157



10,764



(3,669
)


3



24,255Fourth Quarter


17,128



684



(4,402
)


(115
)


13,295Fiscal 2006First Quarter

$
21,265


$
4,168


$
(2,233
)

$
(52
)

$
23,148Second Quarter


18,635



6,903



(1,242
)


(11,087
)


13,209Third Quarter


17,754



4,275



(904
)


(141
)


20,984Fourth Quarter


25,119



(1,953
)


(2,628
)


1



20,539     Financial
    Information about Operating Segments
  Form 10-K
  Investments
    in Other Restaurant Concepts
  and/or
  Restaurant
    Development
   6




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##### Table of Contents



Average per restaurant(1)Carls Jr.


Hardees


La SalsaLand(2)

$



$
456


$
Building and leasehold improvements


1,173



884



577Equipment


327



319



265Total

$
1,500


$
1,659


$
842     (1)
    
    The averages above are contingent upon a number of factors
    including, but not limited to, restaurant prototype,
    geographical area and local zoning requirements.(2)
    
    The majority of Carls Jr. and La Salsa restaurants
    are constructed on leased land.  Restaurant
    Operations and Support
    on-the-job
  Marketing
    and Advertising
        Form 10-K.
  Purchasing
   7




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##### Table of Contents



mark-up
  
    Form 10-K.
  Competition
    and Markets
      Trademarks
    and Service Marks
    Government
    Regulation
     8




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##### Table of Contents



Environmental
    Matters
    on-site and/or
  Seasonality
      Government
    Contracts
    Research
    and Development
   9




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##### Table of Contents



Employees
    Working
    Capital Practices
  Form 10-K
  Disclosure
    Regarding Forward-Looking Statements
  Form 10-K
    Executive
    Officers of the Registrant
    Name

Age

PositionAndrew F. Puzder


56


Chief Executive Officer and
    PresidentE. Michael Murphy


55


Executive Vice President, Chief
    Administrative Officer, General Counsel and SecretaryTheodore Abajian


43


Executive Vice President, Chief
    Financial OfficerJohn J. Dunion


49


Executive Vice President, Supply
    Chain ManagementBrad Haley


49


Executive Vice President,
    Marketing   Carls Jr. and Hardees   Andrew F. Puzder
 10




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##### Table of Contents



E. Michael Murphy
  Theodore Abajian
  John J. Dunion
  Brad R. Haley
  Item 1A.
    Risk
    Factors    Our
    success depends on our ability to judge the impact of
    competitive products and pricing.
    Our
    success depends on our ability to compete with our
    competitors.
   11




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##### Table of Contents



Restrictive
    covenants in our credit facility and outstanding senior
    indebtedness could adversely affect our business.
    Failure
    to continue our revitalization of Hardees would have a
    significant negative effect on our success.
    Our
    success depends on our ability to attract and retain key
    personnel.
    Our
    success depends on our franchisees participation in our
    strategy.
    Our
    financial results are affected by the financial results of our
    franchisees.
    We may
    be unable to recover increased operating costs through price
    increases.
  and/or
 12




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We
    face commodity price and availability risks.
    We
    depend on our suppliers to deliver quality products to us
    timely.
    Adverse
    publicity regarding poultry or beef could negatively impact our
    business.
    Consumer
    preferences and perceptions may have significant effects on our
    business.
  Multi-unit
  Our
    operations are seasonal and heavily influenced by weather
    conditions.
  quarter-to-quarter
 13




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##### Table of Contents



Our
    business may suffer due to our inability to hire and retain
    qualified personnel and due to higher labor costs.
    Our
    sales and profits may be materially and adversely affected by
    our inability to integrate acquisitions
    successfully.
    Our
    business may be impacted by increased insurance
    and/or
    self-insurance costs.
    Our
    financial results may be impacted by our ability to select
    appropriate restaurant locations, construct new restaurants or
    complete remodels.
    The
    nature of our business exposes us to potential
    litigation.
    Governmental
    regulations may change and require us to incur substantial
    expenditures to comply.
   14




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##### Table of Contents



Compliance
    with environmental laws may affect our financial
    condition.
    Provisions
    of our Certificate of Incorporation and Bylaws could limit the
    ability of our stockholders to effect a change in
    control.
      We
    face risks related to interest rates.
    Our
    financial results may be impacted by changes in accounting
    policies and practices.
  Consolidation of Variable Interest
    Entities  an Interpretation of ARB No. 51
  Share-Based Payment
    Item 1B.
    Unresolved
    Staff Comments   15




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##### Table of Contents



Item 2.
    Properties    Land and


Land Leased


Land andBuilding


and Building


BuildingOwned


Owned


Leased


TotalCarls Jr.:Company-operated


16



111



266



393Franchise-operated(1)


10



47



171



228Third party-operated/vacant(2)


4



3



17



24Subtotal


30



161



454



645Hardees:Company-operated


357



150



189



696Franchise-operated(1)


27



39



73



139Third party-operated/vacant(2)


24



15



54



93Subtotal


408



204



316



928La Salsa:Company-operated






4



51



55Third party-operated/vacant(2)


1







6



7Subtotal


1



4



57



62Other:Company-operated










1



1Third party-operated/vacant(2)






2



1



3Subtotal






2



2



4Total:Company-operated


373



265



507



1,145Franchise-operated(1)


37



86



244



367Third party-operated/vacant(2)


29



20



78



127Total


439



371



829



1,639     (1)
    
    Franchise-operated properties are those which we own
    and lease to franchisees, or lease and sublease to franchisees.(2)
    
    Third party-operated/vacant properties are those we
    own or lease that are either leased or subleased by unaffiliated
    entities or are currently vacant.     16




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Employees
    Customers
    Suppliers
    Franchising
    Intellectual
    Property
    Summary
    of Significant Litigation
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   17




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##### Table of Contents



PART II  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    High


LowFiscal 2007First Quarter

$
18.50


$
15.17Second Quarter


17.37



14.00Third Quarter


20.00



14.55Fourth Quarter


20.04



17.57Fiscal 2006First Quarter

$
17.15


$
14.53Second Quarter


16.77



12.11Third Quarter


13.87



11.51Fourth Quarter


15.69



12.45       Rule 10b5-1 Rule 10b5-1
 18




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##### Table of Contents



(a)


(b)


(c)


(d)Total Number of


Maximum DollarShares Purchased


Value of SharesTotal


Average


as Part of


that May Yet BeNumber of


Price


Publicly


Purchased UnderShares


Paid per


Announced Plans


the Plans orPeriod

Purchased


Share


or Programs


ProgramsNovember 7, 2006 
    December 4, 2006


89,400


$
18.92



89,400


$
54,752December 5, 2006 
    December 29, 2006


2,364,192



18.47



2,364,192



11,085December 30, 2006 
    January 29, 2007


88,400



19.18



88,400



109,387Total


2,541,992


$
18.51



2,541,992


$
109,387     COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among CKE Restaurants, Inc.  CKR, QSR Peer Group
    And The S&P Small Cap 600 Index
  
  2002


2003


2004


2005


2006


2007CKE Restaurants, Inc


$
100.00



$
37.13



$
78.77



$
139.18



$
162.15



$
206.15QSR Peer Group(1)


$
100.00



$
63.93



$
104.84



$
129.38



$
147.09



$
170.75S&P Small Cap 600


$
100.00



$
81.22



$
123.90



$
133.88



$
163.47



$
174.17    *
    
    $100 invested on January 31, 2002 in stock or
    index-including reinvestment of dividends.    (1)
    
    The QSR Peer Group is comprised of the following companies: Jack
    in the Box Inc., McDonalds Corp., Wendys International,
    Inc. and Yum! Brands, Inc. 19




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
  Selected
    Financial and Operating Data
  Fiscal Year Ended January 31,(1)(2)2007


2006(7)


2005


2004(6)


2003(4)(5)(as restated)Consolidated Statements of
    Operations Data:Revenue:Company-operated restaurants

$
1,269,687


$
1,209,456


$
1,217,273


$
1,142,929


$
1,109,646Franchised and licensed
    restaurants and other


318,723



308,891



302,608



270,491



253,715Total revenue

$
1,588,410


$
1,518,347


$
1,519,881


$
1,413,420


$
1,363,361Operating income (loss)

$
104,492


$
77,880


$
56,780


$
(8,268
)

$
35,617Interest expense


19,751



23,016



36,748



39,962



39,924Income tax expense (benefit)


31,899



(123,888
)


(1,592
)


2,417



(7,093
)Income (loss) from continuing
    operations


50,172



181,139



18,662



(50,430
)


19,214Loss from discontinued operations










(646
)


(2,790
)


(53
)Income (loss) before cumulative
    effect of accounting change


50,172



181,139



18,016



(53,220
)


19,161Cumulative effect of accounting
    change(5)


















(175,780
)Net income (loss)


50,172



181,139



18,016



(53,220
)


(156,619
)Net income (loss) per
    share  basic


0.79



3.06



0.31



(0.92
)


(2.76
)Income (loss) from continuing
    operations per share  diluted


0.72



2.51



0.31



(0.88
)


0.33Loss from discontinued operations
    per share  diluted










(0.01
)


(0.04
)


Income (loss) before cumulative
    effect of accounting change per share  diluted


0.72



2.51



0.30



(0.92
)


0.33Cumulative effect of accounting
    change per share  diluted(5)


















(3.02
)Net income (loss) per
    share  diluted

$
0.72


$
2.51


$
0.30


$
(0.92
)

$
(2.69
)Weighted-average shares
    outstanding  diluted


72,377



73,250



59,583



57,536



58,124Cash dividends declared per common
    share

$
0.16


$
0.16


$



$



$
Ratio of earnings to fixed
    charges(3)


2.6
x


2.0
x


1.2
x






1.2x 20




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##### Table of Contents



Fiscal Year Ended January 31,(1)(2)2007


2006(7)


2005


2004(6)


2003(4)(5)(as restated)Segment Operating
    Data:Carls Jr.:Total revenue

$
830,961


$
802,761


$
792,829


$
725,055


$
693,692Operating income


83,525



82,773



61,656



55,109



52,577Hardees:Total revenue


706,884



661,509



673,172



642,694



627,785Operating income (loss)


32,547



13,393



5,293



(26,336
)


(16,361
)La Salsa:Total revenue


46,339



49,156



48,794



43,933



39,959Operating loss(6)


(11,381
)


(7,007
)


(10,270
)


(37,304
)


(397
)Consolidated Balance Sheet
    Data:Cash and cash equivalents

$
18,680


$
21,343


$
18,432


$
54,355


$
18,440Working capital deficit


(32,861
)


(27,038
)


(74,907
)


(43,820
)


(69,586
)Total assets


794,422



791,337



668,883



730,404



804,937Total long-term debt and capital
    lease obligations, including current portion


178,055



264,662



317,048



418,176



423,275Stockholders equity


378,846



308,938



119,668



100,658



152,660     (1)
    
    Our fiscal year is 52 or 53 weeks, ending the last Monday
    in January. For clarity of presentation, we generally label all
    fiscal years presented as if the fiscal year ended
    January 31. Fiscal 2007 and 2006 include 52 weeks.
    Fiscal 2005 includes 53 weeks. Fiscal 2004 and 2003 include
    52 weeks.(2)
    
    Fiscal 2007, 2006, 2005, 2004 and 2003, include $8,546, $8,025,
    $14,320, $17,776 and $5,194, respectively, of facility action
    charges, net, which are included in operating income (loss).(3)
    
    For purposes of calculating the ratio of earnings to fixed
    charges (a) earnings represent income (loss) before income
    taxes, discontinued operations and cumulative effect of
    accounting change and fixed charges, and (b) fixed charges
    consist of interest on all indebtedness, interest related to
    capital lease obligations, amortization of debt issuance costs
    and a portion of rental expense that is representative of the
    interest factor (deemed by us to be one-third). Earnings were
    sufficient to cover fixed charges for fiscal 2007, 2006, 2005
    and 2003, and insufficient to cover fixed charges for fiscal
    2004 by $48,013.(4)
    
    Fiscal 2003 includes operating results of SBRG from the date of
    acquisition, March 1, 2002.(5)
    
    During fiscal 2003, we adopted SFAS 142, Goodwill and
    Other Intangible Assets,resulting in a transitional
    impairment charge of $175,780 (or $3.02 per diluted common
    share).(6)
    
    Fiscal 2004 includes a $34,059 impairment charge to reduce the
    carrying value of La Salsa goodwill to $0.(7)
    
    Fiscal 2006 has been restated to correct a $13,443 overstatement
    of our income tax benefit and deferred income tax assets. Fiscal
    2006 (as restated) includes an income tax benefit of $123,888
    attributable primarily to the reversal of a previously recorded
    valuation allowance against deferred tax assets. 21




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##### Table of Contents



Selected
    Financial and Operating Data by Segment
  Fiscal Year Ended January 31,(1)2007


2006


2005


2004


2003(3)Carls Jr.
    RestaurantsRestaurants open (at end of fiscal
    year):Company-operated


393



428



428



426



440Franchised and licensed


694



621



586



580



547Total


1,087



1,049



1,014



1,006



987Restaurant sales:Company-operated restaurants

$
590,613


$
574,663


$
567,960


$
523,945


$
507,526Franchised and licensed
    restaurants(2)


795,520



700,590



679,734



596,318



567,048Average unit volume per
    company-operated restaurant


1,440



1,341



1,301



1,187



1,152Percentage increase in comparable
    company-operated restaurant sales


4.9
%


2.2
%


7.7
%


2.9
%


0.7
%Restaurant operating costs as a
    percentage of company-operated revenue


76.3
%


76.6
%


78.9
%


79.8
%


79.2
%Hardees
    RestaurantsRestaurants open (at end of fiscal
    year):Company-operated


696



663



677



721



730Franchised and licensed


1,210



1,330



1,357



1,400



1,499Total


1,906



1,993



2,034



2,121



2,229Restaurant sales:Company-operated restaurants

$
634,264


$
587,082


$
601,068


$
575,238


$
562,010Franchised and licensed
    restaurants(2)


1,156,201



1,173,442



1,203,750



1,186,490



1,251,526Average unit volume per
    company-operated restaurant


916



874



862



792



763Percentage increase (decrease) in
    comparable company-operated restaurant sales


4.8
%


(0.2
)%


7.0
%


2.5
%


(2.2
)%Restaurant operating costs as a
    percentage of company-operated revenue


81.9
%


84.5
%


85.7
%


90.7
%


89.5
% 22




---



##### Table of Contents



Fiscal Year Ended January 31,(1)2007


2006


2005


2004


2003(3)La Salsa
    RestaurantsRestaurants open (at end of fiscal
    year):Company-operated


55



59



62



61



57Franchised and licensed


41



43



39



41



42Total


96



102



101



102



99Restaurant sales:Company-operated restaurants

$
44,460


$
47,277


$
46,950


$
42,310


$
38,550Franchised and licensed
    restaurants(2)


36,630



34,457



34,170



28,176



23,802Average unit volume per
    company-operated restaurant


797



772



748



723



751Percentage increase (decrease) in
    comparable company-operated restaurant sales


1.2
%


2.6
%


5.2
%


(1.3
)%


0.8
%Restaurant operating costs as a
    percentage of company-operated revenue


93.5
%


95.0
%


97.6
%


94.7
%


87.9
%     (1)
    
    Our fiscal year is 52 or 53 weeks, ending on the last
    Monday in January. For clarity of presentation, we generally
    label all fiscal years presented as if the fiscal year ended
    January 31. Fiscal 2007 and 2006 include 52 weeks.
    Fiscal 2005 includes 53 weeks. Fiscal 2004 and 2003 include
    52 weeks.(2)
    
    Franchisee restaurant operations are not included in our
    Consolidated Financial Statements; however, franchisee sales
    result in royalties and rental income, which are included in
    franchised and licensed revenues.(3)
    
    Fiscal 2003 includes operating results of La Salsa from the
    date of the SBRG acquisition, March 1, 2002. 23




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
  Overview
    
    Consolidated revenue increased 4.6%, to $1,588,410 in fiscal
    2007 from $1,518,347 in fiscal 2006.
    Carls Jr. same-store sales increased for the seventh
    consecutive year in fiscal 2007, growing 4.9% at
    company-operated restaurants, following a 2.2% increase in
    fiscal 2006.
    Hardees same-store sales increased 4.8% at
    company-operated restaurants in fiscal 2007, following a 0.2%
    decrease in fiscal 2006.
    Annual average unit volume increased 7.4%, to $1,440, for
    Carls Jr. company-operated restaurants and increased 4.8%,
    to $916, for Hardees company-operated restaurants.
    Carls Jr. total restaurant operating costs as a percent of
    company-operated revenue decreased 30 basis points to 76.3%
    in fiscal 2007, as compared to 76.6% in fiscal 2006.
    Hardees total restaurant operating costs as a percent of
    company-operated revenue decreased 260 basis points to
    81.9% in fiscal 2007, as compared to 84.5% in fiscal 2006.
    Income before income taxes and discontinued operations increased
    $24,820, or 43.4%, reaching $82,071 in fiscal 2007, as compared
    to $57,251 in fiscal 2006.
    Net income decreased to $50,172, or $0.72 per diluted
    share. This represents a decrease of $130,967 from the prior
    year net income. Net income in fiscal 2006 (as restated)
    includes an income tax benefit of $123,888 attributable
    primarily to the reversal of a previously recorded valuation
    allowance against deferred tax assets, while net income in
    fiscal 2007 includes income tax expense of $31,899.
    During fiscal 2007, we repaid a total of $28,928 of the term
    loan portion of the Facility.
    During fiscal 2007, we repurchased 4,607,437 shares of our
    common stock for $81,057 under our Stock Repurchase Plan.
    On January 22, 2007, we amended the Facility to increase
    the aggregate amount that we are permitted to expend for stock
    repurchases and dividend payments by $130,000, and increase the
    total amount available to us for revolving loans under the
    Facility by $100,000 to $250,000. As of January 31, 2007,
    we are permitted to make additional repurchases of our common
    stock up to $109,387 under the Stock Repurchase Plan.
    During fiscal 2007, we declared cash dividends of $0.04 per
    share of our common stock each quarter for a total of
    $0.16 per share.     24




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
      Restatement
    of Previously Issued Financial Statements
      Form 10-K Form 10-K
    Critical
    Accounting Policies
      
    estimation of future cash flows used to assess the
    recoverability of long-lived assets and to establish the
    estimated liability for closing restaurants and subsidizing
    lease payments of franchisees;
    estimation, using actuarially determined methods, of our
    self-insured claim losses under our workers compensation,
    general and auto liability insurance programs;
    determination of appropriate estimated liabilities for loss
    contingencies;
    determination of appropriate assumptions to use in evaluating
    leases for capital versus operating lease treatment,
    establishing depreciable lives for leasehold improvements and
    establishing straight-line rent expense periods;
    estimation of the appropriate allowances associated with
    franchise and license receivables and liabilities for franchise
    subleases; 25




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   
    determination of the appropriate assumptions to use to estimate
    the fair value of stock-based compensation; and
    estimation of our net deferred income tax asset valuation
    allowance and effective tax rate.    Impairment
    of Property and Equipment and Other Amortizable Long-Lived
    Assets Held and Used, Held for Sale or To Be Disposed of Other
    Than By Sale
    and/or
       26




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    Impairment
    of Goodwill
  Business Combinations
    Estimated
    Liability for Closing Restaurants
       27




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    Estimated
    Liability for Self-Insurance
      Loss
    Contingencies
  Accounting for Contingencies,
  Accounting
    for Lease Obligations
   28




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
      Franchised
    and Licensed Operations
    and/or and/or
     29




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Accounting for Costs
    Associated with Exit or Disposal Activities
  and/or
    Share-Based
    Compensation
    Valuation
    Allowance for Net Deferred Tax Assets
   30




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
        Business
    Strategy
    
    increase revenues, average unit volumes and operating income at
    our major brands;
    remain focused on restaurant fundamentals  quality,
    service and cleanliness;
    capitalize on our unique brand positioning and cutting-edge
    advertising;
    offer premium products that compete on quality, innovation and
    taste;
    continue to capitalize on dual-branding opportunities available
    with Green Burrito and Red
    Burritotm;
    control costs and improve capital structure while increasing
    shareholder distributions;
    leverage our infrastructure and marketing presence to build out
    existing core markets;
    remodel our existing store base to remain competitive; and
    strengthen our franchise system and pursue further franchising
    opportunities, including new franchisees.  Franchise
    Operations
   31




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    and/or
 32




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Operating
    Review
    Fiscal Year Ended January 31,2007


2006


2005(as restated)Revenue:Company-operated restaurants


79.9
%


79.7
%


80.1
%Franchised and licensed
    restaurants and other


20.1



20.3



19.9Total revenue


100.0



100.0



100.0Operating costs and expenses:Restaurant operating costs(1):Food and packaging


28.7



29.3



29.6Payroll and other employee benefits


29.2



29.5



31.0Occupancy and other


21.8



22.4



22.5Total restaurant operating costs


79.7



81.2



83.0Franchised and licensed
    restaurants and other(2)


75.6



77.2



75.2Advertising(1)


5.7



5.9



5.9General and administrative


9.5



9.3



9.1Facility action charges, net


0.5



0.5



0.9Operating income


6.6



5.1



3.7Interest expense


(1.2
)


(1.5
)


(2.4
)Conversion inducement expense


(0.4
)






Other income (expense), net


0.2



0.2



(0.2
)Income before income taxes and
    discontinued operations


5.2



3.8



1.1Income tax expense (benefit)


2.0



(8.2
)


(0.1
)Income from continuing operations


3.2
%


12.0
%


1.2
%     (1)
    
    As a percent of revenue from company-operated restaurants.(2)
    
    As a percent of revenue from franchised and licensed restaurants
    and other. 33




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    Fiscal 2007Carls Jr.


Hardees


La Salsa


Other(A)


Eliminations(B)


TotalCompany-operated revenue

$
590,613


$
634,264


$
44,460


$
350


$



$
1,269,687Restaurant operating costs:Food and packaging


170,142



182,695



11,423



115







364,375Payroll and employee benefits


154,791



201,008



14,791



134







370,724Occupancy and other operating costs


125,574



135,716



15,353



110







276,753Total restaurant operating costs


450,507



519,419



41,567



359







1,011,852Franchised and licensed restaurants
    and other revenue:Royalties


29,692



47,546



1,844



487



(70
)


79,499Distribution centers


187,533



16,995











(8
)


204,520Rent


21,371



7,426















28,797Retail sales of variable interest
    entity














3,467







3,467Other


1,752



653



35











2,440Total franchised and licensed
    restaurants and other revenue


240,348



72,620



1,879



3,954



(78
)


318,723Franchised and licensed restaurants
    and other expenses:Administrative expense (including
    provision for bad debts)


5,281



4,336



1,437











11,054Distribution centers


185,271



17,840















203,111Rent and other occupancy


18,280



5,117















23,397Operating costs of variable
    interest entity














3,437



(47
)


3,390Total franchised and licensed
    restaurants and other expenses


208,832



27,293



1,437



3,437



(47
)


240,952Advertising


33,318



37,589



1,339



7







72,253General and administrative


54,115



87,542



8,374



284







150,315Facility action charges, net


664



2,494



5,003



385







8,546Operating income (loss)

$
83,525


$
32,547


$
(11,381
)

$
(168
)

$
(31
)

$
104,492Company-operated average unit
    volume (trailing-13 periods)

$
1,440


$
916


$
797Franchise-operated average unit
    volume (trailing-13 periods)

$
1,205


$
949


$
869Company-operated same-store sales
    increase


4.9
%


4.8
%


1.2
%Franchise-operated same-store sales
    increase


5.4
%


4.3
%


2.2
%Company-operated same-store
    transaction increase (decrease)


0.7
%


1.4
%


(4.5
)%Average check (actual $)

$
6.49


$
4.89


$
10.84Restaurant operating costs as a %
    of company-operated revenue:Food and packaging


28.8
%


28.8
%


25.7
%Payroll and employee benefits


26.2
%


31.7
%


33.3
%Occupancy and other operating costs


21.3
%


21.4
%


34.5
%Total restaurant operating costs


76.3
%


81.9
%


93.5
%Advertising as a % of
    company-operated revenue


5.6
%


5.9
%


3.0
%   34




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Fiscal 2006Carls Jr.


Hardees


La Salsa


Other(A)


Eliminations(B)


TotalCompany-operated revenue

$
574,663


$
587,082


$
47,277


$
434


$



$
1,209,456Restaurant operating costs:Food and packaging


166,863



174,611



12,617



148







354,239Payroll and employee benefits


150,559



190,486



15,722



193







356,960Occupancy and other operating costs


122,859



131,149



16,559



149







270,716Total restaurant operating costs


440,281



496,246



44,898



490







981,915Franchised and licensed restaurants
    and other revenue:Royalties


26,224



42,050



1,754



433



(86
)


70,375Distribution centers


179,222



24,458











(139
)


203,541Rent


20,968



7,121















28,089Retail sales of variable interest
    entity














4,279







4,279Other


1,684



798



125











2,607Total franchised and licensed
    restaurants and other revenue


228,098



74,427



1,879



4,712



(225
)


308,891Franchised and licensed restaurants
    and other expenses:Administrative expense (including
    provision for bad debts)


4,609



5,169



1,389











11,167Distribution centers


174,149



24,930















199,079Rent and other occupancy


18,213



5,959















24,172Operating costs of variable
    interest entity














4,299



(256
)


4,043Total franchised and licensed
    restaurants and other expenses


196,971



36,058



1,389



4,299



(256
)


238,461Advertising


34,660



35,282



1,014



8







70,964General and administrative


46,284



75,877



7,318



11,623







141,102Facility action charges, net


1,792



4,653



1,544



36







8,025Operating income (loss)

$
82,773


$
13,393


$
(7,007
)

$
(11,310
)

$
31


$
77,880Company-operated average unit
    volume (trailing-13 periods)

$
1,341


$
874


$
772Franchise-operated average unit
    volume (trailing-13 periods)

$
1,160


$
897


$
897Company-operated same-store sales
    increase (decrease)


2.2
%


(0.2
)%


2.6
%Franchise-operated same-store sales
    increase (decrease)


0.7
%


(2.2
)%


3.9
%Company-operated same-store
    transaction decrease


(3.0
)%


(2.7
)%


(1.7
)%Average check (actual $)

$
6.22


$
4.76


$
10.15Restaurant operating costs as a %
    of company-operated revenue:Food and packaging


29.0
%


29.7
%


26.7
%Payroll and employee benefits


26.2
%


32.4
%


33.3
%Occupancy and other operating costs


21.4
%


22.4
%


35.0
%Total restaurant operating costs


76.6
%


84.5
%


95.0
%Advertising as a % of
    company-operated revenue


6.0
%


6.0
%


2.1
%   35




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Fiscal 2005Carls Jr.


Hardees


La Salsa


Other(A)


Eliminations(B)


TotalCompany-operated revenue

$
567,960


$
601,068


$
46,950


$
1,295


$



$
1,217,273Restaurant operating costs:Food and packaging


166,120



180,515



12,848



456







359,939Payroll and employee benefits


160,240



200,349



16,285



531







377,405Occupancy and other operating costs


121,779



134,387



16,711



417







273,294Total restaurant operating costs


448,139



515,251



45,844



1,404







1,010,638Franchised and licensed restaurants
    and other revenue:Royalties


25,426



43,414



1,732



351



(66
)


70,857Distribution centers


176,304



18,181















194,485Rent


22,172



9,985















32,157Retail sales of variable interest
    entity














3,506







3,506Other


967



524



112











1,603Total franchised and licensed
    restaurants and other revenue


224,869



72,104



1,844



3,857



(66
)


302,608Franchised and licensed restaurants
    and other expenses:Administrative expense (including
    provision for bad debts)


4,006



4,758



1,111











9,875Distribution centers


171,363



18,379















189,742Rent and other occupancy


18,040



6,540















24,580Operating costs of variable
    interest entity














3,457



(66
)


3,391Total franchised and licensed
    restaurants and other expenses


193,409



29,677



1,111



3,457



(66
)


227,588Advertising


34,413



36,023



1,377



26







71,839General and administrative


52,418



79,840



6,388



70







138,716Facility action charges, net


2,794



7,088



4,344



94







14,320Operating income (loss)

$
61,656


$
5,293


$
(10,270
)

$
101


$



$
56,780Company-operated average unit
    volume (trailing-13 periods)

$
1,301


$
862


$
748Franchise-operated average unit
    volume (trailing-13 periods)

$
1,146


$
891


$
823Company-operated same-store sales
    increase


7.7
%


7.0
%


5.2
%Franchise-operated same-store sales
    increase


6.6
%


3.6
%


3.7
%Company-operated same-store
    transaction increase


1.3
%


0.2
%


1.0
%Average check (actual $)

$
5.89


$
4.63


$
9.65Restaurant operating costs as a %
    of company-operated revenue:Food and packaging


29.3
%


30.0
%


27.4
%Payroll and employee benefits


28.2
%


33.3
%


34.6
%Occupancy and other operating costs


21.4
%


22.4
%


35.6
%Total restaurant operating costs


78.9
%


85.7
%


97.6
%Advertising as a % of
    company-operated revenue


6.1
%


6.0
%


2.9
%   36




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Fourth Quarter Fiscal 2007Carls Jr.


Hardees


La Salsa


Other(A)


Eliminations(B)


TotalCompany-operated revenue

$
133,041


$
145,030


$
9,349


$
77


$



$
287,497Restaurant operating costs:Food and packaging


38,805



41,508



2,442



25







82,780Payroll and employee benefits


34,800



46,747



3,315



31







84,893Occupancy and other operating costs


29,253



32,009



3,478



24







64,764Total restaurant operating costs


102,858



120,264



9,235



80







232,437Franchised and licensed restaurants
    and other revenue:Royalties


7,214



9,476



386



105



(37
)


17,144Distribution centers


43,332



3,464











(2
)


46,794Rent


5,175



1,326















6,501Retail sales of variable interest
    entity














724







724Other


210



98



2











310Total franchised and licensed
    restaurants and other revenue


55,931



14,364



388



829



(39
)


71,473Franchised and licensed restaurants
    and other expenses:Administrative expense (including
    provision for bad debts)


1,281



1,236



350











2,867Distribution centers


43,245



3,618















46,863Rent and other occupancy


4,332



944















5,276Operating costs of variable
    interest entity














742



(16
)


726Total franchised and licensed
    restaurants and other expenses


48,858



5,798



350



742



(16
)


55,732Advertising


7,065



8,817



286



2







16,170General and administrative


12,921



21,450



1,882



63







36,316Facility action charges, net


142



2,381



2,386



111







5,020Operating income (loss)

$
17,128


$
684


$
(4,402
)

$
(92
)

$
(23
)

$
13,295Company-operated same-store sales
    increase (decrease)


2.8
%


4.8
%


(0.2
)%Franchise-operated same-store sales
    increase


2.6
%


4.1
%


1.1
%Company-operated same-store
    transaction (decrease) increase


(2.1
)%


1.9
%


(4.5
)%Average check (actual $)

$
6.77


$
4.94


$
10.72Restaurant operating costs as a %
    of company-operated revenue:Food and packaging


29.2
%


28.6
%


26.1
%Payroll and employee benefits


26.1
%


32.2
%


35.5
%Occupancy and other operating costs


22.0
%


22.1
%


37.2
%Total restaurant operating costs


77.3
%


82.9
%


98.8
%Advertising as a % of
    company-operated revenue


5.3
%


6.1
%


3.1
%   37




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Fourth Quarter Fiscal 2006Carls Jr.


Hardees


La Salsa


Other(A)


Eliminations(B)


TotalCompany-operated revenue

$
135,133


$
131,025


$
10,265


$
80


$



$
276,503Restaurant operating costs:Food and packaging


39,403



38,899



2,795



26







81,123Payroll and employee benefits


32,334



43,391



3,501



34







79,260Occupancy and other operating costs


27,895



28,333



3,772



24







60,024Total restaurant operating costs


99,632



110,623



10,068



84







220,407Franchised and licensed restaurants
    and other revenue:Royalties


6,464



9,101



405



95



(18
)


16,047Distribution centers


43,021



4,845











(6
)


47,860Rent


5,094



1,301















6,395Retail sales of variable interest
    entity














883







883Other


606



154



94











854Total franchised and licensed
    restaurants and other revenue


55,185



15,401



499



978



(24
)


72,039Franchised and licensed restaurants
    and other expenses:Administrative expense (including
    provision for bad debts)


998



1,407



381











2,786Distribution centers


41,546



4,883















46,429Rent and other occupancy


4,418



1,308















5,726Operating costs of variable
    interest entity














878



(6
)


872Total franchised and licensed
    restaurants and other expenses


46,962



7,598



381



878



(6
)


55,813Advertising


6,433



8,141



(30
)


4







14,548General and administrative


11,625



19,465



1,840



67







32,997Facility action charges, net


547



2,552



1,133



6







4,238Operating income (loss)

$
25,119


$
(1,953
)

$
(2,628
)

$
19


$
(18
)

$
20,539Company-operated same-store sales
    increase


5.3
%


2.9
%


3.7
%Franchise-operated same-store sales
    increase


4.3
%


2.9
%


5.1
%Company-operated same-store
    transaction (decrease) increase


(0.4
)%


0.4
%


(0.5
)%Average check (actual $)

$
6.41


$
4.83


$
10.16Restaurant operating costs as a %
    of company-operated revenue:Food and packaging


29.2
%


29.7
%


27.2
%Payroll and employee benefits


23.9
%


33.1
%


34.1
%Occupancy and other operating costs


20.6
%


21.6
%


36.8
%Total restaurant operating costs


73.7
%


84.4
%


98.1
%Advertising as a % of
    company-operated revenue


4.8
%


6.2
%


(0.3
)%     (A)
    
    Other consists of Green Burrito and amounts that we
    do not believe would be proper to allocate to the operating
    segments.(B)
    
    Eliminations consists of the elimination of royalty
    revenues and expenses generated between Hardees and a
    variable interest entity franchisee included in our Consolidated
    Financial Statements. 38




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Presentation
    of Non-GAAP Measurements
  Adjusted
    EBITDA
        2007Carls Jr.


Hardees


La Salsa


Other


TotalNet income (loss)

$
52,146


$
5,956


$
(7,255
)

$
(675
)

$
50,172Interest expense (income)


3,991



15,491



(17
)


286



19,751Income tax expense (benefit)


29,388



6,966



(4,089
)


(366
)


31,899Depreciation and amortization


26,328



32,821



3,050



219



62,418Facility action charges, net


664



2,494



5,003



385



8,546Adjusted EBITDA

$
112,517


$
63,728


$
(3,308
)

$
(151
)

$
172,786   2006 (as restated)Carls Jr.


Hardees


La Salsa


Other


TotalNet income (loss)

$
77,065


$
(3,782
)

$
(6,855
)

$
114,711


$
181,139Interest expense


4,255



18,641



28



92



23,016Income tax expense (benefit)


1,955







(138
)


(125,705
)


(123,888
)Depreciation and amortization


24,958



35,473



3,558



166



64,155Facility action charges, net


1,792



4,653



1,544



36



8,025Adjusted EBITDA

$
110,025


$
54,985


$
(1,863
)

$
(10,700
)

$
152,447   39




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  2005Carls Jr.


Hardees


La Salsa


Other


TotalNet income (loss)

$
58,490


$
(32,750
)

$
(10,314
)

$
2,590


$
18,016Discontinued operations, excluding
    impairment














(252
)


(252
)Interest expense (income)


5,071



31,510



(27
)


194



36,748Income tax expense (benefit)


498



73



2



(2,165
)


(1,592
)Depreciation and amortization


23,875



38,782



3,965



171



66,793Facility action charges, net


2,794



7,088



4,344



94



14,320Premium on early redemption of
    Senior Notes






9,126











9,126Impairment of Timber Lodge














898



898Adjusted EBITDA

$
90,728


$
53,829


$
(2,030
)

$
1,530


$
144,057     2007


2006


2005(as restated)Cash flows provided by operating
    activities

$
164,145


$
116,173


$
112,222Interest expense


19,751



23,016



36,748Income tax expense (benefit)


31,899



(123,888
)


(1,592
)Premium on early redemption of
    Senior Notes










9,126Amortization of loan fees


(3,097
)


(3,312
)


(3,637
)Share-based compensation expense


(8,308
)


(188
)


Recovery of (provision for) losses
    on accounts and notes receivable


192



(176
)


1,940Loss on sale of property and
    equipment, capital leases and extinguishment of debt


(3,449
)


(3,180
)


(9,676
)Deferred income taxes


(25,961
)


125,478



(295
)Other non-cash charges


(77
)


(88
)


(79
)Change in estimated liability for
    closing restaurants and estimated liability for self-insurance


5,204



13,701



5,905Net change in refundable income
    taxes


4,356



(612
)


3,366Net change in receivables,
    inventories, prepaid expenses and other current assets


3,739



5,002



(1,766
)Net change in accounts payable and
    other current liabilities


(15,608
)


521



(8,086
)Adjusted EBITDA from discontinued
    operations










262Net cash flows from discontinued
    operations










(119
)Adjusted EBITDA, including
    discontinued operations


172,786



152,447



144,319Less: Adjusted EBITDA from
    discontinued operations










(262
)Adjusted EBITDA

$
172,786


$
152,447


$
144,057  40




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Fiscal
    2007 Compared with Fiscal 2006 and Fiscal 2006 Compared with
    Fiscal 2005
  Carls
    Jr.
    Restaurant Portfolio


Fiscal Year Revenue2007-2006


2006-2005











2007-2006


2006-20052007


2006


2005


Change


Change


2007


2006


2005


Change


ChangeCompany


393



428



428



(35
)





$
590,613


$
574,663


$
567,960


$
15,950


$
6,703Franchised and licensed(a)


694



621



586



73



35



240,348



228,098



224,869



12,250



3,229Total


1,087



1,049



1,014



38



35


$
830,961


$
802,761


$
792,829


$
28,200


$
9,932     (a)
    
    Includes $187,533, $179,222 and $176,304 of revenues from
    distribution of food, packaging and supplies to franchised and
    licensed restaurants in fiscal 2007, 2006 and 2005, respectively.  Company-Operated
    Restaurants
  tm tm
   41




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
     2007


2006Restaurant operating costs as a
    percent of company-operated revenue for the prior year


76.6
%


78.9
%Increase (decrease) in
    workers compensation expense


0.6



(1.6
)Decrease in labor costs, excluding
    workers compensation


(0.5
)


(0.4
)Increase (decrease) in general
    liability expense


0.2



(0.3
)Decrease in food and packaging
    costs


(0.2
)


(0.3
)Increase in depreciation and
    amortization expense


0.1



0.1Increase in repair and maintenance
    expense






0.1(Decrease) increase in utilities
    expense


(0.1
)


0.2(Decrease) increase in rent
    expense, property taxes and licenses


(0.1
)


0.1(Decrease) increase in asset
    retirement expense


(0.1
)


0.1Decrease in equipment lease expense






(0.2
)Other, net


(0.2
)


(0.1
)Restaurant operating costs as a
    percent of company-operated revenue for the current year


76.3
%


76.6
%             point-of-sale
 42




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Franchised
    and Licensed Restaurants
            Hardees
    Restaurant Portfolio


Fiscal Year Revenue2007-2006


2006-2005











2007-2006


2006-20052007


2006


2005


Change


Change


2007


2006


2005


Change


ChangeCompany


696



663



677



33



(14
)

$
634,264


$
587,082


$
601,068


$
47,182


$
(13,986
)Franchised and licensed


1,210



1,330



1,357



(120
)


(27
)


72,620



74,427



72,104



(1,807
)


2,323Total


1,906



1,993



2,034



(87
)


(41
)

$
706,884


$
661,509


$
673,172


$
45,375


$
(11,663
)  43




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  Company-Operated
    Restaurants
  tm .
      2007


2006Restaurant operating costs as a
    percent of company-operated revenue for the prior year


84.5
%


85.7
%Decrease in labor costs, excluding
    workers compensation


(1.0
)


(0.2
)Decrease in food and packaging
    costs


(0.9
)


(0.3
)Decrease in depreciation and
    amortization expense


(0.7
)


(0.3
)(Decrease) increase in rent
    expense, property taxes and licenses


(0.4
)


0.1Increase (decrease) in
    workers compensation expense


0.3



(0.7
)Increase (decrease) in general
    liability expense


0.3



(0.4
)(Decrease) increase in utilities
    expense


(0.1
)


0.4Other, net


(0.1
)


0.2Restaurant operating costs as a
    percent of company-operated revenue for the current year


81.9
%


84.5
%        44




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
  point-of-sale
          Franchised
    and Licensed Restaurants
     45




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
        La Salsa
    Restaurant Portfolio


Fiscal Year Revenue2007-2006


2006-2005











2007-2006


2006-20052007


2006


2005


Change


Change


2007


2006


2005


Change


ChangeCompany


55



59



62



(4
)


(3
)

$
44,460


$
47,277


$
46,950


$
(2,817
)

$
327Franchised and licensed


41



43



39



(2
)


4



1,879



1,879



1,844







35Total


96



102



101



(6
)


1


$
46,339


$
49,156


$
48,794


$
(2,817
)

$
362         point-of-sale
 46




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Consolidated
    Expenses
  Consolidated
    Variable Interest Entities
      Advertising
    Expense
    General
    and Administrative Expenses
     47




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Facility
    Action Charges
          Interest
    Expense
    2007


2006


2005Facility

$
6,895


$
7,522


$
6,310Senior subordinated notes due 2009










7,855Capital lease obligations


5,665



6,257



6,9502004 convertible subordinated notes










732023 convertible subordinated notes


2,553



4,200



4,258Amortization of loan fees


3,096



3,312



3,637Write-off of unamortized loan
    fees, term loan due July 2, 2008


242



500



1,452Write-off of unamortized loan
    fees, term loan repaid June 2, 2004










664Write-off of unamortized loan
    fees, senior subordinated notes due 2009










3,068Letter of credit fees and other


1,300



1,225



2,481Total interest expense

$
19,751


$
23,016


$
36,748      48




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Conversion
    Inducement Expense
    Other
    Income (Expense), Net
    Fiscal Year Ended January 31,2007


2006


2005Premium incurred upon early
    redemption of debt

$



$



$
(9,126
)Interest income on notes
    receivable from franchisees, disposition properties and capital
    leases


1,042



1,116



1,784Rental income from properties
    leased to third parties, net


1,813



1,352



2,060Other, net


881



(81
)


2,320Total other income (expense), net

$
3,736


$
2,387


$
(2,962
)   Income
    Taxes
       49




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
         Fiscal
    Fourth Quarter 2007 Compared with Fiscal Fourth Quarter
    2006
  Carls
    Jr.
  Company-Operated
    Restaurants
      Restaurant operating costs as a
    percent of company-operated revenue for the prior year


73.7
%Increase in workers
    compensation expense


2.7Increase in depreciation and
    amortization expense


0.6Increase in general liability
    insurance expense


0.5Decrease in utilities expense


(0.5
)Increase in rent and property taxes


0.4Decrease in labor costs, excluding
    workers compensation


(0.4
)Increase in banking expenses


0.1Increase in equipment lease expense


0.1Increase in repairs and
    maintenance expense


0.1Restaurant operating costs as a
    percent of company-operated revenue for the current year


77.3
%    50




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
               Franchised
    and Licensed Restaurants
      Hardees
  Company-Operated
    Restaurants
   51




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
     Restaurant operating costs as a
    percent of company-operated revenue


84.4
%Increase in general liability
    insurance expense


1.4Decrease in labor costs, excluding
    workers compensation


(1.2
)Decrease in food and packaging
    costs


(1.1
)Decrease in utilities expense


(0.7
)Decrease in rent and property taxes


(0.5
)Decrease in depreciation and
    amortization expense


(0.5
)Increase in repair and maintenance
    expense


0.4Increase in asset retirement
    expense


0.3Increase in workers
    compensation expense


0.3Other, net


0.1Restaurant operating costs as a
    percent of company-operated revenue for the current year


82.9
%                  52




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
      Franchised
    and Licensed Restaurants
      La Salsa
      Accounting
    Pronouncements Not Yet Adopted
  Accounting
    for Certain Hybrid Financial Instruments  an
    amendment of FASB Statements No. 133 and 140. Accounting for
    Derivative Instruments and Hedging Activities Accounting for Transfers and Servicing of
    Financial Assets and Extinguishments of Liabilities 
    a replacement of FASB Statement 125
  Accounting for
    Servicing of Financial Assets  an amendment of FASB
    Statement No. 140.
 53




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
  06-3, How
    Taxes Collected from Customers and Remitted to Governmental
    Authorities Should Be Presented in the Income Statement (That
    is, Gross versus Net Presentation). 06-3 06-3
  Fair Value
    Measurements.
  The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 Accounting for Certain Investment in Debt and Equity
    Securities available-for-sale
  Impact of
    Inflation
   54




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Seasonality
    Competition
  Form 10-K,
  Liquidity
    and Capital Resources
  Form 10-K,
           55




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
        and/or and/or
     56




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
   Form 10-K.
  Form 10-K,
         57




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
    Rule 10b5-1 Rule 10b5-1
      2007


2006New restaurants (including
    restaurants under development)Carls Jr.

$
14,514


$
8,739Hardees


3,362



13,118La Salsa


1,701



173Remodels/Dual-branding (including
    construction in process)Carls Jr.


10,428



3,417Hardees


4,977



5,251La Salsa


328



131Other restaurant additionsCarls Jr.


25,388



11,712Hardees


42,442



19,889La Salsa


455



588Corporate/other


13,673



5,458Total

$
117,268


$
68,476    58




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  Managements Discussion and
    Analysis  (Continued)
 (Dollars in thousands)
      Long-Term
    Obligations
  Contractual
    Cash Obligations
    Payments Due by PeriodsLess Than








AfterTotal


One Year


1-3 Years


3-5 Years


5 YearsLong-term debt(1)(2)

$
131,609


$
1,500


$
2,586


$
2,450


$
125,073Capital lease obligations(3)(4)


72,316



10,476



20,093



17,177



24,570Operating leases(3)


609,714



84,152



147,571



112,225



265,766Unconditional purchase
    obligations(5)


43,796



40,844



2,922



30



Total contractual cash obligations

$
857,435


$
136,972


$
173,172


$
131,882


$
415,409     (1)
    
    Assumes holders of the 2023 Convertible Notes do not exercise
    redemption rights in October 2008.(2)
    
    Gives effect to the terms of the Amended Facility.(3)
    
    The amounts reported above as operating leases and capital lease
    obligations include leases contained in the estimated liability
    for closing restaurants and leases for which we are the obligee
    to the property owner and sublease to franchisees. Additional
    information regarding operating leases and capital lease
    obligations can be found in Note 8 of Notes to Consolidated
    Financial Statements.(4)
    
    Represents the undiscounted value of capital lease payments.(5)
    
    Unconditional purchase obligations include contracts for goods
    and services, primarily related to system restaurant operations
    and contractual commitments for marketing and sponsorship
    arrangements.    Other
    Commercial Commitments
  Amount of Commitment Expirations Per PeriodTotalAmounts


Less Than


1-3


3-5Committed


One Year


Years


YearsStandby letters of credit under
    our Facility

$
57,263


$
44,447


$
12,816


$
Guarantees


369



151



218



Total other commercial commitments

$
57,632


$
44,598


$
13,034


$
  59




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest
    Rate Risk
      Commodity
    Price Risk
    Derivative
    Financial Instruments
    Item 8.
    Financial
    Statements and Supplementary Data    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   60




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##### Table of Contents



Item 9A.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures    Form 10-K, Rule 13a-15(e) Form 10-K
  (b)
    Managements
    Report on Internal Control over Financial
    Reporting  Rule 13a-15(f)
  Internal
    Control  Integrated Framework
      (c)
    Changes
    in Internal Control over Financial Reporting  Form 10-K,
 61




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##### Table of Contents



(d)
    Report
    of Independent Registered Public Accounting Firm     Managements Report on Internal Control
    over Financial Reporting , Internal Control 
    Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
 62




---



##### Table of Contents



(e)
    Certifications  Form 10-K.
  Item 9B.
    Other
    Information   63




---



##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant  Form 10-K.
  Code of
    Ethics and Corporate Governance Information
  Form 8-K, Regulation S-K)
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   64




---



##### Table of Contents



Equity
    Compensation Plan Information
    Number of SecuritiesRemaining Availablefor Future IssuanceNumber of Securities


Weighted-Average


Under Equityto be Issued Upon


Exercise Price of


Compensation PlansExercise of


Outstanding


(ExcludingOutstanding Options,


Options, Warrants


Securities ReflectedPlan Category

Warrants and Rights


and Rights


in Column (a))(a)


(b)


(c)Equity compensation plans approved
    by security holders


5,003,784


$
13.74



1,210,643Equity compensation plans not
    approved by security holders(1)


370,522



8.24



93,529Total


5,374,306


$
13.36



1,304,172     (1)
    
    Represents options that are part of a broad-based
    plan as then defined by the New York Stock Exchange. See
    Note 23 of Notes to Consolidated Financial Statements.  Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   65




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Page(a)(1)

Index to Consolidated Financial
    Statements:Report of
    Independent Registered Public Accounting Firm


69Consolidated
    Balance Sheets  as of January 31, 2007 and
    2006


70Consolidated
    Statements of Income  for the fiscal years ended
    January 31, 2007, 2006 and 2005


71Consolidated
    Statements of Stockholders Equity  for the
    fiscal years ended January 31, 2007, 2006 and
    2005


72Consolidated
    Statements of Cash Flows  for the fiscal years ended
    January 31, 2007, 2006 and 2005


73Notes to
    Consolidated Financial Statements


74All schedules are omitted since
    the required information is not present in amounts sufficient to
    require submission of the schedule, or because the information
    required is included in the Consolidated Financial Statements or
    the notes thereto.(a)(2)

Exhibits:An Exhibit Index has been filed as a part of
    this Annual Report on
    Form 10-K
    beginning on page 112 hereof and is incorporated herein by
    reference  66




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##### Table of Contents



SIGNATURES
    CKE Restaurants, Inc.
  By:
    /s/  Andrew
    F. Puzder         Signature

Title

Date/s/  Byron
    AllumbaughByron
    Allumbaugh

Chairman of the Board

March 30, 2007/s/  Andrew
    F. PuzderAndrew
    F. Puzder

President and Chief Executive
    Officer
    (Principal Executive Officer)

March 30, 2007/s/  Theodore
    AbajianTheodore
    Abajian

Executive Vice President, Chief
    Financial Officer (Principal Financial Officer)

March 30, 2007/s/  Peter
    ChurmPeter
    Churm

Director

March 30, 2007/s/  Matthew
    GoldfarbMatthew
    Goldfarb

Director

March 30, 2007/s/  Carl
    L. KarcherCarl
    L. Karcher

Director

March 30, 2007/s/  Janet
    E. KerrJanet
    E. Kerr

Director

March 30, 2007/s/  Daniel
    D. LaneDaniel
    D. Lane

Director

March 30, 2007/s/  Daniel
    E. Ponder,
    Jr.Daniel
    E. Ponder, Jr.

Director

March 30, 2007 67




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##### Table of Contents



Signature

Title

Date/s/  Jerold
    H.
    RubinsteinJerold
    H. Rubinstein

Director

March 30, 2007/s/  Frank
    P. WilleyFrank
    P. Willey

Director

March 30, 2007  68




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Share-Based
    Payment
  Internal Control 
    Integrated Framework g.
      69




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES



CONSOLIDATED
    BALANCE SHEETS  January 31,


January 31,2007


2006(as restated)(In thousands, exceptpar values)ASSETSCurrent assets:Cash and cash equivalents

$
18,680


$
21,343Accounts receivable, net


42,804



36,153Related party trade receivables


4,644



4,987Inventories, net


21,965



20,953Prepaid expenses


14,174



13,101Assets held for sale


3,949



Advertising fund assets, restricted


17,896



17,226Deferred income tax assets, net


25,998



31,820Other current assets


2,168



2,251Total current assets


152,278



147,834Notes receivable, net


775



1,968Property and equipment, net


488,590



460,083Property under capital leases, net


25,153



29,364Deferred income tax assets, net


83,781



103,920Goodwill


22,649



22,649Other assets, net


21,196



25,519Total assets

$
794,422


$
791,337LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Current portion of bank
    indebtedness and other long-term debt

$
1,500


$
9,247Current portion of capital lease
    obligations


5,323



4,960Accounts payable


64,287



53,883Advertising fund liabilities


17,896



17,226Other current liabilities


96,133



89,556Total current liabilities


185,139



174,872Bank indebtedness and other
    long-term debt, less current portion


114,942



98,731Convertible subordinated notes due
    2023


15,167



105,000Capital lease obligations, less
    current portion


41,123



46,724Other long-term liabilities


59,205



57,072Total liabilities


415,576



482,399Subsequent events (Note 11)Commitments and contingencies
    (Notes 8, 10, 11, 12 and 27)Stockholders equity:Preferred stock, $.01 par
    value; authorized 5,000 shares; none issued or outstanding






Series A Junior Participating
    Preferred stock, $.01 par value; 1,500 shares
    authorized; none issued or outstanding






Common stock, $.01 par value;
    authorized 100,000 shares; 67,247 shares issued and
    67,229 shares outstanding as of January 31, 2007 and
    59,803 shares issued and outstanding as of January 31,
    2006


672



598Common stock held in treasury, at
    cost; 18 shares as of January 31, 2007 and none as of
    January 31, 2006


(360
)


Additional paid-in capital


501,437



472,834Unearned compensation on
    restricted stock






(1,816
)Accumulated deficit


(122,903
)


(162,678
)Total stockholders equity


378,846



308,938Total liabilities and
    stockholders equity

$
794,422


$
791,337    70




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF INCOME  Fiscal Years Ended January 31,2007


2006


2005(as restated)(In thousands, except per share amounts)Revenue:Company-operated restaurants

$
1,269,687


$
1,209,456


$
1,217,273Franchised and licensed restaurants
    and other


318,723



308,891



302,608Total revenue


1,588,410



1,518,347



1,519,881Operating costs and
    expenses:Restaurant operating costs:Food and packaging


364,375



354,239



359,939Payroll and other employee benefits


370,724



356,960



377,405Occupancy and other


276,753



270,716



273,294Total restaurant operating costs


1,011,852



981,915



1,010,638Franchised and licensed restaurants
    and other


240,952



238,461



227,588Advertising


72,253



70,964



71,839General and administrative


150,315



141,102



138,716Facility action charges, net


8,546



8,025



14,320Total operating costs and expenses


1,483,918



1,440,467



1,463,101Operating income


104,492



77,880



56,780Interest expense


(19,751
)


(23,016
)


(36,748
)Conversion inducement expense


(6,406
)






Other income (expense), net


3,736



2,387



(2,962
)Income before income taxes and
    discontinued operations


82,071



57,251



17,070Income tax expense (benefit)


31,899



(123,888
)


(1,592
)Income from continuing operations


50,172



181,139



18,662Discontinued operations:Loss from discontinued operations
    (net of income tax benefit of $0 for 2005)










(646
)Net income

$
50,172


$
181,139


$
18,016Basic income per common share:Continuing operations

$
0.79


$
3.06


$
0.32Discontinued operations










(0.01
)Net income

$
0.79


$
3.06


$
0.31Diluted income per common share:Continuing operations

$
0.72


$
2.51


$
0.31Discontinued operations










(0.01
)Net income

$
0.72


$
2.51


$
0.30Dividends per common share

$
0.16


$
0.16


$
Weighted-average common shares
    outstanding:Basic


63,562



59,226



57,615Dilutive effect of stock options,
    warrants, convertible notes and restricted stock


8,815



14,024



1,968Diluted


72,377



73,250



59,583    71




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY

(In thousands) Officer andNon-Unearned


EmployeeCommon Stock


Additional


Compensation


Director





TotalCommon Stock


Held in Treasury


Paid-In


On Restricted


Notes


Accumulated


StockholdersShares


Amount


Shares


Amount


Capital


Stock


Receivable


Deficit


EquityBalance at January 31,
    2004


59,216


$
592



(1,585
)

$
(10,406
)

$
464,689


$



$
(2,530
)

$
(351,687
)

$
100,658Exercise of stock options


970



10











4,013















4,023Collection of officer and
    non-employee director notes receivable


























2,530







2,530Repurchase and retirement of common
    stock


(2,104
)


(21
)


1,585



10,406



(15,311
)










(633
)


(5,559
)Net income






























18,016



18,016Balance at January 31,
    2005


58,082



581











453,391











(334,304
)


119,668Cash dividends declared






























(9,513
)


(9,513
)Issuance of restricted stock
    awards, net of forfeitures


150



1











2,003



(2,004
)










Amortization of unearned
    compensation






















188











188Exercise of stock options and
    warrants


1,868



19











9,464















9,483Tax benefit from exercise of stock
    options


















11,971















11,971Repurchase and retirement of common
    stock


(297
)


(3
)










(3,995
)














(3,998
)Net income (as restated)






























181,139



181,139Balance at January 31, 2006
    (as restated)


59,803



598











472,834



(1,816
)






(162,678
)


308,938Cash dividends declared






























(10,397
)


(10,397
)Issuance of restricted stock
    awards, net of forfeitures


634



6











(6
)














Reclassification of unearned
    compensation pursuant to SFAS 123R adoption


















(1,816
)


1,816











Exercise of stock options


1,175



12











10,315















10,327Conversion of 2023 Convertible
    Notes into common stock


10,224



102











88,375















88,477Tax benefit from exercise of stock
    options


















4,078















4,078Share-based compensation expense


















8,308















8,308Repurchase and retirement of common
    stock


(4,589
)


(46
)


(18
)


(360
)


(80,651
)














(81,057
)Net income






























50,172



50,172Balance at January 31,
    2007


67,247


$
672



(18
)

$
(360
)

$
501,437


$



$



$
(122,903
)

$
378,846    72




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS

(In
    thousands)  Fiscal Years Ended January 31,2007


2006


2005(as restated)Cash flows from operating
    activities:Net income

$
50,172


$
181,139


$
18,016Adjustments to reconcile net income
    to net cash provided by operating activities:Depreciation and amortization


62,418



64,155



66,793Amortization of loan fees


3,097



3,312



3,637Share-based compensation expense


8,308



188



(Recovery of) provision for losses
    on accounts and notes receivable


(192
)


176



(1,940
)Loss on sale of property and
    equipment, capital leases and extinguishment of debt


3,449



3,180



9,676Facility action charges, net


8,546



8,025



14,320Deferred income taxes


25,961



(125,478
)


295Other non-cash charges


77



88



79Net changes in operating assets and
    liabilities:Estimated liability for closing
    restaurants and estimated liability for self-insurance


(5,204
)


(13,701
)


(5,905
)Refundable income taxes


(4,356
)


612



(3,366
)Receivables, inventories, prepaid
    expenses and other current and non-current assets


(3,739
)


(5,002
)


1,766Accounts payable and other current
    and long-term liabilities


15,608



(521
)


8,086Operating cash flows of
    discontinued operations










765Net cash provided by operating
    activities


164,145



116,173



112,222Cash flows from investing
    activities:Purchases of property and equipment


(117,268
)


(68,476
)


(58,621
)Proceeds from sales of property and
    equipment


21,929



7,993



12,881Collections on notes receivable


2,749



898



1,527Increase in cash upon consolidation
    of variable interest entity










100Disposition of brand, net of cash
    surrendered










6,954Other investing activities


62



(454
)


132Investing cash flows of
    discontinued operations










(269
)Net cash used in investing
    activities


(92,528
)


(60,039
)


(37,296
)Cash flows from financing
    activities:Net change in bank overdraft.


2,620



108



(5,018
)Borrowings under revolving credit
    facility


127,000



136,500



55,000Repayments of borrowings under
    revolving credit facility


(89,500
)


(143,000
)


(40,500
)Proceeds from credit facility term
    loan










230,000Repayment of credit facility term
    loan


(28,928
)


(39,902
)


(115,411
)Repayment of senior subordinated
    notes due 2009










(200,000
)Repayment of convertible
    subordinated notes due 2004










(22,319
)Repayment of other long-term debt


(145
)


(179
)


(152
)Borrowings by consolidated variable
    interest entity


38



75



Repayments of capital lease
    obligations


(4,937
)


(5,089
)


(7,143
)Collections on officer and
    non-employee director notes receivable










2,530Payment of deferred loan fees


(2,733
)


(102
)


(6,193
)Repurchase of common stock


(80,697
)


(3,998
)


(5,559
)Proceeds from exercises of stock
    options and warrants


10,327



9,483



4,023Tax benefit from exercise of stock
    options


2,801







Dividends paid on common stock


(10,126
)


(7,119
)


Financing cash flows of
    discontinued operations










(107
)Net cash used in financing
    activities


(74,280
)


(53,223
)


(110,849
)Net (decrease) increase in cash and
    cash equivalents


(2,663
)


2,911



(35,923
)Cash and cash equivalents at
    beginning of year


21,343



18,432



54,355Cash and cash equivalents at end of
    year

$
18,680


$
21,343


$
18,432    73




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Fiscal Years Ended January 31, 2007, 2006 and 2005
    (Dollars in thousands, except per share amounts)  Note 1 
    Significant Accounting Policies
    Description
    of Business
      Carls Jr.


Hardees


La Salsa


Other


TotalCompany-operated


393



696



55



1



1,145Franchised and licensed


694



1,210



41



15



1,960Total


1,087



1,906



96



16



3,105   Basis
    of Presentation and Fiscal Year
    Restatement
    of Previously Issued Financial Statements
     74




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      PreviouslyReported


Adjustments


As RestatedFiscal 2006Consolidated Balance Sheet
    DataDeferred income tax assets, net

$
31,413


$
407


$
31,820Total current assets


147,427



407



147,834Deferred income tax assets, net


117,770



(13,850
)


103,920Total assets


804,780



(13,443
)


791,337Accumulated deficit


(149,235
)


(13,443
)


(162,678
)Total stockholders equity


322,381



(13,443
)


308,938Total liabilities and
    stockholders equity


804,780



(13,443
)


791,337Consolidated Statement of
    Income DataIncome tax benefit


(137,331
)


13,443



(123,888
)Income from continuing operations


194,582



(13,443
)


181,139Net income


194,582



(13,443
)


181,139Basic income per common share:Continuing operations


3.29



(0.23
)


3.06Net income


3.29



(0.23
)


3.06Diluted income per common share:Continuing operations


2.70



(0.19
)


2.51Net income


2.70



(0.19
)


2.51Consolidated Statement of Cash
    Flows DataCash flows from operating
    activities:Net income


194,582



(13,443
)


181,139Adjustments to reconcile net
    income to net cash provided by operating activities:Deferred income taxes


(138,921
)


13,443



(125,478
)   Variable
    Interest Entities
  Consolidation of
    Variable Interest Entities  an interpretation of ARB
    No. 51
   75




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accounting
    for Franchise Fee Revenue,
      Cash
    and Cash Equivalents
    Inventories
  first-in,
  Deferred
    Financing Costs
  (EITF) 98-14, Debtors Accounting for Changes in Line of Credit or
    Revolving-Debt Arrangements EITF 96-19, Debtors Accounting for a Modification or Exchange of
    Debt Instruments
  Assets
    Held for Sale
  Accounting for the Impairment
    or Disposal of Long-Lived Assets
    Property
    and Equipment
   76




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accounting for Leases
  Capitalized
    Costs
  Accounting for Costs and Initial
    Rental Operations of Real Estate Projects
  Goodwill
  Goodwill and Other
    Intangible Assets Business Combinations
  Facility
    Action Charges
              (i) Impairment
    of Long-Lived Assets
   77




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       (ii) Store
    Closure Costs
    Accounting for Costs
    Associated with Exit or Disposal Activities
    (iii) Gains
    (Losses) on the Sale of Restaurants
    (iv) Amortization
    of Discount Related to Estimated Liability for Closing
    Restaurants
    Guarantees
  Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness to
    Others, an interpretation of SFAS 5, SFAS 57 and
    SFAS 107 and a rescission of FASB Interpretation 34
 78




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Loss
    Contingencies
  Accounting for Contingencies
  Self-Insurance
      Leases
    and Leasehold Improvements
      Franchise
    and Licensed Operations
     79




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       and/or and/or
  Revenue
    Recognition
    Advertising
     80




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income
    Taxes
    Estimations
      
    estimation of future cash flows used to assess the
    recoverability of long-lived assets, including goodwill, and to
    establish the estimated liability for closing restaurants and
    subsidizing lease payments of franchisees;
    estimation, using actuarially determined methods, of our
    self-insured claim losses under our workers compensation,
    general and auto liability insurance programs;
    determination of appropriate estimated liabilities for loss
    contingencies;
    determination of appropriate assumptions to use in evaluating
    leases for capital versus operating lease treatment,
    establishing depreciable lives for leasehold improvements and
    establishing straight-line rent expense periods;
    estimation of the appropriate allowances associated with
    franchise and license receivables and liabilities for franchise
    subleases;
    determination of the appropriate assumptions to use to estimate
    the fair value of share-based compensation; and
    estimation of our net deferred income tax asset valuation
    allowance and effective tax rate.  Income
    Per Share
   81




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         2007


2006


2005(as restated)Net income for computation of
    basic earnings per share

$
50,172


$
181,139


$
18,016Weighted-average shares for
    computation of basic earnings per share


63,562



59,226



57,615Basic net income per share

$
0.79


$
3.06


$
0.31Net income for computation of
    basic earnings per share

$
50,172


$
181,139


$
18,016Add: Interest and amortization
    costs for Convertible Subordinated Notes due 2023, net of
    related tax effect


1,880



3,070



Net income for computation of
    diluted earnings per share

$
52,052


$
184,209


$
18,016Weighted-average shares for
    computation of basic earnings per share


63,562



59,226



57,615Dilutive effect of stock options,
    warrants and restricted stock


1,509



2,181



1,968Dilutive effect of Convertible
    Subordinated Notes due 2023


7,306



11,843



Weighted-average shares for
    computation of diluted earnings per share


72,377



73,250



59,583Diluted net income per share

$
0.72


$
2.51


$
0.30     2007


2006


2005Convertible Subordinated Notes due
    2023










11,811Stock Options and Restricted Stock


1,897



2,175



2,813Warrants










982   Share-Based
    Compensation
  Accounting for Stock
 82




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Issued to Employees Share-Based Payment
  Derivative
    Financial Instruments
    Accounting for Derivative
    Instruments and Hedging Activities,
  Credit
    Risks
      Comprehensive
    Income
  Reporting
    Comprehensive Income
  Segment
    Information
    Reclassifications
    Note 2 
    Accounting Pronouncements Not Yet Adopted
  Accounting
    for Certain Hybrid Financial Instruments  an
    amendment of FASB Statements No. 133 and 140. Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities  a replacement of
    FASB Statement 125.
 83




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Accounting for
    Servicing of Financial Assets  an amendment of FASB
    Statement No. 140.
  Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
  06-3, How
    Taxes Collected from Customers and Remitted to Governmental
    Authorities Should Be Presented in the Income Statement (That
    Is, Gross versus Net Presentation). 06-3 06-3 06-3
  Fair Value
    Measurements.
  The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 Accounting for Certain Investment in Debt and Equity
    Securities available-for-sale
 84




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 3 
    Adoption of New Accounting Pronouncements
  Inventory
    Costs  an amendment of ARB No. 43,
    Chapter 4.
    Accounting
    Changes and Error Corrections  a replacement of APB
    Opinion No. 20 and FASB Statement No. 3.
  FAS 13-1, Accounting for Rental Costs Incurred during a Construction
    Period,
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R).
  Considering the Effects of Prior Year
    Misstatements when Quantifying Misstatements in Current Year
    Financial Statements.
  Note 4 
    Goodwill
   85




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 5 
    Facility Action Charges, Net
    2007


2006


2005Carls Jr.New decisions regarding closing
    restaurants

$
74


$



$
269Unfavorable dispositions of leased
    and fee surplus properties, net


629



846



120Impairment of assets to be
    disposed of










28Impairment of assets to be held
    and used


364



1,431



2,693Gain on sales of restaurants and
    surplus property, net


(651
)


(732
)


(611
)Amortization of discount related
    to estimated liability for closing restaurants


248



247



295664



1,792



2,794HardeesNew decisions regarding closing
    restaurants


3,038



957



5,247Unfavorable (favorable)
    dispositions of leased and fee surplus properties, net


4



(29
)


(1,364
)Impairment of assets to be
    disposed of


2,148



23



683Impairment of assets to be held
    and used


680



2,521



2,428(Gain) loss on sales of
    restaurants and surplus property, net


(3,859
)


504



(917
)Amortization of discount related
    to estimated liability for closing restaurants


483



677



1,0112,494



4,653



7,088La Salsa and
    OtherNew decisions regarding closing
    restaurants


617



157



1,074Unfavorable (favorable)
    dispositions of leased and fee surplus properties, net


1,003



(268
)


172Impairment of assets to be
    disposed of










755Impairment of assets to be held
    and used


2,574



1,338



2,434Loss (gain) on sales of
    restaurants and surplus properties, net


1,170



347



(3
)Amortization of discount related
    to estimated liability for closing restaurants


24



6



65,388



1,580



4,438 86




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2007


2006


2005TotalNew decisions regarding closing
    restaurants

$
3,729


$
1,114


$
6,590Unfavorable (favorable)
    dispositions of leased and fee surplus properties, net


1,636



549



(1,072
)Impairment of assets to be
    disposed of


2,148



23



1,466Impairment of assets to be held
    and used


3,618



5,290



7,555(Gain) loss on sales of
    restaurants and surplus property, net


(3,340
)


119



(1,531
)Amortization of discount related
    to estimated liability for closing restaurants


755



930



1,312$
8,546


$
8,025


$
14,320     2007


2006


2005Property and equipmentCarls Jr.

$
332


$
980


$
2,721Hardees


2,779



2,382



2,868La Salsa and Other


2,536



658



3,1895,647



4,020



8,778Property under capital leasesCarls Jr.






451



Hardees


49



162



22549



613



225Favorable lease rightsCarls Jr.


32







Hardees










18La Salsa


38



680



70



680



18TotalCarls Jr.


364



1,431



2,721Hardees


2,828



2,544



3,111La Salsa and Other


2,574



1,338



3,189$
5,766


$
5,313


$
9,021  87




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     La SalsaCarls Jr.


Hardees


and Other


TotalBalance at January 31, 2004

$
5,008


$
17,115


$
202


$
22,325New decisions regarding closing
    restaurants


269



5,247



1,074



6,590Usage


(1,478
)


(8,934
)


(868
)


(11,280
)Unfavorable (favorable)
    dispositions of leased and fee surplus properties, net


120



(1,364
)


172



(1,072
)Amortization of discount


295



1,011



6



1,312Balance at January 31, 2005


4,214



13,075



586



17,875New decisions regarding closing
    restaurants






957



157



1,114Usage


(1,692
)


(4,815
)


(361
)


(6,868
)Unfavorable (favorable)
    dispositions of leased and fee surplus properties, net


846



(29
)


(268
)


549Amortization of discount


247



677



6



930Balance at January 31, 2006


3,615



9,865



120



13,600New decisions regarding closing
    restaurants


74



3,038



617



3,729Usage


(1,380
)


(4,217
)


(94
)


(5,691
)Unfavorable dispositions of leased
    and fee surplus properties, net


629



4



1,003



1,636Amortization of discount


248



483



24



755Balance at January 31, 2007


3,186



9,173



1,670



14,029Less current portion, included in
    other current liabilities


1,036



2,829



556



4,421Long-term portion, included in
    other long-term liabilities

$
2,150


$
6,344


$
1,114


$
9,608   Note 6 
    Accounts Receivable, Net, and Notes Receivable,
    Net
    2007


2006Trade receivables

$
34,686


$
31,296Refundable income taxes


8,253



3,896Notes receivable, current portion


704



3,676Other


63



118Allowance for doubtful accounts


(902
)


(2,833
)$
42,804


$
36,153  88




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2007


2006Franchisees

$
1,243


$
5,804Employees


36



71Other


2,282



2,350Allowance for doubtful accounts


(2,786
)


(6,257
)$
775


$
1,968     Accounts


NotesReceivable


Receivable


TotalBalance at January 31, 2004

$
5,580


$
6,186


$
11,766Provision (recovery of provision)


(2,835
)


895



(1,940
)Charge-offs


(334
)






(334
)Recoveries


131







131Balance at January 31, 2005


2,542



7,081



9,623Provision (recovery of provision)


663



(487
)


176Charge-offs


(441
)


(337
)


(778
)Recoveries


69







69Balance at January 31, 2006


2,833



6,257



9,090Provision (recovery of provision)


(1,436
)


1,244



(192
)Charge-offs


(495
)


(4,715
)


(5,210
)Balance at January 31, 2007

$
902


$
2,786


$
3,688   Note 7 
    Property and Equipment
    EstimatedUseful Life


2007


2006Land





$
137,561


$
129,635Leasehold improvements


3-25 years



212,364



198,982Buildings and improvements


7-40 years



283,056



261,111Equipment, furniture and fixtures


3-10 years



306,309



301,357939,290



891,085Less: accumulated depreciation and
    amortization






(450,700
)


(431,002
)$
488,590


$
460,083    89




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 8 
    Leases
      2007


2006Buildings

$
69,726


$
72,203Equipment


312



34470,038



72,547Less: accumulated amortization


(44,885
)


(43,183
)$
25,153


$
29,364       Capital


OperatingFiscal Year:2008

$
10,476


$
84,1522009


10,286



76,9152010


9,807



70,6562011


9,066



61,0692012


8,111



51,156Thereafter


24,570



265,766Total minimum lease payments


72,316


$
609,714Less: amount representing interest


(25,870
)Present value of minimum lease
    payments (interest rates primarily ranging from 8% to 14%)


46,446Less: current portion


(5,323
)Capital lease obligations,
    excluding current portion

$
41,123    90




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006Net minimum lease payments
    receivable

$
1,017


$
1,227Less: unearned income


(345
)


(436
)Net investment

$
672


$
791     2007


2006Land

$
15,461


$
15,863Leasehold improvements


5,349



6,577Buildings and improvements


17,198



17,909Equipment, furniture and fixtures


1,446



1,10239,454



41,451Less: accumulated depreciation and
    amortization


(13,404
)


(14,904
)$
26,050


$
26,547     Capital


OperatingLeases or


LessorSubleases


LeasesFiscal Year:2008

$
142


$
28,5522009


142



26,5512010


142



23,0662011


142



19,6932012


142



14,634Thereafter


307



52,347Total minimum future rentals

$
1,017


$
164,843    91




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006


2005Minimum rentals

$
92,288


$
91,886


$
98,730Contingent rentals


4,515



5,206



5,01396,803



97,092



103,743Less: sublease rentals


(31,801
)


(33,221
)


(36,444
)$
65,002


$
63,871


$
67,299       Note 9 
    Other Assets
    2007


2006Intangible assets (see below)

$
15,443


$
16,836Deferred financing costs


3,697



5,708Net investment in lease
    receivables, less current portion


610



748Other


1,446



2,227$
21,196


$
25,519       January 31, 2007


January 31, 2006Weighted-Average


Gross





Net


Gross





NetLife


Carrying


Accumulated


Carrying


Carrying


Accumulated


CarryingIntangible Asset

(Years)


Amount


Amortization


Amount


Amount


Amortization


AmountTrademarks


20


$
17,171


$
(4,224
)

$
12,947


$
17,171


$
(3,365
)

$
13,806Franchise agreements


20



1,780



(417
)


1,363



1,780



(328
)


1,452Favorable lease agreements


16



3,194



(2,061
)


1,133



4,034



(2,456
)


1,578$
22,145


$
(6,702
)

$
15,443


$
22,985


$
(6,149
)

$
16,836    92




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 10 
    Other Current Liabilities
    2007


2006Salaries, wages and other benefits

$
37,108


$
32,439State sales taxes


6,747



7,288Estimated liability for closing
    restaurants


4,421



4,417Accrued interest


856



1,924Estimated liability for property
    taxes


4,955



4,258Estimated liability for litigation


630



1,412Accrued utilities


4,111



3,935Estimated liability for
    self-insurance, current portion


11,182



11,141Other accrued liabilities


26,123



22,742$
96,133


$
89,556   Note 11 
    Long-Term Debt and Bank Indebtedness
    2007


2006Borrowings under revolving portion
    of the Facility

$
45,500


$
8,000Term loan under the Facility


69,821



98,749Convertible subordinated notes due
    2023, interest at 4.00%


15,167



105,000Other long-term debt


1,121



1,229131,609



212,978Less: current portion


(1,500
)


(9,247
)$
130,109


$
203,731        93




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          and/or and/or
     94




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             95




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Fiscal Year:2008

$
1,5002009


1,3642010


1,2222011


1,2242012


1,226Thereafter(1)


125,073$
131,609     (1)
    
    Assumes holders of the 2023 Convertible Notes do not exercise
    redemption rights in October 2008.  Note 12 
    Other Long-Term Liabilities
    2007


2006Estimated liability for closing
    restaurants

$
9,608


$
9,183Estimated liability for
    self-insurance


26,651



26,272Estimated liability for deferred
    rent


11,442



10,068Other


11,504



11,549$
59,205


$
57,072     Note 13 
    Stockholders Equity
      Rule 10b5-1
 96




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Rule 10b5-1
    Note 14 
    Purchase and Cancellation of Stock Options
    Note 15 
    Fair Value of Financial Instruments
    2007


2006Carrying


Estimated


Carrying


EstimatedAmount


Fair Value


Amount


Fair ValueFinancial assets:Cash and cash equivalents

$
18,680


$
18,680


$
21,343


$
21,343Notes receivable, net of allowance
    for doubtful accounts


944



778



3,666



3,309Interest rate cap agreements


13



13



56



56Financial liabilities:Long-term debt, including current
    portion


131,609



150,519



212,978



316,090     Note 16 
    Related Party Transactions
   97




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        point-of-sale
    Note 17 
    Franchise and License Operations
        2007


2006


2005Royalties

$
79,499


$
70,375


$
70,857Foodservice


187,533



179,222



176,304Equipment sales


16,987



24,319



18,181Rental income


28,797



28,089



32,157Initial fees and other


5,907



6,886



5,109$
318,723


$
308,891


$
302,608  98




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2007


2006


2005Foodservice costs of sales

$
185,271


$
174,149


$
171,363Equipment division cost of sales
    and operating expenses


17,840



24,930



18,379Occupancy and other operating
    expenses


37,841



39,382



37,846$
240,952


$
238,461


$
227,588   Note 18 
    Interest Expense
    2007


2006


2005Facility

$
6,895


$
7,522


$
6,310Senior subordinated notes due 2009










7,855Capital lease obligations


5,665



6,257



6,9502004 convertible subordinated notes










732023 convertible subordinated notes


2,553



4,200



4,258Amortization of loan fees


3,096



3,312



3,637Write-off of unamortized loan
    fees, term loan due July 2, 2008


242



500



1,452Write-off of unamortized loan
    fees, term loan repaid June 2, 2004










664Write-off of unamortized loan
    fees, senior subordinated notes due 2009










3,068Letter of credit fees and other


1,300



1,225



2,481Total interest expense

$
19,751


$
23,016


$
36,748   Note 19 
    Other Income (Expense), Net
    2007


2006


2005Premium incurred upon early
    redemption of debt

$



$



$
(9,126
)Interest income on notes
    receivable from franchisees, disposition properties and capital
    leases


1,042



1,116



1,784Rental income from properties
    leased to third parties, net


1,813



1,352



2,060Other, net


881



(81
)


2,320Total other income (expense), net

$
3,736


$
2,387


$
(2,962
)  99




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 20 
    Income Taxes
    2007


2006


2005(as restated)Current:Federal

$
4,070


$
502


$
(2,493
)State


744



183



(214
)Foreign


1,124



905



8205,938



1,590



(1,887
)Deferred:Federal


21,929



(109,871
)


214State


4,032



(15,607
)


8125,961



(125,478
)


295Total

$
31,899


$
(123,888
)

$
(1,592
)       2007


2006


2005(as restated)Income tax expense at statutory
    rate

$
28,780


$
20,038


$
5,975State income taxes, net of federal
    income tax benefit


3,104



(10,025
)


(86
)Tax credits


(300
)


(442
)


(677
)Decrease in valuation allowance,
    federal


(4,842
)


(136,264
)


(7,146
)Nondeductible compensation


2,390



1,793



20Other, net


2,767



1,012



322$
31,899


$
(123,888
)

$
(1,592
)  100




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2007


2006(as restated)Estimated liability for closing
    restaurants

$
5,641


$
5,505Net operating loss carryforwards


21,761



36,509Basis difference in fixed assets


13,555



9,071Goodwill and other intangible
    assets


32,010



38,745Reserves and allowances


25,622



31,930Capital leases


12,583



12,107Federal and state tax credits


20,275



30,170Other


5,589



1,923137,036



165,960Valuation allowance


(27,257
)


(30,220
)Net deferred tax asset

$
109,779


$
135,740        101




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 21 
    Discontinued Operations
      Revenue

$
24,129Operating loss

$
(636
)Interest expense


10Net loss

$
(646
)     Note 22 
    Segment Information
    102




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Carls Jr.


Hardees


La Salsa


Other


Total2007Revenue

$
830,961


$
706,884


$
46,339


$
4,226


$
1,588,410Segment operating income (loss)


83,525



32,547



(11,381
)


(199
)


104,492Interest expense


3,991



15,491



(17
)


286



19,751Total assets


212,480



369,954



20,958



191,030



794,422Capital expenditures


61,280



53,406



2,564



18



117,268Goodwill


22,649















22,649Depreciation and amortization


26,328



32,821



3,050



219



62,418Income tax expense (benefit)


29,388



6,966



(4,089
)


(366
)


31,8992006 (as restated)Revenue

$
802,761


$
661,509


$
49,156


$
4,921


$
1,518,347Segment operating income (loss)


82,773



13,393



(7,007
)


(11,279
)


77,880Interest expense


4,255



18,641



28



92



23,016Total assets


195,729



359,342



24,966



211,300



791,337Capital expenditures


28,754



38,601



910



211



68,476Goodwill


22,649















22,649Depreciation and amortization


24,958



35,473



3,558



166



64,155Income tax expense (benefit)


1,955







(138
)


(125,705
)


(123,888
)2005Revenue

$
792,829


$
673,172


$
48,794


$
5,086


$
1,519,881Segment operating income (loss)


61,656



5,293



(10,270
)


101



56,780Interest expense


5,071



31,510



(27
)


194



36,748Total assets


219,974



362,004



29,682



57,223



668,883Capital expenditures


24,773



30,056



3,705



87



58,621Goodwill


22,649















22,649Depreciation and amortization


23,875



38,782



3,965



171



66,793Income tax expense (benefit)


498



73



2



(2,165
)


(1,592
)   Note 23 
    Share-Based Compensation
  Accounting for Stock-Based Compensation
 103




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accounting for Income Taxes
  Statement of Cash
    Flows
    Decrease in income before income
    taxes

$
4,860Decrease in net income


2,999Decrease in basic net income per
    common share


0.05Decrease in diluted net income per
    common share


0.04      104




---



##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2006


2005(as restated)Net income, as reported

$
181,139


$
18,016Add: Stock-based employee
    compensation expense included in reported net income, net of
    related tax effects


116



Deduct: Total share-based employee
    compensation expense determined under fair value based method,
    net of related tax effects


(2,933
)


(4,651
)Net income  pro forma

$
178,322


$
13,365Net income per common share:Basic  as reported

$
3.06


$
0.31Basic  pro forma


3.01



0.23Diluted  as reported


2.51



0.30Diluted  pro forma


2.43



0.22   Employee
    Stock Purchase Plan
      Stock
    Incentive Plans
   105




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              106




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006


2005Annual dividend yield


1.09
%


1.13
%


Expected volatility


48.66
%


63.6
%


72.6
%Risk-free interest rate (matched
    to the expected term of the outstanding option)


4.76
%


4.39
%


3.46
%Expected life (years)


5.97



5.29



5.43Weighted-average fair value of
    each option granted

$
8.95


$
7.14


$
7.15     Change in Assumption

2007


2006


200510% increase in expected volatility

$
1.23


$
0.79


$
0.631% increase in risk-free interest
    rate


0.28



0.15



0.111 year increase in expected
    life


0.55



0.46



0.4710% decrease in expected volatility


(1.31
)


(0.86
)


(0.69
)1% decrease in risk-free interest
    rate


(0.28
)


(0.15
)


(0.12
)1 year decrease in expected
    life


(0.65
)


(0.56
)


(0.56
)     Stock
    options outstanding:
  Weighted-Average


AggregateWeighted-Average


Remaining


IntrinsicShares


Exercise Price


Contractual Life


ValueOutstanding at January 31,
    2006


6,162,082


$
12.08



5.67Granted


553,144



18.73Exercised


(1,174,891
)


8.79Forfeited


(68,470
)


13.42Expired


(97,559
)


17.84Outstanding at January 31,
    2007


5,374,306


$
13.36



5.38


$
39,839Exercisable at January 31,
    2007


3,929,823


$
12.65



4.12


$
33,353Expected to vest at
    January 31, 2007


1,313,381


$
15.24



8.76


$
5,968     2007


2006


2005Total intrinsic value of stock
    options exercised

$
11,147


$
19,525


$
8,609  107




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Options Outstanding

Options Exercisable(000s)



Weighted-Average

(000s)Range of

Options

Weighted-Average

Remaining

Shares

Weighted-AverageExercise Prices

Outstanding

Exercise Price

Contractual Life

Exercisable

Exercise Price$
2.04


to

$
3.31



693


$
2.84



3.80



693


$
2.843.38





6.71



662



5.52



5.57



662



5.528.39





11.24



501



10.49



4.43



493



10.5211.26





11.26



641



11.26



7.37



405



11.2611.50





13.15



679



13.08



8.57



237



13.0613.53





16.50



664



15.18



5.78



393



14.8217.67





19.13



850



18.68



6.39



363



18.0923.66





36.65



684



27.59



0.79



684



27.59$
2.04




$
36.65



5,374


$
13.36



5.38



3,930


$
12.65   Restricted
    stock awards:
  Weighted-AverageGrant DateShares


Fair ValueRestricted stock awards at
    January 31, 2006


150,000


$
13.33Granted


639,349


$
18.30Awards vested


(168,337
)

$
17.46Forfeited


(5,000
)

$
13.53Restricted stock awards at
    January 31, 2007


616,012


$
17.36      108




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 24 
    Employee Benefit and Retirement Plans
  Savings
    and Profit Sharing Plan
    Deferred
    Compensation Plan
      Note 25 
    Supplemental Cash Flow Information
    2007


2006


2005Cash paid for:Interest, net of amounts
    capitalized

$
17,687


$
19,777


$
32,099Income taxes, net of refunds
    received


5,324



1,362



5,482Non-cash investing and financing
    activities:Gain recognized on sale and
    leaseback transactions


368



361



305Dividends declared, not paid


2,694



2,394



Capital lease obligations incurred
    to acquire assets


302



344



  109




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 26 
    Selected Quarterly Financial Data (Unaudited)
    Quarter1st


2nd


3rd


4thFiscal 2007Total revenue

$
488,557


$
375,965


$
364,918


$
358,970Operating income


33,634



33,308



24,255



13,295Net income


16,168



14,216



9,457



10,331Basic income per common share


0.27



0.24



0.14



0.15Diluted income per common share


0.23



0.20



0.13



0.15Fiscal 2006 (as
    restated)Total revenue

$
465,909


$
359,783


$
344,113


$
348,542Operating income


23,148



13,209



20,984



20,539Net income


15,999



8,448



15,823



140,869Basic income per common share


0.27



0.14



0.27



2.37Diluted income per common share


0.24



0.13



0.23



1.95   12-week 16-week
  Fourth
    Quarter Adjustment
    Note 27 
    Commitments and Contingent Liabilities
    sub-facility sub-facility,
 110




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##### Table of Contents



CKE
    RESTAURANTS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       March 2007

$
26,807April 2007


1,003July 2007


7,279November 2007


8,805December 2007


553February 2008


12,816$
57,263            111




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##### Table of Contents



EXHIBIT INDEX  Exhibits

Description3
.1

Certificate of Incorporation of
    the Company, incorporated herein by reference to
    Exhibit 3.1 to the Companys
    Form S-4
    Registration Statement
    Number 33-52523.3
.2

Certificate of Amendment of
    Certificate of Incorporation, as filed with the Delaware
    Secretary of State on December 9, 1997, filed as
    Exhibit 3.2 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 1998, and is hereby
    incorporated by reference.3
.3

Bylaws of the Company,
    incorporated herein by reference to Exhibit 3.2 to the
    Companys
    Form S-4
    Registration Statement
    Number 33-52523.3
.4

Certificate of Amendment of
    Bylaws, incorporated herein by reference to Exhibit 3.4 to
    the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.3
.5

Certificate of Amendment of
    Bylaws, incorporated herein by reference to Exhibit 3.5 to
    the Companys Current Report on
    Form 8-K
    filed December 13, 2006.4
.6

Indenture, dated as of
    September 29, 2003, by and between the Company and
    J.P. Morgan Trust Company, National Association, as
    Trustee, filed as Exhibit 4.6 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarter ended November 3, 2003, and is hereby
    incorporated by reference.4
.7

Form of Notes (included in
    Exhibit 4.6).4
.8

Registration Rights Agreement,
    dated as of September 29, 2003, by and among the Company
    and Citigroup Global Markets, Inc., for itself and the other
    initial purchasers, filed as Exhibit 4.8 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarter ended November 3, 2003, and is hereby
    incorporated by reference.10
.1

Carl Karcher Enterprises, Inc.
    Profit Sharing Plan, as amended, filed as Exhibit 10.21 to
    the Companys
    Form S-1
    Registration Statement Number 2-73695, and is hereby
    incorporated by reference.(1)10
.4

CKE Restaurants, Inc. 1994 Stock
    Incentive Plan, as amended, incorporated herein by reference to
    Exhibit 4.1 to the Companys
    Form S-8
    Registration Statement
    Number 333-12399.(1)10
.5

CKE Restaurants, Inc. 1999 Stock
    Incentive Plan, incorporated herein by reference to
    Exhibit 4.1 to the Companys
    Form S-8
    Registration Statement
    Number 333-83601.(1)10
.7

Employment Agreement dated
    January 1, 1994, by and between Carl Karcher Enterprises,
    Inc. and Carl N. Karcher, filed as Exhibit 10.89 to the
    Companys Annual Report on
    Form 10-K
    for fiscal year ended January 31, 1994, and is hereby
    incorporated by reference.(1)10
.8

First Amendment to Employment
    Agreement dated November 1, 1997, by and between Carl N.
    Karcher and Carl Karcher Enterprises, Inc., filed as
    Exhibit 10.8 to the Companys Annual Report on
    Form 10-K
    for fiscal year ended January 26, 1998, and is hereby
    incorporated by reference.(1)10
.15

Employment Agreement dated as of
    April 9, 1999, by and between the Company and John J.
    Dunion, filed as Exhibit 10.7 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended May 17, 1999, and is hereby
    incorporated by reference.(1)10
.19

First Amendment to Settlement and
    Development Agreement by and between Carl Karcher Enterprises,
    Inc., CKE Restaurants, Inc. and GB Foods Corporation dated as of
    February 20, 1997, filed as Exhibit 10.31 to the
    Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 27, 1997, and is hereby
    incorporated by reference.10
.48

CKE Restaurants, Inc. 2001 Stock
    Incentive Plan, Incorporated herein by reference to
    Exhibit 4.1 to the Companys
    Form S-8
    Registration Statement
    Number 333-76884.(1)10
.51

Distribution Service Agreement,
    dated as of November 7, 2003, by and between La Salsa,
    Inc. and McCabes Quality Foods, filed as
    Exhibit 10.51 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended November 3, 2003, and is hereby
    incorporated by reference.10
.53

Employment Agreement, effective as
    of January 27, 2004, by and between the Company and
    Theodore Abajian, incorporated herein by reference to the
    like-numbered exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.(1)10
.54

Second Amendment to Employment
    Agreement, effective as of January 1, 2004, by and between
    the Company and Carl N. Karcher, incorporated herein by
    reference to the like-numbered exhibit to the Companys
    Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.(1) 112




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##### Table of Contents



Exhibits

Description10
.55

Employment Agreement, effective as
    of April 4, 2004, by and between the Company and Andrew F.
    Puzder, incorporated herein by reference to the like-numbered
    exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.(1)10
.56

Employment Agreement, effective as
    of January 27, 2004, by and between the Company and E.
    Michael Murphy, incorporated herein by reference to the
    like-numbered exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.(1)10
.57

Employment Agreement, effective as
    of January 27, 2004, by and between the Company and Brad R.
    Haley, incorporated herein by reference to the like-numbered
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended May 17, 2004.(1)10
.58

Sixth Amended and Restated Credit
    Agreement, dated as of June 2, 2004, by and among the
    Company, the Lenders party thereto, and BNP Paribas, a bank
    organized under the laws of France acting through its Chicago
    Branch (as successor in interest to Paribas), as Agent,
    incorporated herein by reference to the like-numbered exhibit to
    the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended May 17, 2004.10
.59

Amendment No. 1 to Sixth
    Amended and Restated Credit Agreement, dated as of
    November 4, 2004, by and among the Company, BNP Paribas, a
    bank organized under the laws of France acting through its
    Chicago branch, as agent, and the lenders party to the Sixth
    Amended and Restated Credit Agreement, dated as of June 2,
    2004, by and among those parties, incorporated herein by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed November 12, 2004.10
.60

Amendment to Employment Agreement
    between the Company and Andrew F. Puzder, effective as of
    February 1, 2005, incorporated herein by reference to
    Exhibit 10.60 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2005.(1)10
.61

Amendment No. 2 to Sixth
    Amended and Restated Credit Agreement, dated as of
    April 21, 2005, by and among the Company, BNP Paribas, a
    bank organized under the laws of France acting through its
    Chicago branch, as agent, and the lenders party to the Sixth
    Amended and Restated Credit Agreement, dated as of June 2,
    2004, by and among those parties, incorporated herein by
    reference to Exhibit 10.61 to the Companys Annual
    Report on
    Form 10-K
    for the fiscal year ended January 31, 2005.10
.62

CKE Restaurants, Inc. 2005 Omnibus
    Incentive Compensation Plan, incorporated herein by reference to
    Annex A of the Companys Definitive Proxy Statement on
    Schedule 14A filed May 20, 2005.(1)10
.63

CKE Restaurants, Inc. 1994
    Employee Stock Purchase Plan, as amended, incorporated herein by
    reference to Annex B of the Companys Definitive Proxy
    Statement on Schedule 14A filed May 20, 2005.(1)10
.64

Form of Stock Option Agreement
    under the 2005 Omnibus Incentive Compensation Plan, incorporated
    herein by reference to Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.65

Form of Restricted Stock Award
    Agreement under the 2005 Omnibus Incentive Compensation Plan,
    incorporated herein by reference to Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.66

Form of Stock Appreciation Rights
    Award Agreement under the 2005 Omnibus Incentive Compensation
    Plan, incorporated herein by reference to Exhibit 10.4 to
    the Companys Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.67

Form of Restricted Stock Unit
    Award Agreement under the 2005 Omnibus Incentive Compensation
    Plan, incorporated herein by reference to Exhibit 10.5 to
    the Companys Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.68

Form of Stock Award Agreement
    under the 2005 Omnibus Incentive Compensation Plan, incorporated
    herein by reference to Exhibit 10.6 to the Companys
    Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.69

CKE Restaurants, Inc. Deferred
    Compensation Plan, incorporated herein by reference to
    Exhibit 10.7 to the Companys Current Report on
    Form 8-K
    filed June 30, 2005.(1)10
.70

Stock Option Purchase Agreement,
    dated as of July 19, 2005, by and between the Company and
    William P. Foley, II, incorporated herein by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed July 19, 2005.10
.71

Amendment No. 2 to Employment
    Agreement between the Company and Andrew F. Puzder, effective as
    of December 6, 2005, incorporated herein by reference to Exhibit
    10.71 to the Companys Annual Report on Form 10-K for the
    fiscal year ended January 30, 2006.(1) 113




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##### Table of Contents



Exhibits

Description10
.72

Amendment No. 1 to Employment
    Agreement between the Company and E. Michael Murphy, effective
    as of December 6, 2005, incorporated herein by reference to
    Exhibit 10.72 to the Companys Annual Report on Form 10-K
    for the fiscal year ended January 30, 2006.(1)10
.73

Amendment No. 1 to Employment
    Agreement between the Company and Theodore Abajian, effective as
    of December 6, 2005, incorporated herein by reference to Exhibit
    10.73 to the Companys Annual Report on Form 10-K for the
    fiscal year ended January 30, 2006.(1)10
.74

Amendment No. 1 to Employment
    Agreement between the Company and Brad R. Haley, effective as of
    December 6, 2005, incorporated herein by reference to Exhibit
    10.74 to the Companys Annual Report on Form 10-K for the
    fiscal year ended January 30, 2006.(1)10
.75

Amendment No. 3 to Employment
    Agreement between the Company and Andrew F. Puzder, effective as
    of October 12, 2006, incorporated herein by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed October 17, 2006.(1)10
.76

Amendment No. 2 to Employment
    Agreement between the Company and E. Michael Murphy, effective
    as of October 12, 2006, incorporated herein by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    filed October 17, 2006.(1)10
.77

Amendment No. 2 to Employment
    Agreement between the Company and Theodore Abajian, effective as
    of October 12, 2006, incorporated herein by reference to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    filed October 17, 2006.(1)10
.78

Amendment No. 3 to the Sixth
    Amended and Restated Credit Agreement, dated as of
    January 22, 2007, by and among the Company, BNP Paribas, a
    bank organized under the laws of France acting through its
    Chicago branch, as agent, and the lenders party to the Sixth
    Amended and Restated Credit Agreement, dated as of June 2,
    2004, by and among those parties, incorporated herein by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed January 25, 2007.10
.79

Seventh Amended and Restated
    Credit Agreement, dated as of March 27, 2007, by and among
    the Company, the Lenders party thereto, and BNP Paribas, a bank
    organized under the laws of France acting through its Chicago
    Branch, as Administrative Agent, and Citigroup Global Markets,
    Inc. and Bank of America, N.A., as Co-Syndication Agents.10
.80

Amendment No. 2 to Employment
    Agreement between the Company and Brad R. Haley, effective as of
    March 20, 2007.(1)11
.1

Computation of Per Share Earnings,
    included in Note 1 of Notes to Consolidated Financial
    Statements.12
.1

Computation of Ratios.14
.1

CKE Restaurants, Inc. Code of
    Ethics for CEO and Senior Financial Officers, as approved by the
    Companys Board of Directors on March 3, 2004,
    incorporated herein by reference to the like-numbered exhibit to
    the Companys Annual Report on
    Form 10-K
    for the fiscal year ended January 26, 2004.21
.1

Subsidiaries of Company.23
.1

Consent of Independent Registered
    Public Accounting Firm.31
.1

Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a),
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.31
.2

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a),
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.32
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Schedules or exhibits omitted. The Company shall furnish
    supplementally to the Securities and Exchange Commission a copy
    of any omitted schedule or exhibit upon request.(1)
    
    A management contract or compensatory plan or arrangement
    required to be filed as an exhibit to this report pursuant to
    Item 15(c) of
    Form 10-K. 114