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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended June 19, 2005



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from:  to



Commission file numbers:

Dominos Pizza, Inc.     333-114442

Dominos, Inc.                333-107774



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Dominos Pizza, Inc.

Dominos, Inc.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 38-2511577                             
|Delaware                                                       |  | 38-3025165                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



30 Frank Lloyd
Wright Drive

Ann Arbor, Michigan 48106

(Address of principal executive offices)



(734) 930-3030

(Registrants telephone number, including area code)



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Indicate by check mark whether 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.    Yes  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act):    Yes ̈No  x



As of July 17, 2005, Dominos Pizza, Inc. had 66,182,767 shares of common stock, par
value $0.01 per share, outstanding. As of July 17, 2005, Dominos, Inc. had 10 shares of common stock, par value $0.01 per share, outstanding. All of the stock of Dominos, Inc. was held by Dominos Pizza, Inc.



This Quarterly Report on Form 10-Q is a combined quarterly report being filed separately by
two registrants: Dominos Pizza, Inc. and Dominos, Inc. Except where the context clearly indicates otherwise, any references in this report to Dominos Pizza, Inc. includes all subsidiaries of Dominos Pizza, Inc., including
Dominos, Inc. Dominos, Inc. makes no representation as to the information contained in this report in relation to Dominos Pizza, Inc. and its subsidiaries, other than Dominos, Inc. and its subsidiaries.



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##### Table of Contents

Dominos Pizza, Inc.

Dominos, Inc.



TABLE OF CONTENTS



|           |  |                                                                                                                                        |  |         
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                                                                        |  | Page No.
|PART I.    |  | FINANCIAL INFORMATION                                                                                                                  |  |         
|           |  |                                                                                                                                       
|Item 1.    |  | Financial Statements                                                                                                                   |  |         
|           |  |                                                                                                                                       
|           |  | Condensed Consolidated Balance Sheets (Unaudited)  June 19, 2005 and January 2, 2005                                                  |  | 3       
|           |  |                                                                                                                                       
|           |  | Condensed Consolidated Statements of Income (Unaudited)  Fiscal quarter and two fiscal quarters ended June 19, 2005 and June 13, 2004 |  | 4       
|           |  |                                                                                                                                       
|           |  | Condensed Consolidated Statements of Cash Flows (Unaudited)  Two fiscal quarters ended June 19, 2005 and June 13, 2004                |  | 5       
|           |  |                                                                                                                                       
|           |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                       |  | 6       
|           |  |                                                                                                                                       
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                  |  | 13      
|           |  |                                                                                                                                       
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                             |  | 22      
|           |  |                                                                                                                                       
|Item 4.    |  | Controls and Procedures                                                                                                                |  | 22      
|           |  |                                                                                                                                       
|PART II.   |  | OTHER INFORMATION                                                                                                                      |  |         
|           |  |                                                                                                                                       
|Item 1.    |  | Legal Proceedings                                                                                                                      |  | 23      
|           |  |                                                                                                                                       
|Item 2.    |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                                                       |  | 23      
|           |  |                                                                                                                                       
|Item 3.    |  | Defaults Upon Senior Securities                                                                                                        |  | 23      
|           |  |                                                                                                                                       
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                                    |  | 24      
|           |  |                                                                                                                                       
|Item 5.    |  | Other Information                                                                                                                      |  | 24      
|           |  |                                                                                                                                       
|Item 6.    |  | Exhibits                                                                                                                               |  | 24      
|           | 
|SIGNATURES |  | 25                                                                                                                                    



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



Dominos Pizza, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

|                                            |  |               |          |   |                        |   |          |  
|------------------------------------------- |  | ------------- | -------- | - | ---------------------- | - | -------- | -
|(In thousands)                              |  | June 19, 2005 |          |   | January 2, 2005 (Note) |  
|Assets                                      |  |               |          |   |                        |   |          |  
|Current assets:                             |  |               |          |   |                        |   |          |  
|Cash and cash equivalents                   |  | $             | 10,504   |   |                        | $ | 40,396   |  
|Accounts receivable                         |  |               | 67,770   |   |                        |   | 73,138   |  
|Inventories                                 |  |               | 20,191   |   |                        |   | 21,505   |  
|Notes receivable                            |  |               | 1,610    |   |                        |   | 1,763    |  
|Prepaid expenses and other                  |  |               | 21,509   |   |                        |   | 13,555   |  
|Advertising fund assets, restricted         |  |               | 37,636   |   |                        |   | 32,817   |  
|Deferred income taxes                       |  |               | 6,252    |   |                        |   | 6,317    |  
|                                            |  |               |          |   |                        |   |          |  
|Total current assets                        |  |               | 165,472  |   |                        |   | 189,491  |  
|                                            |  |               |          |   |                        |   |          |  
|Property, plant and equipment:              |  |               |          |   |                        |   |          |  
|Land and buildings                          |  |               | 23,737   |   |                        |   | 23,241   |  
|Leasehold and other improvements            |  |               | 80,857   |   |                        |   | 74,922   |  
|Equipment                                   |  |               | 163,752  |   |                        |   | 159,462  |  
|Construction in progress                    |  |               | 4,029    |   |                        |   | 6,114    |  
|                                            |  |               |          |   |                        |   |          |  
|                                            |  |               | 272,375  |   |                        |   | 263,739  |  
|Accumulated depreciation and amortization   |  |               | 135,185  |   |                        |   | 126,856  |  
|                                            |  |               |          |   |                        |   |          |  
|Property, plant and equipment, net          |  |               | 137,190  |   |                        |   | 136,883  |  
|                                            |  |               |          |   |                        |   |          |  
|Other assets:                               |  |               |          |   |                        |   |          |  
|Deferred financing costs                    |  |               | 12,589   |   |                        |   | 13,411   |  
|Goodwill                                    |  |               | 22,685   |   |                        |   | 22,955   |  
|Capitalized software                        |  |               | 22,234   |   |                        |   | 24,079   |  
|Other assets                                |  |               | 20,947   |   |                        |   | 20,832   |  
|Deferred income taxes                       |  |               | 38,538   |   |                        |   | 39,696   |  
|                                            |  |               |          |   |                        |   |          |  
|Total other assets                          |  |               | 116,993  |   |                        |   | 120,973  |  
|                                            |  |               |          |   |                        |   |          |  
|Total assets                                |  | $             | 419,655  |   |                        | $ | 447,347  |  
|                                            |  |               |          |   |                        |   |          |  
|Liabilities and stockholders deficit       |  |               |          |   |                        |   |          |  
|Current liabilities:                        |  |               |          |   |                        |   |          |  
|Current portion of long-term debt           |  | $             | 16,490   |   |                        | $ | 25,295   |  
|Accounts payable                            |  |               | 51,926   |   |                        |   | 55,350   |  
|Insurance reserves                          |  |               | 9,985    |   |                        |   | 9,778    |  
|Advertising fund liabilities                |  |               | 37,636   |   |                        |   | 32,817   |  
|Other accrued liabilities                   |  |               | 70,614   |   |                        |   | 66,427   |  
|                                            |  |               |          |   |                        |   |          |  
|Total current liabilities                   |  |               | 186,651  |   |                        |   | 189,667  |  
|                                            |  |               |          |   |                        |   |          |  
|Long-term liabilities:                      |  |               |          |   |                        |   |          |  
|Long-term debt, less current portion        |  |               | 754,182  |   |                        |   | 755,405  |  
|Insurance reserves                          |  |               | 19,770   |   |                        |   | 18,039   |  
|Other accrued liabilities                   |  |               | 33,177   |   |                        |   | 34,116   |  
|                                            |  |               |          |   |                        |   |          |  
|Total long-term liabilities                 |  |               | 807,129  |   |                        |   | 807,560  |  
|                                            |  |               |          |   |                        |   |          |  
|Stockholders deficit:                      |  |               |          |   |                        |   |          |  
|Common stock                                |  |               | 661      |   |                        |   | 687      |  
|Additional paid-in capital                  |  |               | 244,179  |   |                        |   | 302,413  |  
|Retained deficit                            |  |               | (824,443 | ) |                        |   | (859,289 | )
|Deferred stock compensation                 |  |               | (179     | ) |                        |   | (202     | )
|Accumulated other comprehensive income      |  |               | 5,657    |   |                        |   | 6,511    |  
|                                            |  |               |          |   |                        |   |          |  
|Total stockholders deficit                 |  |               | (574,125 | ) |                        |   | (549,880 | )
|                                            |  |               |          |   |                        |   |          |  
|Total liabilities and stockholders deficit |  | $             | 419,655  |   |                        | $ | 447,347  |  
|                                            |  |               |          |   |                        |   |          |  



Note: The balance sheet at January 2,
2005 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial
statements.



See accompanying notes.



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Dominos Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)



|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|---------------------------------------- |  | -------------------- | ------- | - | ------------------------- | - | ------- | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                         |  | Fiscal Quarter Ended |         |   | Two Fiscal Quarters Ended |  
|(In thousands, except per share data)    |  | June 19,2005         |         |   | June 13,2004              |   |         | June 19,2005 |  |   | June 13,2004 |  
|Revenues:                                |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Domestic Company-owned stores            |  | $                    | 91,674  |   |                           | $ | 84,062  |              |  | $ | 189,900      |   |  | $ | 172,027 |  
|Domestic franchise                       |  |                      | 37,237  |   |                           |   | 33,767  |              |  |   | 76,470       |   |  |   | 68,405  |  
|Domestic distribution                    |  |                      | 188,225 |   |                           |   | 180,927 |              |  |   | 390,042      |   |  |   | 351,776 |  
|International                            |  |                      | 29,818  |   |                           |   | 25,480  |              |  |   | 60,210       |   |  |   | 50,783  |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Total revenues                           |  |                      | 346,954 |   |                           |   | 324,236 |              |  |   | 716,622      |   |  |   | 642,991 |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Cost of sales:                           |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Domestic Company-owned stores            |  |                      | 73,093  |   |                           |   | 68,970  |              |  |   | 151,232      |   |  |   | 139,073 |  
|Domestic distribution                    |  |                      | 170,213 |   |                           |   | 164,482 |              |  |   | 352,323      |   |  |   | 318,681 |  
|International                            |  |                      | 15,249  |   |                           |   | 13,183  |              |  |   | 31,655       |   |  |   | 26,524  |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Total cost of sales                      |  |                      | 258,555 |   |                           |   | 246,635 |              |  |   | 535,210      |   |  |   | 484,278 |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Operating margin                         |  |                      | 88,399  |   |                           |   | 77,601  |              |  |   | 181,412      |   |  |   | 158,713 |  
|                                         |  |                      |         |  
|General and administrative               |  |                      | 41,819  |   |                           |   | 38,280  |              |  |   | 84,337       |   |  |   | 75,920  |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Income from operations                   |  |                      | 46,580  |   |                           |   | 39,321  |              |  |   | 97,075       |   |  |   | 82,793  |  
|                                         |  |                      |         |  
|Interest income                          |  |                      | 76      |   |                           |   | 96      |              |  |   | 289          |   |  |   | 183     |  
|Interest expense                         |  |                      | (10,562 | ) |                           |   | (13,904 | )            |  |   | (21,178      | ) |  |   | (27,891 | )
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Income before provision for income taxes |  |                      | 36,094  |   |                           |   | 25,513  |              |  |   | 76,186       |   |  |   | 55,085  |  
|                                         |  |                      |         |  
|Provision for income taxes               |  |                      | 12,693  |   |                           |   | 9,631   |              |  |   | 27,827       |   |  |   | 20,794  |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Net income                               |  | $                    | 23,401  |   |                           | $ | 15,882  |              |  | $ | 48,359       |   |  | $ | 34,291  |  
|                                         |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Earnings per share:                      |  |                      |         |   |                           |   |         |              |  |   |              |   |  |   |         |  
|Common stock  basic                     |  | $                    | 0.36    |   |                           | $ | 0.20    |              |  | $ | 0.72         |   |  | $ | 0.49    |  
|Common stock  diluted                   |  |                      | 0.35    |   |                           |   | 0.18    |              |  |   | 0.70         |   |  |   | 0.43    |  
|                                         |  |                      |         |  
|Class L common stock  basic             |  |                      | N/A     |   |                           | $ | 2.57    |              |  |   | N/A          |   |  | $ | 5.07    |  
|Class L common stock  diluted           |  |                      | N/A     |   |                           |   | 2.57    |              |  |   | N/A          |   |  |   | 5.06    |  
|                                         |  |                      |         |  
|Dividends declared per share             |  | $                    | 0.10    |   |                           | $ |        |              |  | $ | 0.20         |   |  | $ |        |  



See accompanying notes.



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Dominos Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                           |         |   |              |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------ | - | ------- | -
|                                                                                  |  | Two Fiscal Quarters Ended |        
|(In thousands)                                                                    |  | June 19,2005              |         |   | June 13,2004 |  
|Cash flows from operating activities:                                             |  |                           |         |   |              |   |         |  
|Net income                                                                        |  | $                         | 48,359  |   |              | $ | 34,291  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |         |   |              |   |         |  
|Depreciation and amortization                                                     |  |                           | 14,686  |   |              |   | 14,057  |  
|Amortization of deferred financing costs and debt discount                        |  |                           | 1,450   |   |              |   | 1,662   |  
|Provision for deferred income taxes                                               |  |                           | 899     |   |              |   | 3,030   |  
|Other                                                                             |  |                           | 1,085   |   |              |   | 437     |  
|Changes in operating assets and liabilities                                       |  |                           | 5,119   |   |              |   | (531    | )
|                                                                                  |  |                           |         |   |              |   |         |  
|Net cash provided by operating activities                                         |  |                           | 71,598  |   |              |   | 52,946  |  
|                                                                                  |  |                           |         |   |              |   |         |  
|Cash flows from investing activities:                                             |  |                           |         |   |              |   |         |  
|Capital expenditures                                                              |  |                           | (15,210 | ) |              |   | (17,639 | )
|Other                                                                             |  |                           | 2,486   |   |              |   | 389     |  
|                                                                                  |  |                           |         |   |              |   |         |  
|Net cash used in investing activities                                             |  |                           | (12,724 | ) |              |   | (17,250 | )
|                                                                                  |  |                           |         |   |              |   |         |  
|Cash flows from financing activities:                                             |  |                           |         |   |              |   |         |  
|Proceeds from issuance of long-term debt                                          |  |                           | 40,000  |   |              |   |        |  
|Repayments of long-term debt and capital lease obligation                         |  |                           | (50,136 | ) |              |   | (26,427 | )
|Purchase of common stock                                                          |  |                           | (75,000 | ) |              |   | (262    | )
|Dividends                                                                         |  |                           | (6,903  | ) |              |   |        |  
|Other                                                                             |  |                           | 3,424   |   |              |   | (595    | )
|                                                                                  |  |                           |         |   |              |   |         |  
|Net cash used in financing activities                                             |  |                           | (88,615 | ) |              |   | (27,284 | )
|                                                                                  |  |                           |         |   |              |   |         |  
|Effect of exchange rate changes on cash and cash equivalents                      |  |                           | (151    | ) |              |   | 449     |  
|                                                                                  |  |                           |         |   |              |   |         |  
|Increase (decrease) in cash and cash equivalents                                  |  |                           | (29,892 | ) |              |   | 8,861   |  
|                                                                                  |  |                          
|Cash and cash equivalents, at beginning of period                                 |  |                           | 40,396  |   |              |   | 46,391  |  
|                                                                                  |  |                           |         |   |              |   |         |  
|Cash and cash equivalents, at end of period                                       |  | $                         | 10,504  |   |              | $ | 55,252  |  
|                                                                                  |  |                           |         |   |              |   |         |  



See accompanying notes.



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Dominos Pizza, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited; tabular amounts in thousands, except percentages, share and per share amounts)



June 19, 2005



1. Basis of Presentation



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto for the fiscal year ended January 2, 2005 included in our annual report on Form 10-K.



In the opinion of management, all adjustments, consisting of normal
recurring items, considered necessary for a fair presentation have been included. Operating results for the fiscal quarter and two fiscal quarters ended June 19, 2005 are not necessarily indicative of the results that may be expected for the fiscal
year ending January 1, 2006.



Dominos Pizza, Inc. is the
parent and holding company of Dominos, Inc. Accordingly, all 10 outstanding shares of Dominos, Inc. common stock, par value $0.01 per share, are owned by Dominos Pizza, Inc. As the holding company of Dominos, Inc.,
Dominos Pizza, Inc. does not conduct ongoing business operations. As a result, the financial information for Dominos Pizza, Inc. and subsidiaries and Dominos, Inc. and subsidiaries is substantially similar. As the differences are
minor, we have presented Dominos Pizza, Inc. and subsidiaries information throughout this filing, except for the supplemental guarantor condensed consolidating financial statements of Dominos, Inc. and subsidiaries included in footnote
10.



2. Comprehensive Income



|                                                                                  |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|--------------------------------------------------------------------------------- |  | -------------------- | ------ | - | ------------------------- | - | ------ | ------------- |  | - | ------------ | - |  | - | ------ | -
|                                                                                  |  | Fiscal Quarter Ended |        |   | Two Fiscal Quarters Ended |  
|                                                                                  |  | June 19, 2005        |        |   | June 13,2004              |   |        | June 19, 2005 |  |   | June 13,2004 |  
|Net income                                                                        |  | $                    | 23,401 |   |                           | $ | 15,882 |               |  | $ | 48,359       |   |  | $ | 34,291 |  
|Unrealized gains (losses) on derivative instruments, net of tax                   |  |                      | (1,730 | ) |                           |   | 6,399  |               |  |   | 1,475        |   |  |   | 6,206  |  
|Reclassification adjustment for (gains) losses included in net income, net of tax |  |                      | (644   | ) |                           |   | 688    |               |  |   | (942         | ) |  |   | 1,337  |  
|Currency translation adjustment                                                   |  |                      | (689   | ) |                           |   | (263   | )             |  |   | (1,387       | ) |  |   | (408   | )
|                                                                                  |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|Comprehensive income                                                              |  | $                    | 20,338 |   |                           | $ | 22,706 |               |  | $ | 47,505       |   |  | $ | 41,426 |  
|                                                                                  |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  



3. Segment Information



The following table summarizes revenues, income from operations and earnings
before interest, taxes, depreciation, amortization and other, which is the measure by which management allocates resources to its segments and which we refer to as Segment Income, for each of our reportable segments.



|                         |  |                                                       |         |                      |   |               |  |                      |        |  |       |         |   |       |   |        |   |  |   |        
|------------------------ |  | ----------------------------------------------------- | ------- | -------------------- | - | ------------- |  | -------------------- | ------ |  | ----- | ------- | - | ----- | - | ------ | - |  | - | -------
|                         |  | Fiscal Quarters Ended June 19, 2005 and June 13, 2004
|                         |  | DomesticStores                                        |         | DomesticDistribution |   | International |  | IntersegmentRevenues |        |  | Other |         |   | Total
|Revenues                |  |                                                       |         |                      |   |               |  |                      |        |  |       |         |   |       |   |        |   |  |   |        
|2005                     |  | $                                                     | 128,911 |                      | $ | 214,851       |  | $                    | 29,818 |  | $     | (26,626 | ) |       | $ |       |   |  | $ | 346,954
|2004                     |  |                                                       | 117,829 |                      |   | 206,186       |  |                      | 25,480 |  |       | (25,259 | ) |       |   |       |   |  |   | 324,236
|Income from operations  |  |                                                       |         |                      |   |               |  |                      |        |  |       |         |   |       |   |        |   |  |   |        
|2005                     |  | $                                                     | 33,689  |                      | $ | 11,719        |  | $                    | 9,331  |  |       | N/A     |   |       | $ | (8,159 | ) |  | $ | 46,580 
|2004                     |  |                                                       | 28,344  |                      |   | 10,479        |  |                      | 7,479  |  |       | N/A     |   |       |   | (6,981 | ) |  |   | 39,321 
|Segment Income          |  |                                                       |         |                      |   |               |  |                      |        |  |       |         |   |       |   |        |   |  |   |        
|2005                     |  | $                                                     | 36,562  |                      | $ | 14,132        |  | $                    | 9,702  |  |       | N/A     |   |       | $ | (6,302 | ) |  | $ | 54,094 
|2004                     |  |                                                       | 31,191  |                      |   | 12,823        |  |                      | 7,759  |  |       | N/A     |   |       |   | (5,307 | ) |  |   | 46,466 



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##### Table of Contents

|                         |  |                                                           |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|------------------------ |  | --------------------------------------------------------- | ------- | -------------------- | - | ------------- |  | -------------------- | ------ |  | ----- | ------- | - | ----- | - | ------- | - |  | - | -------
|                         |  | Two Fiscal Quarters Ended June 19, 2005 and June 13, 2004
|                         |  | DomesticStores                                            |         | DomesticDistribution |   | International |  | IntersegmentRevenues |        |  | Other |         |   | Total
|Revenues                |  |                                                           |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2005                     |  | $                                                         | 266,370 |                      | $ | 445,826       |  | $                    | 60,210 |  | $     | (55,784 | ) |       | $ |        |   |  | $ | 716,622
|2004                     |  |                                                           | 240,432 |                      |   | 400,125       |  |                      | 50,783 |  |       | (48,349 | ) |       |   |        |   |  |   | 642,991
|Income from operations  |  |                                                           |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2005                     |  | $                                                         | 70,955  |                      | $ | 24,799        |  | $                    | 17,927 |  |       | N/A     |   |       | $ | (16,606 | ) |  | $ | 97,075 
|2004                     |  |                                                           | 60,118  |                      |   | 21,411        |  |                      | 14,990 |  |       | N/A     |   |       |   | (13,726 | ) |  |   | 82,793 
|Segment Income          |  |                                                           |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2005                     |  | $                                                         | 76,573  |                      | $ | 29,761        |  | $                    | 18,652 |  |       | N/A     |   |       | $ | (12,975 | ) |  | $ | 112,011
|2004                     |  |                                                           | 66,018  |                      |   | 25,960        |  |                      | 15,505 |  |       | N/A     |   |       |   | (10,572 | ) |  |   | 96,911 



The following table
reconciles Total Segment Income to consolidated income before provision for income taxes.



|                                                                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|--------------------------------------------------------------- |  | -------------------- | ---------- | - | ------------------------- | - | ---------- | ------------- |  | - | ------------- | - |  | - | ---------- | -
|                                                                |  | Fiscal Quarter Ended |            |   | Two Fiscal Quarters Ended |  
|                                                                |  | June 19, 2005        |            |   | June 13, 2004             |   |            | June 19, 2005 |  |   | June 13, 2004 |  
|Total Segment Income                                            |  | $                    | 54,094     |   |                           | $ | 46,466     |               |  | $ | 112,011       |   |  | $ | 96,911     |  
|Depreciation and amortization                                   |  |                      | (7,365     | ) |                           |   | (7,112     | )             |  |   | (14,686       | ) |  |   | (14,057    | )
|Losses on sale/disposal of assets                               |  |                      | (68        | ) |                           |   | (20        | )             |  |   | (88           | ) |  |   | (38        | )
|Non-cash stock compensation expense                             |  |                      | (81        | ) |                           |   | (13        | )             |  |   | (162          | ) |  |   | (23        | )
|                                                                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Income from operations                                          |  |                      | 46,580     |   |                           |   | 39,321     |               |  |   | 97,075        |   |  |   | 82,793     |  
|                                                                |  |                      |            |  
|Interest income                                                 |  |                      | 76         |   |                           |   | 96         |               |  |   | 289           |   |  |   | 183        |  
|Interest expense                                                |  |                      | (10,562    | ) |                           |   | (13,904    | )             |  |   | (21,178       | ) |  |   | (27,891    | )
|                                                                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Income before provision for income taxes                        |  | $                    | 36,094     |   |                           | $ | 25,513     |               |  | $ | 76,186        |   |  | $ | 55,085     |  
|                                                                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|                                                               
|4. Earnings Per Share                                           | 
|                                                                |  | Fiscal Quarter Ended |            |   | Two Fiscal Quarters Ended |  
|                                                                |  | June 19, 2005        |            |   | June 13, 2004             |   |            | June 19, 2005 |  |   | June 13, 2004 |  
|Net income available to common stockholders  basic and diluted |  | $                    | 23,401     |   |                           | $ | 15,882     |               |  | $ | 48,359        |   |  | $ | 34,291     |  
|                                                                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Allocation of net income to common stockholders:                |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Common stock                                                    |  | $                    | 23,401     |   |                           | $ | 6,580      |               |  | $ | 48,359        |   |  | $ | 15,978     |  
|Class L                                                         |  |                      | N/A        |   |                           |   | 9,302      |               |  |   | N/A           |   |  |   | 18,313     |  
|                                                                |  |                      |            |  
|Weighted average number of shares:                              |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Common stock                                                    |  |                      | 65,285,749 |   |                           |   | 32,701,176 |               |  |   | 67,112,059    |   |  |   | 32,701,326 |  
|Class L                                                         |  |                      | N/A        |   |                           |   | 3,613,978  |               |  |   | N/A           |   |  |   | 3,613,993  |  
|                                                                |  |                      |            |  
|Earnings per share  basic:                                     |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Common stock                                                    |  | $                    | 0.36       |   |                           | $ | 0.20       |               |  | $ | 0.72          |   |  | $ | 0.49       |  
|Class L                                                         |  |                      | N/A        |   |                           |   | 2.57       |               |  |   | N/A           |   |  |   | 5.07       |  
|                                                                |  |                      |            |  
|Diluted weighted average number of shares:                      |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Common stock                                                    |  |                      | 67,770,769 |   |                           |   | 36,901,875 |               |  |   | 69,505,619    |   |  |   | 36,902,025 |  
|Class L                                                         |  |                      | N/A        |   |                           |   | 3,617,486  |               |  |   | N/A           |   |  |   | 3,617,327  |  
|                                                                |  |                      |            |  
|Earnings per share  diluted:                                   |  |                      |            |   |                           |   |            |               |  |   |               |   |  |   |            |  
|Common stock                                                    |  | $                    | 0.35       |   |                           | $ | 0.18       |               |  | $ | 0.70          |   |  | $ | 0.43       |  
|Class L                                                         |  |                      | N/A        |   |                           |   | 2.57       |               |  |   | N/A           |   |  |   | 5.06       |  



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##### Table of Contents

5. Stock-Based Compensation



We account for our stock option plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. The following table illustrates the effect on net income if we had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation to the stock-based
employee compensation.



|                                                                                                                                          |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ------ | - | ------------------------- | - | ------ | ------------- |  | - | ------------ | - |  | - | ------ | -
|                                                                                                                                          |  | Fiscal Quarter Ended |        |   | Two Fiscal Quarters Ended |  
|                                                                                                                                          |  | June 19, 2005        |        |   | June 13,2004              |   |        | June 19, 2005 |  |   | June 13,2004 |  
|Net income, as reported                                                                                                                   |  | $                    | 23,401 |   |                           | $ | 15,882 |               |  | $ | 48,359       |   |  | $ | 34,291 |  
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effects                                |  |                      | 53     |   |                           |   | 8      |               |  |   | 103          |   |  |   | 15     |  
|Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax
effects |  |                      | (333   | ) |                           |   | (82    | )             |  |   | (663         | ) |  |   | (163   | )
|                                                                                                                                          |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|Net income, pro forma                                                                                                                     |  | $                    | 23,121 |   |                           | $ | 15,808 |               |  | $ | 47,799       |   |  | $ | 34,143 |  
|                                                                                                                                          |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|Pro forma earnings per share  basic:                                                                                                     |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|Common stock                                                                                                                              |  | $                    | 0.35   |   |                           | $ | 0.20   |               |  | $ | 0.71         |   |  | $ | 0.49   |  
|Class L                                                                                                                                   |  |                      | N/A    |   |                           |   | 2.57   |               |  |   | N/A          |   |  |   | 5.07   |  
|                                                                                                                                          |  |                      |        |  
|Pro forma earnings per share  diluted:                                                                                                   |  |                      |        |   |                           |   |        |               |  |   |              |   |  |   |        |  
|Common stock                                                                                                                              |  | $                    | 0.34   |   |                           | $ | 0.18   |               |  | $ | 0.69         |   |  | $ | 0.43   |  
|Class L                                                                                                                                   |  |                      | N/A    |   |                           |   | 2.57   |               |  |   | N/A          |   |  |   | 5.06   |  



6. Related Party Share Repurchase



During the second quarter, we repurchased and retired
4,409,171 shares of our Common Stock from JP Morgan Capital, L.P. and its affiliates (collectively, JPMP), for $75.0 million, or $17.01 per share. The repurchase price of $17.01 per share in this private transaction was based on a negotiated
discount between us and JPMP. We used $35.0 million of available cash on hand and $40.0 million of borrowings from our revolving credit facility to fund the repurchase of shares.



7. Income Taxes



Our effective tax rate was 35.2% for the second quarter, down from 37.8% in the first quarter. This decrease in the effective tax rate for the second
quarter was the result of the reversal of approximately $1.1 million of valuation allowances related to net operating loss deferred tax assets from certain of our foreign operations.



8. Supplemental Disclosure of Cash Flow Information



During the first two quarters of 2005, we have recorded approximately $12.7 million in income tax payable reductions as a
result of the tax benefit related to the exercise of stock options.



9. New
Accounting Pronouncements



In December 2004, the Financial
Accounting Standards Board (FASB) issued SFAS No. 123R (revised 2004), Share-Based Payments (SFAS 123R). In April 2005, the FASB amended SFAS 123R to delay the effective date of the Statement to the first annual period beginning after
June 15, 2005. SFAS 123R requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the financial statements based on the estimated fair value of the awards. We are required to
adopt SFAS 123R at the beginning of fiscal 2006. We are currently assessing valuation model alternatives (i.e. Black-Scholes or binomial models) as well as related assumptions to be used in such models. Additionally, we are evaluating the two
adoption alternatives (the modified-prospective method and the modified-retrospective method). Once our evaluation is complete, we will determine an appropriate valuation model, the method of adoption and the impact the adoption will have on our
results of operations.



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10. Supplemental Guarantor Condensed Consolidating Financial Statements of Dominos, Inc. and Subsidiaries



The tables below present condensed consolidating financial
information for the applicable periods for: (1) Dominos, Inc.; (2) on a combined basis, the guarantor subsidiaries of Dominos, Inc.s senior subordinated notes due 2011, which includes most of the domestic subsidiaries of
Dominos, Inc. and one foreign subsidiary of Dominos, Inc.; and (3) on a combined basis, the non-guarantor subsidiaries of Dominos, Inc.s senior subordinated notes due 2011. The separate financial statements of Dominos,
Inc. and subsidiaries are presented using the equity method of accounting. Accordingly, Dominos, Inc.s investment in subsidiaries is included in Other assets and the net earnings of the subsidiaries are included in
Equity earnings in subsidiaries. Except for the minor differences noted in the footnotes to the condensed consolidating financial statements below, the consolidated financial statements of Dominos, Inc. and subsidiaries are
substantially similar to the consolidated financial statements of Dominos Pizza, Inc. and subsidiaries. Each of the guarantor subsidiaries is jointly, severally, fully and unconditionally liable under the related guarantee.



Dominos, Inc. and Subsidiaries

Supplemental Guarantor Condensed Consolidating Balance Sheets



|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|---------------------------------------------------- |  | ------------------- | -------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | -------- | -
|                                                     |  | As of June 19, 2005 |         
|                                                     |  | Dominos, Inc.      |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|Cash and cash equivalents                            |  | $                   |         |   |                       | $ | 9,107                     |  | $ | 1,397        |   |  | $            |         |   |  | $ | 10,504   |  
|Accounts receivable                                  |  |                     |         |   |                       |   | 61,082                    |  |   | 6,688        |   |  |              |         |   |  |   | 67,770   |  
|Advertising fund assets, restricted                  |  |                     |         |   |                       |   |                          |  |   | 37,636       |   |  |              |         |   |  |   | 37,636   |  
|Other current assets                                 |  |                     | 4,029    |   |                       |   | 42,629                    |  |   | 2,904        |   |  |              |         |   |  |   | 49,562   |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Current assets                                       |  |                     | 4,029    |   |                       |   | 112,818                   |  |   | 48,625       |   |  |              |         |   |  |   | 165,472  |  
|                                                     |  |                     |          |   |                      
|Property, plant and equipment, net                   |  |                     |         |   |                       |   | 132,014                   |  |   | 5,176        |   |  |              |         |   |  |   | 137,190  |  
|                                                     |  |                     |          |   |                      
|Other assets                                         |  |                     | 207,412  |   |                       |   | 68,228                    |  |   | 1,088        |   |  |              | (159,735 | ) |  |   | 116,993  |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Total assets                                         |  | $                   | 211,441  |   |                       | $ | 313,060                   |  | $ | 54,889       |   |  | $            | (159,735 | ) |  | $ | 419,655  |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Current portion of long-term debt                    |  | $                   | 16,198   |   |                       | $ | 251                       |  | $ | 41           |   |  | $            |         |   |  | $ | 16,490   |  
|Accounts payable                                     |  |                     |         |   |                       |   | 37,224                    |  |   | 14,702       |   |  |              |         |   |  |   | 51,926   |  
|Advertising fund liabilities                         |  |                     |         |   |                       |   |                          |  |   | 37,636       |   |  |              |         |   |  |   | 37,636   |  
|Other current liabilities                            |  |                     | 14,452   |   |                       |   | 57,395                    |  |   | 2,143        |   |  |              |         |   |  |   | 73,990   |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Current liabilities(1)                               |  |                     | 30,650   |   |                       |   | 94,870                    |  |   | 54,522       |   |  |              |         |   |  |   | 180,042  |  
|                                                     |  |                     |          |   |                      
|Long-term debt                                       |  |                     | 748,307  |   |                       |   | 5,580                     |  |   | 295          |   |  |              |         |   |  |   | 754,182  |  
|Other long-term liabilities                          |  |                     |         |   |                       |   | 52,667                    |  |   | 280          |   |  |              |         |   |  |   | 52,947   |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Long-term liabilities                                |  |                     | 748,307  |   |                       |   | 58,247                    |  |   | 575          |   |  |              |         |   |  |   | 807,129  |  
|                                                     |  |                     |          |   |                      
|Stockholders equity (deficit)(1)                    |  |                     | (567,516 | ) |                       |   | 159,943                   |  |   | (208         | ) |  |              | (159,735 | ) |  |   | (567,516 | )
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  
|Total liabilities and stockholders equity (deficit) |  | $                   | 211,441  |   |                       | $ | 313,060                   |  | $ | 54,889       |   |  | $            | (159,735 | ) |  | $ | 419,655  |  
|                                                     |  |                     |          |   |                       |   |                           |  |   |              |   |  |              |          |   |  |   |          |  



9



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##### Table of Contents

|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|---------------------------------------------------- |  | --------------------- | -------- | - | --------------------- | - | ------------------------- |  | ------------ | ------ |  | ------------ | -------- | - |  | - | -------- | -
|                                                     |  | As of January 2, 2005 |         
|                                                     |  | Dominos, Inc.        |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | Eliminations |        |  | Consolidated |         
|Cash and cash equivalents                            |  | $                     | 3,124    |   |                       | $ | 36,331                    |  | $            | 941    |  | $            |         |   |  | $ | 40,396   |  
|Accounts receivable                                  |  |                       |         |   |                       |   | 65,404                    |  |              | 7,734  |  |              |         |   |  |   | 73,138   |  
|Advertising fund assets, restricted                  |  |                       |         |   |                       |   |                          |  |              | 32,817 |  |              |         |   |  |   | 32,817   |  
|Other current assets                                 |  |                       | 4,050    |   |                       |   | 36,258                    |  |              | 2,832  |  |              |         |   |  |   | 43,140   |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current assets                                       |  |                       | 7,174    |   |                       |   | 137,993                   |  |              | 44,324 |  |              |         |   |  |   | 189,491  |  
|                                                     |  |                       |          |   |                      
|Property, plant and equipment, net                   |  |                       |         |   |                       |   | 130,853                   |  |              | 6,030  |  |              |         |   |  |   | 136,883  |  
|                                                     |  |                       |          |   |                      
|Other assets                                         |  |                       | 227,984  |   |                       |   | 71,578                    |  |              | 1,481  |  |              | (180,070 | ) |  |   | 120,973  |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total assets                                         |  | $                     | 235,158  |   |                       | $ | 340,424                   |  | $            | 51,835 |  | $            | (180,070 | ) |  | $ | 447,347  |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current portion of long-term debt                    |  | $                     | 25,000   |   |                       | $ | 242                       |  | $            | 53     |  | $            |         |   |  | $ | 25,295   |  
|Accounts payable                                     |  |                       |         |   |                       |   | 40,417                    |  |              | 14,933 |  |              |         |   |  |   | 55,350   |  
|Advertising fund liabilities                         |  |                       |         |   |                       |   |                          |  |              | 32,817 |  |              |         |   |  |   | 32,817   |  
|Other current liabilities                            |  |                       | 10,672   |   |                       |   | 63,755                    |  |              | 1,773  |  |              |         |   |  |   | 76,200   |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current liabilities(1)                               |  |                       | 35,672   |   |                       |   | 104,414                   |  |              | 49,576 |  |              |         |   |  |   | 189,662  |  
|                                                     |  |                       |          |   |                      
|Long-term debt                                       |  |                       | 749,361  |   |                       |   | 5,687                     |  |              | 357    |  |              |         |   |  |   | 755,405  |  
|Other long-term liabilities                          |  |                       |         |   |                       |   | 51,903                    |  |              | 252    |  |              |         |   |  |   | 52,155   |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Long-term liabilities                                |  |                       | 749,361  |   |                       |   | 57,590                    |  |              | 609    |  |              |         |   |  |   | 807,560  |  
|                                                     |  |                       |          |   |                      
|Stockholders equity (deficit)(1)                    |  |                       | (549,875 | ) |                       |   | 178,420                   |  |              | 1,650  |  |              | (180,070 | ) |  |   | (549,875 | )
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total liabilities and stockholders equity (deficit) |  | $                     | 235,158  |   |                       | $ | 340,424                   |  | $            | 51,835 |  | $            | (180,070 | ) |  | $ | 447,347  |  
|                                                     |  |                       |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  

---

|(1) | Dominos Pizza, Inc. and subsidiaries had current liabilities of $186,651, and $189,667,
or $6,609 more than and $5 more than Dominos, Inc. and subsidiaries at June 19, 2005 and January 2, 2005, respectively. Dominos Pizza, Inc. and subsidiaries had total stockholders deficit of $(574,125) and $(549,880), or $6,609
more than and $5 more than Dominos, Inc. and subsidiaries at June 19, 2005 and January 2, 2005, respectively. The differences at June 19, 2005 resulted from the inclusion of a dividend payable recorded on Dominos Pizza, Inc. and
subsidiaries that was not recorded on Dominos, Inc. and subsidiaries. While Dominos, Inc. and subsidiaries plans to distribute funds to Dominos Pizza, Inc. and subsidiaries to pay this dividend, it was not a liability for
Dominos, Inc. and subsidiaries at June 19, 2005. There were no other differences between Dominos, Inc. and subsidiaries as compared to Dominos Pizza, Inc. and subsidiaries for the periods presented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dominos, Inc. and Subsidiaries

Supplemental Guarantor Condensed Consolidating Statements of Income



|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Fiscal Quarter Ended June 19, 2005 |        
|                                                          |  | Dominos, Inc.                     |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                  |        |   |                       | $ | 339,222 |                           |  | $ | 7,732        |   |  | $            |        |   |  | $ | 346,954 |  
|                                                          |  |                                    |         |   |                      
|Cost of sales                                             |  |                                    |        |   |                       |   | 253,073 |                           |  |   | 5,482        |   |  |              |        |   |  |   | 258,555 |  
|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                    |        |   |                       |   | 86,149  |                           |  |   | 2,250        |   |  |              |        |   |  |   | 88,399  |  
|                                                          |  |                                    |         |   |                      
|General and administrative                                |  |                                    |        |   |                       |   | 39,281  |                           |  |   | 2,538        |   |  |              |        |   |  |   | 41,819  |  
|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                    |        |   |                       |   | 46,868  |                           |  |   | (288         | ) |  |              |        |   |  |   | 46,580  |  
|                                                          |  |                                    |         |   |                      
|Equity earnings in subsidiaries                           |  |                                    | 30,073  |   |                       |   |        |                           |  |   |             |   |  |              | (30,073 | ) |  |   |        |  
|Interest expense, net                                     |  |                                    | (10,448 | ) |                       |   | (36     | )                         |  |   | (2           | ) |  |              |        |   |  |   | (10,486 | )
|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                    | 19,625  |   |                       |   | 46,832  |                           |  |   | (290         | ) |  |              | (30,073 | ) |  |   | 36,094  |  
|                                                          |  |                                    |         |   |                      
|Provision (benefit) for income taxes                      |  |                                    | (3,776  | ) |                       |   | 16,469  |                           |  |   |             |   |  |              |        |   |  |   | 12,693  |  
|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                                  | 23,401  |   |                       | $ | 30,363  |                           |  | $ | (290         | ) |  | $            | (30,073 | ) |  | $ | 23,401  |  
|                                                          |  |                                    |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  



10



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##### Table of Contents

|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | --------------------------------------- | ------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Two Fiscal Quarters Ended June 19, 2005 |        
|                                                          |  | Dominos, Inc.                          |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                       |        |   |                       | $ | 700,916                   |  | $ | 15,706       |   |  | $            |        |   |  | $ | 716,622 |  
|                                                          |  |                                         |         |   |                      
|Cost of sales                                             |  |                                         |        |   |                       |   | 523,959                   |  |   | 11,251       |   |  |              |        |   |  |   | 535,210 |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                         |        |   |                       |   | 176,957                   |  |   | 4,455        |   |  |              |        |   |  |   | 181,412 |  
|                                                          |  |                                         |         |   |                      
|General and administrative                                |  |                                         |        |   |                       |   | 79,313                    |  |   | 5,024        |   |  |              |        |   |  |   | 84,337  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                         |        |   |                       |   | 97,644                    |  |   | (569         | ) |  |              |        |   |  |   | 97,075  |  
|                                                          |  |                                         |         |   |                      
|Equity earnings in subsidiaries                           |  |                                         | 61,406  |   |                       |   |                          |  |   |             |   |  |              | (61,406 | ) |  |   |        |  
|Interest income (expense), net                            |  |                                         | (20,892 | ) |                       |   | 19                        |  |   | (16          | ) |  |              |        |   |  |   | (20,889 | )
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                         | 40,514  |   |                       |   | 97,663                    |  |   | (585         | ) |  |              | (61,406 | ) |  |   | 76,186  |  
|                                                          |  |                                         |         |   |                      
|Provision (benefit) for income taxes                      |  |                                         | (7,845  | ) |                       |   | 35,672                    |  |   |             |   |  |              |        |   |  |   | 27,827  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                                       | 48,359  |   |                       | $ | 61,991                    |  | $ | (585         | ) |  | $            | (61,406 | ) |  | $ | 48,359  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|                                                          | 
|                                                          |  | Fiscal Quarter Ended June 13, 2004      |        
|                                                          |  | Dominos, Inc.                          |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                       |        |   |                       | $ | 317,599                   |  | $ | 6,637        |   |  | $            |        |   |  | $ | 324,236 |  
|                                                          |  |                                         |         |   |                      
|Cost of sales                                             |  |                                         |        |   |                       |   | 241,816                   |  |   | 4,819        |   |  |              |        |   |  |   | 246,635 |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                         |        |   |                       |   | 75,783                    |  |   | 1,818        |   |  |              |        |   |  |   | 77,601  |  
|                                                          |  |                                         |         |   |                      
|General and administrative                                |  |                                         |        |   |                       |   | 36,271                    |  |   | 2,009        |   |  |              |        |   |  |   | 38,280  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                         |        |   |                       |   | 39,512                    |  |   | (191         | ) |  |              |        |   |  |   | 39,321  |  
|                                                          |  |                                         |         |   |                      
|Equity earnings in subsidiaries                           |  |                                         | 24,308  |   |                       |   |                          |  |   |             |   |  |              | (24,308 | ) |  |   |        |  
|Interest income (expense), net                            |  |                                         | (13,743 | ) |                       |   | 84                        |  |   | (149         | ) |  |              |        |   |  |   | (13,808 | )
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                         | 10,565  |   |                       |   | 39,596                    |  |   | (340         | ) |  |              | (24,308 | ) |  |   | 25,513  |  
|                                                          |  |                                         |         |   |                      
|Provision (benefit) for income taxes                      |  |                                         | (5,317  | ) |                       |   | 14,948                    |  |   |             |   |  |              |        |   |  |   | 9,631   |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                                       | 15,882  |   |                       | $ | 24,648                    |  | $ | (340         | ) |  | $            | (24,308 | ) |  | $ | 15,882  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|                                                          | 
|                                                          |  | Two Fiscal Quarters Ended June 13, 2004 |        
|                                                          |  | Dominos, Inc.                          |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                       |        |   |                       | $ | 630,073                   |  | $ | 12,918       |   |  | $            |        |   |  | $ | 642,991 |  
|                                                          |  |                                         |         |   |                      
|Cost of sales                                             |  |                                         |        |   |                       |   | 474,728                   |  |   | 9,550        |   |  |              |        |   |  |   | 484,278 |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                         |        |   |                       |   | 155,345                   |  |   | 3,368        |   |  |              |        |   |  |   | 158,713 |  
|                                                          |  |                                         |         |   |                      
|General and administrative                                |  |                                         |        |   |                       |   | 72,129                    |  |   | 3,791        |   |  |              |        |   |  |   | 75,920  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                         |        |   |                       |   | 83,216                    |  |   | (423         | ) |  |              |        |   |  |   | 82,793  |  
|                                                          |  |                                         |         |   |                      
|Equity earnings in subsidiaries                           |  |                                         | 51,169  |   |                       |   |                          |  |   |             |   |  |              | (51,169 | ) |  |   |        |  
|Interest income (expense), net                            |  |                                         | (27,531 | ) |                       |   | 89                        |  |   | (266         | ) |  |              |        |   |  |   | (27,708 | )
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                         | 23,638  |   |                       |   | 83,305                    |  |   | (689         | ) |  |              | (51,169 | ) |  |   | 55,085  |  
|                                                          |  |                                         |         |   |                      
|Provision (benefit) for income taxes                      |  |                                         | (10,653 | ) |                       |   | 31,447                    |  |   |             |   |  |              |        |   |  |   | 20,794  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)                                         |  | $                                       | 34,291  |   |                       | $ | 51,858                    |  | $ | (689         | ) |  | $            | (51,169 | ) |  | $ | 34,291  |  
|                                                          |  |                                         |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  



11



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##### Table of Contents

Dominos, Inc. and Subsidiaries

Supplemental Condensed Consolidating Statements of Cash Flows



|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|------------------------------------------------------------ |  | --------------------------------------- | ------- | - | --------------------- | - | -------- | ------------------------- |  | - | ------------ | - | ------------ | - | - |  | - | ------- | -
|                                                             |  | Two Fiscal Quarters Ended June 19, 2005 |        
|                                                             |  | Dominos, Inc.                          |         |   | GuarantorSubsidiaries |   |          | Non-GuarantorSubsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash provided by (used in) operating activities(2)       |  | $                                       | (15,663 | ) |                       | $ | 86,587   |                           |  | $ | 680          |   |              | $ |  |  | $ | 71,604  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Capital expenditures                                         |  |                                         |        |   |                       |   | (15,136  | )                         |  |   | (74          | ) |              |   |  |  |   | (15,210 | )
|Other                                                        |  |                                         |        |   |                       |   | 2,486    |                           |  |   |             |   |              |   |  |  |   | 2,486   |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Net cash used in investing activities                        |  |                                         |        |   |                       |   | (12,650  | )                         |  |   | (74          | ) |              |   |  |  |   | (12,724 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Proceeds from the issuance of long-term debt                 |  |                                         | 40,000  |   |                       |   |         |                           |  |   |             |   |              |   |  |  |   | 40,000  |  
|Repayments of debt                                           |  |                                         | (50,000 | ) |                       |   | (99      | )                         |  |   | (37          | ) |              |   |  |  |   | (50,136 | )
|Other                                                        |  |                                         | 22,539  |   |                       |   | (101,024 | )                         |  |   |             |   |              |   |  |  |   | (78,485 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Net cash provided by (used in) financing activities(2)       |  |                                         | 12,539  |   |                       |   | (101,123 | )                         |  |   | (37          | ) |              |   |  |  |   | (88,621 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Effect of exchange rate changes on cash and cash equivalents |  |                                         |        |   |                       |   | (38      | )                         |  |   | (113         | ) |              |   |  |  |   | (151    | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Increase (decrease) in cash and cash equivalents             |  |                                         | (3,124  | ) |                       |   | (27,224  | )                         |  |   | 456          |   |              |   |  |  |   | (29,892 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Cash and cash equivalents, at beginning of period            |  |                                         | 3,124   |   |                       |   | 36,331   |                           |  |   | 941          |   |              |   |  |  |   | 40,396  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Cash and cash equivalents, at end of period                  |  | $                                       |        |   |                       | $ | 9,107    |                           |  | $ | 1,397        |   |              | $ |  |  | $ | 10,504  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|                                                             | 
|                                                             |  | Two Fiscal Quarters Ended June 13, 2004 |        
|                                                             |  | Dominos, Inc.                          |         |   | GuarantorSubsidiaries |   |          | Non-GuarantorSubsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash provided by (used in) operating activities          |  | $                                       | (28,640 | ) |                       | $ | 79,695   |                           |  | $ | 1,891        |   |              | $ |  |  | $ | 52,946  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Capital expenditures                                         |  |                                         |        |   |                       |   | (16,283  | )                         |  |   | (1,356       | ) |              |   |  |  |   | (17,639 | )
|Other                                                        |  |                                         |        |   |                       |   | 389      |                           |  |   |             |   |              |   |  |  |   | 389     |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Net cash used in investing activities                        |  |                                         |        |   |                       |   | (15,894  | )                         |  |   | (1,356       | ) |              |   |  |  |   | (17,250 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Repayments of debt                                           |  |                                         | (26,234 | ) |                       |   | (90      | )                         |  |   | (103         | ) |              |   |  |  |   | (26,427 | )
|Other                                                        |  |                                         | 54,874  |   |                       |   | (55,727  | )                         |  |   |             |   |              |   |  |  |   | (853    | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Net cash provided by (used in) financing activities(2)       |  |                                         | 28,640  |   |                       |   | (55,817  | )                         |  |   | (103         | ) |              |   |  |  |   | (27,280 | )
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Effect of exchange rate changes on cash and cash equivalents |  |                                         |        |   |                       |   | 461      |                           |  |   | (12          | ) |              |   |  |  |   | 449     |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Increase in cash and cash equivalents                        |  |                                         |        |   |                       |   | 8,445    |                           |  |   | 420          |   |              |   |  |  |   | 8,865   |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Cash and cash equivalents, at beginning of period(2)         |  |                                         |        |   |                       |   | 44,663   |                           |  |   | 1,603        |   |              |   |  |  |   | 46,266  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  
|Cash and cash equivalents, at end of period(2)               |  | $                                       |        |   |                       | $ | 53,108   |                           |  | $ | 2,023        |   |              | $ |  |  | $ | 55,131  |  
|                                                             |  |                                         |         |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |         |  

---

|(2) | Dominos Pizza, Inc. and subsidiaries had net cash provided by operating activities of
$71,598, or $6 less than Dominos, Inc. and subsidiaries, during the first two quarters of 2005. Dominos Pizza, Inc. and subsidiaries had net cash used in financing activities of $(88,615) and $(27,284), or $6 less than and $4 more than
Dominos, Inc. and subsidiaries, during the first two quarters of 2005 and the first two quarters of 2004, respectively. Cash and cash equivalents for Dominos Pizza, Inc. and subsidiaries was $46,391 and $55,252 at December 28, 2003 and
June 13, 2004, respectively. There were no other differences between Dominos, Inc. and subsidiaries as compared to Dominos Pizza, Inc. and subsidiaries for the periods presented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12



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##### Table of Contents

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

(Unaudited; tabular
amounts in millions, except percentages and store data)



The 2005 and 2004 second quarters referenced herein represent the twelve-week periods ended June 19, 2005 and June 13, 2004, respectively. The 2005 and 2004 first two quarters referenced herein represent the twenty-four week periods ended
June 19, 2005 and June 13, 2004, respectively.



Overview



During the second quarter and first two quarters of
2005, global retail sales, comprised of retail sales at both our franchise and Company-owned stores worldwide, grew 13.5% and 13.7%, respectively, as compared to the prior year periods. This growth was driven primarily by robust same store sales
growth in both our domestic and international markets as well as an increase in our worldwide store counts. During the same periods, revenues grew 7.0% and 11.5%, respectively, as compared to the prior year periods. Additionally, we reported
increases in income from operations of 18.5% and 17.3% as compared to the prior year periods.



Our global retail sales benefited from strong same store sales growth, both domestically and internationally, an increase in our worldwide store counts and the positive effect of a weaker U.S. Dollar in the key
international markets in which we compete. During the second quarter and first two quarters of 2005, domestic same store sales grew 6.9% and 9.0%, respectively, comprised of domestic Company-owned same store sales increases of 8.6% and 11.2%,
respectively, and domestic franchise same store sales increases of 6.6% and 8.7%, respectively. These positive same store sales results were driven by positive consumer response to the Companys marketing and promotional activities. We also
continued to benefit from strong same store sales in our international markets during the second quarter and first two quarters, which increased 7.8% and 8.2%, respectively, on a constant dollar basis versus the prior year periods. The second
quarter marked the 46thconsecutive quarter that we have grown our international same store sales. Additionally, we
grew our worldwide net store counts by 79 and 348 stores during the second quarter and trailing four quarters, respectively.



Income from operations increased $7.3 million, or 18.5%, to $46.6 million in the second quarter, from $39.3 million in the comparable period in 2004, and
increased $14.3 million, or 17.3%, to $97.1 million in the first two quarters, from $82.8 million in the comparable period in 2004. These increases were driven by higher royalty revenues from domestic and international franchise stores, higher
domestic Company-owned same store sales, higher volumes in our distribution business and lower cheese costs at our Company-owned stores. The average published cheese block price per pound decreased $0.50 and $0.14 to $1.51 and $1.53 in the second
quarter and first two quarters of 2005, respectively, compared to the prior year period. These increases in income from operations were offset in part by higher variable general and administrative expenses as a result of improved financial
performance as compared to the prior year.



Net income
increased $7.5 million, or 47.3%, to $23.4 million in the second quarter, from $15.9 million in the comparable period in 2004, and increased $14.1 million, or 41.0%, to $48.4 million in the first two quarters, from $34.3 million in the comparable
period in 2004. These increases were driven primarily by the aforementioned increases in income from operations as well as a reduction in interest expense from the comparable periods in 2004. The reduction in interest expense was a result of lower
average debt balances and a reduction in our average borrowing rates. Additionally, net income was positively impacted by lower income taxes resulting from the reversal of valuation allowances related to net operating loss deferred tax assets from
certain of our foreign operations.



13



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##### Table of Contents

Critical accounting policies and estimates



The following discussion and analysis of financial condition and results of operations is based on our consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. The preparation of these financial statements requires our management to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, our management evaluates its estimates, including those related
to revenue recognition, allowance for uncollectible receivables, long-lived and intangible assets, insurance and legal matters and income taxes. We base our estimates on historical experience and on various other assumptions that we believe are
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates.
Changes in our estimates could materially impact our results of operations and financial condition for any particular period. We believe that our most critical accounting policies are:



Revenue recognition. We earn revenues through our network of domestic Company-owned and franchise stores, dough
manufacturing and distribution centers and international operations. Retail sales from Company-owned stores and royalty revenues resulting from the retail sales from franchise stores are recognized as revenues when the items are delivered to or
carried out by customers. Sales of food from our distribution centers are recognized as revenues upon delivery of the food to franchisees while sales of equipment and supplies from our distribution centers are generally recognized as revenues upon
shipment of the related products to franchisees.



Allowance
for uncollectible receivables. We closely monitor our accounts and notes receivable balances and provide allowances for uncollectible amounts as a result of our reviews. These estimates are based on, among other factors, historical collection
experience and a review of our receivables by aging category. Additionally, we may also provide allowances for uncollectible receivables based on specific customer collection issues that we have identified. While write-offs of bad debts have
historically been within our expectations and the provisions established, management cannot guarantee that future write-offs will not exceed historical rates. Specifically, if the financial condition of our franchisees were to deteriorate resulting
in an impairment of their ability to make payments, additional allowances may be required.



Long-lived and intangible assets. We record long-lived assets, including property, plant and equipment and capitalized software, at cost. For acquisitions of franchise operations, we estimate the fair values of
the assets and liabilities acquired based on physical inspection of assets, historical experience and other information available to us regarding the acquisition. We depreciate and amortize long-lived assets using useful lives determined by us based
on historical experience and other information available to us. We review long-lived assets for impairment when events or circumstances indicate that the related amounts might be impaired. We perform related impairment tests on a market level basis
for Company-owned stores. At January 2, 2005, we determined that our long-lived assets were not impaired. However, if our future operating performance were to deteriorate, we may be required to recognize an impairment charge.



We evaluate goodwill for impairment by comparing the fair value of our
reporting units to their carrying values. A significant portion of our goodwill relates to acquisitions of domestic franchise stores and is included in our domestic stores segment. At January 2, 2005, the fair value of our business operations with
associated goodwill exceeded their recorded carrying value, including the related goodwill. However, if the future performance of our domestic Company-owned stores or other segment operations were to deteriorate, we may be required to recognize a
goodwill impairment charge.



At June 19, 2005, we had
approximately $5.5 million in net book value of long-lived assets and goodwill associated with our Company-owned operations in The Netherlands. Recently, our Netherlands operations have performed unfavorably to our internal forecasts and
expectations. Management has responded to this performance gap by developing plans to improve the operating results of this business. If these plans ultimately prove unsuccessful, we may be required to record a partial impairment charge associated
with these operations.



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##### Table of Contents

Insurance and legal matters. We are a party to lawsuits and legal proceedings arising in the
ordinary course of business. Management closely monitors these legal matters and estimates the probable costs for the resolution of such matters. These estimates are primarily determined by consulting with both internal and external parties handling
the matters and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. If our estimates relating to legal matters proved inaccurate for any reason, we may be required to increase or decrease
the related expense in future periods.



For certain periods
prior to December 1998 and for periods after December 2001, we maintain insurance coverage for workers compensation, general liability and owned and non-owned auto liability under insurance policies requiring payment of a deductible for each
occurrence up to between $500,000 and $3.0 million, depending on the policy year and line of coverage. The related insurance reserves are determined using actuarial estimates, which are based on historical information along with assumptions about
future events. Changes in assumptions for such factors as medical costs and legal actions, as well as changes in actual experience, could cause these estimates to change in the near term which could result in an increase or decrease in the related
expense in future periods.



Income taxes. Our net
deferred tax assets assume that we will generate sufficient taxable income in specific tax jurisdictions, based on estimates and assumptions. The amounts relating to taxes recorded on the balance sheet, including tax reserves, also consider the
ultimate resolution of revenue agent reviews based on estimates and assumptions. If these estimates and assumptions change in the future, we may be required to adjust our valuation allowance or other tax reserves resulting in additional income tax
expense or benefit in future periods.



Same Store Sales Growth (versus
the comparable periods in 2004)



|                              |  |                        |   |  |                           |  
|----------------------------- |  | ---------------------- | - |  | ------------------------- | -
|                              |  | Second Quarter of 2005 |   |  | First TwoQuarters of 2005 |  
|Domestic Company-owned stores |  | + 8.6                  | % |  | + 11.2                    | %
|Domestic franchise stores     |  | + 6.6                  | % |  | + 8.7                     | %
|                              |  |                        |   |  |                           |  
|Domestic stores               |  | + 6.9                  | % |  | + 9.0                     | %
|                              |  |                       
|International stores          |  | + 7.8                  | % |  | + 8.2                     | %



Store Counts and Net Unit Growth



|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  
|------------------------------ |  | ---------------------------- | - |  | ----------------------- | - |  | -------------------- | - |  | ------------------- | - |  | ----- | -
|                               |  | Domestic Company-ownedStores |   |  | DomesticFranchiseStores |   |  | Total DomesticStores |   |  | InternationalStores |   |  | Total |  
|Store count at March 27, 2005  |  | 568                          |   |  | 4,447                   |   |  | 5,015                |   |  | 2,784               |   |  | 7,799 |  
|Openings                       |  |                             |   |  | 26                      |   |  | 26                   |   |  | 76                  |   |  | 102   |  
|Closings                       |  |                             |   |  | (12                     | ) |  | (12                  | ) |  | (11                 | ) |  | (23   | )
|Transfers                      |  | 1                            |   |  | (1                      | ) |  |                     |   |  |                    |   |  |      |  
|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  
|Store count at June 19, 2005   |  | 569                          |   |  | 4,460                   |   |  | 5,029                |   |  | 2,849               |   |  | 7,878 |  
|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  
|Second quarter net growth      |  | 1                            |   |  | 13                      |   |  | 14                   |   |  | 65                  |   |  | 79    |  
|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  
|First two quarters net growth  |  | (11                          | ) |  | 32                      |   |  | 21                   |   |  | 100                 |   |  | 121   |  
|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  
|Trailing 4 quarters net growth |  | (8                           | ) |  | 112                     |   |  | 104                  |   |  | 244                 |   |  | 348   |  
|                               |  |                              |   |  |                         |   |  |                      |   |  |                     |   |  |       |  



Income Statement Data



|                                         |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|---------------------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | ------------------------- | ----- |  | ------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|                                         |  | Second Quarterof 2005 |       |  | Second Quarterof 2004 |   |  | First TwoQuarters of 2005 |       |  | First TwoQuarters of 2004 |  
|Total revenues                           |  | $                     | 347.0 |  | 100.0                 | % |  | $                         | 324.2 |  | 100.0                     | % |  | $ | 716.6 |  | 100.0 | % |  | $ | 643.0 |  | 100.0 | %
|                                         |  |                       |       |  |                       |   |  |                          
|Cost of sales                            |  |                       | 258.6 |  | 74.5                  | % |  |                           | 246.6 |  | 76.1                      | % |  |   | 535.2 |  | 74.7  | % |  |   | 484.3 |  | 75.3  | %
|General and administrative               |  |                       | 41.8  |  | 12.1                  | % |  |                           | 38.3  |  | 11.8                      | % |  |   | 84.3  |  | 11.8  | % |  |   | 75.9  |  | 11.8  | %
|                                         |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Income from operations                   |  |                       | 46.6  |  | 13.4                  | % |  |                           | 39.3  |  | 12.1                      | % |  |   | 97.1  |  | 13.5  | % |  |   | 82.8  |  | 12.9  | %
|Interest expense, net                    |  |                       | 10.5  |  | 3.0                   | % |  |                           | 13.8  |  | 4.2                       | % |  |   | 20.9  |  | 2.9   | % |  |   | 27.7  |  | 4.3   | %
|                                         |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Income before provision for income taxes |  |                       | 36.1  |  | 10.4                  | % |  |                           | 25.5  |  | 7.9                       | % |  |   | 76.2  |  | 10.6  | % |  |   | 55.1  |  | 8.6   | %
|Provision for income taxes               |  |                       | 12.7  |  | 3.7                   | % |  |                           | 9.6   |  | 3.0                       | % |  |   | 27.8  |  | 3.9   | % |  |   | 20.8  |  | 3.3   | %
|                                         |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Net income                               |  | $                     | 23.4  |  | 6.7                   | % |  | $                         | 15.9  |  | 4.9                       | % |  | $ | 48.4  |  | 6.7   | % |  | $ | 34.3  |  | 5.3   | %
|                                         |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  



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##### Table of Contents

Revenues



Revenues primarily include retail sales by Company-owned stores, royalties from domestic and international franchise stores, and sales of food, equipment
and supplies by our distribution centers to certain domestic and international franchise stores. Company-owned store and franchise store revenues may vary significantly from period to period due to changes in store count mix while distribution
revenues may vary significantly as a result of fluctuations in commodity prices, primarily cheese and meats.



Consolidated revenues increased $22.8 million, or 7.0%, to $347.0 million in the second quarter of 2005, from $324.2 million in the comparable period in
2004, and increased $73.6 million, or 11.5%, to $716.6 million in the first two quarters of 2005, from $643.0 million in the comparable period in 2004. These increases were a result of increases in revenues at each of our reportable segments and are
more fully described below.



Domestic Stores



Domestic stores revenues are comprised of revenues from our domestic
Company-owned store operations and domestic franchise operations, as summarized in the following table.



|                               |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|------------------------------ |  | --------------------- | ----- |  | --------------------- | - |  | ------------------------- | ----- |  | ------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|Domestic Stores                |  | Second Quarterof 2005 |       |  | Second Quarterof 2004 |   |  | First TwoQuarters of 2005 |       |  | First TwoQuarters of 2004 |  
|Domestic Company-owned stores  |  | $                     | 91.7  |  | 71.1                  | % |  | $                         | 84.1  |  | 71.3                      | % |  | $ | 189.9 |  | 71.3  | % |  | $ | 172.0 |  | 71.5  | %
|Domestic franchise             |  |                       | 37.2  |  | 28.9                  | % |  |                           | 33.8  |  | 28.7                      | % |  |   | 76.5  |  | 28.7  | % |  |   | 68.4  |  | 28.5  | %
|                               |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Total domestic stores revenues |  | $                     | 128.9 |  | 100.0                 | % |  | $                         | 117.8 |  | 100.0                     | % |  | $ | 266.4 |  | 100.0 | % |  | $ | 240.4 |  | 100.0 | %
|                               |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  



Domestic stores
revenues increased $11.1 million, or 9.4%, to $128.9 million in the second quarter of 2005, from $117.8 million in the comparable period in 2004, and increased $26.0 million, or 10.8%, to $266.4 million in the first two quarters of 2005, from $240.4
million in the comparable period in 2004. These increases in revenues were due primarily to higher domestic Company-owned and franchise same store sales as well as increases in the average number of domestic franchise stores in operation during
2005. Domestic same store sales increased 6.9% and 9.0% in the second quarter and first two quarters of 2005, respectively, compared to the same periods in 2004, driven by positive consumer response to the Companys marketing and promotional
activities. These changes in domestic stores revenues are more fully described below.



Domestic Company-Owned Stores



Revenues from domestic Company-owned store operations increased $7.6 million, or 9.1%, to $91.7 million in the second quarter of 2005, from $84.1 million in the comparable period in 2004, and increased $17.9 million,
or 10.4%, to $189.9 million in the first two quarters of 2005, from $172.0 million in the comparable period in 2004. These increases in revenues were due primarily to higher same store sales. Domestic Company-owned same store sales increased 8.6%
and 11.2% in the second quarter and first two quarters of 2005, respectively, compared to the same periods in 2004. There were 569 and 577 domestic Company-owned stores in operation as of June 19, 2005 and June 13, 2004, respectively.



Domestic Franchise



Revenues from domestic franchise operations increased $3.4 million, or
10.3%, to $37.2 million in the second quarter of 2005, from $33.8 million in the comparable period in 2004, and increased $8.1 million, or 11.8%, to $76.5 million in the first two quarters of 2005, from $68.4 million in the comparable period in
2004. These increases in revenues were due primarily to higher same store sales and an increase in the average number of domestic franchise stores open during 2005. Domestic franchise same store sales increased 6.6% and 8.7% in the second quarter
and first two quarters of 2005, respectively, compared to the same periods in 2004. There were 4,460 and 4,348 domestic franchise stores in operation as of June 19, 2005 and June 13, 2004, respectively. The average royalty rate earned on domestic
franchise retail sales was 5.4% in the second quarter of 2005.



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##### Table of Contents

Domestic Distribution



Revenues from domestic distribution operations increased $7.3 million, or 4.0%, to $188.2 million in the second quarter of
2005, from $180.9 million in the comparable period in 2004, and increased $38.2 million, or 10.9%, to $390.0 million in the first two quarters of 2005, from $351.8 million in the comparable period in 2004. These increases in revenues were due
primarily to higher volumes related to increases in domestic franchise retail sales, offset in part by a decrease in cheese prices. The published cheese block price-per-pound averaged $1.51 and $1.53 in the second quarter and first two quarters of
2005, respectively, down from $2.01 and $1.67 in the comparable periods in 2004. Had the 2005 average cheese prices been in effect during 2004, distribution revenues for the second quarter and first two quarters of 2004 would have been approximately
$12.9 million and $6.1 million, respectively, lower than the reported 2004 reported amounts.



International



Revenues from international operations increased $4.3 million, or 17.0%, to $29.8 million in the second quarter of 2005, from $25.5 million in the
comparable period in 2004, and increased $9.4 million, or 18.6%, to $60.2 million in the first two quarters of 2005, from $50.8 million in the comparable period in 2004. These increases in revenues were due to higher same store sales, an increase in
the average number of international stores open during 2005, related increases in revenues from our international distribution operations and the positive effect of a weaker U.S. Dollar in the key international markets in which we compete. On a
constant dollar basis, same store sales increased 7.8% and 8.2% in the second quarter and first two quarters of 2005, respectively, versus the comparable period in 2004. There were 2,849 and 2,605 international stores in operation as of June 19,
2005 and June 13, 2004, respectively. The average royalty rate earned on international franchise retail sales was 3.2% in the second quarter of 2005.



Cost of Sales / Operating Margin



Consolidated cost of sales is comprised primarily of domestic Company-owned store and domestic distribution costs incurred to generate related revenues.
Components of consolidated cost of sales primarily include food, labor and occupancy costs.



The consolidated operating margin, which we define as revenues less cost of sales, increased $10.8 million, or 13.9%, to $88.4 million in the second quarter of 2005, from $77.6 million in the comparable period in 2004
and increased $22.7 million, or 14.3%, to $181.4 million in the first two quarters of 2005, from $158.7 million in the comparable period in 2004. These results are summarized in the following table.



|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | ------------------------- | ----- |  | ------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|                              |  | Second Quarterof 2005 |       |  | Second Quarterof 2004 |   |  | First TwoQuarters of 2005 |       |  | First TwoQuarters of 2004 |  
|Consolidated revenues         |  | $                     | 347.0 |  | 100.0                 | % |  | $                         | 324.2 |  | 100.0                     | % |  | $ | 716.6 |  | 100.0 | % |  | $ | 643.0 |  | 100.0 | %
|Consolidated cost of sales    |  |                       | 258.6 |  | 74.5                  | % |  |                           | 246.6 |  | 76.1                      | % |  |   | 535.2 |  | 74.7  | % |  |   | 484.3 |  | 75.3  | %
|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Consolidated operating margin |  | $                     | 88.4  |  | 25.5                  | % |  | $                         | 77.6  |  | 23.9                      | % |  | $ | 181.4 |  | 25.3  | % |  | $ | 158.7 |  | 24.7  | %
|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  



The increases in
consolidated operating margin for the second quarter and first two quarters of 2005 were due primarily to higher domestic franchise and international royalty revenues resulting from strong global retail sales growth.



As a percentage of revenues, the consolidated operating margin increased 1.6
percentage points to 25.5% in the second quarter of 2005, from 23.9% in the comparable period in 2004, and increased 0.6 percentage points to 25.3% in the first two quarters of 2005, from 24.7% in the comparable period in 2004. The consolidated
operating margin as a percentage of revenues was positively impacted by higher same store sales and store counts, which generated increased domestic and international franchise royalty revenues, higher distribution volumes and higher domestic
Company-owned store revenues. Additionally, the consolidated operating margin was positively impacted as a result of lower cheese costs, which benefited domestic Company-owned store and distribution operating margins as a percentage of revenues.



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##### Table of Contents

As mentioned above, the consolidated operating margin as a percentage of revenues was positively impacted
by lower cheese costs. Cheese price changes are a pass-through in domestic distribution revenues and cost of sales and, as such, have no impact on the related operating margin. However, cheese price changes do impact operating margin as
a percentage of revenues. Had the 2005 average cheese prices been in effect during 2004, the total operating margin for the second quarter and first two quarters of 2004 would have each been approximately 24.9% of total revenues, versus the reported
23.9% and 24.7%, respectively. This would have resulted in operating margin improvements of 0.6 and 0.4 percentage points in the second quarter and first two quarters of 2005, respectively, versus the reported improvements of 1.6 and 0.6 percentage
points.



Domestic Company-Owned Stores



The domestic Company-owned store operating margin
increased $3.5 million, or 23.1%, to $18.6 million in the second quarter of 2005, from $15.1 million in the comparable period in 2004, and increased $5.7 million, or 17.3%, to $38.7 million in the first two quarters of 2005, from $33.0 million in
the comparable period in 2004. These results are summarized in the following table.



|                              |  |                       |      |  |                       |   |  |                           |      |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | --------------------- | ---- |  | --------------------- | - |  | ------------------------- | ---- |  | ------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|Domestic Company-Owned Stores |  | Second Quarterof 2005 |      |  | Second Quarterof 2004 |   |  | First TwoQuarters of 2005 |      |  | First TwoQuarters of 2004 |  
|Revenues                      |  | $                     | 91.7 |  | 100.0                 | % |  | $                         | 84.1 |  | 100.0                     | % |  | $ | 189.9 |  | 100.0 | % |  | $ | 172.0 |  | 100.0 | %
|Cost of sales                 |  |                       | 73.1 |  | 79.7                  | % |  |                           | 69.0 |  | 82.0                      | % |  |   | 151.2 |  | 79.6  | % |  |   | 139.1 |  | 80.8  | %
|                              |  |                       |      |  |                       |   |  |                           |      |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Store operating margin        |  | $                     | 18.6 |  | 20.3                  | % |  | $                         | 15.1 |  | 18.0                      | % |  | $ | 38.7  |  | 20.4  | % |  | $ | 33.0  |  | 19.2  | %
|                              |  |                       |      |  |                       |   |  |                           |      |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  



The increases in the
domestic Company-owned store operating margin during the second quarter and first two quarters of 2005 were due primarily to increases in same store sales and reductions in cheese prices.



As a percentage of store revenues, the store operating margin increased 2.3 percentage points, to 20.3%, in the second
quarter of 2005, from 18.0% in the comparable period in 2004, and increased 1.2 percentage points, to 20.4% in the first two quarters of 2005, from 19.2% in the comparable period in 2004.



As a percentage of store revenues, food costs decreased 1.3 percentage points to 28.3% in the second quarter of 2005, from
29.6% in the comparable period in 2004, and increased 0.8 percentage points to 28.7% in the first two quarters of 2005, from 27.9% in the comparable period in 2004. The decrease in food costs as a percentage of store revenues during the second
quarter was due primarily to a reduction in cheese prices. The increase in food costs as a percentage of store revenues during the first two quarters was due primarily to a change in product mix as a result of certain promotions in 2005, offset in
part by a reduction in cheese prices.



As a percentage of store
revenues, labor costs increased 0.3 percentage points to 29.6% in the second quarter of 2005, from 29.3% in the comparable period in 2004, and decreased 0.6 percentage points to 29.4% in the first two quarters of 2005, from 30.0% in the comparable
period in 2004.



As a percentage of store revenues, occupancy
costs, which include rent, telephone, utilities and depreciation, decreased 0.5 percentage points to 10.8% in the second quarter of 2005, from 11.3% in the comparable period in 2004, and decreased 0.7 percentage points to 10.5% in the first two
quarters of 2005, from 11.2% in the comparable period in 2004. These decreases in occupancy costs as a percentage of revenues were driven primarily by higher same store sales.



Domestic Distribution



The domestic distribution operating margin increased $1.6 million, or 9.5%, to $18.0 million in the second quarter of 2005, from $16.4 million in the
comparable period in 2004, and increased $4.6 million, or 14.0%, to $37.7 million in the first two quarters of 2005, from $33.1 million in the comparable period in 2004. These results are summarized in the following table.



|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | ------------------------- | ----- |  | ------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|Domestic Distribution         |  | Second Quarterof 2005 |       |  | Second Quarterof 2004 |   |  | First TwoQuarters of 2005 |       |  | First TwoQuarters of 2004 |  
|Revenues                      |  | $                     | 188.2 |  | 100.0                 | % |  | $                         | 180.9 |  | 100.0                     | % |  | $ | 390.0 |  | 100.0 | % |  | $ | 351.8 |  | 100.0 | %
|Cost of sales                 |  |                       | 170.2 |  | 90.4                  | % |  |                           | 164.5 |  | 90.9                      | % |  |   | 352.3 |  | 90.3  | % |  |   | 318.7 |  | 90.6  | %
|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  
|Distribution operating margin |  | $                     | 18.0  |  | 9.6                   | % |  | $                         | 16.4  |  | 9.1                       | % |  | $ | 37.7  |  | 9.7   | % |  | $ | 33.1  |  | 9.4   | %
|                              |  |                       |       |  |                       |   |  |                           |       |  |                           |   |  |   |       |  |       |   |  |   |       |  |       |  



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##### Table of Contents

The increases in the domestic distribution operating margin during the second quarter and first two
quarters of 2005 were due primarily to higher volumes as a result of increases in domestic retail sales, offset in part by higher labor, delivery and occupancy costs.



As a percentage of distribution revenues, the distribution operating margin increased 0.5 percentage points, to 9.6%, in the
second quarter of 2005, from 9.1% in the comparable period in 2004, and increased 0.3 percentage points, to 9.7% in the first two quarters of 2005, from 9.4% in the comparable period in 2004. Had the 2005 average cheese prices been in effect during
2004, the distribution operating margin for the second quarter and first two quarters of 2004 would have been approximately 9.8% and 9.6% of distribution revenues, respectively, versus the reported 9.1% and 9.4%. This would have resulted in an
operating margin decrease of 0.2 percentage points during the second quarter of 2005, versus the reported increase of 0.5 percentage points, and an operating margin improvement of 0.1 percentage points in the first two quarters of 2005, versus the
reported improvements of 0.3 percentage points.



General and
Administrative Expenses



General and administrative
expenses increased $3.5 million, or 9.2%, to $41.8 million in the second quarter of 2005, from $38.3 million in the comparable period in 2004, and increased $8.4 million, or 11.1%, to $84.3 million in the first two quarters of 2005, from $75.9
million in the comparable period in 2004. These increases in general and administrative expenses were due primarily to increases in variable general and administrative expenses, including higher administrative labor as a result of higher
performance-based bonuses and increases in advertising contributions as a result of higher Company-owned same store sales. As a percentage of total revenues, general and administrative expenses increased 0.3 percentage points to 12.1% in the second
quarter of 2005, from 11.8% in the comparable period in 2004, and remained flat at 11.8% in the first two quarters of 2005 compared to the comparable period in 2004.



Interest Expense



Interest expense decreased $3.3 million, or 24.0%, to $10.6 million in the second quarter of 2005, from $13.9 million in the comparable period in 2004,
and decreased $6.7 million, or 24.1%, to $21.2 million in the first two quarters of 2005, from $27.9 million in the comparable period in 2004. These decreases in interest expense were due primarily to lower average debt balances and a reduction in
our average borrowing rates. Our average outstanding debt balance, excluding capital lease obligations, decreased $159.4 million to $771.4 million in the second quarter of 2005, from $930.8 million in the comparable period in 2004, and decreased
$171.5 million to $762.2 million in the first two quarters of 2005, from $933.7 million in the comparable period in 2004. Our effective borrowing rate decreased 0.5 percentage points to 5.3% during both the second quarter and first two quarters in
2005, respectively, from 5.8% in the prior year periods. These reductions in average borrowing rates were due to senior credit facility margin pricing reductions and prepayments of senior subordinated notes in 2004, offset in part by higher market
interest rates.



Provision for Income Taxes



Provision for income taxes increased $3.1 million to $12.7 million in the
second quarter of 2005, from $9.6 million in the comparable period in 2004, and increased $7.0 million to $27.8 million in the first two quarters of 2005, from $20.8 million in the comparable period in 2004. The effective tax rate for the second
quarter decreased 2.6 percentage points to 35.2% in the second quarter of 2005, from 37.8% in the comparable period in 2004, and decreased 1.3 percentage points to 36.5% in the first two quarters of 2005, from 37.8% in the comparable period in 2004.
These decreases in the effective tax rate were due primarily to the reversal of valuation allowances related to net operating loss deferred tax assets from certain of our foreign operations.



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Liquidity and Capital Resources



We had negative working capital of $21.2 million and cash and cash equivalents of $10.5 million at June 19, 2005.
Historically, we have operated with minimal positive or negative working capital, primarily because our receivable collection periods and inventory turn rates are faster than the normal payment terms on our current liabilities. We generally collect
our receivables within three weeks from the date of the related sale and we generally experience 40 to 50 inventory turns per year. In addition, our sales are not typically seasonal, which further limits our working capital requirements. These
factors, coupled with significant and ongoing cash flows from operations, which are primarily used to repay debt, invest in long-term assets, and pay dividends, reduce our working capital amounts. Our primary sources of liquidity are cash flows from
operations and availability of borrowings under our revolving credit facility. We expect to fund planned capital expenditures, debt repayments and dividends from these sources. We did not have any material commitments for capital expenditures as of
June 19, 2005.



As of June 19, 2005, we had $770.7 million of
debt, of which $16.5 million was classified as a current liability, including $15.0 million of borrowings under our $125.0 million revolving credit facility. Letters of credit issued under the revolving credit facility were $27.3 million. These
letters of credit are primarily related to our casualty insurance programs and distribution center leases. Borrowings under the revolving credit facility are available to fund our working capital requirements, capital expenditures and other general
corporate purposes.



We enter into interest rate swaps, collars
or similar instruments with the objective of reducing volatility relating to our borrowing costs. As of June 19, 2005, we were party to interest rate derivatives in the total notional amount of $475.0 million. Subsequent to the second quarter, a
$300.0 million interest rate swap expired and a $350.0 million interest rate swap took effect. Approximately 72% of outstanding borrowings were contractually fixed as of June 19, 2005.



Cash provided by operating activities was $71.6 million and $52.9 million in the first two quarters of 2005 and 2004,
respectively. The $18.7 million increase was due primarily to a $14.1 million increase in net income and a $5.7 million net change in operating assets and liabilities.



Cash used in investing activities was $12.7 million and $17.3 million in the first two quarters of 2005 and 2004,
respectively. The $4.6 million decrease was due primarily to a $2.4 million decrease in capital expenditures and a $1.9 million increase in proceeds from the sale of property, plant and equipment resulting from the sale of nine Company-owned stores
in the first quarter of 2005.



Cash used in financing
activities was $88.6 million and $27.3 million in the first two quarters of 2005 and 2004, respectively. The $61.3 million increase was due primarily to a $75.0 million purchase of common stock, a $23.7 million increase in repayments of long-term
debt and a $6.9 million dividend payment, offset in part by $40.0 million of proceeds resulting from short-term borrowings to partially fund the aforementioned share repurchase.



Based upon the current level of operations and anticipated growth, we believe that the cash generated from operations and
amounts available under the revolving credit facility will be adequate to meet our anticipated debt service requirements, capital expenditures, dividend payments and working capital needs for the next twelve months. Our ability to continue to fund
these items and continue to reduce debt could be adversely affected by the occurrence of any of the events described under Risk Factors in our filings with the Securities and Exchange Commission. There can be no assurance, however, that
our business will generate sufficient cash flows from operations or that future borrowings will be available under the senior secured credit facility or otherwise to enable us to service our indebtedness, including the senior secured credit facility
and the senior subordinated notes, or to make anticipated capital expenditures, or to make anticipated dividend payments. Our future operating performance and our ability to service or refinance the senior subordinated notes and to service, extend
or refinance the senior secured credit facility will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Additionally, Dominos, Inc. may be requested to provide funds to
its parent company, Dominos Pizza, Inc. for dividends, distributions and/or other cash needs of Dominos Pizza, Inc.



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Forward-Looking Statements



This filing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relating to our anticipated profitability and operating performance reflect managements expectations based upon currently available
information and data. However, actual results are subject to future risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that can
cause actual results to differ materially include: the uncertainties relating to litigation; consumer preferences, spending patterns and demographic trends; the effectiveness of our advertising, operations and promotional initiatives; our ability to
retain key personnel; new product and concept developments by Dominos and other food-industry competitors; the ongoing profitability of our franchisees and the ability of Dominos and our franchisees to open new restaurants; changes in
food prices, particularly cheese, labor, utilities, insurance, employee benefits and other operating costs; the impact that widespread illness or general health concerns may have on our business and the economy of the countries in which we operate;
severe weather conditions and natural disasters; changes in our effective tax rate; changes in government legislation and regulations; adequacy of our insurance coverage; costs related to future financings and changes in accounting policies. Further
information about factors that could affect Dominos financial and other results is included in our other filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.



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##### Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk



Market Risk



We
are exposed to market risks from interest rate changes on our variable rate debt. Management actively monitors this exposure. We do not engage in speculative transactions nor do we hold or issue financial instruments for trading purposes.



Interest Rate Derivatives



We enter into interest rate swaps, collars or similar instruments with the
objective of reducing volatility relating to our borrowing costs.



We are party to two interest rate swap agreements which effectively convert the variable LIBOR component of the effective interest rate on a portion of our debt under our senior secured credit facility to various fixed rates over various
terms. We are also party to two interest rate swap agreements which effectively convert the 8.25% interest rate on our debt under our senior subordinated notes to variable rates over the term of the senior subordinated notes.



These agreements are summarized in the following table.



|                   |  |                       |  |                         |  |                             |  |                  
|------------------ |  | --------------------- |  | ----------------------- |  | --------------------------- |  | -----------------
|Derivative         |  | Total Notional Amount |  | Term                    |  | Company Pays                |  | Counterparty Pays
|Interest Rate Swap |  | $75.0 million         |  | August 2002  June 2005 |  | 3.25%                       |  | LIBOR            
|Interest Rate Swap |  | $50.0 million         |  | August 2003  July 2011 |  | LIBOR plus 319 basis points |  | 8.25%            
|Interest Rate Swap |  | $50.0 million         |  | August 2003  July 2011 |  | LIBOR plus 324 basis points |  | 8.25%            
|Interest Rate Swap |  | $300.0 million        |  | June 2004  June 2005   |  | 1.62%                       |  | LIBOR            



In 2004, we entered
into an additional interest rate swap agreement effectively converting the variable LIBOR component of the effective interest rate on a portion of our debt under our senior secured credit facility term debt to a fixed rate. The agreement has a
notional starting amount of $350.0 million, began June 30, 2005, ends in June 2007 and fixes the variable LIBOR component at 3.21%. We pay a fixed interest rate under this agreement while the counterparty pays a floating rate. Additionally, the
$300.0 million interest rate swap included in the table above expired on June 30, 2005.



Interest Rate Risk



Our variable
interest expense is sensitive to changes in the general level of interest rates. At June 19, 2005, the weighted average interest rate on our $213.0 million of variable interest debt was 5.9%.



We had total interest expense of approximately $21.2 million in the first two
quarters of 2005. The estimated increase in interest expense for this period from a hypothetical 200 basis point adverse change in applicable variable interest rates would be approximately $2.0 million.



Item 4. Controls and Procedures



Dominos Pizza, Inc.s Chairman and Chief Executive Officer, David A. Brandon, and Executive Vice President and Chief Financial Officer, Harry J. Silverman, performed an evaluation of the effectiveness of Dominos Pizza,
Inc.s and Dominos, Inc.s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation,
Messrs. Brandon and Silverman concluded that each of Dominos Pizza, Inc.s and Dominos, Inc.s disclosure controls and procedures were effective.



During the quarterly period ended June 19, 2005 there have been no changes in either Dominos Pizza, Inc.s or
Dominos, Inc.s internal controls over financial reporting that have materially affected or are reasonably likely to materially affect Dominos Pizza, Inc.s or Dominos, Inc.s internal control over financial
reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



Item 1. Legal Proceedings



We are
a party to lawsuits, revenue agent reviews by taxing authorities and administrative proceedings in the ordinary course of business which include workers compensation, general liability, automobile and franchisee claims. We are also subject to
suits related to employment practices and, specifically in California, wage and hour claims and two class actions pending in Orange County, California Superior Court brought by former employees. On June 10, 2003, a class action complaint was filed
alleging that we failed to provide meal and rest breaks to our employees. This case is in the discovery stage and no determination with respect to class certification has been made.



On August 19, 2004, a class action complaint was filed by a former general manager alleging that we misclassified the
position of general manager. We classify the general manager of a Dominos Pizza store as an exempt employee. This case involves the issue of whether employees and former employees in the general manager position who worked in our 60 California
stores during specified time periods were misclassified as exempt and deprived of overtime pay. We believe this case is without merit and intend to vigorously defend against the related claims. This case is in the earliest stages of discovery, and
the status of the class action certification is yet to be determined. We are presently unable to predict the probable outcome of this matter or the amounts of any potential damages at issue.



We believe that these matters, individually and in the aggregate, will not
have a significant adverse effect on our financial condition and that our established reserves adequately provide for the resolution of such claims.



Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities



|                                             |  |                                               |     |  |                                           |       |                                                                                              |   |                                                                                                                        |  
|-------------------------------------------- |  | --------------------------------------------- | --- |  | ----------------------------------------- | ----- | -------------------------------------------------------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------- | -
|Period                                       |  | (a) Total Numberof Shares (orUnits) Purchased |     |  | (b) Average Price Paidper Share (or Unit) |       | (c) Total Number of Shares(or Units) Purchased as Partof Publicly AnnouncedPlans or Programs |   | (d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that May Yet BePurchased Under thePlans or
Programs
|Period #1 (March 28, 2005 to April 24, 2005) |  | 4,409,171                                     | (1) |  | $                                         | 17.01 |                                                                                              |  |                                                                                                                        | 
|Period #2 (April 25, 2005 to May 22, 2005)   |  |                                              |     |  |                                           |      |                                                                                              |  |                                                                                                                        | 
|Period #3 (May 23, 2005 to June 19, 2005)    |  |                                              |     |  |                                           |      |                                                                                              |  |                                                                                                                        | 
|                                             |  |                                               |     |  |                                           |       |                                                                                              |   |                                                                                                                        |  
|Total                                        |  | 4,409,171                                     |     |  | $                                         | 17.01 |                                                                                              |  |                                                                                                                        | 
|                                             |  |                                               |     |  |                                           |       |                                                                                              |   |                                                                                                                        |  

---

|(1) | As previously reported, in the second quarter we repurchased and retired 4,409,171 shares of our Common Stock from JP Morgan Capital, L.P. and its affiliates
(collectively, JPMP), for $75.0 million, or $17.01 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 3. Defaults Upon Senior Securities



None.



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##### Table of Contents

Item 4. Submission of Matters to a Vote of Security Holders



(a) We held our 2005 Annual Meeting of Shareholders on May 5, 2005.



(b) The following matters were voted upon at the 2005 Annual Meeting of Shareholders:



| | 1. | The election of the nominees for the Board of Directors who will serve for a term to expire at the 2008 Annual Meeting of Shareholders was voted on by the shareholders. The
nominees, all of whom were elected, were Andrew B. Balson and Vernon Bud O. Hamilton. The Inspector of Election certified the following vote tabulations:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                         |  |            |  |               
|------------------------ |  | ---------- |  | --------------
|                         |  | Votes For  |  | Votes Withheld
|Andrew B. Balson         |  | 51,173,718 |  | 4,201,481     
|                         |  |           
|Vernon Bud O. Hamilton |  | 55,044,568 |  | 330,631       



| | 2. | A proposal to ratify the selection of PricewaterhouseCoopers LLP as independent registered public accounting firm for the Company for fiscal year 2005 was approved by the
shareholders. The Inspector of Election certified the following vote tabulations:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|           |  |               |  |                 
|---------- |  | ------------- |  | ----------------
|Votes For  |  | Votes Against |  | Votes Abstaining
|55,295,930 |  | 69,153        |  | 10,114          



The proposal passed with 99.9% of the
voted shares being voted FOR the proposal.



Item 5. Other Information



None.



Item 6. Exhibits



|              |  |                                                                                                                                                                                                                                                                                                                            
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                
|10.1          |  | 4thAmendment to Credit Agreement, dated as of March 28,
2005, by and among Dominos, Inc., Dominos Pizza, Inc., various subsidiaries of Dominos, Inc., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 1.01 of the registrants Current Report on Form 8-K on March 29,
2005 (the March 2005 8-K)).
|              | 
|10.2          |  | Stock Repurchase Agreement, dated as of March 29, 2005, by and among Dominos Pizza, Inc., JP Morgan Capital, L.P., Sixty Wall Street Fund, L.P. and J.P. Morgan Partners (BHCA), L.P.
(Incorporated by reference to Exhibit 1.02 to the March 2005 8-K).                                                                  
|              | 
|31.1          |  | Certification by David A. Brandon pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Dominos Pizza,
Inc.                                                                                                                                         
|              | 
|31.2          |  | Certification by Harry J. Silverman pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Dominos Pizza,
Inc.                                                                                                                                       
|              | 
|31.3          |  | Certification by David A. Brandon pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Dominos,
Inc.                                                                                                                                               
|              | 
|31.4          |  | Certification by Harry J. Silverman pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, relating to Dominos,
Inc.                                                                                                                                             
|              | 
|32.1          |  | Certification by David A. Brandon pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to
Dominos Pizza, Inc.                                                                                                             
|              | 
|32.2          |  | Certification by Harry J. Silverman pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to
Dominos Pizza, Inc.                                                                                                           
|              | 
|32.3          |  | Certification by David A. Brandon pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to
Dominos, Inc.                                                                                                                   
|              | 
|32.4          |  | Certification by Harry J. Silverman pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, relating to
Dominos, Inc.                                                                                                                 



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SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned duly authorized officer.



|                     |  |                        
|-------------------- |  | -----------------------
|                     |  | DOMINOS PIZZA, INC.   
|                     |  | DOMINOS, INC.         
|                     |  | (Registrants)          
|                     | 
|Date: August 3, 2005 |  | /s/ Harry J. Silverman 
|                     |  | Harry J. Silverman     
|                     |  | Chief Financial Officer



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