<SUBMISSION>
<ACCESSION-NUMBER>0001041061-05-000297
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20050903
<FILING-DATE>20051012
<DATE-OF-FILING-DATE-CHANGE>20051012
<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>051135062
</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>form3q05.htm
<DESCRIPTION>FORM 10Q THIRD QUARTER 2005
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 10-Q</TITLE>
</HEAD>
<BODY>



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

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

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

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

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

<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="bottom">
<td align="left" colspan="2"><b>(Mark One)</B></td></tr>
<tr valign="top">
<td align="left" width="3%"><b>[X]&nbsp;&nbsp;</b></td>
<td width="97%"><p align="justify"><b>QUARTERLY  REPORT  PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934 <BR></b>for the
quarterly  period ended September 3, 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;Indicate by check mark whether
the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes&nbsp;<U>
&nbsp;&nbsp;&nbsp;</U>
 No&nbsp;<U>&nbsp;&nbsp;x&nbsp;&nbsp;</u>.


<P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares
outstanding of the Registrant&#146;s Common Stock as of
October 6, 2005 was 283,061,945 shares.</P>


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




















<p align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>YUM!
BRANDS,
INC.</b></font></p>

<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>INDEX</B>
</FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U> Page
No.</U>
</font></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=94% ALIGN=LEFT>Part I.  Financial Information</TD></tr>
<TR VALIGN=Bottom>
     <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></tr>
<tr><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;Condensed Consolidated Statements of Income - Quarters and Years to date ended September</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;3, 2005 and September 4, 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;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;September 3, 2005 and September 4, 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;Condensed Consolidated Balance Sheets - September 3, 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;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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>
&nbsp;&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;&nbsp;and Results of Operations</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23</td></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>
&nbsp;&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>
&nbsp;&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>
&nbsp;&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Part II. Other Information and Signatures</TD>
<TD>&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&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></tr>
<TR VALIGN=Bottom>
        <TD ALIGN=LEFT>&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>46</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>2</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART I -
FINANCIAL INFORMATION</B></FONT>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 1.
Financial Statements</B></FONT>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONDENSED
CONSOLIDATED STATEMENTS OF INCOME</B></FONT><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES<BR>(in millions, except per share data)</P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
<TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1></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>$&nbsp;1,975</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;1,935</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,687</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,528</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;Franchise and license fees</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>268</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>244</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>763</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>698</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>
     <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>Total revenues</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6,450</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6,226</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>
     <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><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;Food and paper</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>619</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>618</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,793</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,746</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Payroll and employee benefits</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>499</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>497</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,486</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,470</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Occupancy and other operating expenses</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>561</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>525</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,582</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,491</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>
     <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>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,679</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,640</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,861</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,707</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;General and administrative expenses</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>252</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>250</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>751</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>721</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>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>24</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Facility actions</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</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>(27</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(66</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(35</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>(2</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2</TD>
        <TD ALIGN=LEFT>)</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>-</TD>
        <TD ALIGN=LEFT>&nbsp;</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>
     <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>&nbsp;Total costs and expenses, net</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>1,921</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,888</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,590</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,417</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>
     <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><B>Operating Profit</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>322</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>860</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>809</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>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>86</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>96</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>
     <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><B>Income Before Income Taxes</b></TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>294</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>262</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>774</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>713</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT></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>80</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>77</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>212</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>208</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>$&nbsp;&nbsp;&nbsp;&nbsp;214</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;185</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;562</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;505</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Basic Earnings Per Common Share</B></TD><TD ALIGN=LEFT>
&nbsp;
</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.75</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.95</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Diluted Earnings Per Common Share</B></TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.87</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;1.66</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Dividends Declared Per Common Share</B>  </TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;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>

<HR SIZE=2 NOSHADE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<HR SIZE=2 NOSHADE>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>3</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS</B></FONT><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES
<BR>(in millions)</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1>&nbsp;</th>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=81% ALIGN=LEFT><B>Cash Flows - Operating Activities</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>Net income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;562</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;505</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>319</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>302</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Facility actions</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22</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>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(30</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(66</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>28</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>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>22</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;&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>(22</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(12</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>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</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>70</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(19</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other current
liabilities</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>86</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(49</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>195</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(58</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>1,041</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>791</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>(362</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(383</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>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14</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>(38</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Short-term investments</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(32</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(46</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>25</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>41</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>(249</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(391</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>78</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>(11</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(9</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>(32</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>(678</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>113</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>127</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>(91</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(29</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>(621</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(205</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>-</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Increase in Cash and Cash Equivalents</B></TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>167</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>195</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>Net Increase in Cash and Cash Equivalents of Mainland
China for December 2004</b></TD><TD ALIGN=LEFT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT></TD><TD ALIGN=LEFT></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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>$&nbsp;&nbsp;&nbsp;&nbsp;263</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;387</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>


<HR SIZE=2 NOSHADE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<HR SIZE=2 NOSHADE>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>4</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>



<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONDENSED
CONSOLIDATED BALANCE SHEETS</B></FONT><BR>
YUM! BRANDS, INC. AND SUBSIDIARIES
<BR>(in millions)</P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<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></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></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>$&nbsp;&nbsp;&nbsp;&nbsp;263</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&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>89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>54</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;Accounts and notes receivable, less allowance: $22 in
2005 and 2004</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>227</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>192</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;Inventories</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>74</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>76</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;Prepaid expenses and other current assets</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>81</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>157</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>76</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current
Assets</B></TD><TD ALIGN=LEFT>&nbsp;</TD>

 <TD ALIGN=RIGHT>967</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>747</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Property, plant and equipment, net of accumulated
depreciation and amortization</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>of $2,799 in 2005 and $2,618 in 2004</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>3,373</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;Goodwill</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>545</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>337</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>190</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>462</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><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets
</B>
</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,874</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&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>$&nbsp;1,240</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&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>136</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>213</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>76</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current
Liabilities</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,665</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,376</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Long-term debt</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,590</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>1,019</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
Liabilities</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,274</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></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>&nbsp;Common stock, no par value, 750 shares authorized; 284
shares and 290 shares</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;issued in 2005 and 2004, respectively</TD>
<TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>174</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>1,573</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>(147</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
Shareholders&#146; Equity</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,600</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
Liabilities and Shareholders&#146; Equity</B></TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;5,874</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&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>

<HR SIZE=2 NOSHADE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<HR SIZE=2 NOSHADE>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>5</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></FONT><BR>
<BR>(tabular amounts in millions, except per share data)</P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.   Financial Statement
Presentation</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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;</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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  September 3, 2005. Our  consolidated  results of operations for the
quarter and year to date ended September 3, 2005 include the
results of operations of the China business for the months of June, 2005 through
August, 2005 and January,  2005 through August,  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  September 4, 2004 continue to include the results of
operations of the China business for the months of May, 2004 through July, 2004
and December,  2003 through July,  2004,  respectively,
as previously reported.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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  September 3, 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  September 3, 2005. The $34
</font></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>6</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>million 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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  September  3, 2005,  the  results of our
operations  for the  quarters  and years to date ended  September  3, 2005 and
September  4, 2004 and cash flows for the years to date
ended September 3, 2005 and September 4, 2004. Our results of operations for
these interim  periods are not  necessarily  indicative of
the results to be expected for the full year.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.   Stock-Based
Employee Compensation</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH=55% ALIGN=LEFT>Net income, as reported</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;214
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;185
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;562
</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;505
</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Deduct: Total stock-based employee compensation
</TD>
<TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;expense determined under fair value based
method</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;for all awards, net of related tax effects
</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>)</TD>
     <TD ALIGN=RIGHT>(25</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR>
     <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>Net income, pro forma</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;206</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;178</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;538</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;480</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.75</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74</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>0.72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.87</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.65</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.72</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66</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>0.69</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>0.59</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1.58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>7</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.   Recently Adopted
Accounting Pronouncements</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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  September 3, 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.   New Accounting
Pronouncements Not Yet Adopted</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.
Compensation cost will be recognized over the vesting period on a straight-line
basis for the fair value of awards that actually vest.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We currently intend to
adopt SFAS 123R using the modified  retrospective  application  transition
method effective  September 4, 2005,
the beginning of our fourth  quarter.  As permitted by SFAS 123R, we plan to
apply the modified  retrospective  application  transition
method to the  beginning of the fiscal year of adoption  (our fiscal year 2005).
As such,  upon  adoption of SFAS 123R the first three
fiscal quarters of 2005 will be adjusted to recognize the compensation cost
previously  reported in the pro forma footnote  disclosures
under the  provisions  of SFAS 123.  Compensation  cost will be  recognized
subsequent  to the date of  adoption  of SFAS 123R for all
share-based payments granted, modified or settled after the date of adoption.
Additionally,  for any unvested awards that were granted
prior to the date of adoption we will  recognize  compensation  cost  subsequent
to the date of adoption using the same estimate of the
grant-date  fair value used to determine  the pro forma  disclosures  under SFAS
123. We  currently  estimate the adoption of SFAS 123R
will decrease  diluted  earnings per common share in the quarter and year to
date ending December 31, 2005 by  approximately  $0.04 and
$0.12, respectively.</font></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<DIV STYLE="page-break-after:always; text-align:center;" ALIGN="Justify">8</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally,  SFAS 123R
requires the benefits of tax  deductions  in excess of
recognized  compensation  expense to be reported as a
financing  cash flow,  rather  than as an  operating  cash flow as required
currently.  This  requirement  will reduce cash flows from
operating  activities and increase cash flows from financing  activities by a
similar  amount.  We currently do not anticipate that the
reclassification will significantly impact our net cash provided by operating
activities.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.   Earnings Per Common
Share (&#147;EPS&#148;)</B></FONT></P>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>


<TR VALIGN=Bottom>
     <TD WIDTH="40%" ALIGN="LEFT">Net income</TD>
     <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;214</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;185</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;562</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;505</TD>
        <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><U>Basic EPS</U></TD><TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Weighted-average common shares outstanding</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">285</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">291</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></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Basic EPS</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.75</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.64</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><U>Diluted EPS</U></TD><TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Weighted-average common shares outstanding</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">285</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">291</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></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Shares assumed issued on exercise of dilutive share
</TD><TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;&nbsp;&nbsp;equivalents</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">37</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">46</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">39</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">49</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Shares assumed purchased with proceeds of dilutive
</TD><TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;&nbsp;&nbsp;share equivalents</TD><TD ALIGN="LEFT">
&nbsp;</TD>
     <TD ALIGN="RIGHT">(24)</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">(32)</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">(26)</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">(34)</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>
     <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">Shares applicable to diluted earnings</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">298</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">305</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">301</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>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Diluted EPS</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.72</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.61</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66</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>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unexercised  employee
stock options to purchase  approximately  0.8 million and 0.4 million shares of
our Common Stock for the quarter
and year to date ended  September 3, 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  September 3, 2005,
respectively.  Unexercised employee stock options to purchase  approximately 0.7
million and 0.5 million shares of our Common Stock for
the quarter and year to date ended September 4, 2004,  respectively,  were not
included in the computation of diluted EPS because their
exercise  prices were greater than the average market price of our Common Stock
during the quarter and year to date ended  September 4,
2004, respectively.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the year to date
ended September 3, 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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.   Comprehensive
Income</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Comprehensive income was as
follows:</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>9</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
         <TH COLSPAN=2></TH></tr>
<tr>
<th colspan=2></th>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>

     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="40%" ALIGN="LEFT">Net income</TD>
     <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;214</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;185</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;562</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;505</TD>
        <TD WIDTH="0%" 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;&nbsp;during the period</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(7)</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">16</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(16)</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">11</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Changes in fair value of derivatives, net of tax</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">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;&nbsp;income, net of tax</TD>
<TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(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>
     <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">Total comprehensive income</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;207</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;201</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;546</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;516</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>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.   Items Affecting
Comparability of Net Income</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Facility actions</U>
</FONT>
</P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Facility actions consists
of the following components:</FONT></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.</LI></UL>





<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN=8>Quarter ended September 3, 2005
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">China 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>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH="32%" ALIGN="LEFT">Refranchising net (gains) losses</TD>
     <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>

     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10</TD>
        <TD WIDTH="0%" ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Store closure costs</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">4</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">5</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Store impairment charges (a)</TD><TD ALIGN="LEFT">
&nbsp;</TD>
     <TD ALIGN="RIGHT">9</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">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>
     <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">&nbsp;&nbsp;Facility actions</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7</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" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN=8>Quarter ended September 4, 2004
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">China 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="32%" ALIGN="LEFT">Refranchising net (gains) losses</TD>
     <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3</TD>
        <TD WIDTH="5%" ALIGN="LEFT">)</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="12%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1</TD>
        <TD WIDTH="0%" ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Store closure costs (b)</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(1</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">4</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 VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Store impairment charges</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">&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>
     <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">&nbsp;&nbsp;Facility actions</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>

<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date ended September 3, 2005
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">China 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>
     <TD ALIGN="LEFT">Refranchising net (gains) losses</TD>
     <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21</TD>
        <TD ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="32%">Store closure costs</TD>
<TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">3</TD>
        <TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">1</TD>
        <TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">-</TD>
        <TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Store impairment charges</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">32</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">5</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">39</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>
     <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">&nbsp;&nbsp;Facility actions</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>10</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Year to date ended September 4, 2004
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">China 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>
<TD ALIGN="LEFT">Refranchising net (gains) losses</TD>
     <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="32%">Store closure costs(b)</TD>
<TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">(2</TD>
        <TD ALIGN="LEFT" WIDTH="5%">)</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">-</TD>
        <TD ALIGN="LEFT" WIDTH="5%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">(1</TD>
        <TD ALIGN="LEFT" WIDTH="5%">)</TD>
     <TD ALIGN="RIGHT" WIDTH="12%">(3</TD>
        <TD ALIGN="LEFT" WIDTH="0%">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;Store impairment charges</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">7</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">6</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">15</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">&nbsp;&nbsp;Facility actions</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN=TOP>
<TD>(a)  </TD>
<TD WIDTH="5%"></TD>
<TD>Store
impairment  charges in the quarter ended September 3, 2005 in the U.S. segment
primarily
 resulted from decisions to close         certain KFC and LJS restaurants.
</TD></TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Workstation" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN=TOP>
<TD>(b)</TD>
<TD WIDTH="5%"></TD>
<TD>The
income in store closure  costs is primarily  the result of gains from the sale
of
properties on which we formerly  operated         restaurants  or  adjustments
to
 previously  recorded  lease  reserves as a result of changes in  settlement
and/or
 sublease         estimates.  </TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Mainland China Supplier
Ingredient Issue</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our KFC business in
mainland China was negatively  impacted by the interruption of product offerings
and negative publicity  associated
with a supplier  ingredient  issue  experienced  in late March,  2005.  During
the </FONT></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>11</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>quarter ended  September 3,
2005, we entered into an
agreement  with the  supplier of the  ingredient  for  partial  recovery of our
losses.  As a result of the  agreement,  we  recognized
approximately  $14 million in Other income (expense) in our Condensed
Consolidated  Statement of Income in the quarter ended September
3, 2005 related to this  recovery.  We expect to recognize an additional
meaningful  financial  recovery from the same supplier in the
quarter ending December 31, 2005.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Sale of an Investment in
Unconsolidated Affiliate</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the second  quarter
of 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.  Prior to the sale,  we
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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This  transaction
generated a one-time gain of  approximately  $17 million for YUM in the second
quarter of 2005 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Income Tax Impact of
Repatriating Qualified Foreign Earnings</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 second quarter of 2005, we
determined that we would repatriate  additional  qualified  </FONT></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>12</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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,
$5 million  and $13  million of which were  recognized  in the  quarter  and
year to date ended  September  3, 2005,  respectively.  No
additional amounts beyond the approximately $500 million as discussed above are
eligible for the Act&acute;s dividends received deduction.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>LJS Trademark/Brand
</u></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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&acute;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 and $3 million was
recorded  during the quarter and year to date ended  September 3, 2005,
respectively.  Amortization  expense in the fiscal year ending
December 31, 2005 will total approximately $4 million.</FONT></P>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Wrench Litigation</U>
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We recorded income of $2
million for the quarter and year to date ended  September 3, 2005 from a
settlement with an insurance  carrier
related to the legal judgment against Taco Bell Corp. on June 4, 2003. An
insignificant  amount of Wrench  litigation  (income) expense
was recorded for the quarter and year to date ended September 4, 2004. See Note
14 for further discussion of Wrench litigation.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>AmeriServe and Other
Charges (Credits) </U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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
September 3, 2005 and for the quarter  ended  September 4, 2004.  Income of $14
million was recorded as  AmeriServe  and other  charges
(credits) for the year to date ended September 4, 2004. The amount  primarily
resulted from cash recoveries  related to the AmeriServe
bankruptcy reorganization process.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.   Other (Income)
Expense</b></FONT></P>

<BR><BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>13</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
     <TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="40%" ALIGN="LEFT">Gain upon sale of investment in unconsolidated
affiliate</TD>
     <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17
</TD>
        <TD WIDTH="5%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD>
        <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Recovery from supplier(a)</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(12</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(12</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD 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">(16</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(14</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(39</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(36</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">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">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>
     <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">Other (income) expense</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27
</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13
</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(66
</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(35
</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>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 0" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>Amount
differs from the total recovery of $14 million  recorded in the quarter ended
September
3, 2005 (see Note 7) as $2 million      was recognized through equity income
from
investments in unconsolidated affiliates. </TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividends  received  from
unconsolidated  affiliates  were  approximately  $21  million  and $25  million
for the years to date ended
September 3, 2005 and September 4, 2004, respectively.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>9.   Debt</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 2005.</FONT></P>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the terms of the
Credit  Facility,  we may borrow up to the maximum  borrowing  limit,  less
outstanding  letters of credit.  At
September 3, 2005, our unused Credit Facility totaled $710 million,  net of
outstanding  letters of credit of $193 million.  There were
borrowings  of $97 million  outstanding  under the Credit  Facility at September
3, 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Included in short-term
borrowings at September 3, 2005 are $200 million in Senior Unsecured Notes with
an April 2006 maturity date.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest  expense on
short-term  borrowings and long-term debt was $34 million and $32 million for
the quarters ended September 3, 2005
and September 4, 2004,  respectively,  and $100 million and $106 million for the
years to date ended September 3, 2005 and September 4,
2004, respectively.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>10.  Reportable
Operating Segments</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>14</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><b><U>Revenues</U></B></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;1,393</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;1,369</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;4,113</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;4,015</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>490</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>509</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,466</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,485</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>360</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>301</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>871</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>726</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>$&nbsp;2,243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;2,179</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;6,450</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;6,226</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>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><u>Operating Profit</u></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>United States</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;189</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;196</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;541</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;567</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>89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>273</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>241</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>85</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>163</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>141</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>(52</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(48</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(155</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(140</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated other income (expense) (c)</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated facility actions(d)</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>21</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Wrench litigation income (expense)(e)</TD><TD ALIGN=LEFT>
&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>AmeriServe and other (charges) credits(e)</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>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>322</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>860</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>809</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>(28</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(29</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(86</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(96</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>$&nbsp;294</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;262</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;774</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;713</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>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><b><u>Identifiable Assets</u></B></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<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></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT>United States</TD>
     <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;3,134</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&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>1,595</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>769</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>613</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Corporate(f)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>376</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><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>$&nbsp;5,874</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&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>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Long-Lived Assets(g)</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<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></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT>United States</TD>
     <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;2,812</TD>
        <TD WIDTH=7% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&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>849</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>488</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>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><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>$&nbsp;4,255</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;4,339</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>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a)  </TD>
<TD WIDTH=95%>Includes
 revenues of  approximately  $294 million and $239 million in mainland China for
the
quarters ended September 3, 2005          and September 4, 2004,  respectively.
Includes
revenues of approximately  $693 million and $575 million in mainland China for
         the years to date ended September 3, 2005 and September 4, 2004,
respectively.</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>     (b) </TD>
<TD WIDTH=95%>Includes
 approximately  $14 million of operating profit in the quarter and year to date
ended
September 3, 2005 related to an          agreement  with a supplier in mainland
China
for a partial  recovery of certain  losses.  See Note 7 for a discussion  of the
         mainland China supplier ingredient issue.</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>     (c) </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 year
to date ended September 3, 2005.</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>     (d) </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>
<BR>


<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>15</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>     (e) </TD>
<TD WIDTH=95%>See
Note 7 for a discussion of AmeriServe and other (charges) credits and Wrench
litigation
income (expense).</TD>
</TR>
</TABLE>
<BR>

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

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>11.  Pension and
Postretirement Medical Benefits</B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Pension Benefits</U>
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Postretirement Medical
Benefits</U></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Components of Net
Periodic Benefit Cost</U></FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Pension Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE>
</TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Pension Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE>
</TH></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>
</TR>
     <TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="30%" ALIGN="LEFT">Service cost</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;8</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;7</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;23</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;22</TD>
        <TD WIDTH="20%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Interest cost</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">9</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">9</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">29</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">27</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">(10</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(9</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(31</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">(28</TD>
        <TD ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Amortization of prior service cost</TD><TD ALIGN="LEFT">
&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Recognized actuarial loss</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">5</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">15</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">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;12</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;39</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;37</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>



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

<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Other Postretirement</TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Other Postretirement</TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Benefits<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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>
</TR>
     <TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="30%" ALIGN="LEFT">Service cost</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;1</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;1</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;2</TD>
        <TD WIDTH="20%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Interest cost</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Expected return on plan assets</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Amortization of prior service cost</TD><TD ALIGN="LEFT">
&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Recognized actuarial loss</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Net periodic benefit cost</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>16</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<u>Contributions</u></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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  September  3, 2005.  However,  on
September  15,  2005 we  elected to make a  discretionary
contribution to the Plan in the amount of $55 million. No further contributions
to the Plan are expected in 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>12.  Share Repurchase Program</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.  During the year to date ended
September 3, 2005, we  repurchased  approximately  3.1 million shares for
approximately  $152 million at an average price per share of
approximately $50 under this program.  At September 3, 2005,  approximately
$348 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.
</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 September 3, 2005, we repurchased  approximately 10 million shares for
approximately  $500 million at an average price per share
of approximately $50 under this program. This program was completed during the
third quarter of 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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
September 3, 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.
</FONT></p>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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  repurchases  as described
above.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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  September  4, 2004,
we  repurchased  approximately  8.1  million  shares for
approximately $294 million at an average price per share of approximately $36
under this program.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>13.  Supplemental Cash Flow Data</B></FONT></P>

<BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>17</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=65%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1>&nbsp;</TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></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>$&nbsp;&nbsp;85</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;100</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>125</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>231</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>$&nbsp;&nbsp;&nbsp;&nbsp;3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>14.  Guarantees,
Commitments and Contingencies</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Lease Guarantees and
Contingencies</u></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 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 $370 million and $365
million,  respectively.  The present value of these  potential
payments  discounted at our pre-tax cost of debt at September 3, 2005 was $313
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 September 3, 2005 and December 25, 2004, was not material.
</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Guarantees Supporting
Financial Arrangements of Franchisees, Unconsolidated Affiliates and Other Third
Parties</u></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 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 $83 million at
September 3, 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September
3, 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 2005. Our  unconsolidated
affiliates  had total revenues of  approximately  $1.2
billion  for the  year to date  ended  September  3,  2005,  and  assets  and
debt of  approximately  $840  million  and $14  million,
respectively, at September 3, 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have also  guaranteed
certain lines of credit,  loans and letters of credit of third parties  totaling
$2 million and $9 million at
September 3, 2005 and December 25,  2004,  respectively.  If all such lines of
credit and letters </FONT></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>18</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>of credit were fully drawn
down,  the
maximum  contingent  liability under these  arrangements  would be approximately
$3 million and $26 million as of September 3, 2005 and
December 25, 2004, respectively.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September
3, 2005 and December 25, 2004 is not significant.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Insurance Programs</u>
</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></p>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Change of Control
Severance Agreements </u></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3,
2005,  payments  of  approximately  $35  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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Litigation</u></FONT>
</P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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;.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>19</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On August 13, 2003, a class
action  lawsuit  against Pizza Hut,  Inc.,  entitled  <U>Coldiron v. Pizza Hut,
Inc.,</U> was filed in the United
States District Court,  Central  District of California.  Plaintiff  alleges
that she and other current and former Pizza Hut Restaurant
General Managers  (&#147;RGM's&#148;) were improperly  classified as exempt
employees under the U.S. Fair Labor Standards Act (&#147;FLSA&#148;).  There is
also a pendent  state law claim,  alleging  that  current and former RGM&#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  elected to
join the  litigation.  However,  currently  only 88 of the
individuals  who elected to join the  litigation  are  plaintiffs  (as a number
of plaintiffs  were  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.  On July 15, 2005,  the Ninth  Circuit  granted  review of the
Rule 23 class  certification  orders and briefing of the
appeal is expected to be completed in December.  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 88 (or approximately 2.5% of the eligible class members).
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December 17, 2002,  Taco
Bell was named as the defendant in a class action  lawsuit filed in the United
States  District  Court for
the  Northern  District of  California  entitled  <U>Moeller,  et al. v. Taco
Bell
Corp.</U>  On August 4, 2003,  plaintiffs  filed an amended
complaint  that alleges,  among other  things,  that Taco Bell has
discriminated  against the class of people who use  wheelchairs  or
scooters for mobility by failing to make its approximately 220 company-owned
restaurants in California (the &#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  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 </FONT></P>

<BR><BR><BR><BR>
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<div style='page-break-after:always; text-align:center'>20</div>
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<BR><BR><BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT>
</P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December  19,  2003,  a
demand for  arbitration  was filed with the American  Arbitration  Association
(&#147;AAA&#148;)  pursuant to the AAA
Supplementary  Rules for Class  Arbitrations  (&#147;AAA Class  Rules&#148;) on
behalf of former LJS  managers  Erin Cole and Nick  Kaufman,  who
reside in South  Carolina  (the &#147;Cole  Arbitration&#148;).  Claimants  in
the Cole  Arbitration  demand a class  arbitration  on claims that
deductions from the salaries of RGMs and Assistant  Restaurant  General Managers
(&#147;ARGMs&#148;) violate  regulations issued pursuant to the
FLSA,  and thus the RGMs and ARGMs  should be treated as the  equivalent  of
hourly  employees  who are  eligible  under the FLSA for
overtime  for any hours  worked over  forty.  The  complaint  in the Cole
Arbitration  subsequently  was amended to add an  additional
allegation of deductions in violation of the FLSA salary basis test, and to add
Victoria  McWhorter,  another LJS former manager, as an
additional  claimant.  LJS has denied the claims and it is LJS's  position that
the claims of Cole,  Kaufman,  and McWhorter  should be
individually arbitrated.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On June 15, 2004, the
arbitrator in the Cole Arbitration  issued a clause  construction  award,
ruling that the LJS Dispute Resolution
Program (&#147;DRP&#148;) does not preclude class  arbitration.  LJS moved to
vacate the clause  construction award in the United States District
Court for the  District of South  Carolina.  On September  15, 2005,  the
federal  court in South  Carolina  ruled that it did not have
jurisdiction  to hear  LJS's  motion to  vacate.  LJS has filed a motion for
reconsideration  of that  ruling,  which is  pending.  On
September  19, 2005,  the  arbitrator  also issued a class  determination
award,  certifying a class of LJS's RGMs and ARGMs  employed
between  December 17, 1998, and August 22, 2004, on FLSA claims,  to proceed on
an opt-out basis under the AAA Class Rules.  That class
determination  award has been stayed for ninety days  effective as of  September
19, 2005 to permit LJS to file a motion to vacate the
class determination award.  LJS intends to file a motion to vacate the class
determination award.
</FONT></P>

<BR><BR><BR><BR>
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<div style='page-break-after:always; text-align:center'>21</div>
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<BR><BR><BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LJS believes that the DRP
provides for  individual  arbitrations.  LJS also believes that if the Cole
Arbitration  proceeds on a class
basis,  (i) the  proceedings  must be  governed by the opt-in  collective
action  structure  of the FLSA,  (ii) a class  should not be
certified  under the applicable  provisions of the FLSA,  (iii) each  individual
should not be able to recover for more than two years
(and a maximum  three  years)  prior to the date they file a consent to join the
arbitration  and (iv) any class should be confined to
South Carolina.  In view of the novelties of proceeding  under the AAA Class
Rules and the inherent  uncertainties  of litigation,  the
outcome of the arbitration and the appeals of the arbitrator's decisions cannot
be predicted at this time.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 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.  During the third quarter of 2005, we entered into a
settlement agreement with another insurance carrier and as a result income of $2
million was recorded in the quarter.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We intend to seek
additional  recoveries from our other  insurance  carriers  during the periods
in question.  We have 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.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Obligations to PepsiCo,
Inc. After Spin-off</U></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>22</div>
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<BR><BR><BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the terms of these
agreements,  we have  indemnified  PepsiCo for any costs or losses it incurs
with  respect to all letters of
credit,  guarantees and contingent  liabilities relating to our businesses under
which PepsiCo remains liable. As of September 3, 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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the Separation
Agreements,  PepsiCo  maintains full control and absolute  discretion with
regard to any combined or consolidated
tax filings for periods through October 6, 1997. PepsiCo also maintains full
control and absolute  discretion  regarding any common tax
audit issues.  Although PepsiCo has  contractually  agreed to, in good faith,
use its best efforts to settle all joint interests in any
common tax audit issue on a basis consistent with prior practice,  there can be
no assurance that  determinations made by PepsiCo would
be the same as we would reach,  acting on our own behalf.  Through  September 3,
2005, there have not been any  determinations  made by
PepsiCo where we would have reached a different determination.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B> 2. Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations</B>
</FONT>
</P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B> Introduction and
Overview</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 13,419 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s key
strategies are:</FONT></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 (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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:</FONT></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>

<UL><LI>Portfolio of category-leading U.S. brands

<BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>23</div>
<!-- MARKER Page Break='End' -->
<BR><BR><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 (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our progress against these
measures is discussed throughout the Management&#146;s Discussion and Analysis
(&#147;MD&amp;A&#148;).</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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;).</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Significant Known
Events, Trends or Uncertainties Expected to Impact 2005 Comparisons with 2004
</b>
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following  factors
impacted  comparability of operating  performance for the quarter and/or year to
date ended September 3, 2005 or
could impact comparisons for the remainder of 2005. Certain of these factors
were previously discussed in our 2004 Form 10-K.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>New Accounting
Pronouncements Not Yet Adopted</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the adoption of
Statement of Financial  Accounting  Standards  (&#147;SFAS&#148;)  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.  Compensation cost will be
recognized over the vesting period on a straight-line basis for the fair value
of awards that actually vest.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We currently intend to
adopt SFAS 123R using the modified  retrospective  application  transition
method effective  September 4, 2005,
the beginning of our fourth  quarter.  As permitted by SFAS 123R, we plan to
apply the modified  retrospective  application  transition
method to the beginning of the fiscal year of adoption (our fiscal year 2005).
As such,  the first three fiscal  quarters of 2005 will
be adjusted to recognize the compensation cost previously  reported in the pro
forma footnote  disclosures under the provisions of SFAS
No. 123,  &#147;Accounting  for  Stock-Based  Compensation&#148;  (&#147;SFAS
123&#148;).  Compensation  cost will be recognized  subsequent to the date of
adoption of SFAS 123R for all  share-based  payments  granted,  modified or
settled after the date of adoption.  Additionally,  for any
unvested  awards that were granted prior to the date of</font></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>24</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>adoption,  we will
recognize cost  subsequent to the date of adoption using the
same  estimate of the  grant-date  fair value used to determine  the pro forma
disclosures  under SFAS 123. We currently  estimate the
adoption of SFAS 123R will  decrease  diluted  earnings  per common  share in
the quarter and year to date ending  December 31, 2005 by
approximately $0.04 per share and $0.12 per share, respectively.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally,  SFAS 123R
requires the benefits of tax  deductions  in excess of  recognized  compensation
expense to be reported as a
financing  cash flow,  rather  than as an  operating  cash flow as required
currently.  This  requirement  will reduce cash flows from
operating  activities and increase cash flows from financing  activities by a
similar  amount.  We currently do not anticipate that the
reclassification will significantly impact our net cash provided by operating
activities.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See Note 4.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>International Reporting
Changes</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 2005. Our  consolidated  results of operations
for the quarter and year to date ended September 3, 2005
include the results of operations of the China business for the months of June,
2005 through  August,  2005 and January,  2005 through
August,  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 September 4, 2004 continue to include
the results of operations of the China business for the months of May, 2004
through July, 2004 and December,  2003 through July,  2004,
respectively, as previously reported.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See Note 1.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Mainland China Supplier
Ingredient Issue</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our KFC  business  in
mainland  China was  negatively  impacted  by the  interruption  of product
offerings  and  negative  publicity
associated with a supplier  ingredient issue  experienced in late March,  2005.
During the quarter ended September 3, 2005, we entered
into an  agreement  with the  supplier  of the  ingredient  for a partial
recovery  of our losses.  As a result of the  agreement,  we
recognized  approximately $14 million in Other income (expense) in our Condensed
Consolidated Statement of Income in the quarter ended
September 3, 2005 related to this recovery.  We expect to recognize an
additional  meaningful financial recovery from the same supplier
in the quarter ending December 31, 2005.</FONT></P>



<BR><BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>25</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We currently  expect full
year China  Division  system sales growth of at least 15%,  revenue growth in
the range of 17%, and operating
profit growth of approximately 10% for the full year, all excluding the impact
of foreign currency translation.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Hurricane Katrina</U>
</FONT>
</P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the quarter ended
September 3, 2005,  Hurricane  Katrina caused  significant  damage to several
company and franchised  stores.
This storm  resulted in  approximately  $3.0 million of one-time  costs being
recorded in the quarter from  property  damage and asset
write-offs related to company  restaurants.  Additionally,  during
mid-September 2005, Hurricane Rita caused further damage to company
and franchised  stores,  though to a lesser extent than  Hurricane  Katrina.
The impact of these  hurricanes on energy prices and lost
profits from closed  restaurants is expected to adversely  impact fourth
quarter  operating  profits by $4 to $6 million.  We do not
expect insurance recoveries, if any, related to the hurricanes to be
significant.
</font></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Extra Week in 2005</u>
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</font></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Sale of Puerto Rico
Business</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Puerto Rico  business
was sold on October 4, 2004 for an amount  approximating  its then carrying
value.  As a result of the sale,
company  sales and  restaurant  profit  decreased $45 million and $8 million,
respectively,  franchise  fees  increased $3 million and
general and  administrative  expenses  decreased $2 million for the quarter
ended  September 3, 2005 as compared to the quarter  ended
September 4, 2004. Company sales and restaurant profit decreased $132 million
and $24 million,  respectively,  franchise fees increased
$8 million and general and  administrative  expenses  decreased $7 million for
the year to date ended  September 3, 2005 as compared to
the year to date ended September 4, 2004.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Sale of an Investment in
Unconsolidated Affiliate</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the second  quarter
of 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.  Prior to the sale,  we
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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This  transaction
generated a one-time gain of  approximately  $17 million for YUM in the second
quarter of 2005 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</font>
</p>
<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>26</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in unconsolidated
affiliates,  the approximate $17 million gain
was recorded in Other income (expense) in our Condensed Consolidated Statements
of Income.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The transaction is not
expected to have a significant impact on the Company&#146;s future results of
operations.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Income Tax Impact of
Repatriating Qualified Foreign Earnings</U></FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 second quarter of 2005, we
determined that we would 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,
$5 million  and $13  million of which were  recognized  in the  quarter  and
year to date ended  September  3, 2005,  respectively.  No
additional amounts beyond the approximately $500 million as discussed above are
eligible for the Act&#146;s dividends received deduction.</font></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Pension Plan Funded
Status</U></font></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain of our employees
are covered under  noncontributory  defined  benefit  pension plans.  The most
significant of these plans was
amended in 2001 such that salaried  employees hired or rehired after  September
30, 2001 are not eligible to participate.  As disclosed
in our 2004 Form 10-K, as of our September 30, 2004 measurement  date these
plans had a projected  benefit  obligation  (&#147;PBO&#148;) of $700
million and a fair value of plan assets of $518  million.  We  currently
estimate  that  increases to plan assets as a result of stock
market gains since  September 30, 2004 as well as a $55 million  pension plan
contribution we made subsequent to September 3, 2005 but
prior to our  September  30, 2005  measurement  date will offset  current years
benefits  earned by covered  employees and interest on
benefits previously earned.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thus, any significant
change in our pension plan funded status at September 30, 2005 versus  September
30, 2004 would primarily be the
result of any change in the discount  rate we use to measure our PBO.  Due to
the  relatively  long time frame over which  benefits are
expected to be paid,  our PBO is highly  sensitive to changes in discount
rates.  A 10 basis point  decrease in the discount rate from
the 6.15% used at September  30, 2004 would  increase  our PBO at  September
30, 2005,  holding all other  variables  and  assumptions
constant,  by  approximately  $14 million.  While we have not yet determined the
discount rate we will use to measure our PBO as of our
September  30, 2005  measurement  date,  we believe that it will  decrease and
estimate that the change in our funded status will range
from a slight improvement to a decline of approximately $35 million.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We do not believe the
remaining  underfunded  status of the pension plan will  materially  affect our
results of operations,  financial
position or cash flows and have incorporated the estimated future impact into
our financial projections and plans.</font></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Store Portfolio Strategy
</u></font></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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,</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>27</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

 <!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
summarizes our refranchising activities:</FONT></P>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</tr>
     <TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=56% ALIGN=LEFT>Number of units refranchised</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>64</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>18</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>205</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>32</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>$&nbsp;&nbsp;&nbsp;38</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;14</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>$&nbsp;&nbsp;(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;(21</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>







<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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;).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
summarizes Company store closure activities:</FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</tr>
     <TR VALIGN=Bottom>
     <TH COLSPAN=2>&nbsp;</TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
     <TH COLSPAN="1">9/3/05 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
     <TR>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD>
     <TD COLSPAN=2></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="56%" ALIGN="LEFT">Number of units closed</TD>
     <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="6%" ALIGN="RIGHT">80</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="6%" ALIGN="RIGHT">45</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="6%" ALIGN="RIGHT">167</TD>
        <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="6%" ALIGN="RIGHT">230</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">$&nbsp;&nbsp;5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;(3</TD>
        <TD ALIGN=LEFT>)</TD></TR>
</TABLE>






<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The  income in store  closure  costs for the year to date ended  September  4,
2004 is  primarily  the result of gains from the sale of
properties on which we previously  operated  restaurants or adjustments to
previously reported lease reserves as a result of changes in
settlement and/or sublease estimates.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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  September 3,
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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The following table summarizes the estimated impact on revenue of refranchising
and Company store closures:</FONT></P>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=8>Quarter Ended 9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE>
</TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN="1"></TH>
<TH COLSPAN="1">China 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>
     <TD ALIGN="LEFT">Decreased sales</TD>
     <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;(60</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;(84</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;(2</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;(146</TD>
        <TD ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="50%">Increased franchise fees</TD>
<TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="10%">2</TD>
        <TD ALIGN="LEFT" WIDTH="2%"></TD>
     <TD ALIGN="RIGHT" WIDTH="10%">4</TD>
        <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
     <TD ALIGN="RIGHT" WIDTH="10%">-</TD>
        <TD ALIGN="LEFT" WIDTH="2%"></TD>
     <TD ALIGN="RIGHT" WIDTH="10%">6</TD>
        <TD ALIGN="LEFT" WIDTH="2%"></TD></TR>
<TR VALIGN=Bottom>
     <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>
     <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">Decreased in total revenues</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;(58</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;(80</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;(2</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;(140</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>
</TABLE>


<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>28</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=8>Year to date Ended 9/3/05
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">China 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>
</TR>
<TR VALIGN=Bottom>

     <TD WIDTH="50%" ALIGN="LEFT">Decreased sales</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(150</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(201</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(9</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(360</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Increased franchise fees</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">5</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">10</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR>
     <TD ALIGN="LEFT">Decrease in total revenues</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">$&nbsp;(145</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;(191</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;(9</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;(345</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>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
summarizes the estimated impact on operating profit of refranchising and Company
store closures:</FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=8> Quarter Ended 9/3/05
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">China 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>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="LEFT">Decreased restaurant profit</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(6</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(10</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;&nbsp;-</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(16</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">4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">6</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">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">2</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">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>
     <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">Decrease in operating profit</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">$&nbsp;(3</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;(4</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;-</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;(7</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
          <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD></TR>

</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=8> Year to date Ended 9/3/05
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1></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 Division
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">China 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>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="LEFT">Decreased restaurant profit</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(14</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(27</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(1</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD>
     <TD WIDTH="10%" ALIGN="RIGHT">$&nbsp;(42</TD>
        <TD WIDTH="2%" ALIGN="LEFT">)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Increased franchise fees</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</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>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>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>
     <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>Decrease in operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(19</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>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Results of Operations </B></FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>

     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
  <TH COLSPAN="1"></TH>
<TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH>9/4/04<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">9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1">9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B/(W)
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>

     <TH COLSPAN="1"></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="LEFT">Company sales</TD>
     <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="2%" ALIGN="RIGHT">$1,975</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="2%" ALIGN="RIGHT">$1,935</TD>
        <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="5%" ALIGN="RIGHT">2</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="2%" ALIGN="RIGHT">$5,687</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="5%" ALIGN="RIGHT">$5,528</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="5%" ALIGN="RIGHT">3</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Franchise and license fees&nbsp;</TD>
<TD ALIGN="RIGHT">&nbsp;</td>
     <TD ALIGN="RIGHT">268</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">244</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">10</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">763</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">698</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">9</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
</TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Revenues</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$2,243</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$2,179</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">3</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$6,450</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$6,226</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">4</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>

<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
</TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Company restaurant profit</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;296</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;295</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">-</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;826</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;821</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">1</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">% of Company sales</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">14.9</TD>
        <TD ALIGN="LEFT">%</TD>
     <TD ALIGN="RIGHT">15.2</TD>
        <TD ALIGN="LEFT">%</TD>
     <TD ALIGN="RIGHT">(0.3)</TD>
        <TD ALIGN="LEFT">&nbsp;ppts.</TD>
     <TD ALIGN="RIGHT">14.5</TD>
        <TD ALIGN="LEFT">%</TD>
     <TD ALIGN="RIGHT">14.8</TD>
        <TD ALIGN="LEFT">%</TD>
     <TD ALIGN="RIGHT">(0.3)</TD>
        <TD ALIGN="LEFT">&nbsp;ppts.</TD></TR>

<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
</TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Operating profit</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;322</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;291</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">11</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;860</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;809</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">6</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">28</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">29</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(2</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">86</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">96</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">10</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">80</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">77</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(3</TD>
        <TD ALIGN="LEFT">)</TD>
     <TD ALIGN="RIGHT">212</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">208</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">(2</TD>
        <TD ALIGN="LEFT">)</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Net income</TD><TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;214</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;185</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">16</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;562</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;505</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">11</TD>
        <TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD><TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<TD COLSPAN=1>&nbsp;</TD>
<TD COLSPAN=1>&nbsp;</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 ALIGN="LEFT"></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT">Diluted earnings per share(a)</TD><TD ALIGN="LEFT">&nbsp;
</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;0.72</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;0.61</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">18</TD>
        <TD ALIGN="LEFT"></TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;1.87</TD>
        <TD ALIGN="LEFT">&nbsp;</TD>
     <TD ALIGN="RIGHT">$&nbsp;&nbsp;1.66</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=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR=#000000 SIZE=2></TD><TD></TD><TD></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 Hang Lv 0" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(a) </TD>
<TD WIDTH=95%>See
Note 5 for the number of shares used in this calculation.</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><B><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Restaurant Unit Activity</FONT>
</B></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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 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 Excluding Licensees
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></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>269</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>88</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>517</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>874</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>(205</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(128</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>331</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>(167</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(29</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(433</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(629</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(15</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7,641</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,595</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>22,301</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31,537</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR COLOR="Black" SIZE="2" ALIGN="Left"></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>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The above totals exclude 2,371 and 2,345 licensed units at September 3, 2005 and
December 25, 2004, respectively.</FONT></P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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 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 Excluding Licensees
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=12% ALIGN=RIGHT>4,989</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=RIGHT>-</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=12% ALIGN=RIGHT>13,482</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=12% 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>58</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>161</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>219</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>(128</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>126</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>(127</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(244</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>(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>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,782</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>-</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>13,530</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18,312</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR COLOR="Black" SIZE="2" ALIGN="Left"></TD>
<td>&nbsp;</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>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The above totals exclude 2,177 and 2,139 licensed units at September 3, 2005 and
December 25, 2004, respectively.
</FONT></P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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 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 Excluding Licensees
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% 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=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New builds</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>348</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>403</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>(77</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(128</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>205</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>(24</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(24</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(189</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(237</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</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>
     <TD COLSPAN=2></TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></td>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=1></td>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,425</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,080</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8,561</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11,066</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></td>
<td>&nbsp;</td>
<TD COLSPAN=1><HR NOSHADE COLOR=Black SIZE=2></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>&nbsp;</TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The above totals exclude 194 and 206 licensed units at September 3, 2005 and
December 25, 2004, respectively.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>29</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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 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 Excluding Licensees
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>

<TR VALIGN=Bottom>
     <TD WIDTH=30% ALIGN=LEFT>Beginning of year</TD>
     <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,266</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>460</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>198</TD>
        <TD WIDTH=6% 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>184</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>60</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>252</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>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(21</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><HR NOSHADE COLOR=Black SIZE=1></td>
<TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=1></td>
<TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=1></td><TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=1></td>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>End of quarter</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,434</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>515</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>210</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2,159</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></TD>
<td><HR NOSHADE COLOR=Black SIZE=2></td>
<TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=2></td>
<TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=2></td><TD COLSPAN=1>&nbsp;</TD>
<td><HR NOSHADE COLOR=Black SIZE=2></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>





<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 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 September 3,
2005 and December 25, 2004:</FONT></P>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
<TH COLSPAN="1" ALIGN="Left"><u>9/3/05</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>
     <TD WIDTH=50% ALIGN=LEFT>United States</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,581</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>1,337</TD>
        <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>2,918</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>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>169</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>189</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></td>
<TD><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<TD><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td><TD><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,601</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,506</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>3,107</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></td>
<TD><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<TD><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td><TD><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
</TR>
</TABLE>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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>
     <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>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</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>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>

</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For the year to date ended September 3, 2005, Company and franchise multibrand
unit gross additions were 226 and 106, respectively.</FONT></P>


<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>30</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>System Sales Growth</b></FONT></P>

 <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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<BR>
currency 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>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH></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=8% 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>7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14</TD>
        <TD ALIGN=LEFT>%</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>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>18</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>31</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Worldwide system sales growth was driven by new unit development and same store
sales growth, partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
U.S. system sales growth was driven by same store sales growth and new unit
development, partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
International Division system sales growth was driven by new unit development
partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
China  Division  system sales growth was driven by new unit  development,
partially  offset by the impact of same store sales declines
driven by the mainland China supplier ingredient issue.</FONT></P>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="Left"><U>Year to date</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<BR>
currency 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>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH>
<TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=1></TH></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=8% 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>10</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>7</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>China Division</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>27</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>16</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>26</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>6</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>





<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Worldwide system sales growth was driven by new unit development and same store
sales growth, partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
U.S. system sales growth was driven by same store sales growth and new unit
development, partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
International  Division system sales growth was driven by new unit  development
and same store sales growth,  partially offset by store
closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
China  Division  system sales growth was driven by new unit  development,
partially  offset by the impact of same store sales declines
driven by the mainland China supplier ingredient issue.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>31</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Revenues</B></FONT></P>









<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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>&nbsp;</th>
     <TH COLSPAN="1" NOWRAP="Nowrap">% Increase/</TH>
<td>&nbsp;</td>
     <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>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>(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>
     <TH COLSPAN=1></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>$1,239</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$1,225</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>387</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>420</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(8</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(12</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>349</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>290</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>
     <TD COLSPAN=2></td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,975</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,935</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr><td>&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>154</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>144</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>103</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>16</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>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2></td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>268</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>244</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>&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>1,393</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,369</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>490</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>509</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(8</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>360</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>301</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>
     <TD COLSPAN=2></td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,243</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$2,179</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>
     <TD COLSPAN=2></td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
</TR>
</TABLE>











<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The  increase  in
Worldwide  Company  sales was  driven by new unit  development  and same store
sales  growth,  partially  offset by
refranchising and store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The increase in Worldwide
franchise and license fees was driven by new unit development,  refranchising,
and same store sales growth,
partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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:</FONT></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=6>Quarter ended 9/3/05<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>
     <TD WIDTH=35% ALIGN=LEFT>KFC</TD>
     <TD WIDTH=10% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>6</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>6</TD>
        <TD WIDTH=5% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% 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>(3</TD>
        <TD ALIGN=LEFT>)%</TD>
     <TD ALIGN=RIGHT>(7</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>8</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>






<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
U.S. blended Company same store sales increased 4% due to increases in
transactions and average guest check.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>32</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in  International  Division  Company  sales was driven by
refranchising  (primarily  our Puerto Rico  business) and store
closures, partially offset by new unit development and same store sales growth.
</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The increase in International Division franchise and license fees was driven by
new unit development and refranchising (primarily our
Puerto Rico business).</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The increase in China Division Company sales was driven by new unit development,
partially offset by the impact of same store sales
declines driven by the mainland China supplier ingredient issue.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
China Division franchise and license fees were basically flat. Increases due to
new unit development were largely offset by the
impact of same store sales declines driven by the mainland China supplier
ingredient issue.</FONT></P>
















<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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</TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE> </TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04 <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>(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>
     <TH COLSPAN=1></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>$3,678</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$3,599</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>1,165</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,229</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(5</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</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>844</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>700</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>
</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>


</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,687</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>5,528</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><td>&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>435</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>416</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>301</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>256</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>17</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>27</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>
</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>


</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>763</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>698</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<tr><td>&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>4,113</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>4,015</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NA</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>1,466</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1,485</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</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>871</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>726</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>20</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>19</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>
</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>


</TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;Worldwide</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$6,450</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$6,226</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><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>


</TR>
</TABLE>








<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The  increase  in
Worldwide  Company  sales was  driven by new unit  development  and same store
sales  growth,  partially  offset by
refranchising and store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The increase in Worldwide
franchise and license fees was driven by new unit  development,  same store
sales growth and  refranchising,
partially offset by store closures.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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:
</FONT></P>


<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>33</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=6>Year to date ended 9/3/05
<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>
     <TD WIDTH=35% ALIGN=LEFT>KFC</TD>
     <TD WIDTH=10% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=7% ALIGN=RIGHT>6</TD>
        <TD WIDTH=14% ALIGN=LEFT>%</TD>
     <TD WIDTH=7% ALIGN=RIGHT>6</TD>
        <TD WIDTH=17% 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>1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(3</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>6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>3</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>







<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
U.S. blended Company same store sales increased 4% due to increases in
transactions and average guest check.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in  International  Division  Company  sales was driven by
refranchising  (primarily  our Puerto Rico  business) and store
closures, partially offset by new unit development and same store sales growth.
</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The increase in International  Division franchise and license fees was driven by
new unit development and refranchising  (primarily our
Puerto Rico business).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The increase in China Division  Company sales was driven by new unit
development,  partially  offset by the impact of same store sales
declines driven by the mainland China supplier ingredient issue.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The increase in China Division  franchise and license fees was primarily driven
by new unit development,  partially offset by the impact of
same store sales declines driven by the mainland China supplier ingredient
issue.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Company Restaurant Margins</B></FONT></P>








<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Quarter ended 9/3/05</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>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>
     <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>29.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>35.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.3</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>29.6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.4</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>26.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>28.4</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</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>12.7</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>20.6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.9</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
</TR>
</TABLE>








<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Quarter ended 9/4/04</U></TH>
<th colspan=1>&nbsp;</th>
     <TH COLSPAN=1>United States<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<th colspan=1>&nbsp;</th>
     <TH COLSPAN=1>International<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<th colspan=1>&nbsp;</th>
     <TH COLSPAN=1>China<BR>
Division<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<th colspan=1>&nbsp;</th>
     <TH COLSPAN=1>Worldwide<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=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>30.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>36.4</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>29.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>25.7</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>25.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.3</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Company restaurant margin</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>14.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>13.5</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>22.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>15.2</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
</TR>
</TABLE>


<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>34</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in U.S.  restaurant  margins as a percentage of sales was driven by
higher occupancy and other costs,  partially offset by
the impact of same store sales growth on restaurant  margin.  Higher  occupancy
and other costs were driven by increases in advertising
costs, depreciation and amortization expense, utility costs and asset write-offs
resulting from Hurricane Katrina.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in International  Division  restaurant  margins as a percentage of
sales included a 61 basis point  unfavorable  impact of
refranchising  our  restaurants  in Puerto Rico.  Also  contributing  to the
decrease were higher labor costs and higher  occupancy and
other costs. These decreases were partially offset by the impact of same store
sales growth on restaurant margin.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 and lower margins  associated with new units during the
initial  periods of operation.  The decrease was partially
offset by lower food and paper costs (principally due to supply chain savings
initiatives).</FONT></P>











<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date ended 9/3/05</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>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></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=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>30.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>36.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>31.5</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>29.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>26.2</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>26.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.2</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.8</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</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>19.2</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.5</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
</TR></TABLE>









<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><U>Year to date ended 9/4/04</U></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>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>
     <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>29.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>33.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>37.3</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>30.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>23.7</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11.2</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>25.5</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>29.1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>30.9</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>27.0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</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>13.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>20.6</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>14.8</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td><td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td></tr>
</TABLE>





<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 advertising  costs,  utility costs and depreciation and
amortization  expense.  Higher food and paper costs were
driven by increased commodity costs (principally meats).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in International  Division  restaurant  margins as a percentage of
sales included 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 higher
labor costs. These decreases were partially offset by the impact of same store
sales growth on restaurant margin.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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,  the lower margins  associated with new units during the
initial </FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>35</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
periods of operation and higher labor costs. The
decrease  was  partially  offset by the impact on  restaurant  margin of lower
food and paper costs  (principally  due to supply  chain
savings initiatives).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Worldwide General and Administrative Expenses</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
General and  administrative  expenses  increased  $2 million or 1% in the
quarter  and $30 million or 4% year to date,  including a 1%
unfavorable  impact from foreign  currency  translation for both periods.  The
quarter and year to date increases were driven by higher
litigation  related  costs,  including  charges of $6 million and $16 million,
respectively,  for the potential  resolution of certain
legal matters as well as higher compensation related costs,  including amounts
associated with investments in strategic  initiatives in
China and other  international  growth markets.  Higher charitable
contributions  also contributed to the year to date increase.  Such
increases  were  partially  offset in both the quarter and year to date by the
effect of lapping  certain prior year reserve  increases
related to potential  development  sites and surplus  facilities  and
reductions  associated  with  operating  restaurants  which were
refranchised in 2004 (primarily the Puerto Rico business).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Worldwide Franchise and License Expenses</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Franchise  and license  expenses  increased $4 million or 43% for the quarter
and $8 million or 44% year to date.  The quarter and year
to date increases were driven by higher provisions for doubtful  franchise and
license fee receivables and certain  franchisee  support
costs.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Worldwide Other (Income) Expense</B></FONT></P>









<TABLE CELLPADDING="0" CELLSPACING="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>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></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">$&nbsp;&nbsp;-</TD>
        <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
     <TD WIDTH="4%" ALIGN="RIGHT">$&nbsp;&nbsp;-</TD>
        <TD WIDTH="4%" 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;-</TD>
        <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Recovery from supplier</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(12</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(12</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>-</TD>
        <TD 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>(16</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(14</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(39</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(36</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>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>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
</TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Other (income) expense</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;(27</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(13</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(66</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>$&nbsp;(35</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
</TR>
</TABLE>






<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Other  income was  positively  impacted in the quarter and year to date ended
September 3, 2005 by a $14
million  financial  recovery  ($2 million of which was
recognized  through equity income from  investments in  unconsolidated
affiliates)  from a supplier  related to an ingredient issue in
mainland China (see Note 7). Other income was also  positively  impacted in the
year to date ended  September 3, 2005 by a $17 million gain  associated with the
sale of our investment in our Poland/Czech Republic unconsolidated affiliate
during the second quarter of 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Worldwide Facility Actions</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
We recorded a net loss from  facility  actions of $7 million and $3 million for
the quarters  ended  September 3, 2005 and September 4,
2004,  respectively.  We recorded a net loss from  facility  actions of $22
million for both the years to date ended  September 3, 2005
and September 4, 2004. 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.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>36</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Operating Profit</B></FONT></P>







<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<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" NOWRAP="Nowrap">Year to date
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B/(W)
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B/(W)
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></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>$&nbsp;189</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;196</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>$&nbsp;541</TD>
        <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>$&nbsp;567</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>89</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>79</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>12</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>273</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>241</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>85</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>64</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>32</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>163</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>141</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</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>(52</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(48</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(7</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(155</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(140</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Unallocated other income (expense)</TD><TD ALIGN=LEFT>&nbsp;
</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(1</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>15</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(4</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>10</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>1</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>NM</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>21</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(10</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>2</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>2</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></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>-</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>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>

</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Operating profit</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;322</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;291</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>11</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;860</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;809</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>6</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>

</TR>
</TABLE>






<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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
year to date ended September 3, 2005 primarily  comprises
the $17 million 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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>
Quarter</U></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in U.S.  operating  profit was  primarily  driven by higher
facility  actions  expense  associated  with store  closures,
partially  offset by the impact of same store sales  growth on  franchise  and
license  fees.  The impact of same store sales growth on
restaurant profit was largely offset by higher occupancy and other costs.</FONT>
</P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Excluding the favorable impact from foreign currency  translation,
International  Division operating profit increased 9%. The increase
in  International  Division  operating  profit  was  driven  by lower  general
and  administrative  costs  and the  impact of new unit
development on franchise and license fees. The increase was partially  offset by
the impact on operating  profit of  refranchising  our
restaurants  in Puerto Rico.  The impact of same store sales growth on
restaurant  profit was largely  offset by higher labor costs and
higher occupancy and other costs. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Excluding the favorable  impact from foreign  currency  translation,  China
Division  operating  profit  increased 31%. The increase in
China Division  operating  profit was driven by a financial  recovery from a
supplier (see Note 7) and the impact on restaurant  profit
of new unit  development and lower food and paper costs  (principally  due to
supply chain savings  initiatives),  partially  offset by
same store sales declines. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>
Year to date</U></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The decrease in U.S.  operating profit was primarily  driven by higher facility
actions expense and higher general and  administrative expense,  partially
offset by the impact of same store sales growth on franchise
and license fees. The impact of same store sales growth
on restaurant profit was largely offset by higher occupancy and other costs and
higher food and paper costs. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 new
unit  development  on  franchise  and  license  fees and
restaurant  profit and the impact of same store sales growth on franchise  and
license fees.  The increase was partially  offset by the
impact on  operating  profit of  refranchising  our  restaurants  in Puerto
Rico.  The impact of same store sales growth on  restaurant
profit was largely offset by higher occupancy and other costs and higher labor
costs.
</FONT></P>

<BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>37</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Excluding the favorable  impact from foreign  currency  translation,  China
Division  operating  profit  increased 14%. The increase in
China Division  operating profit was driven by the impact on restaurant profit
of new unit development and a financial  recovery from a
supplier  (see Note 7). These  increases  were  partially  offset by  increased
general and  administrative  expense and the impact on
restaurant profit of same store sales declines.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Interest Expense, Net</B></FONT></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
    </TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B/(W)
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN="1" NOWRAP="Nowrap">% B/(W)
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=LEFT>Interest expense</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;34</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;32</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=8% ALIGN=RIGHT>(10) </TD>
     <TD WIDTH=4% ALIGN=LEFT>%</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;100</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=RIGHT>$&nbsp;106</TD>
        <TD WIDTH=5% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=5% ALIGN=RIGHT>5 </TD>
     <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest income</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(6</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(3</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>85 </TD><TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>(14</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>(10</TD>
        <TD ALIGN=LEFT>)</TD>
     <TD ALIGN=RIGHT>44 </TD>
<TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<Td>&nbsp;</td>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Interest expense, net</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;28</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;29</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>(2) </TD><TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;86</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$&nbsp;&nbsp;&nbsp;96</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>10 </TD><TD ALIGN=LEFT>%</TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<Td>&nbsp;</td>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
<td>&nbsp;</td>
<td><HR NOSHADE COLOR=Black SIZE=2></TD>
</TR>
</TABLE>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Interest  expense  increased $2 million or 10% in the quarter and decreased $6
million or 5% year to date.  The changes were  primarily
attributable to fluctuations in our average interest rates for each of the
respective periods.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Income Taxes</B></FONT></P>








<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=3>Quarter<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=3>Year to date<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/3/05<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH>
     <TH COLSPAN=1>9/4/04<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=24% ALIGN=LEFT>Income taxes</TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;&nbsp;80</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=10% ALIGN=RIGHT>$&nbsp;&nbsp;77</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=12% ALIGN=RIGHT>$&nbsp;&nbsp;212</TD>
        <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=12% ALIGN=RIGHT>$&nbsp;&nbsp;208</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>27.1</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>29.4</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>27.3</TD>
        <TD ALIGN=LEFT>%</TD>
     <TD ALIGN=RIGHT>29.2</TD>
        <TD ALIGN=LEFT>%</TD></TR>
</TABLE>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Our tax rate for the quarter and year to date was favorably  impacted by the
recognition  of certain  foreign tax credits that we were
able to  substantiate  during 2005 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
quarter and year to date was  unfavorably  impacted by tax
provided on foreign earnings we now expect to repatriate in 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Consolidated Cash Flows</B></FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Net cash provided by operating  activities  </B>was $1,041 million  compared
to $791 million in 2004. The increase was primarily  driven by
lower income tax payments in 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Net cash used in investing  activities </B>was $249 million  versus $391
million in 2004.  The decrease was driven by higher  proceeds from
the  refranchising of restaurants,  lower cash used in the acquisition of
restaurants from franchisees and proceeds from the sale of our
investment in our Poland/Czech Republic unconsolidated affiliate in 2005.</FONT>
</P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Net cash used in  financing  activities  </B>was $621  million  versus  $205
million in 2004.  The  increase  was  driven by higher  share
repurchases and dividend payments in 2005.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>38</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
Liquidity and Capital Resources</B></FONT></P>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During the quarter and year to date ended  September 3, 2005,  we paid cash
dividends  of $33 million and $91  million,  respectively.
Additionally,  on  September  15,  2005,  our Board of  Directors  approved a
cash  dividend of $0.115 per share of common  stock to be
distributed  on November 4, 2005 to  shareholders  of record at the close of
business on October 14, 2005.  The Company is targeting an
annual payout ratio of 15% to 20% of net income.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 September 3, 2005.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Under the terms of the Credit  Facility,  we may borrow up to the maximum
borrowing  limit,  less  outstanding  letters of credit.  At
September 3, 2005, our unused Credit Facility totaled $710 million,  net of
outstanding  letters of credit of $193 million.  There were
borrowings  of $97 million  outstanding  under the Credit  Facility at September
3, 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.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amounts  outstanding  under
Senior  Unsecured  Notes were $1.5  billion at September 3, 2005.  Included in
short-term  borrowings  at
September 3, 2005 are $200 million in Senior  Unsecured  Notes with an April
2006 maturity  date.  The remaining $1.4 billion in Senior
Unsecured Notes comprise the majority of our long-term debt.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
We estimate that in 2005 capital  spending,  including  acquisitions of our
restaurants from  franchisees,  will be approximately  $650
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 $170 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 September 3, 2005 we had
remaining  capacity to repurchase up to $348 million of our outstanding  common
stock  (excluding  applicable  transaction  fees) under
this program.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>39</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Item 3. Quantitative and Qualitative Disclosures About Market Risk</b></font>
</P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Interest Rate Risk</U>
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At September 3, 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 $8 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 September 3, 2005 and December 25, 2004
would decrease  approximately $44 million and $51 million,  respectively.  The
fair value of our Senior Unsecured Notes at September 3,
2005 and  December 25, 2004 would  decrease  approximately  $67 million and $76
million,  respectively.  Fair value was  determined  by
discounting the projected cash flows.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Foreign Currency
Exchange Rate Risk</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>International  Division and
China  Division  operating  profit  together  constitute  approximately  45% 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 September 3, 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
September 3, 2005, operating profit would have decreased $49
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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.
</FONT></P>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Commodity Price Risk</U>
</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>40</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are  subject to
volatility  in food costs as a result of market  risk  associated  with
commodity  prices.  Our ability to recover
increased  costs  through  higher  pricing is, at times,  limited by the
competitive  environment  in which we operate.  We manage our
exposure to this risk primarily  through  pricing  agreements as well as, on a
limited basis,  commodity  future and option  contracts.
Commodity  future and option  contracts  entered into by the Company that were
outstanding at September 3, 2005 and December 25, 2004,
did not significantly impact our financial position, results of operations or
cash flows.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 4. Controls and
Procedures</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Evaluation of Disclosure
Controls and Procedures</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Changes in Internal
Control</U></FONT></P>

 <!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 3, 2005.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Cautionary Statements
</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>41</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.
</FONT></P>

<BR><BR><BR><BR>
<!-- MARKER Page Break='Start' -->
<div style='page-break-after:always; text-align:center'>42</div>
<!-- MARKER Page Break='End' -->
<BR><BR><BR><BR>


<p style=' margin-bottom:0pt; margin-top:6pt;text-align:center;'><u>
<font size=2>Report of Independent Registered Public Accounting Firm</font></u>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The
Board of Directors </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>YUM!
Brands,  Inc.:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
We have reviewed the accompanying Condensed Consolidated Balance Sheet of YUM!
Brands, Inc. and Subsidiaries (&#147;YUM&#148;) as of  September 3, 2005 and the
related Condensed Consolidated Statements of Income for the twelve and
thirty-six weeks ended September 3, 2005 and September 4, 2004 and the Condensed
Consolidated Statements of Cash Flows for the thirty-six weeks ended September
3, 2005 and September 4, 2004.  These interim condensed consolidated financial
statements are the responsibility of YUM&#146;s management.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>
KPMG LLP</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
Louisville, Kentucky</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
October 10, 2005</font></p>

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

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>43
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>
PART II &#150; Other Information and Signatures</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Item
1.  Legal Proceedings</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Item
2.  Unregistered Sales of Equity Securities and Use of Proceeds </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
The following table provides information as of September 3, 2005 with respect to
shares of Common Stock repurchased by the Company during the quarter then ended:
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse'>
    <tr >

<td width="133" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fiscal Periods</font></p> </td>

<td width="108" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2><sup>&nbsp;</sup></font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total number of shares purchased</font></p> </td>

<td width="18" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="96" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2><sup>&nbsp;</sup></font></p>
<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>Average price paid per share</font></p> </td>

<td width="18" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="126" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total number of shares purchased as part of publicly announced plans or programs</font></p> </td>

<td width="18" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="150" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>Approximate dollar value of shares that may yet be purchased under the plans or programs</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>Period 7</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>6/12/05 &#150; 7/9/05</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,250,400</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>52.53</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,250,400</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>470,395,001</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>Period 8</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>7/10/05 &#150; 8/6/05</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:21.0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>731,500</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>51.13</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:21.0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;731,500</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>432,995,275</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>Period 9</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="133" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>8/7/05 &#150; 9/3/05</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,755,700</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>48.64</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="126" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,755,700</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="150" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>347,601,265</font></p> </td> </tr>
    <tr >

<td width="133" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="108" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="18" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="96" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="18" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="126" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="18" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="150" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

<td width="133" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font></p> </td>

<td width="108" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,737,600</font></p> </td>

<td width="18" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="96" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>50.43</font></p> </td>

<td width="18" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="126" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:12.75pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,737,600</font></p> </td>

<td width="18" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

<td width="150" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0in;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>347,601,265</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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.  For
the quarter ended September 3, 2005, approximately 3.1 million shares were
repurchased under this program.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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 September 3, 2005,  approximately 700,000 shares were
repurchased under this program.  This program was completed during the quarter.
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>44
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<font size=2>Item 6.</font><font size=1>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Exhibits</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="685" style='border-collapse:collapse'>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit Index</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>EXHIBITS</font></U><u></u></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 3.1</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated Articles of Incorporation of YUM! Brands, Inc.</font><font color="#0000FF"><font face="Arial" size=2>&nbsp;</font></font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 15</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Letter from KPMG LLP regarding Unaudited Interim Financial Information (Independent Accountants&#146; Acknowledgement).</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 31.1</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 31.2</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 32.1</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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. </font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 32.2</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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. </font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="38" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="422" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:left;'>
<font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>45
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

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

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:center;'><font SIZE=2>SIGNATURES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="192" style='margin-left:293.4pt;border-collapse:collapse'>
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        <td width="192" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>YUM! BRANDS, INC. &nbsp;&nbsp;</font></u><u></u></p> </td> </tr>
    <tr >
        <td width="192" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Registrant)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="600" style='border-collapse:collapse; '>
    <tr >
        <td width="16" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="123" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>October 10, 2005</font></p> </td>
        <td   colspan="2">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="4">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>

<td width="216" nowrap valign=top style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/        Ted F. Knopf</font>                                                                                  </p> </td> </tr>
    <tr >
        <td   colspan="4">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="216" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Senior Vice President of Finance</font></p> </td> </tr>
    <tr >
        <td   colspan="4">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="216" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>


<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>and Corporate Controller</font></p> </td> </tr>
    <tr >
        <td   colspan="4">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="216" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>


<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Principal Accounting Officer)</font></p> </td> </tr>
    <tr>
        <td width="16" ></td>

        <td width="48" ></td>

        <td width="123" ></td>

        <td width="198" ></td>

        <td width="216" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

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

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>46
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
Exhibit 31.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>
<font SIZE=2>CERTIFICATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I,
David C. Novak, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report on Form 10-Q of YUM! Brands, Inc.;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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:</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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; </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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 </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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):</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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 </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Date:  October 10, 2005</font>       </p> </td>

<td width="338" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;/s/ David C. Novak</font></p> </td> </tr>
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        <td width="295" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp; </font></p> </td>
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David C. Novak</font></p> </td> </tr>
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        <td width="295" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman, Chief Executive Officer and President</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
<font size=2>Exhibit 31.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>
<font SIZE=2>CERTIFICATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I,
Richard T. Carucci, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report on Form 10-Q of YUM! Brands, Inc.;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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:</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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; </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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 </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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):</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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 </font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="43" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="634" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Date:  October 10, 2005</font>       </p> </td>

<td width="338" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;/s/ Richard T. Carucci </font></p> </td> </tr>
    <tr >
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp; </font></p> </td>
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Richard T. Carucci </font></p> </td> </tr>
    <tr >
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
Exhibit 32.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
CERTIFICATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
PURSUANT TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>18
U.S.C. SECTION 1350,</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>AS
ADOPTED PURSUANT TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.57in;text-align:justify;'><font size=2>In connection with the Quarterly Report of YUM! Brands, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended September 3, 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:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse; '>
    <tr >
        <td width="16" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="163" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:  October 10, 2005</font></p> </td>
        <td   colspan="2">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>

<td width="336" nowrap valign=top style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ David C. Novak</font>                                                                                                                                   </p> </td> </tr>
    <tr >
        <td   colspan="3">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="336" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman, Chief Executive Officer and President</font></p> </td> </tr>
    <tr>
        <td width="16" ></td>

        <td width="163" ></td>

        <td width="110" ></td>

        <td width="336" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
<font size=2>Exhibit 32.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
CERTIFICATION OF CHIEF FINANCIAL OFFICER</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
PURSUANT TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>18
U.S.C. SECTION 1350,</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>AS
ADOPTED PURSUANT TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.57in;text-align:justify;'><font size=2>In connection with the Quarterly Report of YUM! Brands, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended September 3, 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:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse; '>
    <tr >
        <td width="16" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="163" nowrap valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:  October 10, 2005</font></p> </td>
        <td   colspan="2">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>

<td width="336" nowrap valign=top style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Richard T. Carucci</font></p> </td> </tr>
    <tr >
        <td   colspan="3">

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="336" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer </font></p> </td> </tr>
    <tr>
        <td width="16" ></td>

        <td width="163" ></td>

        <td width="110" ></td>

        <td width="336" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<BR><BR><BR>
<HR SIZE=1 NOSHADE>
<BR><BR><BR><BR>








<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
<font size=2>Exhibit 15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b>
<font size=2>Independent Accountants&#146; Acknowledgment</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The
Board of Directors</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>YUM!
Brands, Inc.:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
We hereby acknowledge our awareness of the use of our report dated October 10,
2005 included within the Quarterly Report on Form 10-Q of YUM! Brands, Inc. for
the twelve and thirty-six weeks ended September 3, 2005, and incorporated by
reference in the following Registration Statements:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse'>
    <tr >
        <td width="355" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Description</font></b></u>                                                                                                                                                                                                                                                                        <u></u></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Registration Statement Number</font></b></u><u></u></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Forms S-3 and S-3/A</font></b></u></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.95pt'>

<td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.95pt'>


<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>YUM! Direct Stock Purchase Program</font></p> </td>

<td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.95pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-46242</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$2,000,000,000 Debt Securities</font>                                          </p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-42969</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Form S-8s</font></b></u></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restaurant Deferred Compensation Plan</font>                                     </p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-36877, 333-32050</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Executive Income Deferral Program</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-36955</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>YUM! Long-Term Incentive Plan</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-36895, 333-85073, 333-32046, 333-109299</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>SharePower Stock Option Plan</font>                                                 </p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-36961</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>YUM! Brands 401(k) Plan</font>                           </p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-36893, 333-32048, 333-109300</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>YUM! Brands, Inc. Restaurant General Manager </font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock Option Plan</font>                               </p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-64547</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>YUM! Brands, Inc. Long Term Incentive Plan</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>333-32052</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="323" valign=top style='padding:0in 5.4pt 0in 5.4pt'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="355" ></td>

        <td width="37" ></td>

        <td width="323" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
Pursuant to Rule 436(c) of the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2>KPMG
LLP</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
Louisville, Kentucky</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
October 10, 2005 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<BR><BR><BR><BR>
<HR SIZE=1 NOSHADE>
<BR><BR><BR><BR><BR>


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

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
<font size=2>Exhibit 3.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>RESTATED
ARTICLES OF INCORPORATION</B></p>

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

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>OF </B></p>

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

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b>YUM! Brands,
Inc.</b></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-indent:0.55in;text-align:justify;'>FIRST:  The name of the corporation is YUM! Brands, Inc., hereinafter referred to as the &#147;Corporation.&#148;</p>

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

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.55in;text-align:justify;'>SECOND:  The Corporation shall have authority to issue 1,000,000,000 shares, without par value, of which 750,000,000 shall be Common Shares, and of which 250,000,000 shares shall be Preferred Shares, with the following powers, preferences and rights, and qualifications, limitations and restrictions.</p>

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


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(a)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Except as otherwise provided by law, each Common Share shall have one vote, and, except as otherwise provided in respect of any series of Preferred Shares hereafter classified or reclassified, the exclusive voting power for all purposes shall be vested in the holders of the Common Shares. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the Common Shares shall be entitled, after payment or provision for payment of the debts and other liabilities of the Corporation and the amount to which the holders of any series of Preferred Shares hereafter classified or reclassified having a preference on distribution in the liquidation, dissolution or winding up of the Corporation shall be entitled, to share ratably in the remaining net assets of the Corporation.</p> </td> </tr></table>


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


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(b)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Board of Directors is authorized, subject to limitations prescribed by the North Carolina Business Corporation Act (&#147;NCBCA&#148;) and these Articles of Incorporation, to adopt and file from time to time articles of amendment that authorize the issuance of Preferred Shares which may be divided into two or more series with such preferences, limitations, and relative rights as the Board of Directors may determine; provided, however, that no holder of any Preferred Share shall be authorized or entitled to receive upon the involuntary liquidation of the Corporation an amount in excess of $100.00 per Preferred Share.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(c) </p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Series A Junior Participating Preferred Stock</u>. A series of Preferred Shares of the Corporation is hereby created, and the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: </p> </td> </tr></table>



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    <tr >
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>1.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Designation and Amount</u>. The shares of such series shall be designated as &#147;Series A Junior Participating Preferred Stock&#148; and the number of shares constituting such series shall be 750,000.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>2.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Dividends and Distributions</u>. </p> </td> </tr></table>



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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(A)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Subject to the prior and superior rights of the holders of any Preferred Shares ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being referred to herein as a &#147;Quarterly Dividend Payment Date&#148;), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in Common Shares or a subdivision of
the outstanding Common Shares (by reclassification or otherwise), declared on
the Common Shares of the Corporation since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at any
time after July 21, 1998 (the &#147;Rights Declaration Date&#148;) (i) declare
any dividend on Common Shares payable in Common Shares,(ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount
to which holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event. </p> </td> </tr></table>



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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(B)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in Paragraph (A) above immediately after it declares a dividend or distribution on the Common Shares (other than a dividend payable in Common Shares); provided that, in the event no dividend or distribution shall have been declared on the Common Shares during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series A Junior </p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. </p>


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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(C)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof. </p> </td> </tr>
</table>



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    <tr >
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>3.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Voting Rights</u>. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: </p> </td> </tr></table>



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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(A)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine the outstanding Common Shares into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event. </p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(B)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of Common Shares shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation. </p> </td> </tr></table>












<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<td width=14%>&nbsp;</td>
<TD WIDTH=4%>(C)</TD>
<TD WIDTH=3%>(i)</TD>
<TD WIDTH=74%><p align=justify>If at any  time  dividends  on any  Series  A
Junior  Participating
                                        Preferred  Stock  shall be in arrears in
an
amount  equal to six (6)                                         quarterly
dividends
 thereon,  the  occurrence of such  contingency
                                        shall  mark the  beginning  of a period
(herein
 called a  "default                                         period")  which
shall
 extend  until such time when all accrued and
                                        unpaid  dividends for all previous
quarterly
 dividend  periods and                                         for the current
quarterly
 dividend  period on all shares of Series
A
Junior  Participating  Preferred Stock then outstanding shall have
                                        been  declared  and  paid or set  apart
for
 payment.  During  each                                         default period,
all
holders of Preferred Shares (including  holders
                                        of  the  Series  A  Junior
Participating
  Preferred  Stock)  with                                         dividends  in
arrears
 in an  amount  equal  to six  (6)  quarterly
                                        dividends  thereon,  voting  as a
class,
 irrespective  of  series,                                         shall have
the right
to elect two (2) directors.</p> </TD>
</TR>
</TABLE>
<BR>


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    <tr >
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1></font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(ii)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders, provided that neither such voting right nor the right of the holders of any other series of Preferred Shares, if any, to increase, in certain cases, the authorized number of directors shall be exercised unless the holders of ten percent (10%) in number of Preferred Shares outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Shares shall not affect the exercise by the holders of Preferred Shares of such voting right. At any meeting at which the holders of Preferred Shares shall exercise such
voting right initially during an existing default period, they shall have the
right, voting as a class, to elect directors to fill such vacancies, if any, in
the Board of Directors as may then exist up to two (2) directors or, if such
right is exercised at an annual meeting, to elect two (2) directors. If the
number which may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Shares shall have the right to
make such increase in the number of directors as shall be necessary to permit
the election by them of the required number. After the holders of the Preferred
Shares shall have exercised their right to elect directors in any default period
and during the continuance of such period, the
</p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.25in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.25in;text-align:justify;'>number of directors shall not be increased or decreased except by vote of the holders of Preferred Shares as herein provided or pursuant to the rights of any equity securities ranking senior to or <u>pari</u> <u>passu</u> with the Series A Junior Participating Preferred Stock. </p>


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    <tr >
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(iii)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Unless the holders of Preferred Shares shall, during an existing default period, have previously exercised their right to elect directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Shares outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Shares, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Shares are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of record of Preferred Shares by mailing a copy of such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Shares outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of the
shareholders. </p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(iv)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>In any default period, the holders of Common Shares, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of directors until the holders of Preferred Shares shall have exercised their right to elect two (2) directors voting as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Shares shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock which elected the director whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the holders of a particular class of stock
shall include directors elected by such directors to </p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.25in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.25in;text-align:justify;'>fill vacancies as provided in clause (y) of the foregoing sentence. </p>


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    <tr >
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(v)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Shares as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Preferred Shares as a class shall terminate, and (z) the number of directors shall be such number as may be provided for in the Restated Articles of Incorporation or By-laws of the Corporation (the &#147;By-laws&#148;) irrespective of any increase made pursuant to the provisions of Paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Restated Articles of Incorporation or By-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors. </p> </td> </tr></table>



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    <tr >
        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(D)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Shares as set forth herein) for taking any corporate action. </p> </td> </tr></table>



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    <tr >
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>4.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Certain Restrictions</u>. </p> </td> </tr></table>



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    <tr >
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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="42" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(A)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not </p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(i)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; </p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(ii)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; </p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(iii)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; or</p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(iv)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. </p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(B)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. </p> </td> </tr></table>



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        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>5.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Reacquired Shares</u>. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued Preferred Shares and may be reissued as part of a new series of Preferred Shares to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. </p> </td> </tr></table>



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        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>6.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Liquidation, Dissolution or Winding Up</u>.  </p> </td> </tr></table>



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        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(A)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received an amount equal to $1,000 per share of Series A Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of </p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>such payment (the &#147;Series A Liquidation Preference&#148;). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of Common Shares shall have received an amount per share (the &#147;Common Adjustment&#148;) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Shares) (such number in clause (ii), the &#147;Adjustment Number&#148;). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Shares, respectively, holders of Series A Junior Participating
Preferred Stock and holders of Common Shares shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Shares and Common
Shares, on a per share basis, respectively. </p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(B)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of Preferred Shares, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Shares. </p> </td> </tr></table>



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        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(C)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine the outstanding Common Shares into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event. </p> </td> </tr></table>



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        <td width="144" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(D)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Notwithstanding the other provisions of this Section 6, no holder of shares of Series A Junior Participating Preferred Stock shall be authorized or entitled to receive upon the </p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2in;text-align:justify;'>involuntary liquidation of the Corporation an amount in excess of $100.00 per share. </p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>7.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Consolidation, Merger, etc</u>. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the Common Shares are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each Common Share is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Share payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
</p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>8.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>No Redemption</u>. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.</p> </td> </tr></table>



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        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>9.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Ranking</u>. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation&#146;s Preferred Shares, if any, as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. </p> </td> </tr></table>



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        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>10.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Amendment</u>. At any time when any shares of Series A Junior Participating Preferred Stock are outstanding, the Restated Articles of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. </p> </td> </tr></table>



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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>11.</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>Fractional Shares</u>. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder&#146;s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.55in;text-align:justify;'>THIRD:  The address of the registered office of the Corporation in the State of North Carolina is 225 Hillsborough Street, Raleigh, Wake County, North Carolina 27603; and the name of its initial registered agent at such address is CT Corporation System.</p>

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

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.55in;text-align:justify;'>FOURTH:  No holder of any share of the Corporation, whether now or hereinafter authorized, shall have any preemptive right to subscribe for or to purchase any shares or other securities of the Corporation, nor have any right to cumulate his votes for the election of Directors. At all meetings of the Shareholders of the Corporation, a quorum being present, all matters (other than the election of Directors) shall be decided by the vote of the holders of a majority of the stock of the Corporation, present in person or by proxy, and entitled to vote thereat.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>FIFTH:  The following provisions are intended for the management of the business and for the regulation of the affairs of the Corporation, and it is expressly provided that the same are intended to be in furtherance and not in limitation of the powers conferred by statute:</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>&nbsp;</p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(a)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Board of Directors shall have the exclusive power and authority to direct management of the business and affairs of the Corporation and shall exercise all corporate powers, and possess all authority, necessary or appropriate to carry out the intent of this provision, and which are customarily exercised by the board of directors of a public company. In furtherance of the foregoing, but without limitation, the Board of Directors shall have the exclusive power and authority to:  (a) elect all executive officers of the Corporation as the Board may deem necessary or desirable from time to time, to serve at the pleasure of the Board; (b) fix the compensation of such officers; (c) fix the compensation of Directors; and (d) determine the time and place of all meetings of the Board of Directors and Shareholders of the Corporation. A scheduled meeting of Shareholders may be
postponed by the Board of Directors by public notice given at or prior to the
time of the meeting.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='text-indent:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(b)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The number of Directors constituting the Board of Directors shall not be less than three nor more than fifteen, as may be fixed from time to time by resolution duly adopted by the Board of Directors. Each director shall be elected to serve a term of one year, with each director&#146;s term to expire at the annual meeting next following the director&#146;s election as a Director. Notwithstanding the expiration of the term of a Director, the Director shall continue to hold office until a successor shall be elected and qualified.</p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='text-indent:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(c)</p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>A vacancy occurring on the Board of Directors, including, without limitation, a vacancy resulting from an increase in the number of Directors or from the failure by Shareholders of the Corporation to elect the full authorized number of Directors, may only be filled by a majority of the remaining Directors or by the sole remaining Director in office. In the event of the death, resignation, retirement, removal or disqualification of a Director during his elected term of office, his successor shall serve until the next Shareholders&#146; meeting at which Directors are elected.</p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>10
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(d)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Board of Directors may adopt, amend or repeal the Corporation&#146;s Bylaws, in whole or in part, including amendment or repeal of any Bylaw adopted by the Shareholders of the Corporation.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(e)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Corporation may in its Bylaws confer upon Directors powers additional to the foregoing and the powers and authorities conferred upon them by statute.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(f)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Corporation reserves the right to amend, alter, change, or repeal any provision herein contained, in the manner now or hereafter prescribed by law, and all the rights conferred upon Shareholders hereunder are granted, and are to be held and enjoyed, subject to such rights of amendment, alteration, change or repeal.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(g)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The only qualifications for Directors of the Corporation shall be those set forth in these Articles of Incorporation. Directors need not be residents of the State of North Carolina or Shareholders of the Corporation.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(h)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Board of Directors may create and make appointments to one or more committees of the Board comprised exclusively of Directors who will serve at the pleasure of the Board and who may have and exercise such powers of the Board in directing the management of the business and affairs of the Corporation as the Board may delegate, in its sole discretion, consistent with the provisions of the NCBCA and these Articles of Incorporation. The Board of Directors may not delegate its authority over the expenditure of funds of the Corporation except to a committee of the Board and except to one or more officers of the Corporation elected by the Board. No committee comprised of persons other than members of the Board of Directors shall possess or exercise any authority in the management of the business and affairs of the Corporation.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>SIXTH:  </p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-1in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(a) </p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Corporation shall, to the fullest extent from time to time permitted by law, indemnify its Directors and officers against all liabilities and expenses in any suit or proceedings, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of the Corporation, including all appeals therefrom, arising out of their status as such or their activities in any of the foregoing capacities, unless the activities of the person to be indemnified were at the time taken known or believed by such Director or officer to be clearly in conflict with the best interests of the Corporation. The Corporation shall likewise and to the same extent indemnify any person who, at the request of the Corporation, is or was serving as a Director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or as a trustee or administrator under any employee
benefit plan.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(b)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The right to be indemnified hereunder shall include, without limitation, the right of a Director or officer to be paid expenses in advance of the final disposition of any proceedings upon receipt of an undertaking to repay </p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>11
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'>such amount unless it shall ultimately be determined that he or she is entitled to be indemnified hereunder.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(c)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>A person entitled to indemnification hereunder shall also be paid reasonable costs, expenses and attorneys&#146; fees (including expenses) in connection with the enforcement of rights to the indemnification granted hereunder.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(d)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The foregoing rights of indemnification shall not be exclusive of any other rights to which those seeking indemnification may be entitled and shall not be limited by the provisions of Section 55-8-51 of the NCBCA or any successor statute.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(e)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>The Board of Directors may take such action as it deems necessary or desirable to carry out these indemnification provisions, including adopting procedures for determining and enforcing the rights guaranteed hereunder, and the Board of Directors is expressly empowered to adopt, approve and amend from time to time such Bylaws, resolutions or contracts implementing such provisions or such further indemnification arrangement as may be permitted by law.</p> </td> </tr></table>


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


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(f)</p> </td>
        <td  valign=top >

<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Neither the amendment or repeal of this Article, nor the adoption of any provision of these Articles of these Articles of Incorporation inconsistent with this Article, shall eliminate or reduce any right to indemnification afforded by this Article to any person with respect to their status or any activities in their official capacities prior to such amendment, repeal or adoption.</p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>SEVENTH:  To the full extent from time to time permitted by law, no person who is serving or who has served as a Director of the Corporation shall be personally liable in any action for monetary damages for breach of any duty as a Director, whether such action is brought by or in the right of the Corporation or otherwise. Neither the amendment or repeal of this Article, nor the adoption of any provision of these Articles of Incorporation inconsistent with this Article, shall eliminate or reduce the protection afforded by this Article to a Director of the Corporation with respect to any matter which occurred, or in any cause of action, suit or claim which but for this Article would have accrued or arisen, prior to such amendment, repeal or adoption.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>EIGHTH:  The provisions of Article 9A of the NCBCA shall not be applicable to the Corporation.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>NINTH:  Except as may be otherwise determined by the Board of Directors, the Shareholders of the Corporation shall have access as a matter of right only to the books and records of the Corporation as may be required to be made available to qualified shareholders by the NCBCA.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>TENTH:  To the extent that there ever may be inconsistency between these Articles of Incorporation and the Bylaws of the Corporation as may be adopted or amended from time to time, the Articles of Incorporation shall always control.</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>12
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
&nbsp;</font></p>






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