<SUBMISSION>
<ACCESSION-NUMBER>0000703351-05-000015
<TYPE>10-K/A
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20040630
<FILING-DATE>20050120
<DATE-OF-FILING-DATE-CHANGE>20050119
<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-K/A
<ACT>34
<FILE-NUMBER>001-10275
<FILM-NUMBER>05537254
</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-K/A
<SEQUENCE>1
<FILENAME>form10ka041.htm
<DESCRIPTION>FORM 10-K/A
<TEXT>
<html>

<head>

<title>Form 10K Restated</title>

</head>

<body link=blue vlink=purple>

<p align="center">UNITED
STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
Washington, D.C.&nbsp;
20549</p>

<p align=center>FORM 10-K/A<br>
[Amendment No.1]</p>

<p align=center>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF<br>
THE SECURITIES EXCHANGE ACT OF 1934</p>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p align=center>For the fiscal year ended June 30, 2004</p>
  </td>
  <td width=319 valign=top>
  <p align=center>Commission File No. 1-10275</p>
  </td>
 </tr>
</table>



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



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

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p align=center>Delaware</p>
  </td>
  <td width=319 valign=top>
  <p align=center>75-1914582</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p align=center>(State or other jurisdiction of</p>
  </td>
  <td width=319 valign=top>
  <p align=center>(I.R.S. employer</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p align=center>incorporation or organization)</p>
  </td>
  <td width=319 valign=top>
  <p align=center>identification no.)</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=319 valign=top>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p align=center>6820 LBJ Freeway, Dallas, Texas</p>
  </td>
  <td width=319 valign=top>
  <p align=center>75240</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p align=center>(Address of principal executive offices)</p>
  </td>
  <td width=319 valign=top>
  <p align=center>(Zip Code)</p>
  </td>
 </tr>
</table>



<p align=center>Registrant's telephone number,<br>
including area code (972) 980-9917</p>

<p>Securities registered
pursuant to Section 12(b) of the Act:</p>



<p align=center><u>Title of Each Class<br>
</u>Common Stock, $0.10 par value<br>
Stock Purchase Rights</p>

<p>Securities registered
pursuant to Section 12(g) of the Act:&nbsp;
None</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.&nbsp; Yes <u>&nbsp;&nbsp;X&nbsp;&nbsp;</u>&nbsp; No ___</p>



<p>Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.&nbsp; ____</p>



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



<p>State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. $2,920,282,280.00.</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=1 cellspacing=0 cellpadding=0 style="border-width: 0">
 <tr>
  <td width=319 valign=top style="border-style: none; border-width: medium">
  <p>Class</p>
  </td>
  <td width=319 valign=top style="border-style: none; border-width: medium">
  <p>Outstanding
  at August 24, 2004</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style="border-style: none; border-width: medium">
  <p>Common
  Stock, $0.10 par value</p>
  </td>
  <td width=319 valign=top style="border-style: none; border-width: medium">
  <p>89,834,485
  shares</p>
  </td>
 </tr>
</table>



<hr><P style="page-break-after: always"></P>



<p align=center><b>Explanatory Note</b></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purpose of this amendment on
Form&nbsp;10-K/A to the Annual Report on Form&nbsp;10-K of Brinker
International, Inc. for the fiscal year ended June 30, 2004 is to restate our
consolidated financial statements for fiscal years 2004, 2003 and 2002 and
related disclosures, as described in Note 2 to the consolidated financial
statements, including the selected financial data included herein as of and for
the fiscal years 2004, 2003, 2002, 2001 and 2000. Additional information about
the decision to restate these financial statements can be found in our Current
Report on Form&nbsp;8-K, filed with the SEC on December 22, 2004. </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No
attempt has been made in this Form&nbsp;10-K/A to modify or update other
disclosures presented in the original report on Form&nbsp;10-K, except as
required to reflect the effects of the restatement. The Form&nbsp;10-K/A does
not reflect events occurring after the filing of the Form&nbsp;10-K or modify
or update those disclosures, including the exhibits to the Form&nbsp;10-K
affected by subsequent events. Information not affected by the restatement is
unchanged and reflects the disclosures made at the time of the original filing
of the Form&nbsp;10-K on September 13, 2004. Accordingly, this Form&nbsp;10-K/A
should be read in conjunction with our filings made with the Securities and
Exchange Commission subsequent to the filing of the original Form&nbsp;10-K,
including any amendments to those filings. The following items have been
amended as a result of the restatement: </p>



<ul>
  <li>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Part II - Item 6
- Selected Financial Data</li>
  <li>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Part II - Item 7
- Management's Discussion and Analysis of Financial Condition and Results of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operations</li>
  <li>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Part II - Item 8
- Financial Statements and Supplementary Data</li>
  <li>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Part IV - Item 15
- Exhibits and Financial Statement Schedules</li>
</ul>



<p><i>Description
of Restatement</i></p>



<p>&nbsp;&nbsp;&nbsp; Following a review of its accounting policy
and in consultation with its independent registered public accounting firm,
KPMG LLP, the Company has corrected its computation of straight-line rent
expense and the related deferred rent liability.&nbsp; Historically, when accounting for leases with renewal options,
rent expense has been recorded on a straight-line basis over the initial
non-cancelable lease term. Buildings and leasehold improvements on those
properties are depreciated over a period equal to the shorter of the term of
the lease, including option periods provided for in the lease, or the useful
life of the assets. The Company has determined that it should recognize rent
expense on a straight-line basis over sufficient renewal periods to equal or
exceed the
depreciable life of the assets, including cancelable option periods where failure
to exercise such options would result in an economic penalty. </p>



<p>&nbsp;&nbsp;&nbsp; The Company also evaluated the accounting of
an intangible asset related to franchise rights acquired in fiscal 1998 and has
determined that it would have been more appropriate to expense the purchase
price of the franchise rights. </p>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp; As a result of the above items, the
cumulative effect of the restatement through fiscal 2004 was an increase in the
deferred rent liability of approximately $20.7 million and a decrease in
intangible franchise rights of $4.4 million. In addition, the deferred income
tax liability at the end of fiscal 2004 decreased by approximately $9.4
million, and retained earnings at the end of fiscal 2004 decreased by
approximately $15.7 million. Rent expense for fiscal years ended 2002, 2003 and
2004 increased by approximately $3.3 million, $3.9 million and $4.9 million,
respectively.<br clear=all></p>

<hr><P style="page-break-after: always"></P>

<p align=center>DOCUMENTS INCORPORATED BY REFERENCE</p>

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

<p>Portions of the registrant's Annual Report to Shareholders
for the fiscal year ended June 30, 2004, are incorporated by reference into
Part II hereof, to the extent indicated herein.&nbsp; Portions of the registrant's Proxy Statement for its annual
meeting of shareholders on November 4, 2004, to be dated on or about September
13, 2004, are incorporated by reference into Part III hereof, to the extent
indicated herein.</p>



<p align=center><b>PART I</b></p>

<p>Item 1.&nbsp; BUSINESS.</p>



<p><b><u>General</u></b></p>



<p>Brinker International, Inc. (the &quot;Company&quot;) is
principally engaged in the ownership, operation, development and franchising of
the 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;) restaurant concepts.&nbsp; Additionally, in July 2001, the Company acquired a 40% interest
in the legal entities owning and developing Rockfish Seafood Grill
(&quot;Rockfish&quot;).&nbsp; In October 2002, the
Company made an additional capital contribution to Rockfish increasing its
ownership interest to approximately 43%.&nbsp;
The Company was organized under the laws of the State of Delaware in
September 1983 to succeed to the business operated by Chili's, Inc., a Texas
corporation, organized in August 1977.&nbsp;
The Company completed the acquisitions of Macaroni Grill, On The Border,
Maggiano's, Corner Bakery and Big Bowl in November 1989, May 1994, August 1995,
August 1995, and February 2001, respectively.</p>



<p><b><u>Primary Restaurant Concepts</u></b></p>



<p><u>Chili's Grill &amp; Bar</u></p>



<p>Chili's is a full-service restaurant, featuring a
casual atmosphere and a varied menu of chicken, beef and seafood entrees,
steaks, fajitas, sandwiches, salads, appetizers, desserts, and its legendary
Big Mouth Burgers and Baby Back Ribs, all prepared fresh daily according to
special Chili's recipes.&nbsp; The full-service
Margarita Bar is available at each Chili's restaurant, with a variety of
specialty margaritas, including the Presidente Margarita, offered as the
concept's signature drink.&nbsp; Emphasis is
placed on serving substantial portions of fresh, flavorful, and high quality
food at modest prices.&nbsp; </p>



<p>Chili's restaurants feature quick, efficient and
friendly table service designed to minimize customer waiting time and
facilitate table turnover, with an average turnover time per table of
approximately 45 minutes.&nbsp; Service
personnel are dressed casually in jeans, knit shirts, t-shirts, and aprons to
reinforce the casual, informal environment.&nbsp;
The decor of a Chili's restaurant consists of booth seating, tile-top
tables, hanging plants and wood and brick walls covered with interesting
memorabilia.</p>



<p>Entree selections range in menu price from $5.89 to
$14.99, with the average revenue per meal, including alcoholic beverages,
approximating $11.68 per person.&nbsp; During
the year ended June 30, 2004, food and non-alcoholic beverage sales constituted
approximately 86.6% of the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 13.4%.</p>



<p><u>Romano's Macaroni Grill</u></p>



<p>Macaroni Grill is a quality, casual, fun Italian
restaurant full of the sights, sounds and aromas of Italy today.&nbsp; Guests enjoy Italian culinary masterpieces
from regions all over Italy as well as a few American Italian favorites.&nbsp; These selections include signature pastas,
grilled features, seafood, salads and pizza from Rome, Sicily, Portofino, Milan,
Bologna and Naples - all prepared by talented chefs in open kitchens.&nbsp;
Macaroni Grill features wood burning ovens, festive string lights, fresh
flowers, a broad selection of wine, and display cooking.&nbsp; Guests </p>



<hr><P style="page-break-after: always"></P>



<p>are met with a sincere welcome at the door and enjoy warm, knowledgeable
service.&nbsp; Additionally, guests enjoy the convenience of Macaroni Grill's
Curbside To Go service.&nbsp; Delicious, chef-prepared meals are delivered right
to their cars for them to share at home with friends and family.</p>



<p>Entree selections range in menu price from $5.99 to
$17.99 with monthly chef features priced separately.&nbsp; The average revenue per meal, including alcoholic beverages, is
approximately $14.26 per person.&nbsp; During
the year ended June 30, 2004, food and non-alcoholic beverage sales constituted
approximately 87.2% of the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 12.8%.</p>



<p><u>Maggiano's Little Italy</u></p>



<p>Maggiano's restaurants are classic re-creations of
dinner houses found in New York's Little Italy in the 1940s.&nbsp; Each of the Maggiano's restaurants is a
casual, full-service Italian restaurant with a family-style menu as well as a
full lunch and dinner menu offering Southern Italian appetizers, homemade
bread, bountiful portions of pasta, chicken, seafood, veal and prime steaks, as
well as a full range of alcoholic beverages. Most Maggiano's restaurants also
feature extensive banquet facilities.&nbsp; </p>



<p>Entree selections range in menu price from $7.95 to
$37.95, with the average revenue per meal, including alcoholic beverages,
approximating $26.31 per person.&nbsp; During
the year ended June 30, 2004, food and non-alcoholic beverage sales constituted
approximately 79.4% of the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 20.6%.</p>



<p><u>On The Border Mexican Grill &amp; Cantina</u></p>



<p>On The Border is a full-service, national,
casual-dining Mexican restaurant chain.&nbsp;
On The Border's menu offers a wide variety of Mexican favorites and is
best known for its fajitas and margaritas.&nbsp;
On The Border also offers a variety of innovative menu items that allow
guests to &quot;Explore the Best of Mexico&quot;, from Guacamole Live! to Shaken
Margarita Shrimp Cocktail to a Red Chili Ribeye.&nbsp; As a full service restaurant, On The Border offers full bar
service, in-restaurant dining and patio dining in all locations.&nbsp; On The Border also offers the convenience of
a To-Go menu and To-Go entrance to expedite take-out service in all locations.&nbsp; In addition to To Go, On The Border offers
catering service from simple drop-off delivery to full-service event planning.</p>



<p>Entree selections range in menu price from $5.99 to
$13.99, with the average revenue per meal, including alcoholic beverages,
approximating $12.75 per person.&nbsp; During
the year ended June 30, 2004, food and non-alcoholic beverage sales constituted
approximately 80.5% of the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 19.5%.</p>



<p><u>Corner Bakery Cafe</u></p>



<p>Evolving over the years from one true bakery to a
collection of destinations for people in their communities, Corner Bakery Cafe
has grown into one of America's premiere quick-casual bakery cafes.&nbsp; Beneath recognizable black and white awnings,
Corner Bakery Cafe serves breakfast, lunch, dinner and everything in
between.&nbsp; Breakfast choices include egg
scramblers, breakfast pastries and mixed-berry parfaits.&nbsp; Lunch and dinner feature hearty soups, fresh
salads, delicious sandwiches, hot panini and decadent desserts.&nbsp; Corner Bakery Cafe's atmosphere allows
guests to sit and relax or get their food to go quickly.&nbsp; Most cafes have both indoor seating and
inviting outdoor patios.&nbsp; Corner Bakery
Cafe's catering offers a wide variety of breakfast treats, fresh salads and
unique sandwich choices for any size meeting or social event.</p>



<p>Prices for menu items range from $1.00 to $6.99 with
the average revenue per meal approximating $7.44 per person.&nbsp; During the fiscal year ended June 30, 2004,
food and non-alcoholic beverage sales constituted over 99% of the concept's
total restaurant revenues.&nbsp; Catering
sales constituted approximately 20.3% of sales.</p>



<p><u>Big Bowl Asian Kitchen</u></p>



<hr><P style="page-break-after: always"></P>



<p>Big Bowl Asian Kitchen is a full-service, casual
dining concept with a menu featuring appetizers and entrees inspired and
influenced by the varied cuisines and flavor profiles of Asia, ranging from the
classic and familiar Chinese and Japanese, to the bold and innovative Thai and
Vietnamese.&nbsp; Staying true to these
varied culinary origins, all of Big Bowl's food is crafted with attention to
detail, using fresh ingredients, an assortment of authentic sauces and
condiments, all served with a variety of noodles and jasmine rice.&nbsp; The stir fry bar allows guests to make
choices from a tremendous assortment of fresh vegetables, sauces with vibrant
flavor profiles, and wok-seared meats.&nbsp;
Complementing the menu, Big Bowl offers an assortment of non-alcoholic
beverages, like its signature ginger soda, as well as cocktails and Asian
beers.&nbsp; Big Bowl's atmosphere is casual
and evocative, with decor elements built on the color palette and icons of the
Far East.&nbsp; The staff-members are
well-trained to escort diners through the menu and the experience, delivering
friendly, knowledgeable service.</p>



<p>Entree selections range in menu price from $6.95 to
$12.95, and appetizer prices range from $3.95 to $7.25.&nbsp; The average revenue per meal, including
alcoholic beverages is approximately $13.15 per person.&nbsp; During the year ended June 30, 2004, food
and non-alcoholic beverage sales constituted approximately 90.2% of the
concept's total restaurant revenues, with alcoholic beverage sales accounting
for the remaining 9.8%.</p>



<p><b><u>Jointly-Developed Concept</u></b></p>



<p><u>Rockfish Seafood Grill</u></p>



<p>Rockfish offers fresh, flavorful seafood dishes served
in a lively environment.&nbsp; Reminiscent of
a fly-fishing camp, the Rockfish decor features piney wood tables, river rock
fireplaces and an open kitchen with chefs preparing the catch of the day.&nbsp; The restaurant serves a wide variety of
reasonably priced seafood ranging from salmon and trout to catfish, shrimp and
crab.&nbsp; Daily chalkboard specials
featuring various items, including, when in-season, Copper River Salmon, are
also very popular with diners.&nbsp; Friendly,
attentive servers clad in Rockfish t-shirts and jeans add to the casual backdrop.&nbsp; All locations feature full-service bars and
most have patio seating availability.</p>



<p>Entree selections range in menu price from $5.63 to
$16.75 with chalkboard specials priced on a daily basis.&nbsp; The average revenue per meal, including
alcoholic beverages, is approximately $14.37 per person.&nbsp; During the year ended June 30, 2004, food
and non-alcoholic beverage sales constituted approximately 86.7% of the
concept's total revenues, with alcoholic beverage sales accounting for the
remaining 13.3%.</p>



<p><b><u>Business Development</u></b></p>



<p>The Company's long-term objective is to continue most
of its expansion of its restaurant concepts by opening Company-operated units
in strategically desirable markets.&nbsp; The
Company intends to concentrate on the development of certain identified markets
to achieve penetration levels deemed desirable in order to improve the
Company's competitive position, marketing potential and profitability.&nbsp; Expansion efforts will be focused not only
on major metropolitan areas in the United States but also on smaller market
areas and non-traditional locations (such as airports, kiosks and food courts)
which can adequately support any of the Company's restaurant concepts.</p>



<p>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.&nbsp; The site selection process
evaluates a variety of factors, including: trade area demographics, such as
target population density and household income levels; physical site
characteristics such as visibility, accessibility and traffic volume; relative
proximity to activity centers such as shopping centers, hotel and entertainment
complexes and office buildings; and supply and demand trends, such as proposed
infrastructure improvements, new developments, and potential competition.&nbsp; Members of management inspect, review and
approve each restaurant site prior to its acquisition.</p>



<p>The Company periodically reevaluates restaurant sites to ensure that site
selection attributes have not deteriorated below minimum standards.&nbsp; In the
event site deterioration were to occur, the Company makes a </p>



<hr><P style="page-break-after: always"></P>



<p>concerted effort to improve the restaurant's performance by providing
physical, operating and marketing enhancements unique to each restaurant's
situation.&nbsp; If efforts to restore the restaurant's performance to
acceptable minimum standards are unsuccessful, the Company considers relocation
to a proximate, more desirable site, or evaluates closing the restaurant if the
Company's measurement criteria, such as return on investment and area
demographic trends, do not support relocation.&nbsp; Since inception, the
Company has closed eighty-seven restaurants, including thirty-five in fiscal
2004, which were performing below the Company's standards primarily due to
declining or shifting trade area demographics.&nbsp; The Company operates
pursuant to a strategic plan targeted to support the Company's long-term growth
objectives, with a focus on continued development of those restaurant concepts
that have the greatest return potential for the Company and its shareholders.</p>



<p>The following table illustrates the system-wide
restaurants opened in fiscal 2004 and the planned openings in fiscal 2005:</p>



<div align=center>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=159 valign=top>

  </td>
  <td width=167 valign=top>
  <p align=right>Fiscal 2004 Openings</p>
  </td>
  <td width=198 valign=top>
  <p align=right>Fiscal 2005 Projected Openings</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Chili's:<br>
  &nbsp; Company-Operated<br>
  &nbsp; Franchise</p>
  </td>
  <td width=167 valign=top>
  <p align=right><br>
  71<br>
  24</p>
  </td>
  <td width=198 valign=top>
  <p align=right><br>
  75-80<br>
  25-30</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Macaroni
  Grill:<br>
  &nbsp; Company-Operated<br>
  &nbsp; Franchise</p>
  </td>
  <td width=167 valign=top>
  <p align=right><br>
  18<br>
  2</p>
  </td>
  <td width=198 valign=top>
  <p align=right><br>
  18-20<br>
  3-6</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Maggiano's</p>
  </td>
  <td width=167 valign=top>
  <p align=right>3</p>
  </td>
  <td width=198 valign=top>
  <p align=right>4-5</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>On
  The Border:<br>
  &nbsp; Company-Operated<br>
  &nbsp; Franchise</p>
  </td>
  <td width=167 valign=top>
  <p align=right><br>
  3<br>
  0</p>
  </td>
  <td width=198 valign=top>
  <p align=right><br>
  10-13<br>
  0-1</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Corner
  Bakery:<br>
  &nbsp; Company-Operated<br>
  &nbsp; Franchise</p>
  </td>
  <td width=167 valign=top>
  <p align=right><br>
  5<br>
  0</p>
  </td>
  <td width=198 valign=top>
  <p align=right><br>
  8-10<br>
  0-1</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Big
  Bowl</p>
  </td>
  <td width=167 valign=top>
  <p align=right>3</p>
  </td>
  <td width=198 valign=top>
  <p align=right>1-2</p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>Rockfish</p>
  </td>
  <td width=167 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 5</u></p>
  </td>
  <td width=198 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 0-1</u></p>
  </td>
 </tr>
 <tr>
  <td width=159 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=167 valign=top>
  <p align=right>134</p>
  </td>
  <td width=198 valign=top>
  <p align=right>144-169</p>
  </td>
 </tr>
</table>

</div>



<p>The Company anticipates that some of the fiscal 2005
projected restaurant openings may be constructed pursuant to &quot;build-to-suit&quot; agreements,
in which the lessor contributes some or substantially all, of the building
construction costs.&nbsp; In other cases, the
Company may either lease or own the land (paying for any owned land from its
own funds) and either lease or own the building, furniture, fixtures and
equipment (paying for any owned items from its own funds).</p>



<p>The following table illustrates the approximate
average capital investment for a typical unit in the Company's primary
restaurant concepts:</p>





<div align=center>

<table border=1 cellspacing=0 cellpadding=0 style="border-width: 0">
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>&nbsp;</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>Chili's</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>Macaroni<br>
  Grill</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center>Maggiano's</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>On The<br>
  Border</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>Big Bowl</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>Corner<br>
  Bakery</p>
  </td>
 </tr>
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>Land</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$&nbsp;&nbsp; 700,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$&nbsp;&nbsp; 950,000</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center>$2,500,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$&nbsp;&nbsp; 800,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$850,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$&nbsp;&nbsp; 600,000</p>
  </td>
 </tr>
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>Building</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>1,100,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>1,300,000</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center>3,150,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>1,300,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>1,100,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>615,000</p>
  </td>
 </tr>
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>Furniture &amp;<br>
  Equipment</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  450,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  520,000</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  1,200,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  520,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  450,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center><br>
  325,000</p>
  </td>
 </tr>
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>Other</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>70,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>80,000</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center>150,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>80,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>50,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>25,000</p>
  </td>
 </tr>
 <tr>
  <td width=81 valign=top style="border-style: none; border-width: medium">
  <p align=center>Total</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$2,320,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$2,850,000</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center>$7,000,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$2,700,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$2,450,000</p>
  </td>
  <td width=82 valign=top style="border-style: none; border-width: medium">
  <p align=center>$1,565,000</p>
  </td>
 </tr>
</table>

</div>



<p>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>



<hr><P style="page-break-after: always"></P>



<p><b><u>Franchise Operations</u></b></p>



<p>The Company intends to continue its expansion through
franchise development, both domestically and internationally.&nbsp; At June 30, 2004, forty-two total joint
venture or franchise development agreements existed.&nbsp; During the year ended June 30, 2004, twenty Chili's franchised
restaurants were opened, four company-owned Chili's were sold to a franchisee,
and two Macaroni Grill franchised restaurants were opened.</p>



<p>In fiscal 2004, the first franchised Chili's opened on
an international United States Air Force base at Kadena Air Force Base in
Okinawa, Japan.&nbsp; Another opening is
planned for Ramstein Air Force Base in Germany during early fiscal 2005.&nbsp; United States Air Force Services is the
Company's franchisee for these locations.&nbsp;
Additionally, in fiscal 2004 the Company sold four company-owned Chili's
restaurants in Northeast Ohio to Strang Management Corporation and received a
commitment from Strang Management Corporation to build sixteen more Chili's
restaurants over a six year period. The Company also entered into a franchise
development agreement limited exclusively to small town Chili's development
with Bonnaroo Restaurant Group for selected small towns in South Carolina and
Georgia.</p>



<p>The Company intends to selectively pursue domestic and
international expansion and is currently contemplating development in other
countries.&nbsp; A typical franchise
development agreement provides for payment of area development and initial
franchise fees in addition to subsequent royalty and advertising fees based on
the gross sales of each restaurant.&nbsp;
Future franchise development agreements are expected to remain limited
to enterprises having significant experience as restaurant operators and proven
financial ability to develop multi-unit operations.</p>



<p><b><u>Jointly-Developed Operations</u></b></p>



<p>From time to time, the Company enters into agreements
for research and development activities related to the testing of new
restaurant concepts, typically acquiring a significant equity interest in such
ventures.&nbsp; The Company's ownership interest
in the legal entities owning the Rockfish restaurants is approximately
43%.&nbsp; At June 30, 2004, twenty-five
Rockfish restaurants were operating, located in the states of Arizona, New
Mexico, North Carolina, and Texas.</p>



<p><b><u>Restaurant Management</u></b></p>



<p>The Company's philosophy to maintain and operate each
concept as a distinct and separate entity ensures that the culture, recruitment
and training programs and unique operating environments are preserved.&nbsp; These factors are critical to the viability
of each concept.&nbsp; Each concept is
directed by a president and one or more concept vice presidents overseeing
specifically identified areas.</p>



<p>The Company's restaurant management structure varies
by concept.&nbsp; The individual restaurants
themselves are led by a management team including a general manager and between
two to five additional managers.&nbsp; The
level of restaurant supervision depends upon the operating complexity and sales
volume of each concept.&nbsp; An area
director/supervisor is responsible for the supervision of, on average, three to
seven restaurants.&nbsp; For those concepts
with a significant number of units within a geographical region, additional
levels of management may be provided.</p>



<p>The Company believes that there is a high correlation
between the quality of restaurant management and the long-term success of a
concept.&nbsp; In that regard, the Company
encourages increased tenure at all management positions through various short
and long-term incentive programs, including equity ownership.&nbsp; These programs, coupled with a general
management philosophy emphasizing quality of life, have enabled the Company to
attract and retain management employees at levels above the industry norm.</p>



<p>The Company ensures consistent quality standards in
all concepts through the issuance of operations manuals covering all elements
of operations and food and beverage manuals, which provide guidance for
preparation of Company-formulated recipes.&nbsp;
Routine visitation to the restaurants by all levels of supervision
enforces strict adherence to Company standards and operating procedures.</p>



<hr><P style="page-break-after: always"></P>



<p>The director of training for each concept is
responsible for maintaining each concept's operational training program.&nbsp; The training program includes a three to
four month training period for restaurant management trainees, a continuing
management training process for managers and supervisors, and training teams
consisting of groups of employees experienced in all facets of restaurant
operations that train employees to open new restaurants.&nbsp; The training teams typically begin on-site
training at a new restaurant seven to ten days prior to opening and remain on
location one to two weeks following the opening to ensure the smooth transition
to operating personnel.</p>



<p><b><u>Purchasing</u></b></p>



<p>The Company's ability to maintain consistent quality
of products throughout each of its restaurant concepts depends upon acquiring
food and beverage products and related items from reliable sources.&nbsp; Suppliers are pre-approved by the Company
and are required, along with the restaurants, to adhere to strict product
specifications established through the Company's quality assurance program to
ensure that high quality, wholesome food and beverage products are served in
the restaurants.&nbsp; The Company negotiates
directly with the major suppliers to obtain competitive prices and uses
purchase commitment contracts to stabilize the potentially volatile pricing
associated with certain commodity items.&nbsp;
All essential food and beverage products are available, or upon short
notice can be made available, from alternative qualified suppliers to be
delivered to the Company's restaurants.&nbsp;
Because of the relatively rapid turnover of perishable food products,
inventories in the restaurants, consisting primarily of food, beverages and
supplies, have a modest aggregate dollar value in relation to revenues.</p>



<p><b><u>Advertising and Marketing</u></b></p>



<p>The Company's concepts generally focus on the eighteen
to fifty-four year old age group, which constitutes approximately half of the
United States population.&nbsp; Members of
this population segment grew up on fast food, but the Company believes that,
with increasing maturity, they prefer a more adult, upscale dining
experience.&nbsp; To attract this target
group, the Company relies primarily on television, radio, direct mail
advertising and information communicated by customers.</p>



<p>The Company's franchise agreements require advertising
contributions to the Company to be used exclusively for the purpose of
maintaining, directly administering and preparing standardized advertising and
promotional activities.&nbsp; Franchisees
spend additional amounts on local advertising when approved by the Company.</p>



<p><b><u>Employees</u></b></p>



<p>At June 30, 2004, the Company employed approximately
96,600 persons, of whom approximately 1,100 were corporate personnel, 5,900
were restaurant area directors, managers or trainees and 89,600 were employed
in non-management restaurant positions.&nbsp;
The executive officers of the Company have an average of over 20 years
of experience in the restaurant industry.</p>



<p>The Company considers its employee relations to be
good and believes that its employee turnover rate compares favorably with the
industry average.&nbsp; Most employees, other
than restaurant management and corporate personnel, are paid on an hourly
basis.&nbsp; The Company believes that it
provides working conditions and wages that compare favorably with those of its
competition.&nbsp; The Company's employees
are not covered by any collective bargaining agreements.</p>



<p><b><u>Trademarks</u></b></p>



<p>The Company has registered and/or has pending, among
other marks, &quot;Big Bowl&quot;, &quot;Big Bowl Asian Kitchen&quot;, &quot;Brinker International&quot;,
&quot;Chili's&quot;, &quot;Chili's Bar &amp; Bites&quot;, &quot;Chili's Grill &amp; Bar&quot;, &quot;Chili's
Margarita Bar&quot;, &quot;Chili's Southwest Grill &amp; Bar&quot;, &quot;Chili's Too&quot;, &quot;Corner
Bakery&quot;, &quot;Corner Bakery Cafe&quot;, &quot;Romano's Macaroni Grill&quot;, &quot;Macaroni Grill&quot;,
&quot;Maggiano's&quot;, &quot;Maggiano's Little Italy&quot;, &quot;On The Border&quot;, &quot;On The
Border Mexican Cafe&quot;, </p>



<hr><P style="page-break-after: always"></P>



<p>and &quot;On The Border Mexican Grill &amp; Cantina&quot;, as trademarks with the United
States Patent and Trademark Office.</p>



<p><b><u>Risk Factors/Forward-Looking Statements</u></b></p>



<p>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 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><u>Competition may adversely affect the Company's
operations and financial results</u>.</p>



<p>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><u>The Company's sales volumes generally decrease in
winter months</u>.</p>



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



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



<hr><P style="page-break-after: always"></P>



<p>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.&nbsp; The
Company expects increases in payroll expenses as a result of federal, state and
local mandated increases in the minimum wage, and although 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><u>Inflation may increase the Company's operating
expenses</u>.</p>



<p>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><u>Increased energy costs may adversely affect the
Company's profitability</u>.</p>



<p>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><u>Successful mergers, acquisitions, divestitures
and other strategic transactions are important to the future growth and
profitability of the Company</u></p>



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



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



<p>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, </p>



<hr><P style="page-break-after: always"></P>



<p>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>



<p><u>Other risk factors may adversely affect the
Company's financial performance</u>.</p>



<p>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 perceptions of food safety, changes in consumer tastes, governmental
monetary policies, changes in demographic trends, availability of employees,
terrorist attacks, and weather and other acts of God.</p>



<p><b><u>Available Information</u></b></p>



<p>The Company maintains an internet website with the
address of http://www.brinker.com.&nbsp;
Copies of the Company's reports filed with, or furnished to, the
Securities and Exchange Commission on Forms 10-K, 10-Q, and 8-K and any
amendments to such reports are available for viewing and copying at such
internet website, free of charge, as soon as reasonably practicable after
filing such material with, or furnishing it to, the Securities and Exchange
Commission.&nbsp; In addition, copies of the
Company's corporate governance materials, including, Corporate Governance
Guidelines, Governance and Nominating Committee Charter, Audit Committee
Charter, Compensation Committee Charter, Executive Committee Charter, Code of
Conduct and Ethical Business Policy, and Problem Resolution Procedure/Whistle
Blower Policy, are available for viewing and copying at the website, free of
charge.</p>





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



<p><b><u>Restaurant Locations</u></b></p>



<p>At June 30, 2004, the Company's system of
company-operated, jointly-developed and franchised units included 1,476
restaurants located in forty-nine states, Washington, D.C., Australia, Bahrain,
Canada, Egypt, Great Britain, Guatemala, Indonesia, Japan, Kuwait, Lebanon,
Malaysia, Mexico, Oman, Peru, Philippines, Puerto Rico, Qatar, Saudi Arabia,
South Korea, Taiwan, United Arab Emirates, and Venezuela.&nbsp; The Company's portfolio of restaurants is
illustrated below:</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=297 valign=top>
  <p>Chili's:<br>
  &nbsp;&nbsp; Company-Operated<br>
  &nbsp;&nbsp; Franchise</p>
  </td>
  <td width=76 valign=top>
  <p align=right><br>
  752<br>
  227</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>Macaroni Grill:<br>
  &nbsp;&nbsp; Company-Operated<br>
  &nbsp;&nbsp; Franchise</p>
  </td>
  <td width=76 valign=top>
  <p align=right><br>
  206<br>
  9</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>Maggiano's</p>
  </td>
  <td width=76 valign=top>
  <p align=right>28</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>On The Border:<br>
  &nbsp;&nbsp; Company-Operated<br>
  &nbsp;&nbsp; Franchise</p>
  </td>
  <td width=76 valign=top>
  <p align=right><br>
  111<br>
  18</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>Corner Bakery:<br>
  &nbsp;&nbsp; Company-Operated<br>
  &nbsp;&nbsp; Franchise</p>
  </td>
  <td width=76 valign=top>
  <p align=right><br>
  83<br>
  3</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>Big Bowl</p>
  </td>
  <td width=76 valign=top>
  <p align=right>14</p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>Rockfish</p>
  </td>
  <td width=76 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 25</u></p>
  </td>
 </tr>
 <tr>
  <td width=297 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=76 valign=top>
  <p align=right>1,476</p>
  </td>
 </tr>
</table>



<p>The 979 Chili's restaurants include domestic
locations in 49 states and foreign locations in 22 countries.&nbsp; The 215 Macaroni Grill restaurants include
domestic locations in 40 states and foreign locations in Canada, Great Britain,
Mexico and Puerto Rico.&nbsp; The Maggiano's,
On The Border, Corner Bakery, and Big Bowl restaurants are located exclusively
within the United States in 13 (and the District of Columbia), 31,&nbsp; 8 (and the District of Columbia), and 6
states, respectively.</p>





<hr><P style="page-break-after: always"></P>





<p><b><u>Restaurant Property Information</u></b></p>



<p>The following table illustrates the approximate
average dining capacity for each current prototypical unit in the Company's
primary restaurant concepts:</p>



<div align=center>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=91 valign=top>

  </td>
  <td width=91 valign=top>
  <p align="center">Chili's</p>
  </td>
  <td width=95 valign=top>
  <p>Macaroni Grill</p>
  </td>
  <td width=112 valign=top>
  <p align="center">Maggiano's</p>
  </td>
  <td width=108 valign=top>
  <p align="center">On The Border</p>
  </td>
  <td width=126 valign=top>
  <p align="center">Big Bowl</p>
  </td>
 </tr>
 <tr>
  <td width=91 valign=top>
  <p>Square Feet</p>
  </td>
  <td width=91 valign=top>
  <p>4,000 - 5,700</p>
  </td>
  <td width=95 valign=top>
  <p align="center">6,300 - 7,000</p>
  </td>
  <td width=112 valign=top>
  <p align="center">12,000 - 18,000</p>
  </td>
  <td width=108 valign=top>
  <p align="center">5,200 - 6,200</p>
  </td>
  <td width=126 valign=top>
  <p align="center">5,500 - 5,700</p>
  </td>
 </tr>
 <tr>
  <td width=91 valign=top>
  <p>Dining Seats</p>
  </td>
  <td width=91 valign=top>
  <p>&nbsp;&nbsp; 150 - 220</p>
  </td>
  <td width=95 valign=top>
  <p align="center">235 - 280</p>
  </td>
  <td width=112 valign=top>
  <p align="center">500 - 725</p>
  </td>
  <td width=108 valign=top>
  <p align="center">195 - 265</p>
  </td>
  <td width=126 valign=top>
  <p align="center">195 - 200</p>
  </td>
 </tr>
 <tr>
  <td width=91 valign=top>
  <p>Dining Tables</p>
  </td>
  <td width=91 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 35 - 50</p>
  </td>
  <td width=95 valign=top>
  <p align="center">50 - 70</p>
  </td>
  <td width=112 valign=top>
  <p align="center">100 - 150</p>
  </td>
  <td width=108 valign=top>
  <p align="center">45 - 65</p>
  </td>
  <td width=126 valign=top>
  <p align="center">45 - 50</p>
  </td>
 </tr>
</table>

</div>



<p>Corner Bakery's size and dining capacity varies
based upon whether it is an in-line or kiosk location.&nbsp; For a Corner Bakery located in a kiosk, the
square footage ranges from 80 to 200 square feet, the number of dining seats
varies from 0 to 40, and the number of dining tables varies from 0 to 15.&nbsp; For in-line Corner Bakery locations, the
square footage ranges from 1,971 to 5,347, the number of dining seats ranges
from 60 to 150, and the number of dining tables ranges from 20 to 50.</p>



<p>Certain of the Company's restaurants are leased for
an initial term of 5 to 30 years, with renewal terms of 1 to 35 years.&nbsp; The leases typically provide for a fixed
rental plus percentage rentals based on sales volume.&nbsp; At June 30, 2004, the Company owned the land and/or building for
861 of the 1,194 Company-operated restaurants.&nbsp;
The Company considers that its properties are suitable, adequate,
well-maintained and sufficient for the operations contemplated.</p>



<p><b><u>Other Properties</u></b></p>



<p>The Company leases warehouse space totaling
approximately 39,150 square feet in Carrollton, Texas, which it uses for
storage of equipment and supplies.&nbsp; The
Company owns an office building containing approximately 108,021 square feet
which it uses for part of its corporate headquarters and menu development
activities.&nbsp; The Company leases an
additional office complex containing approximately 198,000 square feet for the
remainder of its corporate headquarters, of which approximately 151,860 square
feet is currently utilized by the Company, and the remaining 46,140 square feet
is under lease, listed for lease to third party tenants, or reserved for future
expansion of the Company headquarters.&nbsp;
The Company also leases office space in Arizona, California, Colorado,
Florida, Illinois, Missouri, New Jersey, North Carolina, Rhode Island and Texas
for use as regional operation or real estate/construction offices.&nbsp; The size of these office leases range from
144 square feet to 4,049 square feet.&nbsp;
The Company owns or leases warehouse space in California, Georgia,
Illinois and Texas for use as commissaries for the preparation of bread and
other food products primarily for its Corner Bakery stores.&nbsp; The size of these commissaries range from
11,383 square feet to 20,000 square feet.</p>





<p>Item 3.&nbsp;&nbsp;&nbsp; LEGAL PROCEEDINGS.</p>



<p>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.&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, which involved interviews 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 August 30,
2004, the IRS notified the Company that it intends to issue a notice and demand,
on or after September 29, 2004, for the employer's share of FICA taxes on
unreported tips.&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 </p>



<hr><P style="page-break-after: always"></P>



<p>the employment tax treatment of service charges.&nbsp; The Company intends to
vigorously contest the accuracy of any assessment that may be proposed with
respect to either unreported tips or service charges and, in the case of tips,
to assert that the Contract precludes the retroactive assessment of
employer-only FICA taxes.&nbsp; It is not possible at this time to reasonably
estimate the possible loss or range of loss, if any, with respect to either
issue.</p>



<p>The Company is engaged in various other legal
proceedings and has certain unresolved claims pending.&nbsp; The ultimate liability, if any, for the
aggregate amounts claimed cannot be determined at this time.&nbsp; However, management of the Company, based
upon consultation with legal counsel, is of the opinion that there are no
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>Item 4.&nbsp;&nbsp;&nbsp; SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.</p>



<p>None.</p>





<p align=center><b>PART
II</b></p>

<p>Item 5.&nbsp;&nbsp;&nbsp; MARKET FOR REGISTRANT'S COMMON EQUITY,
RELATED SHAREHOLDER<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.</p>



<p>The Company's common stock is traded on the New York
Stock Exchange (&quot;NYSE&quot;) under the symbol &quot;EAT&quot;.&nbsp; Bid prices quoted represent interdealer prices without adjustment
for retail markup, markdown and/or commissions, and may not necessarily
represent actual transactions.&nbsp; The
following table sets forth the quarterly high and low closing sales prices of
the common stock, as reported by the NYSE.</p>



<p>Fiscal year ended June 30, 2004:</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=197 valign=top>

  </td>
  <td width=134 valign=top>
  <p>High</p>
  </td>
  <td width=126 valign=top>
  <p>Low</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>First Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$36.96</p>
  </td>
  <td width=126 valign=top>
  <p>$30.31</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Second Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$34.30</p>
  </td>
  <td width=126 valign=top>
  <p>$29.60</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Third Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$39.54</p>
  </td>
  <td width=126 valign=top>
  <p>$32.47</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Fourth Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$39.52</p>
  </td>
  <td width=126 valign=top>
  <p>$34.12</p>
  </td>
 </tr>
</table>



<p>Fiscal year ended June 25, 2003:</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=197 valign=top>

  </td>
  <td width=134 valign=top>
  <p>High</p>
  </td>
  <td width=126 valign=top>
  <p>Low</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>First Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$32.60</p>
  </td>
  <td width=126 valign=top>
  <p>$25.12</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Second Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$32.25</p>
  </td>
  <td width=126 valign=top>
  <p>$25.64</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Third Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$32.95</p>
  </td>
  <td width=126 valign=top>
  <p>$26.40</p>
  </td>
 </tr>
 <tr>
  <td width=197 valign=top>
  <p>Fourth Quarter</p>
  </td>
  <td width=134 valign=top>
  <p>$36.68</p>
  </td>
  <td width=126 valign=top>
  <p>$30.30</p>
  </td>
 </tr>
</table>





<p>As of August 24, 2004, there were 1,176 holders of
record of the Company's common stock.</p>



<p>The Company has never paid cash dividends on its
common stock and does not currently intend to do so as profits are reinvested
into the Company to fund expansion of its restaurant business.&nbsp; Payment of dividends in the future will
depend upon the Company's growth, profitability, financial condition and other
factors, which the Board of Directors may deem relevant.</p>



<p>In October 2001, the Company issued $431.7 million
aggregate principal amount at maturity of Zero Coupon Convertible Senior
Debentures Due 2021 (the &quot;Debentures&quot;).&nbsp;
The Debentures and the common stock issuable upon conversion of the Debentures
were not registered under the Securities Act of 1933, as amended; however, the
Company subsequently filed a registration statement covering the resale of these
securities by the holders thereof.&nbsp; Banc of America Securities LLC and
Salomon Smith Barney Inc. served as the joint book-running </p>



<hr><P style="page-break-after: always"></P>



<p>managers for the offering.&nbsp; The Debentures were offered and sold only to
&quot;qualified institutional buyers&quot; (as defined in Rule 144A under the Securities
Act of 1933, as amended).&nbsp; The aggregate offering price for the Debentures
was approximately $250.0 million and the aggregate underwriting discount of
2.125% was approximately $5.3 million.&nbsp; The Debentures are redeemable at
the Company's option beginning on October 10, 2004, and the holders of the
Debentures may require the Company to redeem the Debentures on October 10, 2005,
2011 or 2016, and in certain other circumstances.&nbsp; In addition, each $1,000
Debenture is convertible into 18.08 shares of the Company's common stock if the
stock's market price exceeds 120% of the accreted conversion price at specified
dates, the Company exercises its option to redeem the Debentures, a credit
rating of the Debentures is reduced below Baa3 and BBB-, or upon the occurrence
of certain specified corporate transactions.&nbsp; The accreted conversion price
is equal to the issue price of the Debenture plus accrued original issue
discount divided by 18.08 shares.&nbsp; The proceeds of the offering were used
for repayment of existing indebtedness, restaurant acquisitions, purchases of
outstanding common stock under the Company's stock repurchase plan, and for
general corporate purposes.</p>



<p>In May 2004, the Company issued $300.0 million in
the aggregate principal amount at maturity of 5.75% Notes due 2014 (the
&quot;Unregistered Notes&quot;).&nbsp; The Unregistered
Notes were not registered under the Securities Act of 1933, as amended.&nbsp; Citigroup Global Markets Inc. and J.P.
Morgan Securities Inc. served as the joint book-running managers for the
offering.&nbsp; The Unregistered Notes were
offered and sold only to &quot;qualified institutional buyers&quot; (as defined in Rule
144A under the Securities Act of 1933, as amended), and, outside the United
States, to non-U.S. persons in reliance on Regulation S under the Securities
Act.&nbsp; The Unregistered Notes are
redeemable at the Company's option at any time, in whole or in part.&nbsp; The proceeds of the offering were and will
be used for general corporate purposes, including the repurchase of the
Company's common stock pursuant to its share repurchase program.</p>



<p>In September 2004, the Company completed an exchange
offer (the &quot;Exchange Offer&quot;) in the aggregate principal amount of $300.0
million pursuant to which all of the holders of the Unregistered Notes
exchanged the Unregistered Notes for new 5.75% notes due 2014 (the &quot;Registered
Notes&quot;).&nbsp; The Registered Notes are on
substantially the same terms as the Unregistered Notes except that the
Registered Notes have been registered under the Securities Act and are freely
tradeable.&nbsp; The Company did not receive
any new proceeds from the issuance of the Registered Notes.</p>



<p>Except as described in the immediately preceding
paragraphs, during the three-year period ended on August 24, 2004, the Company
issued no securities which were not registered under the Securities Act of
1933, as amended.</p>



<p>Shares repurchased during the fourth quarter of fiscal
2004 are as follows (in thousands, except share and per share amounts):</p>



<table border=0 cellspacing=0 cellpadding=0 width=702>
 <tr>
  <td width=264 valign=bottom>
  <p align=center>&nbsp;</p>
  </td>
  <td width=126 valign=bottom>
  <p align=center><b>Total Number of
  Shares <br>
  <u>Purchased (a)</u></b></p>
  </td>
  <td width=118 valign=bottom>
  <p align=center><b>Average Price
  Paid per <br>
  <u>Share</u></b></p>
  </td>
  <td width=194 valign=bottom>
  <p align=center><b>Maximum Dollar
  Value that May Yet be Purchased Under the<br>
  <u>Program</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=bottom>
  <p>March 25, 2004
  through April 28, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p>&nbsp;&nbsp; 501,000</p>
  </td>
  <td width=118 nowrap valign=bottom>
  <p align=center>$38.06</p>
  </td>
  <td width=194 nowrap valign=bottom>
  <p align=center>$493,600,321.00</p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=bottom>
  <p>April 29, 2004
  through May 26, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p>1,820,300</p>
  </td>
  <td width=118 nowrap valign=bottom>
  <p align=center>$36.76</p>
  </td>
  <td width=194 nowrap valign=bottom>
  <p align=center>$426,604,870.00</p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=bottom>
  <p>May 27, 2004
  through June 30, 2004</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p><u>3,714,000</u></p>
  </td>
  <td width=118 nowrap valign=bottom>
  <p align=center>$35.31</p>
  </td>
  <td width=194 nowrap valign=bottom>
  <p align=center>$295,323,157.00</p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=bottom>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=126 nowrap valign=bottom>
  <p><u>6,035,300</u></p>
  </td>
  <td width=118 nowrap valign=bottom>
  <p align=center>$35.98</p>
  </td>
  <td width=194 nowrap valign=bottom>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
</table>



<blockquote>



<p><font size="2">(a)&nbsp;&nbsp; All of the shares purchased during the fourth quarter of fiscal 2004 were
purchased as part of the publicly announced program described in &quot;Liquidity and
Capital Resources&quot; contained within &quot;Management's Discussion and Analysis of
Financial Condition and Results of Operations&quot; which is incorporated by
reference from the 2004 Annual Report to Shareholders and is presented on pages
F-5 through F-7 of Exhibit 13 to this report.</font></p>







</blockquote>
<hr><P style="page-break-after: always"></P>







<p>Item 6.&nbsp;&nbsp;&nbsp; SELECTED FINANCIAL DATA.</p>



<p>&quot;Selected Financial Data&quot; is incorporated herein by
reference from the 2004 Annual Report to Shareholders and is presented on page
F-1 of Exhibit 13 to this report.</p>





<p>Item 7.&nbsp;&nbsp;&nbsp; MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CONDITION AND RESULTS OF
OPERATIONS.</p>



<p>&quot;Management's Discussion and Analysis of Financial
Condition and Results of Operations&quot; is incorporated herein by reference from
the 2004 Annual Report to Shareholders and is presented on pages F-2 through F&#8209;11
of Exhibit 13 to this report.</p>





<p>Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.</p>



<p>&quot;Quantitative and Qualitative Disclosures About
Market Risk&quot; contained within &quot;Management's Discussion and Analysis of
Financial Condition and Results of Operations&quot; is incorporated herein by reference
from the 2004 Annual Report to Shareholders and is presented on pages F-7
through F-8 of Exhibit 13 to this report.</p>





<p>Item 8.&nbsp;&nbsp;&nbsp; FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.</p>



<p>Reference is made to the Index to Financial
Statements attached hereto on page 20 for a listing of all financial statements
incorporated by reference from the 2004 Annual Report to Shareholders attached
as part of Exhibit 13 to this report.</p>





<p>Item 9.&nbsp;&nbsp;&nbsp; CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ACCOUNTING AND FINANCIAL
DISCLOSURE.</p>



<p>None.</p>





<p>Item 9A.&nbsp; CONTROLS AND PROCEDURES.</p>



<p>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>There were no changes in the Company's internal
control over financial reporting or in other factors that could significantly
affect this control during the quarter ended June 30, 2004, that has materially
affected or is reasonably likely to materially affect, the Company's internal
control over financial reporting.</p>





<p>Item 9B.&nbsp; OTHER INFORMATION.</p>



<hr><P style="page-break-after: always"></P>



<p>None.</p>





<p align=center><b>PART
III</b></p>

<p>Item 10.&nbsp; DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.</p>



<p>&quot;Election of Directors - Information About
Nominees&quot;, &quot;Governance Of The Company&quot;, &quot;Executive Officers&quot;, and &quot;Section
16(a) Beneficial Ownership Reporting Compliance&quot; in the Company's Proxy
Statement to be dated on or about September 13, 2004, for the annual meeting of
shareholders on November 4, 2004, are incorporated herein by reference.</p>



<p>The Company has adopted a code of ethics that
applies to all members of Board of Directors and employees of the Company,
including, the principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.&nbsp; The Company has posted a
copy of the code on the Company's internet website at the internet address:
http://www.brinker.com/corp_gov/ethical_business_policy_pf.asp.&nbsp; Copies of the code may be obtained free of
charge from the Company's website at the above internet address.</p>





<p>Item 11.&nbsp; EXECUTIVE COMPENSATION.</p>



<p>&quot;Executive Compensation&quot; and &quot;Report of the
Compensation Committee&quot; in the Company's Proxy Statement to be dated on or
about September 13, 2004, for the annual meeting of shareholders on November 4,
2004, are incorporated herein by reference.</p>





<p>Item 12.&nbsp; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AND RELATED STOCKHOLDER
MATTERS.</p>



<p>&quot;Election of Directors - Stock Ownership of
Directors&quot;, &quot;Executive Compensation - Equity Compensation Plan Information&quot;,
and &quot;Stock Ownership of Certain Persons&quot; in the Company's Proxy Statement to be
dated on or about September 13, 2004, for the annual meeting of shareholders on
November 4, 2004, are incorporated herein by reference.</p>





<p>Item 13.&nbsp; CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.</p>



<p>&quot;Compensation Committee Interlocks and Insider
Participation&quot; in the Company's Proxy Statement to be dated on or about
September 13, 2004, for the annual meeting of shareholders on November 4, 2004,
is incorporated herein by reference.</p>





<p>Item 14.&nbsp; PRINCIPAL ACCOUNTANT FEES AND SERVICES.</p>



<p>&nbsp;&quot;Report of
the Audit Committee&quot; in the Company's Proxy Statement to be dated on or about
September 13, 2004, for the annual meeting of shareholders on November 4, 2004,
is incorporated herein by reference.</p>







<p align=center><b>PART IV</b></p>

<p>Item 15.&nbsp; EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</p>



<p>(a)&nbsp;&nbsp;&nbsp; (1)
Financial Statements.</p>



<hr><P style="page-break-after: always"></P>



<p>Reference is made to the Index to Financial Statements
attached hereto on page 20 for a listing of all financial statements attached
as Exhibit 13 to this report.</p>



<p>(a)&nbsp;&nbsp;&nbsp; (2)
Financial Statement Schedules.</p>



<p>None.</p>



<p>(a)&nbsp;&nbsp;&nbsp; (3)
Exhibits.</p>



<p>Reference is made to the Exhibit Index preceding the
exhibits attached hereto on page E-1 for a list of all exhibits filed as a part
of this report.</p>



<p align=center>SIGNATURES</p>

<p>Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this Amendment No. 1 on Form 10-K/A to be signed on its behalf
by the undersigned, thereunto duly authorized.</p>



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

  </td>
  <td width=319 valign=top>
  <p>BRINKER INTERNATIONAL,
  INC.,</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>a Delaware corporation</p>
  </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>

  </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>By:<u>&nbsp;&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;</u></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Charles M. Sonsteby, Executive Vice</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; President and Chief Financial Officer</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Dated: January 19, 2005</p>
  </td>
  <td width=319 valign=top>

  </td>
 </tr>
</table>



<hr><P style="page-break-after: always"></P>&nbsp;<p>Pursuant to the requirements
of the Securities Exchange Act of 1934, this Amendment No. 1 on Form 10-K/A has
been signed below by the following persons of the registrant and in the capacities
indicated on January 19, 2005.</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p align=center><u>Name</u></p>
  </td>
  <td width=319 valign=top>
  <p align=center><u>Title</u></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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

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

  <p><br>
  Chairman of the Board,
  President, and Chief Executive Officer <br>
  (Principal Executive
  Officer)</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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

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

  <p><br>
  Executive Vice President
  and Chief Financial Officer<br>
  (Principal Financial and
  Accounting Officer)</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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

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

  _______________________________</div>
  <p>Dan W. Cook, III</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

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

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

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

  _______________________________</div>
  <p>Robert M. Gates</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

  <p>Director</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>

  <p>______________________________ </p>
  </div>
  <p>Marvin J. Girouard</p>
  </td>
  <td width=319 valign=top>


  <p>&nbsp;</p>


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

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

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>
  <p><u>&nbsp; /s/ Ronald Kirk&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </div>
  <p>Ronald Kirk</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

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

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

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

  <u>&nbsp; /s/ George R. Mrkonic&nbsp;&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></div>
  <p>George R. Mrkonic</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

  <p>Director</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>

  <p>&nbsp;<u>&nbsp; /s/ Erle Nye&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </div>
  <p>Erle Nye</p>
  </td>
  <td width=319 valign=top>


  <p>&nbsp;</p>


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

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

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>
  <p><u>&nbsp; /s/ James E. Oesterreicher&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </u></p>
  </div>
  <p>James E. Oesterreicher</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

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

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

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>
  <p>&nbsp;<u>&nbsp; /s/ Cece Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </div>
  <p>Cece Smith</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

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

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

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <div>
  <p>&nbsp;____________________________</p>
  </div>
  <p>Rosendo G. (Ro) Parra</p>
  </td>
  <td width=319 valign=top>

  <p>&nbsp;</p>

  <p>Director</p>
  </td>
 </tr>
</table>



<hr><P style="page-break-after: always"></P>&nbsp;<p align=center>INDEX
TO FINANCIAL STATEMENTS</p>

<p>The following is a listing
of the financial statements (as restated) which are attached hereto as part of
Exhibit 13.</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>
  <p align=right><u>Page</u></p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Selected Financial Data </p>
  </td>
  <td width=121 valign=top>
  <p align=right>F-1</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Management's Discussion
  and Analysis of <br>
  &nbsp;&nbsp;&nbsp; Financial Condition and Results of Operations </p>
  </td>
  <td width=121 valign=top>
  <p align=right><br>
  F-2</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Consolidated Statements of
  Income - Fiscal Years<br>
  &nbsp;&nbsp;&nbsp; Ended June 30, 2004, June 25, 2003, and June 26, 2002</p>
  </td>
  <td width=121 valign=top>
  <p align=right><br>
  F-12</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Consolidated Balance
  Sheets - June 30, 2004 and June 25, 2003</p>
  </td>
  <td width=121 valign=top>
  <p align=right>F-13</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Consolidated Statements of
  Shareholders' Equity - Fiscal<br>
  &nbsp;&nbsp;&nbsp; Years Ended June 30, 2004, June 25, 2003, and June 26, 2002</p>
  </td>
  <td width=121 valign=top>
  <p align=right><br>
  F-14</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Consolidated Statements of
  Cash Flows - Fiscal Years<br>
  &nbsp;&nbsp;&nbsp; Ended June 30, 2004, June 25, 2003, and June 26, 2002</p>
  </td>
  <td width=121 valign=top>
  <p align=right><br>
  F-15</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Notes to Consolidated
  Financial Statements </p>
  </td>
  <td width=121 valign=top>
  <p align=right>F-16</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Report of Independent
  Registered Public Accounting Firm</p>
  </td>
  <td width=121 valign=top>
  <p align=right>F-36</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>

  </td>
  <td width=121 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=517 valign=top>
  <p>Management's
  Responsibility for Consolidated Financial Statements</p>
  </td>
  <td width=121 valign=top>
  <p align=right>F-37</p>
  </td>
 </tr>
</table>





<p>All schedules are omitted as
the required information is inapplicable or the information is presented in the
financial statements or related notes.</p>



<hr><P style="page-break-after: always"></P>&nbsp;<p align=center>INDEX
TO EXHIBITS</p>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=67 valign=top>
  <p><u>Exhibit</u></p>
  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 3(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Certificate of
  Incorporation of the Registrant, as amended.&nbsp;&nbsp; (1)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 3(b)</p>
  </td>
  <td width=571 valign=top>
  <p>Bylaws of the
  Registrant.&nbsp;&nbsp; (2)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 4(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Form of Zero Coupon
  Convertible Senior Debenture Due 2021.&nbsp;&nbsp;
  (3)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 4(b)</p>
  </td>
  <td width=571 valign=top>
  <p>Indenture between the
  Registrant and SunTrust Bank, as Trustee.&nbsp;&nbsp;
  (3)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 4(c)</p>
  </td>
  <td width=571 valign=top>
  <p>Form of 5.75% Note due
  2014.&nbsp;&nbsp; (4)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 4(d)</p>
  </td>
  <td width=571 valign=top>
  <p>Indenture between the
  Registrant and Citibank, N.A., as Trustee. (2)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>&nbsp; 4(e)</p>
  </td>
  <td width=571 valign=top>
  <p>Registration Rights
  Agreement by and among the Registrant, Citigroup Global Marketing, Inc., and
  J.P. Morgan Securities, Inc., as representatives of the initial named
  purchasers of the Notes. (2)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Registrant's 1991 Stock
  Option Plan for Non-Employee Directors and Consultants.&nbsp;&nbsp; (5)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(b)</p>
  </td>
  <td width=571 valign=top>
  <p>Registrant's 1992
  Incentive Stock Option Plan.&nbsp;&nbsp; (5)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(c)</p>
  </td>
  <td width=571 valign=top>
  <p>Registrant's Stock Option
  and Incentive Plan.&nbsp;&nbsp; (6)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(d)</p>
  </td>
  <td width=571 valign=top>
  <p>Registrant's 1999 Stock
  Option and Incentive Plan for Non-Employee Directors and Consultants.&nbsp;&nbsp; (7)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(e)</p>
  </td>
  <td width=571 valign=top>
  <p>Transition Agreement dated
  June 5, 2003, by and among Registrant, Brinker International Payroll Company,
  L.P. and Mr. Ronald A. McDougall.&nbsp;&nbsp;
  (6)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>10(f)</p>
  </td>
  <td width=571 valign=top>
  <p>Consulting Agreement dated
  August 26, 2004, by and between Registrant and Mr. Ronald A. McDougall.&nbsp;&nbsp; (8)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>13</p>
  </td>
  <td width=571 valign=top>
  <p>2004 Annual Report to
  Shareholders.&nbsp;&nbsp; (9)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>21</p>
  </td>
  <td width=571 valign=top>
  <p>Subsidiaries of the
  Registrant.&nbsp;&nbsp; (8)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>23</p>
  </td>
  <td width=571 valign=top>
  <p>Consent of Independent
  Registered Public Accounting Firm.&nbsp;&nbsp;
  (10)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>31(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Certification by Douglas
  H. Brooks, President and Chief Executive Officer of the Registrant, pursuant
  to 17 CFR 240.13a - 14(a) or 17 CFR 240.15d - 14(a).&nbsp;&nbsp; (10)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>31(b)</p>
  </td>
  <td width=571 valign=top>
  <p>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).&nbsp;&nbsp; (10)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>32(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Certification by Douglas
  H. Brooks, 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.&nbsp;&nbsp; (10)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>32(b)</p>
  </td>
  <td width=571 valign=top>
  <p>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.&nbsp;&nbsp; (10)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>99(a)</p>
  </td>
  <td width=571 valign=top>
  <p>Proxy Statement of
  Registrant.&nbsp; (11)</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  <hr><P style="page-break-after: always"></P>
  <p>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>
  <p>_____________________________</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(1)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  annual report on Form 10-K for year ended June 28, 1995, and incorporated
  herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(2)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  registration statement on Form S-4 filed June 25, 2004, SEC File No.
  333-116879, and incorporated herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(3)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  registration statement on Form S-3 filed December 11, 2001, SEC File No.
  333-74902, and incorporated herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(4)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as part of exhibit
  4(d) to annual report on Form 10-K for year ended June 30, 2004 and
  incorporated herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(5)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  annual report on Form 10-K for the year ended June 25, 1997, and incorporated
  herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(6)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  annual report on Form 10-K for the year ended June 25, 2003, and incorporated
  herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(7)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  annual report on Form 10-K for the year ended June 28, 2000, and incorporated
  herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(8)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed as an exhibit to
  annual report on Form 10-K for the year ended June 30, 2004, and incorporated
  herein by reference.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(9)</p>
  </td>
  <td width=571 valign=top>
  <p>Portions filed herewith,
  to the extent indicated herein.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top>

  </td>
  <td width=571 valign=top>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(10)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed herewith.</p>


  </td>
 </tr>
 <tr>
  <td width=67 valign=top>
  <p>(11)</p>
  </td>
  <td width=571 valign=top>
  <p>Filed September 13, 2004.</p>
  </td>
 </tr>
</table>



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>2
<FILENAME>ex13form10ka041.htm
<DESCRIPTION>EXHIBIT 13
<TEXT>
<html>

<head>

<title> </title>

</head>

<body link=blue vlink=purple>

<p align=center><b>EXHIBIT
13</b></p>

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

<table border=1 cellspacing=0 cellpadding=0 width=726 style="border-width: 0">
 <tr>
  <td width=726 colspan=10 valign=top style="border-style: none; border-width: medium">

  <p align=center><b>Brinker International, Inc.<br>
  Selected Financial Data<br>
  </b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(In thousands, except per share amounts and number of restaurants)</b></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <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; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal
  Years&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b><u>&nbsp;&nbsp; 2004(a)</u></b></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b><u>&nbsp;&nbsp; 2003&nbsp;</u></b></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b><u>&nbsp;&nbsp; 2002&nbsp;</u></b></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b><u>&nbsp;&nbsp; 2001&nbsp;</u></b></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp; 2000&nbsp;</u></b></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><b>Income Statement Data:<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(as restated)&nbsp; (as restated)&nbsp;&nbsp;&nbsp; (as restated)&nbsp;&nbsp; (as
  restated)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (as restated)</b></p>

  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Revenues</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$3,707,486</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$3,285,394</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$2,887,111
  </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$2,406,874</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$2,100,496</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">

  <p>Operating Costs and Expenses: </p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Cost of sales</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,024,724</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>900,379</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>796,714</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>663,357</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>575,570</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Restaurant expenses</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>2,033,474</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,802,639</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,585,944</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,305,918</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,140,536</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Depreciation and amortization</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>175,449</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>158,153</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>130,102</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>100,064</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>90,647</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>General and administrative</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>153,231</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 131,763</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 121,420&nbsp;
  </p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 109,110</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 100,123</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Restructure charges and other impairments</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 74,237</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 29,744</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,723&nbsp;

  </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><br>
  <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total operating costs and <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; expenses</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;3,461,115</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;3,022,678</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp; <br>
  <u>&nbsp;2,642,903&nbsp;
  </u> </p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;2,178,449</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;1,906,876</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">

  <p>Operating
  income</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>246,371</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>262,716</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">

  <p align=right>244,208</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>228,425</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>193,620</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Interest
  expense</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>11,603</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>12,449</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right>13,327</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>8,608</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right>10,746</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Other,
  net</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,742</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 567</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 2,332&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 459</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 3,381</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Income
  before provision for income taxes </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">

  <p align=right><br>
  233,026</p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">

  <p align=right><br>
  249,700</p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">

  <p align=right><br>
  228,549</p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><br>
  219,358</p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">

  <p align=right><br>
  179,493</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Provision for income taxes</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 82,108</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 83,500</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 77,904&nbsp;&nbsp;&nbsp; </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 75,805</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 62,926</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Net
  income</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp; 150,918&nbsp; </u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp; 166,200</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp; 150,645&nbsp; </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp; 143,553</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp; 116,567</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Basic
  net income per share </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.57</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.71</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.45</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.18</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Diluted net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.68</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.50</u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.41</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.15</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Basic weighted average<br>
  &nbsp;shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp; 96,072</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 97,096</u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 97,862</u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 99,101</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 98,445</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Diluted weighted average<br>
  &nbsp;shares
  outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp; 97,939</u></p>
  </td>
  <td width=97 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp; 99,135&nbsp;
  </u></p>
  </td>
  <td width=93 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><br>
  &nbsp;&nbsp; 100,565&nbsp;&nbsp;
  </u></p>
  </td>
  <td width=93 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp; 102,098</u></p>
  </td>
  <td width=109 valign=top style="border-style: none; border-width: medium">
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp; 101,114</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><b><br>
  Balance Sheet Data (End of Period):</b></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Working capital (deficit)</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 21,758</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  (143,744)</p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  (160,266)</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  (110,006)</p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  (127,377)</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Total assets</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>2,207,386</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,940,285</p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,778,931</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,440,915</p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,157,923</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Long-term obligations</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>817,802</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>501,032</p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>509,787</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>298,502</p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>171,224</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Shareholders' equity</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,010,422</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,127,642</p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>966,924</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 892,183</p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 755,699</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><b><br>
  Number
  of Restaurants</b></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><b>&nbsp;Open (End of Period):</b></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Company-operated</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,194</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,145</p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,039 </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>899</p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>774</p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>Franchised/Joint venture</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 282</u></p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 257</u></p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 229</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 244</u></p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 264</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=241 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp;&nbsp; Total</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp; &nbsp;&nbsp;&nbsp;1,476</u></p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,402</u></p>
  </td>
  <td width=96 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,268</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,143</u></p>
  </td>
  <td width=110 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,038</u></p>
  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td
  width=2 style="border-style: none; border-width: medium"><p>&nbsp;</td>
  <td width=724 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p>(a)
  Fiscal year 2004 consisted of 53 weeks while all other periods presented
  consisted of 52 weeks.</p>
  </td>
 </tr>
 <tr height=0>
  <td width=2 style="border-style: none; border-width: medium"></td>
  <td width=241 style="border-style: none; border-width: medium"></td>
  <td width=90 style="border-style: none; border-width: medium"></td>
  <td width=96 style="border-style: none; border-width: medium"></td>
  <td width=1 style="border-style: none; border-width: medium"></td>
  <td width=93 style="border-style: none; border-width: medium"></td>
  <td width=2 style="border-style: none; border-width: medium"></td>
  <td width=90 style="border-style: none; border-width: medium"></td>
  <td width=1 style="border-style: none; border-width: medium"></td>
  <td width=109 style="border-style: none; border-width: medium"></td>
 </tr>
</table>

<br clear=all>


<hr><P style="page-break-after: always"></P>&nbsp;<p align=center><b>Management's
Discussion and Analysis of<br>
Financial Condition and Results of Operations</b></p>



<p><b>GENERAL</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For an understanding of the significant
factors that influenced the performance of Brinker International, Inc. (the
&quot;Company&quot;) during the past three fiscal years, the following discussion should
be read in conjunction with the consolidated financial statements and related
notes found elsewhere in this annual report.</p>

<p>&nbsp; &nbsp;&nbsp; The Company has a 52/53 week fiscal year
ending on the last Wednesday in June. Fiscal year 2004, which ended on June 30,
2004, contained 53 weeks while fiscal years 2003 and 2002, which ended on June
25, 2003 and June 26, 2002, respectively, each contained 52 weeks.</p>



<p><b>RESULTS
OF OPERATIONS FOR FISCAL YEARS 2004, 2003, AND 2002</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The following table sets forth expenses as a
percentage of total revenues for the periods indicated for revenue and expense
items included in the consolidated statements of income:</p>





<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="653">
 <tr>
  <td width=653 colspan=6 valign=top>
  <p align="center"><b>Percentage of Total Revenues<br>
  <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Years&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></b></p>
  </td>
 </tr>
 <tr>
  <td width=653 colspan=6 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; <u>&nbsp;2004 </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;  &nbsp;<u>&nbsp;2003 </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; <u>&nbsp;2002
  <br>
  </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;
  <font size="2">(as
  restated)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; (as restated)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (as restated)</font></b></p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>

  </td>
  <td width=72 valign=top>

  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>

  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>

  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>Revenues<br>
&nbsp;</p>
  </td>
  <td width=72 valign=top>
  <p><u>100.0%</u></p>
  </td>
  <td width=24 valign=top>
  <p></p>
  </td>
  <td width=66 valign=top>
  <p><u>100.0%</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u>100.0%</u></p>
  </td>
 </tr>
 <tr>
  <td width=653 colspan=6 valign=top>
  <p>Operating Costs and Expenses:</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>&nbsp; Cost of sales</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp;27.6%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp;27.4%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p>&nbsp;27.6%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>&nbsp; Restaurant
  expenses</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp;54.8%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp;54.9%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p>&nbsp;54.9%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>&nbsp; Depreciation and
  amortization</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp; 4.7%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp; 4.8%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p>&nbsp; 4.5%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>&nbsp; General and
  administrative</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp; 4.2%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp; 4.0%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p>&nbsp; 4.2%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>&nbsp; Restructure
  charges and other impairments</p>
  </td>
  <td width=72 valign=top>
  <p><u>&nbsp; 2.0%</u></p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><u>&nbsp; 0.9%</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u>&nbsp; 0.3%</u></p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p><br>
  Total operating costs and expenses</p>
  </td>
  <td width=72 valign=top>
  <p><u><br>
  &nbsp;93.3%</u></p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><u><br>
  &nbsp;92.0%</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u><br>
  &nbsp;91.5%</u></p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p><br>
  Operating income</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp;&nbsp; <br>
&nbsp; 6.7%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp; <br>
&nbsp; 8.0%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p>&nbsp; <br>
&nbsp; 8.5%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p><br>
  Interest expense</p>
  </td>
  <td width=72 valign=top>
  <p>&nbsp; <br>
&nbsp; 0.3%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p>&nbsp; <br>
&nbsp; 0.4%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><br>
  &nbsp; 0.5%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>Other, net</p>
  </td>
  <td width=72 valign=top>
  <p><u>&nbsp; 0.1%</u></p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><u>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u>&nbsp; 0.1%</u></p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p><br>
  Income before provision for income taxes</p>
  </td>
  <td width=72 valign=top>
  <p><br>
  &nbsp; 6.3%</p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><br>
  &nbsp; 7.6%</p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><br>
  &nbsp; 7.9%</p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p>Provision for income taxes</p>
  </td>
  <td width=72 valign=top>
  <p><u>&nbsp; 2.2%</u></p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><u>&nbsp; 2.5%</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u>&nbsp; 2.7%</u></p>
  </td>
 </tr>
 <tr>
  <td width=367 valign=top>
  <p><br>
  Net income</p>
  </td>
  <td width=72 valign=top>
  <p><u><br>
  &nbsp; 4.1%</u></p>
  </td>
  <td width=24 valign=top>

  </td>
  <td width=66 valign=top>
  <p><u><br>
  &nbsp; 5.1%</u></p>
  </td>
  <td width=30 valign=top>

  </td>
  <td width=94 valign=top>
  <p><u><br>
  &nbsp; 5.2%</u></p>
  </td>
 </tr>
</table>

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



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company is principally engaged in the
ownership, operation, development, and franchising of the 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;) restaurant concepts.&nbsp; In
addition, the Company is involved in the ownership and development of Rockfish
Seafood Grill.&nbsp; At June 30, 2004, the
Company owned, operated, franchised, or was involved in the ownership of 1,476
restaurants.&nbsp; The Company's core concepts
accounted for 82.8% of the total units and included 979 Chili's, 215 Macaroni
Grill, and 28 Maggiano's restaurants.</p>



<p>&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>&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>&nbsp;&nbsp;&nbsp;&nbsp; Revenues for the first 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 4% to 5%.&nbsp;
Cost of sales is estimated to be 0.3% to 0.4% 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% higher than last year as a result of increased utility costs.&nbsp; General and administrative expenses are
estimated to be 0.2% higher due primarily to increased costs related to
consumer research.&nbsp; The effective tax
rate during the first quarter is estimated to be approximately 32.3%.</p>

<p><b>REVENUES</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Revenues for fiscal 2004 increased to $3,707.5 million,
12.8% over the $3,285.4 million generated for fiscal 2003.&nbsp; Revenues for fiscal 2003 increased 13.8%
from fiscal 2002 revenues of $2,887.1 million.&nbsp;
The increases were primarily attributable to a net increase of 49 and
106 company-owned restaurants in fiscal 2004 and 2003, respectively, and an
increase in comparable store sales.&nbsp;
Revenues for fiscal 2004 increased due to a 10.5% increase in capacity
(as measured by average-weighted sales weeks), of which 2.1% was due to the
additional week in fiscal 2004, and a 2.3% increase in comparable store
sales.&nbsp; Revenues for fiscal 2003
increased due to a 12.3% increase in capacity and a 1.5% increase in comparable
store sales.&nbsp; Menu prices in the
aggregate increased 1.8% and 1.3% in fiscal 2004 and 2003, respectively.</p>



<hr><P style="page-break-after: always"></P>



<p><b>COSTS
AND EXPENSES </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Cost of sales, as a percent of revenues,
increased 0.2% in fiscal 2004 due to a 0.5% increase in commodity prices for
meat, seafood, dairy and cheese, and a 0.7% unfavorable product mix shift for
poultry and produce, partially offset by a 0.3% decrease in commodity prices
for poultry, a 0.2% favorable product mix shift for meat and seafood, and a
0.5% increase in menu prices.&nbsp; Cost of
sales, as a percent of revenues, decreased 0.2% in fiscal 2003 due primarily to
a 0.9% decrease in commodity prices for meat and cheese, a 0.4% favorable
product mix shift for beverages, and a 0.1% increase in menu prices, partially
offset by a 1.0% unfavorable product mix shift for meat and produce, and a 0.2%
increase in commodity prices for beverages.&nbsp;
</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restaurant expenses, as a percent of
revenues, decreased 0.1% in fiscal 2004.&nbsp;
The decrease was primarily due to increased sales leverage from the
additional week in fiscal 2004 and decreases in pre-opening costs due to a
lower number of store openings in fiscal 2004 as compared to fiscal 2003,
partially offset by higher labor and training costs related to new service
initiatives, higher payroll taxes resulting from increased tip reporting, and
increases in utility costs, property taxes, and health, workers compensation
and general liability insurance.&nbsp; Also
contributing to the decrease was a $2.4 million gain as a result of the sale of
four Chili's restaurants to a franchise partner and the sale of one real estate
property.&nbsp; Restaurant expenses, as a
percent of revenues, remained flat in fiscal 2003.&nbsp; Increases in wage rates, payroll taxes, and health and workers
compensation insurance were offset by an approximate $11.0 million expense
related to the settlement of certain California labor matters recorded in
fiscal 2002. </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization increased $17.3
million and $28.1 million in fiscal 2004 and 2003, respectively.&nbsp; The increases were due primarily to new unit
construction and ongoing remodel costs, partially offset by a declining
depreciable asset base for older units.&nbsp;
The increase in fiscal 2003 was also due to the acquisition of
previously leased equipment and certain real estate assets, and restaurants
acquired during fiscal 2002.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative expenses increased
$21.5 million and $10.3 million in fiscal 2004 and 2003, respectively.&nbsp; The increases were due primarily to an increase in payroll costs
resulting from an increase in headcount and wage rates.&nbsp; The increase in fiscal 2004 was also
attributable to increased costs related to consumer research.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restructure charges and other impairments
recorded during fiscal 2004 primarily relate to the Company's decision to close
thirty restaurants, including six Chili's, five Macaroni Grill, six On The
Border, six Corner Bakery, and seven Big Bowl restaurants.&nbsp; The decision to close the restaurants was
the result of a comprehensive analysis that examined restaurants not meeting
minimum return on investment thresholds and certain other operating performance
criteria, and resulted in a $39.5 million charge. As a result of the seven Big
Bowl closings and a review of the brand's competitive positioning and future
development plans, the earnings forecast was revised and the Company recorded a
goodwill impairment charge of $27.0 million.&nbsp;
In addition, the Company recorded a $7.7 million charge related to the
final disposition of the Cozymel's Coastal Grill (&quot;Cozymel's&quot;)
restaurants.&nbsp; Restructure charges and
other impairments recorded during fiscal 2003 include a $20.2 million charge
related to the Company's decision to discontinue growth and sell all sixteen of
its Cozymel's restaurants, $5.4 million in charges resulting from the decision
to close nine restaurants and to write down the assets of one under-performing
restaurant, and a $4.1 million impairment of intellectual property rights.</p>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp; &nbsp;&nbsp; Interest expense decreased $846,000 in fiscal
2004 due primarily to debt issuance costs related to the convertible debt being
fully amortized in the second quarter of fiscal 2004, lower average outstanding
balances on the senior notes and revolving lines-of-credit, and a $2.4 million
gain related to an interest rate lock settled in May 2004.&nbsp; These decreases were partially offset by
interest expense related to the 5.75% notes issued in May 2004 (the &quot;Notes&quot;)
and a decrease in capitalized interest due to lower interest rates.&nbsp; Interest expense decreased by $878,000 in
fiscal 2003 due primarily to decreased average borrowings and interest rates on
the Company's revolving lines-of-credit, a decrease in interest expense on the
senior notes due to a scheduled repayment, and an increase in interest
capitalization related to increased new restaurant construction activity.&nbsp; These decreases were partially offset by the
amortization of debt issuance costs and debt discounts on the Company's convertible
debt.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Other, net increased $1.2 million in fiscal
2004 due primarily to gains from life insurance proceeds recorded in fiscal
2003 totaling $3.5 million, partially offset by a $1.0 million decrease in the
Company's share of losses in equity method investees and an increase in
interest income associated with the investment of proceeds received from the
issuance of the Notes.&nbsp; Other, net
decreased $1.8 million in fiscal 2003 due primarily to the previously mentioned
gains from life insurance proceeds, partially offset by a $1.1 million increase
in the Company's share of losses in equity method investees.&nbsp; </p>



<p><b>INCOME TAXES </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company's effective income tax rate was
35.2%, 33.4%, and 34.1% in fiscal 2004, 2003, and 2002, respectively. The
increase in fiscal 2004 was primarily due to the Big Bowl goodwill impairment
charge, which is not deductible for tax purposes, partially offset by an
increase in the FICA tax credit resulting from increased tip reporting.&nbsp; The decrease in fiscal 2003 is primarily due
to the increase in the FICA tax credit resulting from increased tip reporting
and the non-taxable gains from life insurance proceeds, partially offset by the
non-deductible loss resulting from the impairment of Cozymel's goodwill.&nbsp; </p>



<p><b>IMPACT OF
INFLATION</b></p>



<p>&nbsp; &nbsp;&nbsp; The Company has not experienced a significant
overall impact from inflation. As operating expenses increase, the Company, to
the extent permitted by competition, recovers increased costs through a
combination of menu price increases and reviewing, then implementing,
alternative products or processes.</p>

<p><b>LIQUIDITY AND
CAPITAL RESOURCES</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Working capital increased to $21.8 million at June 30, 2004 from a
deficit of $143.7 million at June 25, 2003, primarily due to $298.4 million in
cash received from the issuance of the 5.75% Notes in May 2004.&nbsp; Net cash provided by operating activities
increased to $481.2 million for fiscal 2004 from $448.9 million for fiscal 2003
due to increased profitability before restructuring charges and other
impairments, the additional week in fiscal 2004, 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><hr><P style="page-break-after: always"></P>


<p>&nbsp; &nbsp;&nbsp; Payments of the Company's contractual
obligations under outstanding indebtedness, purchase obligations as defined by
the Securities and Exchange Commission, and the expiration of credit facilities
as of June 30, 2004 are as follows:</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=199 valign=top>

  </td>
  <td width=432 colspan=5 valign=top>
  <p align=center><b>Payments Due by Period<br>
  (in
  thousands)</b></p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=center><b><u><br>
  &nbsp;Total&nbsp;</u></b></p>
  </td>
  <td width=90 valign=top>
  <p align=center><b>Less than<br>
  <u>1 Year</u></b></p>
  </td>
  <td width=78 valign=top>
  <p align=center><b>1-3<br>
  <u>Years</u></b></p>
  </td>
  <td width=90 valign=top>
  <p align=center><b>3-5<br>
  <u>Years</u></b></p>
  </td>
  <td width=90 valign=top>
  <p align=center><b>More than<br>
  <u>5 Years</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>5.75% notes</p>
  </td>
  <td width=84>
  <p align=right>$298,449</p>
  </td>
  <td width=90>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=78>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=90>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=90>
  <p align=right>$298,449</p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Convertible
  debt (a)</p>
  </td>
  <td width=84>
  <p align=right>269,233</p>
  </td>
  <td width=90>
  <p align=right>-</p>
  </td>
  <td width=78>
  <p align=right>-</p>
  </td>
  <td width=90>
  <p align=right>-</p>
  </td>
  <td width=90>
  <p align=right>269,233</p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Senior notes</p>
  </td>
  <td width=84>
  <p align=right>14,851</p>
  </td>
  <td width=90>
  <p align=right>14,851</p>
  </td>
  <td width=78>
  <p align=right>-</p>
  </td>
  <td width=90>
  <p align=right>-</p>
  </td>
  <td width=90>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Capital
  leases</p>
  </td>
  <td width=84>
  <p align=right>60,952</p>
  </td>
  <td width=90>
  <p align=right>3,390</p>
  </td>
  <td width=78>
  <p align=right>6,808</p>
  </td>
  <td width=90>
  <p align=right>7,157</p>
  </td>
  <td width=90>
  <p align=right>43,597</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top>
  <p>Mortgage
  loan <br>
&nbsp;&nbsp;&nbsp; obligations</p>
  </td>
  <td width=84 valign=top>
  <p align=right><br>
  38,931</p>
  </td>
  <td width=90 valign=top>
  <p align=right><br>
  2,344</p>
  </td>
  <td width=78 valign=top>
  <p align=right><br>
  4,733</p>
  </td>
  <td width=90 valign=top>
  <p align=right><br>
  4,349</p>
  </td>
  <td width=90 valign=top>
  <p align=right><br>
  27,505</p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Operating leases </p>
  </td>
  <td width=84>
  <p align=right>881,928</p>
  </td>
  <td width=90>
  <p align=right>104,356</p>
  </td>
  <td width=78>
  <p align=right>199,034</p>
  </td>
  <td width=90>
  <p align=right>174,026</p>
  </td>
  <td width=90>
  <p align=right>404,512</p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Purchase
  obligations (b)</p>
  </td>
  <td width=84>
  <p align=right>107,905</p>
  </td>
  <td width=90>
  <p align=right>22,169</p>
  </td>
  <td width=78>
  <p align=right>51,104</p>
  </td>
  <td width=90>
  <p align=right>34,632</p>
  </td>
  <td width=90>
  <p align=right>-</p>
  </td>
 </tr>
</table>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=199 valign=top>

  </td>
  <td width=432 colspan=5 valign=top>
  <p align=center><b><br>
  Amount of Credit Facility
  Expiration by Period<br>
  (in
  thousands)</b></p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top>

  </td>
  <td width=84 valign=top>
  <p align="center"><b>Total<br>
  <u>Commitment</u></b></td>
  <td width=90 valign=top>
  <p align=center><b>Less than<br>
  <u>1 year (d)</u></b></p>
  </td>
  <td width=79 valign=top>
  <p align=center><b>1-3<br>
  <u>Years</u></b></p>
  </td>
  <td width=93 valign=top>
  <p align=center><b>3-5<br>
  <u>Years</u></b></p>
  </td>
  <td width=86 valign=top>
  <p align=center><b>More than<br>
&nbsp;<u>5 Years</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=199>
  <p>Credit
  facilities (c)</p>
  </td>
  <td width=84>
  <p align=right>$325,000</p>
  </td>
  <td width=90>
  <p align=right>$50,000</p>
  </td>
  <td width=79>
  <p align=right>$275,000</p>
  </td>
  <td width=93>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=86>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;- </p>
  </td>
 </tr>
</table>



<blockquote>



<p><font size="2">(a)&nbsp; The
convertible debt was issued at a discount representing a yield to maturity of
2.75% per annum.&nbsp; The $269.2 million
balance is the accreted carrying value of the debt at June 30, 2004.&nbsp; The convertible debt will continue to
accrete at 2.75% per annum and, if outstanding to maturity in October 2021, the
obligation will total $431.7 million.</font></p>



<p><font size="2">(b)&nbsp; A
&quot;purchase obligation&quot; is defined as an agreement to purchase goods or services
that is enforceable and legally binding on the Company and that specifies all significant
terms, including: fixed or minimum quantities to be purchased; fixed, minimum
or variable price provisions; and the approximate timing of the
transaction.&nbsp; The Company's purchase
obligations primarily consist of long-term obligations for the purchase of
telecommunication services and certain non-alcoholic beverages and exclude
agreements that are cancellable without significant penalty.</font></p>



<p><font size="2">(c)&nbsp; There
were no amounts outstanding under the credit facilities as of June 30, 2004.</font></p>



<p><font size="2">(d)&nbsp; The
portion of the credit facilities that expires in less than one year is an
uncommitted obligation giving the lenders the option not to extend the Company
funding.&nbsp; Should any or all of these
obligations not be extended, the Company has adequate capacity under the
committed facility, which does not expire until fiscal 2006.</font></p>



</blockquote>



<p>&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 $305.9
million in fiscal 2004 compared to $326.5 million in fiscal 2003.&nbsp; The Company estimates that its fiscal 2005
capital expenditures will approximate $396.0 million.&nbsp; These capital expenditures will be funded entirely from
operations and existing credit facilities. </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In May 2004, the Company
issued $300.0 million of 5.75% Notes and received proceeds totaling
approximately $298.4 million prior to debt issuance costs.&nbsp; The Notes require semi-annual interest
payments and mature in June 2014.&nbsp; The
proceeds will primarily be used to repurchase common stock under the Company's
stock repurchase plan.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 2004, the Company closed one Cozymel's restaurant and
sold the remaining fifteen restaurants.&nbsp;
In connection with the disposition, the Company received cash proceeds
totaling $16.0 million.</p>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 2004, the Company's note agreement with the legal
entities (collectively, the &quot;Rockfish Partnership&quot;) owning and developing
Rockfish Seafood Grill was amended and restated,
increasing the amount available under the note to $6.8 million, extending the
maturity date to December 2005, and increasing the interest rate to the prime
rate plus 1.5% (5.5% at June 30, 2004).&nbsp;
The note requires quarterly interest payments until maturity.&nbsp; At June 30, 2004, the Company's note receivable from
Rockfish Partnership totaled $6.8 million.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In August 2004, the Company sold nine of its Chili's restaurants
to a franchise partner and received cash proceeds totaling $12.8 million.</p>



<p>&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 in fiscal 2005 primarily related to the sale of
real estate.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In April 2004, the Board of Directors authorized an
increase in the stock repurchase plan of $500.0 million, bringing the total to
$1,010.0 million.&nbsp; Pursuant to the
Company's stock repurchase plan, the Company repurchased approximately 9.3
million shares of its common stock for $322.6 million during fiscal 2004.&nbsp; As of June 30, 2004, approximately 27.5
million shares had been repurchased for $714.7 million under the stock
repurchase plan.&nbsp; The Company's stock
repurchase plan will be used to minimize the dilutive impact of a potential
conversion of the convertible debt and stock option exercises.&nbsp; The repurchased common stock is reflected as
a reduction of shareholders' equity.</p>



<p>&nbsp;&nbsp; &nbsp; In July 2004, the
Company began entering into forward purchase contracts to repurchase its common
stock.&nbsp; The contracts require the
Company to prepay the cost of the common stock at the inception of each
contract and require physical settlement of the common stock at any time prior
to June 29, 2005.&nbsp; The Company also has
the option to extend the maturity date of the contract for a nominal fee.&nbsp; The shares repurchased under the contracts
are intended to be used to offset the potential dilutive impact of the
convertible debt.&nbsp; The Company expects
to enter into forward purchase contracts of approximately $150.0 million during
fiscal 2005.</p>



<p>&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>

<p><b>QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company is exposed to market risk from
changes in interest rates on debt and certain leasing facilities and from
changes in commodity prices.&nbsp; A
discussion of the Company's accounting policies for derivative instruments is
included in the summary of significant accounting policies in the notes to the
consolidated financial statements.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company is exposed to interest rate risk
on short-term and long-term financial instruments carrying variable interest
rates.&nbsp; The Company's variable rate
financial instruments, consisting of the notional amounts of interest rate
swaps, totaled $129.4 million at June 30, 2004.&nbsp; The impact on the Company's annual results of operations of a
one-point interest rate change on the outstanding balance of these variable
rate financial instruments as of June 30, 2004 would be approximately $1.3
million.&nbsp; The Company may from time to
time utilize interest rate swaps to manage overall borrowing costs and reduce
exposure to adverse fluctuations in interest rates.</p>

<hr><P style="page-break-after: always"></P>

<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company purchases certain commodities
such as beef, chicken, flour, and cooking oil. These commodities are generally
purchased based upon market prices established with vendors. These purchase
arrangements may contain contractual features that limit the price paid by
establishing certain price floors or caps.&nbsp;
The Company does not use financial instruments to hedge commodity prices
because these purchase arrangements help control the ultimate cost paid and any
commodity price aberrations are generally short-term in nature.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; This market risk discussion contains
forward-looking statements.&nbsp; Actual
results may differ materially from this discussion based upon general market
conditions and changes in domestic and global financial markets.</p>

<p><b>CRITICAL
ACCOUNTING POLICIES</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Our significant accounting policies are
disclosed in Note 1 to our consolidated financial statements.&nbsp; The following discussion addresses our most
critical accounting policies, which are those that are most important to the
portrayal of our financial condition and results, and that require significant
judgment.</p>



<p>&nbsp;&nbsp; <b>&nbsp; Property
and Equipment</b>&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment are depreciated on a
straight-line basis over the estimated useful lives of the assets.&nbsp; The useful lives of the assets are based
upon the Company's expectations for the period of time that the asset will be
used to generate revenue.&nbsp; The Company
periodically reviews the assets for changes in circumstances, which may impact
their useful lives.</p>



<p>&nbsp;&nbsp; <b>&nbsp; Impairment of Long-Lived Assets</b>&nbsp;
</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company reviews property and equipment for
impairment when events or circumstances indicate that the carrying amount of a
restaurant's assets may not be recoverable.&nbsp;
The Company tests for impairment using historical cash flows and other
relevant facts and circumstances as the primary basis for its estimates of
future cash flows.&nbsp; This process
requires the use of estimates and assumptions, which are subject to a high
degree of judgment.&nbsp; In addition, at
least annually the Company assesses the recoverability of goodwill and other
intangible assets related to its restaurant concepts.&nbsp; These impairment tests require the Company to estimate fair values
of its restaurant concepts by making assumptions regarding future profits and
cash flows, expected growth rates, terminal values, and other factors.&nbsp; In the event that these assumptions change
in the future, the Company may be required to record impairment charges for
these assets.</p>



<p>&nbsp;&nbsp; <b>&nbsp; Financial Instruments</b>&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company enters into
interest rate swaps to maintain the value of certain fixed-rate debt and lease
obligations.&nbsp; The fair value of these
swaps is estimated using widely accepted valuation methods.&nbsp; The valuation of derivatives involves
considerable judgment, including estimates of future interest rate curves.&nbsp; Changes in those estimates may materially
affect the amounts recognized in the balance sheet for the Company's
derivatives and interest costs in future periods.</p>



<p>&nbsp;&nbsp; <b>&nbsp; Self-Insurance</b>&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company is self-insured
for certain losses related to health, general liability and workers'
compensation.&nbsp; The Company maintains
stop loss coverage with third party insurers to limit its total exposure.&nbsp; The self-insurance liability represents an
estimate of the ultimate cost of claims incurred and unpaid as of the balance
sheet date.&nbsp; The estimated liability is
not discounted and is established based upon analysis of historical data and
</p>



<hr><P style="page-break-after: always"></P>



<p>actuarial estimates, and is reviewed by the Company on a quarterly basis to
ensure that the liability is appropriate. If actual trends, including the
severity or frequency of claims, differ from our estimates, our financial
results could be impacted. </p>



<p><b>FORWARD-LOOKING STATEMENTS</b></p>



<p>&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 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>



<blockquote>



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



</blockquote>



<p>&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>



<blockquote>



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



</blockquote>



<p>&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>



<blockquote>



<p><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>



</blockquote>



<p>&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  </p>



<hr><P style="page-break-after: always"></P>



<p>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>&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>&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 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>



<blockquote>



<p><i>Inflation may increase the
Company's operating expenses.</i></p>



</blockquote>



<p>&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>



<blockquote>



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



</blockquote>



<p>&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>



<blockquote>



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



</blockquote>



<p>&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>



<blockquote>



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



</blockquote>
<hr><P style="page-break-after: always"></P>



<p>&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>



<blockquote>



<p><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>



</blockquote>



<p>&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>



<blockquote>



<p><i>Other risk factors may adversely
affect the Company's financial performance.</i></p>



</blockquote>



<p>&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 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>

<hr><P style="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=655 height="779">
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p align=center><b>BRINKER
  INTERNATIONAL, INC.</b></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p align=center><b>CONSOLIDATED
  STATEMENTS OF INCOME</b></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p align=center><b>(In
  thousands, except per share amounts)</b></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <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; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Years&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></b></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">

  </td>
  <td width=92 valign=top height="19">
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp; 2004&nbsp;</u></b></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=center><b><u>&nbsp;&nbsp; 2003&nbsp;</u></b></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=center><b><u>&nbsp;&nbsp; 2002&nbsp;</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(as restated)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (as restated)&nbsp;&nbsp;&nbsp;&nbsp; (as
  restated)</b></p>

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Revenues</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>$3,707,486</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>$3,285,394</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>$2,887,111</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p>Operating
  Costs and Expenses:</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; Cost of sales </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>1,024,724</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>900,379</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>796,714</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; Restaurant expenses </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>2,033,474</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>1,802,639</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>1,585,944</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; Depreciation and amortization </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>175,449</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>158,153</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>130,102</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; General and administrative </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>153,231</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>131,763</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>121,420</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 74,237</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 29,744</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 8,723</u></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp;&nbsp;&nbsp; Total operating costs and expenses </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;3,461,115</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;3,022,678</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>&nbsp; <u>&nbsp;2,642,903</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Operating
  income </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>246,371</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>262,716</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>244,208</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Interest
  expense</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>11,603</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>12,449</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>13,327</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Other,
  net</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,742</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 567</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 2,332&nbsp;
  </u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p>Income before provision for</p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; income taxes</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right>233,026</p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right>249,700</p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right>228,549</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Provision
  for income taxes </p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 82,108</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 83,500&nbsp;&nbsp;&nbsp; </u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 77,904</u></p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp;&nbsp;&nbsp; Net income</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>$&nbsp; 150,918</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>$&nbsp; 166,200</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>$&nbsp; 150,645</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Basic
  net income per share</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.57</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.71</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>Diluted
  net income per share</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.68</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp; 1.50</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p>Basic weighted average </p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 96,072</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 97,096</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 97,862</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p>Diluted weighted average </p>
  </td>
 </tr>
 <tr>
  <td width=343 valign=top height="19">
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=92 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 97,939</u></p>
  </td>
  <td width=108 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 99,135</u></p>
  </td>
  <td width=113 valign=top height="19">
  <p align=right><u>&nbsp;&nbsp; 100,565</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top height="19">
  <p>See accompanying notes to
  consolidated financial statements.</p>
  </td>
 </tr>
</table>



<hr><P style="page-break-after: always"></P>&nbsp;<div>

<table border=1 cellspacing=0 cellpadding=0 width=676 style="border-width: 0">
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p align=center><b>BRINKER
  INTERNATIONAL, INC.</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p align=center><b>CONSOLIDATED
  BALANCE SHEETS</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p align=center><b>(In
  thousands, except share and per share amounts)</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <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; </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp; 2004&nbsp;</u></b></p>
  <p align=center><b>(as restated)</b></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp;&nbsp;2003&nbsp;</u></b></p>
  <p align=center><b>&nbsp; (as restated)</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p><b>ASSETS</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>Current
  Assets:</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Cash and cash equivalents</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp; 226,762</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 33,492</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Accounts receivable </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>37,934</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>36,019</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Inventories</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>38,113</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>24,403</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Prepaid expenses and other</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>74,764</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>73,686</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Deferred income taxes</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 23,347</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 267</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total current assets </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 400,920</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 167,867</u></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;</p>
  <p>Property
  and Equipment, at Cost:</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Land</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>283,777</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>269,212</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Buildings and leasehold improvements </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,354,671</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,245,546</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Furniture and equipment</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>666,415</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>588,815</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Construction-in-progress</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 72,818</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 71,913</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; &nbsp;</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>2,377,681</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>2,175,486</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Less accumulated depreciation and
  amortization </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp; (810,835</u>)</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp; (675,914</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Net property and equipment </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,566,846</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,499,572</u></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  <p>Other
  Assets:</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Goodwill</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>158,068</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>185,068</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Other</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 81,552</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 87,778</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total other assets</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 239,620</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 272,846</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total assets </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$2,207,386</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$1,940,285</u></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p><b>LIABILITIES AND SHAREHOLDERS' EQUITY</b></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>Current
  Liabilities:</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Current installments of long-term debt </p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 18,099</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 17,629</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Accounts payable</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,795</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>108,068</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Accrued liabilities</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>227,225</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp; 177,983</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Income taxes payable</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 37,043</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 7,931</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total current liabilities</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 379,162</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; 311,611</u></p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>Long-term debt, less current
  installments</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>639,291</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>353,785</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>Deferred
  income taxes</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>72,453</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>47,509</p>
  </td>
 </tr>
 <tr>
  <td width=451 valign=top style="border-style: none; border-width: medium">
  <p>Other
  liabilities</p>
  </td>
  <td width=102 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=right>106,058</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,738</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>Commitments
  and Contingencies (Notes 10 and 16)</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>Shareholders'
  Equity:</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Common stock - 250,000,000 authorized
  shares; </p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; $.10 par value; 117,499,541 shares issued </p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; and 90,647,745 shares outstanding at</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; June 30, 2004, and 117,499,541 shares
  issued</p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; and 97,854,952 shares outstanding at June
  25, 2003</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>11,750</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>11,750</p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Additional paid-in capital</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>357,444</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>344,486</p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>Accumulated other
  comprehensive income</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>737</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609</p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Retained earnings</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,261,647</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,110,729</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,631,578</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right>1,467,574</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Less:</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Treasury stock, at cost (26,851,796 shares
  at</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; June 30, 2004 and 19,644,589 shares at </p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  &nbsp;&nbsp; June 25, 2003)</td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align="right">(619,806)</td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align="right">(337,946)</td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; Unearned compensation</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; (1,350</u>)</p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp; (1,986</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total shareholders' equity </p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,010,422</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;1,127,642</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp; Total
  liabilities and shareholders' equity</p>
  </td>
  <td width=96 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$2,207,386</u></p>
  </td>
  <td width=122 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$1,940,285</u></p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top style="border-style: none; border-width: medium">


  <p>See accompanying notes to
  consolidated financial statements.</p>
  </td>
 </tr>
 <tr height=0>
  <td width=451 style="border-style: none; border-width: medium"></td>
  <td width=6 style="border-style: none; border-width: medium"></td>
  <td width=96 style="border-style: none; border-width: medium"></td>
  <td width=122 style="border-style: none; border-width: medium"></td>
 </tr>
</table>



</div><hr><P style="page-break-after: always"></P>&nbsp;<table border=1 cellspacing=0 cellpadding=0 width=788 style="border-width: 0">
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2">BRINKER INTERNATIONAL, INC.</font></b></p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2">CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY</font></b></p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2">(In thousands)</font></b></p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </font> </p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;</p>
  </td>
  <td width=118 colspan=2 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><u><font size="2"><br>
  <br>
  &nbsp;Common Stock&nbsp; </font> </u></b></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2"><br>
  &nbsp;Additional<br>
  Paid-In</font></b></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2"><br>
  <br>
  &nbsp;Retained</font></b></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2"><br>
  <br>
  &nbsp;Treasury</font></b></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2">Accumulated Other<br>
  Comprehensive</font></b></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><font size="2">&nbsp;<br>
  <br>
  Unearned</font></b></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp;</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><u><font size="2">&nbsp;Shares</font></u></b></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <h4><b><font size="2">&nbsp;</font><u><font size="2">Amount </font> </u> </b></h4>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><u><font size="2">&nbsp;Capital </font> </u></b></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=center><b><u><font size="2">&nbsp;Earnings </font> </u></b></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u><b><font size="2">&nbsp; Stock&nbsp;</font></b></u></td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u><b><font size="2">&nbsp; Income&nbsp;</font></b></u></td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <u><b><font size="2">Compensation</font></b></u></td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u><b><font size="2">&nbsp; Total&nbsp;&nbsp;</font></b></u></td>
 </tr>
 <tr>
  <td width=499 colspan=6 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">

  </td>
  <td
  width=73 style="border-style: none; border-width: medium"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Balances
  at June 27, 2001<br>
  (as
  previously reported)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">99,509</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">$11,750</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">$
  314,867</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">$
  801,988</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">$(225,334)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; (895)</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">$&nbsp;&nbsp; (2,089)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2"><br>
  $
  900,287</font></p>

  </td>
 </tr>
 <tr>
  <td width=678 colspan=8 valign=top style="border-style: none; border-width: medium">

  </td>
  <td
  width=73 style="border-style: none; border-width: medium"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Cumulative
  effect of restatement on prior years </font> </p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2"><br>
  _______</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2"><br>
  _________</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2"><br>
&nbsp;&nbsp;&nbsp;&nbsp; (8,104)</font></u></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2"><br>
  _________</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2"><br>
  __________</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2"><br>
  __________</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2"><br>
&nbsp;&nbsp; (8,104)</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Balances
  at June 27, 2001<br>
  (as
  restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">99,509</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp;11,750</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp; 314,867</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp;&nbsp; 793,884</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp; (225,334)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; (895)</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp; &nbsp;&nbsp;&nbsp; (2,089)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align="right"><font size="2">&nbsp;&nbsp;&nbsp; 892,183</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Net
  income (as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">150,645</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">150,645</font></p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Reclassification
  adjustment</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;to earnings, net of tax</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">895</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 895</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=678 colspan=8 valign=top style="border-style: none; border-width: medium">

  </td>
  <td
  width=73 style="border-style: none; border-width: medium"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;Comprehensive income<br>
&nbsp;&nbsp;(as restated) </font> </p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp; 151,540 </font> </u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Purchases of treasury stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(5,058)</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(136,069)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(136,069)</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuances of common stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,890</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(4,602)</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">42,394</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">37,792</font></p>
  </td>
 </tr>
 <tr>
  <td width=678 colspan=8 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Tax
  benefit from stock</font></p>
  </td>
  <td
  width=73 style="border-style: none; border-width: medium"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;options exercised</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">18,826</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">18,826</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Amortization
  of unearned</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;compensation</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">1,594</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">1,594</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuance
  of restricted</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;stock, net of forfeitures</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 99</font></u></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 1,100</font></u></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 1,335</font></u></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;-</font></u></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; (1,377</font></u><font size="2">)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; 1,058 </font> </u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Balances
  at June 26, 2002<br>
  (as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">97,440 </font> </p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">11,750</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">330,191 </font>
  </p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">944,529 </font>
  </p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(317,674)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(1,872)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">966,924</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Net
  income (as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">166,200</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">166,200</font></p>
  </td>
 </tr>
 <tr>
  <td width=751 colspan=9 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Change
  in fair value</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;of investments, net of tax</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">609</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;Comprehensive income<br>
  &nbsp;(as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp; 166,809</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Purchases of treasury stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(2,208)</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(64,477)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(64,477)</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuances of common stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,492</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(1,748)</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">42,048</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">40,300</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Tax
  benefit from stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=center>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;options exercised</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">13,710</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">13,710</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Amortization
  of unearned</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;compensation</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,101</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,101</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuance
  of restricted</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;stock, net of forfeitures</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp; 131</font></u></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 2,333</font></u></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 2,157</font></u></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; (2,215</font></u><font size="2">)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; 2,275</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Balances
  at June 25, 2003<br>
  (as
  restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">97,855 </font> </p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;11,750</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp; 344,486 </font> </p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;1,110,729 </font> </p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;(337,946)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp; (1,986)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;1,127,642</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Net
  income (as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">150,918</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">150,918</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Change
  in fair value</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;of investments, net of tax</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">128</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 128</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;Comprehensive income<br>
  &nbsp;(as restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp; 151,046</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Purchases
  of treasury stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(9,326)</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(322,615)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">(322,615)</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuances
  of common stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,053</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">2,049</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">39,538</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">41,587</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Tax
  benefit from stock</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;options exercised</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp; 9,752</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp; 9,752</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Amortization
  of unearned</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;compensation</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">-</font></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">1,770</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><font size="2">1,770</font></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Issuance
  of restricted</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">&nbsp;stock, net of forfeitures</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 66</font></u></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 1,157</font></u></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; 1,217</font></u></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</font></u></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp; (1,134</font></u><font size="2">)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; 1,240</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top style="border-style: none; border-width: medium">
  <p><font size="2">Balances
  at June 30, 2004<br>
  (as
  restated)</font></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">90,648 </font> </u></p>
  </td>
  <td width=58 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$11,750</font></u></p>
  </td>
  <td width=83 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$
  357,444 </font> </u></p>
  </td>
  <td width=78 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$1,261,647 </font>
  </u></p>
  </td>
  <td width=74 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$(619,806</font></u><font size="2">)</font></p>
  </td>
  <td width=94 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 737</font></u></p>
  </td>
  <td width=85 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$&nbsp;&nbsp; (1,350</font></u><font size="2">)</font></p>
  </td>
  <td width=73 valign=top style="border-style: none; border-width: medium">
  <p align=right><u><font size="2">$1,010,422</font></u></p>
  </td>
 </tr>
 <tr>
  <td width=678 colspan=8 valign=top style="border-style: none; border-width: medium">

  <p><font size="2">See accompanying notes to
  consolidated financial statements.&nbsp; </font> </p>
  </td>
  <td
  width=73 style="border-style: none; border-width: medium"><p>&nbsp;</td>
 </tr>
</table>

<hr><P style="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=703>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p align=center><b>BRINKER INTERNATIONAL, INC.</b></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p align=center><b>CONSOLIDATED STATEMENTS OF CASH
  FLOWS</b></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p align=center><b>(In
  thousands)</b></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=703 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Years&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></b></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>

  </td>
  <td width=90 valign=top>
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp;
  2004&nbsp;</u></b></p>
  </td>
  <td width=90 valign=top>
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp;
  2003&nbsp;</u></b></p>
  </td>
  <td width=90 valign=top>
  <p align="center"><b>&nbsp;<u>&nbsp;&nbsp;
  2002&nbsp;</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>

  </td>
  <td width=90 valign=top>

  </td>
  <td width=90 valign=top>

  </td>
  <td width=90 valign=top>

  </td>
 </tr>
 <tr>
  <td width=433 valign=top>

  </td>
  <td width=90 valign=top>
  <p align=center><b>(as restated)</b></p>
  </td>
  <td width=90 valign=top>
  <p><b>(as restated)</b></p>
  </td>
  <td width=90 valign=top>
  <p><b>(as restated)</b></p>
  </td>
 </tr>
 <tr>
  <td width=703 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=90 valign=top>
  <p align=right>$ 150,918</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$ 166,200</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$ 150,645</p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p>Adjustments
  to reconcile net income to net cash</p>
  </td>
 </tr>
 <tr>
  <td width=703 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=90 valign=top>
  <p align=right>175,449</p>
  </td>
  <td width=90 valign=top>
  <p align=right>158,153</p>
  </td>
  <td width=90 valign=top>
  <p align=right>130,102</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Restructure charges and other
  impairments</p>
  </td>
  <td width=90 valign=top>
  <p align=right>74,237</p>
  </td>
  <td width=90 valign=top>
  <p align=right>29,744</p>
  </td>
  <td width=90 valign=top>
  <p align=right>8,723</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Deferred
  income taxes</p>
  </td>
  <td width=90 valign=top>
  <p align=right>1,467</p>
  </td>
  <td width=90 valign=top>
  <p align=right>37,743</p>
  </td>
  <td width=90 valign=top>
  <p align=right>22,934</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp; Amortization of deferred
  costs</p>
  </td>
  <td width=90 valign=top>
  <p align=right>9,318</p>
  </td>
  <td width=90 valign=top>
  <p align=right>11,721</p>
  </td>
  <td width=90 valign=top>
  <p align=right>8,252</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Gain on sale of assets</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(2,452)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p>&nbsp;&nbsp; Changes in
  assets and liabilities, excluding</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>effects of acquisitions and dispositions:</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(2,515)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(8,956)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>6,138</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(14,047)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(2,726)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>2,863</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid
  expenses and other</p>
  </td>
  <td width=90 valign=top>
  <p align=right>2,182</p>
  </td>
  <td width=90 valign=top>
  <p align=right>392</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(3,467)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other
  assets</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(3,146)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>2,474</p>
  </td>
  <td width=90 valign=top>
  <p align=right>3,640</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current
  income taxes</p>
  </td>
  <td width=90 valign=top>
  <p align=right>38,864</p>
  </td>
  <td width=90 valign=top>
  <p align=right>37,314</p>
  </td>
  <td width=90 valign=top>
  <p align=right>6,172</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(11,273)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(10,350)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>19,982</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued
  liabilities</p>
  </td>
  <td width=90 valign=top>
  <p align=right>43,645</p>
  </td>
  <td width=90 valign=top>
  <p align=right>14,603</p>
  </td>
  <td width=90 valign=top>
  <p align=right>29,006&nbsp;&nbsp; </p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other
  liabilities</p>
  </td>
  <td width=90 valign=top>
  <p><u>&nbsp;&nbsp; 18,576</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; 12,559</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 5,718</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash provided by operating activities</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 481,223</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 448,871</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; 390,708</u></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=703 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=90 valign=top>
  <p align=right>(305,863)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(326,525)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(371,052)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Proceeds from sale of assets</p>
  </td>
  <td width=90 valign=top>
  <p align=right>22,235</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Issuance of loan to affiliate</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(2,800)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(4,000)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(1,000)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net repayments of advances to
  affiliates </p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 548</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 372</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 708</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Repayment of notes receivable
  from affiliate</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
  <td width=90 valign=top>
  <p align=right>11,000</p>
  </td>
  <td width=90 valign=top>
  <p align=right>325</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Investments in equity method
  investee</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(1,750)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(12,322)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Payments for purchases of
  restaurants</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp; (60,491)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Proceeds from sale of affiliate</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; 4,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  cash used in investing activities</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;(285,880</u>)</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;(320,903</u>)</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;(439,832</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>
  <p>Cash Flows from Financing Activities:</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net proceeds from issuance of
  debt</p>
  </td>
  <td width=90 valign=top>
  <p align=right>296,075</p>
  </td>
  <td width=90 valign=top>
  <p align=right>-</p>
  </td>
  <td width=90 valign=top>
  <p align=right>244,288</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Payments of long-term debt </p>
  </td>
  <td width=90 valign=top>
  <p align=right>(17,120)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(16,890)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(16,908)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Purchases of treasury stock</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;(322,615)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;(64,477)</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(136,069)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Proceeds from issuances of
  treasury stock</p>
  </td>
  <td width=90 valign=top>
  <p align=right>41,587</p>
  </td>
  <td width=90 valign=top>
  <p align=right>40,300</p>
  </td>
  <td width=90 valign=top>
  <p align=right>37,792</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net payments on credit
  facilities </p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; (63,500</u>)</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp; (83,200</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net cash (used in) provided by
  financing</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; activities</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; (2,073</u>)</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;(104,567</u>)</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; 45,903</u></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Net change in cash and cash
  equivalents</p>
  </td>
  <td width=90 valign=top>
  <p align=right>193,270</p>
  </td>
  <td width=90 valign=top>
  <p align=right>23,401</p>
  </td>
  <td width=90 valign=top>
  <p align=right>(3,221)</p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Cash and cash equivalents at
  beginning of year</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; 33,492</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; 10,091</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>&nbsp;&nbsp; 13,312</u></p>
  </td>
 </tr>
 <tr>
  <td width=433 valign=top>
  <p>Cash and cash equivalents at end
  of year</p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>$ 226,762</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>$&nbsp; 33,492</u></p>
  </td>
  <td width=90 valign=top>
  <p align=right><u>$&nbsp; 10,091 </u></p>
  </td>
 </tr>
 <tr>
  <td width=703 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=703 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</b></p>

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





<p><b>1.&nbsp; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>



<p><b>(a) Basis of Presentation</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The consolidated financial statements include the accounts
of Brinker International, Inc. and its wholly-owned subsidiaries (the
&quot;Company&quot;). All intercompany accounts and transactions have been eliminated in
consolidation. The Company owns and operates, franchises, and is involved in
the ownership of various restaurant concepts principally located in the United
States. Investments in unconsolidated affiliates in which the Company exercises
significant influence, but does not control, are accounted for by the equity
method, and the Company's share of the net income or loss of the investees is
included in other, net in the consolidated statements of income.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company has a 52/53 week fiscal year
ending on the last Wednesday in June. Fiscal year 2004, which ended on June 30,
2004, contained 53 weeks while fiscal years 2003 and 2002, which ended on June
25, 2003 and June 26, 2002, respectively, each contained 52 weeks.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Certain prior year amounts in the
accompanying consolidated financial statements have been reclassified to
conform with fiscal 2004 presentation.&nbsp;
These reclassifications have no effect on the Company's net income or
financial position as previously reported.</p>



<p><b>(b) Revenue Recognition</b></p>



<p>&nbsp;&nbsp; &nbsp; The Company records revenue from the sale of
food, beverage and alcohol as products are sold.&nbsp; Initial fees received from a franchisee to establish a new
franchise are recognized as income when the Company has performed its
obligations required to assist the franchisee in opening a new franchise
restaurant, which is generally upon opening of such restaurant.&nbsp; Continuing royalties, which are a percentage
of net sales of franchised restaurants, are accrued as income when earned.&nbsp; Proceeds from the sale of gift cards are
recorded as deferred revenue and recognized as income when redeemed by the
holder.&nbsp; </p>



<p><b>(c) Financial Instruments</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company's policy is to invest cash in
excess of operating requirements in income&#8209;producing investments.
Income-producing investments with maturities of three months or less at the
time of investment are reflected as cash equivalents. </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company's financial instruments at June
30, 2004 and June 25, 2003 consist of cash equivalents, accounts receivable,
notes receivable, and long-term debt. The fair value of the Company's
convertible debt, based on quoted market prices, totaled approximately $287.0
million and $308.3 million at June 30, 2004 and June 25, 2003, respectively.&nbsp; The fair value of all other financial
instruments approximates the carrying amounts reported in the consolidated
balance sheets. The following methods were used in estimating the fair value of
financial instruments other than the convertible debt: cash equivalents and
accounts receivable approximate their carrying amounts due to the short
duration of those items; notes receivable are based on the present value of
expected future cash flows discounted at the interest rate currently offered by
the Company which approximates rates currently being offered by local lending
institutions for loans of similar terms to companies with comparable credit
risk; and long-term debt is based on the amount of future cash flows discounted
using the Company's expected borrowing rate for debt of comparable risk and
maturity.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company's use of derivative instruments
is primarily related to interest rate swaps, which are entered into with the
intent of hedging exposures to changes in value of certain fixed-rate debt and
lease obligations.&nbsp; The Company records
all derivative instruments in the consolidated balance sheet at fair
value.&nbsp; The accounting for </p>

<hr><P style="page-break-after: always"></P>



<p>the gain or
loss due to changes in fair value of the derivative instrument depends on
whether the derivative instrument qualifies as a hedge.&nbsp; If the derivative instrument does not
qualify as a hedge, the gains or losses are reported in earnings when they
occur. However, if the derivative instrument qualifies as a hedge, the
accounting varies based on the type of risk being hedged.&nbsp; Amounts receivable or payable under interest
rate swaps related to the hedged debt and lease obligations are recorded as
adjustments to interest expense and restaurant expenses, respectively. Cash
flows related to derivative transactions are included in operating activities.
See Notes 8 and 9 for additional discussion of debt-related agreements and
hedging activities.</p>

<p><b>(d) Inventories</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories, which consist of food,
beverages, and supplies, are stated at the lower of cost (weighted average cost
method) or market.</p>

<p><b>(e) Property and Equipment</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buildings and leasehold improvements are
amortized using the straight&#8209;line method over the lesser of the life of
the lease, including renewal options, or the estimated useful lives of the
assets, which range from 4 to 20 years. Furniture and equipment are depreciated
using the straight&#8209;line method over the estimated useful lives of the
assets, which range from 3 to 10 years.</p>



<p>&nbsp; &nbsp;&nbsp;&nbsp; The Company evaluates property and equipment
held and used in the business for impairment whenever events or changes in
circumstances indicate that the carrying amount of a restaurant's assets may
not be recoverable. An impairment is determined by comparing estimated
undiscounted future operating cash flows for a restaurant to the carrying
amount of its assets. If an impairment exists, the amount of impairment is
measured as the excess of the carrying amount over the estimated discounted
future operating cash flows of the asset and the expected proceeds upon sale of
the asset.&nbsp; Assets held for sale are
reported at the lower of carrying amount or fair value less costs to sell.</p>

<p><b>(f) Capitalized Interest</b></p>

<p>&nbsp;&nbsp; &nbsp;&nbsp; Interest costs capitalized during the
construction period of restaurants were approximately $3.4 million, $5.6
million, and $4.5 million during fiscal 2004, 2003, and 2002, respectively.</p>



<p><b>(g) Advertising</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Advertising costs are expensed as
incurred.&nbsp; Advertising costs were $151.3
million, $135.2 million, and $116.6 million in fiscal 2004, 2003, and 2002,
respectively, and are included in restaurant expenses in the consolidated
statements of income.</p>



<p><b>(h) Goodwill and Other Intangible Assets </b></p>



<p>&nbsp;&nbsp; &nbsp;&nbsp; Intangible assets include both goodwill and
identifiable intangibles arising from the allocation of the purchase prices of
assets acquired.&nbsp; Goodwill represents
the residual purchase price after allocation to all other identifiable net
assets acquired. Other intangibles consist mainly of intellectual
property.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill is not subject to amortization but
is tested for impairment annually or more frequently if events or changes in
circumstances indicate that the asset might be impaired.&nbsp; Statement of Financial Accounting Standards
(&quot;SFAS&quot;) No. 142, &quot;Goodwill and Other Intangible Assets,&quot; requires a two-step
process for testing impairment of goodwill.&nbsp;
First, the fair value of each reporting unit is compared to its carrying
value to determine whether an indication of impairment exists.&nbsp; If an impairment is indicated, then the fair
value of the reporting unit's goodwill is determined by allocating the unit's fair
value to its assets and liabilities (including any unrecognized intangible
assets) as if the reporting unit had been acquired in a business
combination.&nbsp; The amount of impairment
for goodwill is measured as the excess of its carrying value over its implied
fair value.&nbsp; Intangible assets with
lives  </p>



<hr><P style="page-break-after: always"></P>



<p>restricted by contractual, legal, or other means are amortized over their
useful lives and consist primarily of intellectual property. Amortization
expense is calculated using the straight-line method over their estimated
useful lives of 15 to 20 years.&nbsp; See
Note 5 for additional disclosures related to goodwill and other intangibles.</p>



<p><b>(i) Self-Insurance Program</b></p>



<p>&nbsp;&nbsp; &nbsp; The Company utilizes a
paid loss self-insurance plan for health, general liability and workers' compensation
coverage.&nbsp; Predetermined loss limits
have been arranged with insurance companies to limit the Company's per
occurrence cash outlay.&nbsp; Additionally,
in fiscal 2002, the Company entered into a guaranteed cost agreement with an
insurance company to eliminate all future general liability losses for that
fiscal year.&nbsp; Accrued expenses and other
liabilities include the estimated incurred but unreported costs to settle
unpaid claims and estimated future claims. </p>



<p><b>(j) Income Taxes</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.</p>



<p><b>(k)
Stock-Based Compensation </b></p>



<p>&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 SFAS 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>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp;
  2004&nbsp;</u></p>
  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp;
  2003&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp;
  2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=center>(as restated)</p>
  </td>
  <td width=102 valign=top>
  <p align=center>(as restated)</p>
  </td>
  <td width=96 valign=top>

  <p align="center">(as
  restated)</p>

  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p><br>
  Net income
  - as reported </p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  $150,918</p>
  </td>
  <td width=102 valign=top>
  <p align=right><br>
  $166,200</p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  $150,645 </p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Add:
  Reported stock-based compensation <br>
&nbsp;&nbsp;&nbsp; expense, net of taxes</p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  1,756</p>
  </td>
  <td width=102 valign=top>
  <p align=right><br>
  1,863</p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  2,285</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Deduct: Fair value based
  compensation <br>
&nbsp;&nbsp;&nbsp; expense, net of taxes</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u><br>
  &nbsp;(18,663</u>)</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u><br>
  &nbsp;(17,697</u>)</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u><br>
  &nbsp;(17,195</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Net
  income - pro forma</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$134,011</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$150,366</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;<u>$135,735 </u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Earnings
  per share:</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Basic
  - as reported </p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.57</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.71</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.54</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Basic
  - pro forma</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.39</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.55</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.39</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Diluted
  - as reported</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.68</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.50 </u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Diluted
  - pro forma</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.37</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.52</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$&nbsp;&nbsp; 1.33 </u></p>
  </td>
 </tr>
</table>

<hr><P style="page-break-after: always"></P>&nbsp;<p>&nbsp;&nbsp;&nbsp;&nbsp; The weighted average fair
value of option grants was $11.38, $10.76, and $10.66 during fiscal 2004, 2003,
and 2002, respectively.&nbsp; The fair value
is estimated using the Black-Scholes option-pricing model with the following
weighted average assumptions:</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align="center">&nbsp;<u>&nbsp;2004&nbsp;</u></p>
  </td>
  <td width=102 valign=top>
  <p align="center">&nbsp;<u>&nbsp;2003&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp; 2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Expected
  volatility</p>
  </td>
  <td width=96 valign=top>
  <p align=right>33.0%</p>
  </td>
  <td width=102 valign=top>
  <p align=right>34.0%</p>
  </td>
  <td width=96 valign=top>
  <p align=right>35.5%</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Risk-free
  interest rate</p>
  </td>
  <td width=96 valign=top>
  <p align=right>3.4%</p>
  </td>
  <td width=102 valign=top>
  <p align=right>3.0%</p>
  </td>
  <td width=96 valign=top>
  <p align=right>4.1%</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Expected
  lives</p>
  </td>
  <td width=96 valign=top>
  <p align=right>5 years</p>
  </td>
  <td width=102 valign=top>
  <p align=right>5 years</p>
  </td>
  <td width=96 valign=top>
  <p align=right>5 years</p>
  </td>
 </tr>
 <tr>
  <td width=361 valign=top>
  <p>Dividend
  yield</p>
  </td>
  <td width=96 valign=top>
  <p align=right>0.0%</p>
  </td>
  <td width=102 valign=top>
  <p align=right>0.0%</p>
  </td>
  <td width=96 valign=top>
  <p align=right>0.0%</p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The pro forma disclosures provided are not
likely to be representative of the effects on reported net income for future
years due to future grants.</p>



<p><b>(l)
Comprehensive Income</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.&nbsp; Fiscal 2004 and 2003 comprehensive income consists of net income and the unrealized portion of changes in the fair value of the Company's investments in mutual funds.&nbsp; Fiscal 2002 comprehensive income consists of net income and the effective unrealized portion of changes in the fair value of the Company's cash flow
hedges.</p>

<p><b>(m)
Net Income Per Share</b></p>



<p>&nbsp; &nbsp;&nbsp;&nbsp; Basic earnings per share is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the reporting period.&nbsp; Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock.&nbsp; For the calculation of diluted net income
per share, the basic weighted average number of shares is increased by the
dilutive effect of stock options determined using the treasury stock
method.&nbsp; The Company had approximately
700,000, 1.4 million, and 1.9 million stock options outstanding at June 30,
2004, June 25, 2003, and June 26, 2002, respectively, that were not included in
the dilutive earnings per share calculation because the effect would have been
antidilutive.&nbsp; The Company's
contingently convertible debt securities are not considered for purposes of
diluted earnings per share unless the required conversion criteria have been
met.</p>



<p><b>(n) Segment
Reporting</b></p>



<p>&nbsp; &nbsp;&nbsp; Operating segments are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.&nbsp; The Company identifies operating segments based on management
responsibility and believes it meets the criteria for aggregating its operating
segments into a single reporting segment. </p>

<p><b>(o)
Use of Estimates</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The preparation of the consolidated
financial statements in conformity with generally accepted accounting
principles in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues
and costs and expenses during the reporting period. Actual results could differ
from those estimates.</p>



<hr><P style="page-break-after: always"></P>

<p><b>2.&nbsp; RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS</b></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company has corrected its computation of
straight-line rent expense and the related deferred rent liability.&nbsp; Historically, when accounting for leases
with renewal options, rent expense has been recorded on a straight-line basis
over the initial non-cancelable lease term. Buildings and leasehold
improvements on those properties are depreciated over a period equal to the
shorter of the term of the lease, including option periods provided for in the
lease, or the useful life of the assets. The Company has determined that it
should recognize rent expense on a straight-line basis over sufficient renewal
periods to equal or exceed the depreciable life of the assets, including cancelable option
periods where failure to exercise such options would result in an economic
penalty. </p>



<p>&nbsp;&nbsp; &nbsp; The Company also evaluated the accounting of
an intangible asset related to franchise rights acquired in fiscal 1998 and has
determined that it would have been more appropriate to expense the purchase
price of the franchise rights. </p>



<p>&nbsp;&nbsp; &nbsp; As a result of the above items, the
cumulative effect of the restatement through fiscal 2004 was an increase in the
deferred rent liability of approximately $20.7 million and a decrease in
intangible franchise rights of $4.4 million. In addition, the deferred income
tax liability at the end of fiscal 2004 decreased by approximately $9.4
million, and retained earnings at the end of fiscal 2004 decreased by
approximately $15.7 million. The cumulative effect of the restatement through
fiscal 2003 was an increase in the deferred rent liability of approximately
$15.8 million and a decrease in intangible franchise rights of $4.4 million. In
addition, the deferred income tax liability at the end of fiscal 2004 decreased
by approximately $7.6 million, and retained earnings at the end of fiscal 2004
decreased by approximately $12.6 million. Rent expense for fiscal years ended
2002, 2003 and 2004 increased by approximately $3.3 million, $3.9 million and
$4.9 million, respectively.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The restatement decreased diluted net
earnings per share by approximately $0.02, $0.02 and $0.03 for the fiscal years
ended 2002, 2003 and 2004, respectively.&nbsp;
The restatement does not have any impact on the Company's previously
reported cash flows, sales or comparable store sales or compliance with any
covenant under its credit facility or other debt instruments. </p><hr><P style="page-break-after: always"></P>




<p>&nbsp;&nbsp;&nbsp;&nbsp; The impacts of these restatements on the
consolidated financial statements are summarized below:</p>



<table border=0 cellspacing=0 cellpadding=0 width=681>
 <tr>
  <td width=664 colspan=5 valign=top>
  <p align="center">CONSOLIDATED BALANCE SHEET</td>
 </tr>
 <tr>
  <td width=664 colspan=5 valign=top>
  <p align="center">SUMMARY OF RESTATEMENT
  IMPACTS</td>
 </tr>
 <tr>
  <td width=664 colspan=5 valign=top>
  <p align="center">AS OF JUNE 30, 2004</td>
 </tr>
 <tr>
  <td width=664 colspan=5 valign=top>
  <p align=center>(In thousands)</p>
  </td>
 </tr>
 <tr>
  <td width=301 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>ASSETS</p>
  </td>
  <td width=121 valign=top>
  <p align="center">&nbsp;<u>AS REPORTED</u></p>
  </td>
  <td width=123 valign=top>
  <p align=center><u>ADJUSTMENTS</u></p>
  </td>
  <td width=128 valign=top>
  <p align="center"><u>AS
  RESTATED</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Current
  Assets:</p>
  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Cash and
  cash equivalents</p>
  </td>
  <td width=121 valign=top>
  <p align="right">$&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;
  226,762</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 226,762
  </p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Accounts
  receivable</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  37,934</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp; 37,934</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Inventories</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  38,113</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp; 38,113</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Prepaid
  expenses and other</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  74,764</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp; 74,764</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Deferred
  income taxes</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  23,347</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp; 23,347</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  current assets</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;
  400,920</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp; 400,920</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Property
  and Equipment, at Cost:</p>
  </td>
  <td width=121 valign=top>
  <p>&nbsp;&nbsp; </p>
  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>
  <p>&nbsp;&nbsp; </p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Land</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;
  283,777</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp; 283,777</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Buildings and leasehold improvements</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;
  1,354,671</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp; 1,354,671</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Furniture and equipment</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;
  666,415</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp; 666,415</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Construction-in-process</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  72,818</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp; 72,818</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>

  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;
  2,377,681</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp; 2,377,681</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Less
  accumulated depreciation and<br>
  &nbsp;&nbsp;&nbsp;&nbsp;
  amortization</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; (810,835</u>)</p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u><br>
  &nbsp;&nbsp;&nbsp; (810,835</u>)</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Net
  property and equipment</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;
  1,566,846</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp; 1,566,846</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Other
  Assets:</p>
  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Goodwill</p>
  </td>
  <td width=121 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;
  158,068</p>
  </td>
  <td width=123 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top>
  <p align="right">&nbsp;&nbsp;&nbsp; 158,068</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Other</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  85,957</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp; 81,552</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  other assets</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp;&nbsp;
  244,025</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp; 239,620</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Total
  assets</p>
  </td>
  <td width=121 valign=top>
  <p align="right"><u>$&nbsp;
  2,211,791</u></p>
  </td>
  <td width=123 valign=top>
  <p align="right"><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=128 valign=top>
  <p align="right"><u>$ 2,207,386</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>

  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>LIABILITIES AND SHAREHOLDERS' EQUITY</p>
  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Current
  Liabilities:</p>
  </td>
  <td width=121 valign=top>

  </td>
  <td width=123 valign=top>

  </td>
  <td width=128 valign=top>

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Current
  installments of long-term debt</p>
  </td>
  <td width=121 valign=top align="right">
  <p>$&nbsp;&nbsp;&nbsp;&nbsp;
  18,099</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>$&nbsp;&nbsp;&nbsp; 18,099</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  96,795</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 96,795</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Accrued
  liabilities</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;
  227,225</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; 227,225</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Income
  taxes payable</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  37,043</u></p>
  </td>
  <td width=123 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp; 37,043</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  current liabilities</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;
  379,162</u></p>
  </td>
  <td width=123 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp; 379,162</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Long-term
  debt, less current<br>
  &nbsp;&nbsp;&nbsp;&nbsp;
  installments </p>
  </td>
  <td width=121 valign=top align="right">

  <p>&nbsp;&nbsp;&nbsp;&nbsp;
  <br>
  639,291</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp; &nbsp;&nbsp;<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
  </td>
  <td width=128 valign=top align="right">

  <p>&nbsp;&nbsp;&nbsp; <br>
  639,291</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Deferred
  income taxes</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  81,902</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; (9,449)</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 72,453</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Other
  liabilities</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  85,363</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 20,695</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; 106,058</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>

  </td>
  <td width=121 valign=top align="right">

  </td>
  <td width=123 valign=top align="right">

  </td>
  <td width=128 valign=top align="right">

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;
  Shareholders' Equity:</p>
  </td>
  <td width=121 valign=top align="right">

  </td>
  <td width=123 valign=top align="right">

  </td>
  <td width=128 valign=top align="right">

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Common
  stock</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  11,750</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 11,750</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Additional paid-in capital</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;
  357,444</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; 357,444</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;
  Accumulated other comprehensive income</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  737</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 737</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Retained
  earnings</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u>&nbsp;&nbsp;
  1,277,298</u></p>
  </td>
  <td width=123 valign=top align="right">
  <p><u>&nbsp;&nbsp; (15,651</u>)</p>
  </td>
  <td width=128 valign=top align="right">
  <p><u>&nbsp; 1,261,647</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>

  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;
  1,647,229</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp; (15,651)</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp; 1,631,578</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Less:</p>
  </td>
  <td width=121 valign=top align="right">

  </td>
  <td width=123 valign=top align="right">

  </td>
  <td width=128 valign=top align="right">

  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Treasury
  stock, at cost</p>
  </td>
  <td width=121 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; (619,806)</p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=128 valign=top align="right">
  <p>&nbsp;&nbsp; (619,806)</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp; Unearned
  compensation</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,350</u>)</p>
  </td>
  <td width=123 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=128 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp; (1,350</u>)</p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  shareholders' equity</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u>&nbsp;&nbsp;
  1,026,073</u></p>
  </td>
  <td width=123 valign=top align="right">
  <p><u>&nbsp;&nbsp; (15,651</u>)</p>
  </td>
  <td width=128 valign=top align="right">
  <p><u>&nbsp; 1,010,422</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=301 valign=top>
  <p>&nbsp; Total
  liabilities and shareholders'<br>
  &nbsp;&nbsp;&nbsp;&nbsp; equity</p>
  </td>
  <td width=121 valign=top align="right">
  <p><u><br>
  &nbsp;$&nbsp;
  2,211,791</u></p>
  </td>
  <td width=123 valign=top align="right">
  <p><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=128 valign=top align="right">
  <p><u><br>
  &nbsp;$ 2,207,386</u></p>
  </td>
  <td
  width=8><p>&nbsp;</td>
 </tr>
</table><hr><P style="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=682 height="571">
 <tr>
  <td width=676 colspan=4 valign=top align="center" height="19">
  CONSOLIDATED BALANCE SHEET</td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top align="center" height="20">
  SUMMARY OF RESTATEMENT
  IMPACTS</td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top align="center" height="19">
  AS OF JUNE 25, 2003</td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top align="center" height="19">
  <p align=center>(In thousands)</p>
  </td>
 </tr>
 <tr>
  <td width=676 colspan=4 valign=top height="19">
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">

  </td>
  <td width=117 valign=top height="19">

  </td>
  <td width=130 valign=top height="19">

  </td>
  <td width=112 valign=top height="19">

  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="38">
  <p>ASSETS</p>
  </td>
  <td width=117 valign=top height="38" align="right">
  <p align="center"><u>AS
  REPORTED</u></p>
  </td>
  <td width=130 valign=top height="38" align="right">
  <p align=center><u>ADJUSTMENTS</u></p>
  </td>
  <td width=112 valign=top height="38" align="right">
  <p align=center>&nbsp;<u>AS RESTATED</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp; Current
  Assets:</p>
  </td>
  <td width=117 valign=top height="19" align="right">

  </td>
  <td width=130 valign=top height="19" align="right">

  </td>
  <td width=112 valign=top height="19" align="right">

  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Cash and
  cash equivalents</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>$&nbsp;&nbsp;&nbsp;&nbsp;
  33,492</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 33,492</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Accounts
  receivable</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  36,019</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36,019</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;
  Inventories</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  24,403</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24,403</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Prepaid
  expenses and other</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  73,686</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 73,686</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Deferred
  income taxes</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  267</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 267</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total current
  assets</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;
  167,867</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 167,867</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp; Property
  and Equipment, at Cost:</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp; </p>
  </td>
  <td width=130 valign=top height="19" align="right">

  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp; </p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Land</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;
  269,212</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 269,212</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;
  Buildings and leasehold improvements</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;
  1,245,546</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp; 1,245,546</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;
  Furniture and equipment</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 588,815</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 588,815</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;
  Construction-in-process</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  71,913</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 71,913</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">

  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;
  2,175,486</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp; 2,175,486</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="57">
  <p>&nbsp;&nbsp; Less
  accumulated depreciation and <br>
  &nbsp;&nbsp;&nbsp;&nbsp;
  amortization</p>
  </td>
  <td width=117 valign=top height="57" align="right">
  <p><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; (675,914</u>)</p>
  </td>
  <td width=130 valign=top height="57" align="right">
  <p><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=112 valign=top height="57" align="right">
  <p align=right><u><br>
  &nbsp;&nbsp;&nbsp;&nbsp; (675,914</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Net
  property and equipment</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;
  1,499,572</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp; 1,499,572</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp; Other
  Assets:</p>
  </td>
  <td width=117 valign=top height="19" align="right">

  </td>
  <td width=130 valign=top height="19" align="right">

  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Goodwill</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;
  185,068</p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 185,068</p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp; Other</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  92,183</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 87,778</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  other assets</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;
  277,251</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 272,846</u></p>
  </td>
 </tr>
 <tr>
  <td width=317 valign=top height="19">
  <p>&nbsp; Total
  assets</p>
  </td>
  <td width=117 valign=top height="19" align="right">
  <p><u>$&nbsp;
  1,944,690</u></p>
  </td>
  <td width=130 valign=top height="19" align="right">
  <p><u>&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=112 valign=top height="19" align="right">
  <p align=right><u>$&nbsp; 1,940,285</u></p>
  </td>
 </tr>
</table>



<table border=0 cellspacing=0 cellpadding=0 width=681>
 <tr>
  <td width=318 valign=top>

  </td>
  <td width=119 valign=top>

  </td>
  <td width=130 valign=top>

  </td>
  <td width=114 valign=top>

  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>LIABILITIES AND SHAREHOLDERS' EQUITY</p>
  </td>
  <td width=119 valign=top>

  </td>
  <td width=130 valign=top>

  </td>
  <td width=114 valign=top>

  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp; Current
  Liabilities:</p>
  </td>
  <td width=119 valign=top>

  </td>
  <td width=130 valign=top>

  </td>
  <td width=114 valign=top>

  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Current
  installments of long-term debt</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 17,629</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 17,629</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Accounts
  payable</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 108,068</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 108,068</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Accrued
  liabilities</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 177,983</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 177,983</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Income
  taxes payable</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,931</u></p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,931</u></p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  current liabilities</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 311,611</u></p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 311,611</u></p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp; Long-term
  debt, less current<br>
  &nbsp;&nbsp;&nbsp;&nbsp;
  installments  </p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
  353,785</p>
  </td>
  <td width=130 valign=top align="right">
  <p><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><br>
  &nbsp;&nbsp;&nbsp;&nbsp; 353,785</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp; Deferred
  income taxes</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 55,096</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; (7,587)</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 47,509</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp; Other
  liabilities</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 83,948</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; 15,790</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 99,738</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>

  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=130 valign=top align="right">

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;
  Shareholders' Equity:</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=130 valign=top align="right">

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Common
  stock</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,750</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,750</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp;
  Additional paid-in capital</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 344,486</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 344,486</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp;
  Accumulated other comprehensive income</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Retained
  earnings</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp; 1,123,337</u></p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp; (12,608</u>)</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp; 1,110,729</u></p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>

  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp; 1,480,182</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; (12,608)</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp; 1,467,574</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Less:</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=130 valign=top align="right">

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Treasury
  stock, at cost</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp; (337,946)</p>
  </td>
  <td width=130 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp; (337,946)</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp; Unearned
  compensation</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,986</u>)</p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,986</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; Total
  shareholders' equity</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp; 1,140,250</u></p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp; (12,608</u>)</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp; 1,127,642</u></p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>
  <p>&nbsp; Total
  liabilities and shareholders'<br>
  &nbsp;&nbsp;&nbsp;&nbsp; equity</p>
  </td>
  <td width=119 valign=top align="right">
  <p align=right><u>&nbsp;$&nbsp; 1,944,690</u></p>
  </td>
  <td width=130 valign=top align="right">
  <p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4,405</u>)</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;$&nbsp; 1,940,285</u></p>
  </td>
 </tr>
 <tr>
  <td width=318 valign=top>

  </td>
  <td width=119 valign=top>

  </td>
  <td width=130 valign=top>

  </td>
  <td width=114 valign=top>

  </td>
 </tr>
</table>





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




<table border=0 cellspacing=0 cellpadding=0 width=671>
 <tr>
  <td width=659 colspan=5 valign=top align="center">
  CONSOLIDATED STATEMENT OF INCOME</td>
 </tr>
 <tr>
  <td width=659 colspan=5 valign=top align="center">
  SUMMARY OF RESTATEMENT
  IMPACTS</td>
 </tr>
 <tr>
  <td width=659 colspan=5 valign=top align="center">
  FOR THE YEAR ENDED JUNE 30,
  2004</td>
 </tr>
 <tr>
  <td width=659 colspan=5 valign=top>
  <p align=center>(In thousands, except per share amounts)</p>
  </td>
 </tr>
 <tr>
  <td width=659 colspan=5 valign=top>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=left><u>AS
  REPORTED</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>ADJUSTMENTS</u></p>
  </td>
  <td width=120 valign=top>
  <p align=right><u>AS
  RESTATED</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top>

  </td>
  <td width=120 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Revenues</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$
  3,707,486</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>$
  3,707,486</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Operating
  Costs and Expenses:</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; Cost of sales </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>1,024,724</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>1,024,724</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; Restaurant expenses </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>2,028,569</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>4,905</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>2,033,474</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; Depreciation and amortization </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>175,449</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>175,449</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; General and administrative</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 153,231</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>153,231</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 74,237</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</u></p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 74,237</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp;&nbsp; Total operating costs and expenses </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp; 3,456,210</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,905</u></p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>&nbsp; 3,461,115</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=center>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Operating
  income </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>251,276</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4,905)</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>246,371</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Interest
  expense</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>11,603</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>11,603</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Other,
  net</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,742</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </u></p>
  </td>
  <td width=120 valign=top align="right">
  <p align=center>&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,742</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Income
  before tax expense</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>237,931</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; (4,905)</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>233,026</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Income
  tax expense </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;<u>&nbsp;&nbsp;&nbsp;
  (83,970</u>)</p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,862</u></p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp; (82,108</u>)</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; &nbsp;Net
  income</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 153,961</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(3,043</u>)</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 150,918</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Basic
  net income per share</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.60</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.03</u>)</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.57</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Diluted
  net income per share</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.57</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.03</u>)</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Basic
  weighted average</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 96,072</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 96,072</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Diluted
  weighted average </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,939</u></p>
  </td>
  <td width=102 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=120 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,939</u></p>
  </td>
  <td
  width=16><p>&nbsp;</td>
 </tr>
</table>



<p>&nbsp;</p>



<table border=0 cellspacing=0 cellpadding=0 width=673>
 <tr>
  <td width=673 colspan=5 valign=top align="center">
  CONSOLIDATED STATEMENT OF INCOME</td>
 </tr>
 <tr>
  <td width=673 colspan=5 valign=top align="center">
  SUMMARY OF RESTATEMENT
  IMPACTS</td>
 </tr>
 <tr>
  <td width=673 colspan=5 valign=top align="center">
  FOR THE YEAR ENDED JUNE 25,
  2003</td>
 </tr>
 <tr>
  <td width=673 colspan=5 valign=top>
  <p align=center>(In thousands, except per share amounts)</p>
  </td>
 </tr>
 <tr>
  <td width=673 colspan=5 valign=top>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=280 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=center><u>AS
  REPORTED</u></p>
  </td>
  <td width=143 valign=top>
  <p align=center><u>ADJUSTMENTS</u></p>
  </td>
  <td width=131 valign=top>
  <p align=center><u>AS
  RESTATED</u></p>
  </td>
  <td
  width=5><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>

  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top>

  </td>
  <td width=131 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Revenues</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$
  3,285,394</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>$
  3,285,394</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Operating
  Costs and Expenses:</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; Cost of sales </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>900,379</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>900,379</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; Restaurant expenses </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>1,798,752</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp; 3,887</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>1,802,639</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; Depreciation and amortization </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>158,153</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>158,153</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; General and administrative</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 131,763</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp; 131,763</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 29,744</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </u></p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 29,744</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp;&nbsp; Total operating costs and expenses </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp; 3,018,791</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;3,887</u></p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>&nbsp; 3,022,678</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=center>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Operating
  income </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>266,603</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; (3,887)</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>262,716</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Interest
  expense</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>12,449</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>12,449</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Other,
  net</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 567</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</u></p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 567</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Income
  before tax expense</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>253,587</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp;&nbsp; (3,887)</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>249,700</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Income
  tax expense </p>
  </td>
  <td width=114 valign=top align="right">
  <p>&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(84,951</u>)</p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;1,451</u></p>
  </td>
  <td width=131 valign=top align="right">
  <p>&nbsp;<u>&nbsp;&nbsp;
  (83,500</u>)</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; &nbsp;Net
  income</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 168,636</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;(2,436</u>)</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 166,200</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>

  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Basic
  net income per share</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.74</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(0.03</u>)</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.71</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Diluted
  net income per share</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.70</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(0.02</u>)</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.68</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Basic
  weighted average</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,096</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,096</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>Diluted
  weighted average </p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=280 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=114 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 99,135</u></p>
  </td>
  <td width=143 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=131 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 99,135</u></p>
  </td>
  <td
  width=5 align="right"><p>&nbsp;</td>
 </tr>
 </table>

<hr><P style="page-break-after: always"></P>&nbsp;<table border=0 cellspacing=0 cellpadding=0 width=661>
 <tr>
  <td width=661 colspan=5 valign=top align="center">
  CONSOLIDATED STATEMENT OF INCOME</td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top align="center">
  SUMMARY OF RESTATEMENT
  IMPACTS</td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top align="center">
  FOR THE YEAR ENDED JUNE 26,
  2002</td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top>
  <p align=center>(In thousands, except per share amounts)</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top>
  <p align=center>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=289 valign=top>

  </td>
  <td width=123 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>

  </td>
  <td width=123 valign=top>
  <p align=center><u>AS
  REPORTED</u></p>
  </td>
  <td width=118 valign=top>
  <p align="center">ADJUSTMENTS</td>
  <td width=124 valign=top>
  <p align=center><u>AS
  RESTATED</u></p>
  </td>
  <td
  width=7><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>

  </td>
  <td width=123 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top>

  </td>
  <td width=124 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Revenues</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>$
  2,887,111</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>$
  2,887,111</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Operating
  Costs and Expenses:</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; Cost of sales </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>796,714</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>796,714</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; Restaurant expenses </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>1,582,644</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>3,300</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>1,585,944</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; Depreciation and amortization </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>130,102</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>130,102</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; General and administrative</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp;&nbsp; 121,420</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;&nbsp;&nbsp; 121,420</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; Restructure charges and other impairments</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,723</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</u></p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,723</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp;&nbsp; Total operating costs and expenses </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>&nbsp; 2,639,603</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;3,300</u></p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>&nbsp; 2,642,903</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>

  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=center>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Operating
  income </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>247,508</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp; (3,300)</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>244,208</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Interest
  expense</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>13,327</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>13,327</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Other,
  net</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,332</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</u></p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,332</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Income
  before tax expense</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>231,849</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp;&nbsp; (3,300)</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>228,549</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Income
  tax expense </p>
  </td>
  <td width=123 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(79,136</u>)</p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;1,232</u></p>
  </td>
  <td width=124 valign=top align="right">
  <p>&nbsp;<u>&nbsp;&nbsp;&nbsp;
  (77,904</u>)</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; &nbsp;Net
  income</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 152,713</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;(2,068</u>)</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp; 150,645</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>

  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Basic
  net income per share</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.56</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(0.02</u>)</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.54</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Diluted
  net income per share</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.52</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p>&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;(0.02</u>)</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.50</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Basic
  weighted average</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,862</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 97,862</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>Diluted
  weighted average </p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 <tr>
  <td width=289 valign=top>
  <p>&nbsp; shares outstanding</p>
  </td>
  <td width=123 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 100,565</u></p>
  </td>
  <td width=118 valign=top align="right">
  <p align=right>&nbsp;</p>
  </td>
  <td width=124 valign=top align="right">
  <p align=right><u>&nbsp;&nbsp;&nbsp; 100,565</u></p>
  </td>
  <td
  width=7 align="right"><p>&nbsp;</td>
 </tr>
 </table>





<p>&nbsp;&nbsp;&nbsp;&nbsp; Certain amounts in Notes 1, 5, 6, 7, 10, and
17 have been restated to reflect the restatement adjustments described
above.&nbsp; The restatement adjustments did
not affect cash flows provided by or used in operating, investing or financing
activities.&nbsp; The restatement adjustments
decreased retained earnings as of June 27, 2001 by $8.1 million.</p>





<p><b>3.&nbsp; BUSINESS COMBINATION AND INVESTMENT IN EQUITY METHOD INVESTEE</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In November 2001, the Company acquired from
its franchise partner, Sydran Group, LLC and Sydran Food Services III, L.P.,
thirty-nine Chili's restaurants for approximately $53.9 million.&nbsp; As part of the acquisition, the Company
assumed $35.5 million in capital lease obligations ($19.9 million principal
plus $15.6 million representing a debt premium) and recorded goodwill totaling
approximately $52.5 million.&nbsp; The
operations of the restaurants are included in the Company's consolidated
results of operations from the date of the acquisition. &nbsp;&nbsp;&nbsp; The pro-forma effect of this acquisition on the Company's
historical results of operations is not material.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In July 2001, the Company made a $12.3
million capital contribution to Rockfish Partnership in exchange for an
approximate 40% ownership interest.&nbsp; In
October 2002, the Company made an additional $1.8 million capital contribution
to Rockfish Partnership increasing its ownership interest to approximately 43%.</p>



<p><b>4.&nbsp; RESTRUCTURE CHARGES AND OTHER IMPAIRMENTS </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal
2004, the Company recorded a $39.5 million charge resulting from the decision
to close thirty restaurants, including six Chili's, five Macaroni Grill, six On
The Border, six Corner Bakery, and seven Big Bowl restaurants.&nbsp; The decision to close the restaurants was
the result of a comprehensive analysis that examined restaurants not meeting
minimum return on investment thresholds and certain other operating performance
criteria.&nbsp; The charge consists of
long-lived asset impairments totaling $31.2 million, lease obligation charges
totaling $6.2 million, and the write-off of inventory and other supplies
totaling $2.1 million. The remaining </p>



<hr><P style="page-break-after: always"></P>



<p>carrying values of the long-lived assets
associated with the closed stores totaled approximately $13.0 million at June
30, 2004.&nbsp; In addition, the Company made
lease payments related to the closed stores totaling $800,000 during fiscal
2004, reducing the lease obligation included in accrued liabilities to $5.4
million at June 30, 2004.&nbsp; </p>



<p>&nbsp;&nbsp; &nbsp; As a result
of the seven Big Bowl closings and a review of the brand's competitive positioning
and future development plans, the earnings forecast was revised and the Company
recorded a goodwill impairment charge of $27.0 million.&nbsp; The fair value of Big Bowl was estimated
using the present value of expected future cash flows.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal
2003, the Company evaluated the results of its efforts to reposition
Cozymel's.&nbsp; Based on the performance of
recent openings, the Company decided the brand no longer met the growth
characteristics needed to remain in the Company's portfolio.&nbsp; As a result, the Company entered into
negotiations during the fourth quarter of fiscal 2003 to sell all sixteen of
its Cozymel's restaurants.&nbsp; The decision
to discontinue growth and sell the brand required the Company to record asset
impairment charges totaling $20.2 million ($13.7 million for property and
equipment and $6.5 million for the remaining carrying value of goodwill).&nbsp; The carrying values of the assets to be sold
were approximately $23.8 million as of June 25, 2003 and consisted primarily of
property and equipment.&nbsp; In fiscal 2004,
the Company closed one Cozymel's restaurant and finalized the sale of the
remaining fifteen restaurants.&nbsp; In
connection with the disposition, the Company received cash proceeds totaling
$16.0 million and recorded an additional impairment charge totaling $7.7
million.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal
2003, the Company recorded a $5.4 million charge for long-lived asset
impairments and exit costs resulting from the decision to close nine
restaurants and to write down the assets of one under-performing restaurant.&nbsp; Substantially all of the assets were fully
impaired.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal
2003, the Company closed one of the two remaining PIZZAAHHH! restaurant
locations and cancelled all future development plans for the concept.&nbsp; As a result of this decision, a $4.1 million
impairment charge was recorded, representing the remaining net book value of
the intellectual property rights associated with the PIZZAAHHH! concept.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal
2002, the Company recorded an approximate $8.7 million charge to reduce its
notes receivable from Eatzi's Corporation to their net realizable value (see
Note 15 for additional discussion).&nbsp;&nbsp; </p>



<p><b>5.&nbsp; GOODWILL AND OTHER INTANGIBLES </b></p>



<p>&nbsp; &nbsp;&nbsp; The changes in the carrying amount of
goodwill for the fiscal years ended June 30, 2004 and June 25, 2003 are as
follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=480 valign=top>
  <p align=left>&nbsp;</p>
  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=78 valign=top>
  <p align="center"><u>&nbsp;
  2003&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p align=left>&nbsp;</p>
  </td>
  <td width=84 valign=top>

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

  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p align=left>Balance
  at beginning of year</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$185,068</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$193,899</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p align=left>Impairment
  of goodwill (see Note 4)</p>
  </td>
  <td width=84 valign=top>
  <p align=right>(27,000)</p>
  </td>
  <td width=78 valign=top>
  <p align=right>&nbsp; (6,501)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p align=left>Purchase
  allocation adjustments</p>
  </td>
  <td width=84 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>&nbsp; (2,330</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p align=left>Balance
  at end of year</p>
  </td>
  <td width=84 valign=top>
  <p align=right><u>$158,068</u></p>
  </td>
  <td width=78 valign=top>
  <p align=right><u>$185,068</u></p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The gross carrying amount of
intellectual property subject to amortization totaled $1.2 million at June 30,
2004 and June 25, 2003.&nbsp; Accumulated
amortization related to these intangible assets totaled approximately $359,000
and $308,000 at June 30, 2004 and June 25, 2003, respectively.</p><hr><P style="page-break-after: always"></P>




<p><b>6.&nbsp; ACCRUED AND OTHER LIABILITIES </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities consist of the following
(in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>
  <p align="center">&nbsp;<u>&nbsp;
  2004&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center">&nbsp;
  <u>&nbsp;&nbsp;2003&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Payroll</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$ 84,776</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$ 73,916</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Gift
  cards</p>
  </td>
  <td width=96 valign=top>
  <p align=right>43,550</p>
  </td>
  <td width=96 valign=top>
  <p align=right>36,013</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Sales
  tax</p>
  </td>
  <td width=96 valign=top>
  <p align=right>28,254</p>
  </td>
  <td width=96 valign=top>
  <p align=right>20,606</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Property
  tax</p>
  </td>
  <td width=96 valign=top>
  <p align=right>21,404</p>
  </td>
  <td width=96 valign=top>
  <p align=right>14,901</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Other</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 49,241</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 32,547</u></p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right><u>$227,225</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$177,983</u></p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp; Other liabilities consist of the following
(in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>
  <p align="center">&nbsp;<u>&nbsp;
  2004&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center">&nbsp;
  <u>&nbsp;&nbsp;2003&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>

  <p align=center>(as
  restated)</p>
  </td>
  <td width=96 valign=top>

  <p align="center">(as restated)</p>

  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p><br>
  Retirement
  plan (see Note 13)</p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  $ 38,473</p>
  </td>
  <td width=96 valign=top>
  <p align=right><br>
  $ 33,086</p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>
  <p>Other</p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>_&nbsp; 67,585</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 66,652</u></p>
  </td>
 </tr>
 <tr>
  <td width=463 valign=top>

  </td>
  <td width=96 valign=top>
  <p align=right><u>$
  106,058</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$
  99,738</u></p>
  </td>
 </tr>
</table>

<p><b>7.&nbsp; INCOME TAXES </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The provision for income taxes consists of
the following (in thousands):</p>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=655 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp; 2003&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp; 2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center">(as
  restated)</p>
  </td>
  <td width=102 valign=top>
  <p align="center">(as
  restated)</p>
  </td>
  <td width=96 valign=top>
  <p align="center">(as
  restated)</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top>
  <p>Current income tax expense:</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp; Federal</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  65,977</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  36,761</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$
  47,228</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp; State</p>
  </td>
  <td width=102 valign=top>
  <p align=right>12,885</p>
  </td>
  <td width=102 valign=top>
  <p align=right>8,107</p>
  </td>
  <td width=96 valign=top>
  <p align=right>6,819</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>Foreign</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp; 1,098</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 889</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 923 </u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp;&nbsp; Total current income tax expense</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 79,960</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 45,757</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 54,970 </u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top>
  <p>Deferred
  income tax expense:</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp; Federal</p>
  </td>
  <td width=102 valign=top>
  <p align=right>1,896</p>
  </td>
  <td width=102 valign=top>
  <p align=right>35,968</p>
  </td>
  <td width=96 valign=top>
  <p align=right>20,975</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp; State</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 252</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp; 1,775</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 1,959</u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>&nbsp;&nbsp; Total deferred income tax expense </p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp; 2,148</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 37,743</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 22,934</u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  82,108</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  83,500</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$ 77,904</u></p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp;&nbsp; A reconciliation between the reported
provision for income taxes and the amount computed by applying the statutory
Federal income tax rate of 35% to income before provision for income taxes is
as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp; 2003&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp; 2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center">(as restated)</p>
  </td>
  <td width=102 valign=top>
  <p align="center">(as restated)</p>
  </td>
  <td width=96 valign=top>
  <p align="center">(as restated)</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=4 valign=top>

  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>Income
  tax expense at statutory rate</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  81,559</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  87,395</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$
  79,992</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>FICA
  tax credit</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(17,506)</p>
  </td>
  <td width=102 valign=top>
  <p align=right>(13,236)</p>
  </td>
  <td width=96 valign=top>
  <p align=right>(9,002)</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>State
  income taxes, net of Federal benefit</p>
  </td>
  <td width=102 valign=top>
  <p align=right>8,539</p>
  </td>
  <td width=102 valign=top>
  <p align=right>6,423</p>
  </td>
  <td width=96 valign=top>
  <p align=right>5,706
  </p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>Goodwill
  impairment</p>
  </td>
  <td width=102 valign=top>
  <p align=right>9,450</p>
  </td>
  <td width=102 valign=top>
  <p align=right>2,275</p>
  </td>
  <td width=96 valign=top>
  <p align=right>-</p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>
  <p>Other</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 66</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; 643</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 1,208</u></p>
  </td>
 </tr>
 <tr>
  <td width=355 valign=top>

  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  82,108</u></p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  83,500</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$
  77,904</u></p>
  </td>
 </tr>
</table>

<hr><P style="page-break-after: always"></P>




<p>&nbsp;&nbsp;&nbsp;&nbsp; The income tax effects of temporary
differences that give rise to significant portions of deferred income tax
assets and liabilities as of June 30, 2004 and June 25, 2003 are as follows (in
thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=457 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=96 valign=top>
  <p align="center"><u>&nbsp; 2003&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>

  </td>
  <td width=102 valign=top>
  <p align="center">(as
  restated)</p>
  </td>
  <td width=96 valign=top>
  <p align="center">(as
  restated)</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=3 valign=top>
  <p>Deferred
  income tax assets:</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Restructuring charges and other impairments</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$
  17,399</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp; 5,149</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Employee benefit plans</p>
  </td>
  <td width=102 valign=top>
  <p align=right>13,863</p>
  </td>
  <td width=96 valign=top>
  <p align=right>13,387</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Leasing transactions</p>
  </td>
  <td width=102 valign=top>
  <p align=right>16,716</p>
  </td>
  <td width=96 valign=top>
  <p align=right>14,844</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Insurance reserves</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp; 4,717</p>
  </td>
  <td width=96 valign=top>
  <p align=right>&nbsp; 3,966</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Other, net</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 24,158</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 16,361</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp;&nbsp; Total deferred income tax assets</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 76,853</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp; 53,707</u></p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=3 valign=top>

  </td>
 </tr>
 <tr>
  <td width=655 colspan=3 valign=top>
  <p>Deferred
  income tax liabilities:</p>
  </td>
 </tr>
 <tr>
  <td width=655 colspan=3 valign=top>
  <p>&nbsp; Depreciation and capitalized interest</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp;&nbsp; on property and equipment</p>
  </td>
  <td width=102 valign=top>
  <p align=right>88,509</p>
  </td>
  <td width=96 valign=top>
  <p align=right>72,390</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp;Prepaid
  expenses</p>
  </td>
  <td width=102 valign=top>
  <p align=right>10,456</p>
  </td>
  <td width=96 valign=top>
  <p align=right>9,969</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Goodwill and other amortization</p>
  </td>
  <td width=102 valign=top>
  <p align=right>11,887</p>
  </td>
  <td width=96 valign=top>
  <p align=right>9,106</p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp; Other, net</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 15,107</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;&nbsp; 9,484</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp;&nbsp; Total deferred income tax liabilities</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;125,959</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>&nbsp;100,949</u></p>
  </td>
 </tr>
 <tr>
  <td width=457 valign=top>
  <p>&nbsp;&nbsp; Net deferred income tax liability</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  49,106</u></p>
  </td>
  <td width=96 valign=top>
  <p align=right><u>$
  47,242</u></p>
  </td>
 </tr>
</table>



<p><b>8.&nbsp; DEBT</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Long-term
debt consists of the following (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=480 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=center><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=85 valign=top>
  <p align=center><u>&nbsp; 2003&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=85 valign=top>

  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>5.75%
  notes</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$298,449</p>
  </td>
  <td width=85 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; -</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>Convertible
  debt</p>
  </td>
  <td width=84 valign=top>
  <p align=right>269,233</p>
  </td>
  <td width=85 valign=top>
  <p align=right>262,086</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>Senior
  notes</p>
  </td>
  <td width=84 valign=top>
  <p align=right>14,851</p>
  </td>
  <td width=85 valign=top>
  <p align=right>30,969</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>Capital
  lease obligations (see Note 10)</p>
  </td>
  <td width=84 valign=top>
  <p align=right>35,926</p>
  </td>
  <td width=85 valign=top>
  <p align=right>37,004</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>Mortgage
  loan obligations</p>
  </td>
  <td width=84 valign=top>
  <p align=right><u>&nbsp;
  38,931</u></p>
  </td>
  <td width=85 valign=top>
  <p align=right><u>&nbsp;
  41,355</u></p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=right>657,390</p>
  </td>
  <td width=85 valign=top>
  <p align=right>371,414</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>
  <p>Less
  current installments</p>
  </td>
  <td width=84 valign=top>
  <p align=right><u>&nbsp;(18,099</u>)</p>
  </td>
  <td width=85 valign=top>
  <p align=right><u>&nbsp;(17,629</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=480 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=right><u>$639,291</u></p>
  </td>
  <td width=85 valign=top>
  <p align=right><u>$353,785</u></p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In May 2004, the Company issued $300.0 million of
5.75% Notes and received proceeds totaling approximately $298.4 million prior
to debt issuance costs.&nbsp; The Notes
require semi-annual interest payments and mature in June 2014.</p>



<p>&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 first quarter of
fiscal 2005, since the issuance of the Debentures.&nbsp; The conversion trigger price for the Company's second quarter of
fiscal 2005 is $41.81.</p>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The $14.9 million of unsecured senior notes
bear interest at an annual rate of 7.8%. Interest is payable semi-annually and
the remaining principal is due in fiscal 2005.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company has credit facilities
aggregating $325.0 million at June 30, 2004. A revolving credit facility of
$275.0 million bears interest at LIBOR (1.61% at June 30, 2004) plus a maximum
of 1.375% (0.65% at June 30, 2004) and expires in fiscal 2006. The remaining
credit facility is uncommitted and bears interest based upon the lower of the
banks' &quot;Base&quot; rate, certificate of deposit rate, negotiated rate, or LIBOR rate
plus 0.375%, and expires in fiscal 2005. Unused credit facilities available to
the Company totaled $325.0 million at June 30, 2004. </p>



<p>&nbsp; &nbsp;&nbsp; The mortgage loan obligations require
monthly principal and interest payments, mature on various dates through March
2020, and bear interest at rates ranging from 8.44% to 10.75% per year.&nbsp; The obligations are collateralized by the
underlying restaurant properties. </p>



<p>&nbsp;&nbsp; &nbsp; The Company's debt agreements contain
various restrictive covenants that, among other things, require the maintenance
of certain fixed charge, net worth, and leverage ratios.&nbsp; The Company is currently in compliance with
all covenants.</p>



<p>&nbsp; &nbsp;&nbsp; Excluding capital lease obligations (see
Note 10), the Company's long-term debt maturities for the five years following
June 30, 2004 are as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0 width="653">
 <tr>
  <td width=559 valign=top>
  <p>Fiscal<br>
  <u>&nbsp;Year </u></p>
  </td>
  <td width=94 valign=top>

  </td>
 </tr>
 <tr>
  <td width=559 valign=top>

  </td>
  <td width=94 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>2005</p>
  </td>
  <td width=94 valign=top>
  <p align=right>$ 17,195</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>2006</p>
  </td>
  <td width=94 valign=top>
  <p align=right>2,431</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>2007</p>
  </td>
  <td width=94 valign=top>
  <p align=right>2,302</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>2008</p>
  </td>
  <td width=94 valign=top>
  <p align=right>2,139</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>2009</p>
  </td>
  <td width=94 valign=top>
  <p align=right>2,210</p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>
  <p>Thereafter</p>
  </td>
  <td width=94 valign=top>
  <p align=right><u>&nbsp;595,187 </u></p>
  </td>
 </tr>
 <tr>
  <td width=559 valign=top>

  </td>
  <td width=94 valign=top>
  <p align=right><u>$621,464</u></p>
  </td>
 </tr>
</table>



<p><b>9.&nbsp; DERIVATIVE FINANCIAL INSTRUMENTS</b></p>



<p>&nbsp; &nbsp;&nbsp; The Company entered into two interest rate
swaps in April 2000 with a total notional value of $14.2 million at June 30,
2004.&nbsp; These fair value hedges change
the fixed-rate interest on the senior notes to variable-rate interest.&nbsp; Under the terms of the hedges (which expire
in fiscal 2005), the Company pays semi-annually a variable interest rate based
on 90-Day LIBOR (1.61% at June 30, 2004) plus 0.530% for one of the swaps and
180-Day LIBOR (1.94% at June 30, 2004) plus 0.395% for the other swap, in
arrears, compounded at three-month intervals.&nbsp;
The Company receives semi-annually the fixed interest rate of 7.8% on
the senior notes. The estimated fair values of these agreements at June 30,
2004 and June 25, 2003 were approximately $700,000 and $2.5 million,
respectively, which are included in other assets in the Company's consolidated
balance sheets. The Company's interest rate swap hedges meet the criteria for
the &quot;short-cut method&quot; under SFAS No. 133, &quot;Accounting for Derivative
Instruments and Hedging Activities.&quot;&nbsp;
Accordingly, changes in the fair value of the swaps are offset by a like
adjustment to the carrying value of the debt and no hedge ineffectiveness is
assumed.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company entered into three interest rate
swaps in December 2001 with a total notional value of $115.2 million at June
30, 2004.&nbsp; These fair value hedges
change the fixed-rate interest component of an operating lease commitment for
certain real estate properties entered into in November 1997 to variable-rate
interest.&nbsp; Under the terms of the hedges
(which expire in fiscal 2018), the Company pays monthly a variable rate based
on 30-Day LIBOR (1.37% at June 30, 2004) plus 1.26%.&nbsp; The Company receives monthly the fixed interest rate of 7.156% on
the lease.&nbsp; The estimated fair values of
these agreements at June 30, 2004 and June 25, 2003 were assets of
approximately $7.7 million and $21.4 million, respectively.&nbsp; There was no hedge ineffectiveness during

</p>

<hr><P style="page-break-after: always"></P>



<p>fiscal 2004, 2003, or 2002.&nbsp; Changes in
the fair value of the swaps are recorded in other assets with a like adjustment
in other liabilities.</p>

<p><b>10. LEASES</b></p>



<p><b>(a) Capital Leases</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company leases certain buildings under
capital leases. The asset values of $27.5 million at June 30, 2004 and June 25,
2003, and the related accumulated amortization of $9.5 million and $8.2 million
at June 30, 2004 and June 25, 2003, respectively, are included in property and
equipment. Amortization of assets under capital leases is included in
depreciation and amortization expense.</p>



<p><b>(b) Operating Leases </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company leases restaurant facilities,
office space, and certain equipment under operating leases having terms
expiring at various dates through fiscal 2095. The restaurant leases have
renewal clauses of 1 to 35 years at the option of the Company and, in some
cases, have provisions for contingent rent based upon a percentage of gross
sales, as defined in the leases.&nbsp; Rent
expense for fiscal 2004, 2003, and 2002 was $123.1 million, $111.1 million, and
$103.7 million, respectively.&nbsp;
Contingent rent included in rent expense for fiscal 2004, 2003, and 2002
was $11.6 million, $10.3 million, and $9.7 million, respectively. </p>



<p>&nbsp; &nbsp;&nbsp; In fiscal 1998 and 2000, the Company entered
into equipment leasing facilities totaling $55.0 million and $25.0 million,
respectively.&nbsp; The leasing facilities
were accounted for as operating leases and had expiration dates of 2004 and
2006, respectively.&nbsp; The Company
guaranteed a residual value of approximately 87% of the total amount funded
under the leases.&nbsp; The Company had the
option to purchase all of the leased equipment for an amount equal to the
unamortized lease balance, which could not exceed 75% of the total amount
funded through the leases.&nbsp; In February
2002, the Company acquired the remaining assets leased under the equipment
leasing facilities for $36.2 million and terminated the lease arrangements.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 2000, the Company entered into a
$50.0 million real estate leasing facility.&nbsp;
During fiscal 2001, the Company increased the facility to $75.0
million.&nbsp; The real estate facility was
accounted for as an operating lease and was to expire in fiscal 2007.&nbsp; The Company guaranteed a residual value of
approximately 87% of the total amount funded under the lease.&nbsp; The Company had the option to purchase all
of the leased real estate for an amount equal to the unamortized lease balance.&nbsp; In February 2002, the Company acquired the
remaining assets leased under the real estate leasing facility for $56.8
million and terminated the lease arrangement.</p>



<p><b>(c) Commitments</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; At June 30, 2004, future non-cancelable minimum lease
payments on capital and operating leases were as follows (in thousands):</p>

<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=655 colspan=3 valign=top>

  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>Fiscal<br>
  <u>&nbsp;Year </u></p>
  </td>
  <td width=102 valign=top>
  <p align=center>Capital<br>
  <u>&nbsp;Leases&nbsp;
  </u></p>
  </td>
  <td width=114 valign=top>
  <p align="center">Operating<br>
  <u>&nbsp;Leases&nbsp;
  </u></p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>

  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>2005</p>
  </td>
  <td width=102 valign=top>
  <p align=right>$&nbsp; 3,390</p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;$ 104,356</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>2006</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp; 3,361</p>
  </td>
  <td width=114 valign=top>
  <p align=right>101,778</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>2007</p>
  </td>
  <td width=102 valign=top>
  <p align=right>&nbsp;3,447</p>
  </td>
  <td width=114 valign=top>
  <p align=right>97,256</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>2008</p>
  </td>
  <td width=102 valign=top>
  <p align=right>3,534</p>
  </td>
  <td width=114 valign=top>
  <p align=right>91,241</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>2009</p>
  </td>
  <td width=102 valign=top>
  <p align=right>3,623</p>
  </td>
  <td width=114 valign=top>
  <p align=right>82,785</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>Thereafter</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp; 43,597</u></p>
  </td>
  <td width=114 valign=top>
  <p align=right><u>&nbsp; 404,512</u></p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>&nbsp; Total minimum lease payments</p>
  </td>
  <td width=102 valign=top>
  <p align=right>60,952</p>
  </td>
  <td width=114 valign=top>
  <p align=right><u>$
  881,928</u></p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>&nbsp; Imputed interest (average rate of 7%)</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;(25,026</u>)</p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>&nbsp; Present value of minimum lease payments</p>
  </td>
  <td width=102 valign=top>
  <p align=right>35,926</p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>
  <p>&nbsp; Less current installments</p>
  </td>
  <td width=102 valign=top>
  <p align=right><u>&nbsp;&nbsp;&nbsp; (904</u>)</p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=439 valign=top>

  </td>
  <td width=102 valign=top>
  <p align=right><u>$
  35,022</u></p>
  </td>
  <td width=114 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
</table>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp;&nbsp; At June 30, 2004, the Company had entered
into other lease agreements for restaurant facilities currently under
construction or yet to be constructed. Classification of these leases as
capital or operating has not been determined as construction of the leased
properties has not been completed.</p>



<p><b>11. STOCK OPTION PLANS</b></p>



<p><b>(a)&nbsp; 1983, 1992, and 1998 Employee Incentive Stock
Option Plans</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In accordance with the Incentive Stock
Option Plans adopted in October 1983, November 1992, and October 1998, options
to purchase approximately 40.2 million shares of Company common stock may be
granted to officers, directors, and eligible employees, as defined. Options are
granted at the market value of the underlying common stock on the date of
grant, are exercisable beginning one to two years from the date of grant, with
various vesting periods, and expire 10 years from the date of grant. </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In October 1993, the 1983 Incentive Stock
Option Plan (the &quot;1983 Plan&quot;) expired. Consequently, no options were granted
under the 1983 Plan subsequent to fiscal 1993. Options granted prior to the
expiration of the 1983 Plan were exercisable through April 2003.</p>



<p>&nbsp; &nbsp;&nbsp;&nbsp; In October 1998, the Stock Option and
Incentive Plan (the &quot;1998 Plan&quot;) was adopted and no additional options were
granted under the 1992 Incentive Stock Option Plan (the &quot;1992 Plan&quot;).&nbsp; Options granted under the 1992 Plan prior to
the adoption of the 1998 Plan remain exercisable through March 2008.</p>



<p>&nbsp;&nbsp;&nbsp; &nbsp; Transactions during fiscal 2004, 2003, and
2002 were as follows (in thousands, except option prices):</p>



<table border=0 cellspacing=0 cellpadding=0 width=704>
 <tr>
  <td width=334 colspan=2 valign=top>

  &nbsp;</td>
  <td width=123 colspan=5 valign=top align="right">
  <p align="center">Number of Company Options</td>
  <td width=14 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=233 colspan=5 valign=top>
  <p align=center>Weighted
  Average Share<br>
  Exercise Price</p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>

  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p><u>&nbsp;2004&nbsp;</u></p>
  </td>
  <td width=67 valign=top>
  <p align="center">&nbsp;<u>&nbsp;2003&nbsp;</u></p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align="center">&nbsp;<u>&nbsp;2002&nbsp;</u></p>
  </td>
  <td width=14 valign=top>
  <p align=center>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align="center">&nbsp;
  <u>&nbsp;2004&nbsp;</u></p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align="center">&nbsp;<u>&nbsp;2003&nbsp;</u></p>
  </td>
  <td width=108 valign=top>
  <p align="center">&nbsp;&nbsp;
  <u>&nbsp;2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>
  <p>Options outstanding at</p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>&nbsp; beginning
  of year</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right>9,611</p>
  </td>
  <td width=67 valign=top>
  <p align=right>9,944</p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right>10,759</p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right>$24.07</p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right>$20.50</p>
  </td>
  <td width=108 valign=top>
  <p align=right>$16.91 </p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>Granted</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right>2,879</p>
  </td>
  <td width=67 valign=top>
  <p align=right>2,639</p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right>2,512</p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right>32.53</p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right>30.68</p>
  </td>
  <td width=108 valign=top>
  <p align=right>27.90</p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>Exercised</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right>(1,978)</p>
  </td>
  <td width=67 valign=top>
  <p align=right>(2,477)</p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right>(2,892)</p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right>20.54</p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right>16.05</p>
  </td>
  <td width=108 valign=top>
  <p align=right>13.09</p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>&nbsp;Forfeited</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right><u>(653</u>)</p>
  </td>
  <td width=67 valign=top>
  <p align=right><u>&nbsp;
  (495</u>)</p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right><u>&nbsp;
  (435</u>)</p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right><u>&nbsp;29.08</u></p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right><u>&nbsp;27.54</u></p>
  </td>
  <td width=108 valign=top>
  <p align=right><u>&nbsp;23.38 </u></p>
  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>
  <p>Options outstanding at </p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>&nbsp; end
  of year</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right><u>&nbsp;9,859</u></p>
  </td>
  <td width=67 valign=top>
  <p align=right><u>&nbsp;9,611</u></p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right><u>&nbsp;9,944</u></p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right><u>$26.92</u></p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right><u>$24.07</u></p>
  </td>
  <td width=108 valign=top>
  <p align=right><u>$20.50 </u></p>
  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>

  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>
  <p>Options exercisable at </p>
  </td>
 </tr>
 <tr>
  <td width=334 colspan=2 valign=top>
  <p>&nbsp; end
  of year</p>
  </td>
  <td width=1 colspan=2 valign=top align="right">
  <p align=right><u>&nbsp;3,918</u></p>
  </td>
  <td width=67 valign=top>
  <p align=right><u>&nbsp;3,809</u></p>
  </td>
  <td width=209 colspan=2 valign=top>
  <p align=right><u>&nbsp;4,091</u></p>
  </td>
  <td width=14 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=53 colspan=2 valign=top>
  <p align=right><u>$20.64</u></p>
  </td>
  <td width=72 colspan=2 valign=top>
  <p align=right><u>$16.69</u></p>
  </td>
  <td width=108 valign=top>
  <p align=right><u>$13.38</u></p>
  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>

  <p>

  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>

  </td>
 </tr>
 <tr>
  <td width=127 valign=top>

  </td>
  <td width=348 colspan=8 valign=top>
  <p align="center"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options Outstanding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;</u></p>
  </td>
  <td width=216 colspan=4 valign=top>
  <p align="center"><u>&nbsp;
  Options Exercisable&nbsp;&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=127 valign=top>
  <p align=center><br>
  <br>
  Range of<br>
  exercise<br>
  <u>&nbsp;&nbsp;&nbsp;
  prices&nbsp;&nbsp; </u>&nbsp;</p>
  </td>
  <td width=138 colspan=2 valign=top>
  <p align=center><br>
  <br>
  <br>
  Number
  of<br>
  <u>options</u></p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center>Weighted<br>
  average<br>
  remaining<br>
  contractual<br>
  <u>life (years)</u></p>
  </td>
  <td width=114 colspan=3 valign=top>
  <p align=center><br>
  Weighted<br>
  average<br>
  exercise<br>
  <u>&nbsp;
  price&nbsp; </u>&nbsp;</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=center><br>
  <br>
  <br>
  Number of<br>
  <u>&nbsp;options </u></p>
  </td>
  <td width=114 colspan=2 valign=top>
  <p align=center><br>
  Weighted<br>
  average<br>
  exercise<br>
  <u>&nbsp;
  price&nbsp; </u>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=691 colspan=13 valign=top>

  </td>
 </tr>
 <tr>
  <td width=127 valign=top>
  <p>$ 7.42-$11.58</p>
  </td>
  <td width=138 colspan=2 valign=top>
  <p align=right>655</p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center>2.56</p>
  </td>
  <td width=114 colspan=3 valign=top>
  <p align=right>$ 8.52</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>655</p>
  </td>
  <td width=114 colspan=2 valign=top>
  <p align=right>$ 8.52</p>
  </td>
 </tr>
 <tr>
  <td width=127 valign=top>
  <p>$13.58-$18.67</p>
  </td>
  <td width=138 colspan=2 valign=top>
  <p align=right>1,377</p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center>4.90</p>
  </td>
  <td width=114 colspan=3 valign=top>
  <p align=right>17.09</p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right>1,377</p>
  </td>
  <td width=114 colspan=2 valign=top>
  <p align=right>17.09</p>
  </td>
 </tr>
 <tr>
  <td width=127 valign=top>
  <p>$25.50-$37.25</p>
  </td>
  <td width=138 colspan=2 valign=top>
  <p align=right><u>7,827</u></p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center><u>8.22</u></p>
  </td>
  <td width=114 colspan=3 valign=top>
  <p align=right><u>&nbsp;30.19</u></p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>1,886</u></p>
  </td>
  <td width=114 colspan=2 valign=top>
  <p align=right><u>&nbsp;27.45</u></p>
  </td>
 </tr>
 <tr>
  <td width=127 valign=top>

  </td>
  <td width=138 colspan=2 valign=top>
  <p align=right><u>9,859</u></p>
  </td>
  <td width=96 colspan=3 valign=top>
  <p align=center><u>7.38</u></p>
  </td>
  <td width=114 colspan=3 valign=top>
  <p align=right><u>$26.92</u></p>
  </td>
  <td width=102 colspan=2 valign=top>
  <p align=right><u>3,918</u></p>
  </td>
  <td width=114 colspan=2 valign=top>
  <p align=right><u>$20.64</u></p>
  </td>
 </tr>
 </table>



<p><b>(b) 1991
and 1999 Non-Employee Stock Option Plans</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In accordance with the Stock Option Plan for
Non-Employee Directors and Consultants adopted in May 1991 (the &quot;1991 Plan&quot;),
options to purchase 881,250 shares of Company common stock were authorized for
grant. In fiscal 2000, the 1991 Plan was replaced by the 1999 Stock Option and
Incentive Plan for Non-Employee Directors and Consultants which authorized the
issuance of up to 450,000 shares of Company common stock.&nbsp; The authority to issue the remaining stock
options under the 1991 Plan has been terminated.&nbsp; Options are granted at the market value of the underlying common
stock on the date of grant, vest one-third each year beginning two years from
the date of grant, and expire 10 years from the date of grant. </p>



<hr><P style="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Transactions during fiscal 2004, 2003, and
2002 were as follows (in thousands, except option prices):</p>



<table border=1 cellspacing=0 cellpadding=0 style="border-width: 0">
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=174 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align=center>Number
  of<br>
  &nbsp;&nbsp; Company Options</p>
  </td>
  <td width=240 colspan=3 valign=top style="border-style: none; border-width: medium">
  <p align="center">Weighted Average Share<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exercise Price&nbsp;&nbsp;&nbsp;&nbsp;  </p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=center><u>2004
  </u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=center><u>2003
  </u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=center>&nbsp;<u>2002</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u>&nbsp;2004 </u></p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp; <u>&nbsp;2003 </u></p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u>&nbsp;2002 </u></p>
  </td>
 </tr>
 <tr>
  <td width=649 colspan=7 valign=top style="border-style: none; border-width: medium">
  <p>Options
  outstanding at</p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; beginning of year</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right>440</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>353</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>351</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$21.21</p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; $17.79</p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right>$13.96</p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>Granted</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right>83</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>102</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>82</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>32.80</p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align=center>32.18</p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right>30.06</p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>Exercised</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right>(35)</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>(15)</p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right>(70)</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>10.60</p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align=center>15.36</p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right>11.24</p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>Forfeited</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; -</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp; -</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;(10</u>)</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;&nbsp;&nbsp;&nbsp; - </u></p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;30.06</u></p>
  </td>
 </tr>
 <tr>
  <td width=649 colspan=7 valign=top style="border-style: none; border-width: medium">
  <p>Options
  outstanding at</p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; end of year</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;488</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;440</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;353 </u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$23.90</u></p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$21.21</u></p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$17.79</u></p>
  </td>
 </tr>
 <tr>
  <td width=649 colspan=7 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=649 colspan=7 valign=top style="border-style: none; border-width: medium">
  <p>Options
  exercisable at </p>
  </td>
 </tr>
 <tr>
  <td width=235 valign=top style="border-style: none; border-width: medium">
  <p>&nbsp; end of year</p>
  </td>
  <td width=54 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;244</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;238</u></p>
  </td>
  <td width=60 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>&nbsp;199</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$16.24</u></p>
  </td>
  <td width=84 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$13.57</u></p>
  </td>
  <td width=66 valign=top style="border-style: none; border-width: medium">
  <p align=right><u>$12.61</u></p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp;&nbsp; At June 30, 2004, the range of exercise
prices for options outstanding was $8.33 to $33.26 with a weighted average
remaining contractual life of 6.48 years.</p>

<p><b>12. SHAREHOLDERS' EQUITY</b></p>



<p align=left><b>(a) Stockholder Protection Rights Plan</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company maintains a Stockholder
Protection Rights Plan (the &quot;Plan&quot;).&nbsp;
Upon implementation of the Plan, the Company declared a dividend of one
right on each outstanding share of common stock. The rights are evidenced by
the common stock certificates, automatically trade with the common stock, and
are not exercisable until it is announced that a person or group has become an
Acquiring Person, as defined in the Plan. Thereafter, separate rights
certificates will be distributed and each right (other than rights beneficially
owned by any Acquiring Person) will entitle, among other things, its holder to
purchase, for an exercise price of $40, a number of shares of Company common
stock having a market value of twice the exercise price. The rights may be
redeemed by the Board of Directors for $0.01 per right prior to the date of the
announcement that a person or group has become an Acquiring Person.</p>



<p><b>(b) Preferred
Stock</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company's Board of Directors is
authorized to provide for the issuance of 1.0 million preferred shares with a
par value of $1.00 per share, in one or more series, and to fix the voting
rights, liquidation preferences, dividend rates, conversion rights, redemption
rights, and terms, including sinking fund provisions, and certain other rights
and preferences.&nbsp; As of June 30, 2004,
no preferred shares were issued. </p>



<p><b>(c) Treasury Stock</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; In
April 2004, the Board of Directors authorized an increase in the stock
repurchase plan of $500.0 million, bringing the total to $1,010.0 million.&nbsp; Pursuant to the Company's stock repurchase
plan, the Company repurchased approximately 9.3 million shares of its common
stock for $322.6 million during fiscal 2004.&nbsp;
As of June 30, 2004, approximately 27.5 million shares had been
repurchased for $714.7 million under the stock repurchase plan.&nbsp; The Company's stock repurchase plan will be
used to minimize the dilutive impact of a potential conversion of the
convertible debt and stock option exercises.&nbsp;
The
repurchased common stock is reflected as a reduction of shareholders'
equity.&nbsp; </p>



<p><b>(d) Restricted
Stock</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to shareholder approval in November
1999, the Company implemented the Executive Long-Term Incentive Plan for
certain key employees, one component of which is the award of restricted
stock.&nbsp; During fiscal 2004 and 2003,
respectively, approximately 66,000 and 131,000 shares of restricted stock were
awarded, the </p>

<hr><P style="page-break-after: always"></P>



<p>majority of which vests over a three-year period. Unearned
compensation was recorded as a separate component of shareholders' equity at
the date of the award based on the market value of the shares and is being
amortized to compensation expense over the vesting period.&nbsp; </p>

<p><b>13. SAVINGS PLANS</b></p>



<p>&nbsp; &nbsp;&nbsp; The Company sponsors a qualified defined
contribution retirement plan (&quot;Plan I&quot;) covering salaried employees who have
attained the age of twenty-one and hourly employees who have completed one year
of service and have attained the age of twenty-one. Plan I allows eligible
employees to contribute, subject to Internal Revenue Service limitations on
total annual contributions, up to 50% of their base compensation and 100% of
their eligible bonuses, as defined in the plan, to various investment funds.
The Company matches in cash at a rate of 25% of the first 5% a salaried
employee contributes. Hourly employees do not receive matching
contributions.&nbsp; Employee contributions
vest immediately while Company contributions vest 25% annually beginning in the
participant's second year of eligibility. In fiscal 2004, 2003, and 2002, the
Company contributed approximately $797,000, $889,000, and $828,000,
respectively.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The Company sponsors a non-qualified defined
contribution retirement plan (&quot;Plan II&quot;) covering highly compensated employees,
as defined in the plan. Plan II allows eligible employees to defer receipt of
up to 50% of their base compensation and 100% of their eligible bonuses, as
defined in the plan. The Company matches in cash at a rate of 25% of the first
5% of contributions. Employee contributions vest immediately while Company
contributions vest 25% annually beginning in the participant's second year of
eligibility. In fiscal 2004, 2003, and 2002, the Company contributed
approximately $799,000, $724,000, and $657,000, respectively. At the inception
of Plan II, the Company established a Rabbi Trust to fund Plan II obligations.
The market value of the trust assets is included in other assets and the
liability to Plan II participants is included in other liabilities.</p>

<p><b>14. SUPPLEMENTAL CASH FLOW INFORMATION</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for interest and income taxes is
as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0 width=654>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2003&nbsp;</u></p>
  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp;</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Income
  taxes, net of refunds&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=84 valign=top>
  <p align=right>$40,677</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$7,553</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$48,801
  </p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Interest,
  net of amounts capitalized&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp; 3,977</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp; 3,215</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp;8,229 </p>
  </td>
 </tr>
</table>



<p>&nbsp;&nbsp;&nbsp; Non-cash investing and financing activities
are as follows (in thousands):</p>



<table border=0 cellspacing=0 cellpadding=0 width=654>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2004&nbsp;</u></p>
  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2003&nbsp;</u></p>
  </td>
  <td width=84 valign=top>
  <p align="center"><u>&nbsp; 2002&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>

  </td>
  <td width=84 valign=top>

  </td>
  <td width=84 valign=top>

  </td>
  <td width=84 valign=top>

  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Retirement
  of fully depreciated assets</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$14,235</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$164,509
  </p>
  </td>
  <td width=84 valign=top>
  <p align=right>$10,487
  </p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Net
  (decrease) increase in fair value of interest rate swaps </p>
  </td>
  <td width=84 valign=top>
  <p align=right>(15,523)</p>
  </td>
  <td width=84 valign=top>
  <p align=right>15,063</p>
  </td>
  <td width=84 valign=top>
  <p align=right>5,953</p>
  </td>
 </tr>
 <tr>
  <td width=402 valign=top>
  <p>Restricted
  common stock issued, net of forfeitures</p>
  </td>
  <td width=84 valign=top>
  <p align=right>2,374</p>
  </td>
  <td width=84 valign=top>
  <p align=right>4,490</p>
  </td>
  <td width=84 valign=top>
  <p align=right>2,435
  </p>
  </td>
 </tr>
</table>



<p><b>15. RELATED PARTY TRANSACTIONS</b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company entered into a note agreement
with Rockfish Partnership in December 2002.&nbsp;
During fiscal 2004, the note was amended and restated, increasing the
amount available under the note to $6.8 million, extending the maturity date to
December 2005, and increasing the interest rate to the prime rate plus 1.5%
(5.5% at June 30, 2004).&nbsp; The note
requires quarterly interest payments until maturity.&nbsp; At June 30, 2004, the Company's note receivable from Rockfish
Partnership totaled $6.8 million.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 2002, the Company recorded an
approximate $8.7 million charge to reduce its notes receivable from Eatzi's
Corporation (&quot;Eatzi's&quot;) to their
net realizable value of $11.0 million.&nbsp;
In November 2002, the Company completed the divestiture of Eatzi's and
received an $11.0 million cash payment and a $4.0 million promissory note.&nbsp; The promissory note is unsecured and payable
only upon the closing of an initial public offering </p>



<hr><P style="page-break-after: always"></P>



<p>by Eatzi's.&nbsp; Due to the uncertainty of collecting the
promissory note, the Company has established a reserve for the entire principal
balance.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes receivable are included in other
assets in the accompanying consolidated balance sheets.</p>



<p><b>16. CONTINGENCIES</b></p>



<p>&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.&nbsp; <a name="_DV_C2">The</a> IRS<a name="_DV_C3">
has</a> alleged that the Company did not meet the
requirements of the Contract and <a name="_DV_C5">has</a>
retroactively <a name="_DV_C7">and unilaterally revoked</a>
it.&nbsp; As a result of the revocation, the IRS <a name="_DV_C9">commenced an
examination </a>during fiscal 2004 of the Company's 2000
through 2002 calendar years, which involved interviews of current and former
employees for the purpose of <a name="_DV_C11">assessing</a>
employer-only <a name="_DV_C13">Federal Insurance Contributions Act (&quot;FICA&quot;)
taxes on estimated unreported cash tips</a>.&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 August 30, 2004, the IRS notified the Company that it intends to
issue a notice and demand, on or after September 29, 2004, for the employer's
share of FICA taxes on unreported tips.&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  contest
the<a name="_DV_C34"> accuracy of any </a>assessment that may be proposed with
respect to either unreported tips or service charges and, in the case of tips, <a
name="_DV_C36">to assert that</a> the Contract<a
name="_DV_C37"> </a>precludes the retroactive assessment of employer-only FICA
taxes.&nbsp; It is not possible at this time
to reasonably estimate the possible loss or range of loss, if any, with respect
to either issue.</p>



<p>&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,
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>
<hr><P style="page-break-after: always"></P>




<p><b>17. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) </b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp; The following table summarizes the unaudited
consolidated quarterly results of operations for fiscal 2004 and 2003 (in
thousands, except per share amounts):</p>



<table border=1 cellspacing=0 cellpadding=0 width=661 style="border-width: 0">
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Fiscal Year 2004</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Quarters Ended&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u>Sept.
  24</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>Dec. 24 </u></p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>March 24</u></p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>&nbsp;June 30 </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=center>(as
  restated)</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=center>(as
  restated)</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=center>(as
  restated)</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=center>(as
  restated)</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Revenues</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$870,898</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$886,490</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$931,922</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$1,018,176</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Income before provision for</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>income taxes </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  64,709</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  63,945</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  11,674</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 92,698</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Net
  income</p>

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  43,873</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  43,359</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp; 6</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 63,680</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Basic
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.45</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.45</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.00</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.67</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.44</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.44</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 0.00</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.66</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Basic weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,404</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,156</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>95,973</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>94,854</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,367</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,731</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,007</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,806</p>
  </td>
 </tr>
</table>





<p>&nbsp;</p>





<table border=1 cellspacing=0 cellpadding=0 width=661 style="border-width: 0">
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Year
  2004</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Quarters Ended&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center"><u>Sept.
  24</u></p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>Dec. 24 </u></p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>March 24</u></p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align="center">&nbsp;<u>&nbsp;June 30 </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as
  reported)</p>
  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as
  reported)</p>
  </td>
  <td width=102 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as
  reported)</p>
  </td>
  <td width=108 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as
  reported)</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Revenues</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$870,898</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$886,490</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$931,922</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$1,018,176</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Income before provision for</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>income taxes </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  65,872</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  65,157</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  12,854</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 94,048</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Net
  income</p>

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  44,595</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  44,111</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp; &nbsp; 738</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; 64,517</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Basic
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.46</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.46</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.01</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 0.68</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.45</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.45</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.01</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 0.67</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Basic weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,404</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,156</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>95,973</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>94,854</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,367</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,731</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,007</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,806</p>
  </td>
 </tr>
</table><hr><P style="page-break-after: always"></P>&nbsp;<table border=1 cellspacing=0 cellpadding=0 width=661 style="border-width: 0">
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Year 2003</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Quarters Ended&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p><u>Sept.
  25</u></p>
  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;<u>Dec. 25 </u></p>
  </td>
  <td width=102 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;<u>March 26</u></p>
  </td>
  <td width=108 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp;
  <u>June 25 </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as restated)</p>
  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as restated)</p>
  </td>
  <td width=102 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as restated)</p>
  </td>
  <td width=108 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as restated)</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Revenues</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$773,892</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$794,510</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$840,776</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$876,216</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Income
  before provision for</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>income
  taxes</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  66,861</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  54,800</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  68,236</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  59,803</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Net income </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  44,430</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  36,593</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  45,552</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  39,625</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Basic
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.46</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.38</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.47</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.41</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.45</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.37</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.46</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.40</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Basic weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,177</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,784</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,025</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,405</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Diluted weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,235</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,848</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,901</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,579</p>
  </td>
 </tr>
</table>



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

<table border=1 cellspacing=0 cellpadding=0 width=661 style="border-width: 0">
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fiscal Year
  2003</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Quarters Ended&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p><u>Sept.
  25</u></p>
  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;<u>Dec. 25 </u></p>
  </td>
  <td width=102 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;<u>March 26</u></p>
  </td>
  <td width=108 valign=top align="center" style="border-style: none; border-width: medium">
  <p>&nbsp;&nbsp;
  <u>June 25 </u></p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as reported)</p>
  </td>
  <td width=90 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as reported)</p>
  </td>
  <td width=102 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as reported)</p>
  </td>
  <td width=108 valign=top align="center" style="border-style: none; border-width: medium">
  <p>(as reported)</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Revenues</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$773,892</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$794,510</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$840,776</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$876,216</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Income
  before provision for</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>income
  taxes</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  67,777</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  55,809</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  69,205</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  60,796</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Net income </p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  45,004</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  37,225</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  46,160</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  40,247</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">

  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Basic
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$
  &nbsp;&nbsp; &nbsp;0.46</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.38</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.48</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.41</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>Diluted
  net income per share</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.45</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 0.38</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.47</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>$&nbsp;&nbsp; &nbsp; 0.40</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">

  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Basic weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,177</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>96,784</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,025</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>97,405</p>
  </td>
 </tr>
 <tr>
  <td width=661 colspan=5 valign=top style="border-style: none; border-width: medium">
  <p>Diluted weighted average</p>
  </td>
 </tr>
 <tr>
  <td width=271 valign=top style="border-style: none; border-width: medium">
  <p>shares outstanding</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,235</p>
  </td>
  <td width=90 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,848</p>
  </td>
  <td width=102 valign=top style="border-style: none; border-width: medium">
  <p align=right>98,901</p>
  </td>
  <td width=108 valign=top style="border-style: none; border-width: medium">
  <p align=right>99,579</p>
  </td>
 </tr>
</table>

<hr><P style="page-break-after: always"></P>&nbsp;<p align=center><b>REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</b></p>





<p>The
Board of Directors<br>
Brinker International, Inc.:</p>





<p>&nbsp;&nbsp;&nbsp; We have audited the accompanying
consolidated balance sheets of Brinker International, Inc. and subsidiaries as
of June 30, 2004 and June 25, 2003, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the years in the
three-year period ended June 30, 2004.&nbsp;
These consolidated financial statements are the responsibility of the
Company's management.&nbsp; Our responsibility
is to express an opinion on these consolidated financial statements based on
our audits.</p>



<p>&nbsp;&nbsp;&nbsp; We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United
States).&nbsp; Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.&nbsp; An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.&nbsp; An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.&nbsp; We believe that our
audits provide a reasonable basis for our opinion.</p>



<p>&nbsp;&nbsp;&nbsp; In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of Brinker International, Inc. and subsidiaries as of June
30, 2004 and June 25, 2003, and the results of their operations and their cash
flows for each of the years in the three-year period ended June 30, 2004 in
conformity with accounting principles generally accepted in the United States
of America.</p>



<p>As
discussed in Note 2 to the consolidated financial statements, the Company has
restated its consolidated financial statements for each of the years in the
three year period ended June 30, 2004.</p>







<p align="center">KPMG LLP</p>









<p><br>
<br>
Dallas,
Texas<br>
August
5, 2004, except for Note 16,<br>
as to
which the date is as of August 30, 2004<br>
and
Note 2 as to which the date is as of December 22, 2004&nbsp;</p>

<hr><P style="page-break-after: always"></P>&nbsp;<p align=center><b>MANAGEMENT'S
RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS</b></p>





<p>To Our
Shareholders:</p>



<p>&nbsp;&nbsp;&nbsp; Management is responsible for the
reliability of the consolidated financial statements and related notes, which
have been prepared in conformity with accounting principles generally accepted
in the United States of America and include amounts based upon our estimate and
judgments, as required.&nbsp; The
consolidated financial statements have been audited and reported on by our independent
auditors, KPMG LLP, who were given free access to all financial records and
related data, including minutes of the meetings of the Board of Directors and
Committees of the Board.&nbsp; We believe
that the representations made to the independent auditors were valid and
appropriate.&nbsp; </p>



<p>&nbsp;&nbsp;&nbsp; The Company maintains a system of internal
controls over financial reporting designed to provide reasonable assurance of
the reliability of the consolidated financial statements. The Company's
internal audit function monitors and reports on the adequacy of the compliance
with the internal control system and appropriate actions are taken to address
significant control deficiencies and other opportunities for improving the
system as they are identified.&nbsp; The
Audit Committee of the Board of Directors, which is comprised solely of outside
directors, provides oversight to the financial reporting process through
periodic meetings with our independent auditors, internal auditors, and
management.&nbsp; Both our independent
auditors and internal auditors have free access to the Audit Committee.&nbsp; Although no cost-effective internal control
system will preclude all errors and irregularities, we believe our controls as
of and for the year ended June 30, 2004 provide reasonable assurance that the
consolidated financial statements are reliable.</p>

















<p>DOUGLAS H. BROOKS<br>
President and
Chief Executive Officer</p>















<p>CHARLES M. SONSTEBY<br>
Executive
Vice President and Chief Financial Officer</p>

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

</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<FILENAME>ex2310ka1.htm
<DESCRIPTION>EXHIBIT 23
<TEXT>
<html>

<head>

<title>EXHIBIT 23</title>

</head>

<body>

<p align="center">EXHIBIT 23</p>















<p align="center">Consent of Independent Registered Public Accounting Firm</p>



<p>The
Board of Directors<br>
Brinker International, Inc.:</p>

<p align="justify">We consent to the incorporation by
reference in Registration Statement Nos. 33-61594, 33-56491, 333-02201,
333-93755, 333-42224 and 333-105720 on Form S-8, 333-74902 on Form S-3 and
333-116879 on Form S-4 of Brinker International, Inc. of our report dated
August 5, 2004, except for Note 15, as to which the date is as of August 30,
2004, relating to the consolidated balance sheets of Brinker International,
Inc. and subsidiaries as of June 30, 2004 and June 25, 2003 and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the years in the three-year period ended June 30, 2004, which report is incorporated
by reference in the June 30, 2004 annual report on Form 10&#8209;K/A of Brinker
International, Inc.</p>



<p align="justify">Our report refers to the Company restating its consolidated
financial statements as of June 30, 2004 and June 25, 2003 and for each of the
years in the three-year period ended June 30, 2004.</p>



<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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; KPMG
LLP</p>

<p>&nbsp;Dallas,
Texas<br>
&nbsp;January 17, 2005</p>



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>ex31a10ka1.htm
<DESCRIPTION>EXHIBIT 31(A)
<TEXT>
<html>

<head>

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

</head>

<body>

<p align=right>Exhibit 31a</p>

<p align="center">CERTIFICATION</p>

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



<p>1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
I have reviewed this
Amendment No. 1 to Annual Report on Form 10-K/A 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
annual 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 annual 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>

<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>

<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>

<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>

<p>Date: January 19, 2005</p>





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

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



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>5
<FILENAME>ex31b10ka1.htm
<DESCRIPTION>EXHIBIT 31(B)
<TEXT>
<html>

<head>

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

</head>

<body>

<p align=right>Exhibit 31b</p>

<p align="center">CERTIFICATION</p>

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



<p>1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
I have reviewed this
Amendment No. 1 to Annual Report on Form 10-K/A 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
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>

<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>

<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>

<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>

<p>Date: January 19, 2005</p>





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

  </td>
  <td width=319 valign=top>
  <p><u>&nbsp;&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;&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>6
<FILENAME>ex32a10ka1.htm
<DESCRIPTION>EXHIBIT 32(A)
<TEXT>
<html>

<head>

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

</head>

<body>

<p align=right>Exhibit 32(a)</p>

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

<p align=center><b>CERTIFICATION</b></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 Annual Report on Form 10-K/A for the year ended June 30, 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>







<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p>Dated:
  January 19, 2005</p>
  </td>
  <td width=319 valign=top>

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

  </td>
  <td width=319 valign=top>
  <p>By:<u>&nbsp;&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;&nbsp;&nbsp;</u></p>
  </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>Name:
  Douglas H. Brooks, Chairman of the Board</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Title:&nbsp;&nbsp; President and Chief Executive Officer</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>ex32b10ka1.htm
<DESCRIPTION>EXHIBIT 32(B)
<TEXT>
<html>

<head>

<title>Exhibit 32b</title>

</head>

<body>

<p align=right>Exhibit 32(b)</p>

<p align=center><b>CERTIFICATION</b></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 Annual Report on Form 10-K/A for the year ended June 30, 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>







<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p>Dated:
  January 19, 2005</p>
  </td>
  <td width=319 valign=top>

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

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

  </td>
  <td width=319 valign=top>
  <p>Title:&nbsp;&nbsp; Executive Vice President and</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

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

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



</body>

</html>

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