<SUBMISSION>
<ACCESSION-NUMBER>0001041061-05-000255
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20050611
<FILING-DATE>20050719
<DATE-OF-FILING-DATE-CHANGE>20050718
<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>05960317
</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>form10q2q05.htm
<DESCRIPTION>FORM 10Q, SECOND QUARTER 2005
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 10-Q Second Quarter 2005</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 June 11, 2005</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  July 14, 2005 was
285,413,875 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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2>Page No.<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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 ended June 11,</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;2005 and June 12, 2004</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;&nbsp;June 11, 2005 and June 12, 2004</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 - June 11, 2005</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 25, 2004</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></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>
     <TD ALIGN=RIGHT>22</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>40</TD>
        <TD ALIGN=LEFT>&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>41</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;Report
of Independent Registered Public Accounting Firm</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>43</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>44</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
- Unregistered Sales of Equity Securities and Use of Proceeds</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>44</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
- Submission of Matters to a Vote of Security Holders</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>44</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</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>45</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>47</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR><BR>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>2</P><HR NOSHADE><BR><BR><BR>


<P><B>PART I - FINANCIAL INFORMATION</b></P>

<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=95%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=51% ALIGN=LEFT><B>Revenues</b></TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% 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>$&nbsp;1,902</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,846</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;3,712</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;3,593</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>251</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>231</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>454</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>2,153</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,077</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,207</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,047</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>600</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>588</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,174</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,128</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>504</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>493</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>987</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>973</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>530</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,021</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>966</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>1,634</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,576</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,182</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,067</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>262</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>234</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>499</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>471</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>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</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>(25</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(39</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(22</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation (income) expense</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>AmeriServe and other charges (credits)</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(14</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(14</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>1,879</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,802</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,669</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,529</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>274</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>275</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>538</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>518</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>30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>67</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</b></TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>244</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>480</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>451</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>57</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>132</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>131</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>Net Income</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;187</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;178</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;348</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;320</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>$&nbsp;&nbsp;&nbsp;0.65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.10</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><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>$&nbsp;&nbsp;&nbsp;0.62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.05</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>$&nbsp;0.115</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.215</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.10</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><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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>$&nbsp;348</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;320</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;Depreciation and amortization</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>208</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>195</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>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</TD>
        <TD ALIGN=LEFT>&nbsp;</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>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(23</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</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>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>19</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>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(14</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Inventories</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</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>57</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(21</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>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(64</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>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(66</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;Net change in operating working
capital</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>57</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(171</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>Net Cash Provided by Operating Activities</b></TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>605</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>390</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>(210</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(221</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>41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</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>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term investments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(31</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(27</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Sales of property, plant and equipment</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, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>38</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</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>(140</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(198</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>46</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</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>(7</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>(23</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Repurchase shares of common stock</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>(489</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(294</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>89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>102</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>(58</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>(444</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(199</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>(4</TD>
        <TD ALIGN=LEFT>)</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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Increase (Decrease) in Cash and Cash Equivalents</b>
</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Increase in Cash and Cash Equivalents of Mainland
China for December</b></TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;<B>2004</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>34</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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>62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>192</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>$&nbsp;113</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;183</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>
<!-- 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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/25/04<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>$&nbsp;&nbsp;&nbsp;&nbsp;113</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term investments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>87</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accounts and notes receivable, less allowance: $21 in 2005
and $22 in 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>212</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>192</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Inventories</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>76</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>91</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>142</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>143</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>156</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>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</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>801</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>747</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Property, plant and equipment, net of accumulated
depreciation and amortization</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,371</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,439</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;of $2,733 in 2005 and $2,618 in 2004</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Goodwill</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>550</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>553</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Intangible assets, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>340</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>347</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Investments in unconsolidated affiliates</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>194</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>434</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>416</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total
Assets</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,675</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,696</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</b></TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Current Liabilities</b></TD><TD ALIGN=LEFT>&nbsp;</TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accounts payable and other current liabilities</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,214</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,189</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>60</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>111</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>222</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</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>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</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>1,574</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,376</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Long-term debt</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,562</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,731</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>992</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>994</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>4,128</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,101</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; 286
shares and 290 shares issued in 2005</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;and 2004, respectively</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>328</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>659</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;Retained earnings</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,359</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,067</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Accumulated other comprehensive loss</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>(140</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(131</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>1,547</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,595</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;5,675</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,696</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>
<BR>
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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 (&#147;SEC&#148;) for interim financial
information.
 Accordingly,  they do not include all of the  information  and footnotes
required by
United States  generally  accepted  accounting  principles 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 25, 2004
(&#147;2004 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 2004 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>In 2005, we began reporting  information for our international  business in
two
separate  operating  segments as a result of changes to our  management
reporting
 structure.  The China  Division  includes  mainland  China
(&#147;China&#148;),  Thailand  and
KFC  Taiwan,  and the International  Division  includes  the  remainder  of our
 international  operations.  While this  reporting  change did not impact our
consolidated  results,  segment  information  for  previous  periods  has  been
restated
 to be  consistent  with the  current  period presentation.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Beginning in 2005,  we also changed the China  business  reporting  calendar
to more
closely  align the timing of the  reporting of its results of operations with
our U.S.
 business.  Previously our China business,  like the rest of our international
 businesses,  closed one month (or one period for certain of our  international
 businesses)  earlier than YUM&#146;s period end date to facilitate
consolidated reporting.
 To maintain  comparability  of our consolidated  results of operations,
amounts related
to our China business for December 2004 have not been  reflected in our
Condensed
 Consolidated  Statements  of Income and net income for the China  business for
the one
month period ended December 31, 2004 was recognized as an adjustment  directly
to
 consolidated  retained  earnings in the year to date ended June 11, 2005.  Our
 consolidated  results of operations for the quarter and year to date ended June
11, 2005
include the results of  operations  of the  China  business  for the  months of
March,
 2005  through  May,  2005 and  January,  2005  through  May,  2005,
respectively,  and
the months to be included in future quarterly  reporting  periods will begin one
month
later than in previous years. Our  consolidated  results of  operations  for the
quarter
 and year to date ended June 12,  2004  continue  to include the results of
operations
 of the China  business for the months of  February,  2004 through  April,  2004
and
 December,  2003 through  April,  2004, respectively, as previously reported.
</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>For the  month of  December,  2004 the  China  business  had  revenues  of
$79
 million  and net  income of $6  million.  As  mentioned previously,  neither of
these
 amounts is included in our  Condensed  Consolidated  Statement of Income for
the year to
date ended June 11, 2005 and the net income figure was credited  directly to
retained
 earnings in the first quarter of 2005.  Net income for the month of December,
2004 was
negatively  impacted by costs  incurred in  preparation  of opening a
significant  number
of new stores in early 2005 as well as increased  advertising  expense, all of
which was
recorded in December&#146;s results of operations.  Additionally,  the net
increase in cash
for the China  business in  December,  2004 has been  presented  as a single
line item on
our  Condensed  Consolidated Statement of Cash Flows for the year to date ended
June 11,
2005.  The $34 million</P>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>6</P><HR NOSHADE><BR><BR><BR>



<P> net increase in cash was primarily  attributable  to short-term
 borrowings for working  capital  purposes,  a majority of which were repaid
prior to the
end of the China  business&#146;  first quarter.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our preparation of the accompanying  Financial Statements in conformity with
U.S.
generally accepted accounting  principles 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>In our opinion,  the accompanying  Financial  Statements include all normal
and
recurring  adjustments  considered necessary to present fairly,  when read in
conjunction
 with our 2004 Form 10-K,  our financial  position as of June 11, 2005, the
results of
our operations for the  quarters  and years to date ended June 11, 2005 and June
12, 2004
and cash flows for the years to date ended June 11, 2005 and June 12, 2004. Our
results
of operations  for these interim  periods are not  necessarily  indicative of
the results
to be expected for the full year.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our  significant  interim  accounting  policies  include the  recognition  of
certain
 advertising  and marketing  costs,  generally in proportion to revenue, and the
recognition of income taxes using an estimated annual effective tax rate.</P>

<!-- 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  (&#147;APB
25&#148;). 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 had the Company  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=95%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=51% ALIGN=LEFT>Net income, as reported</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;187
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;178
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;348
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;320
</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Deduct: Total stock-based employee</TD><TD ALIGN=LEFT>&nbsp;
</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>compensation expense determined under fair</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>value based method for all awards, net of</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>related tax effects</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(18</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;168</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;332</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;302</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10</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>0.62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.04</TD>
        <TD ALIGN=LEFT>&nbsp;</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.05</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>0.55</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.99</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>7</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<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>In October 2004, the Financial  Accounting  Standards Board
(&#147;FASB&#148;)  ratified the
consensus  reached by the Emerging Issues Task Force (&#147;EITF&#148;) on Issue
04-1 &#147;Accounting
for Preexisting  Relationships  between the Parties to a Business
Combination&#148;  (&#147;EITF
04-1&#148;). EITF 04-1  requires that a business  combination  between two
parties that have a
 preexisting  relationship  be evaluated to determine if a settlement of that
preexisting
 relationship  exists.  EITF 04-1 also requires that certain  reacquired rights
(including the rights to the acquirer&#146;s trade name under a franchise
agreement) be
recognized as intangible assets apart from goodwill.  However, if a contract
giving rise
to the  reacquired  rights  includes  terms that are favorable or  unfavorable
when
compared to pricing for current market transactions  for the same or similar
items,  EITF
04-1 requires that a settlement  gain or loss should be measured as the lesser
of a) the
amount by which the contract is  favorable or  unfavorable  to market terms from
the
 perspective  of the acquirer or b) the stated settlement provisions of the
contract
available to the counterparty to which the contract is unfavorable.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>EITF 04-1 was effective  prospectively  for business  combinations
consummated in
reporting  periods  beginning after October 13, 2004 (the fiscal year beginning
December
26, 2004 for the Company).  EITF 04-1 applies to  acquisitions of restaurants we
may make
from our franchisees  or  licensees.  We  currently  attempt to have our
franchisees  or
 licensees  enter into  standard  franchise or license agreements for the
applicable
 Concept and/or market when renewing or entering into a new  agreement.
However,  in
certain  instances franchisees or licensees have existing  agreements that
possess terms,
 including  royalty rates, that differ from our current standard agreements for
the
 applicable  Concept  and/or  market.  We acquired no franchisee or licensee
restaurants
in the quarter and year to date ended June 11,  2005.  However,  if in the
future we
were to acquire  restaurants  from a  franchisee  or  licensee  with such an
existing
 agreement,  we would be required to record a  settlement  gain or loss at the
date of
 acquisition.  The amount and timing of any such gains or losses we might record
is
dependent upon the  franchisees or licensees  from which we might acquire
restaurants
 and when the restaurants are acquired.  Accordingly, any impact cannot be
currently
determined.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>In December  2004,  the FASB issued SFAS No. 123  (Revised  2004),
&#147;Share-Based
 Payment&#148;  (&#147;SFAS  123R&#148;),  which  replaces  SFAS 123, supersedes
APB 25 and related
 interpretations  and amends SFAS No. 95,  &#147;Statement  of Cash Flows.&#148;
The  provisions
 of SFAS 123R are similar to those of SFAS 123,  however,  SFAS 123R requires
all
share-based  payments to employees,  including grants of employee stock options,
to be
recognized  in the  financial  statements  as  compensation  cost based on their
fair
value on the date of grant.  Fair value of share-based  awards will be
determined  using
 option-pricing  models (e.g.  Black-Scholes or binomial models) and assumptions
that
appropriately  reflect the specific  circumstances of the awards.  Compensation
cost will
be recognized over the vesting period on a straight-line basis for the fair
value of
awards that actually vest.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We will be required to choose between the  modified-prospective  and
 modified-retrospective  transition  alternatives in adopting SFAS 123R.  Under
the
 modified-prospective-transition  method,  compensation  cost  will be
recognized  in
 financial  statements  issued subsequent to the date of adoption for all
shared-based
 payments granted,  modified or settled after the date of adoption,  as well as
for any
 unvested  awards that were granted  prior to the date of  adoption.  As we
previously
 adopted only the pro forma  disclosure provisions of SFAS 123, we will
recognize
 compensation  cost relating to the unvested  portion of awards granted prior to
the date
of adoption  using the same  estimate  of the  grant-date  fair value and the
same
 attribution  method  used to  determine  the pro forma disclosures  under SFAS
123.
 Under the  modified-retrospective-transition  method  compensation  cost will
be
 recognized  in a manner consistent  with the  modified-prospective-transition
method,
 however,  prior period  financial  statements  will also be restated by
recognizing
 compensation cost as previously</P>

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





<P>  reported in the pro forma  disclosures under SFAS 123.
The restatement  provisions can be applied to either a) all periods presented or
b) to
the beginning of the fiscal year in which SFAS 123R is adopted.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On April 14,  2005,  the SEC  adopted a new rule that  amended  the
compliance  dates
of SFAS 123R to  require  implementation  at the beginning  of the first  fiscal
year
 beginning  after  June 15,  2005 (the year  beginning  January 1, 2006 for the
 Company).  Early adoption of SFAS 123R is permissible.  We are currently
considering
 whether to adopt SFAS 123R in the quarter ended December 31, 2005 or the
quarter  ended
March 25, 2006.  The Company is also in the process of  evaluating  the use of
certain
 option-pricing  models as well as the  assumptions to be used in such models.
When such
evaluation is complete,  we will determine the transition  method to use and the
impact
any change in valuation models might have.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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=95%>
<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=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>$&nbsp;187</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;178</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;348</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;320</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>Basic EPS</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Weighted-average common shares outstanding</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>288</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</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>$&nbsp;0.65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.10</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><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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Weighted-average common shares outstanding</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>288</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Shares assumed issued on exercise of dilutive share</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;equivalents</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>40</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>49</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>40</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>51</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>(26</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(35</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(27</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(36</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>302</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>304</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>303</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>$&nbsp;0.62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;0.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.05</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" FSL="Workstation" -->
<P></P>
Unexercised  employee  stock options to purchase  approximately  0.4 million and
0.2 million shares of our Common Stock for the quarter
and year to date ended June 11, 2005,  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  June 11,  2005,
respectively.  Unexercised employee stock options to purchase  approximately 0.3
million shares and 0.5 million of our Common Stock for
the quarter and year to date ended June 12, 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 June 12,
2004, respectively.

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the year to date ended June 11, 2005, we have granted  employee stock
options
to purchase  approximately 4 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 $46.</P>

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



<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>

<P>Comprehensive income was as follows:</P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>$&nbsp;187</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;178</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;348</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;320</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>(15</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(49</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</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>1</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>(2</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Reclassification of derivative (gains) losses to net</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;income, net of tax</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</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>
     <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>$&nbsp;172</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;129</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;339</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;315</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="RIGHT HANGING PARAGRAPH" 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;<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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Quarter ended June 11, 2005
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=56% ALIGN=LEFT>Refranchising net (gains) losses</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(13</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(13</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</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 VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</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>18</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;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</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;&nbsp;&nbsp;&nbsp;4</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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Quarter ended June 12, 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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=56% ALIGN=LEFT>Refranchising net (gains) losses</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;(1</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;4</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;3</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</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>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</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;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;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><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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date ended June 11, 2005
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=56% ALIGN=LEFT>Refranchising net (gains) losses</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(12</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(11</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</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>
     <TD ALIGN=RIGHT>23</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;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;3</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;&nbsp;15</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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date June 12, 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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=54% ALIGN=LEFT>Refranchising net (gains) losses</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;4</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;11</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store closure costs<SUP>(a)</SUP></TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Store impairment charges</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</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>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;19</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>The
income in store closure  costs is primarily the result of gains from the sale of
properties on which we formerly  operated         restaurants.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Sale of an Investment in Unconsolidated Affiliate</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter ended June 11, 2005, we sold our fifty percent  interest
in the
entity that operated  almost all KFCs and Pizza Huts in Poland and the Czech
Republic to
our then partner in the entity, principally for cash.  Concurrent with the sale,
our former partner  completed
an initial public offering  (&#147;IPO&#148;) of the majority of the stock it
then owned in the
entity.  We previously  accounted for our investment in this entity using the
equity
method.  Subsequent to the IPO, the new publicly held entity, in which YUM has
no
ownership interest,  is a franchisee as was the entity in which we previously
held a
fifty percent interest.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>This  transaction  generated a one-time gain of  approximately  $17 million
for YUM as
cash proceeds (net of expenses) of approximately $25 million from the sale of
our
interest in the entity  exceeded our recorded  investment in this
unconsolidated
 affiliate.  As with our equity  income from  investments  in  unconsolidated
 affiliates,  the  approximate  $17 million  gain was recorded in Other income
(expense)
in our Condensed Consolidated Statement of Income for the quarter and year to
date ended
June 11, 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Income Tax Impact of Repatriating Qualified Foreign Earnings</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The American  Jobs Creation Act of 2004 (the &#147;Act&#148;),  which became
law on October 22,
2004,  allows a dividends  received  deduction of 85% of  repatriated  qualified
foreign
 earnings in fiscal year 2005. We recorded $6 million in income tax expense
during the
quarter ended December 25, 2004 as a result of our then  determination to
repatriate
 approximately $110 million in 2005 which will be eligible for the Act&#146;s
dividends
 received  deduction.  In accordance with FASB Staff Position  109-2,
&#147;Accounting and
Disclosure  Guidance for the Foreign Earnings  Repatriation  Provisions within
the
American Jobs Creation Act of 2004,&#148; we continued to evaluate in 2005
whether we would
repatriate  other  undistributed  earnings from foreign  investments as a result
of the
Act. During the quarter ended June 11, 2005, we determined that we will
repatriate
 additional  qualified  foreign earnings of approximately  $390 million in
fiscal year
2005 which will be eligible for the Act&#146;s dividends  received  deduction
(for a total
 repatriation of qualified  earnings of  approximately $500  million).  As a
result of
this  determination,  approximately  $19 million of additional tax expense will
be
recognized in fiscal 2005,  $8 million of which was  recognized  in the quarter  and year
to date ended June 11,  2005.  No  additional</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>11</P><HR NOSHADE><BR><BR><BR>




<P> amounts  beyond the approximately $500
million as discussed above are eligible for the Act&#146;s dividends received
deduction.</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As required by SFAS No. 142,  &#147;Goodwill and Other  Intangible
Assets&#148; we evaluate the
remaining  useful life of our intangible  assets each reporting  period.  During
the
first quarter of 2005 several  factors  occurred that caused us to reconsider
our
decision that the LJS  trademark/brand,  which was allocated $140 million in
value upon
 acquisition,  had an indefinite  useful life. The primary factor was the
Company&#146;s
 decision to adjust development of certain  multibrand  combinations with LJS.
While we
and our franchisees  continue to build new LJS stand alone units as well as
multibrand
 units that include LJS, our decision to reallocate  certain capital  spending
in the
near term to other  investment  alternatives  is  considered  an  economic
factor  that
may limit  the  useful  life of the LJS trademark/brand.  Accordingly,  during
the first
quarter of 2005, we began to amortize the LJS  trademark/brand  over thirty
years, the
typical term of our multibrand  franchise  agreements  including one renewal.
We
reviewed the LJS trademark/brand for impairment prior to beginning  amortization
and
determined no impairment existed.  Amortization  expense of approximately $1
million was
recorded during the  quarter  and year to date ended June 11,  2005 and
amortization
 expense in the fiscal  year ended  December  31, 2005 will total approximately
$4
million.</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>There was no Wrench  litigation  (income)  expense  recorded  for the quarter
and year
to date ended June 11,  2005.  An  insignificant amount of Wrench  litigation
expense
 was  recorded  for the  quarter  and year to date ended June 12,  2004.  See
Note 14 for
further discussion of Wrench litigation.</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>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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We  classify  expenses  and  recoveries  related to  AmeriServe,  as well as
certain
 other  items,  as  AmeriServe  and other  charges (credits).  The amounts
recorded as
AmeriServe and other charges  (credits) were not significant for both the
quarter and
year to date ended June 11, 2005.  Income of $14 million was recorded as
AmeriServe  and
other  charges  (credits) for both the quarter and year to date ended June 12,
2004.  The
amount  primarily  resulted from cash  recoveries  related to the AmeriServe
bankruptcy
 reorganization process.</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>12</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>Other
(Income) Expense</b></TD>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=67% ALIGN=LEFT>Gain upon sale of investment in unconsolidated
affiliate</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;(17</TD>
        <TD WIDTH=4% ALIGN=LEFT>)</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;(17</TD>
        <TD WIDTH=4% ALIGN=LEFT>)</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Equity income from investments in unconsolidated affiliates
</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(23</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(22</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Foreign exchange net (gain) loss</TD><TD ALIGN=LEFT>&nbsp;
</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;</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>-</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>Other (income) expense</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(25</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(39</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(22</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>Dividends  received from  unconsolidated  affiliates  were  approximately
$17 million
and $13 million for the years to date ended June 11, 2005 and June 12, 2004,
respectively.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>9.</b> </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Debt</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our primary bank credit  agreement  comprises a $1.0 billion senior unsecured
 Revolving Credit Facility (the &#147;Credit  Facility&#148;) which matures in
September  2009. The
Credit  Facility is  unconditionally  guaranteed by our principal  domestic
subsidiaries
 and contains financial  covenants  relating to  maintenance  of leverage  and
fixed
 charge  coverage  ratios.  The Credit  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.  We were
in
compliance with all debt covenants at June 11, 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Under the terms of the Credit Facility,  we may borrow up to the maximum
borrowing
limit,  less outstanding  letters of credit. At June 11,  2005,  our unused
Credit
 Facility  totaled  $739  million,  net of  outstanding  letters of credit of
$196
 million.  There were borrowings of $65 million  outstanding  under the Credit
Facility
at June 11, 2005. The interest rate for borrowings  under the Credit 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 Credit Facility is payable at
least
quarterly.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter ended June 11, 2005, we began  classifying  $200 million
in Senior
 Unsecured Notes as short-term  borrowings due to their April 2006 maturity
date.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Interest  expense on short-term  borrowings and long-term debt was $33
million and $36
million for the quarters ended June 11, 2005 and June  12,  2004,  respectively,
and $66
 million  and $74  million  for the  years to date  ended  June  11,  2005 and
June 12,
 2004, respectively.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>Reportable
Operating Segments</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>As described in Note 1, in 2005 we began reporting  information for our
international
 business in two separate operating segments as a result of changes in our
management
reporting structure.  The China Division includes mainland China,  Thailand and
KFC
Taiwan, and the International  Division  includes the remainder of our
international
 operations.  Segment  information for previous  periods has been restated to
reflect
this reporting change.</P>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>13</P><HR NOSHADE><BR><BR><BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Revenues</u></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;1,385</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;1,349</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;2,720</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;2,646</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>492</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>491</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>976</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>976</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division<SUP>(a)</SUP></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>276</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>237</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>511</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>425</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>$&nbsp;2,153</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2,077</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4,207</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4,047</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=95%>
<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="1" ALIGN="Left"><U>Operating Profit</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;190</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;199</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;352</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;371</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>90</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>184</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>162</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</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>(61</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(44</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(103</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(92</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated other income (expense) <SUP>(b)</SUP></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>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated facility actions<SUP>(c)</SUP></TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(11</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation income (expense)<SUP>(d)</SUP></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>AmeriServe and other (charges) credits<SUP>(d)</SUP></TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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=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>274</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>275</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>538</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>518</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>(30</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(32</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(58</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(67</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</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;244</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;480</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;451</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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Identifiable Assets</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>&nbsp;</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>&nbsp;</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/25/04<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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>&nbsp;</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;3,146</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;3,316</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</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>1,501</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,441</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</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>689</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>613</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Corporate<SUP>(e)</SUP></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>339</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>326</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>$&nbsp;5,675</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,696</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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Long-Lived Assets<SUP>(f)</SUP></U></TH>
     <TH COLSPAN=5></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>12/25/04<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=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT></TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT></TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;2,828</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;2,900</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</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>859</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>904</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD>
        <TD ALIGN=LEFT></TD>
     <TD ALIGN=RIGHT>468</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>436</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>106</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>99</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></TD>
        <TD ALIGN=LEFT></TD>
     <TD ALIGN=RIGHT></TD>
<td>&nbsp;</td>
        <TD ALIGN=right>$&nbsp;4,261</TD>
     <TD ALIGN=RIGHT></TD>
        <TD ALIGN=right>$&nbsp;4,339</TD>
     <TD ALIGN=RIGHT></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>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Includes
 revenues of  approximately  $210 million and $185 million in mainland China for
the
quarters ended June 11, 2005 and          June 12, 2004,  respectively.
Includes
 revenues of  approximately  $399  million and $336 million in mainland  China
for the
         years to date ended June 11, 2005 and June 12, 2004, respectively.</TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Includes
a gain of approximately  $17 million related to the sale of our 50% interest in
our
former  unconsolidated  affiliate          in Poland and the Czech Republic in
the
quarter and year to date ended June 11, 2005.</TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Unallocated
 facility  actions  comprise  refranchising  gains  (losses)  which are not
allocated to
the U.S.,  International          Division or China Division segments for
performance
reporting purposes.</TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(d) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>See
Note 7 for a discussion of AmeriServe and other charges (credits) and Wrench
litigation
(income) expense.</TD>
</TR>
</TABLE>

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<BR><BR><BR><P ALIGN=CENTER>14</P><HR NOSHADE><BR><BR><BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(e) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Primarily
includes deferred tax assets;  property,  plant and equipment,  net, related to
our
office facilities;  income taxes          receivable; and fair value of
derivative
instruments.</TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(f) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>Includes
property, plant and equipment, net; goodwill; and intangible assets, net.</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>11.</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 a
majority of
full-time  U.S.  salaried  employees,  certain U.S. 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 plans are
paid by the Company as
incurred.  During 2001,  the plans  covering our U.S.  salaried employees were
amended
such that any salaried  employee hired or rehired by us after  September 30,
2001 is not
eligible to participate in those plans.  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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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 us 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=90%>
<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=1></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=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>$&nbsp;&nbsp;&nbsp;8</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;8</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;15</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;15</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>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18</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>(11</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(21</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(19</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>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</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>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</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><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>$&nbsp;13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;26</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;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><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=3>Other Postretirement<BR>
Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Other Postretirement<BR>
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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>$&nbsp;-</TD>
        <TD WIDTH=6% ALIGN=LEFT></TD>
 <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;-</TD>
        <TD WIDTH=6% ALIGN=LEFT></TD>
        <TD WIDTH=6% ALIGN=right>$&nbsp;1</TD>
     <TD WIDTH=6% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=right>$&nbsp;1</TD>
     <TD WIDTH=6% ALIGN=RIGHT></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>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</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>1</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>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>$&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4</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="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>15</P><HR NOSHADE><BR><BR><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 2004 Form 10-K,  we are not required to make
contributions  to
the Plan in 2005. No  contributions  have been made to the Plan during the year
to date
ended June 11,  2005.  While we may make a  discretionary  contribution  to the
Plan
during 2005, a decision has not yet been reached.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>Share
Repurchase Program</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In May 2005, our Board of Directors  authorized a share  repurchase  program.
This
program  authorized us to  repurchase,  through May 2006, up to $500 million
(excluding
 applicable  transaction  fees) of our  outstanding  Common Stock.  There have
been no
repurchases made under this program.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In January 2005, our Board of Directors  authorized a share  repurchase
program.
 This program  authorized us to  repurchase,  through January 2006, up to $500
million
 (excluding  applicable  transaction  fees) of our outstanding  Common Stock.
During the
year to date ended June 11, 2005, we repurchased  approximately 9.3 million
shares for
 approximately  $464 million at an average price per share of approximately  $50
under
this program.  At June 11, 2005,  approximately  $36 million  remained
available for
 repurchases  under this program.  Based on market  conditions and other
factors,
 additional  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 May 2004,  our Board of  Directors  authorized a share  repurchase
program.  This
 program  authorized  us to  repurchase,  through November 2005, up to $300
million
 (excluding  applicable  transaction fees) of our outstanding  Common Stock.
During the
year to date ended June 11, 2005, we repurchased  approximately  500,000 shares
for
 approximately  $25 million at an average price per share of $47 under this
program.
 This program was completed during the first quarter of 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the fourth quarter of 2004, we entered into an accelerated  share
repurchase
 program (the  &#147;Program&#148;).  In connection with the Program,  a
third-party  investment
 bank borrowed  approximately  5.4 million  shares of our Common Stock from
 shareholders.  We then repurchased  those  shares at their  then  market  value
of
 $46.58  from the  investment  bank for  approximately  $250  million.  The
repurchase
 was made pursuant to the share  repurchase  program  authorized by our Board of
Directors in May 2004.  Simultaneously,  we entered into a forward  contract
with the
 investment  bank that was indexed to the number of shares  repurchased.  Under
the terms
of the forward  contract,  we were required to pay or entitled to receive a
price
adjustment based on the difference  between the weighted average price of our
Common
Stock during the duration of the Program and the initial  purchase  price of
$46.58 per
share.  The Program was completed  during the first quarter of 2005. We made a
cash
payment of  approximately  $3 million to the investment  bank to settle the
forward
 contract in full.  This payment was  recognized  as an  adjustment  to Common
Stock and
is included in the $464 million in repurchases as described above.</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 21, 2005, up to $300
million
 (excluding  applicable  transaction  fees) of our  outstanding  Common Stock.
This
share  repurchase program was  completed in 2004.  During the year to date ended
June 12,
 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="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>16</P><HR NOSHADE><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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>Supplemental
Cash Flow Data</b></TD>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="75%">
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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="80%" ALIGN="LEFT">Cash Paid for:</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;Interest</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;79</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>98</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>196</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;Capital lease obligations incurred to
acquire assets</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>14.</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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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 frequently  contingently  liable on lease  agreements.
These
leases have varying terms, the latest of which expires in 2031. As of June 11,
2005 and
December 25, 2004,  the  potential  amount of  undiscounted  payments we could
be
required to make in the event of  non-payment  by the primary  lessee was $338
million
and $365 million,  respectively.  The present  value of these  potential
payments
 discounted at our pre-tax cost of debt at June 11, 2005 was $284 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 payments  under these  leases.  Accordingly,  the liability
recorded
for our exposure under such leases at June 11, 2005 and December 25, 2004, was
not
material.</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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We had provided  approximately  $16 million of partial  guarantees  of two
loan
 franchisee  pools  related  primarily to the Company&#146;s historical
refranchising
 programs and, to a lesser  extent,  franchisee  development  of new
restaurants,  at
both June 11, 2005 and December 25, 2004. In support of these  guarantees,  we
posted a
letter of credit of $4 million.  We also provided a standby  letter of credit of
$18
million 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 $84 million at June 11, 2005.</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  refranchising
loss
 (gain).  New loans have not been added to either loan pool in the year to date
ended
June 11, 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We had  guaranteed  certain lines of credit and loans of  unconsolidated
affiliates
 totaling $34 million at December 25, 2004.  There were no such guarantees
outstanding
at June 11, 2005. Our  unconsolidated  affiliates had total revenues of
approximately
$772 million for the year to date ended June 11, 2005,  and assets and debt of
approximately
 $840 million and $32 million,  respectively,  at June 11, 2005.</P>


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<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We have also  guaranteed  certain lines of credit,  loans and letters of
credit of
third parties  totaling $2 million and $9 million at June 11, 2005 and  December
25,
 2004,  respectively.  If all such lines of credit and  letters of credit  were
fully
drawn down,  the maximum  contingent  liability  under these  arrangements
would be
 approximately  $20 million and $26 million as of June 11, 2005 and December 25,
2004,
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
our
unconsolidated  affiliates and other third parties.  Accordingly,  our recorded
liability
as of June 11, 2005 and December 25, 2004 is not significant.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<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
years&#146; coverage
 including  workers&#146;  compensation,  employment practices liability,
general liability,
 automobile liability and 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>In the U.S. and in certain other  countries,  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  our  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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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 at the higher of target for the current year or actual for the
 preceding  year, a proportionate bonus at the higher of target or actual
performance
earned through the date of termination,  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 June 11, 2005,
payments of
 approximately  $34 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>

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<!-- 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.
We
provide reserves for such claims and contingencies  when payment is probable and
estimable in accordance with SFAS No. 5 &#147;Accounting for
Contingencies&#148;.</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&#146;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&#146;s in California
were
 misclassified  under that state&#146;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&#146;s under the FLSA claim,  providing  notice to
prospective
 class members and an opportunity to join the class. Approximately  12 percent
of the
eligible  class members have joined the  litigation as of June 29, 2005
(although a
number were later stricken by the District Court as described below).  Once
class
 certification  discovery is completed,  Pizza Hut intends to challenge the
propriety of
conditional  class  certification.  On July 20, 2004, the District Court granted
summary
 judgment on Ms.  Coldiron&#146;s individual  FLSA claim.  Pizza Hut believes
that the
District  Court&#146;s  summary  judgment  ruling in favor of Ms.  Coldiron is
clearly
erroneous  under  well-established  legal  precedent.  Ms.  Coldiron also filed
a motion
to certify an additional  class of current and former  California  RGM&#146;s
under
 California  state law, a motion for summary  judgment on her individual  state
law
claims 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 opposed all three motions.  On April 1,
2005, the
District Court issued an order granting Ms.  Coldiron&#146;s  motion to certify
a California
 state law class. On April 15, 2005,  Pizza Hut filed a petition for review of
that order
by the United States Court of Appeals for the Ninth  Circuit.  On May 5, 2005,
the
District Court sua sponte filed an order extending the opt-in  cut-off date in
the FLSA
action until  September 1, 2005. On May 13, 2005,  the District Court sua sponte
amended
its April 1, 2005 order to identify  the  California  class  claims and  appoint
class
 counsel.  On May 27,  2005,  Pizza Hut filed a petition for review of the
amended  order
by the Ninth  Circuit.  The Ninth Circuit has not yet ruled on either  petition.
On June
30, 2005,  the District  Court granted Pizza Hut&#146;s motion to strike all
FLSA class
members who joined the  litigation  after July 15, 2004. The effect of this
order is to
reduce the number of FLSA class members to only  approximately 87 (or
approximately 2.5%
of the eligible class members).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We continue to believe that Pizza Hut has properly  classified its RGM&#146;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, and any potential litigation loss from
the outcome
of the case, cannot be predicted at this time.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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 compliant  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
&#147;California
 Restaurants&#148;) 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
&#147;ADA&#148;), 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</P>


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<P> 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&#146;  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&#146;  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&#146;  claims for equitable relief and stage two will
resolve  Plaintiffs&#146;  claims
for damages.  The parties are currently  proceeding with the equitable  relief
stage of
this action.  During this stage,  Taco Bell filed a motion to partially
decertify  the
class to exclude from the Rule  23(b)(2)  class claims for  monetary  damages.
The
District  Court denied the  motion.  Plaintiffs  filed  their own motion for
partial
 summary  judgment  as to  liability  relating to a subset of the California
Restaurants.
 The District Court denied that motion as well.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Taco Bell has denied  liability and intends to  vigorously  defend  against
all claims
in this lawsuit.  Although this lawsuit is at an early stage in the
proceedings,  it is
likely that certain of the California  Restaurants will be determined to be not
fully
compliant with accessibility  laws and that Taco Bell will be required to take
certain
steps to make those restaurants fully compliant.  However, at this time,  it is
not
possible to estimate with  reasonable  certainty  the  potential  costs to bring
any non
compliant  California Restaurants  into compliance with applicable  state and
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 Sixth Circuit  Court of Appeals  reversed the
District  Court&#146;s
 judgment in favor of Taco Bell Corp.  and remanded the case to the District
Court.  Taco
Bell Corp.  unsuccessfully  petitioned the Sixth Circuit 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&#146;  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&#146;s  motion and granted the plaintiff&#146;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 appealed  the verdict to the Sixth Circuit
Court of
Appeals and interest  continued to accrue during the appeal  process.  Prior to
a ruling
from the Sixth  Circuit  Court of  Appeals,  we settled  this  matter  with the
</P>

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<P> Wrench
 plaintiffs  on January  15,  2005.  Concurrent  with the settlement with the
plaintiffs,
 we also settled the matter with certain of our insurance  carriers.  As a
result of
these settlements, reversals of  previously  recorded  expense of $14 million
were
recorded in the year ended  December 25, 2004.  We paid the  settlement amount
to the
plaintiffs and received the insurance recovery during the first quarter of 2005.
</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We intend to seek additional  recoveries from our other insurance  carriers
during the
periods in question.  We also filed suit against Taco  Bell&#146;s  former
advertising
 agency  in the  United  States  District  Court  for the  Central  District  of
 California  seeking reimbursement  for the settlement  amount as well as any
costs that
we have incurred in defending  this matter.  The District Court has issued a
minute order
 granting  defendant&#146;s  motion for summary  judgment but has  requested
submissions
 from the  defendant for its review before issuing a final order.  We believe
that a
grant by the District Court of this summary  judgment motion would be erroneous
under the
law. We will  evaluate our options once a final order has been issued.  Any
additional
 recoveries  will be recorded as they are realized.</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 our October 6, 1997 spin-off from PepsiCo,  Inc.
(&#147;PepsiCo&#148;) (the &#147;Spin-off&#148;),
 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
June 11, 2005, PepsiCo remains liable for  approximately  $29 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 June 11, 2005, there have not been any determinations  made by
PepsiCo
where we would have reached a different determination.</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>15.</b></TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%><B>Subsequent
Event</b></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our KFC business in mainland  China has been  negatively  impacted by the
 interruption  of product  offerings  and negative  publicity associated with a
supplier
 ingredient issue  experienced in late March,  2005.  Subsequent to the end of
our China
 Division&#146;s  second quarter,  we entered  into an agreement  with the
supplier of the
 ingredient  for partial  recovery of our losses.  As a result of the agreement,
we
expect to recognize  approximately  $13 million in operating  profit in the
quarter
 ended  September 3, 2005 related to this recovery with possible additional,
lesser
amounts recognized in the quarter ended December 31, 2005 or March 25, 2006.</P>

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<P><B>Item 2.  Management&#146;s Discussion and Analysis of Financial Condition
and Results of Operations</B></P>

<P><B>Introduction and Overview</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.  YUM is the second  largest QSR company  outside the U.S. with
13,257
units.  Our business  consists of three  operating  segments:  United States,
the
 International Division and the China Division.  The China Division includes
mainland
China (&#147;China&#148;),  Thailand and KFC Taiwan and the International
Division includes the
remainder of our international operations.</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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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
competes 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&#146;s key strategies are:</P>

<UL><LI>Building dominant restaurant brands in mainland China<BR>
<LI>Driving profitable international expansion<BR>
<LI>Improving restaurant operations<BR>
<LI>Multibranding category-leading brands</UL>

<!-- 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>China Division and International Division expansion<BR>
         &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Division and International Division
system sales growth (local currency)<BR>
         &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of new China Division and
International Division restaurant openings<BR>
         &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net China Division and International
Division 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>

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<BR><BR><BR><P ALIGN=CENTER>22</P><HR NOSHADE><BR><BR><BR>


<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>

<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>Throughout the MD&amp;A, the Company provides the percentage  change
excluding the impact
of foreign  currency  translation.  These amounts are derived by  translating
current
year results at prior year  average  exchange  rates.  We believe the
elimination  of
the foreign currency translation impact provides better year-to-year
comparability
without the distortion of foreign currency fluctuations.</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 25,
2004 (&#147;2004 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 W/BOLD" FSL="Workstation" -->
<P><B>Significant Known Events, Trends or Uncertainties Expected to Impact 2005
Comparisons with 2004</B></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The following  factors  impacted  comparability  of operating  performance
for the
quarter  and/or year to date ended June 11, 2005 or could impact comparisons for
the
remainder of 2005.  Certain of these factors were previously discussed in our
2004 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>Upon the adoption of Statement of Financial Accounting Standards No. 123
(Revised
2004),  &#147;Share-Based  Payment&#148; (&#147;SFAS 123R&#148;), we will be
required to recognize
 compensation  cost in the financial  statements  for all  share-based  payments
to our
 employees,  including grants of stock options,  based on the fair value of the
 share-based  awards on the date of grant.  The fair value of the  share-based
awards
will be determined  using option pricing models and assumptions  that
appropriately
 reflect the specific  circumstances of the awards.  Compensation  cost will be
 recognized  over the  vesting  period on a  straight-line  basis for the fair
value of
awards that actually vest.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>On April 14,  2005,  the  Securities  and Exchange  Commission  adopted a new
rule
that  amended the  compliance  dates of SFAS 123R to require  implementation  at
the
beginning of the first fiscal year beginning  after June 15, 2005 (the year
beginning
 January 1, 2006 for the  Company).  Early  adoption  of SFAS 123R is
permissible.  We
are  currently  considering  whether  to adopt  SFAS 123R in the quarter  ended
December
31, 2005 or the quarter  ended March 25,  2006.  We are also in the process of
 evaluating  the use of certain option-pricing  models as</P>

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<BR><BR><BR><P ALIGN=CENTER>23</P><HR NOSHADE><BR><BR><BR>


<P> well as the assumptions to be
used in such models.  When such  evaluation is complete,  we will determine the
transition method to use and the impact any change in valuation models might
have.</P>

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

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In 2005, we began reporting  information for our international  business in
two
separate  operating  segments as a result of changes to our  management
reporting
 structure.  The China  Division  includes  mainland  China
(&#147;China&#148;),  Thailand  and
KFC  Taiwan,  and the International  Division  includes  the  remainder  of our
 international  operations.  While this  reporting  change did not impact our
consolidated  results,  segment  information  for  previous  periods  has  been
restated
 to be  consistent  with the  current  period presentation.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Beginning in 2005,  we also changed the China  business  reporting  calendar
to more
closely  align the timing of the  reporting of its results of operations with
our U.S.
 business.  Previously our China business,  like the rest of our international
 businesses,  closed one month (or one period for certain of our  international
 businesses)  earlier than YUM&#146;s period end date to facilitate
consolidated reporting.
 To maintain  comparability  of our consolidated  results of operations,
amounts related
to our China business for December 2004 have not been  reflected in our
Condensed
 Consolidated  Statements  of Income and net income of the China  business of $6
million
for the one month period ending  December 31, 2004 was recognized as an
adjustment
 directly to consolidated  retained  earnings in the year to date ended June 11,
2005.
 Our  consolidated  results  of  operations  for the  quarter  and year to date
ended
June 11,  2005 include the results of  operations  of the China  business for
the months
of March,  2005 through May,  2005 and January,  2005 through May,  2005,
respectively,
 and the months to be  included in future  quarterly  reporting  periods  will
begin one
month later than in previous  years.  Our  consolidated  results of operations
for the
quarter and year to date ended June 12, 2004 continue to include the results of
operations of the China  business for the months of February,  2004 through
April,  2004
and December,  2003 through April, 2004, respectively, as previously reported.
</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>See Note 1.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Mainland China Supplier Ingredient Issue</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our KFC business in mainland  China has been  negatively  impacted by the
 interruption  of product  offerings  and negative  publicity associated  with a
supplier
 ingredient  issue  experienced  in late March,  2005 (Period 4, the first
period of our
China  Division&#146;s second quarter).  An ingredient was included in a limited
number of
products that necessitated  temporarily  withdrawing those products from
restaurants in
that market.  The supplier  issue was resolved and the products were returned to
the
menu.  Sales at our Pizza Hut restaurants  in mainland  China were not impacted.
As a
result of this issue,  system sales in our China  Division were up 12 % in the
quarter
ended June 11, 2005  excluding the impact of foreign  currency  translation
versus our
ongoing  target of at least 22% growth. Operating  profit for the quarter ended
June 11,
2005 for the China Division was $25 million,  a decrease of 30% from the quarter
ended
June 12, 2004.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>For the remainder of the year,  sales trends are expected to steadily
improve from
the low point in Period 4. We currently expect full year  China  Division
system  sales
and  revenue  growth of 10% to 15%,  excluding  the  impact of foreign  currency
 conversion,  and restaurant  margins of  approximately  17% to 18%.  Operating
profit
for the balance of the year is expected to show growth versus the prior year.
Operating
 profit will be positively  impacted by a partial  financial  recovery from our
mainland
 China  supplier of the ingredient.  We anticipate that operating profit in the
quarter
ended September 3, 2005 will reflect  approximately $13 million related to this
recovery,
with possible additional, lesser amounts recognized in the quarter ended
December 31,
2005 or March 25, 2006.</P>



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

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Extra Week in 2005</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our fiscal  calendar  results in a  fifty-third  week every five or six
years.  Fiscal
 year 2005  includes a  fifty-third  week in the fourth quarter for the majority
of our
U.S.  businesses as well as our international  businesses that report on a
period, as
opposed to a monthly,  basis. In the U.S., we anticipate  permanently
accelerating the
timing of the KFC business closing by one week in December 2005, and thus,
there will be
no fifty-third  week benefit for this business in 2005. We estimate the
fifty-third
 week will increase revenues  and  operating  profit  in 2005 by  approximately
$80
 million  and $15  million,  respectively.  While  the  impact  of the
fifty-third  week
adds a potential  incremental  benefit of $0.04 to diluted earnings per share,
we believe
this benefit will be offset by expense associated with asset actions.</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our  Puerto  Rico  business  was sold on  October  4, 2004 for an amount
 approximating  its then  carrying  value.  Company  sales and restaurant
profit
 decreased  $44  million  and $8  million,  respectively,  franchise  fees
increased  $3
million  and  general  and administrative  expenses  decreased  $3 million for
the
quarter  ended June 11,  2005 as compared to the quarter  ended June 12,  2004.
Company
sales and  restaurant  profit  decreased $87 million and $16 million,
respectively,
 franchise  fees  increased $5 million and general  and  administrative
expenses
 decreased  $5 million  for the year to date ended June 11, 2005 as compared to
the year
to date ended June 12, 2004.</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 June 11, 2005. Higher  commodity  costs,
particularly
 in meat prices,  negatively  impacted  U.S.  restaurant  margins as a
percentage  of
sales by approximately  20 and 110 basis points for the quarter and year to date
ended
June 11, 2005,  respectively,  as compared to the quarter and year to date ended
June 12,
2004. We currently anticipate that commodity cost pressure will lessen during
the
remainder of 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Sale of an Investment in Unconsolidated Affiliate</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the quarter  ended June 11, 2005, we sold our fifty percent  interest
in the
entity that operated  almost all KFCs and Pizza Huts in Poland and the Czech
Republic to
our then partner in the entity, principally for cash.  Concurrent with the sale,
our former partner  completed
an initial public offering  (&#147;IPO&#148;) of the majority of the stock it
then owned in the
entity.  We previously  accounted for our investment in this entity using the
equity
 method.  Subsequent to the IPO, the new publicly  held entity,  in which YUM
has no
ownership  interest,  is a franchisee as was the entity in which we previously
held a
fifty percent interest.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>This  transaction  generated a one-time gain of  approximately  $17 million
for YUM as
cash proceeds (net of expenses) of approximately $25 million from the sale of
our
interest in the entity  exceeded our recorded  investment in this
unconsolidated
 affiliate.  As with our equity  income from  investments  in  unconsolidated
 affiliates,  the  approximate  $17 million  gain was recorded in Other income
(expense)
in our Condensed Consolidated Statement of Income for the quarter and year to
date ended
June 11, 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The transaction is not expected to have a significant  impact on the
Company&#146;s  future
results of operations.  However,  as a result of having  completed the
transaction and
recording the related gain, the Company may pursue  additional  facility actions
in other
markets in the second half of the year which may increase facility actions
expense.</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/UNDERLINE" FSL="Workstation" -->
<P><U>Income Tax Impact of Repatriating Qualified Foreign Earnings</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The American  Jobs Creation Act of 2004 (the &#147;Act&#148;),  which became
law on October 22,
2004,  allows a dividends  received  deduction of 85% of  repatriated  qualified
foreign
 earnings in fiscal year 2005. We recorded $6 million in income tax expense
during the
quarter ended December 25, 2004 as a result of our then  determination to
repatriate
 approximately $110 million in 2005 which will be eligible for the Act&#146;s
dividends
 received  deduction.  In accordance with FASB Staff Position  109-2,
&#147;Accounting and
Disclosure  Guidance for the Foreign Earnings  Repatriation  Provisions within
the
American Jobs Creation Act of 2004,&#148; we continued to evaluate in 2005
whether we would
repatriate  other  undistributed  earnings from foreign  investments as a result
of the
Act. During the quarter ended June 11, 2005, we determined that we will
repatriate
 additional  qualified  foreign earnings of approximately  $390 million in
fiscal year
2005 which will be eligible for the Act&#146;s dividend  received  deduction
(for a total
 repatriation  of qualified  earnings of  approximately $500  million).  As a
result of
this  determination,  approximately  $19 million of additional tax expense will
be
recognized in fiscal 2005,  $8 million of which was  recognized  in the quarter
and year
to date ended June 11,  2005.  No  additional  amounts  beyond the approximately
$500
million as discussed above are eligible for the Act&#146;s dividend received
deduction.</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=85%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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=56% ALIGN=LEFT>Number of units refranchised</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>127</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>11</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>141</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>14</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>$&nbsp;&nbsp;&nbsp;37</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Refranchising net (gains) losses, pre-tax</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(11</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P></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;).

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



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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=42% ALIGN=LEFT>Number of units closed</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>44</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>116</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>87</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>185</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 ALIGN=RIGHT>$&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(5</TD>
        <TD ALIGN=LEFT>)</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The income in store  closure  costs for the  quarter to date ended June 11,
2005 and
the  quarter and year to date ended June 12, 2004 is primarily the result of
gains from
the sale of properties on which we previously operated restaurants.</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>The impact on operating  profit arising from  refranchising  and Company
store
 closures is the net of (a) the estimated  reductions in restaurant  profit,
which
 reflects the  decrease in Company  sales,  and general and  administrative
expenses 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 2004 and were no longer
operated by us
as of June 11, 2005. 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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Quarter ended 6/11/05
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China <BR>
Division<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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT>Decreased sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(45</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(60</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(4</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(109</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>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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>Decrease in total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;(43</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$ &nbsp;(57</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(104</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>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date ended 6/11/05
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China <BR>Division<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=44% ALIGN=LEFT>Decreased sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(90</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(117</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(7</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(214</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>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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><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>$&nbsp;(87</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(111</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(205</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>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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Quarter ended 6/11/05
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China <BR>Division<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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT>Decreased restaurant profit</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(4</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(7</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(12</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>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased general and</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;administrative 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>-</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>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decrease in operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(4</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>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date ended 6/11/05
<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<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China <BR>Division<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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT>Decreased restaurant profit</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(8</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(17</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD WIDTH=6% ALIGN=LEFT>)</TD>
     <TD WIDTH=8% ALIGN=RIGHT>$&nbsp;(26</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>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Decreased general and</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;administrative expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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>Decrease in operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(12</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="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>27</P><HR NOSHADE><BR><BR><BR>



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



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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=2></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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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></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=40% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;1,902</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;1,846</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>3</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;3,712</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;3,593</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>3</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>251</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>231</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>454</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2,153</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2,077</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4,207</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4,047</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <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>Company restaurant profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;268</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;270</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;530</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;526</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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></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>14.6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.5)</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD>
     <TD ALIGN=RIGHT>14.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(0.4)</TD>
        <TD ALIGN=LEFT>&nbsp;ppts.</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;274</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;275</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;538</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;518</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</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>30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>67</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</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>57</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>65</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>132</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>131</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Net income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;187</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;178</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;348</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;320</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Diluted earnings per share<SUP>(a)</SUP></TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;0.62</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$0.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;1.15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1.05</TD>
<td>&nbsp;</td>
        <TD ALIGN=right>10</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" 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/BOLD" FSL="Workstation" -->
<P><B>Restaurant Unit Activity</B></P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Worldwide</U></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>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>Total<BR>
Excluding<BR>
Licensees<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>
     <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=32% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>7,759</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,664</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>21,859</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>31,282</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>170</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>298</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>527</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</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>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(141</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(135</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>274</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(87</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(20</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(264</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(371</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</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>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7,685</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,568</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22,181</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31,434</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>% 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>71</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The above totals exclude 2,345 licensed units at both June 11, 2005 and
December 25,
2004.</P>

<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>28</P><HR NOSHADE><BR><BR><BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>United States</U></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>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>Total<BR>Excluding<BR>Licensees
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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=32% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>4,989</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>-</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>13,482</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>18,471</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New builds</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>100</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>132</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</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>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(83</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>81</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(62</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(160</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(222</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</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>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,866</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13,508</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18,374</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>% of Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>74</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The above totals exclude 2,148 and 2,139 licensed units at June 11, 2005 and
December
25, 2004, respectively.</P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>International Division</U></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>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>Total<BR>
Excluding<BR>
Licensees<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>
     <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=32% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,504</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,204</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>8,179</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>10,887</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>193</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>227</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</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>Refranchising</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(58</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(135</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>193</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>(15</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(104</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(135</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</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>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,439</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,073</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8,466</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10,978</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>% of Total</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>77</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The above totals exclude 197 and 206 licensed units at June 11, 2005 and
December 25,
2004, respectively.</P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>China Division</U></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>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>Total<BR>
Excluding<BR>
Licensees<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>
     <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=32% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,266</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>460</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>198</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,924</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>124</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>39</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>168</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Acquisitions</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>Refranchising</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>Closures</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(14</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>4</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><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>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,380</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>207</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,082</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>% of Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>66</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>24</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>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Beginning of the year  balances have been adjusted to include  December
activity in
mainland  China due to the change in its reporting calendar.  The net change was
an
 addition  of 16, 2, 1 and 19 units for  company,  unconsolidated  affiliates,
 franchisees  and total excluding licensees, respectively. There are no licensed
units in
the China Division.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Multibrand  restaurants are included in the totals above.  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</P>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>29</P><HR NOSHADE><BR><BR><BR>



<P> new multibrand
 restaurant,  while increasing  sales and points of distribution  for two
brands,
 results in just one additional  unit count.  Franchise unit counts below
include both
franchisee and  unconsolidated  affiliate  multibrand units.  Following are
multibrand
 restaurant totals at June 11, 2005 and December 25, 2004:</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>6/11/05</U></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=50% ALIGN=LEFT>United States</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,523</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,290</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>2,813</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>163</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>185</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>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,545</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,453</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,998</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=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>12/25/04</U></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=50% ALIGN=LEFT>United States</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,391</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,250</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>2,641</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>155</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>180</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</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></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>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,419</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,405</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,824</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 June 11, 2005, Company and franchise multibrand
unit gross
additions were 160 and 69, respectively.</P>

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



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="Left"><U>Quarter</U></TH>
     <TH COLSPAN=3>Increase<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="3" NOWRAP="Nowrap">Increase excluding currency<BR>
translation<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>United States</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>4</TD>
        <TD WIDTH=8% ALIGN=LEFT>%</TD>
     <TD WIDTH=4% ALIGN=RIGHT>3</TD>
        <TD WIDTH=8% ALIGN=LEFT>%</TD>
     <TD WIDTH=2% ALIGN=RIGHT>N/</TD>
        <TD WIDTH=2% ALIGN=LEFT>A</TD>
     <TD WIDTH=4% ALIGN=RIGHT>N/</TD>
        <TD WIDTH=2% ALIGN=LEFT>A</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<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 franchise and
license  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.

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Worldwide system sales growth was driven by new unit development and same
store sales
growth, partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. system sales growth was driven by same store sales growth and new unit
development, partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>International  Division system sales growth was driven by new unit
development and
same store sales growth,  partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>China Division system sales growth was driven by new unit development,
partially
offset by same store sales declines.</P>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>30</P><HR NOSHADE><BR><BR><BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Increase<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN="3" NOWRAP="Nowrap">Increase excluding currency<BR>
translation<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>United States</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>4</TD>
        <TD WIDTH=8% ALIGN=LEFT>%</TD>
     <TD WIDTH=4% ALIGN=RIGHT>4</TD>
        <TD WIDTH=8% ALIGN=LEFT>%</TD>
     <TD WIDTH=4% ALIGN=RIGHT>N/</TD>
        <TD WIDTH=4% ALIGN=LEFT>A</TD>
     <TD WIDTH=4% ALIGN=RIGHT>N/</TD>
        <TD WIDTH=2% ALIGN=LEFT>A</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>23</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Worldwide system sales growth was driven by new unit development and same
store sales
growth, partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. system sales growth was driven by same store sales growth and new unit
development, partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>International  Division system sales growth was driven by new unit
development and
same store sales growth,  partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>China Division system sales growth was driven by new unit development,
partially
offset by same store sales declines.</P>

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


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Quarter</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Amount<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% Increase/<BR>
</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% Increase/<BR>
(Decrease)<BR>
excluding<BR>
currency<BR>
</TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>(Decrease)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>translation<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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=44% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$1,240</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$1,208</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>394</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>409</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>268</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>229</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></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>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,902</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,846</TD>
        <TD ALIGN=LEFT>&nbsp;</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>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>145</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>141</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>98</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>82</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></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>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>251</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>231</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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,385</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,349</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>492</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>491</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>276</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>237</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></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>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,153</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,077</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></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></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>The  increase  in  Worldwide  Company  sales was  driven by new unit
development  and
same store  sales  growth,  partially  offset by refranchising and store
closures.</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" FSL="Workstation" -->
<P>The increase in Worldwide  franchise and license fees was driven by new unit
 development,  refranchising,  same store sales growth and royalty rate
increases,
partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in U.S.  Company sales was driven by same store sales growth and
new unit
 development,  partially offset by refranchising and store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. same store sales  include 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:
</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=6>Quarter ended 6/11/05
<HR WIDTH=95% 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 Guest<BR>
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=40% ALIGN=LEFT>KFC</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>8</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=4% ALIGN=RIGHT>8</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=4% ALIGN=RIGHT>-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Pizza Hut</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)%</TD>
     <TD ALIGN=RIGHT>4</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 Company same store sales increased 5% due to increases in
transactions
and average guest check.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  increase in U.S.  franchise  and license  fees was driven by same store
sales
 growth,  new unit  development  and  refranchising, partially offset by store
closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in  International  Division  Company sales was driven by
refranchising
 (primarily our Puerto Rico business),  partially offset by new unit
development.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in International  Division  franchise and license fees was
driven by new
unit  development,  refranchising  (primarily our Puerto Rico business), royalty
rate
increases and same store sales growth.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in China Division Company sales was driven by new unit
development,
partially offset by same store sales declines.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>China  Division  franchise and license fees were  basically  flat.  Increases
due to
new unit  development  were largely offset by same store sales declines.</P>


<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>32</P><HR NOSHADE><BR><BR><BR>









<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=90%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Amount<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% Increase/</TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% Increase/<BR>
(Decrease)<BR>
excluding<BR>
currency<BR>
</TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>(Decrease)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>translation<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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=44% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=9% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,439</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,374</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>778</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(9</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>410</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>21</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,712</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,593</TD>
        <TD ALIGN=LEFT>&nbsp;</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>Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>281</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>272</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>198</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>167</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>495</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>454</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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;United States</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,720</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,646</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>N/A</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;International Division</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>976</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>976</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>511</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>425</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$4,207</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$4,047</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  increase  in  Worldwide  Company  sales was  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>The increase in Worldwide  franchise and license fees was driven by new unit
 development,  same store sales growth,  refranchising and royalty rate
increases,
partially offset by store closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in U.S.  Company sales was driven by same store sales growth and
new unit
 development,  partially offset by refranchising and store closures. Following
are the
same store sales growth results by brand:</P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=6>Year to date ended 6/11/05
<HR WIDTH=95% 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 Guest<BR>
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=10% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>6</TD>
        <TD WIDTH=7% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>6</TD>
        <TD WIDTH=7% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>-</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Pizza Hut</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)%</TD>
     <TD ALIGN=RIGHT>4</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>2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>U.S. blended Company same store sales increased 4% due to increases in
transactions
and average guest check.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  increase in U.S.  franchise  and license  fees was driven by same store
sales
 growth,  new unit  development  and  refranchising, partially offset by store
closures.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in  International  Division  Company sales was driven by
refranchising
 (primarily our Puerto Rico  business),  partially offset by new unit
development.</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in International  Division  franchise and license fees was
driven by new
unit  development,  refranchising  (primarily our Puerto Rico business), same
store sales
growth and royalty rate increases.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in China Division Company sales was primarily driven by new unit
development.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The increase in China  Division  franchise  and license fees was primarily
driven by
new unit  development,  partially  offset by same store sales declines.</P>

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





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Quarter ended 6/11/05</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">United States
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=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=48% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>36.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.5</TD>
        <TD ALIGN=LEFT>&nbsp;</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;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.8</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>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>12.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>13.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.1</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>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Quarter ended 6/12/04</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">United States
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=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=48% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.7</TD>
        <TD ALIGN=LEFT>&nbsp;</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;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.8</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>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>13.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>17.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.6</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>

<P>The decrease in U.S. restaurant margins as a percentage of sales was driven by higher occupancy
and other costs and higher food and paper costs, partially offset by the impact of same store
sales growth on restaurant margin.  Higher occupancy and other costs were driven by increases in
utility costs, advertising costs and depreciation and amortization expense.


<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  decrease  in  International  Division  restaurant  margins  as a
percentage  of
sales was  primarily  driven by a 54 basis  point unfavorable  impact of
refranchising
 our  restaurants in Puerto Rico.  Also  contributing  to the decrease were
higher
 occupancy and other costs and labor costs, partially offset by the impact of
same store
sales growth on restaurant margin.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in China  Division  restaurant  margins as a  percentage  of
sales was
driven by the impact on  restaurant  margin of same store sales declines
resulting from
the mainland China supplier  ingredient issue,  higher labor costs and the lower
margins
associated with new units during the initial  periods of operation.  These
decreases were
partially  offset by the impact on restaurant  margin of same store sales growth
at KFC
Taiwan.</P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date ended 6/11/05</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">United States
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=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=48% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>36.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.6</TD>
        <TD ALIGN=LEFT>&nbsp;</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;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.5</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>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.0</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>12.9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>18.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.3</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="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>34</P><HR NOSHADE><BR><BR><BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date ended 6/12/04</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">United States
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>International<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>China<BR>
Division<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=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=48% ALIGN=LEFT>Company sales</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=6% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>100.0</TD>
        <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Payroll and employee benefits</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.0</TD>
        <TD ALIGN=LEFT>&nbsp;</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;expenses</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.9</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><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>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>13.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>19.4</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.7</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>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in U.S.  restaurant  margins as a percentage  of sales was
driven by
higher food and paper costs and higher  occupancy and other costs,  partially
offset by
the impact of same store sales growth on restaurant  margin.  Higher food and
paper costs
were driven by increased  commodity  costs  (principally  meats).  Higher
occupancy  and
other costs were driven by  increases  in utility  costs, advertising costs and
depreciation and amortization expense.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The  decrease  in  International  Division  restaurant  margins  as a
percentage  of
sales was  primarily  driven by a 62 basis  point unfavorable  impact of
refranchising
 our restaurants in Puerto Rico. Also contributing to the decrease were higher
occupancy
and other costs and labor costs,  partially  offset by the impact of same store
sales
growth on restaurant  margin and lower food and paper costs (principally due to
supply
chain savings initiatives).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in China Division  restaurant  margins as a percentage of sales
was
driven by higher labor costs, the impact on restaurant margin of same store
sales
declines related to the mainland China supplier  ingredient issue and the lower
margins
 associated with new units during the initial  periods of operation.  The
decrease was
partially  offset by the impact of same store sales growth  exclusive of the
mainland
China supplier  ingredient issue on restaurant  margin and lower food and paper
costs
 (principally due to supply chain savings initiatives).</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>General and  administrative  expenses  increased  $28 million or 12% in the
quarter,
 including a 1%  unfavorable  impact from foreign currency  translation.  The
increase in
general and  administrative  expenses was driven by higher litigation related
costs
including a charge of $10 million for the  potential  resolution  of certain
litigation
 matters.  Also  contributing  to the increase were higher charitable
contributions  and
 higher  compensation  related  costs,  including  amounts  associated  with
investments
 in  strategic initiatives in China and other  international  growth  markets.
Such
increases were  partially  offset by reductions  associated  with operating
restaurants
which were refranchised in 2004 (primarily the Puerto Rico business).</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>General and administrative  expenses increased $28 million or 6% year to
date,
 including a 1% unfavorable impact from foreign currency translation.  The
increase in
general and  administrative  expenses  was driven by higher  litigation  related
costs
 (including  the aforementioned  charge) and higher compensation related costs,
 including amounts associated with investments in strategic  initiatives in
China and
other  international  growth  markets.  Also  contributing  to the  increase
was higher
 charitable  contributions.  Such increases were partially  offset by reductions
 associated with operating  restaurants  which were  refranchised in 2004
(primarily the
Puerto Rico business).</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Franchise and license  expenses  decreased $2 million or 29% for the quarter
and
increased $4 million or 45% year to date.  The year to date increase was
primarily
 driven by the  unfavorable  impact of lapping the 2004</P>
<!-- MARKER FORMAT-SHEET="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>35</P><HR NOSHADE><BR><BR><BR>


<P> reversal of previously
 established  allowances for doubtful accounts upon the completion of financial
restructurings by certain Pizza Hut franchisees.</P>

<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Worldwide Other (Income) Expense</B></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=85%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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=67% ALIGN=LEFT>Gain upon sale of investment in unconsolidated
affiliate</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;(17</TD>
        <TD WIDTH=4% ALIGN=LEFT>)</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;(17</TD>
        <TD WIDTH=4% ALIGN=LEFT>)</TD>
     <TD WIDTH=4% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Equity income from investments in unconsolidated affiliates
</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(23</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(22</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Foreign exchange net (gain) 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>-</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>Other (income) expense</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(25</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(39</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(22</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>Other  income  increased  $15 million in the quarter and $17 million  year to
date.
 The  increase  was driven by the $17 million  gain associated with the sale of
our
investment in our  Poland/Czech  Republic  unconsolidated  affiliate  during the
quarter
ended June 11, 2005.</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 from  facility  actions of $4 million and $10 million
for the
 quarters  ended June 11, 2005 and June 12,  2004, respectively.  We  recorded a
net loss
from  facility  actions of $15 million and $19 million for the years to date
ended June
11, 2005 and June 12,  2004,  respectively.  See the  Store  Portfolio  Strategy
section
 for more  detail  of our  refranchising  and  closure activities and Note 7 for
a
summary of the components of facility actions by reportable operating segment.
</P>

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



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH NOWRAP="Nowrap">% B/(W)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></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>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=45% ALIGN=LEFT>United States</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;190</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;199</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(4</TD>
        <TD WIDTH=4% ALIGN=LEFT>)</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;352</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;371</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>(5</TD>
        <TD WIDTH=2% ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>International Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>90</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>184</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>162</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(30</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</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>(61</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(44</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(38</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(103</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(92</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(12</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>17</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</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>13</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(11</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>-</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>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>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=1></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT></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>$&nbsp;274</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;275</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;538</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;518</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=1><HR NOSHADE COLOR=#000000 SIZE=2></TD>
     <TD COLSPAN=1></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT></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>Unallocated  and  corporate  expenses  comprise  general  and  administrative
  expenses  and  unallocated  facility  actions  comprise refranchising  gains
(losses),
 neither of which are  allocated to the U.S.,  International  Division or China
Division
 segments for performance  reporting  purposes.  Unallocated  other income
(expense)  in
the quarter and year to date ended June 11, 2005  primarily comprises the gain
on the
sale of our investment in our  Poland/Czech  Republic  unconsolidated  affiliate
which we
did not allocate to the International Division for performance reporting
purposes.</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/UNDERLINE" FSL="Workstation" -->
<P><U>Quarter</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in U.S.  operating profit was driven by higher impairment
charges
related to our long-lived assets and higher general and administrative  costs.
The
impact of same store sales growth on  restaurant  profit was largely  offset by
higher
 occupancy and other costs as well as higher food and paper costs.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Excluding  the  favorable  impact from foreign  currency  translation,
International
 Division  operating  profit  increased  16%. The increase in International
Division
 operating profit was driven by the impact of same store sales growth on
restaurant
 profit and the impact of new unit development on franchise fees and restaurant
profit.
 The increase was partially offset by the impact on restaurant profit of higher
occupancy
and other costs and the impact on operating profit of refranchising our
restaurants in
Puerto Rico.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Excluding the favorable  impact from foreign  currency  translation,  China
Division
 operating  profit  decreased 31%. The decrease in China  Division  operating
profit was
driven by the impact on operating  profit of the mainland China  supplier
ingredient
 issue and higher  general and  administrative  costs.  The decrease was
partially
 offset by the impact on restaurant  profit of same store sales growth related
primarily
to KFC Taiwan and the impact on restaurant profit of new unit development.</P>

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

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>The decrease in U.S.  operating  profit was driven by higher  impairment
charges
 related to our long-lived  assets.  The impact of same store sales growth on
restaurant
profit was largely offset by higher commodity costs as well as higher occupancy
and other
costs.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Excluding the favorable impact from foreign currency  translation,
International
 Division operating profit increased 9%. The increase in International  Division
 operating profit was driven by the impact of same store sales growth on
restaurant
profit and franchise and license fees as well as the impact of new unit
development  on
 franchise  and license fees and  restaurant  profit.  The increase was
partially  offset
by the  impact on  restaurant  profit of higher  occupancy  and other  costs and
the
 impact on  operating  profit of refranchising our restaurants in Puerto Rico.
</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>China  Division  operating  profit was basically  flat as the impact of new
unit
 development  on  restaurant  profit and franchise and license fees was offset
by the
impact on operating profit of the mainland China ingredient issue.</P>

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



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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=40% ALIGN=LEFT>Interest expense</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;33</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;36</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>7</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;66</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;74</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>11</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>19</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=1></TD>
     <TD COLSPAN=1></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>&nbsp;</td>
<td>&nbsp;</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>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;30</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;67</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=1></TD>
     <TD COLSPAN=1></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>&nbsp;</td>
<td>&nbsp;</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>Interest  expense  decreased $3 million or 7% in the quarter and $8 million
or 11%
year to date. The decreases  were  primarily  driven by 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="PAGE NUMBER" FSL="Workstation" -->
<BR><BR><BR><P ALIGN=CENTER>37</P><HR NOSHADE><BR><BR><BR>



<!-- MARKER FORMAT-SHEET="PARA W/BOLD" FSL="Workstation" -->
<P><B>Income Taxes</B></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>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/11/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>6/12/04<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=28% ALIGN=LEFT>Income taxes</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;57</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;65</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;132</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;131</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Tax rate</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>26.8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>27.5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>29.1</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our tax rate for the quarter was favorably  impacted by the reversal of
reserves during the quarter  ended June 11,  2005
associated  with audits that were settled  as well as the impact on the full
year  effective  tax rate of the  recognition  of certain
 foreign  tax credits  that we were able to  substantiate  during the quarter
ended
 March 19,  2005.  The tax rate for the quarter was  unfavorably impacted by tax
provided
on foreign earnings we now expect to repatriate in 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our tax rate for the year to date was  favorably  impacted by the
recognition  of
certain  foreign  tax  credits  that we were able to substantiate  during  the
year as
well as the  impact of year over year  valuation  allowance  adjustments,
including  the
 lapping of valuation  allowances  established  in the prior year.  The tax rate
for the
year to date was  unfavorably  impacted by tax provided on foreign earnings we
now expect
to repatriate in 2005.</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 $605 million  compared
to $390 million
in 2004.  The increase was  primarily  driven by lower income tax payments in
2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Net cash used in investing  activities</b> was $140 million  versus $198
million in 2004.
 The decrease was driven by higher  proceeds from the refranchising of
restaurants and
the sale of our investment in our Poland/Czech Republic unconsolidated affiliate
in 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P><B>Net cash used in  financing  activities</b>  was $444  million  versus
$199  million in
2004.  The  increase  was  driven by higher  share repurchases and dividend
payments in
2005.</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 three 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 2005 and
beyond.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>During the  quarter  and year to date ended June 11,  2005,  we paid cash
dividends
 of $29  million  and $58  million,  respectively. Additionally,  on May 19,
2005,  our
Board of Directors  approved a cash dividend of $0.115 per share of common stock
to be
distributed on August 5, 2005 to  shareholders  of record at the close of
business on
July 15,  2005.  The Company is  targeting  an annual  payout ratio of 15% to
20% of net
income.</P>


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<BR><BR><BR><P ALIGN=CENTER>38</P><HR NOSHADE><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Our primary bank credit  agreement  comprises a $1.0 billion senior unsecured
 Revolving Credit Facility (the &#147;Credit  Facility&#148;) which matures in
September  2009. The
Credit  Facility is  unconditionally  guaranteed by our principal  domestic
subsidiaries
 and contains financial  covenants  relating to  maintenance  of leverage  and
fixed
 charge  coverage  ratios.  The Credit  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.  We were
in
compliance with all debt covenants at June 11, 2005.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Under the terms of the Credit Facility,  we may borrow up to the maximum
borrowing
limit,  less outstanding  letters of credit. At June 11,  2005,  our unused
Credit
 Facility  totaled  $739  million,  net of  outstanding  letters of credit of
$196
 million.  There were borrowings of $65 million  outstanding  under the Credit
Facility
at June 11, 2005. The interest rate for borrowings  under the Credit 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 Credit Facility is payable at
least
quarterly.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>Amounts  outstanding  under Senior Unsecured Notes were $1.5 billion at June
11, 2005.
During the quarter ended June 11, 2005, we began classifying $200 million in
Senior
 Unsecured Notes as short-term  borrowings due to their April 2006 maturity
date. The
remaining $1.3 billion in Senior Unsecured Notes comprise the majority of our
long-term
debt.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>We estimate that in 2005 capital  spending,  including  acquisitions of our
restaurants from  franchisees,  will be approximately  $720 million.  We also
estimate
that in 2005  refranchising  proceeds,  prior to taxes, will be approximately
$100
million,  employee stock options proceeds,  prior to taxes, will be
approximately $150
million and sales of property,  plant and equipment will be approximately $80
million.
 In May 2005,  the Board of Directors  authorized a new share  repurchase
program for up
to $500 million of the Company&#146;s outstanding  common stock (excluding
applicable
 transaction fees) to be purchased through May 2006. At June 11, 2005 we had
purchased no
shares  under this  program.  Additionally,  we had  remaining  capacity  at
June 11,
 2005 to  repurchase  up to $36 million of our outstanding common stock
(excluding
applicable transaction fees) under our share repurchase program authorized in
January
2005.</P>

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




<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 may  include  the use of  derivative  financial  and
commodity
 instruments  to hedge our  underlying  exposures.  We do not use 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="PARA" FSL="Workstation" -->
<P>At June 11, 2005 and December 25, 2004, a  hypothetical  100 basis point
increase in
short-term  interest rates would result,  over the following  twelve-month
period,  in a
reduction of  approximately  $7 million and $6 million,  respectively,  in
annual  income
before income taxes.  The estimated  reductions  are based upon our current
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 June
11, 2005
and December 25, 2004 would  decrease  approximately  $43 million and $51
million,
 respectively.  The fair value of our Senior  Unsecured  Notes at June 11, 2005
and
 December 25, 2004 would  decrease  approximately  $70 million and $76 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  Division and China  Division  operating  profit  together
constitute
 approximately  43% of our year to date  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 $1.6
billion
as of June 11, 2005. 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 June 11, 2005,  operating  profit would have decreased $29 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  short-term
receivables and
payables.  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>


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<BR><BR><BR><P ALIGN=CENTER>40</P><HR NOSHADE><BR><BR><BR>



<!-- 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 June
11, 2005
and December 25, 2004, did not significantly impact our financial position,
results of
operations or cash flows.</P>

<P><B>Item 4. Controls and Procedures</b></P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Evaluation of Disclosure Controls and Procedures</U></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,  Chief Executive
Officer and
President (the &#147;CEO&#148;) and the 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
the
report.</P>

<!-- MARKER FORMAT-SHEET="PARA W/UNDERLINE" FSL="Workstation" -->
<P><U>Changes in Internal Control</U></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>There were no significant  changes with respect to the Company&#146;s
internal  control
over  financial  reporting or in other factors that materially  affected,  or
are
reasonably  likely to materially  affect,  internal  control over financial
reporting
during the quarter ended June 11, 2005.</P>


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<BR><BR><BR><P ALIGN=CENTER>41</P><HR NOSHADE><BR><BR><BR>



<!-- 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.
Accordingly, you are cautioned not to place undue reliance on forward-looking
statements.</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;  unexpected  disruptions  in our supply
chain;
effects and outcomes of any pending or future legal claims  involving  the
Company;  the
 effectiveness  of operating  initiatives  and marketing,  advertising and
promotional
efforts; our ability to continue to recruit and motivate qualified  restaurant
 personnel;  the ongoing  financial  viability  of our  franchisees  and
licensees;  the
 success of our  refranchising  strategy;  the  success of our strategies for
international  development and operations;  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,
business,
 economic and political  conditions in the countries and territories  where we
operate,
 including  effects of war and terrorist  activities;  new legislation and
governmental
 regulations or changes in laws and regulations and the consequent  impact on
our
business;  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  or  perceptions  concerning the products
of the
Company and/or our competitors,  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>42</P><HR NOSHADE><BR><BR><BR>




<!-- MARKER FORMAT-SHEET="PARA CENTER" FSL="Workstation" -->
<P ALIGN=CENTER><U>Report of Independent Registered Public Accounting Firm</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 June 11, 2005 and the
related  Condensed
 Consolidated  Statements of Income for the twelve and  twenty-four  weeks ended
June 11,
2005 and June 12, 2004 and the  Condensed  Consolidated  Statements  of Cash
Flows for
the  twenty-four  weeks ended June 11, 2005 and June 12, 2004. These interim
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 the 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,  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  accompanying  interim  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  25,  2004,  and the  related  Consolidated  Statements  of Income,
Cash
Flows and Shareholders&#146;  Equity and Comprehensive Income for the year then
ended not
presented herein; and in our report dated February 28, 2005, we expressed an
unqualified
 opinion on those  consolidated  financial  statements.  In our opinion,  the
 information set forth in the accompanying Condensed  Consolidated Balance Sheet
as of
December 25, 2004, is fairly presented,  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>
July 18, 2005</P>

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<BR><BR><BR><P ALIGN=CENTER>43</P><HR NOSHADE><BR><BR><BR>


<P><B>PART II - Other Information and Signatures</b></P>

<P>Item 1.  Legal Proceedings</P>

<blockquote>         Information  regarding legal  proceedings is incorporated
by reference from Note 14 to the Company&#146;s  Condensed  Consolidated
         Financial Statements set forth in Part I of this report.</blockquote>

<P>Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds</P>

<P>The following table provides  information as of June 11, 2005 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=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="Left">Fiscal Periods
<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2>Total number of<BR>
shares purchased<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2>Average<BR> price
paid per <BR>share<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2" NOWRAP="Nowrap">Total number of<BR>
shares purchased as<BR>
part of publicly<BR>
announced plans or<BR>
programs<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2" NOWRAP="Nowrap">Approximate dollar<BR> value of shares that
<BR>
may yet be
purchased <BR>under the plans
or <BR>programs<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></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>
     <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=22% ALIGN=LEFT>Period 4</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=RIGHT></TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>3/20/05 - 4/16/05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,089,100</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>51.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,089,100</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>301,116,977</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Period 5</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>4/17/05 - 5/14/05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,311,300</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>47.96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,311,300</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>142,307,377</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Period 6</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>5/15/05 - 6/11/05</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,092,040</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>50.78</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,092,040</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>536,083,851</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=10><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7,492,440</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>49.75</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7,492,440</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>536,083,851</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=10><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In May 2005, our Board of Directors  authorized a share  repurchase  program.
This
program  authorized us to  repurchase,  through May 2006, up to $500 million
(excluding
 applicable  transaction  fees) of our  outstanding  Common Stock.  There have
been no
repurchases made under this program.</P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>In January 2005, our Board of Directors  authorized a share  repurchase
program.
 This program  authorized us to  repurchase,  through January 2006, up to $500
million
 (excluding  applicable  transaction fees) of our outstanding Common Stock. For
the
quarter ended June 11, 2005, all share repurchases were made under this program.
</P>



<P>Item 4.  Submission of Matters to a Vote of Security Holders</P>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PAR INDENT 1" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%></TD>
<TD></TD>
<TD WIDTH=90%>Our
Annual Meeting of shareholders was held on May 19, 2005.  At the meeting,
shareholders:</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PAR INDENT 1" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>1) </TD>
<TD></TD>
<TD WIDTH=90%>Approved
an amendment to the Company&#146;s  Restated  Articles of  Incorporation to
declassify the
Board of Directors so that each               director  will stand for
re-election  on
an annual  basis and to provide that  directors  can be removed with or without
              cause.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PAR INDENT 1" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>2) </TD>
<TD></TD>
<TD WIDTH=90%>Elected
twelve  directors to serve until the next Annual Meeting of  Shareholders  and
until
their  respective  successors are               duly elected and qualified.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PAR INDENT 1" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>3) </TD>
<TD></TD>
<TD WIDTH=90%>Elected
four Class II directors to serve until their terms expire at the 2008 annual
meeting of
 shareholders  and elected one               Class I director to serve until his
term
expires at the 2007 annual meeting of  shareholders  and until their  respective
              successors  are duly  elected  and  qualified.  This vote was
necessary
 in the event  shareholders  did not approve the               proposed
amendment to the
Company&#146;s Restated Articles of Incorporation as described in number 1.</TD>
</TR>
</TABLE>
<BR>

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<BR><BR><BR><P ALIGN=CENTER>44</P><HR NOSHADE><BR><BR><BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>4) </TD>
<TD></TD>
<TD WIDTH=90%>Ratified
the appointment of KPMG LLP as our independent auditors for the fiscal year
ended
December 31, 2005.
</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=5%>5) </TD>
<TD></TD>
<TD WIDTH=90%>through
9) Rejected five shareholder proposals.</TD>
</TR>
</TABLE>
<BR>




<table border="0" cellspacing=0 cellpadding=0 width="115%" style='margin-left:.05pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Against</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Abstain</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(1)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Amendment to Restated Articles of Incorporation</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>244,570,049</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>2,668,405</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>3,904,480</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(2)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Election of Directors</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Withheld</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>David W. Dorman</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>236,852,229</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:21.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>14,290,705</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Massimo Ferragamo</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>245,864,136</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>5,278,798</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>J. David Grissom</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>245,806,156</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>5,336,778</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Bonnie G. Hill</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>243,870,355</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>7,272,579</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Robert Holland, Jr. </p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>245,327,203</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>5,815,731</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Kenneth G. Langone</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>244,543,467</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>6,599,467</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Jonathan S. Linen</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>236,970,228</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:21.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>14,172,706</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>David C. Novak</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>240,224,620</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:21.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>10,918,314</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Andrall E. Pearson</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>243,001,051</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>8,141,883</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Thomas M. Ryan</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>204,626,735</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:21.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>46,516,199</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Jackie Trujillo</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>243,301,593</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:26.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>7,841,341</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Robert J. Ulrich</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>237,166,159</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:21.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>13,976,775</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=bottom style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(3)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Election of Class II Directors</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Withheld</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>David W. Dorman</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>207,497,362</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>43,645,572</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Massimo Ferragamo</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>207,567,617</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>43,575,317</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Thomas M. Ryan</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>207,553,339</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>43,589,595</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Robert J. Ulrich</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>207,559,066</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>43,583,868</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Election of Class I Director</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Withheld</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Jonathan S. Linen</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>207,527,948</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>43,614,986</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Against</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Abstain</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(4)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Ratification of Independent Auditors</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>241,849,501</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>7,421,870</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>1,871,563</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>For</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Against</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Abstain</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>Non-Votes</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<HR noshade width="100%"  color="gray" size="1"> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(5)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Shareholder Proposal &#150; </p>
<p style='margin-left:.1in;text-indent:-1.2pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>Sustainability Report</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>75,149,000</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>117,270,243</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>23,606,308</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>35,117,383</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(6)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Shareholder Proposal &#150; </p>
<p style='margin-left:.1in;text-indent:1.8pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>Diversity Report</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>25,425,581</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>166,619,645</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>23,983,776</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>35,113,932</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(7)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Shareholder Proposal &#150; </p>
<p style='margin-left:.1in;text-indent:1.8pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>MacBride Principles</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>27,764,824</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>161,208,170</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>27,056,007</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>35,113,933</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(8)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Shareholder Proposal &#150;</p>
<p style='margin-left:.1in;text-indent:1.8pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>Genetically Engineered Food Report</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>14,579,831</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>177,617,231</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>23,831,938</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>35,113,934</p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="10%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>(9)</p> </td>
        <td width="28%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:0pt;margin-bottom:0pt'>Shareholder Proposal &#150;</p>
<p style='margin-left:.1in;text-indent:1.8pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>Animal Welfare Standards Report</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>16,857,822</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="16%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>175,528,526</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="13%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>23,642,455</p> </td>
        <td width="1%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td>
        <td width="12%" valign=top style='padding:0in 4.55pt 0in 4.55pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>35,114,131</p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>


<P>Item 6.  Exhibits</P>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%>            (a) </TD>
<TD></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=5%></TD>
<TD WIDTH=10%>                   <U>EXHIBITS</U></TD>
<TD></TD>
<TD WIDTH=85%></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=5%></TD>
<TD WIDTH=10%>                   Exhibit 15</TD>
<TD></TD>
<TD WIDTH=85%>Letter from KPMG LLP  regarding  Unaudited  Interim  Financial
 Information
(Accountants&#146; Acknowledgement).</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=5%></TD>
<TD WIDTH=10%>                   Exhibit 31.1</TD>
<TD></TD>
<TD WIDTH=85%>Certification  of the  Chairman,  Chief  Executive  Officer  and
 President                                                    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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%></TD>
<TD WIDTH=10%>                   Exhibit 31.2</TD>
<TD></TD>
<TD WIDTH=85%>                   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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%></TD>
<TD WIDTH=10%>                   Exhibit 32.1</TD>
<TD></TD>
<TD WIDTH=85%>                   Certification  of the  Chairman,  Chief
Executive  Officer  and
 President                                                    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 WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%></TD>
<TD WIDTH=10%>                   Exhibit 32.2</TD>
<TD></TD>
<TD WIDTH=85%>
                   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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<BR><BR><BR><P ALIGN=CENTER>46</P><HR NOSHADE><BR><BR><BR>




<P align=center>SIGNATURES</P>

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<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;July 18, 2005</td><TD>
<P ALIGN="LEFT"><u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ted F.
Knopf&nbsp;&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 of Finance
<BR>and Corporate Controller<BR>
(Principal Accounting Officer)</TD></TR>
</TABLE>

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<BR><BR><BR><P ALIGN=CENTER>47</P><HR NOSHADE><BR><BR><BR>
<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<BR><BR><BR><BR><BR><BR>
<P align=center><B><U>Accountants&#146; Acknowledgment</U></B></P>


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

<P>We hereby  acknowledge our awareness of the use of our report dated July 18,
2005 included within the Quarterly  Report on Form 10-Q of
YUM!  Brands,  Inc.  for the twelve and  twenty-four  weeks  ended June 11,
2005,  and  incorporated  by  reference  in the  following
Registration Statements:</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=95%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=48% ALIGN=LEFT><B><U>Description</U></b></TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=47% ALIGN=LEFT><B><u>Registration Statement Number</U></b></TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<tr>
<td>&nbsp;</td></tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B><U>Forms S-3 and S-3/A</U></b></TD><TD 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><td>&nbsp;</td></tr>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B><U>Form S-8s</U></b></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, 333-109299</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</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR>

<P>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.</P>

 <BR><BR><BR>


<P>KPMG LLP<BR>
Louisville, Kentucky<BR>
July 18, 2005</P>
<BR><BR><BR>
<HR SIZE=1 NOSHADE><BR><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>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>I
have reviewed this report on Form 10-Q of YUM! Brands, Inc.;</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD>&nbsp;</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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>3. </TD>
<TD>&nbsp;</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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>4. </TD>
<TD>&nbsp;</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))  and internal  control over           financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant
and have:</TD>
</TR>
</TABLE>
<BR>

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

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>designed
such internal control over financial reporting,  or caused such internal control
over
financial reporting           to be designed under our  supervision,  to provide
 reasonable  assurance  regarding the  reliability of financial
reporting and
the preparation of financial  statements for external purposes in accordance
with
generally accepted           accounting principles;</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD>&nbsp;</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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(d) </TD>
<TD>&nbsp;</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
(the  registrant&#146;s  fourth fiscal  quarter in the case of an
annual  report)
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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>5. </TD>
<TD>&nbsp;</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>

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

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</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 control 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;July 18, 2005</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, Chief Executive Officer and President
</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>
<p align=center><B>CERTIFICATION</b></P>

<!-- MARKER FORMAT-SHEET="PARA" FSL="Workstation" -->
<P>I, Richard T. Carucci, certify that:</P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>I
have reviewed this report on Form 10-Q of YUM! Brands, Inc.;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD>&nbsp;</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>3. </TD>
<TD>&nbsp;</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>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>4. </TD>
<TD>&nbsp;</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))  and internal  control over           financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant
and have:</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>designed
such internal control over financial reporting,  or caused such internal control
over
financial reporting           to be designed under our  supervision,  to provide
 reasonable  assurance  regarding the  reliability of financial
reporting and
the preparation of financial  statements for external purposes in accordance
with
generally accepted           accounting principles;</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(c) </TD>
<TD>&nbsp;</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(d) </TD>
<TD>&nbsp;</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
(the  registrant&#146;s  fourth fiscal  quarter in the case of an
annual  report)
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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>5. </TD>
<TD>&nbsp;</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD>&nbsp;</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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(b) </TD>
<TD>&nbsp;</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 control 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;July 18, 2005</td><TD>
<P ALIGN="LEFT"><u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Richard T. Carucci&nbsp;&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>

<BR><BR><BR>
<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
June
11, 2005, as filed with the Securities and Exchange  Commission on the date
hereof (the  &#147;Periodic  Report&#148;),  I, David C. Novak,
Chairman,  Chief  Executive  Officer and  President 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>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>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;July 18, 2005&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>
<BR>Chairman, Chief Executive Officer and President</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
June
11, 2005, as filed with the Securities and Exchange Commission on the date
hereof (the &#147;Periodic Report&#148;),  I, Richard T. Carucci,
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>
<TR VALIGN=TOP>
<TD WIDTH=5%>1. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>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="RIGHT HANGING PARAGRAPH" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>2. </TD>
<TD>&nbsp;</TD>
<TD WIDTH=95%>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;July 18, 2005&nbsp;&nbsp;</td>
<TD><P ALIGN="LEFT"><U>&nbsp;&nbsp;/s/&nbsp;&nbsp;Richard T.
Carucci&nbsp;&nbsp;&nbsp;&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>


<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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