<SUBMISSION>
<ACCESSION-NUMBER>0000703351-04-000076
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20040929
<FILING-DATE>20041108
<DATE-OF-FILING-DATE-CHANGE>20041108
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BRINKER INTERNATIONAL INC
<CIK>0000703351
<ASSIGNED-SIC>5812
<IRS-NUMBER>751914582
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-10275
<FILM-NUMBER>041124815
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6820 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
<PHONE>9729809917
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6820 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CHILIS INC
<DATE-CHANGED>19910528
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q1q051.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<html>

<head>

<title>Form 10-Q</title>

</head>

<body link=blue vlink=purple>

<p align="center">UNITED STATES</p>



<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECURITIES AND EXCHANGE COMMISSION</p>



<p align="center">WASHINGTON D.C. 20549</p>



<p align="center">FORM 10-Q</p>



<p align="center">QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15 (d) OF THE</p>



<p align="center">SECURITIES EXCHANGE ACT OF 1934<br>
&nbsp;</p>







<p align=center>For
the Quarterly Period Ended September 29, 2004</p>

<p align=center>Commission
File Number 1&#8209;10275<br>
&nbsp;</p>





<p align="center">BRINKER INTERNATIONAL, INC. </p>



<p align="center">(Exact name of registrant as
specified in its charter) </p>





<p>&nbsp;</p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%" bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF">
  <tr>
    <td width="50%">
    <p align="center">DELAWARE</td>
    <td width="50%">
    <p align="center">75-1914582</td>
  </tr>
  <tr>
    <td width="50%">
    <p align="center">(State or other jurisdiction of</td>
    <td width="50%">
    <p align="center">(I.R.S. Employer</td>
  </tr>
  <tr>
    <td width="50%">
    <p align="center">incorporation or organization)</td>
    <td width="50%">
    <p align="center">Identification No.)</td>
  </tr>
</table>





<p align="center">6820 LBJ FREEWAY, DALLAS, TEXAS&nbsp; 75240<br>
(Address of principal executive
offices)<br>
(Zip Code)  </p>



<p align="center">(972) 980&#8209;9917<br>
(Registrant's telephone number,
including area code)  </p>





<p>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.<br>
Yes <u>&nbsp;&nbsp;X&nbsp; </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No <i>_____</i></p>



<p>Indicate by check
mark whether the registrant is an accelerated filer (as defined in Rule 12b-2
of the Exchange Act).<br>
Yes <u>&nbsp;&nbsp;X&nbsp; </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No <i>_____</i></p>



<p>Indicate
the number of shares outstanding of each of the registrant's classes of common stock,
as of the latest practicable date.</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p>Class</p>
  </td>
  <td width=319 valign=top>
  <p>Outstanding
  at November 3, 2004</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Common
  Stock, $0.10 par value</p>
  </td>
  <td width=319 valign=top>
  <p>86,443,414
  shares</p>
  </td>
 </tr>
</table>





<hr><P STYLE="page-break-after: always"></P>&nbsp;<p align="center"> <b>BRINKER INTERNATIONAL, INC.</b></p>

<p align="center"><b>INDEX<br>
&nbsp;</b></p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%">
  <tr>
    <td width="95%">Part I - Financial Information</td>
    <td width="5%"><u>Page</u></td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 1.&nbsp; Financial Statements</td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Consolidated Balance Sheets -<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    September 29, 2004 (Unaudited) and June 30, 2004</td>
    <td width="5%" align="right"><br>
    3</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Consolidated Statements of Income<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited)
    - Thirteen week periods ended<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    September 29, 2004 and September 24, 2003</td>
    <td width="5%" align="right"><br>
    <br>
    4</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Consolidated Statements of Cash Flows<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited)
    - Thirteen week periods ended<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    September 29, 2004 and September 24, 2003</td>
    <td width="5%" align="right"><br>
    <br>
    5</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes
    to Consolidated<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Financial Statements (Unaudited)</td>
    <td width="5%" align="right"><br>
    6</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 2.&nbsp; Management's
    Discussion and Analysis of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Financial Condition and Results of Operations</td>
    <td width="5%" align="right"><br>
    10</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 3.&nbsp; Quantitative and
    Qualitative Disclosures<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    About Market Risk</td>
    <td width="5%" align="right"><br>
    15</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 4.&nbsp; Controls and
    Procedures</td>
    <td width="5%" align="right">15</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">Part II - Other Information</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 1.&nbsp; Legal Proceedings</td>
    <td width="5%" align="right">18</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 2.&nbsp; Unregistered Sales of
    Equity Securities and<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Use of Proceeds</td>
    <td width="5%" align="right"><br>
    18</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp; Item 6.&nbsp; Exhibits</td>
    <td width="5%" align="right">19</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;</td>
    <td width="5%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td width="95%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Signatures</td>
    <td width="5%" align="right">19</td>
  </tr>
</table>
<hr><P STYLE="page-break-after: always"></P>&nbsp;<p><b>PART I.&nbsp; FINANCIAL INFORMATION<br>
Item 1.&nbsp; FINANCIAL STATEMENTS</b></p>



<table cellspacing=0 cellpadding=0 width=680>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p align=center><b>BRINKER
  INTERNATIONAL, INC.</b></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p align=center><b>Consolidated
  Balance Sheets</b></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p align=center><b>(In thousands, except share and per share amounts)</b></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=center><b>September
  29,<br>
  <u>2004<br>
  </u>(Unaudited)</b></p>
  </td>
  <td width=122 valign=top>
  <p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  June 30,<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <u>2004</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>ASSETS</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Current
  Assets:</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Cash and cash equivalents</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>$&nbsp;&nbsp; 50,718 </p>
  </td>
  <td width=122 valign=top>
  <p align=right>$&nbsp;&nbsp; 226,762 </p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Accounts receivable </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>45,884</p>
  </td>
  <td width=122 valign=top>
  <p align=right>37,934</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Inventories</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>42,556</p>
  </td>
  <td width=122 valign=top>
  <p align=right>38,113</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Prepaid expenses and other</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>73,092</p>
  </td>
  <td width=122 valign=top>
  <p align=right>74,764</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Deferred income taxes</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 19,592</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 23,347</u></p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp;&nbsp; Total current assets </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp; 231,842</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp; 400,920</u></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Property
  and Equipment, at cost:</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Land</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>286,635</p>
  </td>
  <td width=122 valign=top>
  <p align=right>283,777</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Buildings and leasehold improvements </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>1,386,668</p>
  </td>
  <td width=122 valign=top>
  <p align=right>1,354,671</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Furniture and equipment</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>686,403</p>
  </td>
  <td width=122 valign=top>
  <p align=right>666,415</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Construction-in-progress</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 75,498</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 72,818</u></p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; &nbsp;</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>2,435,204</p>
  </td>
  <td width=122 valign=top>
  <p align=right>2,377,681</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Less accumulated depreciation and
  amortization </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp; (850,000</u>)</p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp; (810,835</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp;&nbsp; Net property and equipment </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;1,585,204</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;1,566,846</u></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Other
  Assets:</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Goodwill</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>136,021</p>
  </td>
  <td width=122 valign=top>
  <p align=right>158,068</p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp; Other</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 73,482</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 85,957</u></p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp;&nbsp; Total other assets</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp; 209,503</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp; 244,025</u></p>
  </td>
 </tr>
 <tr>
  <td width=456 valign=top>
  <p>&nbsp;&nbsp; Total assets </p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>$2,026,549</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>$2,211,791</u></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>LIABILITIES AND
  SHAREHOLDERS' EQUITY</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Current
  Liabilities:</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Current installments of long-term debt </p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 18,131</p>
  </td>
  <td width=122 valign=top>
  <p align=right>$&nbsp;&nbsp; 18,099</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Accounts payable</p>
  </td>
  <td width=96 valign=top>
  <p align=right>100,141</p>
  </td>
  <td width=122 valign=top>
  <p align=right>96,795</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Accrued liabilities</p>
  </td>
  <td width=96 valign=top>
  <p align=right>208,867</p>
  </td>
  <td width=122 valign=top>
  <p align=right>227,225</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Income taxes payable</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 37,043</u></p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp;&nbsp;&nbsp; Total current liabilities</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 327,139</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp; 379,162</u></p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>Long-term debt, less current installments</p>
  </td>
  <td width=96 valign=top>
  <p align=right>640,319</p>
  </td>
  <td width=122 valign=top>
  <p align=right>639,291</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>Deferred income taxes</p>
  </td>
  <td width=96 valign=top>
  <p align=right>83,081</p>
  </td>
  <td width=122 valign=top>
  <p align=right>81,902</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>Other liabilities</p>
  </td>
  <td width=96 valign=top>
  <p align=right>92,472</p>
  </td>
  <td width=122 valign=top>
  <p align=right>85,363</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Contingencies
  (Note 7) </p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>Shareholders'
  Equity:</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>&nbsp; Common stock - 250,000,000 authorized
  shares; $0.10 </p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>&nbsp;&nbsp; par value; 117,499,541 shares issued and </p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>&nbsp;&nbsp; 96,688,926 shares outstanding at September
  29,</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>&nbsp;&nbsp; 2004, and 117,499,541 shares issued and</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp;&nbsp; 90,647,745 shares outstanding at June 30, 2004</p>
  </td>
  <td width=96 valign=top>
  <p align=right>11,750</p>
  </td>
  <td width=122 valign=top>
  <p align=right>11,750</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Additional paid-in capital</p>
  </td>
  <td width=96 valign=top>
  <p align=right>233,424</p>
  </td>
  <td width=122 valign=top>
  <p align=right>357,444</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Accumulated other comprehensive income</p>
  </td>
  <td width=96 valign=top>
  <p align=right>658</p>
  </td>
  <td width=122 valign=top>
  <p align=right>737</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Retained earnings</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;1,292,017</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;1,277,298</u></p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>1,537,849</p>
  </td>
  <td width=122 valign=top>
  <p align=right>1,647,229</p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>
  <p>&nbsp; Less:</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  &nbsp; Treasury stock, at cost (20,810,615 shares at September<br>
&nbsp;&nbsp;&nbsp;&nbsp; 29, 2004 and 26,851,796 shares at June 20, 2004)</td>
  <td width=96 valign=top>
  <p align="right"><br>
  (652,409)</td>
  <td width=122 valign=top>
  <p align="right"><br>
  (619,806)</td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp; Unearned compensation</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; (1,902</u>)</p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; (1,350</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp;&nbsp; Total shareholders' equity </p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 883,538</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>&nbsp;1,026,073</u></p>
  </td>
 </tr>
 <tr>
  <td width=462 colspan=2 valign=top>
  <p>&nbsp;&nbsp; Total
  liabilities and shareholders' equity</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$2,026,549</u></p>
  </td>
  <td width=122 valign=top>
  <p align=right><u>$2,211,791</u></p>
  </td>
 </tr>
 <tr>
  <td width=680 colspan=4 valign=top>

  <p>See accompanying notes to
  consolidated financial statements.</p>
  </td>
 </tr>
 <tr height=0>
  <td width=456></td>
  <td width=6></td>
  <td width=96></td>
  <td width=122></td>
 </tr>
</table>

<hr><P STYLE="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=733>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p align=center><b>BRINKER
    INTERNATIONAL, INC.</b></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p align=center><b>Consolidated
    Statements of Income</b></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p align=center><b>(In thousands, except per
    share amounts)</b></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p align=center><b>(Unaudited)</b></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; <u>Thirteen Week Periods Ended</u></b></p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>

    </td>
    <td width=106 valign=top>
    <p align=left><b>&nbsp; September
    29,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>2004</u></b></p>
    </td>
    <td width=74 valign=top>

    </td>
    <td width=112 colspan=2 valign=top>
    <p><b>&nbsp;&nbsp;&nbsp; September 24,<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; <u>2003</u></b></p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>

    </td>
    <td width=106 valign=top>
    <p align=center>&nbsp;</p>
    </td>
    <td width=74 valign=top>

    </td>
    <td width=112 colspan=2 valign=top>
    <p align=center>&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Revenues</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>$
    910,478</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>$
    870,898</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p>Operating
    Costs and Expenses:</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; Cost of sales </p>
    </td>
    <td width=106 valign=top>
    <p align=right>253,089</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>239,902</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; Restaurant expenses </p>
    </td>
    <td width=106 valign=top>
    <p align=right>509,401</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>486,358</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; Depreciation and amortization </p>
    </td>
    <td width=106 valign=top>
    <p align=right>45,939</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>&nbsp;&nbsp;&nbsp; 42,409</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; General and administrative</p>
    </td>
    <td width=106 valign=top>
    <p align=right>&nbsp;&nbsp; 37,152</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>&nbsp;&nbsp; 33,296</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; Restructure charges and other impairments</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp;&nbsp; 48,256</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp;&nbsp; Total operating costs and expenses </p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp; 893,837</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>&nbsp; 801,965</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Operating
    income </p>
    </td>
    <td width=106 valign=top>
    <p align=right>16,641</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>68,933</p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Interest
    expense</p>
    </td>
    <td width=106 valign=top>
    <p align=right>7,119</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>3,318</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Other,
    net</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 442</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; (257</u>)</p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Income
    before income tax benefit (expense)</p>
    </td>
    <td width=106 valign=top>
    <p align=right>9,080</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>65,872</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>

    </td>
    <td width=106 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right>&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Income
    tax benefit (expense) </p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp;&nbsp;&nbsp; 5,639</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>&nbsp; (21,277</u>)</p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; &nbsp;
    Net income</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>$&nbsp; 14,719</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>$&nbsp; 44,595</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Basic
    net income per share</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.16</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.46</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>Diluted
    net income per share&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.16</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.45</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p>Basic weighted average </p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; shares outstanding</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp;&nbsp; 89,761</u></p>
    </td>
    <td width=74 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=112 colspan=2 valign=top>
    <p align=right><u>&nbsp;&nbsp; 97,404</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p>Diluted weighted average </p>
    </td>
   </tr>
   <tr>
    <td width=355 valign=top>
    <p>&nbsp; shares outstanding</p>
    </td>
    <td width=106 valign=top>
    <p align=right><u>&nbsp;&nbsp; 90,930</u></p>
    </td>
    <td width=89 colspan=2 valign=top>
    <p align=right>&nbsp;</p>
    </td>
    <td width=97 valign=top>
    <p align=right><u>&nbsp;&nbsp; 99,367</u></p>
    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>

    </td>
   </tr>
   <tr>
    <td width=647 colspan=5 valign=top>
    <p>See accompanying notes to
    consolidated financial statements.</p>
    </td>
   </tr>
   <tr height=0>
    <td width=355></td>
    <td width=106></td>
    <td width=74></td>
    <td width=15></td>
    <td width=97></td>
   </tr>
  </table>
  <p align=left></p>

<hr><P STYLE="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=667>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p align=center><b>BRINKER INTERNATIONAL, INC.</b></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p align=center><b>Consolidated Statements of Cash Flows</b></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p align=center><b>(In thousands)</b></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p align=center><b>(Unaudited)</b></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Thirteen
  Week Periods Ended</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>

  </td>
  <td width=102 valign=top>
  <p align=center><b>September
  29,</b></p>
  </td>
  <td width=36 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=center><b>September
  24,</b></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=center><b><u>2004</u></b></p>
  </td>
  <td width=36 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=center><b><u>2003</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>Cash Flows from Operating Activities:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net income</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  14,719</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$
  44,595</p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>Adjustments to reconcile net income to net cash</p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>&nbsp; provided by
  operating activities:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Depreciation and amortization</p>
  </td>
  <td width=102 valign=top>
  <p align=right>45,939</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>42,409</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=102 valign=top>
  <p align=right>48,256</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Deferred income taxes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=102 valign=top>
  <p align=right>4,977</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>684</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Gain on sale of assets</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(3,777)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Amortization of deferred costs&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=102 valign=top>
  <p align=right>2,068</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>2,706</p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>&nbsp;&nbsp; Changes in assets and liabilities, excluding <br>
  &nbsp;&nbsp;&nbsp;&nbsp; effects of dispositions:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(8,067)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;2,922</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(4,558)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>143</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other</p>
  </td>
  <td width=102 valign=top>
  <p align=right>2,471</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>2,739</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets</p>
  </td>
  <td width=102 valign=top>
  <p align=right>351</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(2,317)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current income taxes</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(37,043)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>19,836</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable</p>
  </td>
  <td width=102 valign=top>
  <p align=right>3,346</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(8,693)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(17,224)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(11,374)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 2,150</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 3,659</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating
  activities</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp; 53,608</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 97,309</u></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>Cash
  Flows from Investing Activities:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Payments
  for property and equipment</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(84,307)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(67,966)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Proceeds
  from sale of assets</p>
  </td>
  <td width=102 valign=top>
  <p align=right>13,482</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net
  repayments of advances to affiliates </p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  116</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 552&nbsp;&nbsp;
  </p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Issuance of loan to affiliate&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; </p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; (1,300</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; (70,709</u>)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; (68,714</u>) </p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>Cash
  Flows from Financing Activities:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Purchases
  of shares under forward contracts</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(120,600)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Purchases of treasury stock</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;(42,293)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp; (51,904)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Proceeds
  from issuances of treasury stock</p>
  </td>
  <td width=102 valign=top>
  <p align=right>4,632</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>4,657</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Payments
  of long-term debt </p>
  </td>
  <td width=102 valign=top>
  <p align=right>(682)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;(677)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net
  borrowings on credit facilities </p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 400</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;(158,943</u>)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; (47,524</u>) </p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net change in cash and cash equivalents</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(176,044)</p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(18,829)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Cash and cash equivalents at beginning of period</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 226,762</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 33,492</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Cash and cash equivalents at end of period</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$&nbsp; 50,718</u></p>
  </td>
  <td width=36 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp; 14,563</u></p>
  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=667 colspan=4 valign=top>
  <p>See
  accompanying notes to consolidated financial statements.</p>
  </td>
 </tr>
</table>



<hr><P STYLE="page-break-after: always"></P>&nbsp;<p align=center><b>BRINKER INTERNATIONAL, INC.<br>
Notes to Consolidated Financial Statements<br>
(Unaudited)</b></p>





<p><b>1.&nbsp;&nbsp; BASIS OF PRESENTATION</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The consolidated financial statements of
Brinker International, Inc. and its wholly-owned subsidiaries (collectively,
the &quot;Company&quot;) as of September 29, 2004 and June 30, 2004 and for the thirteen
week periods ended September 29, 2004 and September 24, 2003, have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission (&quot;SEC&quot;).&nbsp; The
Company owns, operates, or franchises various restaurant concepts under the
names of Chili's Grill &amp; Bar (&quot;Chili's&quot;), Romano's Macaroni Grill
(&quot;Macaroni Grill&quot;), Maggiano's Little Italy (&quot;Maggiano's&quot;), On The Border
Mexican Grill &amp; Cantina (&quot;On The Border&quot;), Corner Bakery Cafe (&quot;Corner
Bakery&quot;), and Big Bowl Asian Kitchen (&quot;Big Bowl&quot;).&nbsp; In addition, the Company owns an approximate 43% interest in the
legal entities owning and developing Rockfish Seafood Grill (&quot;Rockfish&quot;).&nbsp; </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The information furnished herein reflects all
adjustments (consisting only of normal recurring accruals and adjustments)
which are, in the opinion of management, necessary to fairly state the interim
operating results for the respective periods.&nbsp;
However, these operating results are not necessarily indicative of the
results expected for the full fiscal year.&nbsp;
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been omitted pursuant
to SEC rules and regulations. The notes to the consolidated financial
statements (unaudited) should be read in conjunction with the notes to the
consolidated financial statements contained in the June 30, 2004 Form 10-K.
Management believes that the disclosures are sufficient for interim financial
reporting purposes.</p>



<p align="justify"><b>2.&nbsp;&nbsp;&nbsp;  STOCK OPTION PLANS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company accounts for its stock based
compensation under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, &quot;Accounting for Stock Issued to Employees,&quot;
and related interpretations (&quot;APB 25&quot;), and has adopted the disclosure-only
provisions of Statement of Financial Accounting Standards (&quot;SFAS&quot;) No. 123,
&quot;Accounting for Stock-Based Compensation.&quot;&nbsp;
Under APB 25, no stock-based compensation cost is reflected in net
income for grants of stock options to employees because the Company grants
stock options with an exercise price equal to the market value of the stock on
the date of grant.&nbsp; Had the Company used
the fair value based accounting method for stock compensation expense
prescribed by SFAS No. 123, the Company's net income and earnings per share
would have been reduced to the pro-forma amounts illustrated as follows (in
thousands, except per share amounts):</p><hr><P STYLE="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=583>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=240 colspan=2 valign=top>
  <p align=center><b><u>Thirteen Week Periods Ended</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=center><b>September 29,</b></p>
  </td>
  <td width=120 valign=top>
  <p align=center><b>September 24,</b></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=center><b>&nbsp; <u>2004</u></b></p>
  </td>
  <td width=120 valign=top>
  <p align=center><b>&nbsp;<u>2003</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>Net
  income - as reported</p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp; 14,719</p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp; 44,595</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>Add:
  Reported stock-based <br>
  &nbsp; compensation expense,<br>
  &nbsp; net of taxes </p>
  </td>
  <td width=120 valign=top>
  <p align=right><br>
  <br>
  395</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  <p align=right>587</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>&nbsp; </p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>Deduct:
  Fair value based<br>
  &nbsp; compensation expense, <br>
  &nbsp; net of taxes </p>
  </td>
  <td width=120 valign=top>
  <p align=right><u><br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4,724</u>)</p>
  </td>
  <td width=120 valign=top>
  <p align=right><br>
  <u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; (4,590</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>Net
  income - pro-forma</p>
  </td>
  <td width=120 valign=top>
  <p align=right><u>$&nbsp; 10,390</u></p>
  </td>
  <td width=120 valign=top>
  <p align=right><u>$&nbsp; 40,592</u></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top>
  <p>Earnings
  per share:</p>
  </td>
  <td width=120 valign=top>
  <p align=right><u>&nbsp; </u></p>
  </td>
  <td width=120 valign=top>
  <p align=right><u>&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=343>
  <p>Basic -
  as reported</p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.16</u></p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.46</u></p>
  </td>
 </tr>
 <tr>
  <td width=343>
  <p>Basic -
  pro-forma</p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.12</u></p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.42</u></p>
  </td>
 </tr>
 <tr>
  <td width=343>

  </td>
  <td width=120>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=343>
  <p>Diluted
  - as reported</p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.16</u></p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.45</u></p>
  </td>
 </tr>
 <tr>
  <td width=343>
  <p>Diluted
  - pro-forma</p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.11</u></p>
  </td>
  <td width=120>
  <p align=right><u>$&nbsp;&nbsp;&nbsp; 0.41</u></p>
  </td>
 </tr>
</table>





<p><b>3.&nbsp;&nbsp;&nbsp;  RESTRUCTURE CHARGES AND OTHER IMPAIRMENTS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company recorded a $31.2 million impairment charge resulting from the decision
to sell nine Big Bowl restaurants and to close the remaining five
restaurants.&nbsp; The decision to dispose of
Big Bowl was the result of recent research and testing of the brand's competitive
positioning.&nbsp; The impairment charge consists
of goodwill totaling $21.6 million and buildings, furniture, and equipment
totaling $9.6 million.&nbsp; The carrying
values of the remaining long-lived assets totaled approximately $6.0 million as
of September 29, 2004 and were based on an offer price obtained in connection
with the sale of the brand.&nbsp; During the
second quarter of fiscal 2005, the Company expects to record an additional
charge of approximately $3.0 million, primarily related to existing lease obligations
associated with the disposition of Big Bowl.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company recorded a $16.9 million charge to fully impair the investment and
notes receivable associated with Rockfish as a result of recent declines in
operating performance and lower forecasted earnings.&nbsp;&nbsp; </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company recorded a $1.4 million charge for long-lived asset impairments
associated with the closure of one Corner Bakery commissary.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 2004, the Company recorded a $39.5
million impairment charge resulting from the decision to close thirty
restaurants.&nbsp; The charge consisted primarily of buildings, furniture, and
equipment totaling $31.2 million, lease obligation charges totaling $6.2
million, and the write-off of inventory and other supplies totaling $2.1
million.&nbsp; The fair value of the long-lived assets was based on estimates
from third party real estate brokers who examined comparable property sales
values in the respective markets in which the restaurants were located and offer
prices received from third parties in connection with the sale of the
restaurants.&nbsp; During the first quarter of fiscal 2005, the Company recorded
a $1.2 million gain related to the thirty closed restaurants consisting of
increases in the estimated sales value of previously impaired owned units and
decreases in the estimated lease obligation.&nbsp; The carrying values of the
remaining long-lived assets totaled approximately $12.3 million at </p>



<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>



<p align="justify">September 29, 2004.&nbsp; In addition, during the first quarter of fiscal
2005, the Company made payments totaling $1.6 million primarily related to lease
termination costs associated with the closed restaurants, reducing the lease
obligation in accrued liabilities to $3.2 million.</p>



<p align="justify"><b>4.&nbsp;&nbsp;&nbsp;  CONVERTIBLE
DEBT</b></p>

<p align="justify">&nbsp;&nbsp; &nbsp;&nbsp; In October 2001, the Company issued $431.7
million of zero coupon convertible senior debentures (the &quot;Debentures&quot;),
maturing on October 10, 2021, and received proceeds totaling approximately
$250.0 million prior to debt issuance costs.&nbsp;
The Debentures require no interest payments and were issued at a
discount representing a yield to maturity of 2.75% per annum.&nbsp; The Debentures are redeemable at the
Company's option beginning on October 10, 2004.&nbsp; If redeemed by the Company, the holders of the Debentures may
elect to receive payment in cash or common stock.&nbsp; The holders may require the Company to redeem the Debentures on
October 10, 2005, 2011 or 2016, and in certain other circumstances.&nbsp; If the holders exercise their redemption
rights, the Company may choose to pay in cash, common stock, or a combination
of the two.&nbsp; In addition, each $1,000
Debenture is convertible into 18.08 shares (7.8 million shares in total) of the
Company's common stock if the stock's market price exceeds 120% of the accreted
conversion price for at least 20 trading days during the first 30 trading days
of each quarter, the Company exercises its option to redeem the Debentures, the
credit rating of the Debentures is reduced below both Baa3 and BBB-, or upon
the occurrence of certain specified corporate transactions.&nbsp; The market price of the Company's common
stock has not exceeded 120% of the accreted conversion price for any quarter,
including the second quarter of fiscal 2005, since the issuance of the
Debentures.&nbsp; The conversion trigger price
for the Company's third quarter of fiscal 2005 is $42.10.</p>

<p align="justify"><b>5.&nbsp;&nbsp;&nbsp;

SHAREHOLDERS' EQUITY</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company acquired approximately 3.5 million shares of its common stock for
$120.6 million under forward purchase contracts.&nbsp; The shares repurchased under the contracts are intended to be
used to offset the dilutive impact of the convertible debt and are recorded as
a reduction of additional paid-in capital in the accompanying consolidated
balance sheet.&nbsp; The contracts were settled
in October 2004.&nbsp; </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the Company's stock repurchase
plan, the Company repurchased approximately 1.2 million shares of its common
stock for $42.3 million during the first quarter of fiscal 2005.&nbsp; As of September 29, 2004, approximately $132.4
million was available under the Company's share repurchase authorizations, net
of the shares acquired under the forward purchase contracts.&nbsp; The Company's stock repurchase plan will be
used to minimize the dilutive impact of the convertible debt and stock option
exercises.&nbsp; The repurchased common stock
is recorded in treasury stock in the accompanying consolidated balance sheets.</p>





<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>



<p align="justify">&nbsp;</p>





<p align="justify"><b>6.&nbsp;&nbsp;&nbsp;&nbsp;SUPPLEMENTAL CASH FLOW INFORMATION</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for interest and income taxes for
the first quarter of fiscal 2005 is as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0 width=600>
 <tr>
  <td width=360 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=center><b>September
  29, <br>
  <u>2004</u></b></p>
  </td>
  <td width=120 valign=top>
  <p align=center><b>September
  24, <br>
  <u>2003</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=360 valign=top>

  </td>
  <td width=120 valign=top>

  </td>
  <td width=120 valign=top>

  </td>
 </tr>
 <tr>
  <td width=360 valign=top>
  <p>Income taxes,
  net of refunds</p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 26,493</p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
  830</p>
  </td>
 </tr>
 <tr>
  <td width=360 valign=top>
  <p>Interest, net of amounts capitalized</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;
  816 </p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;
  861 </p>
  </td>
 </tr>
</table>





<p>&nbsp;&nbsp; Non-cash investing and financing activities
for the first quarter of fiscal 2005 are as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0 width=600>
 <tr>
  <td width=360 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=center><b>September
  29, <br>
  <u>2004</u></b></p>
  </td>
  <td width=120 valign=top>
  <p align=center><b>September
  24, <br>
  <u>2003</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=360 valign=top>

  </td>
  <td width=120 valign=top>

  </td>
  <td width=120 valign=top>

  </td>
 </tr>
 <tr>
  <td width=360 valign=top>
  <p>Retirement of
  fully depreciated assets</p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  4,338&nbsp; </p>
  </td>
  <td width=120 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  101</p>
  </td>
 </tr>
 <tr>
  <td width=360 valign=top>
  <p>Net increase (decrease) in fair value of
  interest rate swaps </p>
  </td>
  <td width=120 valign=top>
  <p align=right>5,006</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;&nbsp; (8,603)</p>
  </td>
 </tr>
 <tr>
  <td width=360 valign=top>
  <p>Restricted common stock issued, net of&nbsp; forfeitures</p>
  </td>
  <td width=120 valign=top>
  <p align=right>1,638&nbsp;
  </p>
  </td>
  <td width=120 valign=top>
  <p align=right>2,337&nbsp;
  </p>
  </td>
 </tr>
</table>





<p><b>7.&nbsp;&nbsp;&nbsp;

CONTINGENCIES</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In January 1996, the Company entered into a
Tip Reporting Alternative Commitment agreement (the &quot;Contract&quot;) with the
Internal Revenue Service (the &quot;IRS&quot;).&nbsp;
The Contract required the Company, among other things, to implement tip
reporting educational programs for its hourly restaurant employees and to
establish tip reporting procedures, although employees remain ultimately
responsible for accurately reporting their tips.&nbsp; The IRS has alleged that the Company did not meet the
requirements of the Contract and has retroactively and unilaterally revoked
it.&nbsp; As a result of the revocation, the
IRS commenced an examination during fiscal 2004 of the Company's 2000 through
2002 calendar years for payroll tax purposes, which involved interviews of a number
of current and former employees for the purpose of assessing employer-only
Federal Insurance Contributions Act (&quot;FICA&quot;) taxes on estimated unreported cash
tips.&nbsp; In connection with this
examination, the IRS has also alleged that some portion of these unreported
tips should have been treated as service charges subject to employment
taxes.&nbsp; On September 29, 2004, the IRS
issued a notice and demand under Section 3121(q) of the Internal Revenue Code
for the employer's share of FICA taxes totaling $31.4 million on asserted
unreported tips during the examination period.&nbsp;
The proposed assessment was based on the assumption that the cash tip
reporting rate should have been approximately two percentage points less than the
charge tip reporting rate.&nbsp; The Company
believes that it has complied and continues to comply with all of the terms of
the Contract and with the law pertaining to the employment tax treatment of
service charges.&nbsp; The Company intends to
vigorously assert that the Contract remains in force and precludes the proposed
retroactive assessment of employer-only FICA taxes and to vigorously contest
the accuracy of the proposed assessment related to unreported tips.&nbsp; The Company also intends to vigorously
contest the accuracy of any assessment that may be proposed related to service
charges.&nbsp; It is not possible at this
time to reasonably estimate the possible loss or range of loss, if any, with
respect to either the tip or service charge issue.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company is engaged in various other legal
proceedings and has certain unresolved claims pending. The ultimate liability,
if any, for the aggregate amounts claimed cannot be determined at this time.
However, </p>

<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>



<p align="justify">management of the Company, based upon consultation with legal counsel, is of
the opinion that there are no other matters pending or threatened which are
expected to have a material adverse effect, individually or in the aggregate, on
the Company's consolidated financial condition or results of operations.</p>

<p align="justify"><b>Item 2.&nbsp; MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The following table sets forth selected
operating data as a percentage of total revenues
for the periods indicated. All information is derived from the accompanying
consolidated statements of income. </p>





<table border=0 cellspacing=0 cellpadding=0 width=661>
 <tr>
  <td width=661 colspan=6 valign=top>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <u><b>13 Week Periods Ended</b></u></td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=121 colspan=2 valign=top>
  <p align=center><b>September 29,</b></p>
  </td>
  <td width=18 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=120 colspan=2 valign=top>
  <p align=center><b>September 24,</b></p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=121 colspan=2 valign=top>
  <p align=center><b><u>2004</u></b></p>
  </td>
  <td width=18 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 colspan=2 valign=top>
  <p align=center><b><u>2003</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=121 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=18 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Revenues&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>100.0 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>100.0 %</u></p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Operating Costs and Expenses:</p>
  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp; Cost of sales</p>
  </td>
  <td width=91 valign=top>
  <p align=right>27.8 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>27.5 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp; Restaurant expenses</p>
  </td>
  <td width=91 valign=top>
  <p align=right>55.9 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>55.8 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp; Depreciation and amortization</p>
  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp; 5.0 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp; 4.9 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp; General and administrative</p>
  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp; 4.1 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp; 3.8 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>&nbsp; 5.3 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 0.0 %</u></p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>&nbsp;&nbsp; Total operating costs and expenses</p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>&nbsp;98.1 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;92.0 %</u></p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Operating income</p>
  </td>
  <td width=91 valign=top>
  <p align=right>1.9 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>8.0 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Interest expense</p>
  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp; 0.8 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp; 0.4 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Other, net</p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>&nbsp; 0.0 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 0.0 %</u></p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Income before income tax
  benefit (expense)</p>
  </td>
  <td width=91 valign=top>
  <p align=right>1.1 %</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>7.6 %</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Income tax benefit (expense)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>&nbsp; 0.5 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>(2.4
  %</u>)</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=91 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Net income</p>
  </td>
  <td width=91 valign=top>
  <p align=right><u>&nbsp; 1.6 %</u></p>
  </td>
  <td width=48 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 5.2 %</u></p>
  </td>
  <td
  width=30><p>&nbsp;</td>
 </tr>
 <tr height=0>
  <td width=402></td>
  <td width=91></td>
  <td width=30></td>
  <td width=18></td>
  <td width=90></td>
  <td width=30></td>
 </tr>
</table>



<hr><P STYLE="page-break-after: always"></P>&nbsp;<p align="justify">&nbsp; The following table details the number of
restaurant openings during the first quarter, total restaurants open at the end of the first quarter, and
total projected openings in fiscal 2005. </p>





<table cellspacing=0 cellpadding=0 width=578>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=143 colspan=2 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=163 colspan=2 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center>Total&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=143 colspan=2 valign=top>
  <p align=center>First Quarter<br>
  <u>Openings</u></p>
  </td>
  <td width=163 colspan=2 valign=top>
  <p align=center>Total Open at End<br>
  <u>Of First Quarter</u></p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center>Projected<br>
  <u>Openings</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=center>Fiscal</p>
  </td>
  <td width=71 valign=top>
  <p align=center>Fiscal</p>
  </td>
  <td width=78 valign=top>
  <p align=center>Fiscal</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=center>Fiscal</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=center>Fiscal</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=center><u>2005</u></p>
  </td>
  <td width=71 valign=top>
  <p align=center><u>2004</u></p>
  </td>
  <td width=78 valign=top>
  <p align=center><u>2005</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=center><u>2004</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=center><u>2005</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Chili's: </p>
  </td>
  <td width=71 valign=top>

  </td>
  <td width=71 valign=top>

  </td>
  <td width=78 valign=top>

  </td>
  <td width=81 colspan=2 valign=top>

  </td>
  <td width=99 colspan=2 valign=top>

  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Company-owned</p>
  </td>
  <td width=71 valign=top>
  <p align=right>14</p>
  </td>
  <td width=71 valign=top>
  <p align=right>18</p>
  </td>
  <td width=78 valign=top>
  <p align=right>757</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>711</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>77-80</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Franchised</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; 7</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; 5</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp; 242</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>&nbsp; 210</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>&nbsp;
  25-30</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=71 valign=top>
  <p align=right>21</p>
  </td>
  <td width=71 valign=top>
  <p align=right>23</p>
  </td>
  <td width=78 valign=top>
  <p align=right>999</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>921</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>102-110</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Macaroni Grill:</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Company-owned</p>
  </td>
  <td width=71 valign=top>
  <p align=right>5</p>
  </td>
  <td width=71 valign=top>
  <p align=right>4</p>
  </td>
  <td width=78 valign=top>
  <p align=right>211</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>198</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>15-18</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Franchised</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; 1</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp; &nbsp;&nbsp;9</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 9</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;
  5-6</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=71 valign=top>
  <p align=right>5</p>
  </td>
  <td width=71 valign=top>
  <p align=right>5</p>
  </td>
  <td width=78 valign=top>
  <p align=right>220</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>207</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>20-24</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Maggiano's</p>
  </td>
  <td width=71 valign=top>
  <p align=right>2</p>
  </td>
  <td width=71 valign=top>
  <p align=right>3</p>
  </td>
  <td width=78 valign=top>
  <p align=right>30</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>28</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>5</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>On The Border:</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Company-owned</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=71 valign=top>
  <p align=right>-</p>
  </td>
  <td width=78 valign=top>
  <p align=right>112</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>114</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>8-10</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Franchised</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp;&nbsp; 18</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp; 18</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;
  0-1</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=71 valign=top>
  <p align=right>-</p>
  </td>
  <td width=78 valign=top>
  <p align=right>130</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>132</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>8-11</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Corner Bakery:</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Company-owned</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=78 valign=top>
  <p align=right>83</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>86</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>8-10</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp; Franchised</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 3</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 3</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;
  0-1</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=78 valign=top>
  <p align=right>86</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>89</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>8-11</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Big Bowl</p>
  </td>
  <td width=71 valign=top>
  <p align=right>-</p>
  </td>
  <td width=71 valign=top>
  <p align=right>1</p>
  </td>
  <td width=78 valign=top>
  <p align=right>14</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>19</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Rockfish
  Partnership</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp; -</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp; 2</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;&nbsp; 25</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;&nbsp;
  22</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Cozymel's</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp; -</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp; 16</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=71 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Grand Total</p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp;30</u></p>
  </td>
  <td width=71 valign=top>
  <p align=right><u>&nbsp;35</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>1,504</u></p>
  </td>
  <td width=81 colspan=2 valign=top>
  <p align=right><u>1,434</u></p>
  </td>
  <td width=99 colspan=2 valign=top>
  <p align=right><u>143-161</u></p>
  </td>
 </tr>
 <tr height=0>
  <td width=176></td>
  <td width=71></td>
  <td width=71></td>
  <td width=78></td>
  <td width=86></td>
  <td width=1></td>
  <td width=96></td>
  <td width=3></td>
 </tr>
</table>

<hr><P STYLE="page-break-after: always"></P>&nbsp;<p><b>OVERVIEW </b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; At September 29, 2004, the Company owned,
operated, franchised, or was involved in the ownership of 1,504
restaurants.&nbsp; The Company's core
concepts accounted for 83.0% of the total units and included 999 Chili's, 220
Macaroni Grill, and 30 Maggiano's restaurants.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; The
Company intends to continue the expansion of its restaurant concepts by opening
units in strategically desirable markets. The Company considers the restaurant
site selection process critical to its long-term success and devotes
significant effort to the investigation of new locations utilizing a variety of
sophisticated analytical techniques. The Company intends to concentrate on the
development of certain identified markets to achieve penetration levels deemed
desirable in order to improve competitive position, marketing potential and
profitability. Expansion efforts will be focused not only on major metropolitan
areas, but also on
smaller market areas and non-traditional locations (such as airports, kiosks and
food courts) that can adequately support any of the Company's restaurant
concepts. The specific rate at which the Company is able to open new
restaurants is determined by its success in locating satisfactory sites,
negotiating acceptable lease or purchase terms, securing appropriate local
governmental permits and approvals, and by its capacity to supervise
construction and recruit and train management personnel.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; The
restaurant industry is a highly competitive business, which is sensitive to
changes in economic conditions, trends in lifestyles and fluctuating
costs.&nbsp; Operating margins for restaurants are susceptible to fluctuations
in prices of commodities, which include among other things, beef, chicken,
seafood, dairy, cheese, produce and other necessities to operate a restaurant
such as natural gas or other energy supplies.&nbsp; Additionally, the
restaurant industry is characterized by a high initial capital investment,
coupled with high labor costs.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Revenues
for the second quarter of fiscal 2005 are estimated to increase by 5% to 7%
compared to the same quarter in fiscal 2004, driven primarily by capacity gains
of 5% to 6%.&nbsp; Cost of sales is estimated
to be 0.5% to 0.6% higher than last year due to the impact of higher beef,
chicken and dairy costs.&nbsp; Restaurant
expenses are estimated to be 0.4% to 0.5% lower than last year as a result of
potential refranchising gains and lower advertising costs.&nbsp; General and administrative expenses are
estimated to be 0.1% lower due primarily to lower performance based expenses.&nbsp; Additionally, during the second quarter of
fiscal 2005, the Company expects to record an additional charge of
approximately $3.0 million, primarily related to existing lease obligations
associated with the disposition of Big Bowl.&nbsp;
The effective tax rate during the second quarter is estimated to be
32.2%.</p>

<p align="justify"><b>&nbsp;REVENUES</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Revenues for the first quarter of fiscal 2005
increased to $910.5 million, 4.5% over the $870.9 million generated for the
same quarter of fiscal 2004. The increase was primarily attributable to a net
increase of 35 company-owned restaurants since September 24, 2003.&nbsp; The Company increased its capacity for the
first quarter of fiscal 2005 by approximately 3.5% compared to the respective
prior year quarter. Comparable store sales increased 0.3% for the first quarter
as compared to the same period of fiscal 2004.&nbsp;
Menu prices in the aggregate increased 2.2% in the first quarter of
fiscal 2005 as compared to the same period of fiscal 2004.</p>



<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>
<p align="justify">&nbsp;</p>
<p align="justify"><b>COSTS AND EXPENSES </b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Cost
of sales, as a percent of revenues, increased 0.3% for the first quarter of
fiscal 2005 as compared to the same period of fiscal 2004.&nbsp; The increase was due to a 1.0% increase in commodity prices for meat,
seafood, poultry, dairy and cheese, and a 0.2% unfavorable product mix shift
for meat and seafood, partially offset by a 0.7% increase in menu prices, and a
0.2% decrease in commodity prices for produce.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Restaurant
expenses, as a percent of revenues, increased 0.1% for the first quarter of
fiscal 2005 as compared to the same quarter of fiscal 2004.&nbsp; The increase was primarily due to increases
in labor costs, payroll taxes, and health, workers compensation and general
liability insurance.&nbsp; These increases
were partially offset by a $3.8 million gain recorded during the first quarter
of fiscal 2005 as a result of the sale of nine Chili's restaurants to a new
franchise partner, and decreases in manager bonuses and advertising costs.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Depreciation
and amortization increased $3.5 million for the first quarter of fiscal 2005 as
compared to the same period of fiscal 2004.&nbsp;
The increase in depreciation expense was due to new unit construction
and ongoing remodel costs, partially offset by a decrease in depreciation
related to store closures and a declining depreciable asset base for older
units.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; General and administrative expenses increased
$3.9 million for the first quarter of fiscal 2005 as compared to the same
period of fiscal 2004. The increase was primarily due to increased costs
related to consumer research and an increase in payroll costs resulting from an increase in headcount, partially
offset by a decrease in incentive based compensation. </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Restructure
charges and other impairments recorded during the first quarter of fiscal 2005 include a $31.2 million
impairment charge resulting from the decision to sell nine Big Bowl restaurants
and to close the remaining five restaurants, a $16.9 million charge to fully
impair the investment and notes receivable associated with Rockfish, a $1.4
million charge associated with the closure of one Corner Bakery commissary, and
a $1.2 million gain associated with the thirty restaurants closed in fiscal
2004, consisting of increases in the estimated sales value of previously
impaired owned units and decreases in the estimated lease obligation. </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Interest expense increased $3.8 million for
the first quarter of fiscal 2005 as compared to the same period of fiscal
2004.&nbsp; The increase was primarily due to
interest expense related to the 5.75% notes issued in May 2004 (the &quot;Notes&quot;),
partially offset by debt issuance costs related to the convertible debt being
fully amortized in the second quarter of fiscal 2004 and a lower average
outstanding balance on the senior notes.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Other,
net increased $700,000 for the first quarter of fiscal 2005 as compared to the
same period of fiscal 2004 due primarily to an increase in the Company's share
of losses in an equity method investee, partially offset by an increase in
interest income associated with the investment of proceeds received from the
issuance of the Notes.</p>



<p align="justify"><b>INCOME TAXES</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; The effective income tax rate decreased to a benefit
of 62.1% for the current quarter as compared to an expense of 32.3% for the same
quarter last year.&nbsp; The decrease in the tax rate was primarily due to the
disposition of Big Bowl, which allowed the Company to take tax deductions for
goodwill impairment charges totaling $48.6 million ($21.6 million recorded
during the first quarter of fiscal 2005 and $27.0 million recorded in fiscal
2004).</p>

<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>



<p align="justify">&nbsp;</p>



<p align="justify"><b>LIQUIDITY AND CAPITAL RESOURCES</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Working capital decreased to a deficit of
$95.3 million at September 29, 2004 from a working capital surplus of $21.8
million at June 30, 2004, primarily due to payments made under the forward
purchase contracts and purchases of treasury stock during the first quarter of
fiscal 2005.&nbsp; Net cash provided by
operating activities decreased to $53.6 million for the first quarter of fiscal
2005 from $97.3 million during the same period in fiscal 2004 due to decreased
profitability and the timing of operational receipts and payments. The Company
believes that its various sources of capital, including availability under
existing credit facilities, ability to raise additional financing, and cash
flow from operating activities, are adequate to finance operations as well as
the repayment of current debt obligations.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Capital expenditures consist of purchases of
land for future restaurant sites, new restaurants under construction, purchases
of new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures were $84.3 million for the first
quarter of fiscal 2005 compared to $68.0 million for the same period of fiscal
2004.&nbsp; The Company estimates that its
capital expenditures during the second quarter of fiscal 2005 will approximate
$102.0 million.&nbsp; These capital
expenditures will be funded entirely from operations and existing credit
facilities. </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company sold nine Chili's restaurants to a new franchise partner and received
cash proceeds totaling $12.4 million.&nbsp; </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; In
connection with the closing of thirty restaurants in fiscal 2004, the Company expects to generate cash of approximately $13.0 million during the remainder of
fiscal 2005, primarily related
to the sale of real estate.</p>

<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; During the first quarter of fiscal 2005, the
Company acquired approximately 3.5 million shares of its common stock for
$120.6 million under forward purchase contracts.&nbsp; The shares repurchased under the contracts
are intended to be used to offset the dilutive impact of the convertible debt
and are recorded as a reduction of additional paid-in capital in the
accompanying consolidated balance sheet.&nbsp;
The contracts were settled in October 2004.&nbsp; </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the Company's stock repurchase
plan, the Company repurchased approximately 1.2 million shares of its common
stock for $42.3 million during the first quarter of fiscal 2005.&nbsp; As of September 29, 2004, approximately
$132.4 million was available under the Company's share repurchase
authorizations, net of the shares acquired under the forward purchase
contracts.&nbsp; The Company's stock
repurchase plan will be used to minimize the dilutive impact of the convertible
debt and stock option exercises.&nbsp; The
repurchased common stock is recorded in treasury stock in the accompanying
consolidated balance sheets.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; The Company is not aware of any other event or
trend that would potentially affect its liquidity. In the event such a trend
develops, the Company believes that there
are sufficient funds available under its credit facilities and from its
internal cash generating capabilities to adequately manage the expansion of its
business.</p>



<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>
<p align="justify">&nbsp;</p>
<p align="justify"><b>RECENT ACCOUNTING
PRONOUNCEMENTS</b></p>

<p align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp; </b>In
September 2004, the Emerging Issues Task Force (&quot;EITF&quot;) reached a consensus on
EITF Issue No. 04-8, &quot;The Effect of Contingently Convertible Debt on Diluted
Earnings Per Share,&quot; which requires shares associated with contingently
convertible debt instruments with market price triggers to be included in the
computation of diluted earnings
per share (&quot;EPS&quot;) regardless of whether the market price trigger has been
met.&nbsp; EITF 04-8 also requires that prior
period diluted EPS amounts presented for comparative purposes be restated.&nbsp; EITF 04-8 is effective for reporting periods
ending after December 15, 2004.&nbsp; The
impact of applying EITF 04-8 to the Company's convertible debt will result in
reductions to previously reported diluted EPS as follows:&nbsp; </p>



<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="87%">
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="32%" colspan="3">
    <p align="center">Fiscal Years</td>
    <td width="31%" colspan="2">
    <p align="center">Quarters Ended</td>
  </tr>
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="10%">2004</td>
    <td width="10%">2003</td>
    <td width="12%">2002</td>
    <td width="16%">Sept. 29,<br>
&nbsp;&nbsp;&nbsp; 2004</td>
    <td width="15%">Sept. 24,<br>
&nbsp;&nbsp;&nbsp; 2003</td>
  </tr>
  <tr>
    <td width="37%">Diluted earnings per share - <br>
    as reported</td>
    <td width="10%">$1.57</td>
    <td width="10%">$1.70</td>
    <td width="12%">$1.52</td>
    <td width="16%">$0.16</td>
    <td width="15%">$0.45</td>
  </tr>
  <tr>
    <td width="37%">Diluted earnings per share - <br>
    pro-forma</td>
    <td width="10%">$1.50</td>
    <td width="10%">$1.64</td>
    <td width="12%">$1.48</td>
    <td width="16%">$0.16</td>
    <td width="15%">$0.43</td>
  </tr>
</table>





<p><b>Item 3.&nbsp;&nbsp;&nbsp;&nbsp; QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; There
have been no material changes in the quantitative and qualitative market risks
of the Company since the prior reporting period.</p>

<p align="justify"><b>Item 4.&nbsp;&nbsp; CONTROLS
AND PROCEDURES </b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; An
evaluation was carried out under the supervision and with the participation of
the Company's management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of its
disclosure controls and procedures [as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;)], as
of the end of the period covered by this report.&nbsp; Based upon the
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the design and operation of these disclosure controls and procedures were
effective in timely making known to them material information relating to the
Company required to be disclosed in the Company's reports filed or submitted
under the Exchange Act.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There
were no significant changes in the Company's internal control over financial
reporting or in other factors that could significantly affect this control
during the quarter ended September 29, 2004, that has materially affected or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.</p>

<p align="justify"><b>FORWARD-LOOKING STATEMENTS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company wishes to caution readers that the
following important factors, among others, could cause the actual results of the
Company to differ materially from those indicated by forward-looking statements
made in this report and from time to time in news releases, reports, proxy
statements, registration statements and other written communications, as well as
verbal forward-looking statements made from time to time by representatives of
the Company.&nbsp; Such forward-looking statements involve risks and
uncertainties that may cause the Company's or the restaurant industry's actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking </p>



<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>



<p align="justify">statements.&nbsp; Factors that might cause actual events or results to differ
materially from those indicated by these forward-looking statements may include
matters such as future economic performance, restaurant openings, operating
margins, the availability of acceptable real estate locations for new
restaurants, the sufficiency of the Company's cash balances and cash generated
from operating and financing activities for the Company's future liquidity and
capital resource needs, and other matters, and are generally accompanied by
words such as &quot;believes,&quot; &quot;anticipates,&quot; &quot;estimates,&quot; &quot;predicts,&quot; &quot;expects&quot; and
similar expressions that convey the uncertainty of future events or outcomes.&nbsp;
An expanded discussion of some of these risk factors follows.</p>



<p align="justify"><i>Competition
may adversely affect the Company's operations and financial results.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The restaurant business is
highly competitive with respect to price, service, restaurant location,
nutritional and dietary trends and food quality, and is often affected by
changes in consumer tastes, economic conditions, population and traffic
patterns.&nbsp; The Company competes within
each market with locally-owned restaurants as well as national and regional
restaurant chains, some of which operate more restaurants and have greater
financial resources and longer operating histories than the Company.&nbsp; There is active competition for management
personnel and for attractive commercial real estate sites suitable for
restaurants.&nbsp; In addition, factors such
as inflation, increased food, labor and benefits costs, and difficulty in
attracting hourly employees may adversely affect the restaurant industry in
general and the Company's restaurants in particular.</p>



<p align="justify"><i>The Company's sales volumes generally
decrease in winter months.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company's sales volumes
fluctuate seasonally, and are generally higher in the summer months and lower
in the winter months, which may cause seasonal fluctuations in the Company's
operating results.</p>



<p align="justify"><i>Changes in governmental regulation may
adversely affect the Company's ability to open new restaurants and the
Company's existing and future operations.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each of the Company's
restaurants is subject to licensing and regulation by alcoholic beverage
control, health, sanitation, safety and fire agencies in the state, county
and/or municipality in which the restaurant is located.&nbsp; The Company generally has not encountered
any material difficulties or failures in obtaining the required licenses or
approvals that could delay or prevent the opening of a new restaurant and
although the Company does not, at this time, anticipate any occurring in the
future, there can be no assurance that the Company will not experience material
difficulties or failures that could delay the opening of restaurants in the
future.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company is subject to
federal and state environmental regulations, and although these have not had a
material negative effect on the Company's operations, the Company cannot ensure
that there will not be a material negative effect in the future.&nbsp; More stringent and varied requirements of local
and state governmental bodies with respect to zoning, land use and
environmental factors could delay or prevent development of new restaurants in
particular locations.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp; The Company is subject to the Fair Labor Standards
Act, which governs such matters as minimum wages, overtime and other working
conditions, along with the Americans With Disabilities Act, various family leave
mandates and a variety of other laws enacted, or rules and regulations
promulgated, by federal, state and local governmental authorities that govern
these and other employment matters. The Company expects increases in payroll
expenses as a result of federal, state and local mandated increases in the
minimum wage, and although </p>






<p align="justify">such increases are not expected to be material, the Company cannot assure
that there will not be material increases in the future.&nbsp; In addition, the
Company's vendors may be affected by higher minimum wage standards, which may
increase the price of goods and services supplied to the Company.</p>



<p align="justify"><i>Inflation may increase the
Company's operating expenses.</i></p>



<p align="justify"><hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company has not
experienced a significant overall impact from inflation.&nbsp; As operating expenses increase, the Company,
to the extent permitted by competition, recovers increased costs by increasing
menu prices, by reviewing, then implementing, alternative products or
processes, or by implementing other cost-reduction procedures.&nbsp; There can be no assurance, however, that the
Company will be able to continue to recover increases in operating expenses due
to inflation in this manner.</p>



<p align="justify"><i>Increased energy costs may
adversely affect the Company's profitability.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company's success
depends in part on its ability to absorb increases in utility costs.&nbsp; Various regions of the United States in
which the Company operates multiple restaurants, particularly California, have
experienced significant and temporary increases in utility prices.&nbsp; If these increases should recur, they will
have an adverse effect on the Company's profitability.</p>



<p align="justify"><i>Successful mergers, acquisitions, divestitures and
other strategic transactions are important to the future growth and
profitability of the Company.</i></p>

<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company intends to evaluate potential
mergers, acquisitions, joint venture investments, and divestitures as part of
its strategic planning initiative.&nbsp;
These transactions involve various inherent risks, including accurately
assessing the value, future growth potential, strengths, weaknesses, contingent
and other liabilities and potential profitability of acquisition candidates;
the Company's ability to achieve projected economic and operating synergies;
unanticipated changes in business and economic conditions affecting an acquired
business; and the ability of the Company to complete divestitures on acceptable
terms and at or near the prices estimated as attainable by the Company.</p>



<p align="justify"><i>If the Company is unable to meet its growth plan,
the Company's profitability in the future may be adversely affected.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company's ability to meet its growth
plan is dependent upon, among other things, its ability to identify available,
suitable and economically viable locations for new restaurants, obtain all
required governmental permits (including zoning approvals and liquor licenses)
on a timely basis, hire all necessary contractors and subcontractors, and meet
construction schedules.&nbsp; The costs related
to restaurant and concept development include purchases and leases of land,
buildings and equipment and facility and equipment maintenance, repair and
replacement.&nbsp; The labor and materials
costs involved vary geographically and are subject to general price
increases.&nbsp; As a result, future capital
expenditure costs of restaurant development may increase, reducing
profitability.&nbsp; There can be no
assurance that the Company will be able to expand its capacity in accordance
with its growth objectives or that the new restaurants and concepts opened or
acquired will be profitable.</p>



<p align="justify"><i>Unfavorable publicity relating to one or more of the
Company's restaurants in a particular brand may taint public perception of the
brand.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Multi-unit restaurant businesses can be
adversely affected by publicity resulting from poor food quality, illness or
other health concerns or operating issues stemming from one or a limited number
of restaurants.&nbsp; In particular, since the Company depends heavily on the &quot;Chili's&quot; brand for a
majority of its revenues, unfavorable publicity relating to one or more Chili's
restaurants could have a material adverse effect on the Chili's brand, and
consequently on the Company's business, financial condition, and results of
operations.<p align="justify"><i>Other risk factors may adversely
affect the Company's financial performance.</i></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other risk factors that could
cause the Company's actual results to differ materially from those indicated in
the forward-looking statements include, without limitation, changes in economic
conditions, consumer
<hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>




<p align="justify">perceptions of food safety, changes in consumer tastes,
governmental monetary policies, changes in demographic trends, availability of
employees, terrorist acts, and weather and other acts of God.
<p align="justify">&nbsp;</p>
<p align="justify"><b>PART II. OTHER INFORMATION</b></p>

<p align="justify"><b>Item 1. &nbsp;&nbsp; LEGAL
PROCEEDINGS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Information regarding legal proceedings is incorporated by
reference from Note 7 to the Company's consolidated financial statements set
forth in Part I of this report. </p>



<p align="justify"><b>Item 2. &nbsp;&nbsp;&nbsp;&nbsp; UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares repurchased during the first quarter of
fiscal 2005 are as follows (in thousands, except share and per share amounts):</p>



<table border=0 cellspacing=0 cellpadding=0 width=649>
 <tr>
  <td width=241 valign=bottom>
  <p align=center>&nbsp;</p>
  </td>
  <td width=126 valign=bottom>
  <p align=center><b>Total Number of
  Shares <u><br>
  Purchased (a)</u></b></p>
  </td>
  <td width=114 valign=bottom>
  <p align=center><b>Average <br>
  Price
  <br>
  Paid per <u><br>
  Share</u></b></p>
  </td>
  <td width=168 valign=bottom>
  <p align=center><b>Maximum Dollar
  <br>
  Value that May <br>
  Yet be Purchased <u><br>
  Under the Program</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=bottom>
  <p>July 1, 2004
  through <br>
&nbsp;&nbsp; August 4, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,224,800</p>
  </td>
  <td width=114 nowrap valign=bottom>
  <p align=center>$34.49</p>
  </td>
  <td width=168 nowrap valign=bottom>
  <p align=center>&nbsp;$253,030(b)</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=bottom>
  <p>August 5, 2004
  through <br>
&nbsp;&nbsp; September 1, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</p>
  </td>
  <td width=114 nowrap valign=bottom>
  <p align=center>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=168 nowrap valign=bottom>
  <p align=center>&nbsp;$253,030(c) </p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=bottom>
  <p>September 2, 2004
  through <br>
&nbsp;&nbsp; September 29, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p align="left">&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
  <td width=114 nowrap valign=bottom>
  <p align=left>&nbsp; &nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
  <td width=168 nowrap valign=bottom>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $253,030&nbsp;&nbsp; </p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=bottom>

  </td>
  <td width=126 nowrap valign=bottom>
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;1,224,800 </u></p>
  </td>
  <td width=114 nowrap valign=bottom>
  <p align=left>&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp; 34.49</p>
  </td>
  <td width=168 nowrap valign=bottom>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
</table>



<blockquote>



<p align="justify"><font size="2">(a)&nbsp;&nbsp;
All
of the shares purchased during the first quarter of fiscal 2005 were purchased
as part of the publicly announced program described in Part I of this report.</font></p>

<p align="justify"><font size="2">(b)&nbsp; The
Company entered into forward purchase contracts to acquire 2,714,612 shares of
common stock during the five-week period ended August 4, 2004 at an average
share price of $35.49, plus fees.&nbsp;
Payment for these shares was made during the five-week period ended
August 4, 2004, thereby reducing the remaining amount available for future
repurchases to $156.5 million.&nbsp; These
contracts physically settled, and the shares were received, in October 2004.</font></p>

<p align="justify"><font size="2">(c)&nbsp;&nbsp; The
Company entered into forward purchase contracts to acquire 800,000 shares of
common stock during the four-week period ended September 1, 2004 at an average
share price of $30.03, plus fees.&nbsp;
Payment for these shares was made during the four-week period ended
September 1, 2004, thereby reducing the remaining amount available for future
repurchases to $132.4 million.&nbsp; These
contracts physically settled, and the shares were received, in October 2004.</font></p>



</blockquote>



<p><b><hr align="justify"><P STYLE="page-break-after: always" align="justify"></P>
Item 6.&nbsp; EXHIBITS </b></p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%">
  <tr>
    <td width="10%">31(a)</td>
    <td width="90%" align="justify">Certification by Douglas H. Brooks, Chairman
    of the Board, President and Chief
    Executive Officer of the Registrant, pursuant to 17 CFR 240.13a - 14(a) or 17 CFR 240.15d - 14(a).</td>
  </tr>
  <tr>
    <td width="10%">&nbsp;</td>
    <td width="90%" align="justify">&nbsp;</td>
  </tr>
  <tr>
    <td width="10%">(31(b)</td>
    <td width="90%" align="justify">Certification by Charles M. Sonsteby, Executive Vice President and Chief Financial Officer of
the Registrant, pursuant to 17 CFR 240.13a - 14(a) or 17 CFR 240.15d - 14(a).</td>
  </tr>
  <tr>
    <td width="10%">&nbsp;</td>
    <td width="90%" align="justify">&nbsp;</td>
  </tr>
  <tr>
    <td width="10%">32(a)</td>
    <td width="90%" align="justify">Certification by Douglas H. Brooks, Chairman
    of the Board, President and Chief
    Executive Officer of the Registrant, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</td>
  </tr>
  <tr>
    <td width="10%">32(b)</td>
    <td width="90%" align="justify">Certification by Charles M. Sonsteby, Executive
Vice President and Chief Financial Officer of the Registrant, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.</td>
  </tr>
</table>

<p>&nbsp;</p>



<p align=center><b>SIGNATURES</b></p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.</p>



<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%">
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">BRINKER INTERNATIONAL, INC.</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">Date: November 8, 2004</td>
    <td width="58%">By:<u>&nbsp; /s/ Douglas H. Brooks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
    </u></td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Douglas H. Brooks, Chairman
    of the Board,</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President and Chief Executive
    Officer</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp; (Principal Executive Officer)</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;</td>
  </tr>
  <tr>
    <td width="42%">Date: November 8, 2004</td>
    <td width="58%">By:<u>&nbsp; /s/ Charles M. Sonsteby&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
    </u></td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp; Charles M. Sonsteby,</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp; Executive Vice President and</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer</td>
  </tr>
  <tr>
    <td width="42%">&nbsp;</td>
    <td width="58%">&nbsp;&nbsp;&nbsp;&nbsp; (Principal Financial Officer)</td>
  </tr>
</table>

</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ex31a1q051.htm
<DESCRIPTION>EXHIBIT 31(A)
<TEXT>
<html>

<head>

<title>EXHIBIT 31(a)</title>

</head>

<body>

<p align="center">EXHIBIT 31(a)</p>



<p align=center><b>&nbsp;CERTIFICATIONS</b></p>

<p align=center>&nbsp;</p>

<p>I,
Douglas H. Brooks, certify that: </p>



<p>1.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed
this quarterly report on Form 10-Q of Brinker International, Inc.;</p>

<p>2.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;</p>

<p>3.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my
knowledge, the financial statements, and other financial information included
in this quarterly 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;</p>

<p>4.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant's
other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</p>

<blockquote>

<p>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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;</p>

<p>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluated the
effectiveness of the registrant'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</p>

<p>c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and</p>

</blockquote>

<p>5.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant's
other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):</p>

<blockquote>

<p>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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's ability to record,
process, summarize and report financial information; and</p>

<p>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or
not material, that involves management or other employees who have a
significant role in the registrant's internal control over financial reporting.</p>

</blockquote>

<p>Date: November 8,
2004</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><u>/s/ Douglas H. Brooks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Douglas H. Brooks, Chairman of the Board,</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>President and Chief Executive Officer</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>(Principal Executive Officer)</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  &nbsp;</td>
 </tr>
</table>



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>ex31b1q051.htm
<DESCRIPTION>EXHIBIT 31(B)
<TEXT>
<html>

<head>

<title>EXHIBIT 31(b)</title>

</head>

<body>

<p align="center">EXHIBIT 31(b)</p>





<p>I,
Charles M. Sonsteby, certify that: </p>



<p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
I have reviewed this
quarterly report on Form 10-Q of Brinker International, Inc.;</p>

<p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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;</p>

<p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on my knowledge,
the financial statements, and other financial information included in this
quarterly 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;</p>

<p>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The registrant's other
certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the registrant and have:</p>

<ol start=4 type=1>
 <ol start=1 type=a>
  <li>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;<br>
&nbsp;</li>
  <li>Evaluated
      the effectiveness of the registrant'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<br>
&nbsp;</li>
  <li>Disclosed
      in this report any change in the registrant's internal control over
      financial reporting that occurred during the registrant's most recent
      fiscal quarter (the registrant's fourth fiscal quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant's internal control over financial
      reporting; and<br>
&nbsp;</li>
 </ol>
 <li>The registrant's
     other certifying officer(s) and I have disclosed, based on our most recent
     evaluation of internal control over financial reporting, to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):<br>
&nbsp;<ol start=1 type=a>
  <li>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's ability to record,
      process, summarize and report financial information; and<br>
&nbsp;</li>
  <li>Any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      control over financial reporting.</li>
 </ol>
</ol>


<p>Date: November 8, 2004</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><u>/s/
  Charles M. Sonsteby&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Charles
  M. Sonsteby</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Executive
  Vice President and</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Chief
  Financial Officer</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>(Principal
  Financial Officer)</p>
  </td>
 </tr>
</table>



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>ex32a1q051.htm
<DESCRIPTION>EXHIBIT 32(A)
<TEXT>
<html>

<head>

<title>EXHIBIT 32(a)</title>

</head>

<body>

<p align="center">EXHIBIT 32(a)</p>





<p align=center>CERTIFICATION</p>

<p align=center>&nbsp;</p>



<p>Pursuant to 18 U.S.C. Section 1350, the undersigned
officer of Brinker International, Inc. (the &quot;Company&quot;), hereby
certifies that the Company's Quarterly Report on Form 10-Q for the quarter
ended September 29, 2004 (the &quot;Report&quot;) fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934 and that the information contained in the Report fairly
presents, in all material respects, the financial condition and results of operations
of the Company.</p>





<p>Date:&nbsp; November 8, 2004</p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%" bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/&nbsp; Douglas H.
    Brooks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
    </u></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Douglas H. Brooks, Chairman
    of the Board,</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President and Chief Executive Officer</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Principal Executive Officer)</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
</table>

</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>ex32b1q051.htm
<DESCRIPTION>EXHIBIT 32(B)
<TEXT>
<html>

<head>

<title>EXHIBIT 32(b)</title>

</head>

<body>

<p align="center">EXHIBIT 32(b)</p>





<p align=center>CERTIFICATION</p>

<p align=center>&nbsp;</p>



<p>Pursuant to 18 U.S.C. Section 1350, the undersigned
officer of Brinker International, Inc. (the &quot;Company&quot;), hereby
certifies that the Company's Quarterly Report on Form 10-Q for the quarter
ended September 29, 2004 (the &quot;Report&quot;) fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934 and that the information contained in the Report fairly
presents, in all material respects, the financial condition and results of operations
of the Company.</p>







<p>Date:&nbsp; November 8, 2004</p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse" width="100%" bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/&nbsp; Charles M.
    Sonsteby&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </u></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Charles M. Sonsteby</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Executive Vice President and</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Principal Financial Officer)</td>
  </tr>
</table>

</body>

</html>

</TEXT>
</DOCUMENT>
</SUBMISSION>
