----

----

| R                                                       | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|---------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                    |                                                                                     |
| For the quarterly period ended May 23, 2011             |
|                                                    |  OR                                                                            |
| £                                                  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from __________ to__________. |

| Delaware                                                       |   | 33-0602639                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| 6307 Carpinteria Avenue, Ste. A, Carpinteria, California       |   | 93013                                |
| (Address of principal executive offices)                       |   | (Zip Code)                           |

| Large accelerated filer £ | Accelerated filer £ | Non-accelerated filer R | Smaller reporting company £ |
|--------------------------------|--------------------------|-------------------------|----------------------------------|

----

----

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|                                                                                                | Page No. |
|-----------------------------------------------------------------------------------------------------|----------|
| Part I. Financial Information                                                                       |
| Item 1. Condensed Consolidated Financial Statements (Unaudited):                                    |     |
| Condensed Consolidated Balance Sheets                                                               | 3        |
| Condensed Consolidated Statements of Operations                                                     | 4        |
| Condensed Consolidated Statements of Cash Flows                                                     | 5        |
| Notes to Condensed Consolidated Financial Statements                                                | 6        |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20       |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                  | 37       |
| Item 4. Controls and Procedures                                                                     | 37       |
|                                                                                                |
| Part II. Other Information                                                                          |
| Item 1. Legal Proceedings                                                                           | 38       |
| Item 6. Exhibits                                                                                    | 40       |
| Signatures                                                                                          | 41       |

----

CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Successor    |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | May 23, 2011 |      |   | January 31, 2011 |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         |      |   |   |   |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         |      |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                   |   | $            | 75,938    |   |   | $ | 42,586 |   |
| Accounts receivable, net of allowance for doubtful accounts of $162 as of May 23, 2011 and $92 as of January 31, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         | 20,915    |   |   |   | 27,533 |   |
| Related party trade receivables                                                                                                                                                                             |   |         | 281       |   |   |   | 216 |   |
| Inventories                                                                                                                                                                                                 |   |         | 16,273    |   |   |   | 14,526 |   |
| Prepaid expenses                                                                                                                                                                                            |   |         | 14,700    |   |   |   | 14,219 |   |
| Assets held for sale                                                                                                                                                                                        |   |         | 440       |   |   |   | 196 |   |
| Advertising fund assets, restricted                                                                                                                                                                         |   |         | 17,883    |   |   |   | 18,464 |   |
| Deferred income tax assets, net                                                                                                                                                                             |   |         | 16,864    |   |   |   | 17,079 |   |
| Other current assets                                                                                                                                                                                        |   |         | 3,914     |   |   |   | 4,065 |   |
| Total current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 167,208   |   |   |   | 138,884 |   |
| Notes receivable, net                                                                                                                                                                                       |   |         | —   |   |   |   | 172 |   |
| Property and equipment, net of accumulated depreciation and amortizationof $58,226 as of May 23, 2011 and $36,342 as of January 31, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 629,613   |   |   |   | 640,194 |   |
| Property under capital leases, net of accumulated amortization of $5,698 asof May 23, 2011 and $3,638 as of January 31, 2011                                                                                          |   |         | 35,622    |   |   |   | 36,156 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 208,885   |   |   |   | 207,817 |   |
| Intangible assets, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         | 443,977   |   |   |   | 448,499 |   |
| Other assets, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 23,774    |   |   |   | 24,444 |   |
| Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $            | 1,509,079 |   |   | $ | 1,496,166 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |      |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDER’S EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         |      |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |      |   |   |   |   |   |
| Current portion of bank indebtedness and other long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $            | 30        |   |   | $ | 29 |   |
| Current portion of capital lease obligations                                                                                                                                                                |   |         | 7,821     |   |   |   | 7,434 |   |
| Accounts payable                                                                                                                                                                                            |   |         | 38,998    |   |   |   | 41,442 |   |
| Advertising fund liabilities                                                                                                                                                                                |   |         | 17,883    |   |   |   | 18,464 |   |
| Other current liabilities                                                                                                                                                                                   |   |         | 104,070   |   |   |   | 81,958 |   |
| Total current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | 168,802   |   |   |   | 149,327 |   |
| Bank indebtedness and other long-term debt, less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         | 590,272   |   |   |   | 589,987 |   |
| Capital lease obligations, less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 39,779    |   |   |   | 41,082 |   |
| Deferred income tax liabilities, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 149,700   |   |   |   | 151,828 |   |
| Other long-term liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | 136,889   |   |   |   | 139,173 |   |
| Total liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 1,085,442 |   |   |   | 1,071,397 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |      |   |   |   |   |   |
| Commitments and contingencies (Notes 7, 9 and 14)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         |      |   |   |   |   |   |
| Subsequent event (Notes 7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         |      |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |      |   |   |   |   |   |
| Stockholder’s equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         |      |   |   |   |   |   |
| Common stock, $0.01 par value; 100 shares authorized, issued and outstanding as of May 23, 2011 and January 31, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | —   |   |   |   | — |   |
| Additional paid-in capital                                                                                                                                                                                  |   |         | 454,128   |   |   |   | 452,659 |   |
| Accumulated deficit                                                                                                                                                                                         |   |         | (30,491   | ) |   |   | (27,890 | ) |
| Total stockholder’s equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         | 423,637   |   |   |   | 424,769 |   |
| Total liabilities and stockholder’s equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $            | 1,509,079 |   |   | $ | 1,496,166 |   |

----

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Successor                      |    |   | Predecessor                    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           |    |   |                           |   |
| Company-operated restaurants                                                                                                              |   | $                              | 351,604 |   |                           | $      | 331,005 |   |
| Franchised and licensed restaurants and other                                                                                             |   |                           | 48,979  |   |                           |   | 104,180 |   |
| Total revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 400,583 |   |                           |   | 435,185 |   |
| Operating costs and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           |    |   |                           |   |   |   |
| Restaurant operating costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |    |   |                           |   |   |   |
| Food and packaging                                                                                                                                       |   |                           | 108,902 |   |                           |   | 98,149 |   |
| Payroll and other employee benefits                                                                                                                      |   |                           | 101,663 |   |                           |   | 98,255 |   |
| Occupancy and other                                                                                                                                      |   |                           | 82,683  |   |                           |   | 78,754 |   |
| Total restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 293,248 |   |                           |   | 275,158 |   |
| Franchised and licensed restaurants and other                                                                                             |   |                           | 25,878  |   |                           |   | 79,762 |   |
| Advertising                                                                                                                               |   |                           | 20,061  |   |                           |   | 19,817 |   |
| General and administrative                                                                                                                |   |                           | 40,960  |   |                           |   | 39,471 |   |
| Facility action charges, net                                                                                                              |   |                           | 511     |   |                           |   | 863 |   |
| Other operating expenses, net                                                                                                             |   |                           | 351     |   |                           |   | 6,568 |   |
| Total operating costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 381,009 |   |                           |   | 421,639 |   |
| Operating income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 19,574  |   |                           |   | 13,546 |   |
| Interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | (24,395 | )      |                           |   | (5,025 | ) |
| Other income (expense), net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 799     |   |                           |   | (13,883 | ) |
| Loss before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (4,022  | )      |                           |   | (5,362 | ) |
| Income tax benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | (1,421  | )      |                           |   | (2,269 | ) |
| Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                              | (2,601  | )      |                           | $      | (3,093 | ) |

----

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                  |   | Successor                      |          |   | Predecessor                    |   |
|---------------------------------------------------------------------------------------|--------|--------------------------------|---------------|--------|--------------------------------|--------|
|                                                                                  |   | SixteenWeeks EndedMay 23, 2011 |          |   | SixteenWeeks EndedMay 17, 2010 |   |
| Cash flows from operating activities:                                                 |   |                           |          |   |                           |   |
| Net loss                                                                              |   | $                              | (2,601        | )      |                           | $      | (3,093 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities:       |   |                           |          |   |                           |   |   |   |
| Depreciation and amortization                                                         |   |                           | 24,938        |   |                           |   | 22,644 |   |
| Amortization of debt issuance costs and discount on notes                             |   |                           | 1,244         |   |                           |   | 365 |   |
| Share-based compensation expense                                                      |   |                           | 1,469         |   |                           |   | 2,187 |   |
| Provision for (recovery of) losses on accounts and notes receivable                   |   |                           | 71            |   |                           |   | (23 | ) |
| Loss on sale of property and equipment and capital leases                             |   |                           | 713           |   |                           |   | 1,280 |   |
| Facility action charges, net                                                          |   |                           | 682           |   |                           |   | 863 |   |
| Deferred income taxes                                                                 |   |                           | (1,913        | )      |                           |   | (6 | ) |
| Net changes in operating assets and liabilities:                                      |   |                           |          |   |                           |   |   |   |
| Receivables, inventories, prepaid expenses and other current and non-current assets   |   |                           | 2,084         |   |                           |   | (442 | ) |
| Estimated liability for closed restaurants and estimated liability for self-insurance |   |                           | 83            |   |                           |   | (906 | ) |
| Accounts payable and other current and long-term liabilities                          |   |                           | 27,528        |   |                           |   | 9,600 |   |
| Net cash provided by operating activities                                             |   |                           | 54,298        |   |                           |   | 32,469 |   |
| Cash flows from investing activities:                                                 |   |                           |          |   |                           |   |   |   |
| Purchases of property and equipment                                                   |   |                           | (13,581       | )      |                           |   | (23,727 | ) |
| Proceeds from sale of property and equipment                                          |   |                           | 947           |   |                           |   | 67 |   |
| Collections of non-trade notes receivable                                             |   |                           | 572           |   |                           |   | 233 |   |
| Other investing activities                                                            |   |                           | 57            |   |                           |   | (313 | ) |
| Net cash used in investing activities                                                 |   |                           |  (12,005 | )      |                           |   |  (23,740 | ) |
| Cash flows from financing activities:                                                 |   |                           |          |   |                           |   |   |   |
| Net change in bank overdraft                                                          |   |                           | (6,382        | )      |                           |   | (7,482 | ) |
| Borrowings under Predecessor revolving credit facility                                |   |                           | —       |   |                           |   | 91,000 |   |
| Repayments of borrowings under Predecessor revolving credit facility                  |   |                           | —       |   |                           |   | (82,500 | ) |
| Repayments of Predecessor senior credit facility term loan                            |   |                           | —       |   |                           |   | (10,301 | ) |
| Payment of debt issuance costs                                                        |   |                           | (44           | )      |                           |   | — |   |
| Repayments of other long-term debt                                                    |   |                           | (9            | )      |                           |   | (9 | ) |
| Repayments of capital lease obligations                                               |   |                           | (2,506        | )      |                           |   | (2,482 | ) |
| Repurchase of common stock                                                            |   |                           | —       |   |                           |   | (1,823 | ) |
| Exercise of stock options                                                             |   |                           | —       |   |                           |   | 901 |   |
| Tax impact of stock option and restricted stock award transactions                    |   |                           | —       |   |                           |   | 122 |   |
| Dividends paid on common stock                                                        |   |                           | —       |   |                           |   | (3,317 | ) |
| Net cash used in financing activities                                                 |   |                           | (8,941        | )      |                           |   |  (15,891 | ) |
| Net increase (decrease) in cash and cash equivalents                                  |   |                           | 33,352        |   |                           |   | (7,162 | ) |
| Cash and cash equivalents at beginning of period                                      |   |                           | 42,586        |   |                           |   | 18,246 |   |
| Cash and cash equivalents at end of period                                            |   | $                              | 75,938        |   |                           | $      | 11,084 |   |

----

NOTE 1 — BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

|             |   | Carl’s Jr. |   |   | Hardee’s |   |   | Other  |   |   | Total   |   |
|------------------|--------|------------------|--------|--------|----------------|--------|--------|--------|--------|--------|---------|--------|
| Company-operated |   |             | 424    |   |           |   | 470    |   |   |   | 1       |   |   |   | 895 |   |
| Franchised       |   |             | 680    |   |           |   | 1,225  |   |   |   | 10      |   |   |   | 1,915 |   |
| Licensed         |   |             | 158    |   |           |   | 214    |   |   |   | — |   |   |   | 372 |   |
| Total            |   |             | 1,262  |   |           |   | 1,909  |   |   |   | 11      |   |   |   | 3,182 |   |

----

----

| Total consideration:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|
| Cash paid to shareholders                                                                                                                                                             |   | $      | 704,065  |   |
| Less: post-combination share-based compensation expense                                                                                                                               |   |   | (10,587  | ) |
| Total purchase price consideration                                                                                                                                                                   |   |   | 693,478  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |     |   |
| Fair value of assets acquired and liabilities assumed:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |     |   |
| Cash and cash equivalents                                                                                                                                                             |   |   | 25,724   |   |
| Accounts receivable(1)                                                                                                                                                                |   |   | 39,762   |   |
| Inventories                                                                                                                                                                           |   |   | 13,956   |   |
| Deferred income tax assets, net - current                                                                                                                                             |   |   | 19,872   |   |
| Other current assets                                                                                                                                                                  |   |   | 36,372   |   |
| Notes receivable - current and long-term(2)                                                                                                                                           |   |   | 2,311    |   |
| Property and equipment(3)                                                                                                                                                             |   |   | 654,467  |   |
| Property under capital leases                                                                                                                                                         |   |   | 39,738   |   |
| Intangible assets                                                                                                                                                                     |   |   | 457,001  |   |
| Other assets                                                                                                                                                                          |   |   | 5,363    |   |
| Bank indebtedness - current and long-term                                                                                                                                             |   |   | (271,505 | ) |
| Capital lease obligations - current and long-term                                                                                                                                     |   |   | (52,922  | ) |
| Accounts payable                                                                                                                                                                      |   |   | (54,811  | ) |
| Deferred income tax liabilities, net - long-term                                                                                                                                      |   |   | (165,456 | ) |
| Unfavorable lease obligations                                                                                                                                                         |   |   | (96,356  | ) |
| Other liabilities - current and long-term(4)                                                                                                                                          |   |   | (167,855 | ) |
| Net assets acquired                                                                                                                                                                                  |   |   | 485,661  |   |
| Excess purchase price attributed to goodwill acquired                                                                                                                       |   | $      | 207,817  |   |

| (1)   | The gross amount due under accounts receivable acquired is $40,081, of which $319 was expected to be uncollectible. |
|-----------------|---------------------------------------------------------------------------------------------------------------------|

| (2)   | The gross amount due under notes receivable acquired is $5,947, of which $3,636 was expected to be uncollectible. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

| (3)   | The estimated fair value of property and equipment acquired consisted of $231,916 of land, $87,709 of leasehold improvements, $223,751 of buildings and improvements, and $111,091 of equipment, furniture and fixtures. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Litigation reserves of $2,305 are included within other current liabilities. Since the acquisition date fair value of these contingent liabilities could not be determined during the measurement period, we recorded an accrued liability for litigation contingencies with a probable likelihood of loss and for which the range of loss was reasonably estimable. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|          |   | Predecessor                       |    |
|---------------|--------|-----------------------------------|---------|
|          |   | SixteenWeeks EndedMay 17, 2010(1) |    |
| Total revenue |   | $                                 | 436,226 |   |
| Net loss      |   |                              | (4,555  | ) |

| (1) | The unaudited pro forma results of operations exclude any effect related to the senior unsecured PIK toggle notes issued by CKE Holdings, Inc. (see Note 7). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Carl’s Jr. |    |   | Hardee’s |   |   | Total  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|----------------|--------|--------|--------|--------|
| Successor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |             |    |   |           |   |   |   |   |
| Balance at January 31, 2011                                                                                        |   | $                | 199,166 |   |           | $      | 8,651  |   |   | $ | 207,817 |   |
| Additions                                                                                                          |   |             | — |   |           |   | 1,068  |   |   |   | 1,068 |   |
| Balance at May 23, 2011                                                                                            |   | $                | 199,166 |   |           | $      | 9,719  |   |   | $ | 208,885 |   |

|                       |   | Successor                    |   |
|----------------------------|--------|------------------------------|--------|
|                       |   | May 23, 2011                 |   |   | January 31, 2011 |   |
|                       |   | Weighted AverageLife (Years) |   |   | GrossCarrying Amount |   |   | AccumulatedAmortization |   |   | NetCarrying Amount |   |   | GrossCarrying Amount |   |   | AccumulatedAmortization |   |   | NetCarrying Amount |   |
| Trademarks/Tradenames      |   | Indefinite                   |   |   | $ | 278,000 |   |   | $ | — |   |   | $ | 278,000 |   |   | $ | 278,000 |   |   | $ | — |   |   | $ | 278,000 |   |
| Favorable lease agreements |   |  13                     |   |   |   | 90,086 |   |   |   | (8,471 | ) |   |   | 81,615 |   |   |   | 90,181 |   |   |   | (5,313 | ) |   |   | 84,868 |   |
| Franchise agreements       |   |  20                     |   |   |   | 88,085 |   |   |   | (3,723 | ) |   |   | 84,362 |   |   |   | 88,000 |   |   |   | (2,369 | ) |   |   | 85,631 |   |
|                       |   |                         |   |   |   | $ | 456,171 |   |   | $ | (12,194 | ) |   | $ | 443,977 |   |   | $ | 456,181 |   |   | $ | (7,682 | ) |   | $ | 448,499 |   |

----

| May 24, 2011 through January 31, 2012 |   | $      | 9,874   |   |
|---------------------------------------|--------|--------|---------|--------|
| Fiscal 2013                           |   |   | 13,833  |   |
| Fiscal 2014                           |   |   | 12,899  |   |
| Fiscal 2015                           |   |   | 11,743  |   |
| Fiscal 2016                           |   |   | 11,117  |   |
| Fiscal 2017                           |   |   | 10,629  |   |
| Thereafter                            |   |   | 95,882  |   |
|                                  |   | $      | 165,977 |   |

----

|                                                      |   | Successor                      |    |   | Predecessor                    |   |
|-----------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                      |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Senior secured revolving credit facility                  |   | $                              | — |   |                           | $      | — |   |
| Senior secured second lien notes                          |   |                           | 21,116  |   |                           |   | — |   |
| Predecessor senior credit facility                        |   |                           | — |   |                           |   | 1,542 |   |
| Interest rate swap agreements                             |   |                           | — |   |                           |   | 1,370 |   |
| Capital lease obligations                                 |   |                           | 1,462   |   |                           |   | 1,535 |   |
| Amortization of debt issuance costs and discount on notes |   |                           | 1,244   |   |                           |   | 332 |   |
| Letter of credit fees and other                           |   |                           | 573     |   |                           |   | 246 |   |
|                                                      |   | $                              | 24,395  |   |                           | $      | 5,025 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                  |   | Successor            |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                  |   | May 23, 2011         |    |   | January 31, 2011 |   |
|                                                                                                                                                                                                                                                                                                                                                                                  |   | Carrying Amount |    |   | EstimatedFair Value |   |   | Carrying Amount |   |   | EstimatedFair Value |   |
| Financial assets:                                                                                                                                                                                                                                                                                                                                                                     |   |                 |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                           |   | $                    | 75,938  |   |   | $ | 75,938 |   |   | $ | 42,586 |   |   | $ | 42,586 |   |
| Notes receivable                                                                    |   |                 | 2,553   |   |   |   | 2,575 |   |   |   | 4,681 |   |   |   | 4,619 |   |
| Financial liabilities:                                                                                                                                                                                                                                                                                                                                                                |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank indebtedness and other long-term debt, including current portion                                                                                                                                                                                                                                                                                                                 |   |                 | 590,302 |   |   |   | 660,995 |   |   |   | 590,016 |   |   |   | 676,005 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Successor                      |    |   | Predecessor                    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Share-based compensation expense related to restricted stock awards that contain market or performance conditions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                              | — |   |                           | $      | 533 |   |
| Share-based compensation expense related to Units that contain performance conditions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           | 767     |   |                           |   | — |   |
| All other share-based compensation expense                                                                                                |   |                           | 702     |   |                           |   | 1,654 |   |
| Total share-based compensation expense                                                                                                    |   | $                              | 1,469   |   |                           | $      | 2,187 |   |
| Associated tax benefits                                                                                                                   |   | $                              | — |   |                           | $      | 666 |   |

----

|                                                                           |   | Successor                      |    |   | Predecessor                    |   |
|--------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                                           |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Estimated liability for new restaurant closures                                |   | $                              | 133     |   |                           | $      | 363 |   |
| Adjustments to estimated liability for closed restaurants                      |   |                           | 492     |   |                           |   | 73 |   |
| Impairment of assets classified as held for sale                               |   |                           | — |   |                           |   | 104 |   |
| Impairment of assets classified as held and used                               |   |                           | 58      |   |                           |   | 55 |   |
| (Gain) loss on sales of restaurants and surplus properties, net                |   |                           | (298    | )      |                           |   | 138 |   |
| Amortization of discount related to estimated liability for closed restaurants |   |                           | 126     |   |                           |   | 130 |   |
|                                                                           |   | $                              | 511     |   |                           | $      | 863 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Successor                      |    |   | Predecessor                    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Property and equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           |    |   |                           |   |
| Carl’s Jr.                                                                                             |   | $                              | — |   |                           | $      | 3 |   |
| Hardee’s                                                                                               |   |                           | 58      |   |                           |   | 156 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                              | 58      |   |                           | $      | 159 |   |

|                           |   | Successor                      |   |   | Predecessor                    |   |
|--------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                           |   | SixteenWeeks EndedMay 23, 2011 |   |   | SixteenWeeks EndedMay 17, 2010 |   |
| Federal and state income taxes |   | $                              | (1,912 | )      |                           | $      | (2,663 | ) |
| Foreign income taxes           |   |                           | 491    |   |                           |   | 394 |   |
| Income tax benefit             |   | $                              | (1,421 | )      |                           | $      | (2,269 | ) |

----

----

|                                                      |   | Successor                      |      |   | Predecessor                    |   |
|-----------------------------------------------------------|--------|--------------------------------|-----------|--------|--------------------------------|--------|
|                                                      |   | SixteenWeeks EndedMay 23, 2011 |      |   | SixteenWeeks EndedMay 17, 2010 |   |
| Revenue:                                                  |   |                           |      |   |                           |   |
| Carl’s Jr.                                          |   | $                              | 206,134   |   |                           | $      | 260,777 |   |
| Hardee’s                                            |   |                           | 194,216   |   |                           |   | 174,157 |   |
| Other                                                     |   |                           | 233       |   |                           |   | 251 |   |
| Total                                                     |   | $                              | 400,583   |   |                           | $      | 435,185 |   |
|                                                      |   |                           |      |   |                           |   |   |   |
| Segment income:                                           |   |                           |      |   |                           |   |   |   |
| Carl’s Jr.                                          |   | $                              | 27,421    |   |                           | $      | 31,124 |   |
| Hardee’s                                            |   |                           | 33,842    |   |                           |   | 29,177 |   |
| Other                                                     |   |                           | 133       |   |                           |   | 147 |   |
| Total                                                     |   |                           | 61,396    |   |                           |   | 60,448 |   |
| Less: General and administrative expense                  |   |                           | (40,960   | )      |                           |   | (39,471 | ) |
| Less: Facility action charges, net                        |   |                           | (511      | )      |                           |   | (863 | ) |
| Less: Other operating expenses, net                       |   |                           | (351      | )      |                           |   | (6,568 | ) |
| Operating income                                          |   |                           | 19,574    |   |                           |   | 13,546 |   |
| Interest expense                                          |   |                           | (24,395   | )      |                           |   | (5,025 | ) |
| Other income (expense), net                               |   |                           | 799       |   |                           |   | (13,883 | ) |
| Loss before income taxes                                  |   | $                              | (4,022    | )      |                           | $      | (5,362 | ) |
|                                                      |   |                           |      |   |                           |   |   |   |
| Depreciation and amortization:                            |   |                           |      |   |                           |   |   |   |
| Depreciation and amortization included in segment income: |   |                           |      |   |                           |   |   |   |
| Carl’s Jr.                                          |   | $                              | 11,924    |   |                           | $      | 10,447 |   |
| Hardee’s                                            |   |                           | 12,055    |   |                           |   | 10,890 |   |
| Other                                                     |   |                           | —   |   |                           |   | — |   |
| Other depreciation and amortization(1)               |   |                           | 959       |   |                           |   | 1,307 |   |
| Total depreciation and amortization                       |   | $                              | 24,938    |   |                           | $      | 22,644 |   |
|                                                      |   |                           |      |   |                           |   |   |   |
|                                                      |   | Successor                      |      |
|                                                      |   | May 23, 2011                   |      |   | January 31, 2011               |   |
| Total assets:                                             |   |                           |      |   |                           |   |   |   |
| Carl’s Jr.                                          |   | $                              | 798,663   |   |                           | $      | 779,306 |   |
| Hardee’s                                            |   |                           | 650,875   |   |                           |   | 648,813 |   |
| Other                                                     |   |                           | 59,541    |   |                           |   | 68,047 |   |
| Total                                                     |   | $                              | 1,509,079 |   |                           | $      | 1,496,166 |   |

| (1)   | Represents depreciation and amortization excluded from the computation of segment income. |
|-----------------|-------------------------------------------------------------------------------------------|

----

|                                                 |   | Successor                      |   |   | Predecessor                    |   |
|------------------------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                                 |   | SixteenWeeks EndedMay 23, 2011 |   |   | SixteenWeeks EndedMay 17, 2010 |   |
| Cash paid for:                                       |   |                           |   |   |                           |   |
| Interest, net of amounts capitalized                 |   | $                              | 1,656  |   |                           | $      | 6,079 |   |
| Income taxes (received) paid, net                    |   |                           | (727   | )      |                           |   | 371 |   |
| Non-cash investing and financing activities:         |   |                           |   |   |                           |   |   |   |
| Capital lease obligations incurred to acquire assets |   |                           | 1,665  |   |                           |   | 2,906 |   |
| Accrued property and equipment purchases             |   |                           | 2,765  |   |                           |   | 4,479 |   |

----

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

| ·   | Overview |
|--------------------|----------|

| ·   | Operating Review |
|--------------------|------------------|

| ·   | Liquidity and Capital Resources |
|--------------------|---------------------------------|

| ·   | Critical Accounting Policies |
|--------------------|------------------------------|

| ·   | Significant Known Events, Trends, or Uncertainties Expected to Impact Fiscal 2012 Comparisons with Fiscal 2011 |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | New Accounting Pronouncements |
|--------------------|-------------------------------|

| ·   | Presentation of Non-GAAP Measures |
|--------------------|-----------------------------------|

| ·   | Certain Financial Information of CKE Holdings, Inc. |
|--------------------|-----------------------------------------------------|

----

| Consolidated:        |   | Company-operated |    |   | Franchised |   |    | Licensed |   |   | Total   |   |
|----------------------|--------|------------------|---------|--------|------------|--------|---------|----------|--------|--------|---------|--------|
| Open at May 17, 2010 |   |             | 898     |   |       |   | 1,907   |     |   |   | 341     |   |   |   | 3,146 |   |
| New                  |   |             | 8       |   |       |   | 39      |     |   |   | 37      |   |   |   | 84 |   |
| Closed               |   |             | (14     | )      |       |   | (28     | )        |   |   | (6      | )      |   |   | (48 | ) |
| Divested             |   |             | — |   |       |   | (3      | )        |   |   | — |   |   |   | (3 | ) |
| Acquired             |   |             | 3       |   |       |   | — |     |   |   | — |   |   |   | 3 |   |
| Open at May 23, 2011 |   |             | 895     |   |       |   | 1,915   |     |   |   | 372     |   |   |   | 3,182 |   |

| Carl’s Jr.:    |   | Company-operated |    |   | Franchised |   |    | Licensed |   |   | Total   |   |
|----------------------|--------|------------------|---------|--------|------------|--------|---------|----------|--------|--------|---------|--------|
| Open at May 17, 2010 |   |             | 424     |   |       |   | 671     |     |   |   | 138     |   |   |   | 1,233 |   |
| New                  |   |             | 7       |   |       |   | 22      |     |   |   | 22      |   |   |   | 51 |   |
| Closed               |   |             | (7      | )      |       |   | (13     | )        |   |   | (2      | )      |   |   | (22 | ) |
| Divested             |   |             | — |   |       |   | — |     |   |   | — |   |   |   | — |   |
| Acquired             |   |             | — |   |       |   | — |     |   |   | — |   |   |   | — |   |
| Open at May 23, 2011 |   |             | 424     |   |       |   | 680     |     |   |   | 158     |   |   |   | 1,262 |   |

| Hardee’s:      |   | Company-operated |    |   | Franchised |   |    | Licensed |   |   | Total   |   |
|----------------------|--------|------------------|---------|--------|------------|--------|---------|----------|--------|--------|---------|--------|
| Open at May 17, 2010 |   |             | 473     |   |       |   | 1,225   |     |   |   | 203     |   |   |   | 1,901 |   |
| New                  |   |             | 1       |   |       |   | 17      |     |   |   | 15      |   |   |   | 33 |   |
| Closed               |   |             | (7      | )      |       |   | (14     | )        |   |   | (4      | )      |   |   | (25 | ) |
| Divested             |   |             | — |   |       |   | (3      | )        |   |   | — |   |   |   | (3 | ) |
| Acquired             |   |             | 3       |   |       |   | — |     |   |   | — |   |   |   | 3 |   |
| Open at May 23, 2011 |   |             | 470     |   |       |   | 1,225   |     |   |   | 214     |   |   |   | 1,909 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Successor                      |     |   | Predecessor                    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | SixteenWeeks EndedMay 23, 2011 |     |   | SixteenWeeks EndedMay 17, 2010 |   |
| Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           |     |   |                           |   |
| Company-operated restaurants                                                                                                  |   | $                              | 351,604  |   |                           | $      | 331,005 |   |
| Franchised and licensed restaurants and other                                                                                 |   |                           | 48,979   |   |                           |   | 104,180 |   |
| Total revenue                                                                                                                                |   |                           | 400,583  |   |                           |   | 435,185 |   |
| Operating costs and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           |     |   |                           |   |   |   |
| Restaurant operating costs                                                                                                    |   |                           | 293,248  |   |                           |   | 275,158 |   |
| Franchised and licensed restaurants and other                                                                                 |   |                           | 25,878   |   |                           |   | 79,762 |   |
| Advertising                                                                                                                   |   |                           | 20,061   |   |                           |   | 19,817 |   |
| General and administrative                                                                                                    |   |                           | 40,960   |   |                           |   | 39,471 |   |
| Facility action charges, net                                                                                                  |   |                           | 511      |   |                           |   | 863 |   |
| Other operating expenses, net                                                                                                 |   |                           | 351      |   |                           |   | 6,568 |   |
| Total operating costs and expenses                                                                                                           |   |                           | 381,009  |   |                           |   | 421,639 |   |
| Operating income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 19,574   |   |                           |   | 13,546 |   |
| Interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (24,395  | )      |                           |   | (5,025 | ) |
| Other income (expense), net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 799      |   |                           |   | (13,883 | ) |
| Loss before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | (4,022   | )      |                           |   | (5,362 | ) |
| Income tax benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | (1,421   | )      |                           |   | (2,269 | ) |
| Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                              | (2,601   | )      |                           | $      | (3,093 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Company-operated restaurant-level adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           |     |   |                           |   |   |   |
| Company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 351,604  |   |                           | $      | 331,005 |   |
| Less: restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (293,248 | )      |                           |   | (275,158 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 21,600   |   |                           |   | 20,376 |   |
| Less: advertising expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | (20,061  | )      |                           |   | (19,817 | ) |
| Company-operated restaurant-level adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                              | 59,895   |   |                           | $      | 56,406 |   |
| Company-operated restaurant-level adjusted EBITDA margin                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 17.0     | %      |                           |   | 17.0 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Franchise restaurant adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           |     |   |                           |   |   |   |
| Franchised and licensed restaurants and other revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                              | 48,979   |   |                           | $      | 104,180 |   |
| Less: franchised and licensed restaurants and other expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | (25,878  | )      |                           |   | (79,762 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 2,379    |   |                           |   | 961 |   |
| Franchise restaurant adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 25,480   |   |                           | $      | 25,379 |   |

| (1) | Refer to definitions of company-operated restaurant-level non-GAAP measures and franchise restaurant adjusted EBITDA under the heading “Presentation of Non-GAAP Measures” in this Item 2. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Successor                      |     |   | Predecessor                    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | SixteenWeeks EndedMay 23, 2011 |     |   | SixteenWeeks EndedMay 17, 2010 |   |
| Company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 188,288  |   |                           | $      | 182,279 |   |
| Franchised and licensed restaurants and other revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 17,846   |   |                           |   | 78,498 |   |
| Total revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | 206,134  |   |                           |   | 260,777 |   |
| Restaurant operating costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |     |   |                           |   |   |   |
| Food and packaging                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | 57,556   |   |                           |   | 53,587 |   |
| Payroll and other employee benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 53,679   |   |                           |   | 51,576 |   |
| Occupancy and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 46,318   |   |                           |   | 44,256 |   |
| Total restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 157,553  |   |                           |   | 149,419 |   |
| Franchised and licensed restaurants and other expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 9,985    |   |                           |   | 69,000 |   |
| Advertising expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 11,175   |   |                           |   | 11,234 |   |
| General and administrative expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | 19,299   |   |                           |   | 18,960 |   |
| Facility action charges, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           | 359      |   |                           |   | 31 |   |
| Operating income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                              | 7,763    |   |                           | $      | 12,133 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Company-operated average unit volume (trailing-52 weeks)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                              | 1,389    |   |                           | $      | 1,412 |   |
| Franchise-operated average unit volume (trailing-52 weeks)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                              | 1,102    |   |                           | $      | 1,115 |   |
| Company-operated same-store sales increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 2.1      | %      |                           |   | (6.1 | )% |
| Franchise-operated same-store sales increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                           | 0.4      | %      |                           |   | (3.6 | )% |
| Company-operated same-store transaction decrease                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (0.1     | )%     |                           |   | (3.8 | )% |
| Company-operated average check (actual $)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                              | 6.97     |   |                           | $      | 6.79 |   |
| Restaurant operating costs as a percentage of company-operated restaurants revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |     |   |                           |   |   |   |
| Food and packaging                                                                                                 |   |                           | 30.6     | %      |                           |   | 29.4 | % |
| Payroll and other employee benefits                                                                                |   |                           | 28.5     | %      |                           |   | 28.3 | % |
| Occupancy and other                                                                                                |   |                           | 24.6     | %      |                           |   | 24.3 | % |
| Total restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 83.7     | %      |                           |   | 82.0 | % |
| Advertising expense as a percentage of company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 5.9      | %      |                           |   | 6.2 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Company-operated restaurant-level adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           |     |   |                           |   |   |   |
| Company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 188,288  |   |                           | $      | 182,279 |   |
| Less: restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (157,553 | )      |                           |   | (149,419 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 10,836   |   |                           |   | 9,905 |   |
| Less: advertising expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | (11,175  | )      |                           |   |  (11,234 | ) |
| Company-operated restaurant-level adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                              | 30,396   |   |                           | $      | 31,531 |   |
| Company-operated restaurant-level adjusted EBITDA margin                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 16.1     | %      |                           |   | 17.3 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Franchise restaurant adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           |     |   |                           |   |   |   |
| Franchised and licensed restaurants and other revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                              | 17,846   |   |                           | $      | 78,498 |   |
| Less: franchised and licensed restaurants and other expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | (9,985   | )      |                           |   | (69,000 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 1,088    |   |                           |   | 542 |   |
| Franchise restaurant adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 8,949    |   |                           | $      | 10,040 |   |

| (1) | Refer to definitions of company-operated restaurant-level non-GAAP measures and franchise restaurant adjusted EBITDA under the heading “Presentation of Non-GAAP Measures” in this Item 2. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Successor                      |     |   | Predecessor                    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | SixteenWeeks EndedMay 23, 2011 |     |   | SixteenWeeks EndedMay 17, 2010 |   |
| Company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 163,250  |   |                           | $      | 148,651 |   |
| Franchised and licensed restaurants and other revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 30,966   |   |                           |   | 25,506 |   |
| Total revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | 194,216  |   |                           |   | 174,157 |   |
| Restaurant operating costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |     |   |                           |   |   |   |
| Food and packaging                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | 51,317   |   |                           |   | 44,531 |   |
| Payroll and other employee benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 47,941   |   |                           |   | 46,635 |   |
| Occupancy and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 36,337   |   |                           |   | 34,469 |   |
| Total restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 135,595  |   |                           |   | 125,635 |   |
| Franchised and licensed restaurants and other expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 15,893   |   |                           |   | 10,762 |   |
| Advertising expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | 8,886    |   |                           |   | 8,583 |   |
| General and administrative expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | 21,662   |   |                           |   | 20,464 |   |
| Facility action charges, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           | 151      |   |                           |   | 779 |   |
| Operating income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                              | 12,029   |   |                           | $      | 7,934 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Company-operated average unit volume (trailing-52 weeks)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                              | 1,088    |   |                           | $      | 1,001 |   |
| Franchise-operated average unit volume (trailing-52 weeks)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                              | 1,055    |   |                           | $      | 977 |   |
| Company-operated same-store sales increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 9.6      | %      |                           |   | (1.2 | )% |
| Franchise-operated same-store sales increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                           | 5.9      | %      |                           |   | (0.5 | )% |
| Company-operated same-store transaction increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 3.0      | %      |                           |   | (0.7 | )% |
| Company-operated average check (actual $)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                              | 5.30     |   |                           | $      | 5.00 |   |
| Restaurant operating costs as a percentage of company-operated restaurants revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |     |   |                           |   |   |   |
| Food and packaging                                                                                                 |   |                           | 31.4     | %      |                           |   | 30.0 | % |
| Payroll and other employee benefits                                                                                |   |                           | 29.4     | %      |                           |   | 31.4 | % |
| Occupancy and other                                                                                                |   |                           | 22.3     | %      |                           |   | 23.2 | % |
| Total restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 83.1     | %      |                           |   | 84.5 | % |
| Advertising expense as a percentage of company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 5.4      | %      |                           |   | 5.8 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Company-operated restaurant-level adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           |     |   |                           |   |   |   |
| Company-operated restaurants revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 163,250  |   |                           | $      | 148,651 |   |
| Less: restaurant operating costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (135,595 | )      |                           |   | (125,635 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 10,764   |   |                           |   | 10,471 |   |
| Less: advertising expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | (8,886   | )      |                           |   | (8,583 | ) |
| Company-operated restaurant-level adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                              | 29,533   |   |                           | $      | 24,904 |   |
| Company-operated restaurant-level adjusted EBITDA margin                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 18.1     | %      |                           |   | 16.8 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |     |   |                           |   |   |   |
| Franchise restaurant adjusted EBITDA(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           |     |   |                           |   |   |   |
| Franchised and licensed restaurants and other revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                              | 30,966   |   |                           | $      | 25,506 |   |
| Less: franchised and licensed restaurants and other expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | (15,893  | )      |                           |   | (10,762 | ) |
| Add: depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 1,291    |   |                           |   | 419 |   |
| Franchise restaurant adjusted EBITDA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | 16,364   |   |                           | $      | 15,163 |   |

|  (1) | Refer to definitions of company-operated restaurant-level non-GAAP measures and franchise restaurant adjusted EBITDA under the heading “Presentation of Non-GAAP Measures” in this Item 2. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                       |   |   |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|
| Company-operated restaurant-level adjusted EBITDA margin for the period ended May 17, 2010 |   |   | 17.3   | % |
| Increase in food and packaging costs                                                       |   |   | (1.2   | ) |
| Payroll and other employee benefits:                                                       |   |   |   |   |
| Increase in workers’ compensation expense                                            |   |   | (0.5   | ) |
| Decrease in labor costs, excluding workers’ compensation                             |   |   | 0.3    |   |
| Occupancy and other (excluding depreciation and amortization):                             |   |   |   |   |
| Decrease in repairs and maintenance expense                                                |   |   | 0.3    |   |
| Increase in banking and ATM costs                                                          |   |   | (0.2   | ) |
| Other, net                                                                                 |   |   | (0.1   | ) |
| Advertising expense                                                                        |   |   | 0.2    |   |
| Company-operated restaurant-level adjusted EBITDA margin for the period ended May 23, 2011 |   |   | 16.1   | % |

----

|                                                        |   | Successor                      |    |   | Predecessor                    |   |
|-------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
|                                                        |   | SixteenWeeks EndedMay 23, 2011 |    |   | SixteenWeeks EndedMay 17, 2010 |   |
| Franchised and licensed restaurants and other revenue:      |   |                           |    |   |                           |   |
| Royalties                                                   |   | $                              | 10,672  |   |                           | $      | 10,065 |   |
| Distribution centers                                        |   |                           | — |   |                           |   | 61,873 |   |
| Rent and other occupancy                                    |   |                           | 6,746   |   |                           |   | 6,277 |   |
| Franchise fees                                              |   |                           | 428     |   |                           |   | 283 |   |
| Total franchised and licensed restaurants and other revenue |   | $                              | 17,846  |   |                           | $      | 78,498 |   |
| Franchised and licensed restaurants and other expense:      |   |                           |    |   |                           |   |   |   |
| Administrative expense (including provision for bad debts)  |   | $                              | 3,436   |   |                           | $      | 2,025 |   |
| Distribution centers                                        |   |                           | — |   |                           |   | 61,119 |   |
| Rent and other occupancy                                    |   |                           | 6,549   |   |                           |   | 5,856 |   |
| Total franchised and licensed restaurants and other expense |   | $                              | 9,985   |   |                           | $      | 69,000 |   |

----

|                                                                                       |   |   |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|
| Company-operated restaurant-level adjusted EBITDA margin for the period ended May 17, 2010 |   |   | 16.8   | % |
| Increase in food and packaging costs                                                       |   |   | (1.5   | ) |
| Payroll and other employee benefits:                                                       |   |   |   |   |
| Decrease in labor costs, excluding workers’ compensation                             |   |   | 1.7    |   |
| Decrease in workers’ compensation expense                                            |   |   | 0.3    |   |
| Occupancy and other (excluding depreciation and amortization):                             |   |   |   |   |
| Decrease in rent expense                                                                   |   |   | 0.2    |   |
| Other, net                                                                                 |   |   | 0.3    |   |
| Advertising expense                                                                        |   |   | 0.3    |   |
| Company-operated restaurant-level adjusted EBITDA margin for the period ended May 23, 2011 |   |   | 18.1   | % |

|                                                        |   | Successor                      |   |   | Predecessor                    |   |
|-------------------------------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                                        |   | SixteenWeeks EndedMay 23, 2011 |   |   | SixteenWeeks EndedMay 17, 2010 |   |
| Franchised and licensed restaurants and other revenue:      |   |                           |   |   |                           |   |
| Royalties                                                   |   | $                              | 17,971 |   |                           | $      | 16,179 |   |
| Distribution centers                                        |   |                           | 8,571  |   |                           |   | 5,514 |   |
| Rent and other occupancy                                    |   |                           | 4,023  |   |                           |   | 3,502 |   |
| Franchise fees                                              |   |                           | 401    |   |                           |   | 311 |   |
| Total franchised and licensed restaurants and other revenue |   | $                              | 30,966 |   |                           | $      | 25,506 |   |
| Franchised and licensed restaurants and other expense:      |   |                           |   |   |                           |   |   |   |
| Administrative expense (including provision for bad debts)  |   | $                              | 3,964  |   |                           | $      | 2,654 |   |
| Distribution centers                                        |   |                           | 8,532  |   |                           |   | 5,503 |   |
| Rent and other occupancy                                    |   |                           | 3,397  |   |                           |   | 2,605 |   |
| Total franchised and licensed restaurants and other expense |   | $                              | 15,893 |   |                           | $      | 10,762 |   |

----

----

----

----

|                                   |   | Successor                      |   |   | Predecessor                    |   |
|----------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                   |   | SixteenWeeks EndedMay 23, 2011 |   |   | SixteenWeeks EndedMay 17, 2010 |   |
| Remodels:                              |   |                           |   |   |                           |   |
| Carl’s Jr.                       |   | $                              | 44     |   |                           | $      | 1,418 |   |
| Hardee’s                         |   |                           | 4,282  |   |                           |   | 6,916 |   |
| Capital maintenance:                   |   |                           |   |   |                           |   |   |   |
| Carl’s Jr.                       |   |                           | 1,849  |   |                           |   | 4,243 |   |
| Hardee’s                         |   |                           | 3,392  |   |                           |   | 5,696 |   |
| New restaurants and rebuilds:          |   |                           |   |   |                           |   |   |   |
| Carl’s Jr.                       |   |                           | 1,968  |   |                           |   | 2,618 |   |
| Hardee’s                         |   |                           | 1,190  |   |                           |   | 1,393 |   |
| Dual-branding:                         |   |                           |   |   |                           |   |   |   |
| Carl’s Jr.                       |   |                           | 244    |   |                           |   | 169 |   |
| Hardee’s                         |   |                           | 234    |   |                           |   | 735 |   |
| Real estate and franchise acquisitions |   |                           | 11     |   |                           |   | 20 |   |
| Corporate and other                    |   |                           | 367    |   |                           |   | 519 |   |
| Total                                  |   | $                              | 13,581 |   |                           | $      | 23,727 |   |

----

----

----

| ·   | Because not all companies calculate these measures identically, our presentation of such measures may not be comparable to similarly titled measures of other companies; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | These measures exclude certain general and administrative and other operating costs, which should also be considered when assessing our operating performance; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | These measures exclude depreciation and amortization, and although they are non-cash charges, the assets being depreciated or amortized will often have to be replaced and new investments made to support the operations of our restaurant portfolio. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

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ITEM 1. LEGAL PROCEEDINGS

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ITEM 6. EXHIBITS

| Exhibit No. |   | Description                                                                                                                                          |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                 |
|  31.1  |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                            |
|        |   |                                                                                                                                                 |
|  31.2  |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                            |
|        |   |                                                                                                                                                 |
|  32.1  |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. |
|        |   |                                                                                                                                                 |
|  32.2  |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. |
|        |   |                                                                                                                                                 |

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SIGNATURES

|                |   | CKE RESTAURANTS, INC.                                                                                                                                                                                                                                 |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                  |
| Date: June 29, 2011 |   | /s/ Reese Stewart                                       |
|                |   | Reese Stewart                                                                                                                                                                                                                                         |
|                |   | Senior Vice PresidentChief Accounting Officer(Principal Accounting Officer)                                                                                                                                                                           |

----

| Exhibit No. |   | Description                                                                                                                                          |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                 |
|  31.1  |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                            |
|        |   |                                                                                                                                                 |
|  31.2  |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.                            |
|        |   |                                                                                                                                                 |
|  32.1  |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. |
|        |   |                                                                                                                                                 |
|  32.2  |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. |

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