<SUBMISSION>
<ACCESSION-NUMBER>0001041061-04-000318
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20040904
<FILING-DATE>20041012
<DATE-OF-FILING-DATE-CHANGE>20041012
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>YUM BRANDS INC
<CIK>0001041061
<ASSIGNED-SIC>5812
<IRS-NUMBER>133951308
<STATE-OF-INCORPORATION>NC
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-13163
<FILM-NUMBER>041073255
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1441 GARDINER LANE
<CITY>LOUISVILLE
<STATE>KY
<ZIP>40213
<PHONE>5028748300
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1900 COLONEL SANDERS LANE
<CITY>LOUISVILLE
<STATE>KY
<ZIP>40213
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>TRICON GLOBAL RESTAURANTS INC
<DATE-CHANGED>19970627
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>GREAT AMERICAN RESTAURANT CO
<DATE-CHANGED>19970618
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q3q04.htm
<DESCRIPTION>FORM 10-Q THIRD QUARTER 2004
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 10-Q, Third Quarter 2004</TITLE>
</HEAD>
<BODY>
<HR ALIGN=LEFT WIDTH=100% SIZE=5 NOSHADE>

<H2 ALIGN="CENTER"><font size="5">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font></H2>

<P ALIGN=CENTER>Washington, D. C. 20549</p>

<HR Size="1" width="15%" align="center" noshade>

<H2 ALIGN="CENTER"><font size="5">FORM 10-Q</font></H2>

<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="bottom">
<td align="left" colspan="2"><b>(Mark One)</B></td></tr>
<tr valign="top">
<td align="left" width="3%"><b>[X]&nbsp;&nbsp;</b></td>
<td width="97%"><p align="justify"><b>QUARTERLY  REPORT  PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934 <BR></b>for the
quarterly  period ended September 4, 2004</p></td>
</tr>
</table>

<br>

<P ALIGN="CENTER">OR</p>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td align="left" width="3"><b>[&nbsp;&nbsp;]&nbsp;&nbsp;</b></td>
<td width="97%"><p align="left"><b>TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p></td>
</tr>
</table>

<br>

<p align="center"><b>For the transition period from ____________ to
_________________</b></p>

<br>

<P ALIGN="CENTER"><b>Commission file number 1-13163</b></p>

<HR SIZE=1 WIDTH=15% ALIGN=CENTER NOSHADE>

<H2 ALIGN="CENTER"><font size="5"><b>YUM! BRANDS, INC.</b></font></h2>

<h4 align="center"><font size="2">(Exact name of registrant as
specified in its charter)</font></h4>

<table width="100%">
<tr valign="bottom">
<td width="35%" align="center"><u>North Carolina</u></td>
<td width="1%">&nbsp;&nbsp;</td>
<td width="64%" align="center"><u>13-3951308</u></td></tr>
<tr valign="top">
<td align="center">(State or other jurisdiction of<br>
         incorporation or organization)</td>
<td width="20%">&nbsp;&nbsp;</td>
<td align="center">(I.R.S. Employer<br>Identification No.)</td></tr>
<tr>
<td width="20%">&nbsp;&nbsp;</td>
<td>&nbsp;&nbsp;</td>
<td>&nbsp;&nbsp;&nbsp;</td></tr>
<tr valign="bottom">
<td align="center" colspan="2">1441 Gardiner Lane, Louisville, Kentucky</td>
<td align="center">40213</td></tr>
<tr valign="bottom">
<td align="center" colspan="2">(Address of principal executive offices)</td>
<td align="center">(Zip Code)</td></tr>
<tr>
<td>&nbsp;&nbsp;&nbsp;</td>
<td width="20%">&nbsp;&nbsp;</td>
<td>&nbsp;&nbsp;</td></tr>
<tr valign="bottom">
<td Align="center" colspan="3">&nbsp;&nbsp;&nbsp;Registrant&#146;s telephone
number, including area code:&nbsp;&nbsp;&nbsp;&nbsp;(502) 874-8300</td></tr>
</table>

<br><br>

<P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.&nbsp;&nbsp;Yes&nbsp;<u>&nbsp;&times;&nbsp;
</u>
&nbsp;No&nbsp;<u>&nbsp;&nbsp;&nbsp;</u></P>

<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark  whether
the  registrant  is an  accelerated  filer (as defined in Rule 12b-2 of the
Exchange
Act). Yes&nbsp; <U>&nbsp;&times;&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;No&nbsp;
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>


<P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares
outstanding of the Registrant&#146;s Common Stock as of October 7, 2004 was 292,931,021 shares.</P>


<HR ALIGN=LEFT WIDTH=100% SIZE=5 NOSHADE>
<BR><BR>

<p align=center><b>YUM! BRANDS, INC.</b><BR><BR>
<b>INDEX</b></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Page No.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=94% ALIGN=LEFT>Part I.  Financial Information</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1 - Financial Statements</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Statements of Income - Quarters and Years to date </TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ended September 4, 2004 and September 6, 2003</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Statements of Cash Flows - Years to date ended</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 4, 2004 and September 6, 2003</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Balance Sheets - September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and December 27, 2003</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Condensed Consolidated Financial Statements</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2 - Management&#146;s Discussion and Analysis of Financial Condition</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and Results of Operations</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 3 - Quantitative and Qualitative Disclosures about Market Risk</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 4 - Controls and Procedures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent Accountants&#146; Review Report</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>38</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Part II. Other Information and Signatures</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1 - Legal Proceedings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2 - Changes in Securities, Use of</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds and Issuer Purchases of Equity Securities</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 6 - Exhibits and Reports on Form 8-K</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signatures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>2</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>PART I - FINANCIAL INFORMATION</B></P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Item 1.  Financial Statements</B></P>

<P><B>CONDENSED CONSOLIDATED STATEMENTS OF INCOME</b><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES<BR>
 (in millions, except per share data)</P>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=55% ALIGN=LEFT><B>Revenues</b></TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,935</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,765</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,528</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,085</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>244</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>224</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>698</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>642</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,989</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6,226</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,727</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Costs and expenses, net</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurants</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>618</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>544</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,746</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,568</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>497</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>473</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,470</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,396</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Occupancy and other operating expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>525</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>481</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,491</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,373</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,640</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,498</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,707</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,337</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>General and administrative expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>250</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>212</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>721</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>623</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Franchise and license expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other (income) expense</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(35</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(24</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>42</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>AmeriServe and other charges (credits)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(14</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total costs and expenses, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,888</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,720</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,417</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,021</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Operating Profit</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>269</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>706</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>123</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Income Before Income Taxes and Cumulative Effect of</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;<B>Accounting  Change</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>262</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>230</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>713</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>583</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Income tax provision</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>208</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Income Before Cumulative Effect of Accounting Change</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>185</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>164</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>404</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Cumulative effect of accounting change, net of tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Income</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;185</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;164</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;403</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Basic Earnings Per Common Share</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><b>Diluted Earnings Per Common Share</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Dividends Declared Per Common Share</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<HR SIZE=1 NOSHADE>
<P>See accompanying Notes to Condensed Consolidated Financial Statements.</P>
<HR SIZE=1 NOSHADE>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>3</P><HR NOSHADE><BR><BR><BR>


<P><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</B><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES<BR>
(in millions)</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=81% ALIGN=LEFT><B>Cash Flows - Operating Activities</b></TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;403</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Adjustments to reconcile net income to net cash provided by operating activities:</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Cumulative effect of accounting change, net of tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>302</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>273</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Wrench litigation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>42</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;AmeriServe and other charges (credits)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities and deferred credits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(30</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(24</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Other non-cash charges and credits, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Changes in operating working capital, excluding effects of acquisitions and</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;dispositions:</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Accounts and notes receivable</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(12</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Inventories</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(19</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(17</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other current liabilities</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(19</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(49</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Net change in operating working capital</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(58</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>21</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Cash Provided by Operating Activities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>791</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>769</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Cash Flows - Investing Activities</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Capital spending</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(383</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(358</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Proceeds from refranchising of restaurants</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisition of restaurants from franchisees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(38</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(30</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term investments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(46</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Sales of property, plant and equipment</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Cash Used in Investing Activities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(391</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(336</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Cash Flows - Financing Activities</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Revolving Credit Facility activity</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Three months or less, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(153</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Repayments of long-term debt</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(15</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term borrowings-three months or less, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(50</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Repurchase shares of common stock</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(294</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(121</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Employee stock option proceeds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>127</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>70</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Dividends paid on common shares</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(29</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Cash Used in Financing Activities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(205</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(269</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Effect of Exchange Rates on Cash and Cash Equivalents</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Increase in Cash and Cash Equivalents</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>195</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>168</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Cash and Cash Equivalents - Beginning of Period</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>192</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>130</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Cash and Cash Equivalents - End of Period</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;387</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;298</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<HR SIZE=1 NOSHADE>
<P>See accompanying Notes to Condensed Consolidated Financial Statements.</P>
<HR SIZE=1 NOSHADE>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>4</P><HR NOSHADE><BR><BR><BR>


<P><B>CONDENSED CONSOLIDATED BALANCE SHEETS</b><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES<BR>
(in millions)</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/27/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=81% ALIGN=LEFT><B>ASSETS</b></TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Current Assets</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Cash and cash equivalents</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;387</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;192</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term investments, at cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accounts and notes receivable, less allowance: $18 in 2004 and $25 in 2003</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>168</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>150</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Inventories</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>67</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Assets classified as held for sale</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>97</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Prepaid expenses and other current assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>98</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Deferred income taxes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>153</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>165</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Advertising cooperative assets, restricted</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>70</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Current Assets</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,106</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>806</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Property, plant and equipment, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,317</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,280</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Goodwill</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>559</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>521</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Intangible assets, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>351</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>357</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Investments in unconsolidated affiliates</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>189</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>184</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>462</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>472</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Assets</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,984</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,620</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Current Liabilities</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accounts payable and other current liabilities</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,176</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,157</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Income taxes payable</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>147</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>238</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term borrowings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>375</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Advertising cooperative liabilities</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>70</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Current Liabilities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,768</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,461</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Long-term debt</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,699</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,056</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other liabilities and deferred credits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,003</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>983</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Liabilities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,470</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,500</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Shareholders&#146; Equity</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Preferred stock, no par value, 250 shares authorized; no shares issued</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Common stock, no par value, 750 shares authorized; 292 shares issued in 2004 and 2003,</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;respectively</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>823</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>916</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Retained earnings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>890</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>414</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accumulated other comprehensive income (loss)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(199</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(210</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Shareholders&#146; Equity</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,514</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,120</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Liabilities and Shareholders&#146; Equity</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,984</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,620</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>
<HR SIZE=1 NOSHADE>
<P>See accompanying Notes to Condensed Consolidated Financial Statements.</P>
<HR SIZE=1 NOSHADE>


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<BR><BR><BR><P ALIGN=CENTER>5</P><HR NOSHADE><BR><BR><BR>


<P><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</b><BR>
(Tabular amounts in millions, except per share data)</P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>1.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Financial
Statement Presentation</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have prepared our accompanying unaudited Condensed  Consolidated  Financial
Statements  (&#147;Financial  Statements&#148;) in accordance with the rules and
 regulations of the  Securities  and Exchange  Commission for interim  financial
 information.  Accordingly,  they do not include all of the information and footnotes
required by accounting  principles  generally accepted in the United States of America
for complete  financial  statements.  Therefore,  we suggest that the  accompanying
 Financial  Statements be read in conjunction  with the Consolidated  Financial
 Statements and notes thereto included in our annual report on Form 10-K for the fiscal
year ended December 27, 2003 (&#147;2003 Form 10-K&#148;).  Except as disclosed  herein,
 there has been no material change in the information  disclosed in the notes to our
Consolidated Financial Statements included in the 2003 Form 10-K.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our  Financial  Statements  include YUM!  Brands,  Inc. and its  wholly-owned
 subsidiaries  (collectively  referred to as &#147;YUM&#148; or the &#147;Company&#148;).
 The Financial  Statements  include the worldwide  operations of KFC, Pizza Hut, Taco
Bell, Long John Silver&#146;s  (&#147;LJS&#148;) and A&amp;W All-American  Food Restaurants  (&#147;A&amp;W&#148;)
 (collectively  the &#147;Concepts&#148;).  References to YUM throughout these notes to
our Financial Statements are made using the first person notations of &#147;we,&#148; &#147;us&#148; or
&#147;our.&#148;</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our preparation of the accompanying  Financial  Statements in conformity with
accounting  principles  generally  accepted in the United States of America requires us
to make estimates and assumptions  that affect reported amounts of assets and
liabilities,  disclosure of contingent  assets and liabilities at the date of the
Financial  Statements,  and the reported  amounts of revenues and expenses during the
reporting period.  Actual results could differ from the estimates.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We participate in various  advertising  cooperatives  with our franchisees and
licensees.  In certain of these  cooperatives we possess majority voting rights,  and
thus control the  cooperatives.  We have  previously  reported the related assets and
liabilities of those advertising  cooperatives we control in accounts and notes
 receivable,  prepaid expenses and other current assets and accounts payable and other
current  liabilities,  as appropriate.  We have now summed all assets and liabilities of
these  advertising  cooperatives and reported  the  amounts as  advertising  cooperative
 assets,  restricted  and  advertising  cooperative  liabilities  in the  Condensed
Consolidated  Balance Sheet as of September 4, 2004. We have  reclassified  those amounts
in the Condensed  Consolidated  Balance Sheet as of December 27, 2003 for  comparative
 purposes.  As the  contributions  to these  cooperatives  are  designated  and
segregated for advertising,  we act as an agent for the  franchisees  and licensees  with
regard to these  contributions.  Thus,  in  accordance  with Statement of Financial
 Accounting  Standards (&#147;SFAS&#148;) No. 45, &#147;Accounting for Franchise Fee
Revenue,&#148; we do not reflect,  and have not reflected in the past,  franchisee  and
licensee  contributions  to these  cooperatives  in our  Condensed  Consolidated
 Statements of Income.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In our opinion,  the accompanying  Financial  Statements include all normal and
recurring  adjustments  considered necessary to present fairly,  when read in
 conjunction  with our 2003 Form 10-K,  our  financial  position as of September 4, 2004,
 and the results of our operations  for the  quarters  and years to date ended  September
 4, 2004 and  September  6, 2003 and cash flows for the years to date ended September 4,
2004 and September 6, 2003. Our results of operations for these interim  periods are not
 necessarily  indicative of the results to be expected for the full year.</P>


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<BR><BR><BR><P ALIGN=CENTER>6</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have  reclassified  certain items in the  accompanying  Financial  Statements  and
Notes to the Financial  Statements in order to be comparable with the current
classifications.  These reclassifications had no effect on previously reported net income.</P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>2.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Stock-Based
Employee Compensation</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The Company accounts for its stock-based  employee  compensation  plans under the
recognition and measurement  principles of Accounting Principles  Board Opinion No. 25,
 &#147;Accounting for Stock Issued to Employees,&#148;  and related  Interpretations.  No
stock-based  employee compensation  cost is  reflected  in net income,  as all options
 granted  under those plans had an exercise  price equal to the market value of the
underlying  common stock on the date of grant.  The following table  illustrates the
effect on net income and earnings per share if the Company had applied the fair value
 recognition  provisions of Statement of Financial  Accounting  Standards  (&#147;SFAS&#148;)
No. 123 &#147;Accounting for Stock-Based Compensation&#148; (&#147;SFAS 123&#148;), to
stock-based employee compensation.</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=55% ALIGN=LEFT>Net income, as reported</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;185</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;164</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;505</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;403</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Deduct: Total stock-based employee compensation</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>expense determined under fair value based method for</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>all awards, net of related tax effects</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(25</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(25</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net income, pro forma</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;178</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;157</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;480</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;378</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Basic earnings per common share</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;As reported</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Pro forma</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Diluted earnings per common share</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;As reported</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Pro forma</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.51</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>3.</B></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Recently
Adopted Accounting Pronouncements</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have adopted  Financial  Accounting  Standards  Board (&#147;FASB&#148;)
 Interpretation  No. 46 (revised  December 2003),  &#147;Consolidation  of Variable
 Interest  Entities,  an  interpretation  of ARB No. 51&#148; (&#147;FIN 46&#148;).  FIN
46 addresses  the  consolidation  of an entity whose equity holders either (a) have not
provided  sufficient  equity at risk to allow the entity to finance its own activities or
(b) do not possess certain  characteristics of a controlling  financial interest.  FIN 46
requires the consolidation of such an entity, known as a variable  interest entity (&#147;VIE&#148;),
 by the primary  beneficiary of the entity.  The primary  beneficiary is the entity, if
any, that is obligated  to absorb a majority of the risk of loss from the VIE&#146;s
 activities,  entitled  to receive a majority of the VIE&#146;s  residual returns, or
both.  FIN 46 excludes from its scope businesses (as defined by FIN 46) unless certain
conditions exist.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The principal entities in which we possess a variable interest include franchise
 entities,  including our  Unconsolidated  Affiliates, which operate our restaurants.  We
do not possess any ownership  interests in franchise  entities except for our investments
in various Unconsolidated  Affiliates  accounted  for under the equity  method.
 Additionally,  we generally do not provide  financial  support to franchise entities in
a typical franchise relationship.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>7</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We also possess  variable  interests in certain  purchasing  cooperatives we have
formed along with  representatives  of the franchisee groups of each of our Concepts.
 These purchasing  cooperatives were formed for the purpose of purchasing certain
 restaurant  products and equipment in the U.S. Our equity  ownership in each cooperative
is generally  proportional to our percentage  ownership of the U.S. system units for the
Concept.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As a result of the adoption of FIN 46 we have not consolidated any franchise entities,
purchasing cooperatives or other entities.</P>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>4.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>New
Accounting Pronouncements Not Yet Adopted</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On December 8, 2003,  the Medicare  Prescription  Drug,  Improvement  and
 Modernization  Act of 2003 (the &#147;Act&#148;),  which  introduces a Medicare
 prescription  drug  benefit,  as well as a federal  subsidy to sponsors of retiree
 health care benefit  plans that provide a benefit that is at least  actuarially
 equivalent to the Medicare  benefit,  was enacted.  On May 19, 2004,  the FASB issued
 Financial Staff Position (&#147;FSP&#148;) No. 106-2,  &#147;Accounting and Disclosure
 Requirements Related to the Medicare Prescription Drug,  Improvement and Modernization
 Act of 2003&#148; (&#147;FSP 106-2&#148;) to discuss  certain  accounting and disclosure
 issues raised by the Act. FSP 106-2 addresses accounting for the federal subsidy for the
sponsors of single employer defined benefit  postretirement  healthcare plans and
disclosure requirements  for  plans  for which  the  employer  has not yet been  able to
 determine  actuarial  equivalency.  Except  for  certain nonpublic  entities,  FSP 106-2
is effective for the first interim or annual period  beginning  after June 15, 2004 (the
quarter ending December 25, 2004 for the Company).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The reported net periodic benefit cost of our postretirement plan in the accompanying
 Financial  Statements and Notes to the Financial Statements  does not  reflect  the
 effects  of the Act.  We do not  believe at this time that the  effects of the Act will
 materially affect our postretirement benefit obligation or our postretirement benefit
expense reported in future periods.</P>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>5.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Earnings
Per Common Share (&#147;EPS&#148;)</b></TD>
</TR>
</TABLE>
<BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>     <TH COLSPAN=1></TH>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH=63% ALIGN=LEFT>Net income</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;185</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;164</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;505</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;403</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><U>Basic EPS</U></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Weighted-average common shares</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;outstanding</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>294</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>293</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Basic EPS</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><U>Diluted EPS</U></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Weighted-average common shares</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;outstanding</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>294</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>293</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Shares assumed issued on exercise of dilutive</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;share equivalents</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>46</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>49</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>52</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Shares assumed purchased with proceeds of dilutive</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;share equivalents</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(32</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(41</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(34</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(40</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Shares applicable to diluted earnings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>305</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>307</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>305</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>305</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Diluted EPS</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>8</P><HR NOSHADE><BR><BR><BR>




<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Unexercised  employee  stock options to purchase  approximately  0.7 million and 0.5
million shares of our Common Stock for the quarter and year to date ended  September 4,
2004,  respectively,  were not included in the  computation  of diluted EPS because their
exercise prices were greater than the average market price of our Common Stock during the
quarter and year to date ended September 4, 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Unexercised  employee  stock options to purchase  approximately  1 million and 5
million shares of our Common Stock for the quarter and year to date ended September 6,
2003,  respectively,  were not included in the computation of diluted EPS because their
exercise prices were greater than the average market price of our Common Stock during the
quarter and year to date ended September 6, 2003.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the year to date ended  September 4, 2004, we granted  employee stock options
to purchase  approximately 5 million shares of our Common  Stock at an exercise  price
equal to the average  market price on the date of grant.  The  weighted-average  exercise
 price of these options was approximately $35.</P>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>6.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Comprehensive Income</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Comprehensive income was as follows:</P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=60% ALIGN=LEFT>Net income</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;185</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;164</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;505</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;403</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Foreign currency translation adjustment arising</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;during the period</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Changes in fair value of derivatives, net of tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Reclassification of derivative losses</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;to net income, net of tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total comprehensive income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;201</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;157</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;516</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;431</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>7.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Items Affecting Comparability of Net Income</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Facility actions</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Facility actions consists of the following components:</P>

<UL><LI>Refranchising net (gains) losses;<BR>
<LI>Store closure costs; and<BR>
<LI>Impairment of long-lived assets for stores we intend to close and stores we intend to continue to use in the business.</uL>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Quarter ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=66% ALIGN=LEFT>Refranchising net (gains) losses(a)</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;(3</TD>
        <TD WIDTH=7% ALIGN=LEFT>)</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;2</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;(1</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>

<BR>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>9</P><HR NOSHADE><BR><BR><BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Quarter ended September 6, 2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></th>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=66% ALIGN=LEFT>Refranchising net (gains) losses(a)</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD WIDTH=7% ALIGN=LEFT>)</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;7</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Year to date ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=66% ALIGN=LEFT>Refranchising net (gains) losses(a)(c)</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;4</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;10</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Year to date ended September 6, 2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=66% ALIGN=LEFT>Refranchising net (gains) losses(a)</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;(7</TD>
        <TD WIDTH=7% ALIGN=LEFT>)</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;20</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;13</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>International
 includes  write downs related to our Puerto Rico  business  which is held for sale in
the amounts of $1 million      and $5 million for the  quarters to date ended  September
 4, 2004 and  September  6, 2003,  respectively,  and $6 million and $15      million for
the years to date ended September 4, 2004 and September 6, 2003, respectively.</TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Income
in store  closure  costs  results  primarily  from  gains from the sale of  properties
 on which we  formerly  operated      restaurants or adjustments to previously recorded
lease reserves as a result of changes in settlement and/or sublease estimates.</TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c)</TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>U.S.
 includes a $7 million  write down on  restaurants  we currently own but have offered to
sell at amounts lower than their      carrying amounts.</TD>
</TR>
</TABLE>
<BR>


<P>The following  table  summarizes the carrying values of the major classes of assets
held for sale at September 4, 2004 and December 27, 2003.  U.S.  amounts  primarily
 represent land on which we previously  operated  restaurants  and are net of impairment
 charges of $5 million and $2 million at  September  4, 2004 and  December  27, 2003,
 respectively.  International  amounts  relate  primarily to our Puerto Rico business,
 which we have written down by  approximately  $22 million since it was  designated  held
for sale in the quarter ended  December 28, 2002.  The carrying  values of  liabilities
 of the Puerto Rico business  that we anticipate  would be assumed by a buyer were not
 significant  at September 4, 2004 or at December 27, 2003.  Subsequent to the quarter
ended  September 4, 2004, we sold the Puerto Rico business at an amount that approximates
its carrying value.</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT>Property, plant and equipment, net</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;15</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;68</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;83</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Goodwill</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Assets classified as held for sale</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;82</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;97</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>10</P><HR NOSHADE><BR><BR><BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>December 27, 2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT>Property, plant and equipment, net</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;9</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;73</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;82</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Goodwill</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Assets classified as held for sale</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;87</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following table  summarizes  Company sales and restaurant  profit related to
stores held for sale at September 4, 2004, or disposed of through  refranchising  or
closure during 2004 and 2003.  The operations of such stores  classified as held for sale
as of September 4, 2004 or September 6, 2003 or disposed of in the quarters and years to
date ended September 4, 2004 or September 6, 2003,  which meet the  conditions  of SFAS
No. 144,  &#147;Accounting  for the  Impairment or Disposal of Long-Lived  Assets&#148;  (&#147;SFAS
144&#148;),  for reporting as discontinued  operations were not material.  Restaurant
 profit represents  Company sales less the cost of food and paper,  payroll and employee
benefits and occupancy and other operating expenses.</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=62% ALIGN=LEFT>Stores held for sale at September 4, 2004:</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;45</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;132</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;131</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Stores disposed of in 2004 and 2003:</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;231</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Wrench Litigation</U></P>


<P>An  insignificant  amount of expense was  recorded as Wrench  litigation  for the
 quarter  and year to date ended  September  4, 2004. Expense of $7 million and $42
 million was  recorded as Wrench  litigation  for the quarter and year to date ended
 September  6, 2003, reflecting  the  amounts  awarded  to the  plaintiff  and  estimated
 pre-judgment  interest.  See Note 13 for a  discussion  of Wrench litigation.</P>


<P><U>AmeriServe and Other Charges (Credits) </U></P>


<P>AmeriServe Food  Distribution  Inc.  (&#147;AmeriServe&#148;)  was the primary
 distributor of food and paper supplies to our U.S. stores when it filed for protection
 under Chapter 11 of the U.S.  Bankruptcy Code on January 31, 2000. A plan of
 reorganization  for AmeriServe (the &#147;POR&#148;) was approved on November 28, 2000,
which resulted in, among other things, the assumption of our distribution agreement,
 subject to certain amendments,  by McLane Company,  Inc. During the AmeriServe
bankruptcy  reorganization  process, we took a number of actions to ensure  continued
 supply to our system.  Those  actions  resulted in  significant  expense for the
Company,  primarily  recorded in 2000.  Under the POR we are entitled to proceeds from
certain  residual  assets,  preference  claims and other legal  recoveries of the estate.</P>


<P>We  classify  expenses  and  recoveries  related to  AmeriServe,  as well as certain
 other  items,  as  AmeriServe  and other  charges (credits).  An  insignificant  amount
was recorded as AmeriServe and other charges  (credits) for the quarter ended  September
4, 2004. Income of $14 million was  recorded as  AmeriServe  and other  charges
 (credits)  for the year to date ended  September  4, 2004.  The amount primarily
resulted from cash recoveries related to the AmeriServe bankruptcy  reorganization
 process.  Income of $3 million was recorded as</P>



<BR><BR><BR><P ALIGN=CENTER>11</P><HR NOSHADE><BR><BR><BR>



<P>AmeriServe  and other charges  (credits)
 for the quarter  ended  September 6, 2003 and primarily  includes the reversal of
reserves  associated  with the  settlement of certain wage and hour  litigation.  Income
of $1 million was recorded as  AmeriServe  and other  charges  (credits) for the year to
date ended  September 6, 2003 and primarily  includes  recoveries  related to the
 AmeriServe bankruptcy  reorganization  process and the reversal of reserves  associated
 with the settlement of certain wage and hour  litigation, partially  offset by costs to
defend certain wage and hour  litigation and  integration  costs related to our
 acquisition of Yorkshire Global Restaurants, Inc.</P>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>8.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Debt</B></TD>
</TR>
</TABLE>
<BR>


<P>At September 4, 2004,  our primary bank credit  agreement  comprises a $1.0 billion
senior  unsecured  Revolving  Credit  Facility (the &#147;Existing  Facility&#148;) with
a maturity date of June 25, 2005. At September 4, 2004, our unused Existing  Facility
 totaled $734 million, net of outstanding  letters of credit of $266 million.  There were
no borrowings  outstanding  under the Existing Facility at September 4, 2004.</P>


<P>On September 7, 2004, the Company executed an amended and restated  five-year
 Revolving Credit Facility (the &#147;New Facility&#148;)  totaling $1.0 billion  which
 replaced  the Existing  Facility.  Under the terms of the New  Facility,  the Company
may borrow up to the maximum borrowing  limit less  outstanding  letters of credit.  The
interest rate for  borrowings  under the New Facility  ranges from 0.35% to 1.625% over
the London  Interbank  Offered Rate  (&#147;LIBOR&#148;) or 0.00% to 0.20% over an
Alternate  Base Rate,  which is the greater of the Prime Rate or the Federal  Funds
 Effective  Rate plus 0.50%.  The exact spread over LIBOR or the Alternate  Base Rate, as
 applicable, will depend upon our performance  under specified  financial  criteria.
 Interest on any outstanding  borrowings under the New Facility is payable at least
quarterly.</P>


<P>The New Facility is  unconditionally  guaranteed by our principal domestic
 subsidiaries and contains  financial  covenants relating to maintenance  of leverage and
fixed  charge  coverage  ratios.  The New  Facility  also  contains  affirmative  and
 negative  covenants including,  among other things,  limitations on certain additional
indebtedness,  guarantees of indebtedness,  level of cash dividends, aggregate  non-U.S.
 investment and certain other transactions as defined in the agreement.  These covenants
are substantially  similar to those contained in the Existing Facility.</P>


<P>Included in short-term  borrowings at September 4, 2004 are $350 million of Senior
 Unsecured Notes with a May 2005 maturity date (&#147;the May 2005  Notes&#148;).  The
May 2005 Notes were included in long-term  debt at December 27, 2003.  Additionally,
 short-term  borrowings at September 4, 2004 now includes a derivative  adjustment of $13
million related to the pay-variable  interest rate swaps designated as a hedge of the May
2005 Notes.  The  derivative  adjustment  related to these swaps was  included in
long-term  debt,  along with the May 2005 Notes, at December 27, 2003.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter  ended June 12, 2004, we entered into  additional  pay-variable
 interest  rate swaps with notional  amounts of $850 million.  The swaps were  entered
into with  financial  institutions  and have reset dates and  critical  terms that match
those of $75 million,  $375  million  and $400  million  in  long-term  debt  under our
 2008,  2011 and 2012  fixed-rate  Senior  Unsecured  Notes, respectively.  Accordingly,
 the swaps are  accounted  for as hedges of these  portions  of our debt.  Considering
 the impact of these swaps, at September 4, 2004 approximately 50% of our long-term debt
is at variable interest rates.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Interest  expense on short-term  borrowings and long-term debt was $32 million and $43
million for the quarters ended September 4, 2004 and  September 6, 2003,  respectively,
 and $106 million and $131 million for the years to date ended  September 4, 2004 and
 September 6, 2003, respectively.</P>




<BR><BR><BR><P ALIGN=CENTER>12</P><HR NOSHADE><BR><BR><BR>




<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>9.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Reportable
Operating Segments</b></TD>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Revenues</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;1,369</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;1,337</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;4,015</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;3,917</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>810</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>652</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,211</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,810</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;2,179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;1,989</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;6,226</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;5,727</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Operating Profit</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;196</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;204</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;567</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;571</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>143</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>114</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>382</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>297</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated and corporate expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(48</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(38</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(140</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(107</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated other income (expense)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated facility actions(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(42</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>AmeriServe and other (charges)</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;credits(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>269</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>706</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(29</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(39</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(96</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(123</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Income before income taxes and</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;cumulative effect of accounting</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;change</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;262</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;230</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;713</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;583</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE><BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>

<TR VALIGN=Bottom>
 <TH COLSPAN="1" ALIGN="Left"><U>Identifiable Assets</U></TH>
<th colspan=5></th>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/27/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></th>
     <TH COLSPAN=1></TH>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;3,305</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;3,279</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,150</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,880</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Corporate(c)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>529</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>461</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;5,984</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;5,620</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Long-Lived Assets(d)</U></TH>
     <TH COLSPAN=5></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/27/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>

<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;2,884</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=RIGHT>$&nbsp;&nbsp;2,880</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,259</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,206</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Corporate</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>84</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
<td>&nbsp;</td>
        <TD ALIGN=right>$&nbsp;&nbsp;4,227</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=right>$&nbsp;&nbsp;4,158</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Unallocated
 facility  actions  comprises  refranchising  gains (losses) which are not allocated to
the U.S. or  International              segments for performance reporting purposes.</TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>See
Note 7 for a discussion of AmeriServe and other charges (credits) and Wrench litigation.</TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Primarily
includes deferred tax assets, cash and cash equivalents,  property, plant and equipment,
 net, related to our office              facilities and fair value of interest rate swaps.</TD>
</TR>
</TABLE>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(d) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Includes
property, plant and equipment, net; goodwill; and intangible assets, net.</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>13</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>10.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Pension
and Postretirement Medical Benefits</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Pension Benefits</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We sponsor noncontributory  defined benefit pension plans covering substantially all
full-time U.S. salaried employees,  certain hourly employees and certain  international
 employees.  The most significant of these plans, the YUM Retirement Plan (the &#147;Plan&#148;),
 is funded while  benefits  from the other plan are paid by the Company as  incurred.
 During  2001,  the Plan was amended  such that any salaried employee hired or rehired by
YUM after  September 30, 2001 is not eligible to  participate in the Plan.  Benefits are
based on years of service and earnings or stated amounts for each year of service.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Postretirement Medical Benefits</U></P>


<P>Our  postretirement  plan  provides  health care  benefits,  principally  to U.S.
 salaried  retirees and their  dependents.  This plan includes  retiree cost sharing
 provisions.  During 2001, the plan was amended such that any salaried  employee hired or
rehired by YUM after  September 30, 2001 is not eligible to  participate  in this plan.
 Employees  hired prior to September 30, 2001 are eligible for benefits if they meet age
and service requirements and qualify for retirement benefits.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Components of Net Periodic Benefit Cost</U></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Pension Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Pension Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT>Service cost</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;7</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;22</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;18</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Expected return on plan assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(28</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(21</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Amortization of prior service cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Recognized actuarial loss</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net periodic benefit cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Other<BR>
Postretirement Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Other<BR>
Postretirement Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT>Service cost</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Expected return on plan assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Amortization of prior service cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Recognized actuarial loss</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net periodic benefit cost</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Contributions</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As disclosed in our 2003 Form 10-K,  we are not required to make  contributions  to
the Plan in 2004. No  contributions  have been made to the Plan during the quarter or
year to date ended  September 4, 2004.  However,  subsequent  to September 4, 2004</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>14</P><HR NOSHADE><BR><BR><BR>



<P> we
elected to make a discretionary contribution to the Plan in the amount of $50 million.
 No further contributions to the Plan are expected in 2004.</P>



<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>11.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Share
Repurchase Program</b></TD>
</TR>
</TABLE>
<BR>


<P>In May 2004,  our Board of  Directors  authorized a share  repurchase  program.  This
 program  authorizes  us to  repurchase,  through November 2005, up to $300 million
 (excluding  applicable  transaction fees) of our outstanding  Common Stock. As of
September 4, 2004, no shares have been repurchased  under this program and $300 million
remained  available for  repurchases.  Based on market  conditions and other factors,
 repurchases may be made from time to time in the open market or through  privately
 negotiated  transactions at the discretion of the Company.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In November 2003, our Board of Directors  authorized a share  repurchase  program.
 This program  authorized us to repurchase,  through May 2005, up to $300 million
 (excluding  applicable  transaction fees) of our outstanding  Common Stock. As of
September 4, 2004, this share program was substantially  completed.  During the year to
date ended September 4, 2004, we repurchased  approximately 8.1 million shares for
approximately $294 million at an average price per share of approximately $36 under this
program.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In November 2002, our Board of Directors  authorized a share repurchase  program.
 This program  authorized us to repurchase up to $300 million  (excluding  applicable
 transaction  fees) of our outstanding  Common Stock.  This share  repurchase  program
was completed in 2003.  During the year to date ended  September  6, 2003,  we
 repurchased  approximately  4.7 million  shares for  approximately  $121 million at an
average price per share of approximately $26 under this program.</P>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>12.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Supplemental
Cash Flow Data</b></TD>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="90%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="82%" ALIGN="LEFT">Cash Paid for:</TD>
     <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="5%" ALIGN="RIGHT"></TD>
        <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="5%" ALIGN="RIGHT"></TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Interest</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;&nbsp;&nbsp;$100</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;119</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Income taxes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>231</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>120</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Significant Non-Cash Investing and Financing Activities:</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Debt reduction due to amendment of sale-leaseback agreements</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;88</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Capital lease obligations incurred to acquire assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>13.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Guarantees,
Commitments and Contingencies</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Lease Guarantees and Contingencies</U></P>


<P>As a result of (a)  assigning  our interest in  obligations  under real estate  leases
as a condition to the  refranchising  of certain Company  restaurants;  (b) contributing
 certain Company restaurants to unconsolidated  affiliates;  and (c) guaranteeing certain
other leases,  we are  contingently  liable on certain  lease  agreements.  These leases
have varying  terms,  the latest of which expires in 2030. As of September 4, 2004 and
December 27, 2003,  the  potential  amount of  undiscounted  payments we could be
required to make in the event of non-payment by the primary lessee was $367 million and
$393 million,  respectively.  The present value of these  potential payments  discounted
at our pre-tax cost of debt at September 4, 2004 was $299 million.  Our  franchisees are
the primary lessees under the vast majority of these leases.  We generally have
 cross-default  provisions with these  franchisees that would put them in default of
their franchise  agreement in the event of non-payment  under the lease.  We believe
these  cross-default  provisions  significantly reduce the risk that we will be required
to make</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>15</P><HR NOSHADE><BR><BR><BR>


<P> payments  under these  leases.  Accordingly,  the liability  recorded for our
exposure under such leases at September 4, 2004 and December 27, 2003 was not material.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Included in the potential  payments  described  above are  contingent  liabilities
 related to our  guarantees  of lease  agreements of certain  former non-core  businesses of
PepsiCo, Inc. (&#147;PepsiCo&#148;) which were sold prior to our October 6, 1997 spin-off  from  PepsiCo
(the &#147;Spin-off&#148;).  Two of these  businesses,  Chevys Mexican  Restaurant and
Hot 'n Now filed for bankruptcy  protection in October 2003 and January  2004,
 respectively.  We  believe  that we have  appropriately  provided  for our  estimated
 probable  exposure  under  these guarantees  and we do not expect any necessary,  future
 adjustments  to recorded  reserves to have a material  impact on our Financial
Statements.  Any related expenses have been recorded as AmeriServe and other charges
(credits) in our Consolidated Income Statement.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Guarantees Supporting Financial Arrangements of Franchisees, Unconsolidated
Affiliates and Other Third Parties</U></P>


<P>We had provided  approximately $16 million and $32 million of partial  guarantees of
two franchisee loan pools related primarily to the Company&#146;s historical
 refranchising  programs and, to a lesser extent,  franchisee  development of new
restaurants at September 4, 2004 and December  27, 2003,  respectively.  In support of
these  guarantees,  we had posted $4 million and $32 million of letters of credit at
 September  4, 2004 and December  27,  2003,  respectively.  We also had provided a
standby  letter of credit of $18 million and $23 million at September 4, 2004 and
December 27, 2003,  respectively,  under which we could  potentially  be required to fund
a portion of one of the franchisee loan pools. The total loans  outstanding under these
loan pools were  approximately  $105 million at September 4, 2004.  On July 12, 2004,
 approximately  $26 million of loans were sold from one of the loan pools  to the other resulting in a
reduction of our related guarantees  and  letters of credit by $16  million.
 Additionally,  on August 2, 2004,  a $12 million  letter of credit  related to our
guarantee of one of the loan pools was eliminated  based on our improved  credit rating
and, on August 6, 2004, a third party assumed a portion of the risk associated with one
of the loan pools  resulting in a $5 million  reduction of our standby letter of credit.
 These changes resulted in a $21 million decrease in our maximum exposure related to the
franchisee loan pools.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Any  funding  under the  guarantees  or letters of credit  would be secured by the
 franchisee  loans and any  related  collateral.  We believe  that we have  appropriately
 provided  for  our  estimated  probable  exposures  under  these  contingent
 liabilities.  These provisions were primarily charged to net refranchising loss (gain).
 New loans are not currently being added to either loan pool.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have guaranteed  certain lines of credit and loans of  unconsolidated  affiliates
 totaling $30 million and $28 million at September 4, 2004 and December 27, 2003,
 respectively.  Our unconsolidated  affiliates had total revenues of approximately $430
million and $1.2 billion,  respectively,  for the quarter and year to date ended
 September 4, 2004,  and assets of $856 million and debt of $54 million at September 4,
2004.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have also  guaranteed  certain lines of credit,  loans and letters of credit of
third parties  totaling $7 million and $8 million at September  4, 2004 and  December
 27,  2003,  respectively.  If all such lines of credit and  letters of credit were fully
 drawn,  the maximum  contingent  liability under these  arrangements would be
approximately $24 million and $25 million as of September 4, 2004 and December 27, 2003,
respectively.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have varying  levels of recourse  provisions  and  collateral  that  mitigate the
risk of loss  related to our  guarantees  of these financial  arrangements of
unconsolidated  affiliates and other third parties.  Accordingly,  our recorded liability
as of September 4, 2004 and December 27, 2003 is not significant.</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>16</P><HR NOSHADE><BR><BR><BR>






<P><U>Insurance Programs</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We are self-insured for a substantial portion of our current and prior coverage
including workers&#146;  compensation,  employment practices liability,  general
liability and automobile liability as well as property losses  (collectively,  &#147;property
and casualty losses&#148;).  To mitigate the cost of our exposures for certain  property
and casualty  losses,  we make annual  decisions to  self-insure  the risks of loss up to
defined  maximum per  occurrence  retentions  on a line by line basis or to combine
 certain lines of coverage into one loss pool with a single  self-insured  aggregate
 retention.  The Company then purchases  insurance  coverage,  up to a certain  limit,
 for losses that exceed the  self-insurance  per  occurrence  or  aggregate  retention.
 The  insurers&#146;  maximum  aggregate  loss limits are significantly  above our
 actuarially  determined  probable  losses;  therefore,  we believe the  likelihood  of
losses  exceeding  the insurers&#146; maximum aggregate loss limits is remote.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We are also self-insured for healthcare  claims for eligible  participating  employees
subject to certain  deductibles and limitations. We have  accounted  for our retained
 liabilities  for  property and casualty  losses and  healthcare  claims,  including
 reported and incurred but not reported claims, based on information provided by
independent actuaries.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Due to the inherent  volatility of  actuarially  determined  property and casualty
loss  estimates,  it is reasonably  possible that we could  experience  changes in
estimated  losses which could be material to our growth in  quarterly  and annual net
income.  We believe that we have recorded  reserves for property and casualty losses at a
level which has  substantially  mitigated the potential  negative impact of adverse
developments and/or volatility.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Change of Control Severance Agreements </U></P>


<P>The Company has severance  agreements  with certain key  executives  (the  &#147;Agreements&#148;)
 that are renewable on an annual basis.  These Agreements are triggered by a termination,
 under certain conditions,  of the executive&#146;s  employment  following a change in
control of the Company,  as defined in the Agreements.  If triggered,  the affected
 executives  would generally  receive twice the amount of both their  annual  base
 salary  and  their  annual  incentive  in a lump  sum,  a  proportionate  bonus at the
 higher of target or actual performance,  outplacement  services  and  a tax  gross-up
 for  any  excise  taxes.  These  Agreements  have  a  three-year  term  and
automatically  renew each  January 1 for  another  three-year  term  unless the Company
 elects not to renew the  Agreements.  If these Agreements had been triggered as of
September 4, 2004,  payments of  approximately  $30 million would have been made. In the
event of a change of control,  rabbi trusts would be established  and used to provide
payouts under existing  deferred and incentive  compensation plans.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Litigation</U></P>


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We are subject to various claims and  contingencies  related to lawsuits,  taxes,
 environmental  and other matters  arising out of the normal course of business.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On August 13, 2003, a class action  lawsuit  against Pizza Hut,  Inc.,  entitled
 <U>Coldiron v. Pizza Hut,  Inc.</U>, was filed in the United States District Court,  Central
 District of California.  Plaintiff  alleges that she and other current and former Pizza
Hut Restaurant General Managers  (&#147;RGM's&#148;) were improperly  classified as exempt
 employees under the U.S. Fair Labor Standards Act (&#147;FLSA&#148;).  There is also a pendent
 state law claim,  alleging  that  current and former  RGM's in  California  were
 misclassified  under that state's law. Plaintiff  seeks unpaid  overtime  wages and
 penalties.  On May 5, 2004, the District  Court granted  conditional  certification  of
a nationwide  class of RGM's under the FLSA claim,  providing  notice to prospective
 class members and an opportunity to join the class. Less than 10 percent of the eligible class
members have joined the litigation.  Once class  certification  discovery is
completed,  Pizza Hut intends to challenge the  propriety of  conditional  class</P>





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<P> certification.  On July 20, 2004,  the District  Court granted  summary judgment on Ms.
 Coldiron's  individual FLSA claim.  Pizza Hut believes that the District  Court's  summary
 judgment ruling in favor of Ms. Coldiron is clearly erroneous under well-established
 legal precedent,  and is currently considering whether to seek a writ of mandamus review by the
U.S. Court of Appeals for the Ninth Circuit,  requesting that the Court of Appeals vacate
the District  Court's  decision  granting Ms.  Coldiron's  motion for summary  judgment.
 As of September 28, 2004, Ms.  Coldiron has also filed motions to certify an additional
class of current and former  California RGM's under  California state law, and a
motion  requesting that the District Court enter summary judgment on the damages that
FLSA class members would be due upon successful  prosecution of the class-wide
 litigation.  Pizza Hut is opposing both motions.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We continue to believe that Pizza Hut has properly  classified its RGM's as exempt
under the FLSA and  California  law and  accordingly intend to vigorously  defend against
all claims in this lawsuit.  However,  in view of the inherent  uncertainties  of
litigation,  the outcome of this case cannot be predicted at this time.  Likewise, the
amount of any potential loss cannot be reasonably estimated.</P>


<P>On December 17, 2002,  Taco Bell was named as the defendant in a class action  lawsuit
filed in the United  States  District  Court for the Northern  District of  California
 entitled  <U>Moeller,  et al. v. Taco Bell Corp.</U>  On August 4, 2003,  plaintiffs  filed an
amended complaint  that alleges,  among other  things,  that Taco Bell has  discriminated
 against the class of people who use  wheelchairs  or scooters for mobility by failing to
make its approximately 220 company-owned  restaurants in California (the "California
 Restaurants") accessible  to the class.  Plaintiffs  contend  that queue  rails and
other  architectural  and  structural  elements  of the Taco Bell restaurants relating to
the path of travel and use of the facilities by persons with mobility-related
 disabilities  (including parking spaces,  ramps,  counters,  restroom facilities,  and
seating) do not comply with the U.S. Americans with Disabilities Act (the "ADA"), the
Unruh Civil Rights Act (the &#147;Unruh Act&#148;),  and the California  Disabled  Persons Act (the
&#147;CDPA&#148;).  Plaintiffs have requested:  (a) an  injunction  from the  District  Court
 ordering  Taco Bell to comply with the ADA and its  implementing  regulations;  (b) that
the District Court declare Taco Bell in violation of the ADA, the Unruh Act, and the
CDPA;  and (c) monetary  relief under the Unruh Act or CDPA.  Plaintiffs,  on behalf of
the class, are seeking the minimum  statutory damages per offense of either $4,000 under
the Unruh Act or  $1,000  under  the CDPA for each  aggrieved  member of the  class.
 Plaintiffs  contend  that  there  may be in  excess of  100,000 individuals in the
class. For themselves,  the four named plaintiffs have claimed  aggregate  minimum
statutory damages of no less than $16,000,  but are expected to claim  greater  amounts
based on the number of Taco Bell outlets they visited at which they claim to have
suffered discrimination.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On February 23, 2004, the District  Court granted  Plaintiffs'  motion for class
 certification.  The District  Court  certified a Rule 23(b)(2)  mandatory  injunctive
relief class of all individuals with disabilities who use wheelchairs or electric
scooters for mobility who, at any time on or after December 17, 2001, were denied,  or
are currently being denied,  on the basis of disability,  the full and equal enjoyment of
the California Restaurants.  The class includes claims for injunctive relief and minimum
statutory damages.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Pursuant  to the  parties'  agreement,  on or about  August 31,  2004,  the  District
 Court  ordered  that the trial of this action be bifurcated so that stage one will
resolve  Plaintiffs'  claims for equitable relief and stage two will resolve  Plaintiffs'
 claims for damages.  The parties are currently  proceeding with the equitable  relief
stage of this action.  During this stage,  Taco Bell intends to file a motion to
partially  decertify  the class to exclude from the Rule  23(b)(2)  class claims for
monetary  damages.  Plaintiffs have stated their intent to oppose Taco Bell's motion and
to file their own motion for summary  judgment as to liability  relating to a subset of
the California Restaurants.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Taco Bell has denied  liability  and intends to  vigorously  defend  against all
claims in this  lawsuit.  This  lawsuit is at an early stage in the  proceedings.
 Accordingly,  at this time,  it is not possible to  reasonably  estimate any</P>




<BR><BR><BR><P ALIGN=CENTER>18</P><HR NOSHADE><BR><BR><BR>


<P>  potential
 costs to bring any non-compliant  California  Restaurants into compliance with
applicable state or federal  disability  access laws. Nor is it possible at this time to
reasonably estimate the probability or amount of liability for monetary damages on a
class-wide basis to Taco Bell.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On January 16,  1998,  a lawsuit  against  Taco Bell Corp.,  entitled  <U>Wrench LLC,
 Joseph  Shields and Thomas Rinks v. Taco Bell Corp.</U> (&#147;Wrench&#148;)  was filed in the United
States  District  Court for the Western  District of Michigan.  The lawsuit  alleged that
Taco Bell Corp.  misappropriated  certain ideas and concepts used in its  advertising
 featuring a Chihuahua.  The  plaintiffs  sought to recover monetary damages under
several theories,  including breach of implied-in-fact  contract,  idea misappropriation,
 conversion and unfair competition.  On June 10, 1999,  the District Court granted
 summary  judgment in favor of Taco Bell Corp.  Plaintiffs  filed an appeal with the U.S.
 Court of Appeals for the Sixth  Circuit,  and oral arguments were held on September 20,
2000. On July 6, 2001, the Court of Appeals reversed the District  Court's  judgment in
favor of Taco Bell Corp. and remanded the case to the District Court.  Taco Bell Corp.
 unsuccessfully  petitioned  the Court of Appeals for  rehearing en banc,  and its
petition for writ of  certiorari to the United States  Supreme  Court was denied on
January 21, 2002.  The case was  returned to District  Court for trial which began on May
14, 2003 and on June 4, 2003 the jury  awarded $30 million to the  plaintiffs.
 Subsequently,  the  plaintiffs'  moved to amend the  judgment to include pre-judgment
 interest and post-judgment  interest and Taco Bell filed its post-trial motion for
judgment as a matter of law or a new trial.  On  September 9, 2003,  the District  Court
 denied Taco Bell's  motion and granted the  plaintiff's  motion to amend the judgment.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In view of the jury  verdict  and  subsequent  District  Court  ruling,  we  recorded
a charge of $42  million in 2003.  We continue to believe that the Wrench  plaintiffs'  claims
are without  merit and have  appealed the verdict to the Sixth  Circuit  Court of
Appeals. Post-judgment  interest  will  continue to accrue  during the appeal  process.
 We have  included the  liability  related to the Wrench judgment and related interest as
accounts payable and other current liabilities in our Condensed Consolidated Balance
Sheets.</P>


<P>On July 9, 2003,  we filed suit against Taco Bell's  former  advertising  agency in
the United  States  District  Court for the Central District of California seeking
 reimbursement for any final award that may be ultimately  affirmed by the appeals courts
and costs that we have incurred in defending this matter.  We are also seeking
reimbursement from our insurance carriers.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Obligations to PepsiCo, Inc. After Spin-off</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In connection with the Spin-off,  we entered into separation and other related
agreements (the &#147;Separation  Agreements&#148;)  governing the Spin-off and our subsequent
relationship with PepsiCo.  These agreements provide certain indemnities to PepsiCo.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Under the terms of these  agreements,  we have  indemnified  PepsiCo for any costs or
losses it incurs  with  respect to all letters of credit,  guarantees and  contingent
 liabilities  relating to our businesses  under which PepsiCo  remains  liable.  As of
September 4, 2004,  PepsiCo remains liable for  approximately  $43 million on a nominal
basis related to these  contingencies.  This obligation ends at the time  PepsiCo is
 released,  terminated  or  replaced  by a qualified  letter of credit.  We have not been
 required to make any payments under this indemnity.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Under the Separation  Agreements,  PepsiCo  maintains full control and absolute
 discretion with regard to any combined or consolidated tax filings for periods  through
 October 6, 1997.  PepsiCo also  maintains full control and absolute  discretion
 regarding any common tax audit issues.  Although PepsiCo has  contractually  agreed to,
in good faith, use its best efforts to settle all joint interests in any common tax audit
issue on a basis  consistent with prior practice,  there can be no assurance that
 determinations  made by PepsiCo would be the same as we would  reach,  acting on our own
behalf.  Through  September  4, 2004,  there have not been any  determinations made by
PepsiCo where we would have reached a different determination.</P>




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<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Item 2.  Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations</B></P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Introduction</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>YUM! Brands,  Inc. and Subsidiaries  (collectively  referred to as &#147;YUM&#148; or
the &#147;Company&#148;)  comprises the worldwide  operations of KFC, Pizza Hut, Taco
Bell, Long John Silver&#146;s (&#147;LJS&#148;) and A&amp;W All-American  Food
Restaurants  (&#147;A&amp;W&#148;)  (collectively  &#147;the Concepts&#148;) and is the
world&#146;s  largest  quick service  restaurant  (&#147;QSR&#148;)  company based on the
number of system units.  LJS and A&amp;W  were added when YUM acquired  Yorkshire Global
 Restaurants,  Inc. (&#147;YGR&#148;) on May 7, 2002. With 12,657  international  units,
YUM is the second largest QSR company outside the U.S.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Through  its  Concepts,  YUM  develops,  operates,  franchises  and  licenses  a
system of both  traditional  and  non-traditional  QSR restaurants.  Traditional  units
feature dine-in,  carryout and, in some instances,  drive-thru or delivery  services.
 Non-traditional units,  which are  typically  licensed  outlets,  include  express
 units and kiosks  which  have a more  limited  menu and  operate in non-traditional
 locations  like malls,  airports,  gasoline  service  stations,  convenience  stores,
 stadiums,  amusement  parks and colleges, where a full-scale traditional outlet would
not be practical or efficient.</P>


<P>The retail food industry,  in which the Company  competes,  is made up of
supermarkets,  supercenters,  warehouse  stores,  convenience stores,  coffee shops,
 snack bars,  delicatessens  and  restaurants  (including the QSR segment),  and is
intensely  competitive  with respect to food quality,  price,  service,  convenience,
 location and concept.  The industry is often  affected by changes in consumer tastes;
 national,  regional or local economic  conditions;  currency  fluctuations;  demographic
trends;  traffic patterns;  the type, number and location of competing  food retailers
and products;  and  disposable  purchasing  power.  Each of the Concepts  compete with
international,  national and regional  restaurant  chains as well as locally-owned
 restaurants,  not only for customers,  but also for management and hourly personnel,
suitable real estate sites and qualified franchisees.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The Company is focused on five long-term measures  identified as essential to our
growth and progress.  These five measures and related key performance indicators are as
follows:</P>

<ul><LI>International expansion<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International system-sales growth (local currency)<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of new international restaurant openings<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net international unit growth</uL>

<ul><LI>Multibrand innovation and expansion<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of multibrand restaurant locations<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of multibrand units added<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of franchise multibrand units added</uL>

<UL><LI>Portfolio of category-leading U.S. brands<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. blended same-store sales growth<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. system-sales growth</UL>

<UL><LI>Global franchise fees<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New restaurant openings by franchisees<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise fee growth</UL>


<BR><BR><BR><P ALIGN=CENTER>20</P><HR NOSHADE><BR><BR><BR>


<UL><LI>Strong cash generation and returns<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash generated from all sources<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash generated from all sources after capital spending<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restaurant margins</ul>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our progress against these measures is discussed throughout the Management&#146;s
Discussion and Analysis (&#147;MD&amp;A&#148;).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  following  MD&amp;A  should  be read in  conjunction  with the  unaudited  Condensed
 Consolidated  Financial  Statements  (&#147;Financial Statements&#148;),  the
 Cautionary  Statements  and our annual report on Form 10-K for the fiscal year ended
 December 27, 2003 (&#147;2003 Form 10-K&#148;).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>All Note  references  herein refer to the  accompanying  Notes to the Financial
 Statements.  Tabular amounts are displayed in millions except per share and unit count
amounts, or as otherwise specifically identified.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Significant Known Events, Trends or Uncertainties Expected to Impact 2004
Comparisons with 2003</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following  factors  impacted  comparability  of operating  performance  for the
quarter and year to date ended September 4, 2004 or could impact comparisons for the
remainder of 2004.  Certain of these factors were previously discussed in our 2003 Form
10-K.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>New Accounting Pronouncements Not Yet Adopted</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>See Note 4.</P>


<P><U>Canada Unconsolidated Affiliate Dissolution</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As  previously  disclosed  in our 2003 Form 10-K,  on November 10, 2003 we  dissolved
 our  unconsolidated  affiliate  that  previously operated 733  restaurants in Canada.
 We owned 50% of this  unconsolidated  affiliate  prior to its  dissolution  and
accounted for our interest under the equity method.  Of the restaurants  previously
 operated by the  unconsolidated  affiliate,  we now operate the vast majority  of Pizza
 Huts and Taco  Bells,  while  almost  all KFCs are  operated  by  franchisees.  As a
result  of  operating  certain restaurants  that were  previously  operated by the
 unconsolidated  affiliate,  our Company sales,  restaurant  profit and general and
administrative  expenses will  increase and our  franchise  fees will  decrease.
 Additionally,  on a full year basis other income will increase  as we recorded a loss
from our  investment  in the  Canadian  unconsolidated  affiliate  in 2003.  The overall
 impact on net income is not expected to be material.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As a result of our dissolution of our Canada Unconsolidated  Affiliate,  Company sales
increased $37 million,  franchise fees decreased $2 million,  restaurant profit increased
$2 million and general and administrative  expenses increased $3 million for the quarter
ended September 4, 2004  compared to the quarter  ended  September 6, 2003.  The impacts
on other income and net income were not  significant for the quarter.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As a result of the dissolution of our Canada Unconsolidated Affiliate,  Company sales
increased $108 million,  franchise fees decreased $6 million,  restaurant  profit
 increased  $5 million,  general and  administrative  expenses  increased  $8 million and
other  income increased $6 million for the year to date ended  September  4, 2004
 compared to the year to date ended  September 6, 2003.  The impact on net income was not
significant for the year to date.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
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<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Amendment of Sale-Leaseback Agreements</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On August 15, 2003, we amended two  sale-leaseback  agreements  assumed in our 2002
acquisition of YGR such that the amended agreements qualified  for  sale-leaseback
 accounting.  Restaurant  profit  decreased by $1 million and $5 million in the quarter
and year to date ended September 4, 2004,  respectively,  compared to the same periods in
2003 as a result of the two amended agreements being accounted for as operating leases
 subsequent to the amendment.  Interest expense  decreased by $1 million and $6 million
in the quarter and year to date ended September 4, 2004, respectively.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Puerto Rico Business Held for Sale</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our Puerto Rico business has been held for sale since the fourth  quarter of 2002.
 Subsequent to the quarter ended  September 4, 2004, we sold our Puerto Rico business for
an amount  approximating  carrying value.  Accordingly,  Company sales and restaurant
 profit will decrease  $27  million  and $4  million,  respectively,  and we  estimate
 franchise  fees will  increase  $2 million  and  general and administrative  expenses
will decrease $2 million for the quarter and year to date ended  December 25, 2004, as
compared to the quarter and year to date ended December 27, 2003.  The impact on net
income is not expected to be significant.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Commodity Inflation</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increased cost of certain  commodities  negatively  impacted our U.S.  margins for
the quarter and year to date ended  September 4, 2004. Higher commodity costs,
 particularly in cheese and meat prices,  negatively  impacted U.S.  restaurant  margins
by approximately 190 and 160 basis points for the quarter and year to date ended
 September 4, 2004,  respectively.  We currently  estimate  that higher commodity costs
 (particularly in meats and cheese) will negatively  impact U.S.  restaurant  margins by
approximately 150 basis points for the quarter  ending  December 25, 2004.  We have
 incorporated  this  potential  unfavorable  impact into our  operating  plans and
outlook.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>AmeriServe and Other Charges (Credits)</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>An  insignificant  amount was recorded as AmeriServe  and other charges  (credits) for
the quarter ended  September 4, 2004.  Income of $14 million was recorded as AmeriServe
and other charges  (credits) for the year to date ended September 4, 2004. The amount
 primarily resulted  from cash  recoveries  related to the  AmeriServe  bankruptcy
 reorganization  process.  Income of $3 million was recorded as AmeriServe  and other
 charges  (credits)  for the quarter  ended  September  6, 2003 and  primarily  includes
the reversal of reserves associated  with the  settlement  of certain  wage and hour
 litigation.  Income of $1 million  was  recorded as  AmeriServe  and other charges
(credits) for the year to date ended September 6, 2003 and primarily includes  recoveries
related to the AmeriServe  bankruptcy reorganization  process and the reversal of
reserves  associated  with the  settlement of certain wage and hour  litigation,
 partially offset by costs to defend certain wage and hour  litigation and  integration
 costs related to our acquisition of YGR. See Note 7 for a discussion of AmeriServe and
other charges (credits).</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Wrench Litigation</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>An  insignificant  amount of expense was recorded for the quarter and year to date
ended September 4, 2004 reflecting  interest related to the Wrench  litigation.  Expense
of $7 million and $42 million was  recorded as Wrench  litigation  for the quarter and
year to date ended  September 6, 2003  reflecting  the amounts  awarded to the  plaintiff
 and estimated  pre-judgment  interest.  See Note 13 for a discussion of Wrench
litigation.</P>

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<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Pension Plan Funded Status</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Certain of our employees are covered under  noncontributory  defined  benefit  pension
plans.  The most  significant of these plans was amended in 2001 such that salaried
 employees hired or rehired after  September 30, 2001 are not eligible to participate.
 As disclosed in our 2003 Form 10-K, as of our September 30, 2003 measurement  date these
plans had a projected  benefit  obligation  (&#147;PBO&#148;) of $629 million and a fair
value of plan assets of $438 million.  We currently  estimate that continued  benefits
 earned by covered  employees and interest on benefits previously earned,  both of which
result in an increase in our PBO, will be substantially  offset by increases to plan
assets as a result of stock market gains since  September 30, 2003 as well as a $50
million  pension plan  contribution we made subsequent to September 4, 2004 but prior to
our September 30, 2004 measurement date.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Thus,  any change in our pension plan funded  status at September  30, 2004 versus
 September  30, 2003 will be primarily the result of any change in the discount rate we
use to measure our PBO. Due to the  relatively  long time frame over which  benefits are
expected to be paid, our PBO is highly  sensitive to changes in discount  rates. A 10
basis point  increase/decrease  in the discount rate from the 6.25% used at September 30,
2003 would  decrease/increase  our PBO at September 30, 2004,  holding all other
 variables and assumptions constant,  by  approximately  $12 million.  While we have not
yet determined the discount rate we will use to measure our PBO as of our September 30,
2004 measurement date, we do not anticipate that any resulting change in our PBO will be
significant.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We do not believe the remaining  underfunded  status of the pension plan will
 materially  affect our results of operations,  financial position or cash flows and have
 incorporated  the estimated  future impact into our financial  projections and plans. We
estimate that pension expense will increase in the range of $5 million to $10 million in
2005 from the $54 million that is being expensed in 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Store Portfolio Strategy</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>From time to time we sell Company  restaurants  to existing and new  franchisees
 where  geographic  synergies can be obtained or where their  expertise can generally be
leveraged to improve our overall  operating  performance,  while retaining  Company
 ownership of key U.S. and International  markets.  Such  refranchisings  reduce our
reported revenues and restaurant profits and increase the importance of system sales
growth as a key performance measure.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following table summarizes our refranchising activities:</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=61% ALIGN=LEFT>Number of units refranchised</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>18</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>9</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>32</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>76</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising proceeds, pre-tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising net (gains) losses, pre-tax(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Refranchising
 losses for the year to date ended  September 4, 2004  primarily  include  charges to
write down our Puerto Rico      business to our then  estimate of its fair value and
charges to write down certain U.S.  restaurants  we currently own but we have
     offered to sell at amounts  lower than their  carrying  values.  Refranchising  net
losses for the  quarter and year to date ended      September 6, 2003  primarily
 included  charges to write down our Puerto Rico business to our then estimate of its
fair value.  As      previously noted, we sold our Puerto Rico business  subsequent to
the quarter ended September 4, 2004 for an amount  approximating      carrying value.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>23</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In addition to our refranchising  program, from time to time we close restaurants that
are poor performing,  we relocate restaurants to a new site within the same trade area or
we  consolidate  two or more of our existing  units into a single unit  (collectively,
 &#147;store closures&#148;).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following table summarizes Company store closure activities:</P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=60% ALIGN=LEFT>Number of units closed</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>45</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>58</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>230</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>159</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;(3</TD>
        <TD WIDTH=5% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;(2</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Impairment charges for stores to be closed</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>For the years to date ended  September 4, 2004 and September 6, 2003,  income in store
closure costs results  primarily from gains from the sale of properties on which we
formerly  operated  restaurants or adjustments to previously  recorded lease reserves as
a result of changes in settlement and/or sublease estimates.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The impact on operating  profit  arising from  refranchising  and Company store
 closures is the net of (a) the estimated  reduction in restaurant  profit,  which
 reflects  the  decrease  in Company  sales,  and general and  administrative  expenses  (&#147;G&amp;A&#148;)
and (b) the estimated  increase in franchise  fees from the stores  refranchised.  The
amounts  presented  below reflect the estimated  impact from stores  that were  operated
 by us for all or some  portion of the  comparable  period in 2003 and are no longer
 operated  by us as of September 4, 2004.  The amounts do not include  results  from new
 restaurants  that we opened in  connection  with a relocation  of an existing unit or
any incremental impact upon consolidation of two or more of our existing units into a
single unit.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following table summarizes the estimated impact on revenue of refranchising and
Company store closures:</P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Quarter ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT>Decreased sales</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(54</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(23</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(77</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Increased franchise fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decrease in total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(52</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(23</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(75</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Year to date ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT>Decreased sales</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(163</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(77</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(240</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Increased franchise fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decrease in total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(158</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(75</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(233</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>24</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following table summarizes the estimated impact on operating profit of
refranchising and Company store closures:</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Quarter ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=58% ALIGN=LEFT>Decreased restaurant profit</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(2</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(2</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(4</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Increased franchise fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased G&amp;A expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=5>Year to date ended September 4, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>U.S.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Worldwide<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=58% ALIGN=LEFT>Decreased restaurant profit</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(11</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(6</TD>
        <TD WIDTH=8% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(17</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Increased franchise fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased G&amp;A expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(7</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Results of Operations</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;1,935</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;1,765</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>10</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;5,528</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;5,085</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>9</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>244</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>224</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>698</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>642</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2,179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,989</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;6,226</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,727</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;295</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;267</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;821</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;748</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;% of Company sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.1</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>14.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.1</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;269</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;706</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>123</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Income tax provision</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>208</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(16</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Income before cumulative effect of</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;accounting change</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>185</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>164</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>404</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Cumulative effect of accounting</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;change, net of tax</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;185</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;164</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;403</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Diluted earnings per share(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;0.53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;1.66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>See
Note 5 for the number of shares used in this calculation.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Impact of Foreign Currency Translation on Reported Results</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Throughout  the MD&amp;A,  the Company  provides  the  percentage  impact of foreign
 currency  translation.  These  amounts are derived by translating  current  year
 results at prior year  average  exchange  rates.  We  believe  the  presentation  of the
 foreign  currency translation impact allows for better year-to-year comparability
without the distortion of foreign currency fluctuations.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>25</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Restaurant Unit Activity</B></P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Unconsolidated<BR>
Affiliates<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchisees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Licensees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=40% ALIGN=LEFT>Balance at December  27, 2003</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>7,854</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>1,512</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>21,471</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>2,362</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>33,199</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New Builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>239</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>94</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>496</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>164</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>993</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>73</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(76</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(32</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(230</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(27</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(456</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(191</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(904</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7,902</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,574</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>21,467</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,332</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33,275</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>% of Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>

<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left">Worldwide Multibrand Restaurants<HR WIDTH=70% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchise<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=56% ALIGN=LEFT>Balance at December 27, 2003</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>1,084</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>1,243</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>2,327</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,347</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,321</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,668</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The franchise  multibrand unit counts include both franchisee and unconsolidated
 affiliate  multibrand units.  Multibrand  conversions increase  the sales and points of
 distribution  for the second  brand added to a restaurant  but do not result in an
 additional  unit count.  Similarly, a new multibrand  restaurant,  while increasing
sales and points of distribution for two brands, results in just one additional unit
count.</P>


<P>For the year to date ended September 4, 2004, Company and franchise multibrand unit
gross additions were 281 and 107, respectively.</P>


<P><B>Worldwide System Sales Growth</B></P>


<P>System  sales  growth  includes  the  results  of  all  restaurants  regardless  of
 ownership,  including  Company-owned,   franchise, unconsolidated  affiliate and license
 restaurants.  Sales of franchise,  unconsolidated  affiliate  and license  restaurants
 generate franchise  and  license  fees for the Company  (typically  at a rate of 4% to
6% of sales).  Franchise,  unconsolidated  affiliate  and license restaurants sales are
not included in Company sales on the Consolidated  Statements of Income;  however,  the
fees are included in the Company&#146;s  revenues.  We believe system sales growth is
useful to investors as a significant  indicator of the overall  strength of our business
as it incorporates all of our revenue drivers, Company and franchise same store sales as
well as net unit development.</P>


<P>Worldwide  system  sales  growth was 9% for the quarter and 8% year to date,
 including a 2%  favorable  impact from  foreign  currency translation in both periods.
 Excluding the favorable  impact of foreign  currency  translation,  the increases were
driven by new unit development and same store sales growth, partially offset by store
closures.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Revenues</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Company  sales  increased  $170 million or 10% in the  quarter,  including a 1%
favorable  impact from  foreign  currency  translation. Excluding the favorable  impact
of foreign  currency  translation,  the increase was driven by new unit  development,
 same store sales growth,  and  acquisitions  of  franchisee  restaurants  (primarily
 units in Canada which we now operate),  partially  offset by store closures and
refranchising.</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>26</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Company sales  increased $443 million or 9% year to date,  after a 2% favorable
 impact from foreign  currency  translation.  Excluding the favorable  impact of foreign
 currency  translation,  the increase was driven by new unit  development,  acquisitions
of franchisee restaurants  (primarily units in Canada which we now operate) and same
store sales growth,  partially offset by refranchising and store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Franchise  and license  fees  increased  $20 million or 9% for the  quarter,
 including a 2%  favorable  impact from  foreign  currency translation.  Franchise  and
license  fees  increased  $56 million or 9% year to date,  including a 3%  favorable
 impact from  foreign currency  translation.  Excluding the impact of foreign  currency
 translation,  the increases were driven by new unit  development and same store sales
growth,  partially offset by store closures and our acquisitions of franchisee
 restaurants (primarily units in Canada which we now operate).</P>


<P><B>Worldwide Company Restaurant Margin</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=28% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1.1) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>31.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(0.8) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.1 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>26.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.9 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Occupancy and other operating</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.1 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>27.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.1 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>14.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.1 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Restaurant  margin as a percentage of sales increased  approximately 10 basis points
in the quarter.  U.S.  restaurant margin decreased approximately 70 basis points and
International restaurant margin increased 110 basis points, respectively.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Restaurant  margin as a percentage of sales increased  approximately  10 basis points
year to date. U.S.  restaurant  margin  decreased approximately 20 basis points and
International restaurant margin increased approximately 70 basis points.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The changes in U.S. and International restaurant margin are discussed in the
respective sections.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide General and Administrative Expenses</B></P>


<P>Worldwide  G&amp;A  expenses  increased  $38  million or 18% in the  quarter,  including a
1%  unfavorable  impact  from  foreign  currency translation.  The  increase  was driven
by higher  compensation  related  costs,  including  amounts  associated  with
 investments  in strategic  initiatives in China and other  international  growth
markets,  incentive  compensation and pension costs. Also contributing to the increase
were increased  reserves  related to potential  development  sites and surplus
 facilities and costs  associated with a biennial  International  leadership  conference
 held in 2004. The increase was also partially  attributable  to expenses of $3 million
associated with operating the restaurants we now own in Canada that were previously
operated by our unconsolidated affiliate.</P>


<P>Worldwide  G&amp;A  expenses  increased  $98  million  or 16% year to  date,  including  a
2%  unfavorable  impact  from  foreign  currency translation.  The increase was driven by
higher compensation related costs, including incentive  compensation,  amounts associated
with investments in strategic  initiatives in China and other  international  growth
markets and pension  costs.  Also  contributing  to the increase  were  increased
 reserves  related to  potential  development  sites and surplus  facilities,  expenses
 associated  with the implementation of new financial and human resource systems,  and
the unfavorable  impact of lapping the recovery of $3 million of legal fees during</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>27</P><HR NOSHADE><BR><BR><BR>

<P> 2003.
The increase was also partially  attributable to expenses of $8 million  associated with
operating the restaurants we now own in Canada that were previously operated by our
unconsolidated affiliate.</P>


<P><B>Worldwide Franchise and License Expenses</B></P>


<P>Worldwide  franchise  and license  expenses  increased  $1 million or 19% in the
quarter and  decreased $4 million or 18% year to date. The year to date  decrease was
primarily  driven by the favorable  impact of lapping the biennial  International
 franchise  convention held in 2003.</P>


<P><B>Worldwide Other (Income) Expense</B></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT>Equity income from investments in</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;unconsolidated affiliates</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(14</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(9</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(36</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(22</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Foreign exchange net loss (gain)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other (income) expense</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(35</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(24</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Worldwide other income increased $3 million or 40% in the quarter,  including a 5%
favorable impact from foreign currency  translation, and $11 million or 48% year to date,
 including  an 8% favorable  impact from  foreign  currency  translation.  The  increases
in other income in the  quarter  and year to date ended  September  4, 2004 were
 primarily  driven by an  increase  in equity  income  from our unconsolidated
 affiliates,  principally in China.  The increase in other income for the year to date
was also partially  driven by the dissolution of our unconsolidated affiliate in Canada
which recorded a loss in the year to date ended September 6, 2003.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Facility Actions</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We recorded a net loss of $3 million and $9 million from  facility  actions for the
quarters  ended  September 4, 2004 and September 6, 2003,  respectively.  We  recorded  a
net loss of $22  million  and $24  million  from  facility  actions  for the years to
date  ended September 4, 2004 and September 6, 2003,  respectively.  See the Store
Portfolio  Strategy section for more detail of our refranchising and closure activities
and Note 7 for a summary of components of facility actions by reportable operating
segment.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Operating Profit</B></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=46% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;196</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;204</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(5</TD>
        <TD WIDTH=3% ALIGN=LEFT>)</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;567</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;571</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(1</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>143</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>114</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>382</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>297</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated and corporate expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(48</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(38</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(28</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(140</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(107</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(32</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated other income (expense)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(42</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>AmeriServe and other (charges)</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;credits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;269</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;706</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>28</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. and International operating profit are discussed in the respective sections.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Unallocated  facility  actions  comprise  refranchising  gains (losses) which are not
allocated to U.S. or  International  segments for performance reporting purposes.  See
Note 7 for further discussion.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Interest Expense, Net</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=LEFT>Interest expense</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;32</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;43</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>27</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;106</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;131</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>20</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(22</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;123</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Interest  expense  decreased  $11 million or 27% for the quarter and $25 million or
20% year to date.  The decrease for the quarter was driven by a decrease in our average
 interest rates,  primarily  attributable  to pay-variable  interest rate swaps entered
into during the quarter ended June 12, 2004.  The year to date decrease was driven by a
reduction in our average debt  outstanding,  partially as a result of the amended YGR
 sale-leaseback  agreement,  and a decrease in our average  interest  rates,  primarily
 attributable  to the pay-variable interest rate swaps entered into during the quarter
ended June 12, 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Income Taxes</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">9/6/03(a)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=35% ALIGN=LEFT>Income taxes</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;77</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;66</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;208</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;179</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Effective tax rate</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.4</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>28.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>29.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>30.8</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hanging" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Amount
does not include the income tax benefit of approximately $1 million on the $2 million
cumulative effect adjustment      due to the adoption of SFAS 143.</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in our  effective  tax rate for the quarter  ended  September 4, 2004 was
driven by the impact of lapping the benefit in 2003 of amending  certain  prior U.S.
 income tax returns to claim credit for foreign taxes paid in prior years as well as
lapping the favorable  impact of certain  International tax planning strategies.  The increase was
partially  offset by a number of factors, including the reversal of reserves in the
current year associated with audits that were settled.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  decrease in our  effective  tax rate for the year to date ended  September 4,
2004 was driven by a number of factors, including  the reversal of reserves  in the current year associated
 with audits that were settled.  The decrease was partially  offset by the impact of
lapping the  benefit in 2003 of  amending  certain  prior U.S.  income tax  returns to
claim  credit for foreign taxes paid in prior years.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>While we continue to claim credit for foreign taxes paid in the current year,  the
amended  return  benefit  recognized in 2003 was non-recurring.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>29</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Results of Operations</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=39% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1,225</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1,199</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>2</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;3,599</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;3,518</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>2</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>144</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>138</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>416</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>399</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1,369</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1,337</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;4,015</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;3,917</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;174</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;178</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;514</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;510</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>% of Company sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.7)</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>14.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.2)</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;196</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;204</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;567</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;571</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Restaurant Unit Activity</B></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Unconsolidated<BR>
Affiliates<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchisees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Licensees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=36% ALIGN=LEFT>Balance at December 27, 2003</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>5,094</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>6</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>13,566</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>2,156</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>20,822</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New Builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>170</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>150</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>398</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(58</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(17</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(150</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(266</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(180</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(602</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,063</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13,432</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,123</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20,618</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>% of Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left">U.S. Multibrand Restaurants<HR WIDTH=75% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchise<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=56% ALIGN=LEFT>Balance at December 27, 2003</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>1,032</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>1,116</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT>2,148</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,295</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,189</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,484</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>For the year to date ended September 4, 2004, Company and franchise multibrand unit
gross additions were 281 and 102, respectively.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. System Sales Growth</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S.  system sales growth was 4% for both the quarter and year to date.  The
 increases  were driven by same store sales growth and new unit development, partially
offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Revenues</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Company  sales  increased $26 million or 2% in the quarter and $81 million or 2% year
to date.  The  increases  were driven by new unit development and same store sales
growth, partially offset by refranchising and store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Franchise  and license fees  increased $6 million or 5% in the quarter and $17 million
or 4% year to date.  The  increases  were driven by same store sales growth and new unit
development, partially offset by store closures.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>30</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Same Store Sales</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. same store sales includes only Company  restaurants  that have been open one year
or more.  U.S.  blended same store sales include KFC, Pizza Hut, and Taco Bell Company
owned  restaurants  only.  U.S. same store sales for Long John Silver&#146;s and A&amp;W
  restaurants  are not included. Following are the same store sales growth results by
brand for the quarter and year to date ended September 4, 2004:</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=6>Quarter ended September 4, 2004<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Same Store<BR>
Sales<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Transactions<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Average<BR>
Guest Check<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=35% ALIGN=LEFT>KFC</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>2</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(1</TD>
        <TD WIDTH=5% ALIGN=LEFT>)%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>3</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Pizza Hut</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Taco Bell</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=7>Year to date ended September 4, 2004<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Same Store<BR> Sales<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Transactions<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Average<BR>
Guest Check<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=35% ALIGN=LEFT>KFC</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(2</TD>
        <TD WIDTH=5% ALIGN=LEFT>)%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(3</TD>
        <TD WIDTH=5% ALIGN=LEFT>)%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>1</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Pizza Hut</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Taco Bell</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S.  blended same store sales  increased 4% and 3% for the quarter and year to date,
 respectively,  due to increases in average guest checks and transactions.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Company Restaurant Margin</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1.6) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>29.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1.0) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.7</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>30.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.6</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Occupancy and other operating</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.2</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>25.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.2</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.7) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>14.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.2) </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Restaurant  margin as a percentage  of sales  decreased  approximately  70 basis
points and 20 basis points for the quarter and year to date,  respectively.  The
 decreases  were driven by higher food and paper  costs,  partially  offset by the impact
of same store sales increases on restaurant  margin.  Higher food and paper costs were
primarily driven by increased  commodity costs  (principally  cheese and meats).</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>U.S. Operating Profit</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Operating  profit  decreased  $8 million or 5% for the  quarter  and $4 million or 1%
year to date.  The  decreases  were driven by the impact of higher  commodity costs
 (primarily  cheese and meat) on restaurant  profit and higher G&amp;A expenses,  partially
offset by the impact of same store sales increases on restaurant profit and franchise and
license fees.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>31</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>International Results of Operations</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=34% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;710</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;566</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>25</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;1,929</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;1,567</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>23</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>86</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>282</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;810</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;652</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;2,211</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1,810</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;121</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>34</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;307</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;238</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>% of Company sales</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17.0</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>1.1 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>15.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.7 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;143</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;114</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;382</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;297</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>


<P><B>International Restaurant Unit Activity</B></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Unconsolidated<BR>
Affiliates<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchisees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Licensees<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=40% ALIGN=LEFT>Balance at December 27, 2003</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>2,760</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>1,506</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>7,905</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>206</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>12,377</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New Builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>161</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>94</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>326</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>595</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(18</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(15</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(80</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(21</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(190</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(11</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(302</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,839</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,574</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8,035</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>209</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12,657</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>% of Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left">International Multibrand Restaurants<HR WIDTH=70% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Company<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Franchise<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Total<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=62% ALIGN=LEFT>Balance at December 27, 2003</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>52</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>127</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>179</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Balance at September 4, 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>52</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>132</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>184</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>For the year to date ended September 4, 2004,  there were no Company  multibrand  unit
gross additions and 5 franchise  multibrand unit gross additions.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>International System Sales Growth</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>International  system sales growth  increased 16% in the quarter and year to date,
 including 4% and 7% favorable  impacts from foreign currency translation for the quarter
and year to date,  respectively.  Excluding the favorable impact of foreign currency
 translation, the increases were driven by new unit development and same store sales
growth, partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>International Revenues</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Company  sales  increased  $144 million or 25% in the  quarter,  including a 2%
favorable  impact from  foreign  currency  translation. Excluding the favorable  impact
of foreign  currency  translation,  the increase was driven by new unit  development,
 acquisitions  of franchisee  restaurants  (primarily  units in Canada  which we now
 operate)  and same store sales  growth,  partially  offset by store closures and
refranchising.</P>




<BR><BR><BR><P ALIGN=CENTER>32</P><HR NOSHADE><BR><BR><BR>

<P>Company  sales  increased  $362  million or 23% year to date,  including a 5%  favorable  impact  from  foreign  currency  translation.
Excluding the favorable  impact of foreign  currency  translation,  the increase was driven by new unit development and acquisitions of
franchisee  restaurants  (primarily  units  in  Canada  which  we now  operate)  and same  store  sales  growth,  partially  offset  by
refranchising and store closures.</P>

<P>Franchise  and license fees  increased $14 million or 16% in the quarter and $39 million or 16% year to date, including a 5% and an 8%
favorable impact from foreign currency  translation for the quarter and year to date,  respectively.  Excluding the favorable impact of
foreign currency translation,  the increases were driven by new unit development,  same store sales growth, and royalty rate increases,
partially offset by acquisitions of franchisee restaurants (primarily units in Canada which we now operate) and store closures.</P>

<P><B>International Company Restaurant Margin</b></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/6/03<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=4% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=4% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=4% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=4% ALIGN=LEFT>%</TD>
     <TD WIDTH=5% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>34.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.4 </TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>35.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.5</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.4</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>19.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.1</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Occupancy and other operating</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.3</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>29.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.1</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17.0</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>1.1</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>15.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>0.7</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Restaurant  margin as a percentage of sales  increased  approximately  110 basis
points in the quarter.  The increase was driven by the impact of same store sales
 increases on  restaurant  margin and lower food and paper costs  (principally  due to
supply chain  savings initiatives).  The increase was  partially  offset by an increase
in labor costs and a 60 basis point  unfavorable  impact of operating the  restaurants
 in Canada,  which is a market  with below  average  margins,  that were  previously
 operated  by our  unconsolidated affiliate.</P>


<P>Restaurant  margin  as a  percentage  of sales  increased  approximately  70 basis
 points  year to date  including  a 10 basis  points unfavorable  impact  from  foreign
 currency  translation.  The  increase  was driven by the impact of same store  sales
 increases  on restaurant  margin and lower food and paper costs  (principally  due to
supply chain savings  initiatives).  The increase was partially offset by a 50 basis
point  unfavorable  impact of operating the restaurants in Canada,  which is a market
with below average  margins, that were previously operated by our unconsolidated
affiliate.</P>


<P>The impact from foreign  currency  translation  on margin as a  percentage  of sales
is a result of the  portfolio  of markets  effect. International  margin percentages in
total are impacted  unfavorably when currencies  strengthen in markets with below average
margins. Those  markets  contributing  to the  unfavorable  impact of foreign  currency
 translation  on margin year to date have below  average margins largely due to their
higher labor costs.</P>


<P><B>International Operating Profit</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Operating profit increased $29 million or 25% in the quarter,  including a 4%
favorable impact from foreign currency  translation.  The remaining  increase was driven
by the impact of same store sales increases on restaurant  profit and franchise and
license fees and new unit development, partially offset by higher G&amp;A costs.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Operating profit increased $85 million or 28% year to date,  including a 6% favorable
 impact from foreign  currency  translation.  The remaining  increase was driven by new
unit  development,  the impact of same store sales</p>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>33</P><HR NOSHADE><BR><BR><BR>


<P>  increases on restaurant  profit and
franchise and license fees and higher income from our investments in unconsolidated
affiliates, partially offset by higher G&amp;A costs.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Consolidated Cash Flows</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Net cash  provided by operating  activities</b> was $791 million  compared to $769
million in 2003.  The increase was driven by higher net income and the timing of payment
of accounts  payable and other  current  liabilities  compared to 2003.  The  increase
 was  partially offset by higher income tax payments in 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Net cash used in investing  activities</b>  was $391 million  compared to $336 million in
2003.  The change was primarily due to the timing of purchases of short-term investments
and increased capital spending.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Net cash used in  financing  activities</b>  was $205  million  compared  to $269  million
 in 2003.  The change was due to lower credit facility and long-term debt repayments
and higher proceeds from stock option exercises, partially offset by higher share
repurchases.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Consolidated Financial Condition</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Assets  increased  $364 million or 6% to $6.0  billion in 2004.  The  increase  was
 primarily  driven by higher cash and short term investment  balances due to
the timing of our discretionary  spending.  The decrease in the allowance for doubtful
accounts was the result of the  completion of financial  restructurings  by certain
 Pizza Hut U.S.  franchisees  which  resulted in the reversal of previously established
reserves and the transfer for certain amounts, along with related receivables, to
long-term notes receivable.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Liabilities  decreased $30 million or 1% to $4.5 billion in 2004.  The decrease was
primarily  driven by lower income taxes payable due to the excess of current year tax
payments  made over the current year  provision.  The decrease was  partially  offset by
increases in other  liabilities,  primarily driven by an increase in the pension
liability,  and accounts payable and other current  liabilities due to the timing of
payments.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Liquidity and Capital Resources</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Operating in the QSR industry  allows us to generate  substantial  cash flows from the
 operations  of our Company  stores and from our franchise  operations,  which require a
limited YUM  investment.  In each of the last two fiscal years,  net cash provided by
operating activities  has  exceeded $1  billion.  These cash flows have  allowed us to
fund our  discretionary  spending,  while at the same time reducing  our  long-term  debt
 balances.  We expect  these  levels of net cash  provided by  operating  activities  to
continue in the foreseeable  future.  Our  discretionary  spending  includes  capital
 spending for new  restaurants,  acquisitions of restaurants from franchisees,
 repurchases  of shares of our common stock and dividends  paid to our  shareholders.
 Though a decline in revenues  could adversely impact our cash flows from operations,  we
believe our operating cash flows,  our ability to reduce  discretionary  spending, and
our borrowing capacity will allow us to meet our cash requirements in 2004 and beyond.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter ended  September 4, 2004, we paid our first-ever  quarterly  cash
dividend  totaling $29 million.  Additionally,  on September  24, 2004 our Board of
Directors  approved our second cash dividend of $0.10 per share of common stock to be
 distributed  on November  5, 2004 to  shareholders  of record at the close of  business
 on  October  15,  2004.  On an annual  basis,  the  Company is targeting a payout ratio
of 15% to 20% of net income.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>34</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>At September 4, 2004 our primary bank credit  agreement  comprises a $1.0 billion
 senior  unsecured  Revolving  Credit  Facility  (the &#147;Existing  Facility&#148;)
with a maturity date of June 25, 2005. At September 4, 2004, our unused Existing
 Facility  totaled $734 million, net of outstanding  letters of credit of $266 million.
 There were no borrowings  outstanding  under the Existing Facility at September 4, 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On September 7, 2004, the Company executed an amended and restated  five-year
 Revolving Credit Facility (the &#147;New Facility&#148;)  totaling $1.0 billion  which
 replaced  the Existing  Facility.  Under the terms of the New  Facility,  the Company
may borrow up to the maximum borrowing  limit less  outstanding  letters of credit.  The
interest rate for  borrowings  under the New Facility  ranges from 0.35% to 1.625% over
the London  Interbank  Offered Rate  (&#147;LIBOR&#148;) or 0.00% to 0.20% over an
Alternate  Base Rate,  which is the greater of the Prime Rate or the Federal  Funds
 Effective  Rate plus 0.50%.  The exact spread over LIBOR or the Alternate  Base Rate, as
 applicable, will depend upon our performance  under specified  financial  criteria.
 Interest on any outstanding  borrowings under the New Facility is payable at least
quarterly.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The New Facility is  unconditionally  guaranteed by our principal domestic
 subsidiaries and contains  financial  covenants relating to maintenance  of leverage and
fixed  charge  coverage  ratios.  The New  Facility  also  contains  affirmative  and
 negative  covenants including,  among other things,  limitations on certain additional
indebtedness,  guarantees of indebtedness,  level of cash dividends, aggregate  non-U.S.
 investment and certain other transactions as defined in the agreement.  These covenants
are substantially  similar to those contained in the Existing Facility.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The remainder of our long-term debt primarily  comprises  Senior  Unsecured  Notes.
 Amounts  outstanding  under Senior Unsecured Notes were $1.87  billion at  September  4,
2004.  At  September  4, 2004,  $350  million of these  Senior  Unsecured  Notes are
 included in short-term  borrowings due to their May 2005 maturity date. The remaining
 Senior  Unsecured Notes are included in long-term debt based on their  maturities.  We
 currently  anticipate  that our cash  flows  provided  by  operating  activities  will
 permit  us to make a significant portion of the $350 million payment for the May 2005
Senior Unsecured Notes without borrowing additional amounts.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As  previously  reported,  we estimate that capital  spending will be  approximately
 $770 million and  refranchising  proceeds will be approximately  $100 million in 2004.
 Additionally,  subsequent to September 4, 2004 we made a discretionary  $50 million
 contribution to our most  significant  pension plan. At September 4, 2004, we had
remaining  capacity to repurchase,  through  November 21, 2005, up to $300 million of our
outstanding Common Stock (excluding  applicable  transaction fees) under the share
repurchase program authorized in May 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Item 3.  Quantitative and Qualitative Disclosures About Market Risk</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The Company is exposed to financial  market risks  associated  with  interest  rates,
 foreign  currency  exchange  rates and commodity prices.  In the normal course of
business and in accordance  with our policies,  we manage these risks through a variety
of strategies, which include the use of derivative financial and commodity  instruments
to hedge our underlying  exposures.  Our policies prohibit the use of derivative
instruments for trading purposes, and we have procedures in place to monitor and control
their use.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Interest Rate Risk</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have a market risk exposure to changes in interest  rates,  principally in the
United  States.  We attempt to minimize this risk and lower our overall borrowing costs
through the utilization of derivative  financial  instruments,  primarily  interest rate
swaps. These swaps are entered into with financial  institutions  and have reset dates
and critical  terms that match those of the underlying  debt. Accordingly,  any change in
market value  associated  with interest  rate swaps is offset by the opposite  market
impact on the related debt.</P>



<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>35</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter  ended June 12, 2004, we entered into  additional  pay-variable
 interest  rate swaps with notional  amounts of $850 million.  The swaps were  entered
into with  financial  institutions  and have reset dates and  critical  terms that match
those of $75 million,  $375  million  and $400  million  in  long-term  debt  under our
 2008,  2011 and 2012  fixed-rate  Senior  Unsecured  Notes, respectively.  Accordingly,
 the swaps are  accounted  for as hedges of these  portions  of our debt.  Considering
 the impact of these swaps, at September 4, 2004 approximately 50% of our long-term debt
is at variable interest rates.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>At September 4, 2004 and December 27, 2003, a  hypothetical  100 basis point  increase
in short-term  interest  rates would result in a reduction of $9 million and $3 million,
 respectively,  in annual  income before taxes.  The  estimated  reductions  are based
upon the level of variable rate debt and assume no changes in the volume or composition
 of debt. In addition,  the fair value of our derivative financial  instruments  at
 September  4, 2004 and  December  27,  2003  would  decrease  approximately  $54
 million  and $5  million, respectively.  The fair value of our Senior  Unsecured  Notes
at September 4, 2004 and December 27, 2003 would  increase  approximately $81 million and
$87 million, respectively.  Fair value was determined by discounting the projected cash
flows.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Foreign Currency Exchange Rate Risk</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>International  operating profit  constitutes  approximately  40% of our year to date
2004 operating profit,  excluding  unallocated and corporate  expenses.  In  addition,
 the  Company&#146;s  net asset  exposure  (defined as foreign  currency  assets less
 foreign  currency liabilities)  totaled  approximately  $1.4 billion as of September 4,
2004.  Operating in international  markets exposes the Company to movements in foreign
 currency  exchange  rates.  The Company&#146;s  primary  exposures  result from our
 operations in  Asia-Pacific,  the Americas  and  Europe.  Changes  in foreign  currency
 exchange  rates  would  impact the  translation  of our  investments  in foreign
operations,  the fair value of our foreign currency  denominated  financial  instruments
and our reported foreign currency  denominated earnings  and cash flows.  For the year to
date ended  September  4, 2004,  operating  profit would have  decreased  approximately
 $40 million if all foreign currencies had uniformly  weakened 10% relative to the U.S.
dollar.  The estimated  reduction assumes no changes in sales volumes or local currency
sales or input prices.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We attempt to minimize the  exposure  related to our  investments  in foreign
 operations  by financing  those  investments  with local currency debt when  practical
and holding cash in local  currencies  when  possible.  In addition,  we attempt to
minimize the exposure related to foreign currency denominated  financial  instruments by
purchasing goods and services from third parties in local currencies when practical.
 Consequently,  foreign  currency  denominated  financial  instruments  consist
 primarily of  intercompany  short-term receivables  and  payables.  At times,  we
 utilize  forward  contracts  to reduce  our  exposure  related  to these  foreign
 currency denominated  financial  instruments.  The  notional  amount  and  maturity
 dates  of these  contracts  match  those of the  underlying receivables or payables such
that our foreign currency exchange risk related to these instruments is eliminated.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Commodity Price Risk</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We are  subject to  volatility  in food costs as a result of market  risk  associated
 with  commodity  prices.  Our ability to recover increased  costs  through  higher
 pricing is, at times,  limited by the  competitive  environment  in which we operate.
 We manage our exposure to this risk primarily  through  pricing  agreements as well as,
on a limited basis,  commodity  future and option  contracts. Commodity  future and
option  contracts  entered into by the Company that were  outstanding at September 4,
2004 and December 27, 2003, were not significant to the Financial Statements.</P>




<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>36</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Item 4. Controls and Procedures</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The Company has evaluated the  effectiveness  of the design and operation of its
disclosure  controls and procedures  pursuant to Rules 13a-15(e) and 15d-15(e)  under the
 Securities  Exchange Act of 1934 as of the end of the period  covered by this report.
 Based on the evaluation,  performed under the supervision and with the participation of
the Company&#146;s  management,  including the Chairman and Chief Executive Officer (the
&#147;CEO&#148;) and Chief Financial Officer (the &#147;CFO&#148;), the Company&#146;s
 management,  including the CEO and CFO, concluded that the Company&#146;s disclosure
controls and procedures were effective as of the end of the period covered by this report.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter ended September 4, 2004, we implemented  certain  modules of an
enterprise  resource  planning  software that impact our domestic  reporting  systems.
 This  implementation  resulted in certain  changes to our internal  controls  associated
 with those systems.  We have reviewed the controls  associated with each domestic system
affected by the  implementation  of the software and made appropriate  changes to those
 controls.  We believe that the controls as modified are designed and operating
 effectively.  There were no other significant  changes with respect to the Company&#146;s
 internal controls over financial  reporting or in other factors that could significantly
affect internal controls over financial reporting during the quarter ended September 4,
2004.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Cautionary Statements</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>From time to time, in both written reports and oral statements,  we present &#147;forward-looking
 statements&#148; within the meaning of Section 27A of the  Securities  Act of 1933, as
amended,  and Section 21E of the  Securities  Exchange Act of 1934, as amended.  The
statements include  those  identified by such words as &#147;may,&#148;  &#147;will,&#148;  &#147;expect,&#148;  &#147;project,&#148;  &#147;anticipate,&#148;  &#147;believe,&#148;  &#147;plan&#148; and
other similar terminology.  These  &#147;forward-looking  statements&#148; reflect our
current expectations regarding future events and operating and financial performance  and
are  based  upon data  available  at the time of the  statements.  Actual  results
 involve  risks and  uncertainties, including both those specific to the Company and
those specific to the industry, and could differ materially from expectations.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Company risks and uncertainties  include,  but are not limited to, potentially
 substantial tax contingencies  related to the Spin-off, which,  if they occur,  require
us to indemnify  PepsiCo,  Inc.;  changes in effective  tax rates;  our debt leverage and
the attendant potential  restriction  on our  ability  to  borrow in the  future;
 potential  unfavorable  variances  between  estimated  and  actual liabilities;  our
ability to secure  distribution  of products and equipment to our  restaurants  on
favorable  economic  terms and our ability to ensure adequate supply of restaurant
 products and equipment in our stores;  effects and outcomes of legal claims  involving
the Company;  the effectiveness of operating  initiatives and advertising and promotional
 efforts;  the ongoing financial viability of our  franchisees  and  licensees;  the
success of our  refranchising  strategy;  volatility of actuarially  determined  losses
and loss estimates;  and adoption of new or changes in  accounting  policies and
 practices  including  pronouncements  promulgated  by standard setting bodies.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Industry risks and uncertainties  include,  but are not limited to, economic and
political  conditions in the countries and territories where we operate,  including
effects of war and terrorist activities;  changes in legislation and governmental
regulation;  new product and concept development by us and/or our food industry
 competitors;  changes in commodity,  labor, and other operating costs;  changes in
competition in the food industry;  publicity which may impact our business and/or
industry;  severe weather  conditions;  volatility of commodity costs;  increases in
minimum wage and other operating  costs;  availability  and cost of land and
 construction;  consumer preferences,  spending  patterns and  demographic  trends;
 political or economic  instability in local markets and changes in currency exchange and
interest rates;  and the impact that any widespread  illness or general health concern
may have on our business and/or the economy of the countries in which we operate.</P>




<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>37</P><HR NOSHADE><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="PARA CENTER" FSL="Workstation" -->
<P ALIGN=CENTER><U>Independent Accountants&#146; Review Report</U></P>


<P>The Board of Directors<BR>
YUM! Brands,  Inc.:</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have reviewed the accompanying  condensed  consolidated  balance sheet of YUM!
Brands, Inc. and Subsidiaries (&#147;YUM&#148;) as of September 4, 2004,  the related
 condensed  consolidated  statements of income for the twelve and  thirty-six  weeks
ended  September 4, 2004 and September 6, 2003, and the related  condensed  consolidated
 statements of cash flows for the thirty-six  weeks ended September 4, 2004 and September
6, 2003.  These condensed consolidated financial statements are the responsibility of YUM&#146;s
management.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We conducted our review in accordance  with standards of the Public Company
 Accounting  Oversight Board (United  States).  A review of interim financial
 information consists  principally of applying analytical  procedures and making
inquiries of persons responsible for financial and accounting  matters.  It is
 substantially  less in scope than an audit conducted in accordance with the standards of
the Public  Company  Accounting  Oversight  Board (United  States),  the objective of
which is the  expression of an opinion  regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Based on our review,  we are not aware of any  material  modifications  that  should
be made to the  condensed  consolidated  financial statements referred to above for them
to be in conformity with U.S. generally accepted accounting principles.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have previously  audited,  in accordance with the standards of the Public Company
 Accounting  Oversight Board (United States),  the consolidated  balance  sheet of YUM as
of December  27,  2003,  and the related  consolidated  statements  of income,  cash
flows,  and shareholders&#146;  equity  (deficit)  and  comprehensive  income  for the
year then ended not  presented  herein;  and in our report  dated February 10, 2004, we
expressed an unqualified opinion on those consolidated  financial  statements.  Our
report refers to the adoption of the provisions of the Financial  Accounting  Standards
Board&#146;s Statement of Financial  Accounting  Standards No. 142,  &#147;Goodwill and
Other  Intangible  Assets,&#148; in 2002. In our opinion,  the  information set forth in
the  accompanying  condensed  consolidated  balance sheet as of December 27, 2003, is
fairly stated,  in all material  respects,  in relation to the consolidated  balance
sheet from which it has been derived.</P>
<BR><BR><BR><BR>




<P>KPMG LLP<BR>
Louisville, Kentucky<BR>
October 4, 2004</P>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>38</P><HR NOSHADE><BR><BR><BR>




<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>PART II - Other Information and Signatures</B></P>


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Item 1.  Legal Proceedings</P>

 <blockquote>        Information  regarding legal  proceedings is incorporated  by reference from Note 13 to the Company&#146;s  Condensed  Consolidated
         Financial Statements set forth in Part I of this report.</blockquote>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following  table  provides  information  as of September 4, 2004 with respect to
shares of Common Stock  repurchased by the Company during the quarter then ended:</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left">Fiscal Periods</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Total number of<BR>
shares purchased</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Average price<BR>
paid per share</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Total number of<BR>
shares purchased as<BR>
part of publicly<BR>
announced plans or<BR>
programs</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">Approximate dollar value<BR>
of shares that may yet be<BR>
purchased under the plans<BR>
or programs</TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>Period 7</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>6/13/04 - 7/10/04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Period 8</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>7/11/04 - 8/7/04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Period 9</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>8/8/04 - 9/4/04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,700</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$37.01</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,700</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$300,048,827</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,700</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$37.01</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,700</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$300,048,827</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In November 2003, our Board of Directors  authorized a share repurchase  program.
 This program  authorized us to repurchase,  through May 21, 2005, up to $300 million of
our outstanding  Common Stock (excluding  applicable  transaction fees). For the year to
date ended September 4, 2004,  all  repurchases  of shares have  occurred  under this
 program.  As of September  4, 2004,  this share  repurchase program was substantially
completed.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In May 2004, our Board of Directors  authorized a share repurchase  program.  This
program authorized us to repurchase through November 21, 2005, up to $300 million of our
 outstanding  Common Stock  (excluding  applicable  transaction  fees). As of September
4, 2004, no shares have been repurchased under this program.</P>


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Item 6.  Exhibits and Reports on Form 8-K</P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=10%>(a) </TD>
<TD>&nbsp; </TD>
<TD WIDTH=85%>Exhibit
Index</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp; </TD>
<TD WIDTH=10%>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD WIDTH=85%><U>EXHIBITS</u></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 10.6</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Amended and Restated Credit Agreement, dated as of September 7, 2004 among YUM, the lenders party thereto, JP Morgan Chase Bank, as Administrative Agent, and Citibank N.A.,
as Syndication Agent</TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 10.25 </TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>YUM Director Stock Option Award Agreement</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 10.26 </TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>YUM 1999 Long Term Incentive Plan Award Agreement</TD>
</TR>
</TABLE>
<BR>


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<BR><BR><BR><P ALIGN=CENTER>39</P><HR NOSHADE><BR><BR><BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 15 </TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Letter from KPMG LLP regarding Unaudited Interim Financial
         Information (Accountants&#146; Acknowledgment)</TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 31.1</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of
                                            Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
                                            Act of 2002.</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 31.2</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of Securities
                                            Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                                            2002.</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 32.1</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Certification  of the Chairman and Chief Executive  Officer  pursuant to 18 U.S.C.  Section
                                            1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=4%>&nbsp; </TD>
<TD WIDTH=6%>&nbsp;</TD>
<TD NOWRAP="Nowrap">Exhibit 32.2</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<TD WIDTH=80%>Certification  of the Chief  Financial  Officer  pursuant  to 18 U.S.C.  Section  1350,  as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=3%>(b)</TD>
<TD ALIGN=LEFT WIDTH=3%>&nbsp;</TD>
<TD WIDTH=94%><P ALIGN=LEFT>Reports
on Form 8-K </P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=3%>&nbsp;</TD>
<TD ALIGN=LEFT WIDTH=3%>&nbsp; </TD>
<TD WIDTH=94%><P ALIGN=LEFT>We filed a Current  Report on Form 8-K dated July 13, 2004,  attaching  our earnings  release for the  second-quarter
ended June 12, 2004.</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=3%>&nbsp;</TD>
<TD ALIGN=LEFT WIDTH=3%>&nbsp;</TD>
<TD WIDTH=94%><P ALIGN=LEFT> We filed a Current Report on Form 8-K dated July 16, 2004,  announcing the  resignation of Jamie Dimon from the Board of Directors.</td>
</TR>
</TABLE>
<BR>
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<BR><BR><BR><P ALIGN=CENTER>40</P><HR NOSHADE><BR><BR><BR>

<p align=center>SIGNATURES</P>

<P>Pursuant to the  requirement  of the  Securities  Exchange Act of 1934,  the registrant has duly caused this report to be signed on its
behalf by the undersigned, duly authorized officer of the registrant.</P>




<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">&nbsp;</td>
<TD><P ALIGN="LEFT"><U>YUM! BRANDS, INC.</u><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Registrant)</TD></TR>
</TABLE>

<BR><BR>



<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">

<TR VALIGN="TOP">
<TD WIDTH="45%">Date:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2004</td><TD>
<P ALIGN="LEFT"><u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gregory N. Moore&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</u><BR>
Senior Vice President and Controller<BR>
(Principal Accounting Officer)</TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>41</P><HR SIZE=1 NOSHADE>
<BR>
<BR><BR><BR><BR>



<HR SIZE=5 NOSHADE>
<BR><BR><BR><BR><BR><BR>
<p align=center>AMENDED AND RESTATED CREDIT AGREEMENT</p>
<BR>

 <p align=center>dated as of</p><BR>

<p align=center>September 7, 2004</p><BR>

<p align=center>among</p><BR>

<p align=center>YUM! BRANDS, INC.,</p><BR>

<p align=center>The Lenders Party Hereto</p><BR>

<p align=center>and</p><BR>

<p align=center>JPMORGAN CHASE BANK,<BR>
                                         as Administrative Agent</p><BR>

<HR SIZE=1 WIDTH=15% ALIGN=CENTER NOSHADE><BR>

<P align=center>CITIBANK, N.A.,<BR>
as Syndication Agent</p><BR>


<p align=center>J.P. MORGAN SECURITIES INC. and CITIGROUP GLOBAL MARKETS INC.,<BR>
                                 as Lead Arrangers and Joint Bookrunners</p><BR>


<p align=center>HSBC BANK USA, N.A., COOPERATIEVE CENTRALE RAIFFEISEN-<BR>
BOERENLEENBANK B.A. &#147;RABOBANK INTERNATIONAL&#148;, NEW YORK<BR>
BRANCH, and<BR>
SUNTRUST BANK<BR>
as Documentation Agents</p><BR><BR>

<HR SIZE=5 NOSHADE>
<BR><BR><BR>

<p align=center>TABLE OF CONTENTS</p>

<p align=right><U>Page</U></P>
<BR>
<p align=center>ARTICLE I</P>

<p align=center>Definitions</P><BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 1.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Defined Terms</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>1</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 1.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Classification of Loans and Borrowigs</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 1.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Terms Generally</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 1.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Accounting Terms; GAAP</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE II</P>

<P align=center>The Credits</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 2.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Commitments</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>24</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Loans and Borrowings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Requests for Revolving Borrowings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Competitive Bid Procedure</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Swingline Loans</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.06</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Letters of Credit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.07</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Funding of Borrowings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>36</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.08</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Interest Elections</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.09</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Termination, Reduction and Extension of Commitments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>38</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.10</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Repayment of Loans; Evidence of Debt</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>40</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.11</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Prepayment of Loans</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.12</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.13</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Interest</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>43</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.14</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Alternate Rate of Interest</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>44</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.15</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Increased Costs</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>44</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.16</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Break Funding Payments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>46</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.17</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Taxes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>46</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.18</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Payments Generally; Pro Rata Treatment; Sharing of Set-offs</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>47</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.19</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Mitigation Obligations; Replacement of Lenders</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>49</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 2.20</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Increase in Commitments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>50</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE III</P>

<P align=center>Representations and Warranties</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 3.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Organization; Powers</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>51</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Authorization; Enforceability</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>51</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Governmental Approvals; No Conflicts</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>52</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Financial Condition; No Material Adverse Change</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>52</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Properties</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>52</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.06</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Litigation and Environmental Matters</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.07</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Compliance with Laws and Agreements</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.08</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Investment and Holding Company Status</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>53</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.09</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Taxes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.10</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>ERISA</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.11</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Disclosure</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 3.12</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Initial Guarantors</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE IV</P>

<P align=center>Conditions</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 4.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Effective Date</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>55</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 4.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Each Credit Event</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>56</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE V</P>

<P align=center>Affirmative Covenants</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 5.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Financial Statements and Other Information</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>57</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Notices of Material Events</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Existence; Conduct of Business</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Payment of Obligations</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Maintenance of Properties; Insurance</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.06</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Books and Records; Inspection Rights</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.07</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Compliance with Laws</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>60</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.08</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Use of Proceeds and Letters of Credit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>60</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 5.09</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Principal Domestic Subsidiaries</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>60</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE VI</P>

<P align=center>Negative Covenants</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 6.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Subsidiary Indebtedness</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>60</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Liens</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Fundamental Changes</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Investments, Loans, Advances, Guarantees and Acquisitions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>63</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Hedging Agreements</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.06</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Restricted Payments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.07</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Transactions with Affiliates</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.08</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Issuances of Equity Interests by Principal Domestic Subsidiaries</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.09</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Leverage Ratio</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.10</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Fixed Charge Coverage Ratio</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 6.11</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Sale and Lease-Back Transactions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE VII</P>

<P align=center>Events of Default</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 7.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Events of Default</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>66</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 7.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Exclusion of Immaterial Subsidiaries</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>68</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<p align=center>ARTICLE VIII</P>

<P align=center>The Administrative Agent</P>


<p align=center>ARTICLE IX</P>

<P align=center>Miscellaneous</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=17% ALIGN=LEFT>SECTION 9.01</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=73% ALIGN=LEFT>Notices</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>71</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.02</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Waivers; Amendments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.03</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Expenses; Indemnity; Damage Waiver</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>73</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.04</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Successors and Assigns</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>75</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Survival</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.06</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Counterparts; Integration; Effectiveness</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.07</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Severability</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.08</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Right of Setoff</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.09</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Governing Law; Jurisdiction; Consent to Service of Process</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.10</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>WAIVER OF JURY TRIAL</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>80</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.11</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Headings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>80</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.12</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Confidentiality</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>81</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.13</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Interest Rate Limitation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>81</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.14</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Judgment Currency</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>82</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.15</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Existing Credit Agreement; Effectiveness of Amendment and Restatement</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>82</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SECTION 9.16</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>USA Patriot Act</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>82</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<P><U>SCHEDULES:</U></P>

<P>Schedule A - Initial Guarantors<BR>
Schedule 2.01 -- Commitments<BR>
Schedule 2.06 -- Existing Letters of Credit<BR>
Schedule 3.06 -- Disclosed Matters<BR>
Schedule 3.11 -- Disclosure<BR>
Schedule 6.01 -- Existing Indebtedness<BR>
Schedule 6.02 -- Existing Liens</P>

<P><U>EXHIBITS:</U></P>

<P>Exhibit A -- Form of Assignment and Assumption<BR>
Exhibit B -- Form of Guarantee Agreement<BR>
Exhibit C-1 -- Form of Opinion of Mayer, Brown, Rowe &amp; Maw LLP<BR>
Exhibit C-2 -- Form of Opinion of Matthew Preston, Esq.</P>





<blockquote><blockquote>AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 7, 2004, among YUM!
                           BRANDS, INC., the LENDERS party hereto, JPMORGAN CHASE BANK, as Administrative Agent,
                           CITIBANK, N.A., as Syndication Agent, J.P. MORGAN SECURITIES INC. and CITIGROUP GLOBAL
                           MARKETS INC., as Lead Arrangers and Joint Bookrunners, and HSBC BANK USA, N.A., COOPERATIEVE
                           CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. &#147;RABOBANK INTERNATIONAL&#148;, NEW YORK BRANCH and
                           SUNTRUST BANK, as Documentation Agents.</blockquote></blockquote>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, the Borrower has requested, and the Lenders
and the Administrative Agent have agreed, upon the terms and subject to the conditions
set forth herein, that the Existing Credit Agreement be amended and restated in its
entirety as provided herein effective upon satisfaction of the conditions set forth in
Section 4.01 below;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NOW, THEREFORE, the Borrower, each of the Lenders and
the Administrative Agent hereby agree as follows:</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE I</P>

<!-- MARKER FORMAT-SHEET="Paragraph w/underline" FSL="Workstation" -->
<P><U>Definitions</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1.01.  <U>Defined Terms.</U>  As used in this
Agreement, the following terms have the meanings specified below:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ABR</U>&#148;, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Acquired Business</U>&#148; means any Person, property,
business or asset acquired (or, as applicable, proposed to be acquired) by the Borrower
or a Subsidiary pursuant to a Permitted Acquisition.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Adjusted EBITDA</U>&#148; means, for any period, the
Consolidated EBITDA of the Borrower for such period, adjusted (a) to include (to the
extent not otherwise included) the Consolidated EBITDA of any Acquired Business acquired
during such period (and, solely for purposes of determining whether a proposed
acquisition is a Permitted Acquisition pursuant to clause (d) of the definition of the
term Permitted Acquisition, any Acquired Business that, at the time of calculation of
Adjusted EBITDA for such purpose, has been acquired subsequent to the end of such period
and prior to such time as well as that proposed to be acquired) pursuant to a Permitted
Acquisition and not subsequently sold, transferred or otherwise disposed of during such
period (or, solely for purposes of determining whether a proposed acquisition is a
Permitted Acquisition, subsequent to the end of such period and prior to such time),
based on the actual Consolidated EBITDA of such Acquired Business for such period
(including the</P>

<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>2</P>
<BR><BR><BR>


<P> portion thereof attributable to such period prior to the date of
acquisition of such Acquired Business) and (b) to exclude the Consolidated EBITDA of any
Sold Business sold, transferred or otherwise disposed of during such period (and, solely
for purposes of determining whether a proposed acquisition is a Permitted Acquisition
pursuant to clause (d) of the definition of the term Permitted Acquisition, any Sold
Business that, at the time of calculation of Adjusted EBITDA for such purpose, has been
sold, transferred or otherwise disposed of subsequent to the end of such period and prior
to such time), based on the actual Consolidated EBITDA of such Sold Business for such
period (including the portion thereof attributable to such period prior to the date of
sale, transfer or disposition of such Sold Business).  For purposes of calculating
Adjusted EBITDA for any period, the portion of the Consolidated EBITDA of any Acquired
Business that is to be included in Adjusted EBITDA for such period that is attributable
to the period prior to the date of acquisition of such Acquired Business shall be
determined as though all net income of such Acquired Business for such period was
distributed to the holders of the Equity Interests of such Acquired Business ratably.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Adjusted LIBO Rate</U>&#148; means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Administrative Agent</U>&#148; means JPMorgan Chase Bank, in
its capacity as administrative agent for the Lenders hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Administrative Questionnaire</U>&#148; means an Administrative
Questionnaire in a form supplied by the Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Affiliate</u>&#148;means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Alternate Base Rate</U>&#148; means, for any day, a rate per
annum equal to the greatest of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.  Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Alternative Currency</U>&#148; means any currency other than
dollars which is freely transferable and convertible into dollars.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Applicable Percentage</U>&#148; means, with respect to any
Lender, the percentage of the total Commitments represented by such Lender&#146;s Commitment.
 If the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to any
assignments.</P>


<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>3</P>
<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Applicable Rate</U>&#148; means, for any day, with respect to
any ABR Loan or Eurodollar Revolving Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per annum set forth below under the
caption &#147;ABR Spread&#148;, &#147;Eurodollar Spread&#148; or &#147;Facility Fee Rate&#148; (collectively referred
to herein as &#147;Pricing&#148;), as the case may be, as determined in the manner set forth below
based upon (a) the ratings by Moody&#146;s and S&amp;P, respectively, applicable on such date to
the Index Debt and (b) the Leverage Ratio.  If the Category applicable to the ratings
established or deemed to have been established (as set forth below) by Moody&#146;s and S&amp;P for
the Index Debt (the &#147;Index Category&#148;) shall fall within a Category numerically higher
(i.e., less favorable to the Borrower) than the Category applicable to the Leverage Ratio
(the &#147;Leverage Category&#148;), then the Pricing shall be determined by reference to the
Leverage Category; provided, that in any case where the Leverage Category is more than
one Category numerically lower (i.e., more favorable to the Borrower) than the applicable
Index Category, then the Pricing shall be determined by reference to the Category one
numerically lower (i.e., more favorable to the Borrower) than the applicable Index
Category.  If the Leverage Category is in a Category numerically higher (i.e., less
favorable to the Borrower) than the Index Category, then Pricing shall be determined by
reference to the Index Category.</P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><U>Category</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><U>Index Debt</U><BR>
<U>Ratings</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><U>Leverage</U><BR> <U>Ratio</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><U>Facility Fee</U><BR>
<U>Rate</U><BR>
<U>(basis points)</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><U>Eurodollar Spread</U><BR>
<U>(basis points)</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><U>ABR Spread</U><BR>
<U>(basis points)</U><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=2% ALIGN=RIGHT>1</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT>> A2 / A</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT>&lt;0.60x</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT>8.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT>27.0</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT>0</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>A3 / A-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.60x -0.84x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>Baa1 / BBB+</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.85x -1.09x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>Baa2 / BBB</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.10x -1.49x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>47.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>Baa3 / BBB-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.50x -1.89x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>80.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>Ba1 / BB+</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.90x -2.29x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>100.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&lt;Ba1 / BB+</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&gt;2.30x</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>120.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=12><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the foregoing, (i) if either Moody&#146;s or
S&amp;P shall not have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this paragraph), then such rating
agency shall be deemed to have established a rating in Category 7; (ii) if the ratings
established or deemed to have been established by Moody&#146;s and S&amp;P for the Index Debt
shall fall within different Categories, the Applicable Rate shall be based on the
Category numerically lower (i.e., more favorable to the Borrower) of the two ratings
unless one of the two ratings is two or more Categories numerically lower (i.e., more
favorable to the Borrower) than the other, in which case the Applicable Rate shall be
determined by reference to the Category one numerically higher (i.e., less favorable to
the Borrower) than the Category numerically lower (i.e., more favorable to the Borrower)
of the two ratings; and (iii) if the ratings established or deemed to have been
established by Moody&#146;s and S&amp;P for the Index Debt shall be changed (other than as a
result of a change in the rating system of Moody&#146;s or S&amp;P), such change shall be
effective as of the date on which it is first announced by the applicable rating agency,
irrespective of when notice of such change shall have been furnished by the Borrower to
the Agent and the Lenders pursuant to Section 5.01 or otherwise.  Each change in the
Applicable Rate shall apply during the period commencing on the effective date of such
change and ending on the date immediately</P>



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<P> preceding the effective date of the next such
change.  If the rating system of Moody&#146;s or S&amp;P shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations, the
Borrower and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such rating
agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be
determined by reference to the rating most recently in effect prior to such change or
cessation.</P>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the foregoing, (i) the Leverage Ratio
shall be determined as of the end of each fiscal quarter of the Borrower&#146;s fiscal year
based upon the Borrower&#146;s consolidated financial statements delivered pursuant to Section 5.01(a)
or (b); and (ii) each change in the Applicable Rate resulting from a change in the
Leverage Ratio shall be effective during the period commencing on and including the date
of delivery to the Administrative Agent of such consolidated financial statements
indicating such change and ending on the date immediately preceding the effective date of
the next change in the Applicable Rate; <U>provided</U> that the Leverage Ratio shall be deemed
to be based on Category 7 (A) at any time that an Event of Default (other than an Event
of Default of the type set forth in clause (e) or (h) of Section 7.01) has occurred and
is continuing or (B) if the Borrower fails to deliver the consolidated financial
statements required to be delivered by it pursuant to Section 5.01(a) or (b), during the
period from the expiration of the time for delivery thereof until (but excluding the date
that) such consolidated financial statements are delivered.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Approved Fund</U>&#148; has the meaning assigned to such term
in Section 9.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Arrangers</U>&#148; means J.P. Morgan Securities Inc. and
Citigroup Global Markets Inc., in their capacities as arrangers hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Assignment and Assumption</U>&#148; means an assignment and
assumption entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Augmenting Lender</U>&#148; has the meaning set forth in Section 2.20.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Availability Period</U>&#148; means the period from and
including the Effective Date to but excluding the earlier of the Maturity Date and the
date of termination of the Commitments.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Board</U>&#148; means the Board of Governors of the Federal
Reserve System of the United States of America.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrower</U>&#148; means Yum! Brands, Inc., a North Carolina
corporation.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrowing</U>&#148; means (a) Revolving Loans of the same Type,
made, converted or continued on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect, (b) a Competitive Loan or group of
Competitive</P>


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<BR><BR><BR>


<P> Loans of the same Type made on the same date and as to which a single
Interest Period is in effect or (c) a Swingline Loan.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrowing Request</U>&#148; means a request by the Borrower for
a Revolving Borrowing in accordance with Section 2.03.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Business Day</U>&#148; means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term &#147;Business Day&#148; shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Capital Expenditures</U>&#148; means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the Borrower
and its Included Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance with GAAP
(except for the exclusion of Excluded Subsidiaries) and (b) Capital Lease Obligations
incurred by the Borrower and its Included Subsidiaries during such period; provided that
consideration paid for Permitted Acquisitions shall not be construed to constitute
Capital Expenditures.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Capital Lease Obligations</U>&#148; of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Change in Control</U>&#148; means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 30% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the Borrower
by Persons who were neither (i) nominated by the board of directors of the Borrower nor
(ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect
Control of the Borrower by any Person or group.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Change in Law</U>&#148; means (a) the adoption of any law, rule
or regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender&#146;s
or such Issuing Bank&#146;s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement that would be complied with by similarly situated banks
acting reasonably.</P>


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<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Class</U>&#148;, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Competitive Loans or Swingline Loans.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>CLO</U>&#148;has the meaning assigned to such term in Section
9.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Code</U>&#148; means the Internal Revenue Code of 1986, as
amended from time to time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Commitment</U>&#148; means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder,  expressed as an amount representing the
maximum aggregate amount of such Lender&#146;s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09, (b) increased
from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial
amount of each Lender&#146;s Commitment is set forth on Schedule 2.01, or in the Assignment
and Assumption pursuant to which such Lender shall have assumed its Commitment, as
applicable.  The initial aggregate amount of the Lenders&#146; Commitments is $1,000,000,000.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Commitment Increase</U>&#148; has the meaning set forth in
Section 2.20.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Competitive Bid</U>&#148; means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Competitive Bid Rate</U>&#148; means, with respect to any
Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender
making such Competitive Bid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Competitive Bid Request</U>&#148; means a request by the
Borrower for Competitive Bids in accordance with Section 2.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Competitive Loan</U>&#148; means a Loan made pursuant to Section 2.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated EBITDA</U>&#148; means, for any Person for any
period, Consolidated Net Income of such Person for such period, plus, without duplication
and to the extent deducted from revenues in determining such Consolidated Net Income, the
sum of (a) the aggregate amount of Consolidated Interest Expense of such Person for such
period, (b) the aggregate amount of income tax expense of such Person for such period, (c) all
amounts attributable to depreciation and amortization of such Person for such period, (d) all
non-cash charges and non-cash losses of such Person during such period and (e) all losses
from the sale of assets outside the ordinary course of business of such Person during
such period and minus, without duplication and to the extent added to revenues in
determining such Consolidated Net Income for such period, all gains from the sale of
assets outside the ordinary course of business of such Person during such period, all as
determined on a consolidated basis with respect to such Person and its subsidiaries in
accordance with GAAP (except, in the case of the Borrower, for the</P>




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<BR><BR><BR>


<P> exclusion of Excluded
Subsidiaries).  Unless the context otherwise requires, references to &#147;Consolidated EBITDA&#148; are
to Consolidated EBITDA of the Borrower and the Included Subsidiaries.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated EBITDAR&#148;</U> means, for any Person for any
period, the sum of Consolidated EBITDA of such Person for such period and Rental Expense
of such Person for such period.  Unless the context otherwise requires, references to &#147;Consolidated
EBITDAR&#148; are to Consolidated EBITDAR of the Borrower and the Included Subsidiaries.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated Indebtedness</U>&#148; means, as of any date of
determination, without duplication (a) the aggregate principal amount of Indebtedness of
the Borrower and the Included Subsidiaries outstanding as of such date (including
Indebtedness of Excluded Subsidiaries to the extent Guaranteed by the Borrower or any
Included Subsidiary), plus (b) the Securitization Amount as of such date, minus (c) the
aggregate amount of cash and Permitted Investments (other than any cash and Permitted
Investments that are subject to a Lien) owned by the Borrower and the Included
Subsidiaries as of such date, determined on a consolidated basis in accordance with GAAP
(except for the exclusion of Excluded Subsidiaries); provided that, for purposes of this
definition, the term &#147;Indebtedness&#148; shall exclude obligations as an account party in
respect of letters of credit to the extent that such letters of credit have not been
drawn upon.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated Interest Expense</U>&#148; means, for any Person
for any period, the interest expense, both expensed and capitalized (including the
interest component in respect of Capital Lease Obligations), accrued or paid by such
Person during such period, determined on a consolidated basis with respect to such Person
and its Subsidiaries in accordance with GAAP (except, in the case of the Borrower, for
the exclusion of Excluded Subsidiaries); provided that interest expense of an Excluded
Subsidiary shall be deemed to be interest expense of the Borrower to the extent such
interest expense relates to Indebtedness to the extent Guaranteed by the Borrower or an
Included Subsidiary.  Unless the context otherwise requires, references to &#147;Consolidated
Interest Expense&#148; are to Consolidated Interest Expense of the Borrower and the Included
Subsidiaries.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated Net Income</U>&#148; means, for any Person for any
period, net income or loss of such Person for such period determined on a consolidated
basis with respect to such Person and its subsidiaries in accordance with GAAP; provided
that, in the case of the Borrower, there shall be excluded (a) the income of any Person
(other than a Foreign Subsidiary) in which any other Person (other than the Borrower or
any Domestic Subsidiary or any director holding qualifying shares in compliance with
applicable law) has a joint interest, except to the extent of the Attributable Income (as
defined below) of such Person, (b) the income of any Excluded Subsidiary, except to the
extent of the amount of dividends or other distributions (including distributions made as
a return of capital or repayment of principal of advances) actually paid to the Borrower
or any Included Subsidiaries by such Excluded Subsidiary during such period, (c) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any of the Subsidiaries or the date such</P>





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<P>Person&#146;s assets are acquired by the Borrower or any of the Subsidiaries and (d) for
purposes of Section 6.06, without duplication and to the extent added to or subtracted
from revenues in determining net income or loss for such period, all non-cash
extraordinary items during such period, as determined on a consolidated basis for the
Borrower and the Subsidiaries in accordance with GAAP.  Unless the context otherwise
requires, references to &#147;Consolidated Net Income&#148; are to Consolidated Net Income of the
Borrower and the Included Subsidiaries.  For purposes hereof, &#147;Attributable Income&#148; means,
for any period, (i) in the case of any Domestic Subsidiary at least 90% of the Equity
Interests in which are owned (directly or indirectly) by the Borrower, a portion of the
net income of such Subsidiary for such period equal to the Borrower&#146;s direct or indirect
ownership percentage of the Equity Interests of such Subsidiary or (ii) in the case of
any Domestic Subsidiary less than 90% of the Equity Interests in which are owned
(directly or indirectly) by the Borrower, the  amount of dividends or other distributions
(including distributions made as a return of capital or repayment of principal of
advances) actually paid by such Subsidiary to the Borrower or a wholly owned Domestic
Subsidiary.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Consolidated Net Tangible Assets</U>&#148; means, with respect
to the Borrower as of any date, the total amount of assets (less applicable valuation
allowances) after deducting (a) all current liabilities (excluding (i) the amount of
liabilities which are by their terms extendable or renewable at the option of the obligor
to a date more than 12 months after the date as of which the amount is being determined,
(ii) the current portion of long-term Indebtedness and (iii) Loans outstanding hereunder)
and (b) all goodwill, tradenames, trademarks, patents, unamortized debt discount and
expense and other like intangible assets, all as set forth on the most recent balance
sheet of the Borrower and its consolidated Subsidiaries included in financial statements
of the Borrower delivered to the Administrative Agent on or prior to such date of
determination pursuant to clause (a) or (b) of Section 5.01 and determined on a
consolidated basis in accordance with GAAP.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Control</U>&#148; means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.  &#147;Controlling&#148; and
&#147;Controlled&#148; have meanings correlative thereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Default</U>&#148; means any event or condition which
constitutes an Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Disclosed Matters</U>&#148; means the actions, suits and
proceedings and the environmental matters disclosed in Schedule 3.06.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Dollar Amount</u>&#148; means, in relation to any Competitive
Borrowing denominated in an Alternative Currency, the amount designated by the Borrower
as the dollar amount of such Competitive Borrowing in the Competitive Bid Request for
such Borrowing, subject to Section 2.04(g).</P>


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<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>dollars</U>&#148;or &#147;<U>$</U>&#148; refers to lawful money of the United
States of America.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Domestic Subsidiary</U>&#148; means a Subsidiary that is not a
Foreign Subsidiary.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Effective Date</U>&#148; means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Environmental Laws</U>&#148; means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding
agreements issued, promulgated or entered into by or with any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural resources,
the presence, management, Release or threatened Release of any Hazardous Material or to
health and safety matters.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Environmental Liability</U>&#148; means any liability,
contingent or otherwise (including any liability for damages, costs of environmental
compliance, investigation or remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the presence, Release or threatened Release of any Hazardous Materials or
(e) any contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Equity Interests</U>&#148; means shares of capital stock,
partnership interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any such
equity interests.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Equivalent Amount</U>&#148; means, in connection with the
determination of the amount of a Competitive Loan to be made in an Alternative Currency
in relation to the Dollar Amount of such Loan, the amount of such Alternative Currency
converted from such Dollar Amount at the spot buying rate of the Lender that is to make
such Loan (based on the London interbank market rate then prevailing) for dollars against
such Alternative Currency as of approximately 9:00 a.m., New York City time, three
Business Days before such date.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA</U>&#148; means the Employee Retirement Income Security
Act of 1974, as amended from time to time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA Affiliate</U>&#148; means any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single employer
under Section 414 of the Code.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA Event</U>&#148; means (a) any &#147;reportable event&#148;, as
defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with</P>


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<BR><BR><BR>

<P> respect to any Plan of an &#147;accumulated funding deficiency&#148; (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eurodollar</U>&#148;, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Event of Default</U>&#148; has the meaning assigned to such
term in Article VII.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Excluded Equity Interests</U>&#148; means, with respect to any
Person, any Equity Interest that by its terms or otherwise (a) matures or is subject to
mandatory redemption or repurchase pursuant to a sinking fund obligation or otherwise;
(b) is convertible into or exchangeable or exercisable for Indebtedness or any Excluded
Equity Interest at the option of the holder thereof; or (c) may be required to be
redeemed or repurchased at the option of the holder thereof, in whole or in part.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Excluded Subsidiary</U>&#148; means a Foreign Subsidiary of
which securities or other ownership interests representing less than 80% of the
outstanding capital stock or other equity interests, as the case may be, are, at the time
any determination is being made, beneficially owned, whether directly or indirectly, by
the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Excluded Taxes</U>&#148; means, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income  by the United States of
America, or by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction  in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party to this Agreement (or designates a new lending office) or is attributable to such
Foreign</P>


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<P> Lender&#146;s failure to comply with Section 2.17(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.17(a).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Existing Credit Agreement</U>&#148; means the Credit Agreement
dated as of June 25, 2002 among the Borrower, the lenders party thereto and JPMorgan
Chase Bank, as administrative agent, as amended and in effect immediately prior to the
Effective Date.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Existing Letters of Credit</U>&#148; means each letter of
credit previously issued for the account of the Borrower or a Subsidiary that (a) is
outstanding under the Existing Credit Agreement on the Effective Date and (b) is listed
on Schedule 2.06.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Federal Funds Effective Rate</U>&#148; means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Financial Officer</U>&#148; means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Fixed Charge Coverage Ratio</U>&#148; means, for any period,
the ratio of (i) Consolidated EBITDAR of the Borrower for such period minus Capital
Expenditures for such period to (ii) the sum of Consolidated Interest Expense of the
Borrower for such period plus Rental Expense of the Borrower for such period.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Fixed Rate</U>&#148; means, with respect to any Competitive
Loan (other than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related Competitive Bid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Fixed Rate Loan</U>&#148; means a Competitive Loan bearing
interest at a Fixed Rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Foreign Lender</U>&#148; means any Lender that is organized
under the laws of a jurisdiction other than that in which the Borrower is located.  For
purposes of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Foreign Subsidiary</U>&#148; means a Subsidiary organized under
the laws of a jurisdiction other than the United States of America, any State thereof or
the District of Columbia.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>GAAP</U>&#148; means generally accepted accounting principles
in the United States of America.</P>


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<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Governmental Authority</U>&#148; means the government of the
United States of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Guarantee</U>&#148; of or by any Person (the &#147;<U>guarantor</U>&#148;) means
any obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any other Person
(the &#147;<U>primary obligor</U>&#148;) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other obligation or to
purchase (or to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any letter of
credit or letter of guaranty issued to support such Indebtedness or obligation; <U>provided</U>,
that the term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Guarantee Agreement</U>&#148; means the Guarantee Agreement
substantially in the form of Exhibit B among the Borrower, the Guarantors and the
Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Guarantors</U>&#148; means the Initial Guarantors and any other
Subsidiaries that become parties to the Guarantee Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Hazardous Materials</U>&#148; means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates or byproducts, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Hedging Agreement</U>&#148; means any interest rate protection
agreement, foreign currency exchange agreement or other interest or currency exchange
rate hedging arrangement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Included Subsidiary</U>&#148; means any Subsidiary that is not
an Excluded Subsidiary.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Increase Effective Date</U>&#148; has the meaning set forth in
Section 2.20.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Increasing Lender</U>&#148; has the meaning set forth in Section 2.20.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Indebtedness</U>&#147; of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person upon which
interest charges are</P>



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<P>customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by
such Person, (e) all obligations of such Person in respect of the deferred purchase price
of property or services (excluding current accounts payable incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of outstanding
Indebtedness of others (other than Guarantees of contingent lease payments related to
sales of restaurants by the Borrower and the Subsidiaries or their predecessors in
interest (howsoever effected)), (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers&#146; acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable therefor as a
result of such Person&#146;s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is not
liable therefor.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Indemnified Taxes</U>&#148; means Taxes other than Excluded
Taxes.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Index Debt</U>&#148; means (a) indebtedness in respect of the
obligations of the Borrower under this Agreement or, if such indebtedness is not rated by
the relevant rating agency, (b) senior unsecured, long-term indebtedness for borrowed
money of the Borrower that is not guaranteed by any other Person or subject to any other
credit enhancement (regardless of whether there is any such indebtedness outstanding).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Information Memorandum</U>&#148; means the Confidential
Information Memorandum dated August 2004 relating to the Borrower and the Transactions.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Initial Guarantors</U>&#148; means the Subsidiaries listed on
Schedule A.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Interest Election Request</U>&#148; means a request by the
Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Interest Payment Date</U>&#148; means (a) with respect to any
ABR Loan (other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months&#146; duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months&#146; duration
after the first day of such Interest Period, (c) with respect to any Fixed Rate Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Fixed Rate Borrowing with an Interest Period of more than 90 days&#146; duration
(unless otherwise specified in the applicable</P>



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<P> Competitive Bid Request), each day prior to
the last day of such Interest Period that occurs at intervals of 90 days&#146; duration after
the first day of such Interest Period, and any other dates that are specified in the
applicable Competitive Bid Request as Interest Payment Dates with respect to such
Borrowing and (d) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Interest Period</U>&#148; means (a) with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three or six (or
with the consent of each Lender, nine or twelve months) months thereafter, as the
Borrower may elect and (b) with respect to any Fixed Rate Borrowing, the period (which
shall not be less than one day or more than 360 days) commencing on the date of such
Borrowing and ending on the date specified in the applicable Competitive Bid Request;
<U>provided</U>, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless, in the
case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that
commences on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period.  For
purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Issuing Bank</U>&#148; means, as the context may require, (a) JPMorgan
Chase Bank, with respect to Letters of Credit issued by it, (b) Citibank, N.A., with
respect to Letters of Credit issued by it, (c) any other Lender that becomes an Issuing
Bank pursuant to Section 2.06(j), with respect to Letters of Credit issued by it, and (d) any
Person that has issued an Existing Letter of Credit, with respect to such Existing Letter
of Credit and, in each case, its successors in such capacity as provided in Section 2.06(i).
 An Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of such Issuing Bank, in which case the term &#147;Issuing Bank&#148; shall
include any such Affiliate with respect to Letters of Credit issued by such Affiliate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LC Commitment</U>&#148; means, with respect to any Issuing Bank
at any time, the maximum amount of LC Exposure at such time that may be attributable to
Letters of Credit issued by such Issuing Bank and its Affiliates.  The initial LC
Commitment of JPMorgan Chase Bank is $250,000,000 and the initial LC Commitment of
Citibank, N.A., is $250,000,000. The initial LC Commitment of each other Issuing Bank
shall be the amount agreed between the Borrower and such Issuing Bank.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LC Disbursement</U>&#148; means a payment made by an Issuing
Bank pursuant to a Letter of Credit.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LC Exposure</U>&#148; means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.</P>


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<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Lenders</U>&#147; means the Persons listed on Schedule 2.01 and
any other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption.  Unless the context otherwise requires, the term &#147;Lenders&#148; includes
the Swingline Lender.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Letter of Credit</U>&#148; means any letter of credit issued by
an Issuing Bank pursuant to this Agreement. As of the Effective Date, each Existing
Letter of Credit shall constitute a Letter of Credit as though issued pursuant to this
Agreement on the Effective Date.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Leverage Ratio</U>&#148; means, on any date, the ratio of (a)
Consolidated Indebtedness as of such date to (b) Adjusted EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not
the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the
Borrower most recently ended prior to such date).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LIBO Rate</U>&#148; means, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of Dow Jones Market
Service (or on any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that such rate
is not available at such time for any reason, then the &#147;<U>LIBO Rate</U>&#148; with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits
of $5,000,000 and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Lien</U>&#148; means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or similar right
of a third party (other than any such rights of a financial institution under repurchase
agreements described in clause (d) of the definition of &#147;Permitted Investments&#148; entered
into with such financial institution) with respect to such securities.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Lien Basket Amount</U>&#148; means, at any time, the sum of (a) the
Securitization Amount at such time, plus (b) the aggregate principal amount of
obligations (including contingent obligations, in the case of Guarantees or letters of
credit) at such time secured by Liens permitted under clause (h) of Section 6.02, plus</P>



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<P> (c) the
fair market value of all property sold or transferred after the Effective Date pursuant
to Sale and Lease-Back Transactions permitted by clause (b) of Section 6.12.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Loan Documents</U>&#148; means this Agreement, the Guarantee
Agreement and any promissory notes issued pursuant to Section 2.10(e).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Loan Parties</U>&#148; means the Borrower and the Guarantors.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Loans</U>&#148; means the loans made by the Lenders to the
Borrower pursuant to this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Margin</U>&#147; means, with respect to any Competitive Loan
bearing interest at a rate based on the LIBO Rate, the marginal rate of interest, if any,
to be added to or subtracted from the LIBO Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material Adverse Effect</U>&#148; means a material adverse
effect on (a) the business, assets, operations or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower to
perform any of its obligations under any Loan Document or (c) the rights and remedies
available to the Lenders under any Loan Document.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material Indebtedness</U>&#148; means Indebtedness (other than
(a) the Loans and Letters of Credit and (b) Indebtedness owing to the Borrower or a
Subsidiary), or obligations in respect of one or more Hedging Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$75,000,000.  For purposes of determining Material Indebtedness, the &#147;principal amount&#148; of
the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Maturity Date</U>&#148; means September 7, 2009, as such date
may be extended pursuant to Section 2.09.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Moody&#146;s</U>&#148; means Moody&#146;s Investors Service, Inc.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Multiemployer Plan</U>&#148; means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>New Lender</U>&#148; has the meaning set forth in Section 2.09.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Other Taxes</U>&#148; means any and all present or future
 stamp or documentary taxes or any other excise or property  taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Participant</U>&#148; has the meaning set forth in Section 9.04.</P>




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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>17</P>
<BR><BR><BR>



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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>PBGC</U>&#148; means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar functions.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted Acquisition</U>&#148; means the acquisition by the
Borrower or a Subsidiary of the assets of a Person constituting a business unit or any
Equity Interests of a Person; provided that (a) immediately after giving effect thereto
no Default shall have occurred and be continuing or would result therefrom, (b) all
transactions related thereto shall be consummated in accordance with applicable laws,
except where the failure to do so, individually or in the aggregate, would not reasonably
be expected to result in a Material Adverse Effect, (c) in the case of an acquisition of
Equity Interests in a Person, after giving effect to such acquisition, at least 90% of
the Equity Interests in such Person, and any other Subsidiary resulting from such
acquisition, shall be owned directly or indirectly by the Borrower or any of its wholly
owned Subsidiaries and all actions required to be taken, if any, with respect to each
Subsidiary resulting from such acquisition under Section 5.09 shall be taken, (d) the
Borrower and its Subsidiaries are in compliance, on a pro forma basis after giving effect
to such acquisition, with the covenants contained in Sections 6.09 and 6.10 recomputed as
of the last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available as if such acquisition had occurred on the first day
of each relevant period for testing such compliance (using Adjusted EBITDA in lieu of
Consolidated EBITDA for the relevant period and including, for purposes of Section 6.10,
pro forma adjustments to Consolidated Interest Expense and Rental Expense for the
relevant period as if such acquisition had occurred on the first day of such period), (e)
the Borrower has delivered to the Administrative Agent a certificate of a Financial
Officer to the effect set forth in clauses (a), (c) and (d) above, together with all
relevant financial information for the business or entity being acquired and (f) in the
case of an acquisition of a publicly-owned entity, such acquisition shall not have been
preceded by an unsolicited tender offer.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted Encumbrances</U>&#148; means:</P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(a) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">Liens
imposed by law for taxes that are not yet due or are being contested in compliance with
         Section 5.04;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(b) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">carriers&#146;,
warehousemen&#146;s, mechanics&#146;, materialmen&#146;s, repairmen&#146;s and other like Liens imposed by
         law, arising in the ordinary course of business and securing obligations that
are not overdue by more than          30 days or are being contested in compliance with
Section 5.04;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(c)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"> pledges
and deposits made in the ordinary course of business in compliance with workers&#146;         compensation,
unemployment insurance and other social security laws or regulations;</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(d)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety
         and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course          of business;</P></TD>
</TR>
</TABLE>
<BR>



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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>18</P>
<BR><BR><BR>







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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(e) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">judgment
liens in respect of judgments that do not constitute an Event of Default under clause (l)
         of Section 7.01; and</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(f)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">easements,
zoning restrictions, rights-of-way and similar encumbrances on real property imposed by
         law or arising in the ordinary course of business that do not secure any
monetary obligations and do not          materially detract from the value of the
affected property or interfere with the ordinary conduct of business          of the
Borrower or any Subsidiary;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P><U>provided</U> that the term &#147;Permitted Encumbrances&#148; shall not include any Lien securing
Indebtedness.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted Investments</U>&#148; means:</P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(a)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">direct
obligations of, or obligations the principal of and interest on which are unconditionally
         guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed          by the full faith and credit of the United
States of America), in each case maturing within three years from          the date of
acquisition thereof;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(b)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">investments
in commercial paper maturing within 270 days from the date of acquisition thereof and
         rated, at such date of acquisition, at least A-1 by S&amp;P or P-1 by Moody&#146;s;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(c)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">investments
in certificates of deposit, banker&#146;s acceptances and time deposits maturing within
         180 days from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit          accounts issued or offered by, any domestic
office of any Lender, any Affiliate of any Lender, or any other          commercial bank
organized under the laws of the United States of America or any State thereof (or
domestic          office of any commercial bank that is organized under the laws of any
country that is a member of the OECD)          which has a combined capital and surplus
and undivided profits of not less than $500,000,000;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(d)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">fully
collateralized repurchase agreements (i) with a term ending on the next Business Day for
         direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by,          the United States of America (or by any agency
thereof to the extent such obligations are backed by the full          faith and credit
of the United Sates of America) and entered into with a financial institution satisfying
the          criteria described in clause (c) above, or (ii) with a term of not more than
30 days for securities described          in clause (a) above and entered into with a
financial institution satisfying the criteria described in          clause (c) above;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(e)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">investments
in money market funds (i) with a policy to invest substantially all their assets in
         one or more investments described in the foregoing items (a), (b), (c) and (d)
or (ii) having the highest          credit rating obtainable from S&amp;P or from Moody&#146;s;</P></TD>
</TR>
</TABLE>
<BR>





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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>19</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(f)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">investments
in (i) any debt securities rated AA- or above by S&amp;P and Aa3 or above by Moody&#146;s and
         maturing within one year from the date of acquisition thereof and (ii) mutual
funds with assets of at least          $5,000,000,000 and that invest 100% of their
assets in securities described in clause (a) above or          subclause (i) of this
clause (f); and</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(g)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">in
the case of any Foreign Subsidiary, investments by such Subsidiary that are denominated
in          dollars, Euros or the currency of the jurisdiction where such Foreign
Subsidiary&#146;s principal business          activities are conducted and are available in
the principal financial markets of the jurisdiction and otherwise          are comparable
(as nearly as practicable) to the investments described above; <U>provided</U> that, for
purposes of          this clause (g), (i) the foregoing clause (a) shall be deemed to
refer to obligations of, or obligations the          principal of and interest on which
are unconditionally guaranteed by, the government of the jurisdiction in          which
such Foreign Subsidiary is located, in each case maturing within one year from the date
of acquisition          thereof, and (ii) commercial banks referred to in the foregoing
clause (c) shall be deemed to include          commercial banks located in the applicable
jurisdiction that the applicable Foreign Subsidiary determines in          good faith to
be among the most creditworthy banks available for deposits in the location where such
deposits          are being made.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted Obligations</U>&#148; means (a) obligations of the
Borrower or any Guarantor with respect to unsecured debt securities issued by the
Borrower or such Guarantor, respectively, and (b) a negative pledge obligation not
exceeding $25,000,000 under an agreement with the PBGC pursuant to which the PBGC has
been granted the right to an equal and ratable security interest in any of the Borrower&#146;s
property or assets with respect to which the Lenders are granted a security interest.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted Securitization Transaction</U>&#148; means any sale,
assignment or other transfer (or series of related sales, assignments or other transfers)
by the Borrower or any Subsidiary of receivables or royalty payments owing to the
Borrower or such Subsidiary or any interest in any of the foregoing pursuant to a
securitization transaction, together in each case with any collections and other proceeds
thereof, any collection or deposit account related thereto, and any collateral,
guarantees or other property or claims supporting or securing payment by the obligor
thereon of, or otherwise related to, any such receivables or royalty payments.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Person</U>&#148; means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Plan</U>&#148;  means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under ERISA be deemed to be) an &#147;employer&#148; as
defined in Section 3(5) of ERISA.</P>





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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>20</P>
<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Prime Rate</U>&#148; means the rate of interest per annum
publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Principal Domestic Subsidiary</U>&#148; means (a) any
Subsidiary organized in the United States of America whose consolidated assets exceed 5%
of the consolidated assets of the Borrower and its consolidated Subsidiaries or whose
revenues exceed 5% of the consolidated revenues of the Borrower and its consolidated
Subsidiaries, in each case as of the end of the most recent fiscal quarter or for the
most recently ended four consecutive fiscal quarters, respectively, or (b) any Subsidiary
that holds any material trademark (including any Kentucky Fried Chicken, KFC, Pizza Hut, A&amp;W, Long
John Silver&#146;s or Taco Bell trademark) for use in the United States of America or any
jurisdiction therein.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Register</U>&#148; has the meaning set forth in Section 9.04.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Related Parties</U>&#148; means, with respect to any specified
Person, such Person&#146;s Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person&#146;s Affiliates.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Release</U>&#148; means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migrating into or through the environment or any facility, building or
structure.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Rental Expense</U>&#148; means, for any Person for any period,
the minimum rental expense of such Person deducted in determining Consolidated Net Income
of such Person for such period.  Unless the context otherwise requires, references to &#147;Rental
Expense&#148; are to Rental Expense of the Borrower and the Included Subsidiaries.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;<U>Required Lenders</U>&#148; means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 50% of the sum
of the total Revolving Credit Exposures and unused Commitments at such time; provided
that, for purposes of declaring the Loans to be due and payable pursuant to Section 7.01,
and for all purposes after the Loans become due and payable pursuant to Article VII or
the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders
shall be included in their respective Revolving Credit Exposures in determining the
Required Lenders.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Restricted Payment</U>&#148; means any dividend or other
distribution (whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Borrower or any option, warrant or other right to acquire any
such Equity Interests in the Borrower.</P>



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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>21</P>
<BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving Borrowing</U>&#148; means a Borrowing made pursuant
to Section 2.01.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving Credit Exposure</U>&#148; means, with respect to any
Lender at any time, the sum of the outstanding principal amount of such Lender&#146;s
Revolving Loans and its LC Exposure and Swingline Exposure at such time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving Loan</U>&#148; means a Loan made pursuant to Section 2.01.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>S&amp;P</U>&#148; means Standard  Poor&#146;s.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Sale and Lease-Back Transaction</U>&#148; has the meaning
assigned to such term in Section 6.12.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Securitization Amount</U>&#148; means, at any date of
determination thereof and in respect of any Permitted Securitization Transaction, (a) in
the case of a Permitted Securitization Transaction structured as a borrowing of loans
secured by receivables or royalty payments, the outstanding principal amount of
Indebtedness incurred in respect of such Permitted Securitization Transaction that is
secured by such receivables or royalty payments and (b) in the case of a Permitted
Securitization Transaction structured as a sale or other transfer of receivables or
royalty payments (other than a sale or transfer of such receivables or royalty payments
to a Subsidiary), the aggregate amount of cash consideration received by the Borrower or
any of its Subsidiaries from such sale or transfer, but only to the extent representing
the outstanding equivalent of principal, capital or comparable interests in respect of
such receivables or royalty payments that remain uncollected at such time and would not
be distributed to the Borrower or a Subsidiary if such Permitted Securitization
Transactions were to be terminated at such time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Securitization Subsidiary</U>&#148; means any Subsidiary that
is formed by the Borrower or any of its Subsidiaries for the sole purpose of effecting or
facilitating a Permitted Securitization Transaction and that (a) owns no assets other
than receivables, royalty payments and other assets that are related to such Permitted
Securitization Transaction and (b) engages in no business and incurs no Indebtedness, in
each case, other than those related to such Permitted Securitization Transaction.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Sold Business</U>&#148; means any Person, property, business or
asset sold, transferred or otherwise disposed of by the Borrower or any Subsidiary, other
than in the ordinary course of business.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Specified Currency</U>&#148; has the meaning assigned to such
term in Section 9.14.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Statutory Reserve Rate</U>&#148; means a fraction (expressed as
a decimal), the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Administrative Agent is subject for eurocurrency funding
(currently</P>


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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=right>22</P>
<BR><BR><BR>


<P> referred to as &#147;Eurocurrency Liabilities&#148;in Regulation D of the Board).  Such
reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or any
comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>subsidiary</U>&#148; means, with respect to any Person (the &#147;parent&#148;)
at any date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the parent in the
parent&#146;s consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited liability
company, partnership, association or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Subsidiary</U>&#148; means any subsidiary of the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Swingline Exposure</U>&#148; means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total  Swingline
Exposure at such time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Swingline Lenders</U>&#148; means JPMorgan Chase Bank, in its
capacity as lender of Swingline Loans hereunder, and Citibank, N.A., in its capacity as
lender of Swingline Loans hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Swingline Loan</U>&#148; means a Loan made pursuant to Section 2.05.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Syndication Agent</U>&#148; means Citibank, N.A., in its
capacity as syndication agent hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>System Unit</U>&#148; means any restaurant operated under the
name Kentucky Fried Chicken, KFC, Pizza Hut, Taco Bell, A&amp;W, Long John Silver&#146;s or any
other brand that is acquired and operated by the Borrower or a Subsidiary or franchised
or licensed by the Borrower or a Subsidiary to any of its franchisees or licensees.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Taxes</U>&#148; means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Transactions</U>&#148; means the execution, delivery and
performance by the Loan Parties of the Loan Documents, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.</P>


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<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Type</U>&#148;, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the
Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or
a Fixed Rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Withdrawal Liability</U>&#148; means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of
ERISA.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SECTION 1.02. <U>Classification of Loans and Borrowings</U>.
 For purposes of this Agreement, Loans may be classified and referred to by Class (<U>e.g.</U>,
a &#147;Revolving Loan&#148;) or by Type (<U>e.g.</U>, a &#147;Eurodollar Loan&#148;) or by Class and Type (<U>e.g.</U>, a &#147;Eurodollar
Revolving Loan&#148;).  Borrowings also may be classified and referred to by Class (<U>e.g.</U>, a &#147;Revolving
Borrowing&#148;) or by Type (<U>e.g.</U>, a &#147;Eurodollar Borrowing&#148;) or by Class and Type (<U>e.g.</U>, a &#147;Eurodollar
Revolving Borrowing&#148;).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1.03.  <U>Terms Generally</U>.  The definitions of
terms herein shall apply equally to the singular and plural forms of the terms defined.
 Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words &#147;include&#148;, &#147;includes&#148; and &#147;including&#148; shall be
deemed to be followed by the phrase &#147;without limitation&#148;.  The word &#148;will&#148; shall be
construed to have the same meaning and effect as the word &#147;shall&#148;.  Unless the context
requires otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified (subject
to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person&#146;s
successors and assigns, (c) the words &#147;herein&#148;, &#147;hereof&#148; and &#147;hereunder&#148;, and words of
similar import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words &#147;asset&#148; and &#147;property&#148; shall
be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract
rights.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1.04.  <U>Accounting Terms; GAAP</U>.  Except as
otherwise expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; <U>provided</U> that, if
the Borrower notifies the Administrative Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application or interpretation thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until  such notice shall have
been withdrawn or such provision  amended in accordance herewith.</P>


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<BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE II</P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>The Credits</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.01.  <U>Commitments</U>.  Subject to the terms and
conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal amount that
will not result in (a) such Lender&#146;s Revolving Credit Exposure exceeding such Lender&#146;s
Commitment or (b) the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans exceeding the total Commitments.
 Within the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Revolving Loans.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.02.  <U>Loans and Borrowings</U>.  (a)  Each
Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans of the
same Type made by the Lenders ratably in accordance with their respective Commitments.
 Each Competitive Loan shall be made in accordance with the procedures set forth in
Section 2.04.  The failure of any Lender to make any Loan required to be made by it shall
not relieve any other Lender of its obligations hereunder; <U>provided</U> that the Commitments
and Competitive Bids of the Lenders are several and no Lender shall be responsible for
any other Lender&#146;s failure to make Loans as required.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Subject to Section 2.14, (i) each Revolving
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised entirely of Eurodollar Loans or Fixed Rate Loans as the Borrower may request in
accordance herewith.  Each Swingline Loan shall be an ABR Loan unless otherwise agreed by
the Borrower and the Swingline Lender pursuant to Section 2.13(d). Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; <U>provided</U> that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement and shall not result in any increased costs under Section 2.15 or
any obligation by the Borrower to make any payment under Section 2.17 in excess of the
amounts, if any, that such Lender would be entitled to claim under Section 2.15 or 2.17,
as applicable, without giving effect to such change in lending office.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" --><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      At the commencement of each Interest Period
for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $10,000,000.  At the time
that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $10,000,000; <U>provided</U> that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments or that is required to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(e) or that is required to finance
the repayment of outstanding Swingline Loans as contemplated by paragraph (d) below.
 Each Competitive Borrowing shall be in an aggregate amount that is an integral multiple
of $1,000,000 and not less than $10,000,000 (or, in the case of a Competitive Borrowing</P>


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<BR><BR><BR>



<P>made in an Alternative Currency, a Dollar Amount of not less than $10,000,000).  Each
Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not
less than $500,000.  Borrowings of more than one Type and Class may be outstanding at the
same time; <U>provided</U> that there shall not at any time be more than a total of fifteen
Eurodollar Revolving Borrowings outstanding.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" --><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Subject to Section 2.05, at the request of a
Swingline Lender, the Lenders will be required to make ABR Revolving Loans on the
Business Day immediately preceding the last day of any calendar quarter in an aggregate
amount equal to the principal amount of such Swingline Lender&#146;s Swingline Loans then
outstanding, the proceeds of which shall be applied to repay such Swingline Loans.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" --><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.03.  <U>Requests for Revolving Borrowings</U>.  To
request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent and signed
by the Borrower.  Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
aggregate amount of such Borrowing;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
date of such Borrowing, which shall be a Business Day;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iv)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">in
the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto,
which shall be a          period contemplated by the definition of the term &#147;Interest
Period&#148;; and</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(v)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
location and number of the Borrower&#146;s account to which funds are to be disbursed, which
shall comply with          the requirements of Section 2.07.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>If no election as to the Type of Revolving Borrowing is specified, then the requested
Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month&#146;s duration.  Promptly following
receipt of a  Borrowing Request in accordance with this Section, the Administrative</P>


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<BR><BR><BR>


<P> Agent
shall advise each Lender of the details thereof and of the amount of such Lender&#146;s Loan
to be made as part of the requested Borrowing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.04.  <U>Competitive Bid Procedure</U>.  (a)  Subject
to the terms and conditions set forth herein, from time to time during the Availability
Period the Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; <U>provided</U> that the
sum of the total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the total Commitments.  To
request Competitive Bids, the Borrower shall notify the Administrative Agent of such
request by telephone (x) in the case of a Eurodollar Borrowing to be made in dollars, not
later than 11:00 a.m., New York City time, four Business Days before the date of the
proposed Borrowing, (y) in the case of a Fixed Rate Borrowing to be made in dollars, not
later than 10:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing and (z) in the case of a Competitive Borrowing to be made in an
Alternate Currency in accordance with subsection (g) of this Section, not later than
10:00 a.m., New York City time, six Business Days before the date of the proposed
Borrowing; <U>provided</U> that the Borrower may submit up to (but not more than) three
Competitive Bid Requests on the same day, but a Competitive Bid Request shall not be made
within five Business Days after the date of any previous Competitive Bid Request, unless
any and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected.  Each such telephonic Competitive
Bid Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by the
Administrative Agent and signed by the Borrower.  Each such telephonic and written
Competitive Bid Request shall specify the following information in compliance with Section 2.02:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
aggregate amount of the requested Borrowing (expressed in dollars);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
date of such Borrowing, which shall be a Business Day;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">whether
such Borrowing is to be a Eurodollar Borrowing or a Fixed Rate Borrowing;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iv)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
currency in which the proposed Borrowing is to be made, which shall be dollars or,
subject to paragraph (g)          of this Section, an Alternative Currency;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(v)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Interest Period to be applicable to such Borrowing, which shall be a period contemplated
by the definition          of the term &#147;Interest Period&#148;; and</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(vi)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
location and number of the Borrower&#146;s account to which funds are to be disbursed, which
shall comply with          the requirements of Section 2.07.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details thereof by
telecopy, inviting the Lenders to submit Competitive Bids.</P>


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<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Each Lender may (but shall not have any
obligation to) make one or more Competitive Bids to the Borrower in response to a
Competitive Bid Request.  Each Competitive Bid by a Lender must be in a form approved by
the Administrative Agent and must be received by the Administrative Agent by telecopy, in
the case of a Eurodollar Competitive Borrowing, not later than 9:30 a.m., New York City
time, three Business Days before the proposed date of such Competitive Borrowing, and in
the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the
proposed date of such Competitive Borrowing.  Competitive Bids that do not conform
substantially to the form approved by the Administrative Agent may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable.  Each Competitive Bid shall specify (i) the principal amount
(which shall be expressed in dollars and be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower) of the Competitive Loan or Loans that the Lender is
willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is prepared
to make such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places), (iii) the currency in which such Loan or
Loans will be made and (iv) the Interest Period applicable to each such Loan and the last
day thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Administrative Agent shall promptly notify
the Borrower by telecopy of the Competitive Bid Rate and the principal amount specified
in each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Subject only to the provisions of this
paragraph, the Borrower may accept or reject any Competitive Bid.  The Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or reject
each Competitive Bid, in the case of a Eurodollar Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before the date of the proposed
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 10:30 a.m.,
New York City time, on the proposed date of the Competitive Borrowing; provided that (i) the
failure of the Borrower to give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made at a lower
Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the aggregate amount of the requested Competitive Borrowing
specified in the related Competitive Bid Request, (iv) to the extent necessary to comply
with clause (iii) above, the Borrower may accept Competitive Bids at the same Competitive
Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive Bid shall
be accepted for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; <U>provided further</U> that if a
Competitive Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a</P>


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<BR><BR><BR>

<P> minimum of $1,000,000 or any
integral multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in a manner
determined by the Borrower.  A notice given by the Borrower pursuant to this paragraph
shall be irrevocable.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      The Administrative Agent shall promptly notify
each bidding Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      If the Administrative Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to the Borrower at least one quarter of an hour earlier than the time by
which the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      The Borrower may request Competitive Loans in
an Alternative Currency, subject to the terms and conditions of this subsection (g), in
addition to the other conditions applicable to such Loans hereunder.  Any request for
Competitive Loans in an Alternative Currency shall be subject to the following conditions:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)      after giving effect to any Competitive
Borrowing in an Alternative Currency, the aggregate Dollar Amount of all
         outstanding Competitive Loans denominated in Alternative Currencies shall not
exceed $250,000,000, and</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)     if there shall occur at or prior to 10:00
a.m., New York City time, on the date of any Competitive Borrowing to          be
denominated in an Alternative Currency any change in national or international financial,
political or          economic conditions or currency exchange rates or exchange controls
which would, in the reasonable opinion of          any Lender that shall have offered to
make any Competitive Loan in connection with such Borrowing, make it
         impracticable for such Lender&#146;s Loan to be denominated in such Alternative
Currency, then such Lender may by          notice to the Borrower and the Administrative
Agent withdraw its offer to make such Loan.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any Competitive Loan which is to be made in an
Alternative Currency in accordance with this subsection (g) shall be advanced in the
Equivalent Amount of the Dollar Amount thereof and shall be repaid or prepaid in such
Alternative Currency in the amount borrowed.  Interest payable on any Loan denominated in
an Alternative Currency shall be paid in such Alternative Currency.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining whether the aggregate
principal amount of Loans outstanding hereunder exceeds any applicable limitation
expressed in dollars, each Competitive Loan denominated in an Alternative Currency shall
be deemed to be in a principal amount equal to the Dollar Amount thereof.  The Dollar
Amount of any</P>


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<P> Competitive Loan with an Interest Period exceeding three months in duration
shall be adjusted on each date that would have been the last day of an Interest Period
for such Loan if such Loan had successive Interest Periods of three months duration. Each
such adjustment shall be made by the Lender holding such Loan by determining the amount
in dollars that would be required in order to result in an Equivalent Amount in the
applicable Alternative Currency equal to the principal amount of the applicable Loan
outstanding on the date of the adjustment, and the amount in dollars so determined shall
be the Dollar Amount of such Loan unless and until another adjustment is required hereby.
 Each Lender that makes a Competitive Loan denominated in an Alternative Currency agrees
to determine any such adjustments if and when required to be made pursuant to this
paragraph and to notify the Borrower and the Administrative Agent of each such adjustment
promptly upon making such determination.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.05.  <U>Swingline Loans</U>.  (a)  Subject to the
terms and conditions set forth herein, the Swingline Lenders agree to make Swingline
Loans to the Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the aggregate
principal amount of outstanding Swingline Loans exceeding $150,000,000 or (ii) the sum of
the total Revolving Credit Exposures plus the aggregate principal amount of outstanding
Competitive Loans exceeding the total Commitments; <U>provided</U> that (A) no Swingline Loans
will be made on the last day of any calendar quarter and (B) if any Swingline Loans are
outstanding on the Business Day immediately preceding the last day of any calendar
quarter, the Lenders will be required, if requested by a Swingline Lender, to make ABR
Revolving Loans on such day in an equivalent amount, the proceeds of which will be
applied to repay such Swingline Loans.  Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      To request a Swingline Loan, the Borrower
shall notify the Administrative Agent of such request by telephone (confirmed by
telecopy), not later than 12:00 noon, New York City time, on the day of a proposed
Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline Loan.  The
Administrative Agent will promptly advise the Swingline Lenders of any such notice
received from the Borrower.  The Swingline Lenders shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit account of the
Borrower with the Administrative Agent (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the applicable Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.  Each Swingline Lender shall be required to make
available 50% of each Swingline Loan requested by the Borrower.  No Swingline Lender
shall be required to make available any Swingline Loan if such Loan would cause the
aggregate amount of outstanding Swingline Loans of such Swingline Lender to exceed
$75,000,000.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      A Swingline Lender may by written notice given
to the Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day in all or
a portion of such</P>


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<P> Swingline Lender&#146;s Swingline Loans outstanding.  Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will participate.
 Promptly upon receipt of such notice, the Administrative Agent will give notice thereof
to each  Lender, specifying in such notice such Lender&#146;s Applicable Percentage of such
Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the account
of the applicable Swingline Lender, such Lender&#146;s Applicable Percentage of such Swingline
Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph
by wire transfer of immediately available funds, in the same manner as provided in Section 2.07
with respect to Loans made by such Lender (and Section 2.07 shall apply, <U>mutatis</U>
<U>mutandis</U>, to the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the applicable Swingline Lender the amounts so received by it from the
Lenders.  The Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of
such Swingline Loan shall be made to the Administrative Agent and not to the applicable
Swingline Lender.  Any amounts received by a Swingline Lender from the Borrower (or other
party on behalf of the Borrower) in respect of a Swingline Loan after receipt by such
Swingline Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall
have made their payments pursuant to this paragraph and to such Swingline Lender, as
their interests may appear; <U>provided</U> that any such payment so remitted shall be repaid to
such Swingline Lender or to the Administrative Agent, as applicable, if and to the extent
such payment is required to be refunded to the Borrower for any reason.  The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve the
Borrower of any default in the payment thereof.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.06.  <U>Letters of Credit</U>.  (a)  <U>General</U>.  Upon
the satisfaction (or waiver in accordance with Section 9.02) of the conditions specified
in Section 4.01, on the Effective Date, each Existing Letter of Credit will
automatically, without any action on the part of any Person, be deemed to be a Letter of
Credit issued hereunder for the account of the Borrower for all purposes of this
Agreement and the other Loan Documents.  In addition, subject to the terms and conditions
set forth herein, the Borrower may request the issuance of Letters of Credit for its own
account (for its own behalf or on behalf of any Subsidiary), in a form reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and
from time to time during the Availability Period.  In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, any Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control, and any obligations or liabilities
imposed on the Borrower under any such letter of credit application (including by reason
of rights or</P>

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<P> remedies granted to an Issuing Bank) shall be disregarded (it being
understood that this Agreement sets forth all obligations and liabilities of the Borrower
with respect to Letters of Credit).</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if arrangements for
doing so have been approved by the applicable Issuing Bank) to the relevant Issuing Bank
selected by the Borrower to issue such Letter of Credit and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section),
the amount of such Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit.  If requested by the applicable Issuing Bank, the Borrower also shall
submit a letter of credit application on such Issuing Bank&#146;s standard form in connection
with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall
not exceed $500,000,000, (ii) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans shall not exceed the total
Commitments and (iii) the LC Exposure attributable to the Letters of Credit issued by any
Issuing Bank (and its Affiliates) shall not exceed such Issuing Bank&#146;s LC Commitments.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Expiration Date.  Except as set forth in
Section 2.06(l), each Letter of Credit shall expire at or prior to the close of business
on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal
or extension) and (ii) the date that is five Business Days prior to the Maturity Date;
<U>provided</U> that any Letter of Credit may provide for the automatic renewal or extension
thereof at the scheduled expiry thereof if (A) such Letter of Credit also provides that
the Issuing Bank in respect thereof may, by notice to the beneficiary, elect not to so
renew or extend such Letter of Credit and (B) any such renewal or extension shall be for
a period that expires at a date that complies (except as set forth in Section 2.06(l))
with clauses (i) and (ii) above.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Participations.  By the issuance of a Letter
of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the applicable Issuing Bank or the Lenders, the
Issuing Bank in respect of such Letter of Credit hereby grants to each Lender, and each
Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit
(including each Existing Letter of Credit) equal to such Lender&#146;s Applicable Percentage
of the aggregate amount available to be drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the</P>


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<P> Administrative Agent, for the account of the
applicable Issuing Bank, such Lender&#146;s Applicable Percentage of each LC Disbursement made
by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever; provided that the foregoing shall not be construed to excuse the applicable
Issuing Bank from liability to the Lenders for damages caused by such Issuing Bank&#146;s
gross negligence or willful misconduct.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Reimbursement.  If an Issuing Bank shall make
any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the Borrower receives such notice, if
such notice is received prior to 10:00 a.m., New York City time, on the day of receipt,
or (ii) the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt; <U>provided</U>
that the Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR
Revolving Borrowing (if such LC Disbursement is not less than $10,000,000) or Swingline
Loan (if such LC Disbursement is not less than $500,000) in an equivalent amount and, to
the extent so financed, the Borrower&#146;s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan, as
applicable.  If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment then due
from the Borrower in respect thereof and such Lender&#146;s Applicable Percentage thereof.
 Promptly following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07
shall apply, <U>mutatis</U> <U>mutandis</U>, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so
received by it from the Lenders.  Promptly following receipt by the Administrative Agent
of any payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the applicable Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank,
then to such Lenders and such Issuing Bank as their interests may appear.  Any payment
made by a Lender pursuant to this paragraph to reimburse the applicable Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as
contemplated above) shall not</P>


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<P> constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      Obligations Absolute.  The Borrower&#146;s
obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section
shall be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances whatsoever
and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or
this Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment
by an Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv) any other
event or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable discharge
of, or provide a right of setoff against, the Borrower&#146;s obligations hereunder.  Neither
the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the
control of any Issuing Bank; <U>provided</U> that the foregoing shall not be construed to excuse
an Issuing Bank from liability to the Borrower to the extent of any direct or actual
damages (as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by such Issuing Bank&#146;s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit issued by it comply
with the terms thereof.  The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of an Issuing Bank (as finally determined by
a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination.  In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents presented which
appear on their face to be in substantial compliance with the terms of a Letter of
Credit, the applicable Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation, regardless
of any notice or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the terms of such
Letter of Credit.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      Disbursement Procedures.  An Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit issued by it.  Such Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed
by telecopy) of such demand for payment and whether such Issuing Bank has made or will
make an LC Disbursement thereunder; <U>provided</U> that any failure to give or delay in giving
such notice</P>


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<p> shall not relieve the Borrower of its obligation to reimburse such Issuing
Bank and the Lenders with respect to any such LC Disbursement.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)      Interim Interest.  If an Issuing Bank shall
make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Revolving Loans; <U>provided</U> that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(e) shall apply.  Interest accrued pursuant to this paragraph shall be for
the account of the applicable Issuing Bank, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such
Issuing Bank shall be for the account of such Lender to the extent of such payment.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)      Replacement of Issuing Bank.  Any Issuing Bank
may be replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative
Agent shall notify the Lenders of any such replacement of an Issuing Bank.  At the time
any such replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From
and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein to the
term &#147;Issuing Bank&#148; shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall require.
 After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of Credit.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)      Addition of Issuing Bank.  The Borrower may,
at any time and from time to time with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld) and such Lender, designate one or more
additional Lenders to act as an issuing bank under the terms of this Agreement.  Any
Lender designated as an Issuing Bank pursuant to this paragraph (j) shall be deemed to be
an &#147;Issuing Bank&#148; for the purposes of this Agreement (in addition to being a Lender) with
respect to Letters of Credit issued by such Lender.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)      Cash Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Borrower receives
notice from the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph,
the Borrower shall deposit in an account with the Administrative Agent, in the name of
the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to
the LC Exposure as of such date plus any accrued and unpaid interest thereon; <U>provided</U>
that</P>


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<P> the obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the Borrower
described in clause (i) or (j) of Section 7.01.  Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the obligations of
the Borrower under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account.
 Other than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and at the
Borrower&#146;s risk and expense, such deposits shall not bear interest.  Interest or profits,
if any, on such investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse any Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so applied,
shall be held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Lenders with LC Exposure representing greater than 50% of the
total LC Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement.  If the Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, (i) such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived and (ii) from time to time there shall be
returned to the Borrower an amount equal to the excess, if any, of the amount of cash
collateral then held hereunder over the amount of LC Exposure and accrued and unpaid
interest thereon.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)      The Borrower may request that an Issuing Bank
allow, and an Issuing Bank may (in its sole discretion) agree to allow, one or more
Letters of Credit issued by it to expire later than permitted by Section 2.06(c).  Any
such Letter of Credit is referred to herein as an &#147;<U>Extended Letter of Credit</U>&#148;.  The
following provisions shall apply to any Extended Letter of Credit, notwithstanding any
contrary provision set forth in this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
participations of each Lender in each Extended Letter of Credit shall terminate at the
close of business on          the date that is five Business Days prior to the Maturity
Date, with the effect that the Lenders shall not have          any obligations to acquire
participations in any LC Disbursement made thereafter (other than in respect of
         demands for drawings submitted prior to such termination).</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">On
a date to be determined by the applicable Issuing Bank (in its sole discretion), the
Borrower shall deposit          with such Issuing Bank an amount in cash equal to the LC
Exposure as of such date attributable to the Extended          Letters of Credit issued
by such Issuing Bank for the account of the Borrower.  Each such deposit shall be held
         by the applicable Issuing Bank as collateral for the obligations of the Borrower
in respect of such Extended          Letters of Credit.  The applicable Issuing Bank
shall have exclusive dominion and control, including the          exclusive right of
withdrawal, over such account.  Other than any interest earned</P>



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<P> on the investment of such
         deposits, which investments shall be made at the option and sole discretion of
the applicable Issuing Bank and          at the Borrower&#146;s risk and expense, such
deposits shall not bear interest.  Interest or profits, if any, on          such
investments shall accumulate in such account.  Moneys in such account shall be applied by
the applicable          Issuing Bank to reimburse LC Disbursements in respect of such
Extended Letters of Credit issued for the account          of the Borrower for which such
Issuing Bank has not been reimbursed and, to the extent not so applied, shall be
         held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time.          If any Extended Letter of Credit expires or is
terminated, then within three Business Days thereafter the          relevant Issuing Bank
shall return to the Borrower cash collateral then held attributable to such Extended
         Letter of Credit (after deducting therefrom any amounts owed to such Issuing
Bank by the Borrower that are then          due).</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">After
the close of business on the date that is five Business Days prior to the Maturity Date,
the fees that          would have accrued pursuant to clause (i) of Section 2.12(b) (if
the participations of the Lenders in the          Extended Letters of Credit had not
terminated) shall continue to accrue on the LC Exposure in respect of each
         Extended Letter of Credit and shall be payable to the applicable Issuing Bank
for its own account.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.07.  <U>Funding of Borrowings</U>.  (a)  Each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof (i) by wire
transfer of immediately available funds by 12:00 noon, New York City time at the place of
payment, to the account of the Administrative Agent most recently designated by it for
such purpose by notice to the Lenders or (ii) subject to the provisions of Section 2.04,
if such Borrowing is to be made in an Alternative Currency, by making available the
Equivalent Amount of such Alternative Currency (in such funds as may then be customary
for the settlement of international transactions in the Alternative Currency) by 12:00
noon, local time at the place of payment, to the account of the Administrative Agent at
such place as shall have been notified by the Administrative Agent to the Lenders by not
less than five Business Days&#146; notice; <U>provided</U> that Swingline Loans shall be made as
provided in Section 2.05.  The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained with the Administrative Agent in New York City and designated by
the Borrower in the applicable Borrowing Request or Competitive Bid Request (or, in the
case of a Borrowing made in an Alternative Currency, to an account mutually agreed
between the Borrower and the Administrative Agent for funding such Borrowing); <U>provided</U>
that (i) ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e) shall be remitted by the Administrative Agent to the
applicable Issuing Bank and (ii) ABR Revolving Loans made to refinance outstanding
Swingline Loans as provided in Section 2.02(d) shall be remitted by the Administrative
Agent to the applicable Swingline Lender.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender&#146;s share of such
Borrowing, the</P>

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<BR><BR><BR>

<P> Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount.  In
such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender&#146;s Loan included in such Borrowing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.08.  <U>Interest Elections</U>.  (a)  Each Revolving
Borrowing initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in the case
of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided
in this Section.  The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This Section shall
not apply to Competitive Borrowings or Swingline Borrowings, which may not be converted
or continued.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be made on
the effective date of such election.  Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Each telephonic and written Interest Election
Request shall specify the following information in compliance with Section 2.02:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Borrowing to which such Interest Election Request applies and, if different options are
being elected with          respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in          which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for each
         resulting Borrowing);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
effective date of the election made pursuant to such Interest Election Request, which
shall be a Business          Day;</P></TD>
</TR>
</TABLE>
<BR>

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<BR><BR><BR>



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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iv) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable
thereto after giving          effect to such election, which shall be a period
contemplated by the definition of the term &#147;Interest Period&#148;.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>If any such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected an
Interest Period of one month&#146;s duration.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Promptly following receipt of an Interest
Election Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender&#146;s portion of each resulting Borrowing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable thereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.09.  <U>Termination, Reduction and Extension of
Commitments</U>.  (a)  Unless previously terminated, the Commitments shall terminate on the
Maturity Date.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Borrower may at any time terminate, or
from time to time reduce, the Commitments; <U>provided</U> that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $5,000,000 and not less
than $10,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if,
after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11,
the sum of the Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans would exceed the total Commitments.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Borrower shall notify the Administrative
Agent of any election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the contents
thereof.  Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; <U>provided</U> that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is
not satisfied.  Any termination or</P>



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<BR><BR><BR>

<P> reduction of the Commitments shall be permanent.  Each
reduction of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      (i) The Borrower may, by notice to the
Administrative Agent (which shall promptly deliver a copy to each of the Lenders) not
less than 60 days prior to the Maturity Date then in effect (the &#147;<U>Pending Maturity Date</U>&#148;),
request that the Lenders extend the Pending Maturity Date to a date specified in such
notice that is a Business Day not later than one year after the Pending Maturity Date
(the &#147;<U>Extended Maturity Date</U>&#148;).  Each Lender shall, by notice to the Borrower and the
Administrative Agent given not later than the date specified in the Borrower&#146;s notice for
a response (which shall be at least 30 days prior to the Pending Maturity Date) (the &#147;<U>Response
Deadline</U>&#148;), advise the Borrower whether or not such Lender agrees to such extension (and
any Lender that does not advise the Borrower on or before the Response Deadline shall be
deemed to have advised the Borrower that it will not agree to such extension).  In the
event that, by the Response Deadline, Lenders holding less than 66?% of the aggregate
Commitments shall have agreed to extend the Pending Maturity Date, the Borrower may
arrange for one or more banks or other financial institutions (any such bank or other
financial institution referred to in this clause (d)(i) being called an &#147;<U>New Lender</U>&#148;),
which may include any Lender, to extend Commitments or increase their existing
Commitments in an aggregate amount equal to the unsubscribed amount; <U>provided</U> that (A) each
New Lender, if not already a Lender hereunder, shall be subject to the approval of the
Administrative Agent and each Issuing Bank and Swingline Lender (which approvals shall
not be unreasonably withheld) and the Borrower and each New Lender shall execute all such
documentation as the Administrative Agent shall reasonably specify to evidence its
Commitment and/or its status as a Lender hereunder and (B) each New Lender shall execute
all such documentation pursuant to the preceding clause (A) no later than the Pending
Maturity Date.</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">If
(and only if) Lenders, including New Lenders, holding Commitments that represent at least
66?% of the          aggregate Commitments prior to the Pending Maturity Date shall have
agreed to extend the Maturity Date, then          (effective on and as of the Pending
Maturity Date), (A) the Maturity Date shall be extended to the Extended          Maturity
Date, and (B) the Commitment of each non-extending Lender shall terminate, and all Loans
of such          non-extending Lender shall become due and payable, together with all
interest accrued thereon and all other          amounts owed to such Lender hereunder, on
the Pending Maturity Date then in effect.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">Notwithstanding
the provisions of paragraphs (d)(i) and (d)(ii) of this Section, no extension of the
Pending          Maturity Date shall be effective with respect to any Lender unless, on
and as of the Pending Maturity Date, the          conditions set forth in Section 4.02
shall be satisfied (with all references in such Section to a Borrowing          being
deemed to be references to such extension) and the Administrative Agent shall have
received a certificate          to that effect, dated the Pending Maturity Date, and
executed by a Financial Officer.</P></TD>
</TR>
</TABLE>
<BR>




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<BR><BR><BR>





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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iv) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">On
the Pending Maturity Date, if any Revolving Loans are outstanding, the Borrower (A) shall
prepay all          Revolving Loans then outstanding (including all accrued but unpaid
interest thereon) and (B) may, at its          option, fund such prepayment by
simultaneously borrowing Revolving Loans of the Types and for the Interest
         Periods specified in a Borrowing Request delivered pursuant to Section 2.03,
which Revolving Loans shall be          made by the Lenders (including any New Lenders)
ratably in accordance with their respective Commitments          (calculated after giving
effect to (x) any Commitment increases by any Lenders or any new Commitments made by
         any New Lenders pursuant to paragraph (d)(i) of this Section and (y) the
termination of the Commitments of          non-extending Lenders).  The payments made
pursuant to clause (A) above in respect of each Eurodollar Loan          shall be subject
to Section 2.16.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SECTION 2.10.  <U>Repayment of Loans; Evidence of Debt</U>.
 (a)  The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each Revolving Loan of
such Lender on the Maturity Date, (ii) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Competitive Loan on the last day of
the Interest Period applicable to such Loan and (iii) to each Swingline Lender the then
unpaid principal amount of each Swingline Loan of such Swingline Lender on the earlier of
the Maturity Date and the date that is five Business Days after such Swingline Loan is
made; provided that on each date that a Revolving Borrowing or Competitive Borrowing
(other than a Competitive Borrowing denominated in an Alternative Currency) is made, the
Borrower shall repay all Swingline Loans which were outstanding at the time such
Borrowing was requested.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Administrative Agent shall maintain
accounts in which it shall record (i) the amount and currency of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender&#146;s share
thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall be <U>prima</U> <U>facie</U> evidence of the
existence and amounts of the obligations recorded therein; <U>provided</U> that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Any Lender may request that Loans of any Class
made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.11.  <U>Prepayment of Loans</U>.  (a)  The Borrower
shall have the right at any time and from time to time to prepay any Borrowing in whole
or in part, subject to prior notice in accordance with paragraph (b) of this Section;
provided that the Borrower shall not have the right to prepay any Competitive Loan
without the prior consent of the Lender thereof.


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Borrower shall notify the Administrative
 Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of prepayment
of an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment.
 Each such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; <U>provided</U> that, if a
notice of optional prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.09, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance with
Section 2.09.  Promptly following receipt of any such notice relating to a Revolving
Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
 Each partial prepayment of any Revolving Borrowing shall be in an amount that would be
permitted in the case of an advance of a Revolving Borrowing of the same Type as provided
in Section 2.02.  Each prepayment of a Revolving Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.12.  <U>Fees</U>.  (a)  The Borrower agrees to pay
to the Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such Lender
(whether used or unused) during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates; <U>provided</U> that, if such Lender
continues to have any Revolving Credit Exposure after its Commitment terminates, then
such facility fee shall continue to accrue on the daily amount of such Lender&#146;s Revolving
Credit Exposure from and including the date on which its Commitment terminates to but
excluding the date on which such Lender ceases to have any Revolving Credit Exposure.
 Accrued facility fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments terminate,
commencing on the first such date to occur after the date hereof; <U>provided</U> that</P>


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<P> any
facility fees accruing after the date on which the Commitments terminate shall be payable
on demand.  All facility fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day but
excluding the last day).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with respect to
its participations in Letters of Credit, which shall accrue at the same Applicable Rate
as the spread over the Adjusted LIBO rate applicable to Eurodollar Revolving Loans on the
average daily amount of such Lender&#146;s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender&#146;s Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to
each Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum
separately agreed upon between the Borrower and such Issuing Bank on the average daily
amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank
(excluding any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any such LC
Exposure, as well as such Issuing Bank&#146;s standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of drawings
thereunder.  Participation fees and fronting fees accrued through and including the last
day of March, June, September and December of each year shall be payable on the third
Business Day following such last day, commencing on the first such date to occur after
the Effective Date; <U>provided</U> that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand.  Any other fees payable to such Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand.  All
participation fees and fronting fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first day but
excluding the last day).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Borrower agrees to pay to the
Administrative Agent for the account of each Lender its Applicable Percentage of a
utilization fee that shall accrue at the rate of 0.125% on the daily total amount of
outstanding Loans (including Competitive Loans and Swingline Loans but excluding Letters
of Credit) during any period in which the total amount of outstanding Loans (including
Competitive Loans and Swingline Loans but excluding Letters of Credit) is greater than
50% of the total Commitments; <U>provided</U> that, if such Lender continues to have any
Revolving Credit Exposure (other than pursuant to Section 2.06(l)) after its Commitment
terminates, then such utilization fee shall continue to accrue on the daily amount of
such Lender&#146;s Revolving Credit Exposure from and including the date on which its
Commitment terminates to but excluding the date on which such Lender ceases to have any
Revolving Credit Exposure.  Accrued utilization fees shall be payable in arrears on the
last day of March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date hereof;
<U>provided</U> that any utilization fees accruing after the date on which the Commitments
terminate shall be payable on demand.  All utilization fees shall be computed on the
basis of a year of</P>

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<P ALIGN=right>43</P>
<BR><BR><BR>

<p> 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative Agent.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the Administrative Agent (or to the
applicable Issuing Bank, in the case of fees payable to it) for distribution, in the case
of facility fees, participation fees and utilization fees, to the Lenders.  Fees paid
shall not be refundable under any circumstances.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.13.  <U>Interest</U>.  (a)  The Loans comprising
each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Loans comprising each Eurodollar Borrowing
shall bear interest (i) in the case of a Eurodollar Revolving Loan, at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate, or
(ii) in the case of a Eurodollar Competitive Loan, at the LIBO Rate for the Interest
Period in effect for such Borrowing plus (or minus, as applicable) the Margin applicable
to such Loan.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Each Fixed Rate Loan shall bear interest at
the Fixed Rate applicable to such Loan.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Each Swingline Loan shall bear interest at
such rate per annum as shall be agreed to in writing by the Borrower and the Swingline
Lender with respect to such Swingline Loan or, if no such agreement shall be made, at the
rate then applicable to ABR Loans pursuant to paragraph (a) of this Section.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before judgment, at
a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
 rate otherwise applicable to such Loan as provided in the preceding paragraphs of this
Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      Accrued interest on each Loan shall be payable
in arrears on each Interest Payment Date for such Loan and, in the case of Revolving
Loans, upon termination of the Commitments; <U>provided</U> that (i) interest accrued pursuant
to paragraph (e) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan
prior to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any Eurodollar Revolving Loan prior to the end of </P>


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<BR><BR><BR>

<P>the current Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or
LIBO Rate shall be determined by the Administrative Agent, and such determination shall
be conclusive absent manifest error.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.14.  <U>Alternate Rate of Interest</U>.  If prior to
the commencement of any Interest Period for a Eurodollar Borrowing:</P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(a)</TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Administrative Agent determines (which determination shall be conclusive absent manifest
error) that          adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate or the LIBO Rate, as          applicable, for such Interest Period; or</P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(b) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Administrative Agent is advised by the Required Lenders (or, in the case of a Eurodollar
Competitive Loan,          the Lender that is required to make such Loan) that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for          such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or
         maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as,
a Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request requests a
Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Borrower for a Eurodollar Competitive Borrowing shall be ineffective;
provided that (A) if the circumstances giving rise to such notice do not affect all the
Lenders, then requests by the Borrower for Eurodollar Competitive Borrowings may be made
to Lenders that are not affected thereby and (B) if the circumstances giving rise to such
notice affect only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SECTION 2.15.  <U>Increased Costs</U>.  (a)  If any Change in
Law shall:</P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">impose,
modify or deem applicable any reserve, special deposit or similar requirement against
assets of,          deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement          reflected in the Adjusted LIBO Rate)
or any Issuing Bank; or</P></TD>
</TR>
</TABLE>
<BR>

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<BR><BR><BR>


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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">impose
on any Lender or any Issuing Bank or the London interbank market any other condition
affecting this          Agreement or Eurodollar Loans or Fixed Rate Loans made by such
Lender or any Letter of Credit or participation          therein;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>and the result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or such Issuing Bank hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Issuing Bank, as the case may be, for such additional
costs incurred or reduction suffered.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      If any Lender or any Issuing Bank reasonably
determines that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender&#146;s or such Issuing Bank&#146;s capital or
on the capital of such Lender&#146;s or such Issuing Bank&#146;s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender or such Issuing Bank or such Lender&#146;s or such Issuing
Bank&#146;s holding company could have achieved but for such Change in Law (taking into
consideration such Lender&#146;s or such Issuing Bank&#146;s policies and the policies of such
Lender&#146;s or such Issuing Bank&#146;s holding company with respect to capital adequacy), then
from time to time the Borrower will pay to such Lender or such Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or such Issuing
Bank or such Lender&#146;s or such Issuing Bank&#146;s holding company for any such reduction
suffered.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      A certificate of a Lender or an Issuing Bank
setting forth the amount or amounts necessary to compensate such Lender or such Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Failure or delay on the part of any Lender or
any Issuing Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender&#146;s or such Issuing Bank&#146;s right to demand such compensation;
<U>provided</U> that the Borrower shall not be required to compensate a Lender or an Issuing
Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days
prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions and of
such Lender&#146;s or such Issuing Bank&#146;s intention to claim compensation therefor; <U>provided</U>
<U>further</U> that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.</P>


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<BR><BR><BR>


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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Notwithstanding the foregoing provisions of
this Section, a Lender shall not be entitled to compensation pursuant to this Section in
respect of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.16.  <U>Break Funding Payments</U>.  In the event of
(a) the payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan or Fixed Rate Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(b)
and is revoked in accordance therewith), (d) the failure to borrow any Competitive Loan
after accepting the Competitive Bid to make such Loan, or (e) the assignment of any
Eurodollar Loan or Fixed Rate Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.19,
then, in any such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such Lender to
be the excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest Period
for such Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it to bid,
at the commencement of such period, for dollar deposits of a comparable amount and period
from other banks in the eurodollar market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.17.  <U>Taxes</U>.  (a)  Any and all payments by or
on account of any obligation of the Borrower hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; <U>provided</U> that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with applicable
law.</P>


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<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      In addition, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Bank, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf
or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or
at a reduced rate.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.18.  <U>Payments Generally; Pro Rata Treatment;
Sharing of Set-offs</U>.  (a)   Except for payments required to be made hereunder in an
Alternative Currency as expressly provided in Section 2.04(g), the Borrower shall make
each payment required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or
2.17, or otherwise) in dollars prior to 12:00 noon, New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim.  All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York,
except payments to be made directly to an Issuing Bank or Swingline Lender as expressly
provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto.  All payments to be made by the
Borrower in an Alternative Currency pursuant to Section 2.04(g) shall be made in such
Alternative Currency in such funds as may then be customary for the settlement of
international transactions in such Alternative Currency for the account of the
Administrative Agent at such time and at such place as shall have been notified by the
Administrative Agent to the Borrower by not less than four Business Days&#146; notice.  Any</P>

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<BR><BR><BR>


<P>amounts received after the time required to be received hereunder on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon.  The Administrative
Agent shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.  Except for
payments required to be made hereunder in an Alternative Currency as expressly provided
in Section 2.04(g), all payments hereunder shall be made in dollars.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      If at any time insufficient funds are received
by and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees then due
to such parties, and (ii) second, towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then due to
such parties; <U>provided</U> that all funds received by the Administrative Agent in an
Alternative Currency pursuant to Section 2.04(g) shall be applied ratably to the payment
of amounts due with respect to Competitive Loans in such Alternative Currency in
accordance with the provisions of this paragraph to the parties entitled thereto in
accordance with the amounts then due to such parties.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans
and accrued interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans and participations in LC Disbursements and
Swingline Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; <U>provided</U> that (i) if any such
participations are purchased and all or any portion of the payment giving rise thereto is
recovered,  such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a participation</P>

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<P>pursuant to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or any Issuing Bank hereunder that
the Borrower will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or any Issuing Bank, as the case may be,
the amount due.  In such event, if the Borrower has not in fact made such payment, then
each of the Lenders or each Issuing Bank, as the case may be, severally agrees to repay
to the Administrative Agent forthwith on demand the amount so distributed to such Lender
or such Issuing Bank with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b) or
2.18(d), then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender&#146;s obligations under such
Sections until all such unsatisfied obligations are fully paid.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.19.  <U>Mitigation Obligations; Replacement of
Lenders</U>.  (a)  If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to file any certificate or document reasonably requested by the Borrower or
designate a different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if such filing, designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) in the judgment of such Lender, would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or
if any Lender defaults in its obligation to fund Loans hereunder, or if the Borrower is
entitled to replace a Lender pursuant to Section 9.02(c), then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and subject to
the restrictions</P>

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<BR><BR><BR>


<P> contained in Section 9.04), all its interests, rights and obligations
under this Agreement (other than in respect of any outstanding Competitive Loans held by
it) to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); <U>provided</U> that (i) the Borrower shall have
received the prior written consent of the Administrative Agent, which consent shall not
be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans (other than Competitive Loans) and
participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments.  A Lender
shall not be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower
to require such  assignment and delegation cease to apply.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.20.  <U>Increase in Commitments</U>.  (a)  The
Borrower may, by written notice to the Administrative Agent (which shall promptly deliver
a copy to each of the Lenders), request that the total Commitments be increased; <U>provided</U>
that the total Commitments shall not be increased by more than $250,000,000 during the
term of this Agreement pursuant to this Section.  Such notice shall set forth the amount
of the requested increase in the total Commitments and the date on which such increase is
requested to become effective (which shall be not less than 10 Business Days or more than
60 days after the date of such notice), and shall offer each Lender the opportunity to
increase its Commitment by its Applicable Percentage of the proposed increased amount.
 Each Lender shall, by notice to the Borrower and the Administrative Agent given not more
than 10 days after the date of the Borrower&#146;s notice, either agree to increase its
Commitment by all or a portion of the offered amount (each Lender so agreeing being an &#147;<U>Increasing
Lender</U>&#148;) or decline to increase its Commitment (and any Lender that does not deliver such
a notice within such period of 10 days shall be deemed to have declined to increase its
Commitment).  In the event that, on the 10th day after the Borrower shall have delivered
a notice pursuant to the first sentence of this paragraph, the Lenders shall have agreed
pursuant to the preceding sentence to increase their Commitments by an aggregate amount
less than the increase in the total Commitments requested by the Borrower, the Borrower
may arrange for one or more banks or other financial institutions (any such bank or other
financial institution being called an &#147;<U>Augmenting Lender</U>&#148;), which may include any Lender,
to extend Commitments or increase their existing Commitments in an aggregate amount equal
to the unsubscribed amount; provided that each Augmenting Lender, if not already a Lender
hereunder, shall be subject to the approval of the Administrative Agent, each Issuing
Bank and each Swingline Lender (such approvals not to be unreasonably withheld), and the
Borrower and each Augmenting Lender shall execute all such documentation as the
Administrative Agent shall reasonably specify to evidence its Commitment and/or its
status as a Lender hereunder.  Any increase in the total Commitments may be made in an
amount which is less than the increase requested by the Borrower if the Borrower is
unable to arrange for, or chooses not to arrange for, Augmenting Lenders.</P>


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<HR SIZE=1 NOSHADE>
<P ALIGN=right>51</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      On the effective date (the &#147;<U>Increase Effective
Date</U>&#148;) of any increase in the total Commitments pursuant to this Section 2.20 (the &#147;<U>Commitment
Increase</U>&#148;), if any Revolving Loans are outstanding, the Borrower (i) shall prepay all
Revolving Loans then outstanding (including all accrued but unpaid interest thereon) and
(ii) may, at its option, fund such prepayment by simultaneously borrowing Revolving Loans
of the Types and for the Interest Periods specified in a Borrowing Request delivered
pursuant to Section 2.03, which Revolving Loans shall be made by the Lenders (including
the Increasing Lenders and the Augmenting Lenders, if any) ratably in accordance with
their respective Commitments (calculated after giving effect to the Commitment Increase).
 The payments made pursuant to clause (i) above in respect of each Eurodollar Loan shall
be subject to Section 2.16.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Increases and new Commitments created pursuant
to this Section 2.20 shall become effective on the date specified in the notice delivered
by the Borrower pursuant to the first sentence of paragraph (a) above; <U>provided</U> that the
Borrower may, with the consent of the Administrative Agent (such consent not to be
unreasonably withheld), extend such date by up to 30 days by delivering written notice to
the Administrative Agent no less than three Business Days prior to the date specified in
the notice delivered by the Borrower pursuant to the first sentence of paragraph (a)
above.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Notwithstanding the foregoing, no increase in
the total Commitments (or in the Commitment of any Lender) or addition of an Augmenting
Lender shall become effective under this Section unless (i) on the date of such increase,
the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied and
the Administrative Agent shall have received a certificate to that effect dated such date
and executed by a Financial Officer of the Borrower, and (ii) the Administrative Agent
shall have received (with sufficient copies for each of the Lenders) documents consistent
with those delivered on the Effective Date under clauses (c) and (d) of Section 4.01.</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE III</P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Representations and Warranties</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Borrower represents and warrants to the Lenders
that:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.01.  <U>Organization; Powers</U>.  Each of the
Borrower and its Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and  is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is required, in
each case except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.02.  <U>Authorization; Enforceability</U>.  The
Transactions to be entered into by each Loan Party are within such Loan Party&#146;s corporate
powers and have been duly authorized by all necessary corporate and, if required,
stockholder action.  This</p>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>52</P><BR><BR><BR>

<p> Agreement and any promissory notes issued pursuant to Section 2.10(e)
have been duly executed and delivered by the Borrower and constitute, and the Guarantee
Agreement when executed and delivered by any Loan Party that becomes party thereto will
constitute, a legal, valid and binding obligation of the Borrower or such Loan Party, as
the case may be, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors&#146; rights
generally and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.03.  <U>Governmental Approvals; No Conflicts</U>.
 The Transactions (a) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, agreement or other instrument
binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment (other than pursuant to this Agreement or
repayment of amounts owing under the Existing Credit Agreement) to be made by the
Borrower or any of its Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except,
with respect to clauses (b) and (c), any such violations, defaults and payments which,
individually or in the aggregate, would not reasonably be expected to result in a
Material Adverse Effect and except, with respect to clause (d), any such Liens set forth
in Schedule 6.02.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.04.  <U>Financial Condition; No Material Adverse
Change</U>.  (a)  The Borrower has heretofore furnished to the Lenders (i) its consolidated
balance sheet and statements of income, stockholder&#146;s equity and cash flows as of and for
the fiscal year ended December 27, 2003, reported on by KPMG LLP, independent public
accountants, and (ii) its condensed consolidated balance sheet as of March 23, 2004, its
condensed consolidated statements of income for the 12 week periods ended March 23, 2004
and March 24, 2004, and its condensed consolidated statements of cash flows for the 12
week periods ended March 23, 2004 and March 24, 2004, certified by its Financial Officer.
 Such financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      As of the Effective Date, there has been no
material adverse change in the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole since December 27, 2003.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.05.  <U>Properties</U>.  (a)  Each of the Borrower
and its Subsidiaries has good title to, or valid leasehold interests in, all its real and
personal property material to the business of the Borrower and its Subsidiaries on a
consolidated basis, except for minor defects in title and other matters that do not
interfere with their</p>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>53</P>
<BR><BR><BR>

<p> ability to conduct their businesses on a consolidated basis as
currently conducted or to utilize such properties for their intended purposes on a
consolidated basis.</P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to the business of the Borrower and its Subsidiaries on a
consolidated basis, and the use thereof by the Borrower and its Subsidiaries does not
infringe upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, would not reasonably be expected to result in a
Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.06.  <U>Litigation and Environmental Matters</U>.
 (a)  There are no actions, suits or proceedings (and, to the knowledge of the Borrower,
there are no investigations) by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or any of its Subsidiaries (i) as to which there is a reasonable likelihood of
an adverse determination and that, if adversely determined, would reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that, other than actions, suits or proceedings commenced by
the Administrative Agent or any Lender, involve this Agreement or the Transactions.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor
any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)  has
received notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or would reasonably be expected to result in, a Material
Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.07.  <U>Compliance with Laws and Agreements</U>.
 Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property, except
where the failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.  No Default has occurred and is
continuing.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" --><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.08.  <U>Investment and Holding Company Status</U>.
 Neither the Borrower nor any of its Subsidiaries is (a) an &#147;investment company&#148; as
defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a &#147;holding
company&#148; as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>54</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.09.  <U>Taxes</U>.  Each of the Borrower and its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports required
to have been filed and has paid or caused to be paid all Taxes required to have been paid
by it, except (a) Taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so would not reasonably be
expected to result in a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.10.  <U>ERISA</U>.  No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, would reasonably be expected
to result in a Material Adverse Effect.  The present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market value of the
assets of all such underfunded Plans by an amount which, if it were required to be fully
paid, would reasonably be expected to result in a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.11.  <U>Disclosure</U>.  The Borrower has disclosed
to the Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a Material
Adverse Effect; <U>provided</U> that, for purposes of this sentence, any information disclosed
in any publicly available filing made by the Borrower with the Securities and Exchange
Commission pursuant to the rules and regulations of the Securities and Exchange
Commission shall be considered to have been disclosed to the Lenders.  Except as set
forth in Schedule 3.11, neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on behalf of the
Borrower by any of its authorized representatives to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished), when taken as a whole,
contained, at the time so furnished, any material misstatement of fact or omitted, at the
time so furnished, to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made and the nature and scope of
the report, financial statement, certificate or other information being furnished, not
materially misleading; <U>provided</U> that, with respect to projected financial information,
the Borrower represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.12.  <U>Initial Guarantors</U>.  As of the Effective
Date, there are no Principal Domestic Subsidiaries other than the Initial Guarantors.</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>55</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE IV </P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Conditions</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.01.  <U>Effective Date</U>.  The amendment and
restatement of the Existing Credit Agreement as provided herein and the obligations of
the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(a) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent (or its counsel) shall have received from each party hereto either
(i) a counterpart          of this Agreement signed on behalf of such party or (ii) written
evidence satisfactory to the Administrative          Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party          has
signed a counterpart of this Agreement.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(b) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent (or its counsel) shall have received from each of the Borrower and
the Initial          Guarantors either (i) a counterpart of the Guarantee Agreement
signed on behalf of such party or (ii) written          evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
         signature page of the Guarantee Agreement) that such party has signed a
counterpart of the Guarantee Agreement.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(c) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent shall have received a favorable written opinion (addressed to the
Administrative Agent          and the Lenders and dated the Effective Date) of each of
Mayer, Brown, Rowe &amp; Maw LLP and Matthew Preston,          Esq., counsel for the Loan
Parties, substantially in the form of Exhibits C-1 and C-2, respectively, and
         covering such other matters relating to the Loan Parties, the Loan Documents or
the Transactions as the          Required Lenders shall reasonably request.  The Borrower
hereby requests such counsel to deliver such opinion.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(d) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its          counsel may reasonably request relating to the
organization, existence and good standing of the Loan Parties,          the authorization
of the Transactions and any other legal matters relating to the Loan Parties, the Loan
         Documents or the Transactions, all in form and substance reasonably satisfactory
to the Administrative Agent          and its counsel.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(e) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent shall have received a certificate, dated the Effective Date and
signed by the          President, a Vice President or a Financial Officer of the
Borrower, solely in his capacity as such and not          individually, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(f) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
Administrative Agent shall have received all fees and other amounts due and payable on or
prior to the          Effective Date, including, to the extent</p>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>56</P>
<BR><BR><BR>


<p> invoiced, reimbursement or
payment of all out-of-pocket expenses          required to be reimbursed or paid by the
Borrower hereunder.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(g) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">All
outstanding loans, accrued and unpaid interest thereon and accrued an unpaid fees and
other amounts accrued          and owing under the Existing Credit Agreement shall be
paid in full (without prejudice to the Borrower&#146;s right          to borrow hereunder in
order to finance such payment) and all commitments under the Existing Credit Agreement
         (except those that are continuing as Commitments hereunder) shall have been
terminated.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>The Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing,
the amendment and restatement of the Existing Credit Agreement and the obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall
not become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on September 30,
2004 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.02.  <U>Each Credit Event</U>.  The obligation of
each Lender to make a Loan on the occasion of any Borrowing, and of any Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(a) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
representations and warranties of the Borrower set forth in this Agreement shall be true
and correct (or,          in the case of any representation or warranty not qualified as
to materiality, true and correct in all material          respects) on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension of
         such Letter of Credit, as applicable, except to the extent that any such
representations and warranties          expressly relate to an earlier date in which case
any such representations and warranties shall be true and          correct (or, in the
case of any such representation or warranty not qualified as to materiality, true and
         correct in all material respects) at and as of such earlier date.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(b) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">At
the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or          extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the Borrower on the
date thereof as to the matters specified in paragraphs (a) and (b) of this Section.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>57</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE V</P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Affirmative Covenants</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the Commitments have expired or been terminated
and the principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with the
Lenders that:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.01.  <U>Financial Statements and Other
Information</U>.  The Borrower will furnish to the Administrative Agent (with sufficient
copies for each Lender):</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      within 90 days after the end of each fiscal
year of the Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders&#146; equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous fiscal year,
all reported on by KPMG LLP or other independent public accountants of recognized
national standing (without a &#147;going concern&#148; or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP (identifying in an
explanatory paragraph any material accounting changes); <U>provided</U> that delivery of the
Borrower&#146;s form 10-K containing the information required to be contained therein pursuant
to the rules and regulations of the Securities and Exchange Commission, including the
financial statements described above reported on by KPMG LLP or other independent public
accountants of recognized national standing (without a &#147;going concern&#148; or like
qualification or exception and without any qualification or exception as to the scope of
such audit), shall be deemed to satisfy the requirements of this clause (a);</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, its condensed
consolidated balance sheet and related statements of operations, stockholders&#146; equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of the end
of) the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes; <U>provided</U> that delivery of the Borrower&#146;s Form 10-Q,
containing the information required to be contained therein pursuant to the rules and
regulations of the Securities and Exchange Commission, together with the certificate of a
Financial Officer as described above, shall be deemed to satisfy the requirements of this
clause (b);</P>


<BR><BR><BR>
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<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be taken
with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.01, 6.06, 6.09 and 6.10 (including any adjustments necessary
to reflect the existence of any Excluded Subsidiaries) and (iii) stating whether any
material change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements accompanying
such certificate;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      concurrently with any delivery of financial
statements under clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the course of
their examination of such financial statements of any Default (which certificate may be
limited to the extent required by accounting rules or guidelines);</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said Commission,
or with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      promptly following any request therefor, such
other information regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request; <U>provided</U> that any request by a
Lender for any information pursuant to this clause (f) shall be made through the
Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>Any financial statement, report, proxy statement or other material required to be
delivered pursuant to clause (a), (b) or (e) of this Section shall be deemed to have been
furnished to the Administrative Agent and each Lender on the date that the Borrower
notifies the Administrative Agent that such financial statement, report, proxy statement
or other material is posted on the Securities and Exchange Commission&#146;s website at
<U>www.sec.gov</U>; <U>provided</U> that the Administrative Agent will promptly inform the Lenders of
any such notification by the Borrower; <U>provided</U>, <U>further</U> that the Borrower will furnish
paper copies of such financial statement, report, proxy statement or material to the
Administrative Agent or any Lender that requests, by notice to the Borrower, that the
Borrower do so, until the Borrower receives notice from the Administrative Agent or such
Lender, as applicable, to cease delivering such paper copies.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.02.  <U>Notices of Material Events</U>.  The
Borrower will furnish to the Administrative Agent written notice of any of the following
promptly after a Financial Officer or other executive officer of the Borrower becomes
aware thereof:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      the occurrence of any Default;</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>59</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      the filing or commencement of any action, suit
or proceeding by or before any arbitrator or Governmental Authority against or affecting
the Borrower or any Affiliate thereof that, if adversely determined, would reasonably be
expected to result in a Material Adverse Effect;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      the occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have occurred, could reasonably be expected
to result in liability of the Borrower and its Subsidiaries in an aggregate amount
exceeding $75,000,000; and</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      any other development (except any change in
general economic conditions) that results in, or would reasonably be expected to result
in, a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of the
Borrower setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.03.  Existence; Conduct of Business.  The
Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal existence
and the rights, licenses, permits, privileges and franchises material to the conduct of
the business of the Borrower and its Subsidiaries on a consolidated basis; <U>provided</U> that
the foregoing shall not prohibit any merger, consolidation, liquidation, dissolution or
sale of assets permitted under Section 6.03.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.04.  <U>Payment of Obligations</U>.  The Borrower
will, and will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, would reasonably be expected to result in a Material
Adverse Effect before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate proceedings,
(b) the Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment pending such
contest would not reasonably be expected to result in a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.05.  <U>Maintenance of Properties; Insurance</U>.
 The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of their business on a consolidated basis in good
working order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies (or pursuant to self-insurance
arrangements that are consistent with those used by other companies that are similarly
situated), insurance in such amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or similar
locations.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.06.  <U>Books and Records; Inspection Rights</U>.
 The Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all dealings and
transactions in relation</p>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>60</P>
<BR><BR><BR>

<p> to its business and activities.  The Borrower will, and will
cause each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect
its properties, to examine and make extracts from its books and records, and to discuss
its affairs, finances and condition with its officers and independent accountants, all
during normal business hours; <U>provided</U> that, in the case of any Lender, unless an Event
of Default has occurred and is continuing, the Borrower shall not be required to permit
any such visits by such Lender or its representatives pursuant to this Section more than
once during any calendar year (and the Lenders will exercise reasonable efforts to
coordinate such visits through the Administrative Agent).</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.07.  <U>Compliance with Laws</U>.  The Borrower
will, and will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, would not reasonably
be expected to result in a Material Adverse Effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.08.  <U>Use of Proceeds and Letters of Credit</U>.
 The proceeds of all Loans will be used only for general corporate purposes, including
acquisitions.  No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations of the
Board, including Regulations U and X.  Letters of Credit will be issued only for general
corporate purposes.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.09.  <U>Principal Domestic Subsidiaries</U>.
 Promptly after any Subsidiary (including any Subsidiary formed or acquired after the
date of execution and delivery of this Agreement) that is not a Guarantor becomes a
Principal Domestic Subsidiary, the Borrower will cause such Subsidiary to enter into the
Guarantee Agreement and become a Guarantor as provided in the Guarantee Agreement;
provided that (a) the foregoing shall not apply to any Securitization Subsidiary and (b)
this Section shall not apply after all the Guarantees under the Guarantee Agreement have
been released and terminated pursuant to Section 11 thereof.</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE VI </P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Negative Covenants</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the Commitments have expired or terminated and
the principal of and interest on each Loan and all fees  payable hereunder have been paid
in full and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.01.  <U>Subsidiary Indebtedness</U>.  The Borrower
will not permit the aggregate principal amount of Indebtedness of its Domestic
Subsidiaries (excluding (a) any Indebtedness of a Domestic Subsidiary owed to the
Borrower or another Domestic Subsidiary, (b) any Indebtedness of a Guarantor, so long as
its Guarantee under</p>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>61</P>
<BR><BR><BR>

<p> the Guarantee Agreement remains in effect, (c) any Indebtedness of a
Securitization Subsidiary that is included in calculating the Securitization Amount, (d) any
Guarantee by a Domestic Subsidiary of Indebtedness of a Foreign Subsidiary, if the assets
of such Domestic Subsidiary consist solely of investments in Foreign Subsidiaries and a
de minimis amount of other assets, and (e) Indebtedness existing as of the Effective Date
and set forth on Schedule 6.01, but including (except as provided in clause (d) above)
any Guarantee by a Domestic Subsidiary (other than a Guarantor) of Indebtedness of any
other Person, including the Borrower, a Guarantor or a Foreign Subsidiary) at any time to
exceed $200,000,000.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.02.  <U>Liens</U>.  The Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof, except:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      Permitted Encumbrances;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      any Lien on any property or asset of the
Borrower or any Domestic Subsidiary existing on the date hereof; <U>provided</U> that (i) such
Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and
(ii) such Lien shall secure only those obligations which it secures on the date hereof
and refinancings, extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; p<U>rovided further</U> that any such Lien securing
obligations in excess of $2,000,000 shall not be permitted under this clause (b) unless
such Lien is set forth in Schedule 6.02;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof prior to
the time such Person becomes a Subsidiary; <U>provided</U> that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or
assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Liens on fixed or capital assets (including
equipment) hereafter acquired, constructed or improved by the Borrower or any Subsidiary;
<U>provided</U> that (i) such security interests secure Indebtedness incurred to finance the
acquisition, construction or improvement of such fixed or capital assets, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to or within 90 days
after such acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 90% of the cost of acquiring, constructing
or improving such fixed or capital assets  and (iv) such security interests shall not
apply to any other property or assets of the Borrower or any Subsidiary;</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>62</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      Liens securing Capital Lease Obligations
arising out of Sale and Lease-Back Transactions; <U>provided</U> that (i) such Sale and
Lease-Back Transaction is consummated within 90 days after the purchase by the Borrower
or a Subsidiary of the property or assets which are the subject of such Sale and
Lease-Back Transaction and (ii) such Liens do not at any time encumber any property or
assets other than the property or assets that are the subject of such Sale and Lease-Back
Transaction;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      any Lien on any property or asset of any
Subsidiary securing obligations in favor of the Borrower or any other Subsidiary;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      any Lien on any property or asset of any
Foreign Subsidiary securing obligations of any Foreign Subsidiary; and</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)      Permitted Securitization Transactions, Liens
arising in connection with any Permitted Securitization Transaction and other Liens not
otherwise permitted by the foregoing clauses of this Section; <U>provided</U> that the Lien
Basket Amount shall not at any time exceed 15% of the Consolidated Net Tangible Assets of
the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.03.  <U>Fundamental Changes</U>.  (a)  The Borrower
will not, and will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of the assets of the Borrower and the
Subsidiaries (taken as a whole), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall have
occurred and be continuing and no Default shall result therefrom (i) any Person may merge
into the Borrower in a transaction in which the Borrower is the surviving corporation,
(ii) any Person may merge with any Subsidiary in a transaction in which the surviving
entity is a Subsidiary, (iii) the Borrower may sell, transfer, lease or otherwise dispose
of assets to a Subsidiary or a Subsidiary may sell, transfer, lease or otherwise dispose
of assets to the Borrower or another Subsidiary, (iv) any Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or dissolution is
in the best interests of the Borrower and is not materially disadvantageous to the
Lenders, (v) the Borrower and its Subsidiaries may sell, transfer, lease or otherwise
dispose of any Foreign Subsidiary or any assets of any Foreign Subsidiary, (vi) this
Section shall not be construed to restrict investments permitted by Section 6.04, (vii) this
Section shall not be construed to restrict Permitted Securitization Transactions, (viii) the
Borrower and its Subsidiaries may sell, transfer, lease or otherwise dispose of assets
used or formerly used in its Long John Silver&#146;s business and (ix) the Borrower and its
Subsidiaries may sell, transfer, lease or otherwise dispose of assets with an aggregate
fair market value not exceeding $300,000,000 during the term of this Agreement (in
addition to sales, transfers, leases and other dispositions of assets that would not be
prohibited by this Section without giving effect to this clause (ix)); <U>provided</U> that any
merger permitted by clause (i) or (ii) of this Section involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>63</P>
<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      A substantial majority of the business engaged
in by the Borrower and its Subsidiaries will continue to be businesses of the type
conducted by the Borrower and its Subsidiaries on the Effective Date and businesses
reasonably related thereto; <U>provided</U> that the foregoing shall not be construed to
restrict the conduct of businesses that are limited to serving the Borrower and its
Subsidiaries and their respective franchisees and licensees, such as the creation of
Subsidiaries to conduct insurance or inventory purchasing activities for the Borrower and
its Subsidiaries and their respective franchisees and licensees.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.04.  <U>Investments, Loans, Advances, Guarantees
and Acquisitions</U>.  The Borrower will not, and will not permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that was not
a wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right to acquire
any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit, except:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      Permitted Investments;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      investments by the Borrower or any of its
Subsidiaries in the capital stock of their respective Subsidiaries;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary and
promissory notes or bonds issued by any Subsidiary to the Borrower or any other
Subsidiary;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      subject to Section 6.01, Guarantees by the
Borrower of Indebtedness of any Subsidiary or by any Subsidiary of Indebtedness of the
Borrower or any other Subsidiary;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      debt securities, promissory notes and similar
instruments received as non-cash consideration in connection with sales or dispositions
of assets;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      investments received as a result of the
compromise of claims against delinquent franchisees or account debtors in the ordinary
course of business or the bankruptcy or reorganization of such franchisee or account
debtors;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      Guarantees made by the Borrower and the
Subsidiaries of obligations of franchisees and other third parties (other than the
Borrower, the Subsidiaries and any joint ventures of the Borrower and the Subsidiaries)
incurred in the ordinary course of business;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)      investments by the Borrower or any of its
Subsidiaries to the extent the consideration for such investments consists solely of
capital stock of the Borrower;</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>64</P>
<BR><BR><BR>





<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)      purchases by the Borrower or any of its
Subsidiaries of any restaurant from a franchisee or licensee operating under any license
granted by the Borrower or any of its Subsidiaries or any interest in a joint venture of
the Borrower or any of its Subsidiaries that engages in businesses that the Borrower and
its Subsidiaries would be permitted to engage in, in each case for consideration
consisting of cash or common stock of the Borrower; <U>provided</U> that after giving effect to
such purchase, percentage ownership of System Units by the Borrower and its Subsidiaries
does not exceed 37.5% of the total System Units;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)      Permitted Acquisitions;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)      Guarantees made by the Borrower or any
Guarantor of Hedging Agreements entered into by any Subsidiary with any Lender or any
Affiliate of a Lender;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)      Guarantees made by the Borrower and the
Subsidiaries of lease payments related to sales of restaurants by the Borrower and the
Subsidiaries;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)      investments by Subsidiaries in, and Guarantees
by Subsidiaries of Indebtedness of, joint ventures that are formed to engage in
businesses that the Borrower and its Subsidiaries would be permitted to engage in;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)      investments which are made for the purpose of
hedging investment risks associated with investment decisions made by executives under
the Borrower&#146;s deferred compensation plan for executives; and</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)      other investments and Guarantees not otherwise
permitted by the foregoing clauses of this Section in an aggregate amount at any time
outstanding not to exceed $300,000,000.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.05.  <U>Hedging Agreements</U>.  The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any Hedging
Agreement or commodity price protection agreement or other commodity price hedging
arrangement, other than Hedging Agreements, commodity price protection agreements and
other commodity price hedging arrangements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.06.  <U>Restricted Payments</U>.  The Borrower
will not, and will not permit any of its Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, except (a) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in additional
shares of its capital stock, (b) Subsidiaries may make Restricted Payments to the
Borrower or a wholly owned Subsidiary and may make other Restricted Payments that are
made ratably to the holders of their capital stock, (c) the Borrower may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit plans for
management or employees of the Borrower and its Subsidiaries and (d) the Borrower and its
Subsidiaries may declare and make Restricted Payments not otherwise permitted by the
foregoing clauses of this section in an aggregate amount during the term of this
Agreement not</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>65</P>
<BR><BR><BR>

<P> exceeding the sum of (i)  $750,000,000 plus (ii) 50% of cumulative
Consolidated Net Income since the end of the fiscal year ended December 27, 2003, plus
(iii) 100% of the net cash proceeds received by the Borrower from issuances of its Equity
Interests other than Excluded Equity Interests (including net cash proceeds received by
the Borrower from the exercise of options for its Equity Interests other than Excluded
Equity Interests) after the Effective Date; <U>provided</U>, that this Section 6.06 shall not
apply after the date that (A) the Borrower&#146;s senior unsecured, long term indebtedness for
borrowed money (that is not guaranteed or subject to any other credit enhancement) is
rated at least Baa2 by Moody&#146;s and BBB by S&amp;P, (B) no Default exists and (C) the
Administrative Agent shall have received a certificate of a Financial Officer to such
effect.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.07.  <U>Transactions with Affiliates</U>.  The
Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any of its
then Affiliates, except (a) in the ordinary course of business for consideration and on
terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm&#146;s-length basis from unrelated third parties (including pursuant to
joint venture agreements entered into after the Effective Date with third parties that
are not Affiliates), (b) transactions between or among the Borrower and its wholly owned
Subsidiaries or between or among wholly owned Subsidiaries, in each case not involving
any other Affiliate, (c) any Restricted Payment permitted by Section 6.06 and (d) the
foregoing shall not prevent the Borrower or any Subsidiary from performing its
obligations under agreements existing on the date hereof between the Borrower or any of
its Subsidiaries and any joint venture of the Borrower or any of its Subsidiaries in
accordance with the terms of such agreements as in effect on the date hereof or pursuant
to amendments or modifications to any such agreements that are not adverse to the
interests of the Lenders.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.08.  <U>Issuances of Equity Interests by
Principal Domestic Subsidiaries</U>.  The Borrower will not permit any Principal Domestic
Subsidiary to issue any additional Equity Interest in such Principal Domestic Subsidiary
other than (a) to the Borrower, (b) to another Subsidiary in which the Borrower owns,
directly or indirectly, a percentage interest not less than the percentage interest owned
in the Principal Domestic Subsidiary issuing such Equity Interest, (c) any such issuance
that does not reduce the Borrower&#146;s direct or indirect percentage ownership interest in
such Principal Domestic Subsidiary and (d) issuances of Equity Interests after the date
hereof which are not otherwise permitted by the foregoing clauses of this Section,
<U>provided</U> that the aggregate consideration received therefor (net of all consideration
paid in connection with all repurchases or redemptions thereof) does not exceed
$100,000,000 during the term of this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.09.  <U>Leverage Ratio</U>.  The Borrower will not
permit the Leverage Ratio as of any date to exceed 2.75 to 1.0.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.10.  <U>Fixed Charge Coverage Ratio</U>.  The
Borrower will not permit the Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters ending after the Effective Date to be less than 1.40 to 1.00.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>66</P>
<BR><BR><BR>





<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.11.  <U>Sale and Lease-Back Transactions</U>.  The
Borrower will not, and will not permit any of its Domestic Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it intends to
use for substantially the same purpose or purposes as the property sold or transferred (a
&#147;<U>Sale and Lease-Back Transaction</U>&#148;), except (a) any Sale and Lease-Back Transaction
consummated within 90 days after the purchase by the Borrower or a Domestic Subsidiary of
the property or assets (other than assets acquired pursuant to any Permitted Acquisition)
which are the subject of such Sale and Lease-Back Transaction and (b) other Sale and
Lease-Back Transactions; <U>provided</U> that any Sale and Lease-Back Transaction permitted by
clause (b) above shall be subject to compliance with the limitation set forth in the
proviso to clause (h) of Section 6.02.</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE VII </P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Events of Default</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.01.  <U>Events of Default</U>.  If any of the
following events (&#147;<U>Events of Default</U>&#148;) shall occur:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      the Borrower shall fail to pay any principal
of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      the Borrower shall fail to pay any interest on
any Loan or any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five days;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      any representation or warranty made or deemed
made by or on behalf of the Borrower or any Subsidiary in or in connection with this
Agreement or any amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in connection
with this Agreement or any amendment or modification hereof or waiver hereunder, shall
prove to have been incorrect in any material respect when made or deemed made;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the
Borrower&#146;s existence) or 5.08 or in Article VI;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative Agent to
the Borrower (which notice will be given at the request of any Lender);</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>67</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)      the Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)      any event or condition occurs that results in
any Material Indebtedness becoming due prior to its scheduled maturity; <U>provided</U> that
this clause (g) shall not apply to (i) Indebtedness that becomes due as a result of the
voluntary sale or transfer of property or assets by the Borrower or a Subsidiary or (ii) any
amount that becomes due under a Hedging Agreement as a result of the termination thereof,
other than a termination by the applicable counterparty attributable to an event or
condition that constitutes or is in the nature of an event of default in respect of the
Borrower or a Subsidiary;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)      any event or condition occurs that enables or
permits the holder or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; <U>provided</U> that this clause (h) shall not apply (i) at any time when the Index
Debt is rated at least BBB by S&amp;P and Baa2 by Moody&#146;s, (ii) to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness or (iii) to any event or condition that enables a counterparty
to terminate a Hedging Agreement, other than an event or condition that constitutes or is
in the nature of an event of default in respect of the Borrower or a Subsidiary;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)      subject to Section 7.02, an involuntary
proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any Subsidiary or its debts,
or of a substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be entered;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)      subject to Section 7.02, the Borrower or any
Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the foregoing;</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>68</P>
<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)      subject to Section 7.02, the Borrower or any
Subsidiary shall become unable, admit in writing its inability or fail generally to pay
its debts as they become due;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)      subject to Section 7.02, one or more judgments
for the payment of money in an aggregate amount in excess of $75,000,000 (excluding
amounts believed in good faith by the Borrower to be covered by insurance from
financially sound insurance companies) shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any assets of
the Borrower or any Subsidiary to enforce any such judgment;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)      an ERISA Event shall have occurred that, when
taken together with all other ERISA Events that have occurred, would reasonably be
expected to result in a Material Adverse Effect;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)      a Change in Control shall occur; or</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)      any Guarantee by any Guarantor under the
Guarantee Agreement shall be determined by a court of competent jurisdiction, or shall be
asserted by the Borrower or a Guarantor, to be unenforceable, or any Guarantor shall fail
to observe or perform any material covenant, condition or agreement contained in the
Guarantee Agreement; <U>provided</U> that the foregoing shall not apply with respect to the
termination of any or all the Guarantees under the Guarantee Agreement pursuant to
Section 11 thereof or Section 9.02(b) hereof;</P>

<!-- MARKER FORMAT-SHEET="Paragraph" FSL="Workstation" -->
<P>then, and in every such event (other than an event with respect to the Borrower
described in clause (i) or (j) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of the
Required Lenders shall, by notice to the Borrower, take any or all of the following
actions, at the same or different times:  (i) terminate the Commitments, and thereupon
the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to
be due and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower, and (iii) enforce its rights
under the Guarantee Agreement on behalf of the Lenders and the Issuing Banks; and in case
of any event with respect to the Borrower described in clause (i) or (j) of this Article,
the Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other obligations of
the Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.02.  <U>Exclusion of Immaterial Subsidiaries</U>.
 Solely for purposes of determining whether a Default has occurred under clause (i), (j),
(k) or (l) of</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>69</P>
<BR><BR><BR>


<P> Section 7.01, any reference in any such clause to any &#147;Subsidiary&#148; shall be
deemed not to include any Subsidiary affected by any event or circumstance referred to in
any such clause that (a) is not a Principal Domestic Subsidiary, (b) does not have
consolidated assets accounting for more than 3% of the consolidated assets of the
Borrower and its Subsidiaries, (c) did not, for the most recent period of four
consecutive fiscal quarters, have consolidated revenues accounting for more than 3% of
the consolidated revenues of the Borrower and its Subsidiaries and (d) did not, for the
most recent period of four consecutive fiscal quarters, have Consolidated EBITDAR in an
amount exceeding 3% of the Borrower&#146;s Consolidated EBITDAR for such period; <U>provided</U> that
if it is necessary to exclude more than one Subsidiary from clause (i), (j), (k) and (l)
of Section 7.01 pursuant to this Section in order to avoid a Default thereunder, all
excluded Subsidiaries shall be considered to be a single consolidated Subsidiary for
purposes of determining whether the conditions specified in clauses (b), (c) and (d)
above are satisfied.</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE VIII</P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>The Administrative Agent</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the Lenders and the Issuing Banks hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such powers as
are delegated to the Administrative Agent by the terms of the Loan Documents, together
with such actions and powers as are reasonably incidental thereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The bank serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such bank and
its Affiliates may accept deposits from, lend money to and generally engage in any kind
of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were
not the Administrative Agent hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents.  Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights
and powers expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>70</P>
<BR><BR><BR>


<P> the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of
its Affiliates in any capacity.  The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or wilful misconduct.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not
be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed by it to
be genuine and to have been signed or sent by the proper Person.  The Administrative
Agent also may rely upon any statement made to it orally or by telephone and believed by
it to be made by the proper Person, and shall not incur any liability for relying
thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through their
respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities as
Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Banks and the Borrower.
 Upon any such resignation, the Required Lenders shall have the right, with the consent
of the Borrower (which consent shall not be unreasonably withheld, and shall not be
required so long as any Event of Default set forth in clause (i) or (j) of Section 7.01
has occurred and is continuing), to appoint a successor.  If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks,
appoint a successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>71</P>
<BR><BR><BR>

<P> Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder.  The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor.  After the Administrative Agent&#146;s resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon
this Agreement, any other Loan Document or related agreement or any document furnished
hereunder or thereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party hereto agrees and acknowledges that the
Syndication Agent and the Arrangers do not have any duties or responsibilities in their
capacities as Syndication Agents and Arrangers, respectively, hereunder and shall not
have, or become subject to, any liability hereunder in such capacities.</P>

<!-- MARKER FORMAT-SHEET="Center" FSL="Workstation" -->
<P ALIGN=CENTER>ARTICLE IX</P>

<!-- MARKER FORMAT-SHEET="Center w/Underline" FSL="Workstation" -->
<P ALIGN=center><U>Miscellaneous</U></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.01.  <U>Notices</U>.  (a)  Except in the case of
notices and other communications expressly permitted to be given by telephone (and
subject to paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(i) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to the Borrower, to it at Yum! Brands, Inc., P.O. Box 32070, Louisville, KY 40232, (or,
in the case of          overnight packages, 1900 Colonel Sanders Lane, Louisville, KY
40213-1963), Attention of Robert C. Kreidler,          Senior Vice President and
Treasurer (Telecopy No. (502) 874-2410);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency Services Group, 270
Park Avenue, 15th          Floor, New York, NY 10017, Attention of Ruby Tulloch (Telecopy
No. (212) 270-6937), with a copy to JPMorgan          Chase Bank,  270 Park Avenue, 47th
Floor, New York, NY 10017, Attention of Barry K. Bergman  (Telecopy No.          (212)
270-1467);</P></TD>
</TR>
</TABLE>
<BR>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>72</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to JPMorgan Chase Bank as Issuing Bank, to it at Loan and Agency Services Group, 10420
Highland Manor Drive,          4th Floor, Tampa, FL 33647, Attention of Vera Kostic
(Telecopy No. (813) 432-6350);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(iv) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to Citibank, N.A. as Issuing Bank, to it at Citibank, NA, 2 Penns Way, Suite 110, New
Castle, DE 19720,          Attention of Alex Iannelli (Telecopy No. (212) 994-0847);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(v) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to JPMorgan Chase Bank as a Swingline Lender, to it at Loan and Agency Services, 1111
Fannin, 10th Floor,          Houston, TX 77002, Attention of Angelica M. Garza (Telecopy
No. (713) 750-2782);</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(vi) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to Citibank, N.A. as a Swingline Lender, to it at Citibank, NA, 2 Penns Way, Suite 110,
New Castle, DE          19720, Attention of Alex Iannelli (Telecopy No. (212) 994-0847));
and</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(vii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">if
to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent and the Borrower; <U>provided</U> that the
foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by
the Administrative Agent, the Borrower and the applicable Lenders.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures
approved by it; <U>provided</U> that approval of such procedures may be limited to particular
notices or communications.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      Any party hereto may change its address or
telecopy number for notices and other communications hereunder by notice to the other
parties hereto.  All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been given on
the date of receipt.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.02.  <U>Waivers; Amendments</U>.  (a)  No failure or
delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The rights and
remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Default,
regardless of</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>73</P>
<BR><BR><BR>

<P> whether the Administrative Agent, any Lender or any Issuing Bank may have
had notice or knowledge of such Default at the time.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      Neither this Agreement nor any other Loan
Document nor any provision thereof may be waived, amended or modified except, in the case
of this Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties that are parties thereto, in each case with the consent of the
Required Lenders; <U>provided</U> that no such agreement shall (i) increase  the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal amount
of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone
the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or
any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section 2.18(b)
or (c) in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, or (v) change any of the provisions of this
Section or the definition of &#147;Required Lenders&#148; or any other provision of any Loan
Document specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender; <U>provided further</U> that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative Agent, an
Issuing Bank or a Swingline Lender hereunder without the prior written consent of the
Administrative Agent, such Issuing Bank or such Swingline Lender, as the case may be.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      If, in connection with any proposed waiver,
amendment or modification of this Agreement or any other Loan Document or any provision
hereof or thereof, the consent of one or more of the Lenders whose consent is required is
not obtained, then the Borrower shall have the right to replace each such non-consenting
Lender with one or more assignees pursuant to Section 2.19(b); <U>provided</U> that at the time
of such replacement, each such assignee consents to the proposed waiver, amendment or
modification.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.03.  <U>Expenses; Indemnity; Damage Waiver</U>.  (a)
 The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Arrangers and their respective Affiliates, including the
reasonable fees, charges and disbursements of Cravath, Swaine &amp; Moore LLP, counsel for
the Administrative Agent and the Arrangers , in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof (whether
or not the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>74</P>
<BR><BR><BR>

<P> Administrative
Agent, any Issuing Bank or any Lender, including the fees, charges and disbursements of
any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection
with the enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred during
 any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Borrower shall indemnify the
Administrative Agent, the Syndication Agent, each Arranger, any Issuing Bank and each
Lender, and each Related Party of any of the foregoing Persons (each such Person being
called an &#147;<U>Indemnitee</U>&#148;) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated hereby,
the performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including
any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or Release of
Hazardous Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the Borrower or
any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory and regardless of whether any Indemnitee is a party thereto;
<U>provided</U> that such indemnity shall not, as to any Indemnitee, be available (i) to the
extent that such losses, claims, damages, liabilities or related expenses are determined
by a court of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee (it being understood
that, for purposes of this clause, each of an Arranger, the Administrative Agent or a
Lender, on the one hand, and their respective officers, directors, employees, agents and
controlling persons, on the other hand, shall be considered to be a single party seeking
indemnification) or (ii) with respect to any amounts paid pursuant to any settlement made
by such Indemnitee without the consent of the Borrower, which consent shall not be
unreasonably withheld.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative Agent, an Issuing Bank or a
Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, such Issuing Bank or such Swingline Lender, as the
case may be, such Lender&#146;s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;
<U>provided</U> that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be (i) was incurred by or asserted against the
Administrative Agent, such Issuing Bank or such Swingline Lender in its capacity as such
and (ii) in</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>75</P>
<BR><BR><BR>

<P> respect of Extended Letters of Credit issued under Section 2.06(l), was
incurred at or prior to the close of business on the date that is five Business Days
prior to the Maturity Date.  Any payment by a Lender hereunder shall not relieve the
Borrower of its liability in respect thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)      All amounts due under this Section shall be
payable promptly after written demand therefor.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.04.  <U>Successors and Assigns</U>.  (a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including
any Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section.  Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section)
and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      (i)  Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:</P>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(A) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Borrower, <U>provided</U> that no consent of the Borrower shall be required for an assignment to
a Lender, an          Affiliate of a Lender, an Approved Fund (as defined below) with
respect to a Lender or, if an Event of Default          under clause (a), (b), (i) or (j)
of Section 7.01 has occurred and is continuing, any other assignee;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(B) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
Administrative Agent; <U>provided</U> that no consent of the Administrative Agent shall be
required for an          assignment to an assignee that is (i) a Lender immediately prior
to giving effect to such assignment, (ii) an          Affiliate of any such Lender or
(iii) an Approved Fund with respect to such Lender; and</P></TD>
</TR>
</TABLE>
<BR>
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>76</P>
<BR><BR><BR>





<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(C) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">each
Issuing Bank.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(ii) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">Assignments
shall be subject to the following additional conditions:</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(A) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">except
in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of
the entire          remaining amount of the assigning Lender&#146;s Commitment, the amount of
the Commitment of the assigning Lender          subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
         assignment is delivered to the Administrative Agent) shall not be less than
$10,000,000 unless each of the          Borrower and the Administrative Agent otherwise
consent; <U>provided</U> that no such consent of the Borrower shall be          required if an
Event of Default under clause (a), (b), (i) or (j) of Section 7.01 has occurred and is
         continuing;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(B) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">each
partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender&#146;s          rights and obligations under this Agreement; provided that
this clause shall not apply to rights in respect of          outstanding Competitive
Loans;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(C) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
parties to each assignment shall execute and deliver to the Administrative Agent an
Assignment and          Assumption, together with a processing and recordation fee of
$3,500;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(D) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative          Questionnaire; and</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">(E) </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">in
the case of an assignment by a Lender to a CLO (as defined below) administered or managed
by such Lender or          by an Affiliate of such Lender, the assigning Lender may
retain the sole right to approve any amendment,          modification or waiver of any
provision of this Agreement, <U>provided</U> that the Assignment and Assumption between
         such Lender and such CLO may provide that such Lender will not, without the
consent of such CLO, agree to any          amendment, modification or waiver described in
the first proviso to Section 9.02(b) that affects such CLO.</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Section 9.04(b), the terms &#147;Approved
Fund&#148; and &#147;CLO&#148; have the following meanings:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Approved Fund</U>&#148; means, with respect to any Lender, (a) a
CLO administered or managed by such Lender or an Affiliate of such Lender and (b) with
respect to any Lender that is a fund which invests in bank loans and similar extensions
of credit, any other fund that invests in bank loans and similar extensions of credit and
is managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>CLO</U>&#148; means any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding or
otherwise investing in bank</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>77</P>
<BR><BR><BR>


<P> loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of such Lender.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)    Subject to acceptance and recording thereof
pursuant to paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender&#146;s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or
transfer by a Lender of rights or obligations under this</P>


<P> Agreement that does not comply
with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with paragraph (c)
of this Section.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)     The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the Loans
and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time
(the &#147;<U>Register</U>&#148;), and shall give prompt written notice to the Borrower of each Assignment
and Assumption so accepted and recorded.  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower, any Issuing
Bank and any Lender, at any reasonable time and from time to time upon reasonable prior
notice.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)      Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the assignee&#146;s
completed Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of this
Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as provided in
this paragraph.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      (i)  Any Lender may, without the consent of
the Borrower, the Administrative Agent, any Issuing Bank or any Swingline Lender, sell
participations to one or more banks or other entities (a &#147;<U>Participant</U>&#148;) in all or a
portion of such Lender&#146;s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); <U>provided</U> that (A) such Lender&#146;s
obligations under this</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>78</P>
<BR><BR><BR>




<P>Agreement shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders
shall continue to deal solely and directly with such Lender in connection with such Lender&#146;s
rights and obligations under this Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the
sole right to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; <U>provided</U> that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant, agree to
any amendment, modification or waiver described in the first proviso to Section 9.02(b)
that affects such Participant.  Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.08 as though it were
a Lender, provided that such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)     A Participant shall not be entitled to receive
any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the prior written consent
of the Borrower.  A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit of
the Borrower, to comply with Section 2.17(e) as though it were a Lender.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; <U>provided</U> that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.05.  <U>Survival</U>.  All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan Documents
and the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this Agreement
is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>79</P>
<BR><BR><BR>

<P> not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17
and 9.03 and Article VIII shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.06.  <U>Counterparts; Integration;
Effectiveness</U>.  This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement, the
Guarantee Agreement and any separate letter agreements with respect to fees payable to
the Administrative Agent and the Issuing Banks constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter hereof.
 Except as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the signatures of each
of the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.07.  <U>Severability</U>.  Any provision of this
Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.08.  <U>Right of Setoff</U>.  If an Event of Default
shall have occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand under this
Agreement, but only to the extent such obligations are then due and payable.  The rights
of each Lender under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.09.  <U>Governing Law; Jurisdiction; Consent to
Service of Process</U>.  (a)  This Agreement shall be construed in accordance with and
governed by the law of the State of New York.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of
the Supreme Court of the State</P>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>80</P>
<BR><BR><BR>

<P> of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to any Loan Document,
or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted
by law, in such Federal court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in
this Agreement or any other Loan Document shall affect any right that the Administrative
Agent, any Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the Borrower or
its properties in the courts of any jurisdiction.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)      The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or any other Loan Document in
any court referred to in paragraph (b) of this Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)      Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 9.01.
 Nothing in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.10.  <U>WAIVER OF JURY TRIAL</U>.  EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN  ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.11.  <U>Headings</U>.  Article and Section headings
and the Table of Contents used herein are for convenience of reference only, are not part
of this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>81</P>
<BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.12.  <U>Confidentiality</U>.  Each of the
Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its and its Affiliates&#146; directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority, (c) to the extent  required by applicable laws or
regulations or by any subpoena or similar legal process (subject to the last sentence of
this paragraph), (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the Administrative
Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower.  For the purposes of this Section, &#147;<U>Information</U>&#148; means all information
received from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, any Issuing Bank or any Lender
on a nonconfidential basis prior to disclosure by the Borrower.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person
would accord to its own confidential information.  If any Lender receives any subpoena or
similar legal process referred to in clause (c) above, such Lender will endeavor, to the
extent practicable, to notify the Borrower and afford the Borrower an opportunity to
challenge the same before disclosing any confidential Information pursuant thereto.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.13.  <U>Interest Rate Limitation</U>.
 Notwithstanding anything herein to the contrary, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which are
treated as interest on such Loan under applicable law (collectively the &#147;<U>Charges</U>&#148;), shall
exceed the maximum lawful rate (the &#147;<U>Maximum Rate</U>&#148;) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect of such
Loan but were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>82</P>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.14.  <U>Judgment Currency</U>.  If for the purposes
of obtaining judgment in any court it is necessary to convert a sum due from the Borrower
hereunder in the currency expressed to be payable herein (the &#147;<U>Specified Currency</U>&#148;) into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in accordance
with normal banking procedures the Administrative Agent could purchase the Specified
Currency with such other currency at the Administrative Agent&#146;s New York office on the
Business Day preceding that on which final judgment is given.  The obligations of the
Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than the Specified Currency, be
discharged only to the extent that on the Business Day following receipt by such Lender
or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such
other currency such Lender or the Administrative Agent (as the case may be) may in
accordance with normal banking procedures purchase the Specified Currency with such other
currency; if the amount of the Specified Currency so purchased is less than the sum
originally due to such Lender or the Administrative Agent, as the case may be, in the
Specified Currency, the Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Administrative Agent, as the case may be, against such loss.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.15.  <U>Existing Credit Agreement; Effectiveness
of Amendment and Restatement</U>.  Until this Agreement becomes effective in accordance with
the terms of Section 4.01, the Existing Credit Agreement shall remain in full force and
effect and shall not be affected hereby.  After the Effective Date, the provisions of the
Existing Credit Agreement shall be superseded by the provisions hereof.  The parties
hereto agree to waive any notices required under Section 2.09(c) of the Existing Credit
Agreement.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.16.  <U>USA Patriot Act</U>.  Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)), (the &#147;Act&#148;), it is required to
obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the Act.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>83</P>
<BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the day and
year first above written. their respective authorized officers as of the day and year
first above written.</P>

                                                     YUM! BRANDS, INC.,

<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">YUM! BRANDS, INC.</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>

<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">JPMORGAN CHASE BANK,<BR>individually and as<BR>Administrative Agent,</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">CITIBANK, N.A.,</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>84</P>
<BR><BR><BR>


<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>HSBC BANK USA, N.A.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>85</P>
<BR><BR><BR>



<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>COOPERATIEVE CENTRALE<BR>
 RAIFFEISEN-BOERENLEENBANK B.A.<BR>
&#147;RABOBANK INTERNATIONAL&#148;, NEW <BR>
YORK BRANCH,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>86</P>
<BR><BR><BR>





<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>SUNTRUST BANK,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>87</P>
<BR><BR><BR>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>BANK OF AMERICA, N.A.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>88</P>
<BR><BR><BR>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>SUMITOMO MITSUI BANKING CORP.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>89</P>
<BR><BR><BR>



<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>WACHOVIA BANK, NATIONAL ASSOCIATION,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>90</P>
<BR><BR><BR>

<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>COMERICA BANK,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>91</P>
<BR><BR><BR>

<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>SCOTIABANC, INC.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD>
</TR>
<tr>
<td>&nbsp;</td>
<td><BR>THE BANK OF NOVA SCOTIA</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></tr>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>92</P>
<BR><BR><BR>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>U.S. BANK NATIONAL ASSOCIATION,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>


<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>93</P>
<BR><BR><BR>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>WELLS FARGO BANK, N.A.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>






<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>94</P>
<BR><BR><BR>


<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>BAYERISCHE HYPO-UND<BR> VEREINSBANK AG, NEW YORK <BR>BRANCH</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>








<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>95</P>
<BR><BR><BR>








<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>BRANCH BANKING &amp; TRUST CO.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>96</P>
<BR><BR><BR>










<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>FIFTH THIRD BANK,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>97</P>
<BR><BR><BR>













<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td> NATIONAL CITY BANK OF<BR> KENTUCKY,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>








<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>98</P>
<BR><BR><BR>








<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>NORDDEUTSCHE LANDESBANK<BR> GIROZENTRALE,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>






<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>99</P>
<BR><BR><BR>













<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>NORTHERN TRUST CO.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>



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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>100</P>
<BR><BR><BR>









<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>THE BANK OF NEW YORK,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>






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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>101</P>
<BR><BR><BR>









<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>THE HUNTINGTON NATIONAL BANK,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>







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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>102</P>
<BR><BR><BR>













<TABLE WIDTH="100%" BORDER="0" CELLPADDING="1" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"></TD>
     <TD WIDTH="50%">SIGNATURE PAGE TO YUM! BRANDS, <BR>
INC. 2004 AMENDED AND RESTATED<BR>
CREDIT AGREEMENT</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td> WESTPAC BANKING CORP.,</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</TD></TR>
</TABLE>
<BR>


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<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<P ALIGN=RIGHT>&nbsp;</P>
<BR><BR><BR>

<P ALIGN=CENTER>SCHEDULE A<BR>
TO<BR>
CREDIT AGREEMENT</p>

<p ALIGN=CENTER><u>INITIAL GUARANTORS</u></p>

<p><u>Subsidiary (Jurisdiction of Incorporation)</U></p>

<p>YGR Acquisitions Corp. (Delaware)<BR>
YGR America, Inc. (Delaware)<BR>
Yorkshire Global Restaurants, Inc. (Maryland)<BR>
Long John Silver&#146;s, Inc. (Delaware)<BR>
LJS Restaurants, Inc. (Delaware)<BR>
A&amp;W Restaurants, Inc. (Michigan)<BR>
KFC Corporation (Delaware)<BR>
Kentucky Fried Chicken Corporate Holdings Ltd. (Delaware)<BR>
Kentucky Fried Chicken International Holdings, Inc. (Delaware)<BR>
KFC Holding Co. (Delaware)<BR>
KFC U.S. Properties, Inc. (Delaware)<BR>
Pizza Hut, Inc. (California)<BR>
Pizza Hut International, LLC (Delaware)<BR>
Pizza Hut of America, Inc. (Delaware)<BR>
Taco Bell Corp. (California)<BR>
Taco Bell of America, Inc. (Delaware)<BR>




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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>




<P ALIGN=RIGHT>SCHEDULE 2.01<BR>
To Credit Agreement</p>

<P ALIGN=CENTER><U>COMMITMENTS</U></P>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=1>Lenders</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>Allocations</TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=74% ALIGN=LEFT>JPMorgan Chase Bank</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=20% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;100,000,000</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Citibank, N.A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;100,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>HSBC Bank USA, N.A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&#147;Rabobank International&#148;, New York Branch</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SunTrust Bank</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Bank of America, N.A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Sumitomo Mitsui Banking Corp.</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wachovia Bank, National Association</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Comerica Bank</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,500,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Scotiabanc Inc.</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,500,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>U.S. Bank National Association</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,500,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wells Fargo Bank, N.A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,500,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Bayerische Hypo- und Vereinsbank AG, New York Branch</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Branch Banking &amp; Trust Co.</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Fifth Third Bank</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>National City Bank of Kentucky</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Norddeutsche Landesbank Girozentrale</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Northern Trust Co.</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>The Bank of New York</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>The Huntington National Bank</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Westpac Banking Corp.</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Total</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT><b>$1,000,000,000</B></TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>


<P ALIGN=RIGHT>SCHEDULE 2.06<BR>
To Credit Agreement</p>


<P ALIGN=CENTER>See Attached Chart of Existing Letters of Credit</p>


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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>

<P ALIGN=RIGHT>SCHEDULE 3.06<BR>
To Credit Agreement</P>


<p align=center><U>DISCLOSED MATTERS</U></p>


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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">1. </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
matters described in the Borrower&#146;s Annual Report on Form 10-K for the year ended
December 27, 2003 under               the captions &#147;Item 3 - Legal Proceedings&#148; and in &#147;Note
24 - Guarantees, Commitments and Contingencies&#148; in               the Notes to
Consolidated Financial Statements under &#147;Item 8 - Financial Statements and Supplementary
Data.&#148;</P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">2. </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">The
matters described in the Borrower&#146;s Quarterly Report on Form 10-Q for the quarter ended
June 12, 2004 under               the captions &#147;Part II - Item 1 - Legal Proceedings&#148; and
&#147;Note 13 - Commitments and Contingencies&#148; in the               Notes to Condensed
Consolidated Financial Statements under &#147;Part I - Financial Information.&#148;</P></TD>
</TR>
</TABLE>
<BR>



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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>




<P ALIGN=RIGHT>SCHEDULE 3.11<BR>
To Credit Agreement</p>

<P ALIGN=CENTER>DISCLOSURE</p>


<P ALIGN=CENTER>None.</p>

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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>



<P ALIGN=RIGHT>SCHEDULE 6.01<BR>
To Credit Agreement</P>
<P ALIGN=CENTER><u>EXISTING INDEBTEDNESS</u></p>

<p>Indebtedness of Domestic Subsidiaries as of the Effective Date is US$141,794,000.</p>


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<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>




<P ALIGN=RIGHT>SCHEDULE 6.02<BR>
To Credit Agreement<BR>
SCHEDULE 6.02<BR>
To Credit Agreement</p>


<P align=center><U>EXISTING LIENS</U></P>


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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%">     1. </TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT">Liens
created and existing pursuant to the sale-leaseback agreements, Master Lease Agreements
and      related agreements entered into by certain subsidiaries of the Borrower and
evidencing the following sale-leaseback      transactions:</P></TD>
</TR>
</TABLE>
<BR>



<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="34%">Original Transaction<BR>Date</TD>
     <TD WIDTH="33%">Lessor</TD>
     <TD WIDTH="33%">Lessee</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN="TOP">
     <TD>April 30, 2003</TD>
     <TD>GE Capital Franchise Finance<BR>Corporation,<BR>successor in interest to FFCA<BR>
Acquisition Corporation</TD>
     <TD>KFC U.S. Properties, Inc.</TD></TR>
<tr>
<td>&nbsp;</td>
</tr>
<TR VALIGN="TOP">
     <TD>April 30, 2003<BR>Amended April 15,<BR>2003</TD>
     <TD>Lo Jon Property II LLC</TD>
     <TD>KFC U.S. Properties, Inc.</TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD></TD>
     <TD></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD></TD>
     <TD></TD></TR>
</TABLE>


<BR><BR><BR>
<HR SIZE=1 NOSHADE><BR><BR><BR><BR><BR>


<P align=center><B><U>DIRECTOR&#146;S STOCK OPTION AWARD</u></b></P>

<P align=center><B>FORM OF STOCK OPTION AGREEMENT</b></P>


<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AGREEMENT  made as of the ____ day of  November  __,
 200__,  by and  between  YUM!  Brands,  Inc. a North  Carolina corporation  having its
principal  office at 1441 Gardiner  Lane,  Louisville,  Kentucky  40213 (&#147;YUM!&#148; or the &#147;Company&#148;)
and _________________ (the &#147;Optionee&#148;).</P>

<P align=center><B>W I T N E S S E T H:</b></P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  the Board of directors of YUM!  Brands has
 authorized the award to Optionee of options to purchase the number of shares of YUM!
Brands Common Stock set forth below;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, it is appropriate to set forth the terms of
this option award in this Agreement;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, it is mutually agreed as follows:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <U>Grant.</U> In  consideration  of the Optionee  remaining
as a Director of YUM!  Brands,  YUM! Brands hereby grants to the Optionee,  on the terms
and  conditions  set forth herein,  the right and option to purchase an aggregate of
______ shares of the Company&#146;s Common Stock,  with no par value, at a price of $______
per share (the &#147;Option  Exercise  Price&#148;), which was the Fair  Market  Value (as  defined
 below) of YUM!  on November  __,  200__,  the date of grant.  The right to purchase each
such share is referred to herein as an &#147;Option&#148;.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  <U>Exercisability.</U>  Subject to the terms and
 conditions  set forth  herein,  the Options  shall be  exercisable during the &#147;Option
 Term.&#148; The Option  Term  begins on November  __,  200__ and ends on  November  __,
 200__.  During the Option Term and until  terminated  or expired,  all or a portion of
the  exercisable  Options may be exercised at any time under  procedures that may be
established  from time to time by those  Directors of the Company who are Company
 employees or their  delegate (the  &#147;Employee  Directors&#148;),  including  (without
 limitation)  procedures  regarding the frequency of exercise and the minimum  number of
Options that may be  exercised  at any time.  Fractional  Options may not be exercised
and no fractional  shares shall be purchasable or  deliverable  hereunder.  No omission
to exercise an Option shall result in the lapse of any other Option  granted  hereunder
 until the  termination of such Option.  The Options shall  terminate and expire no later
than the end of the Option Term.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  <U>Exercise  Procedure.</U>  Subject to the terms and
 conditions  set forth  herein,  Options may be  exercised  by giving notice of exercise
to YUM! Brands in the manner  specified from time to time by YUM!  Brands.  The aggregate
Option Exercise  Price for the shares  being  purchased,  together  with any amount which
the Company may be required to withhold upon such exercise in respect of applicable
 foreign,  federal  (including  FICA),  state and local taxes, must be paid in full at
the time of issuance of such shares,  which may be by tendering  previously  acquired
 shares of YUM! Common Stock (or delivering a certification  of ownership of such shares)
or through a cashless  exercise  (subject to applicable legal restrictions), with shares
or proceeds withheld for taxes.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  <U>Effect of  Death,  Disability  and  Cessation  of
 Director  Status.</U>  No Option  may be  exercised  after the Optionee ceases to be a
Director of the Company, except that:</P>


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<BR><BR><BR>
<P ALIGN=center>1</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      if such
 cessation  occurs by reason of the  Optionee&#146;s  death,  the Options  then held may be
 exercised  by the Optionee&#146;s  designated  beneficiary (or, if none, legal
representative) until the expiration of such Options in accordance with the terms hereof;</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if such  cessation
 occurs  by reason of the  Optionee&#146;s  becoming  Totally  Disabled  (as  defined below)
or by reason of the  Optionee&#146;s  Retirement  (as defined  below),  the Options  then held
may be  exercised  by the Optionee until the expiration of such Options in accordance
with the terms hereof;</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if such  cessation  is
 voluntary  by the  Optionee  or is by action of the  Company,  the  Options then held
 shall  terminate  on the date the  Optionee  ceases to be a  Director  (except  as
 described  in  paragraph  5 &#147;Misconduct&#148; below), and may not be exercised after such
date of cessation.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  <U>Misconduct.</U>  In the event the  Employee  Directors
 determine  that the  Optionee  has (i) used for profit or disclosed to unauthorized
 persons,  confidential  information or trade secrets of the Company, (ii) breached any
contract with or violated any fiduciary  obligation  to the Company,  (iii)  engaged in
the unlawful  trading of any  securities of YUM! or of another company based upon
 information  gained as a result of your position with the Company,  or (iv) engaged in
any conduct which is injurious to the Company,  then YUM! may terminate all of the
Optionee&#146;s  outstanding  Options and the Optionee shall forfeit all rights to any
unexercised Options granted hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  <U>Adjustment  for Change in Common Stock.</U>  In the
event of any change in the  outstanding  shares of YUM! Stock by reason of any stock
 split,  stock  dividend,  recapitalization,  merger,  consolidation,  combination  or
 exchange of shares,  partial or  complete  liquidation  or similar  corporate  change,
 the number of shares  which the  Optionee  may purchase  pursuant to the Options and the
Option  Exercise  Price at which the Optionee may purchase  such shares shall be adjusted
appropriately in the Employee Director&#146;s discretion.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  <U>Nontransferability.</U>  These  Options are  personal
to the Optionee  and,  during his or her  lifetime,  may be exercised only by the
Optionee.  The Options shall not be  transferable  or assignable,  other than by will or
the laws of descent and  distribution,  and any such  purported  transfer  or  assignment
 shall be null and void  without the express consent of the Employee Directors.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.  <U>Buy-Out  of  Option  Gains.</U>  At any  time,  the
 Employee  Directors  shall  have the  right,  in their  sole discretion  and  without
the  consent of the  Optionee,  to cancel any Option and to pay to the  Optionee  the
 difference between the Option  Exercise  Price of the Option and the Fair Market Value
of the shares covered by the Options as of the date the Committee  provides  written
 notice (the &#147;Buy Out Notice&#148;) of its intention to exercise such right.  Payments of such
buy out amounts  pursuant to this  provision  shall be effected by YUM! as promptly as
possible after the date of the Buy Out Notice and may be made in cash or in shares of
Common  Stock,  or partly in cash and partly in Common Stock as the Employee  Directors
deem  advisable.  To the extent payment is made in shares of Common Stock,  the number of
shares shall be  determined  by dividing  the amount of payment to be made by the Fair
 Market  Value of a share at the date of the Buy Out Notice.  In no event shall YUM! be
required to deliver a fractional  share of Common Stock in satisfaction of this buy out
 provision.  Payments of any</P>

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<P>such buy out amounts  shall be made net of any  applicable foreign,  federal  (including FICA), state and local withholding taxes.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  <U>Change in  Control.</U>  Notwithstanding  anything  in
this  Agreement  to the  contrary  (including  paragraph 5 above),  in the event of a
Change in Control (as defined  under the YUM!  Long Term  Incentive  Plan),  if the
 Optionee&#146;s status as a Director  of the  Company is  involuntarily  terminated  within 2
years  following  a Change in  Control,  all Options  shall  continue  to be  exercisable
 at any time within 3 years  after the date of such  termination  of Director status, but
in no event after the end of the Option Term.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.  <U>Definitions.</U>   As used in this Agreement, the
following terms shall have the meanings set forth below:</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &#147;Fair  Market  Value&#148;
of a share of YUM!  Common  Stock shall mean an amount equal to the average of the high
and low sales prices of a share of YUM!  Brands  Common Stock as reported on the
 composite  tape for  securities listed on The New York Stock  Exchange  Inc.,  on the
date in question  (or, if no sales of Common Stock were made on said Exchange on such
date,  on the next  preceding  day on which sales were made on such  Exchange),  rounded
to four  decimal places.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)  &#147;Retirement&#148; shall
have the meaning determined by the Employee Directors in their sole discretion.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)  &#147;Totally  Disabled&#148;
 shall mean total  disability  of the  Optionee as  determined  by the Employee
Directors, upon the basis of such evidence as the Employee Directors deem necessary and
advisable.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.  <U>Notices.</U>  Any  notice to be given to YUM!  under
 the terms of this  Agreement  shall be  addressed  to YUM! Brands, Inc. at Louisville,
 Kentucky 40213, Attention:  Vice President,  Compensation and Benefits, or such other
address as YUM! may  hereafter  designate  to the  Optionee.  Any such notice  shall be
deemed to have been given when  personally delivered,  addressed as aforesaid,  or when
enclosed in a properly  sealed  envelope or wrapper,  addressed as aforesaid, and
deposited, postage prepaid, with the federal postal service.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.   <U>Binding Effect.</U></P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)      This  Agreement
 shall be binding upon and inure to the benefit of any assignee or successor in interest
to YUM!,  whether by merger,  consolidation or the sale of all or substantially  all of
YUM!&#146;s assets.  YUM! will require  any  successor  (whether  direct  or  indirect,  by
 purchase,  merger,  consolidation  or  otherwise)  to all or substantially  all of the
business  and/or assets of YUM!  Brands to expressly  assume and agree to perform this
Agreement in the same manner and to the same extent that YUM! would be required to
perform if no such succession had taken place.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)      This  Agreement
 shall be binding  upon and inure to the benefit of the  Optionee or his or her legal
 representative  and any person to whom the Options may be transferred  by will, the
applicable  laws of descent and distribution or consent of the Employee Directors.</P>


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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.  <U>Amendment.</U>  The Employee  Directors may amend the
terms and  conditions of this  Agreement,  provided  that: (i) no such  amendment  shall
be adverse to the  Optionee  without the  Optionee&#146;s  consent,  (ii) no such  amendment
 may extend the Option Term,  and (iii) the  Amendments  must be  permissible  under the
terms of any plan document  adopted in accordance with paragraph 14.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <U>Plan  Controls.</U>  The Options and the terms and
 conditions  set forth  herein are subject in all  respects to the terms and  conditions
of any plan document  (&#147;Plan&#148;) that may be adopted by the Board and any Operating
 Guidelines or other policies or regulations that may be adopted by the Employee
 Directors for  administration  of the Plan, which shall be controlling.  All
 interpretations or determinations of the Employee  Directors shall be final,  binding
and conclusive upon the Optionee and his or her legal  representatives  or  successors
 on any  question  arising  hereunder or under the Plan, the Operating Guidelines or
other policies or regulations which govern administration of the Plan.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.  <U>Registration,  Listing and  Qualification  of
Shares.</U>  The Options shall be subject to the requirement  that if, at any time,  the
Employee  Directors  shall  determine  that the  registration,  listing or  qualification
 of shares covered  hereby  upon any  securities  exchange  or under any  foreign,
 federal,  state or local law,  or the  consent or approval of any  governmental
 regulatory  body, is necessary or desirable as a condition of, or in connection  with,
 the granting  of the Options or the  purchase of shares  hereunder,  the  Options may
not be  exercised  unless and until such registration,  listing, qualification,  consent
or approval shall have been effected or obtained free of any condition not acceptable to
the Employee  Directors.  The Employee Directors may require the Optionee to make such
 representations  and agreements  and furnish  such  information  as the  Employee
 Directors  deem  appropriate  to assure  compliance  with or exemption from the
foregoing or any other  applicable  legal  requirement,  and may cause the  certificate
or certificates issued upon exercise of the Options to bear a legend  indicating  the
 existence of any  restriction  resulting  from such representations  and  agreements.
 By entering into this  Agreement,  the Optionee  agrees to seek all necessary  approval
under, make all required  notifications under and comply with all laws, rules and
regulations  applicable to the ownership of stock options and stock and the exercise of
stock options, including,  without limitation,  currency and exchange laws, rules and
regulations.  The Options do not convey rights as a shareholder to the Optionee.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.  <U>Governing  Law.</U> This Agreement  shall be governed
by and construed in accordance  with the laws of the State of North Carolina.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please  indicate  your  understanding  and  acceptance
 of the  foregoing by signing and returning a copy of this Agreement.</P>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">&nbsp;</td>
<TD>YUM! BRANDS, INC.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;<BR>
By:&nbsp;
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anne P. Byerlein, Chief People Officer<BR><BR>
</TD></TR>
</TABLE>
<BR>
<BR><BR><BR>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I confirm my  understanding  of the  foregoing  and
accept the Options  described  above subject to the terms and conditions described herein.</P>




<P><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
(Name of Director)</P>


<BR><BR><BR><BR>
<HR SIZE=1 NOSHADE><BR><BR><BR><BR><BR><BR>




<P align=center><B><U>1999 LONG TERM INCENTIVE PLAN AWARD FOR JANUARY__, 200 </U></b></P>

<P align=center><B>FORM OF STOCK OPTION AGREEMENT</b></p>


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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AGREEMENT  made as of the  ____  day of  January,
 200__,  by and  between  YUM!  Brands,  Inc.,  a  North  Carolina corporation  having
its  principal  office at 1441  Gardiner  Lane,  Louisville,  Kentucky  40213  (&#147;YUM!&#148;)
 and  ___________ ____________ _____________ (the &#147;Optionee&#148;).</P>

<P align=center><B>W I T N E S S E T H:</B></P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  the  shareholders  of YUM!  approved the Long
Term  Incentive  Plan (the &#147;Plan&#148;),  for the purposes and subject to the provisions set
forth in the Plan;</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  pursuant to authority granted to it in said
Plan, the Compensation  Committee of the Board of Directors of YUM!  (the  &#147;Committee&#148;),
 has granted to Optionee  options to purchase  the number of shares of YUM!  Common Stock
set forth below;</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  options  granted  under the Plan are to be
evidenced by an Agreement in such form and  containing  such terms and conditions as the
Committee shall determine;</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, it is mutually agreed as follows:</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  <U>Grant.</U>  In  consideration  of the  Optionee
 remaining  in the  employ of YUM!,  or one of its  divisions  or direct or indirect
 subsidiaries  (collectively  the  &#147;Company&#148;),  YUM!  hereby grants to the  Optionee,  on
the terms and conditions set forth herein,  the right and option to purchase an aggregate
of ___________  shares of the Company&#146;s Common Stock,  with no par value, at a price of
$_____ per share (the &#147;Option Exercise  Price&#148;),  which was the Fair Market Value (as
defined  below) of YUM!  Common Stock on January __, 200__,  the date of grant.  The
right to purchase each such share is referred to herein as an &#147;Option&#148;.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  <U>Exercisability.</U>  The Options will become
 exercisable  at a rate of 25% of the original  share grant per year beginning  on the
first  anniversary  of the grant (i.e.,  January __,  200__).  Exercisable  Options must
be exercised no later than January __, ____.  (The time during which Options are
 exercisable  is referred to as the &#147;Option  Term.&#148;) Once exercisable and until
 terminated,  all or a portion of the exercisable  Options may be exercised from time to
time and at any time  under  procedures  that  the  Committee  shall  establish  from
 time to time,  including,  without  limitation, procedures  regarding  the  frequency
 of exercise and the minimum  number of Options  which may be exercised at any time.
Fractional  Options may not be exercised  and no fractional  shares shall be  purchasable
 or  deliverable  hereunder.  No omission to exercise an Option shall result in the lapse
of any other Option granted  hereunder  until the  termination of such Option.  The
Options shall terminate and expire no later than the end of the option term.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.  Exercise  Procedure.  Subject to the terms and
 conditions  set forth  herein,  Options may be  exercised  by giving notice of exercise
to Merrill Lynch, the stock  administrator (or any other stock plan administrator
 designated by YUM!) in the manner  specified from time to time by YUM! or the stock plan
 administrator.  The aggregate  Option Exercise Price for the shares being  purchased,
 together  with any amount which the Company may be required to withhold  upon</P>


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<P>such exercise in respect of applicable  foreign,  federal  (including FICA), state and local
taxes, must be paid in full at the time of  issuance  of such  shares,  which  may be by
 tendering  previously  acquired  shares  of YUM!  Common  Stock (or delivering  a
 certification  of ownership of such shares) or through a cashless  exercise  (subject to
 applicable  legal restrictions), with shares or proceeds withheld for taxes.</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  <U>Effect  of  Death,  Retirement,   Total  Disability  and  Termination  of  Employment.</U>   The  Options
 shall automatically  expire upon, and no Option may be exercised  after,  the
termination of the Optionee&#146;s  employment with the Company,  provided,  however,  that if
such termination  occurs by reason of the Optionee&#146;s death,  Retirement (as defined
below) or Total Disability (as defined below), then the Optionee&#146;s  designated
 beneficiary (or, if none, his or her legal representative),  in the event of death,  or
the Optionee,  in the event of Retirement  or Total  Disability,  all Options which are
otherwise  exercisable on the Optionee&#146;s last day of active  employment may be exercised
 during the Option Term in accordance with this Agreement.  Notwithstanding  the prior
sentence,  in the event the Optionee&#146;s  employment with the Company is  involuntarily
 terminated  without cause and solely as a result of (i) a disposition (or similar
 transaction) with  respect to an  identifiable  Company  business  or segment
 (&#147;Business&#148;),  and in  accordance  with the terms of the transaction,  the Optionee and
a substantial  portion of the other  employees of the Business  continue in employment
with such Business or commence  employment  with its acquiror,  (ii) the  elimination  of
the  Optionee&#146;s  position  within the Company,  or (iii) the  selection  of the Optionee
 for work force  reduction  (whether  voluntary  or  involuntary),  the Optionee  shall
have a period of 90 days after  termination  of active  employment  to exercise  such
vested or previously exercisable options, but such exercise period shall not extend
beyond the end of the Option term.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  <U>Misconduct.</U>  In the event the  Committee
 determines  that the  Optionee has (i) used for profit or disclosed to  unauthorized
 persons,  confidential  information or trade secrets of the Company,  (ii) breached any
contract with or violated any  fiduciary  obligation  to the  Company,  or (iii)  engaged
in any conduct  which is injurious to the Company including  diverting  employees of the
Company to leave the Company  without the Company&#146;s  prior  consent,  then YUM! may
terminate all of the Optionee&#146;s  outstanding  Options and the Optionee shall forfeit all
rights to any unexercised Options granted hereunder.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  <U>Adjustment for Change in Common Stock.</U>  In the
event of any change in the  outstanding  shares of YUM! Common Stock by reason of any
stock split, stock dividend,  recapitalization,  merger, consolidation,  combination or
exchange of shares or similar corporate  change,  the number of shares which the Optionee
may purchase pursuant to the Options and the Option  Exercise Price at which the Optionee
may purchase such shares shall be adjusted  appropriately  in the Committee&#146;s discretion.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  <U>Nontransferability.</U>  These  Options are  personal
to the Optionee  and,  during his or her  lifetime,  may be exercised only by the
Optionee.  The Options shall not be  transferable  or assignable,  other than by will or
the laws of descent and  distribution,  and any such  purported  transfer  or  assignment
 shall be null and void  without the express consent of the Committee.</P>

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<BR><BR><BR>




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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <U>Buy-Out of Option  Gains.</U>  At any time after any
Option  becomes  exercisable,  the  Committee  shall have the right,  in its sole
 discretion and without the consent of the Optionee,  to cancel such Option and to pay to
the Optionee the  difference  between the Option  Exercise  Price of the Option and the
Fair Market Value of the shares  covered by the Options as of the date the  Committee
 provides  written  notice (the &#147;Buy Out Notice&#148;) of its  intention to exercise such
right.  Payments of such buy out  amounts  pursuant  to this  provision  shall be
effected by YUM! as promptly as possible after the date of the Buy Out  Notice and may be
made in cash or in shares of Common  Stock,  or partly in cash and partly in Common Stock
as the Committee  deems  advisable.  To the extent  payment is made in shares of Common
Stock,  the number of shares  shall be  determined  by dividing  the amount of payment to
be made by the Fair Market  Value of a share at the date of the Buy Out  Notice.  In no
event  shall  YUM!  be  required  to  deliver a  fractional  share of Common  Stock in
satisfaction  of this  buy out  provision.  Payments  of any  such buy out  amounts
 shall  be made net of any  applicable foreign, federal (including FICA), state and local
withholding taxes.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  <U>Change in  Control.</U>  Notwithstanding  anything  in
this  Agreement  to the  contrary  (including  paragraph 5 above),  in the event of a
Change in Control (as defined in the Plan),  the Options  shall  become  fully and
 immediately exercisable.  If the employment of the Optionee is terminated  within 2
years  following a Change in Control,  all Options shall continue to be exercisable  at
any time within 3 years after the date of such  termination of employment,  but in no
event after the end of the Option Term.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.  <U>Definitions.</U>   As used in this Agreement, the
following terms shall have the meanings set forth below:</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &#147;Fair  Market  Value&#148;
of a share of YUM!  Common  Stock shall mean an amount equal to the average of the high
and low sales prices of a share of YUM!  Common Stock as reported on the composite tape
for securities  listed on The New York Stock  Exchange  Inc., on the date in question
(or, if no sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange), rounded to four decimal places.</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &#147;Retirement&#148;  shall
have the meaning used in the YUM!  Retirement  Plan, as then in effect,  whether it
occurs on the Optionee&#146;s  Normal  Retirement Date or Early  Retirement  Date, or in the
absence of such Retirement Plan being  applicable  to the  Optionee.  &#147;Retirement&#148;  shall
mean  termination  of employment by the Optionee on or after the Optionee&#146;s attainment of
age 55 and 10 years of service.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)  &#147;Totally  Disabled&#148;
 shall mean  either (i) the  Optionee  has been  determined  to be  eligible to receive
long-term  disability  benefits under a long-term  disability plan maintained by YUM!, or
(ii) total disability of the Optionee as  determined  by the  Committee,  upon the basis
of such  evidence as the  Committee  deems  necessary  and advisable.</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.  <U>Notices.</U>  Any notice to be given to YUM!  under
the terms of this  Agreement  shall be  addressed to YUM! at Louisville,  Kentucky 40213,
 Attention:  Vice  President,  Compensation  and Benefits,  or such other address as YUM!
may hereafter  designate  to the  Optionee.  Any such</P>

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<HR SIZE=1 NOSHADE>
<BR><BR><BR>


<P>notice  shall be deemed to have
been given when  personally  delivered, addressed  as  aforesaid,  or when  enclosed in a
properly  sealed  envelope  or  wrapper,  addressed  as  aforesaid,  and deposited,
postage prepaid, with the federal postal service.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.  <U>Binding Effect.</U></P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This  Agreement  shall
be binding  upon and inure to the  benefit of any  assignee or  successor  in interest to
YUM!,  whether by merger,  consolidation  or the sale of all or substantially  all of
YUM!&#146; assets.  YUM! will require  any  successor  (whether  direct  or  indirect,  by
 purchase,  merger,  consolidation  or  otherwise)  to all or substantially  all of the
business  and/or assets of YUM! to expressly  assume and agree to perform this  Agreement
in the same manner and to the same extent that YUM! would be required to perform if no
such succession had taken place.</P>

<!-- MARKER FORMAT-SHEET="Para dbl Indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This  Agreement  shall
be binding  upon and inure to the benefit of the Optionee or his or her legal
representative  and any person to whom the  Options  may be  transferred  by will,  the
 applicable  laws of  descent  and distribution or consent of the committee.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.  <U>Receipt  of  Prospectus.</U>  The  Optionee  hereby
 acknowledges  that he or she has  received  a copy of YUM!&#146; Prospectus  relating to the
Options,  the shares covered thereby and the Plan, and that he or she fully understands
his or her rights under the Plan.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <U>Plan  Controls.</U>  The Options and the terms and
 conditions  set forth  herein are subject in all  respects to the  terms and  conditions
 of the Plan and any  Operating  Guidelines  or other  policies  or  regulations  which
 govern administration  of the Plan,  which shall be  controlling.  YUM!  reserves its
right to amend or terminate the Plan at any time without the consent of the Optionee,
 provided,  however, that Options outstanding under the Plan at the time of such
amendment  or  termination  shall  not be  adversely  affected  thereby.  All
 interpretations  or  determinations  of the Committee shall be final,  binding and
conclusive upon the Optionee and his or her legal  representatives  on any question
arising  hereunder  or  under  the  Plan,  the  Operating  Guidelines  or  other
 policies  or  regulations  which  govern administration of the Plan.</P>

<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <U>Rights to Future Grants;  Compliance  with Law.</U> By
entering into this  Agreement,  the Optionee  acknowledges and agrees that the award and
 acceptance of Options  pursuant to this  Agreement  does not entitle the Optionee to
future grants of stock  options  or other  awards in the  future  under  the Plan or any
 other  plan,  nor does it confer on the Optionee  any right  with  respect to
 continuance  of  employment.  The  Optionee  further  agrees to seek all  necessary
approval under, make all required  notifications  under and comply with all laws, rules
and regulations  applicable to the ownership of stock  options and stock and the
 exercise of stock  options,  including,  without  limitation,  currency and exchange
laws, rules and regulations.  The Options do not convey rights as a shareholder to the
Optionee.</P>

<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR>
<P ALIGN=center>&nbsp;</P>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>



<!-- MARKER FORMAT-SHEET="Para w/indent" FSL="Workstation" -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.  <U>Governing  Law.</U> This Agreement  shall be governed
by and construed in accordance  with the laws of the State of North Carolina.</P>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">&nbsp;</td>
<TD>YUM! BRANDS, INC.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;<BR>
By:&nbsp;
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anne P. Byerlein, Chief People Officer<BR><BR>
<BR>
By:&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optionee,<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Print Name)<BR>
</TD></TR>
</TABLE>
<BR>
<BR><BR><BR>
<HR SIZE=1 NOSHADE><BR><BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif"><B>EXHIBIT 15</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Project" -->
<p align=center><B><U>Independent Accountants&#146; Acknowledgment</U></B></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT>The Board of Directors and Shareholders<BR>
YUM! Brands, Inc.: </P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P>We hereby acknowledge our awareness
of the use of our report dated September 4, 2004 included within the Quarterly Report on
Form 10-Q of YUM! Brands, Inc. for the twelve and thirty-six weeks ended September 4, 2004, and
incorporated by reference in the following Registration Statements: </P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="Left"><U>Description</U> </TH>
     <TH COLSPAN="2" ALIGN="LEFT"><U>Registration Statement Number</U> </TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="57%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="3%" ALIGN="LEFT">&nbsp; </TD>
     <TD WIDTH="38%" ALIGN="LEFT">&nbsp; </TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=57% ALIGN=LEFT><U><B>Forms S-3 and S-3/A</B></U> </TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp; </TD>
     <TD WIDTH=38% ALIGN=LEFT>&nbsp; </TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=57% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=38% ALIGN=LEFT>&nbsp; </TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Direct Stock Purchase Program </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-46242 </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>$2,000,000,000 Debt Securities </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-42969 </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=57% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp; </TD>
     <TD WIDTH=38% ALIGN=LEFT>&nbsp; </TD>

     <TD WIDTH=2% ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><U><B>Form S-8s</B></U> </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Restaurants Puerto Rico, Inc. Save-Up Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-85069 </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Restaurant Deferred Compensation Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-36877, 333-32050 </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Executive Income Deferral Program </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-36955</TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Long-Term Incentive Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-36895, 333-85073, 333-32046</TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>SharePower Stock Option Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-36961 </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Brands 401(k) Plan</TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-36893, 333-32048, 333-109300</TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Brands, Inc. Restaurant General Manager </TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Stock Option Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>
     <TD ALIGN=LEFT>333-64547</TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>YUM! Brands, Inc. Long-Term Incentive Plan </TD><TD ALIGN=LEFT>&nbsp; </TD>

     <TD ALIGN=LEFT>333-32052, 333-109299</TD><TD ALIGN=LEFT>&nbsp; </TD></TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif">Pursuant to Rule 436(c) of the
Securities Act of 1933, such report is not considered a part of a registration statement
prepared or certified by an accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the Act. </FONT> </P>


<BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT>Louisville, Kentucky<BR>
October 7, 2004</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE><BR><BR><BR>


<p align=right>Exhibit 31.1</P>

<P align=center><B>CERTIFICATION</B></P>

<P>I, David C. Novak, certify that:</P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD WIDTH=95%>I
have reviewed this report on Form 10-Q of YUM! Brands, Inc.;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD WIDTH=95%>Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a      material fact necessary to make the statements made, in light of the
circumstances under which such statements were      made, not misleading with respect to
the period covered by this report;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>3. </TD>
<TD WIDTH=95%>Based
on my knowledge, the financial statements, and other financial information included in
this report,      fairly present in all material respects the financial condition,
results of operations and cash flows of the      registrant, as of, and for, the periods
presented in this report.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>4. </TD>
<TD WIDTH=95%>The
registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure      controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be      designed under our supervision, to ensure that material information
relating to the registrant, including its      consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in      which this
report is being prepared;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD WIDTH=95%>evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in
this report      our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period      covered by this report based on such
evaluation; and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD WIDTH=95%>disclosed
in this report any change in the registrant&#146;s internal control over financial reporting
that occurred      during the registrant&#146;s most recent fiscal quarter that has materially
affected, or is reasonably likely to      materially affect, the registrant&#146;s internal
control over financial reporting; and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>5. </TD>
<TD WIDTH=95%>The
registrant&#146;s other certifying officer and I have disclosed, based on our most recent
evaluation of internal      control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of      directors (or persons
performing the equivalent function):</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>all
significant deficiencies and material weaknesses in the design or operation of internal
control over      financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process,      summarize and report financial information;
and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD WIDTH=95%>any
fraud, whether or not material, that involves management or other employees who have a
significant role in      the registrant&#146;s internal controls over financial reporting.</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">Date:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2004</td><TD>
<P ALIGN="LEFT"><u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
David C. Novak&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</u><BR>Chairman and Chief Executive Officer
</TD></TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER></P><HR SIZE=1 NOSHADE>
<BR>
<BR>
<BR>



<p align=right>Exhibit 31.2</P><BR>

<P align=center><b>CERTIFICATION</b></p>

<P>I, David J. Deno, certify that:</P>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD WIDTH=95%>I
have reviewed this report on Form 10-Q  of YUM! Brands, Inc.;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD WIDTH=95%>Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a      material fact necessary to make the statements made, in light of the
circumstances under which such statements were      made, not misleading with respect to
the period covered by this report;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>3. </TD>
<TD WIDTH=95%>Based
on my knowledge, the financial statements, and other financial information included in
this report,      fairly present in all material respects the financial condition,
results of operations and cash flows of the      registrant, as of, and for, the periods
presented in this report.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>4. </TD>
<TD WIDTH=95%>The
registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure      controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be      designed under our supervision, to ensure that material information
relating to the registrant, including its      consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in      which this
report is being prepared;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD WIDTH=95%>evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in
this report      our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period      covered by this report based on such
evaluation; and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD WIDTH=95%>disclosed
in this report any change in the registrant&#146;s internal control over financial reporting
that occurred      during the registrant&#146;s most recent fiscal quarter that has materially
affected, or is reasonably likely to      materially affect, the registrant&#146;s internal
control over financial reporting; and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>5. </TD>
<TD WIDTH=95%>The
registrant&#146;s other certifying officer and I have disclosed, based on our most recent
evaluation of internal      control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of      directors (or persons
performing the equivalent function):</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>all
significant deficiencies and material weaknesses in the design or operation of internal
control over      financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process,      summarize and report financial information;
and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD WIDTH=95%>any
fraud, whether or not material, that involves management or other employees who have a
significant role in      the registrant&#146;s internal controls over financial reporting.</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">Date:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2004</td><TD>
<P ALIGN="LEFT"><u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
David J. Deno&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</u><BR>Chief Financial Officer
</TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Page Number" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER></P><HR SIZE=1 NOSHADE>
<BR>
<BR>
<BR>




<p align=right>Exhibit 32.1</p>

<p align=center>CERTIFICATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER<BR>
                                                       PURSUANT TO<BR>
                                                 18 U.S.C. SECTION 1350,<BR>
                                                  AS ADOPTED PURSUANT TO<BR>
                                      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</p>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of YUM!  Brands,  Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended
September 4, 2004, as filed with the  Securities  and Exchange  Commission  on the date hereof (the  &#147;Periodic  Report&#148;),  I,
David C. Novak,  Chairman and Chief  Executive  Officer of the Company,  certify,  pursuant to 18 U.S.C.  Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</p>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>1. </TD>
<TD WIDTH=90%>the
Periodic  Report fully complies with the  requirements  of Section 13(a) or 15(d) of the
Securities  Exchange               Act of 1934; and</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>2. </TD>
<TD WIDTH=90%>the
 information  contained in the Periodic  Report  fairly  presents,  in all material
 respects,  the financial               condition and results of operations of the
Company.</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">Date:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2004&nbsp;&nbsp;</td>
<TD><P ALIGN="LEFT"><U>&nbsp;&nbsp;/s/&nbsp;&nbsp;David C. Novak&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>
<BR>Chairman and Chief Executive Officer</P></TD></TR>
</TABLE>
<BR><BR>



<P>A signed original of this written  statement  required by Section 906 has been provided to YUM!  Brands,  Inc. and will be
retained by YUM! Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.</P>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<BR><BR><BR>

<p align=right>Exhibit 32.2</p>

<P align=center>CERTIFICATION OF CHIEF FINANCIAL OFFICER<BR>
                                                       PURSUANT TO<BR>
                                                 18 U.S.C. SECTION 1350,<BR>
                                                  AS ADOPTED PURSUANT TO<BR>
                                      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of YUM!  Brands,  Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended
September 4, 2004, as filed with the  Securities  and Exchange  Commission  on the date hereof (the  &#147;Periodic  Report&#148;),  I,
David J. Deno, Chief Financial Officer of the Company,  certify,  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:</p>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>1. </TD>
<TD WIDTH=90%>the
Periodic  Report fully complies with the  requirements  of Section 13(a) or 15(d) of the
Securities  Exchange               Act of 1934; and</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>2. </TD>
<TD WIDTH=90%>the
 information  contained in the Periodic  Report  fairly  presents,  in all material
 respects,  the financial               condition and results of operations of the
Company.</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
<TD WIDTH="45%">Date:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2004&nbsp;&nbsp;</td>
<TD><P ALIGN="LEFT"><U>&nbsp;&nbsp;/s/&nbsp;&nbsp;David J. Deno&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>
<BR>Chief Financial Officer</P></TD></TR>
</TABLE>
<BR><BR>
<BR><BR><BR>


<P>A signed original of this written  statement  required by Section 906 has been provided to YUM!  Brands,  Inc. and will be
retained by YUM! Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.</P>



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