##### Table of Contents

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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 September 5, 2004



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 October 11, 2004, Dominos Pizza, Inc. had 68,655,553 shares of common stock, par
value $0.01 per share, outstanding. As of October 11, 2004, 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)  September 5, 2004 and December 28, 2003                                                          |  | 3       
|           |  |                                                                                                                                                     
|           |  | Condensed Consolidated Statements of Income (Unaudited)  Fiscal quarter and three fiscal quarters ended     September 5, 2004 and September 7, 2003 |  | 4       
|           |  |                                                                                                                                                     
|           |  | Condensed Consolidated Statements of Cash Flows (Unaudited)  Three fiscal quarters ended September 5,     2004 and September 7, 2003                |  | 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                                                                                           |  | 20      
|           |  |                                                                                                                                                     
|Item 4.    |  | Controls and Procedures                                                                                                                              |  | 20      
|           |  |                                                                                                                                                     
|PART II.   |  | OTHER INFORMATION                                                                                                                                    |  |         
|           |  |                                                                                                                                                     
|Item 1.    |  | Legal Proceedings                                                                                                                                    |  | 21      
|           |  |                                                                                                                                                     
|Item 2.    |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                                                                     |  | 21      
|           |  |                                                                                                                                                     
|Item 3.    |  | Defaults Upon Senior Securities                                                                                                                      |  | 21      
|           |  |                                                                                                                                                     
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                                                  |  | 21      
|           |  |                                                                                                                                                     
|Item 5.    |  | Other Information                                                                                                                                    |  | 21      
|           |  |                                                                                                                                                     
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                                                     |  | 21      
|           | 
|SIGNATURES |  | 22                                                                                                                                                  



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)                              |  | September 5, 2004 |          |   | December 28, 2003(Note) |  
|Assets                                      |  |                   |          |   |                         |   |          |  
|Current assets:                             |  |                   |          |   |                         |   |          |  
|Cash and cash equivalents                   |  | $                 | 20,223   |   |                         | $ | 42,852   |  
|Accounts receivable                         |  |                   | 64,091   |   |                         |   | 64,571   |  
|Inventories                                 |  |                   | 23,357   |   |                         |   | 19,480   |  
|Notes receivable                            |  |                   | 1,479    |   |                         |   | 3,785    |  
|Prepaid expenses and other                  |  |                   | 19,563   |   |                         |   | 16,040   |  
|Advertising fund assets, restricted         |  |                   | 28,043   |   |                         |   | 30,544   |  
|Deferred income taxes                       |  |                   | 5,843    |   |                         |   | 5,730    |  
|                                            |  |                   |          |   |                         |   |          |  
|Total current assets                        |  |                   | 162,599  |   |                         |   | 183,002  |  
|                                            |  |                   |          |   |                         |   |          |  
|Property, plant and equipment:              |  |                   |          |   |                         |   |          |  
|Land and buildings                          |  |                   | 22,156   |   |                         |   | 21,849   |  
|Leasehold and other improvements            |  |                   | 70,935   |   |                         |   | 61,433   |  
|Equipment                                   |  |                   | 167,553  |   |                         |   | 158,286  |  
|Construction in progress                    |  |                   | 6,466    |   |                         |   | 6,133    |  
|                                            |  |                   |          |   |                         |   |          |  
|                                            |  |                   | 267,110  |   |                         |   | 247,701  |  
|Accumulated depreciation and amortization   |  |                   | 131,326  |   |                         |   | 120,634  |  
|                                            |  |                   |          |   |                         |   |          |  
|Property, plant and equipment, net          |  |                   | 135,784  |   |                         |   | 127,067  |  
|                                            |  |                   |          |   |                         |   |          |  
|Other assets:                               |  |                   |          |   |                         |   |          |  
|Deferred financing costs                    |  |                   | 13,946   |   |                         |   | 18,847   |  
|Goodwill                                    |  |                   | 23,780   |   |                         |   | 23,432   |  
|Capitalized software                        |  |                   | 25,003   |   |                         |   | 27,197   |  
|Other assets                                |  |                   | 19,764   |   |                         |   | 16,988   |  
|Deferred income taxes                       |  |                   | 40,167   |   |                         |   | 52,042   |  
|                                            |  |                   |          |   |                         |   |          |  
|Total other assets                          |  |                   | 122,660  |   |                         |   | 138,506  |  
|                                            |  |                   |          |   |                         |   |          |  
|Total assets                                |  | $                 | 421,043  |   |                         | $ | 448,575  |  
|                                            |  |                   |          |   |                         |   |          |  
|Liabilities and stockholders deficit       |  |                   |          |   |                         |   |          |  
|Current liabilities:                        |  |                   |          |   |                         |   |          |  
|Current portion of long-term debt           |  | $                 | 317      |   |                         | $ | 18,572   |  
|Accounts payable                            |  |                   | 50,001   |   |                         |   | 53,388   |  
|Insurance reserves                          |  |                   | 10,737   |   |                         |   | 9,432    |  
|Advertising fund liabilities                |  |                   | 28,043   |   |                         |   | 30,544   |  
|Other accrued liabilities                   |  |                   | 57,023   |   |                         |   | 72,327   |  
|                                            |  |                   |          |   |                         |   |          |  
|Total current liabilities                   |  |                   | 146,121  |   |                         |   | 184,263  |  
|                                            |  |                   |          |   |                         |   |          |  
|Long-term liabilities:                      |  |                   |          |   |                         |   |          |  
|Long-term debt, less current portion        |  |                   | 804,004  |   |                         |   | 941,165  |  
|Insurance reserves                          |  |                   | 17,928   |   |                         |   | 15,941   |  
|Other accrued liabilities                   |  |                   | 27,925   |   |                         |   | 25,169   |  
|                                            |  |                   |          |   |                         |   |          |  
|Total long-term liabilities                 |  |                   | 849,857  |   |                         |   | 982,275  |  
|                                            |  |                   |          |   |                         |   |          |  
|Stockholders deficit:                      |  |                   |          |   |                         |   |          |  
|Class L common stock                        |  |                   |         |   |                         |   | 36       |  
|Common stock                                |  |                   | 687      |   |                         |   | 327      |  
|Additional paid-in capital                  |  |                   | 302,004  |   |                         |   | 181,897  |  
|Retained deficit                            |  |                   | (881,842 | ) |                         |   | (900,232 | )
|Deferred stock compensation                 |  |                   | (218     | ) |                         |   |         |  
|Accumulated other comprehensive income      |  |                   | 4,434    |   |                         |   | 9        |  
|                                            |  |                   |          |   |                         |   |          |  
|Total stockholders deficit                 |  |                   | (574,935 | ) |                         |   | (717,963 | )
|                                            |  |                   |          |   |                         |   |          |  
|Total liabilities and stockholders deficit |  | $                 | 421,043  |   |                         | $ | 448,575  |  
|                                            |  |                   |          |   |                         |   |          |  

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Note: The balance sheet at December 28, 2003 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.



3



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##### Table of Contents

Dominos Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)



|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|---------------------------------------------------------------------- |  | -------------------- | ------- | - | --------------------------- | - | ------- | ---------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                                       |  | Fiscal Quarter Ended |         |   | Three Fiscal Quarters Ended |  
|(In thousands, except per share data)                                  |  | September 5,2004     |         |   | September 7,2003            |   |         | September 5,2004 |  |   | September 7,2003 |  
|Revenues:                                                              |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Domestic Company-owned stores                                          |  | $                    | 87,471  |   |                             | $ | 82,419  |                  |  | $ | 259,497          |   |  | $ | 258,236 |  
|Domestic franchise                                                     |  |                      | 35,199  |   |                             |   | 31,411  |                  |  |   | 103,604          |   |  |   | 98,164  |  
|Domestic distribution                                                  |  |                      | 177,422 |   |                             |   | 157,689 |                  |  |   | 529,199          |   |  |   | 479,757 |  
|International                                                          |  |                      | 24,886  |   |                             |   | 21,329  |                  |  |   | 75,669           |   |  |   | 64,159  |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Total revenues                                                         |  |                      | 324,978 |   |                             |   | 292,848 |                  |  |   | 967,969          |   |  |   | 900,316 |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Cost of sales:                                                         |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Domestic Company-owned stores                                          |  |                      | 72,118  |   |                             |   | 67,861  |                  |  |   | 211,192          |   |  |   | 208,033 |  
|Domestic distribution                                                  |  |                      | 161,002 |   |                             |   | 142,354 |                  |  |   | 479,683          |   |  |   | 428,823 |  
|International                                                          |  |                      | 12,576  |   |                             |   | 11,133  |                  |  |   | 39,099           |   |  |   | 34,719  |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Total cost of sales                                                    |  |                      | 245,696 |   |                             |   | 221,348 |                  |  |   | 729,974          |   |  |   | 671,575 |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Operating margin                                                       |  |                      | 79,282  |   |                             |   | 71,500  |                  |  |   | 237,995          |   |  |   | 228,741 |  
|                                                                       |  |                      |         |  
|General and administrative                                             |  |                      | 50,904  |   |                             |   | 49,097  |                  |  |   | 126,824          |   |  |   | 124,243 |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Income from operations                                                 |  |                      | 28,378  |   |                             |   | 22,403  |                  |  |   | 111,171          |   |  |   | 104,498 |  
|                                                                       |  |                      |         |  
|Interest income                                                        |  |                      | 226     |   |                             |   | 124     |                  |  |   | 409              |   |  |   | 320     |  
|Interest expense                                                       |  |                      | (17,280 | ) |                             |   | (30,967 | )                |  |   | (45,170          | ) |  |   | (54,320 | )
|Other                                                                  |  |                      | (9,751  | ) |                             |   | (20,422 | )                |  |   | (9,751           | ) |  |   | (22,164 | )
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes              |  |                      | 1,573   |   |                             |   | (28,862 | )                |  |   | 56,659           |   |  |   | 28,334  |  
|                                                                       |  |                      |         |  
|Provision (benefit) for income taxes                                   |  |                      | 594     |   |                             |   | (10,824 | )                |  |   | 21,389           |   |  |   | 10,625  |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Net income (loss)                                                      |  | $                    | 979     |   |                             | $ | (18,038 | )                |  | $ | 35,270           |   |  | $ | 17,709  |  
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Net income (loss) available to common stockholders  basic and diluted |  | $                    | 979     |   |                             | $ | (52,012 | )                |  | $ | 35,270           |   |  | $ | (25,332 | )
|                                                                       |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Earnings per share:                                                    |  |                      |         |   |                             |   |         |                  |  |   |                  |   |  |   |         |  
|Class L common stock  basic                                           |  | $                    | 0.50    |   |                             | $ | 2.31    |                  |  | $ | 5.57             |   |  | $ | 7.85    |  
|Class L common stock  diluted                                         |  |                      | 0.50    |   |                             |   | 2.31    |                  |  |   | 5.57             |   |  |   | 7.83    |  
|                                                                       |  |                      |         |  
|Common stock  basic                                                   |  | $                    | (0.02   | ) |                             | $ | (1.85   | )                |  | $ | 0.37             |   |  | $ | (1.64   | )
|Common stock  diluted                                                 |  |                      | (0.02   | ) |                             |   | (1.85   | )                |  |   | 0.35             |   |  |   | (1.64   | )



See accompanying notes.



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##### Table of Contents

Dominos Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                             |          |   |                  |   |           |  
|--------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ---------------- | - | --------- | -
|                                                                                  |  | Three Fiscal Quarters Ended |         
|(In thousands)                                                                    |  | September 5,2004            |          |   | September 7,2003 |  
|Cash flows from operating activities:                                             |  |                             |          |   |                  |   |           |  
|Net income                                                                        |  | $                           | 35,270   |   |                  | $ | 17,709    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |          |   |                  |   |           |  
|Depreciation and amortization                                                     |  |                             | 21,428   |   |                  |   | 19,993    |  
|Amortization of deferred financing costs                                          |  |                             | 6,535    |   |                  |   | 18,674    |  
|Provision for deferred income taxes                                               |  |                             | 8,927    |   |                  |   | 3,901     |  
|Other                                                                             |  |                             | 1,140    |   |                  |   | 144       |  
|Changes in operating assets and liabilities                                       |  |                             | (15,552  | ) |                  |   | (8,327    | )
|                                                                                  |  |                             |          |   |                  |   |           |  
|Net cash provided by operating activities                                         |  |                             | 57,748   |   |                  |   | 52,094    |  
|                                                                                  |  |                             |          |   |                  |   |           |  
|Cash flows from investing activities:                                             |  |                             |          |   |                  |   |           |  
|Capital expenditures                                                              |  |                             | (28,640  | ) |                  |   | (17,567   | )
|Other                                                                             |  |                             | 1,945    |   |                  |   | 7,653     |  
|                                                                                  |  |                             |          |   |                  |   |           |  
|Net cash used in investing activities                                             |  |                             | (26,695  | ) |                  |   | (9,914    | )
|                                                                                  |  |                             |          |   |                  |   |           |  
|Cash flows from financing activities:                                             |  |                             |          |   |                  |   |           |  
|Proceeds from the issuance of long-term debt                                      |  |                             |         |   |                  |   | 1,010,090 |  
|Cash paid for financing fees                                                      |  |                             | (654     | ) |                  |   | (20,048   | )
|Repayments of debt                                                                |  |                             | (155,593 | ) |                  |   | (640,426  | )
|Net proceeds from the issuance of common stock                                    |  |                             | 119,550  |   |                  |   |          |  
|Purchases of preferred stock                                                      |  |                             |         |   |                  |   | (200,557  | )
|Distributions                                                                     |  |                             | (16,880  | ) |                  |   | (188,333  | )
|Other                                                                             |  |                             | (596     | ) |                  |   | (372      | )
|                                                                                  |  |                             |          |   |                  |   |           |  
|Net cash used in financing activities                                             |  |                             | (54,173  | ) |                  |   | (39,646   | )
|                                                                                  |  |                             |          |   |                  |   |           |  
|Effect of exchange rate changes on cash and cash equivalents                      |  |                             | 491      |   |                  |   | 5         |  
|                                                                                  |  |                             |          |   |                  |   |           |  
|Increase (decrease) in cash and cash equivalents                                  |  |                             | (22,629  | ) |                  |   | 2,539     |  
|                                                                                  |  |                            
|Cash and cash equivalents, at beginning of period                                 |  |                             | 42,852   |   |                  |   | 22,596    |  
|                                                                                  |  |                             |          |   |                  |   |           |  
|Cash and cash equivalents, at end of period                                       |  | $                           | 20,223   |   |                  | $ | 25,135    |  
|                                                                                  |  |                             |          |   |                  |   |           |  



See accompanying notes.



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##### Table of Contents

Dominos Pizza, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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



September 5, 2004



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 December 28, 2003 included in our other filings with the Securities and
Exchange Commission.



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 three fiscal quarters ended September 5, 2004 are not necessarily indicative of the
results that may be expected for the fiscal year ending January 2, 2005.



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 7.



2. Comprehensive Income (Loss)



|                                                                                 |  |                      |        |   |                             |   |         |                   |  |   |                  |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | -------------------- | ------ | - | --------------------------- | - | ------- | ----------------- |  | - | ---------------- | - |  | - | ------ | -
|                                                                                 |  | Fiscal Quarter Ended |        |   | Three Fiscal Quarters Ended |  
|                                                                                 |  | September 5, 2004    |        |   | September 7,2003            |   |         | September 5, 2004 |  |   | September 7,2003 |  
|Net income (loss)                                                                |  | $                    | 979    |   |                             | $ | (18,038 | )                 |  | $ | 35,270           |   |  | $ | 17,709 |  
|Unrealized gains (losses) on derivative instruments, net of tax                  |  |                      | (3,210 | ) |                             |   | 576     |                   |  |   | 2,996            |   |  |   | (990   | )
|Reclassification adjustment for losses included in net income (loss), net of tax |  |                      | 366    |   |                             |   | 906     |                   |  |   | 1,703            |   |  |   | 2,999  |  
|Currency translation adjustment                                                  |  |                      | 134    |   |                             |   | (679    | )                 |  |   | (274             | ) |  |   | 556    |  
|                                                                                 |  |                      |        |   |                             |   |         |                   |  |   |                  |   |  |   |        |  
|Comprehensive income (loss)                                                      |  | $                    | (1,731 | ) |                             | $ | (17,235 | )                 |  | $ | 39,695           |   |  | $ | 20,274 |  
|                                                                                 |  |                      |        |   |                             |   |         |                   |  |   |                  |   |  |   |        |  



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 September 5, 2004 and September 7, 2003
|                         |  | DomesticStores                                                |         | DomesticDistribution |   | International |  | IntersegmentRevenues |        |  | Other |         |   | Total
|Revenues                |  |                                                               |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                             | 122,670 |                      | $ | 203,401       |  | $                    | 24,886 |  | $     | (25,979 | ) |       | $ |        |   |  | $ | 324,978
|2003                     |  |                                                               | 113,830 |                      |   | 181,092       |  |                      | 21,329 |  |       | (23,403 | ) |       |   |        |   |  |   | 292,848
|Income from operations  |  |                                                               |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                             | 29,480  |                      | $ | 9,936         |  | $                    | 7,238  |  |       | N/A     |   |       | $ | (18,276 | ) |  | $ | 28,378 
|2003                     |  |                                                               | 25,625  |                      |   | 9,195         |  |                      | 6,654  |  |       | N/A     |   |       |   | (19,071 | ) |  |   | 22,403 
|Segment Income          |  |                                                               |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                             | 32,619  |                      | $ | 12,530        |  | $                    | 7,500  |  |       | N/A     |   |       | $ | (6,524  | ) |  | $ | 46,125 
|2003                     |  |                                                               | 28,643  |                      |   | 10,958        |  |                      | 6,895  |  |       | N/A     |   |       |   | (4,486  | ) |  |   | 42,010 



6



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##### Table of Contents

|                         |  |                                                                     |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|------------------------ |  | ------------------------------------------------------------------- | ------- | -------------------- | - | ------------- |  | -------------------- | ------ |  | ----- | ------- | - | ----- | - | ------- | - |  | - | -------
|                         |  | Three Fiscal Quarters Ended September 5, 2004 and September 7, 2003
|                         |  | DomesticStores                                                      |         | DomesticDistribution |   | International |  | IntersegmentRevenues |        |  | Other |         |   | Total
|Revenues                |  |                                                                     |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                                   | 363,101 |                      | $ | 603,527       |  | $                    | 75,669 |  | $     | (74,328 | ) |       | $ |        |   |  | $ | 967,969
|2003                     |  |                                                                     | 356,400 |                      |   | 551,438       |  |                      | 64,159 |  |       | (71,681 | ) |       |   |        |   |  |   | 900,316
|Income from operations  |  |                                                                     |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                                   | 89,598  |                      | $ | 31,348        |  | $                    | 22,227 |  |       | N/A     |   |       | $ | (32,002 | ) |  | $ | 111,171
|2003                     |  |                                                                     | 86,452  |                      |   | 31,526        |  |                      | 18,666 |  |       | N/A     |   |       |   | (32,146 | ) |  |   | 104,498
|Segment Income          |  |                                                                     |         |                      |   |               |  |                      |        |  |       |         |   |       |   |         |   |  |   |        
|2004                     |  | $                                                                   | 98,637  |                      | $ | 38,490        |  | $                    | 23,005 |  |       | N/A     |   |       | $ | (17,096 | ) |  | $ | 143,036
|2003                     |  |                                                                     | 95,257  |                      |   | 36,678        |  |                      | 19,337 |  |       | N/A     |   |       |   | (13,980 | ) |  |   | 137,292



The following table
reconciles Total Segment Income to consolidated income (loss) before provision (benefit) for income taxes.



|                                                          |  |                      |         |   |                             |   |         |                   |  |   |                  |   |  |   |         |  
|--------------------------------------------------------- |  | -------------------- | ------- | - | --------------------------- | - | ------- | ----------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                          |  | Fiscal Quarter Ended |         |   | Three Fiscal Quarters Ended |  
|                                                          |  | September 5, 2004    |         |   | September 7,2003            |   |         | September 5, 2004 |  |   | September 7,2003 |  
|Total Segment Income                                      |  | $                    | 46,125  |   |                             | $ | 42,010  |                   |  | $ | 143,036          |   |  | $ | 137,292 |  
|Depreciation and amortization                             |  |                      | (7,370  | ) |                             |   | (6,668  | )                 |  |   | (21,428          | ) |  |   | (19,993 | )
|Gains (losses) on sale/disposal of assets                 |  |                      | (365    | ) |                             |   | 2,795   |                   |  |   | (402             | ) |  |   | 3,152   |  
|Other non-cash stock compensation expense                 |  |                      | (12     | ) |                             |   |        |                   |  |   | (35              | ) |  |   | (219    | )
|Termination of management agreement                       |  |                      | (10,000 | ) |                             |   |        |                   |  |   | (10,000          | ) |  |   |        |  
|2003 recapitalization expenses                            |  |                      |        |   |                             |   | (15,734 | )                 |  |   |                 |   |  |   | (15,734 | )
|                                                          |  |                      |         |   |                             |   |         |                   |  |   |                  |   |  |   |         |  
|Income from operations                                    |  |                      | 28,378  |   |                             |   | 22,403  |                   |  |   | 111,171          |   |  |   | 104,498 |  
|Interest income                                           |  |                      | 226     |   |                             |   | 124     |                   |  |   | 409              |   |  |   | 320     |  
|Interest expense                                          |  |                      | (17,280 | ) |                             |   | (30,967 | )                 |  |   | (45,170          | ) |  |   | (54,320 | )
|Other                                                     |  |                      | (9,751  | ) |                             |   | (20,422 | )                 |  |   | (9,751           | ) |  |   | (22,164 | )
|                                                          |  |                      |         |   |                             |   |         |                   |  |   |                  |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  | $                    | 1,573   |   |                             | $ | (28,862 | )                 |  | $ | 56,659           |   |  | $ | 28,334  |  
|                                                          |  |                      |         |   |                             |   |         |                   |  |   |                  |   |  |   |         |  



4.
Earnings Per Share



|                                                                       |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|---------------------------------------------------------------------- |  | -------------------- | ---------- | - | --------------------------- | - | ---------- | ----------------- |  | ---------------- | ---------- |  | - | ---------- | -
|                                                                       |  | Fiscal Quarter Ended |            |   | Three Fiscal Quarters Ended |  
|                                                                       |  | September 5, 2004    |            |   | September 7,2003            |   |            | September 5, 2004 |  | September 7,2003 |           
|Net income (loss)                                                      |  | $                    | 979        |   |                             | $ | (18,038    | )                 |  | $                | 35,270     |  | $ | 17,709     |  
|Accumulated preferred stock dividends                                  |  |                      |           |   |                             |   | (373       | )                 |  |                  |           |  |   | (9,125     | )
|Accretion amounts relating to redemption value of preferred stock      |  |                      |           |   |                             |   | (33,601    | )                 |  |                  |           |  |   | (33,916    | )
|                                                                       |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Net income (loss) available to common stockholders  basic and diluted |  | $                    | 979        |   |                             | $ | (52,012    | )                 |  | $                | 35,270     |  | $ | (25,332    | )
|                                                                       |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Allocation of net income (loss) to common stockholders:                |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Class L                                                                |  | $                    | 1,823      |   |                             | $ | 8,350      |                   |  | $                | 20,138     |  | $ | 28,357     |  
|Common stock                                                           |  |                      | (844       | ) |                             |   | (60,362    | )                 |  |                  | 15,132     |  |   | (53,689    | )
|                                                                       |  |                      |            |  
|Weighted average number of shares:                                     |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Class L                                                                |  |                      | 3,613,978  |   |                             |   | 3,614,466  |                   |  |                  | 3,613,991  |  |   | 3,614,629  |  
|Common stock                                                           |  |                      | 55,813,460 |   |                             |   | 32,705,967 |                   |  |                  | 40,406,868 |  |   | 32,707,435 |  
|                                                                       |  |                      |            |  
|Earnings per share  basic:                                            |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Class L                                                                |  | $                    | 0.50       |   |                             | $ | 2.31       |                   |  | $                | 5.57       |  | $ | 7.85       |  
|Common stock                                                           |  |                      | (0.02      | ) |                             |   | (1.85      | )                 |  |                  | 0.37       |  |   | (1.64      | )
|                                                                       |  |                      |            |  
|Diluted weighted average number of shares:                             |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Class L                                                                |  |                      | 3,617,682  |   |                             |   | 3,619,134  |                   |  |                  | 3,617,371  |  |   | 3,620,502  |  
|Common stock                                                           |  |                      | 55,813,460 |   |                             |   | 32,705,967 |                   |  |                  | 42,875,425 |  |   | 32,707,435 |  
|                                                                       |  |                      |            |  
|Earnings per share  diluted:                                          |  |                      |            |   |                             |   |            |                   |  |                  |            |  |   |            |  
|Class L                                                                |  | $                    | 0.50       |   |                             | $ | 2.31       |                   |  | $                | 5.57       |  | $ | 7.83       |  
|Common stock                                                           |  |                      | (0.02      | ) |                             |   | (1.85      | )                 |  |                  | 0.35       |  |   | (1.64      | )



7



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##### Table of Contents

The denominator in calculating diluted earnings per share for common stock for the third quarter of 2004
does not include 2,441,176 dilutive shares resulting from stock options as their inclusion would be anti-dilutive. Additionally, the denominator in calculating diluted earnings per share for common stock for the third quarter and first three
quarters of 2003 does not include 1,992,759 and 2,119,319, respectively, of dilutive shares resulting from stock options as their inclusion would be anti-dilutive.



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 |      |   | Three Fiscal Quarters Ended |  
|                                                                                                                                          |  | September 5, 2004    |      |   | September 7,2003            |   |         | September 5, 2004 |  |   | September 7,2003 |  
|Net income (loss), as reported                                                                                                            |  | $                    | 979  |   |                             | $ | (18,038 | )                 |  | $ | 35,270           |   |  | $ | 17,709 |  
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effects                                |  |                      | 12   |   |                             |   | 1,726   |                   |  |   | 35               |   |  |   | 1,863  |  
|Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax
effects |  |                      | (210 | ) |                             |   | (2,534  | )                 |  |   | (381             | ) |  |   | (2,771 | )
|                                                                                                                                          |  |                      |      |   |                             |   |         |                   |  |   |                  |   |  |   |        |  
|Net income (loss), pro forma                                                                                                              |  | $                    | 781  |   |                             | $ | (18,846 | )                 |  | $ | 34,924           |   |  | $ | 16,801 |  
|                                                                                                                                          |  |                      |      |   |                             |   |         |                   |  |   |                  |   |  |   |        |  



The pro forma basic
and diluted earnings per share amounts for Class L and common stock are the same as reported amounts.



6. Significant Changes in Equity



Prior to the Dominos Pizza, Inc. initial public offering of common stock (the IPO) completed on July 16, 2004, the Company amended its
certificate of incorporation and bylaws to, among other changes, convert all of its Class L common stock into shares of its common stock. In the IPO, Dominos Pizza, Inc. issued and sold 9,375,000 shares of common stock resulting in net
proceeds to the Company of approximately $119.6 million. Also in the IPO, existing shareholders sold an aggregate of 14,846,929 shares of common stock. The Company did not receive any proceeds from the sale of shares by the selling shareholders.
Immediately following the closing of the IPO, the Company had 68,653,626 shares of common stock outstanding. Additionally, in connection with the IPO, the Company used general funds to pay in full $16.9 million of contingent notes held by our
founder and former majority stockholder and his spouse.



7. 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.



8



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##### Table of Contents

Dominos, Inc. and Subsidiaries

Supplemental Guarantor Condensed Consolidating Balance Sheets



|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|---------------------------------------------------- |  | ----------------------- | -------- | - | --------------------- | - | ------------------------- |  | ------------ | ------ |  | ------------ | -------- | - |  | - | -------- | -
|                                                     |  | As of September 5, 2004 |         
|                                                     |  | Dominos, Inc.          |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | Eliminations |        |  | Consolidated |         
|Cash and cash equivalents                            |  | $                       | 3,109    |   |                       | $ | 15,533                    |  | $            | 1,581  |  | $            |         |   |  | $ | 20,223   |  
|Accounts receivable                                  |  |                         |         |   |                       |   | 57,422                    |  |              | 6,669  |  |              |         |   |  |   | 64,091   |  
|Advertising fund assets, restricted                  |  |                         |         |   |                       |   |                          |  |              | 28,043 |  |              |         |   |  |   | 28,043   |  
|Other current assets                                 |  |                         | 7,735    |   |                       |   | 39,441                    |  |              | 3,066  |  |              |         |   |  |   | 50,242   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current assets                                       |  |                         | 10,844   |   |                       |   | 112,396                   |  |              | 39,359 |  |              |         |   |  |   | 162,599  |  
|                                                     |  |                         |          |   |                      
|Property, plant and equipment, net                   |  |                         |         |   |                       |   | 130,178                   |  |              | 5,606  |  |              |         |   |  |   | 135,784  |  
|                                                     |  |                         |          |   |                      
|Other assets                                         |  |                         | 220,700  |   |                       |   | 70,604                    |  |              | 780    |  |              | (169,424 | ) |  |   | 122,660  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total assets                                         |  | $                       | 231,544  |   |                       | $ | 313,178                   |  | $            | 45,745 |  | $            | (169,424 | ) |  | $ | 421,043  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current portion of long-term debt                    |  | $                       |         |   |                       | $ | 235                       |  | $            | 82     |  | $            |         |   |  | $ | 317      |  
|Accounts payable                                     |  |                         |         |   |                       |   | 35,659                    |  |              | 14,342 |  |              |         |   |  |   | 50,001   |  
|Advertising fund liabilities                         |  |                         |         |   |                       |   |                          |  |              | 28,043 |  |              |         |   |  |   | 28,043   |  
|Other current liabilities                            |  |                         | 8,077    |   |                       |   | 57,854                    |  |              | 1,429  |  |              |         |   |  |   | 67,360   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current liabilities(1)                               |  |                         | 8,077    |   |                       |   | 93,748                    |  |              | 43,896 |  |              |         |   |  |   | 145,721  |  
|                                                     |  |                         |          |   |                      
|Long-term debt                                       |  |                         | 798,002  |   |                       |   | 5,771                     |  |              | 231    |  |              |         |   |  |   | 804,004  |  
|Other long-term liabilities                          |  |                         |         |   |                       |   | 45,594                    |  |              | 259    |  |              |         |   |  |   | 45,853   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Long-term liabilities                                |  |                         | 798,002  |   |                       |   | 51,365                    |  |              | 490    |  |              |         |   |  |   | 849,857  |  
|                                                     |  |                         |          |   |                      
|Stockholders equity (deficit)(1)                    |  |                         | (574,535 | ) |                       |   | 168,065                   |  |              | 1,359  |  |              | (169,424 | ) |  |   | (574,535 | )
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total liabilities and stockholders equity (deficit) |  | $                       | 231,544  |   |                       | $ | 313,178                   |  | $            | 45,745 |  | $            | (169,424 | ) |  | $ | 421,043  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  



|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|---------------------------------------------------- |  | ----------------------- | -------- | - | --------------------- | - | ------------------------- |  | ------------ | ------ |  | ------------ | -------- | - |  | - | -------- | -
|                                                     |  | As of December 28, 2003 |         
|                                                     |  | Dominos, Inc.          |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | Eliminations |        |  | Consolidated |         
|Cash and cash equivalents(1)                         |  | $                       |         |   |                       | $ | 41,123                    |  | $            | 1,603  |  | $            |         |   |  | $ | 42,726   |  
|Accounts receivable                                  |  |                         |         |   |                       |   | 59,109                    |  |              | 5,462  |  |              |         |   |  |   | 64,571   |  
|Advertising fund assets, restricted                  |  |                         |         |   |                       |   |                          |  |              | 30,544 |  |              |         |   |  |   | 30,544   |  
|Other current assets                                 |  |                         | 7,664    |   |                       |   | 35,243                    |  |              | 2,128  |  |              |         |   |  |   | 45,035   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current assets                                       |  |                         | 7,664    |   |                       |   | 135,475                   |  |              | 39,737 |  |              |         |   |  |   | 182,876  |  
|                                                     |  |                         |          |   |                      
|Property, plant and equipment, net                   |  |                         |         |   |                       |   | 122,815                   |  |              | 4,252  |  |              |         |   |  |   | 127,067  |  
|                                                     |  |                         |          |   |                      
|Other assets                                         |  |                         | 248,660  |   |                       |   | 81,897                    |  |              | 805    |  |              | (192,856 | ) |  |   | 138,506  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total assets                                         |  | $                       | 256,324  |   |                       | $ | 340,187                   |  | $            | 44,794 |  | $            | (192,856 | ) |  | $ | 448,449  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current portion of long-term debt                    |  | $                       | 18,234   |   |                       | $ | 221                       |  | $            | 117    |  | $            |         |   |  | $ | 18,572   |  
|Accounts payable                                     |  |                         |         |   |                       |   | 41,832                    |  |              | 11,556 |  |              |         |   |  |   | 53,388   |  
|Advertising fund liabilities                         |  |                         |         |   |                       |   |                          |  |              | 30,544 |  |              |         |   |  |   | 30,544   |  
|Other current liabilities                            |  |                         | 20,944   |   |                       |   | 59,721                    |  |              | 1,094  |  |              |         |   |  |   | 81,759   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Current liabilities                                  |  |                         | 39,178   |   |                       |   | 101,774                   |  |              | 43,311 |  |              |         |   |  |   | 184,263  |  
|                                                     |  |                         |          |   |                      
|Long-term debt                                       |  |                         | 934,914  |   |                       |   | 5,931                     |  |              | 320    |  |              |         |   |  |   | 941,165  |  
|Other long-term liabilities                          |  |                         | 321      |   |                       |   | 40,521                    |  |              | 268    |  |              |         |   |  |   | 41,110   |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Long-term liabilities                                |  |                         | 935,235  |   |                       |   | 46,452                    |  |              | 588    |  |              |         |   |  |   | 982,275  |  
|                                                     |  |                         |          |   |                      
|Stockholders equity (deficit)(1)                    |  |                         | (718,089 | ) |                       |   | 191,961                   |  |              | 895    |  |              | (192,856 | ) |  |   | (718,089 | )
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  
|Total liabilities and stockholders equity (deficit) |  | $                       | 256,324  |   |                       | $ | 340,187                   |  | $            | 44,794 |  | $            | (192,856 | ) |  | $ | 448,449  |  
|                                                     |  |                         |          |   |                       |   |                           |  |              |        |  |              |          |   |  |   |          |  

---

|(1) | Dominos Pizza, Inc. and subsidiaries had current liabilities of $146,121, or $400 more
than Dominos, Inc. and subsidiaries at September 5, 2004. Dominos Pizza, Inc. and subsidiaries had cash and cash equivalents of $42,852, or $126 more than Dominos, Inc. and subsidiaries at December 28, 2003. Dominos Pizza,
Inc. and subsidiaries had total stockholders deficit of $(574,935) and $(717,963), or $400 more than and $126 less than Dominos, Inc. and subsidiaries at September 5, 2004 and December 28, 2003, 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9



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##### Table of Contents

Dominos, Inc. and Subsidiaries

Supplemental Guarantor Condensed Consolidating Statements of Income



|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | -------------------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Fiscal Quarter Ended September 5, 2004 |        
|                                                          |  | Dominos, Inc.                         |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                      |        |   |                       | $ | 318,623 |                           |  | $ | 6,355        |   |  | $            |        |   |  | $ | 324,978 |  
|                                                          |  |                                        |         |   |                      
|Cost of sales                                             |  |                                        |        |   |                       |   | 240,944 |                           |  |   | 4,752        |   |  |              |        |   |  |   | 245,696 |  
|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                        |        |   |                       |   | 77,679  |                           |  |   | 1,603        |   |  |              |        |   |  |   | 79,282  |  
|                                                          |  |                                        |         |   |                      
|General and administrative                                |  |                                        |        |   |                       |   | 48,831  |                           |  |   | 2,073        |   |  |              |        |   |  |   | 50,904  |  
|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                        |        |   |                       |   | 28,848  |                           |  |   | (470         | ) |  |              |        |   |  |   | 28,378  |  
|                                                          |  |                                        |         |   |                      
|Equity earnings in subsidiaries                           |  |                                        | 17,520  |   |                       |   |        |                           |  |   |             |   |  |              | (17,520 | ) |  |   |        |  
|Interest income (expense), net(2)                         |  |                                        | (16,921 | ) |                       |   | (501    | )                         |  |   | 344          |   |  |              |        |   |  |   | (17,078 | )
|Other expense                                             |  |                                        | (9,751  | ) |                       |   |        |                           |  |   |             |   |  |              |        |   |  |   | (9,751  | )
|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                        | (9,152  | ) |                       |   | 28,347  |                           |  |   | (126         | ) |  |              | (17,520 | ) |  |   | 1,549   |  
|                                                          |  |                                        |         |   |                      
|Provision (benefit) for income taxes                      |  |                                        | (10,107 | ) |                       |   | 10,701  |                           |  |   |             |   |  |              |        |   |  |   | 594     |  
|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)(2)                                      |  | $                                      | 955     |   |                       | $ | 17,646  |                           |  | $ | (126         | ) |  | $            | (17,520 | ) |  | $ | 955     |  
|                                                          |  |                                        |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  



|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | --------------------------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Three Fiscal Quarters Ended September 5, 2004 |        
|                                                          |  | Dominos, Inc.                                |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                             |        |   |                       | $ | 948,696 |                           |  | $ | 19,273       |   |  | $            |        |   |  | $ | 967,969 |  
|                                                          |  |                                               |         |   |                      
|Cost of sales                                             |  |                                               |        |   |                       |   | 715,672 |                           |  |   | 14,302       |   |  |              |        |   |  |   | 729,974 |  
|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                               |        |   |                       |   | 233,024 |                           |  |   | 4,971        |   |  |              |        |   |  |   | 237,995 |  
|                                                          |  |                                               |         |   |                      
|General and administrative                                |  |                                               |        |   |                       |   | 120,960 |                           |  |   | 5,864        |   |  |              |        |   |  |   | 126,824 |  
|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                               |        |   |                       |   | 112,064 |                           |  |   | (893         | ) |  |              |        |   |  |   | 111,171 |  
|                                                          |  |                                               |         |   |                      
|Equity earnings in subsidiaries                           |  |                                               | 68,688  |   |                       |   |        |                           |  |   |             |   |  |              | (68,688 | ) |  |   |        |  
|Interest income (expense), net(2)                         |  |                                               | (44,452 | ) |                       |   | (412    | )                         |  |   | 78           |   |  |              |        |   |  |   | (44,786 | )
|Other expense                                             |  |                                               | (9,751  | ) |                       |   |        |                           |  |   |             |   |  |              |        |   |  |   | (9,751  | )
|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                               | 14,485  |   |                       |   | 111,652 |                           |  |   | (815         | ) |  |              | (68,688 | ) |  |   | 56,634  |  
|                                                          |  |                                               |         |   |                      
|Provision (benefit) for income taxes                      |  |                                               | (20,760 | ) |                       |   | 42,149  |                           |  |   |             |   |  |              |        |   |  |   | 21,389  |  
|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)(2)                                      |  | $                                             | 35,245  |   |                       | $ | 69,503  |                           |  | $ | (815         | ) |  | $            | (68,688 | ) |  | $ | 35,245  |  
|                                                          |  |                                               |         |   |                       |   |         |                           |  |   |              |   |  |              |         |   |  |   |         |  



|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | -------------------------------------- | ------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Fiscal Quarter Ended September 7, 2003 |        
|                                                          |  | Dominos, Inc.                         |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                      |        |   |                       | $ | 288,044                   |  | $ | 4,804        |   |  | $            |        |   |  | $ | 292,848 |  
|                                                          |  |                                        |         |   |                      
|Cost of sales                                             |  |                                        |        |   |                       |   | 217,603                   |  |   | 3,745        |   |  |              |        |   |  |   | 221,348 |  
|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                        |        |   |                       |   | 70,441                    |  |   | 1,059        |   |  |              |        |   |  |   | 71,500  |  
|                                                          |  |                                        |         |   |                      
|General and administrative(2)                             |  |                                        |        |   |                       |   | 48,260                    |  |   | 1,315        |   |  |              |        |   |  |   | 49,575  |  
|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                        |        |   |                       |   | 22,181                    |  |   | (256         | ) |  |              |        |   |  |   | 21,925  |  
|                                                          |  |                                        |         |   |                      
|Equity earnings in subsidiaries                           |  |                                        | 13,624  |   |                       |   |                          |  |   |             |   |  |              | (13,624 | ) |  |   |        |  
|Interest income (expense), net                            |  |                                        | (30,915 | ) |                       |   | 147                       |  |   | (75          | ) |  |              |        |   |  |   | (30,843 | )
|Other expense                                             |  |                                        | (20,422 | ) |                       |   |                          |  |   |             |   |  |              |        |   |  |   | (20,422 | )
|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                        | (37,713 | ) |                       |   | 22,328                    |  |   | (331         | ) |  |              | (13,624 | ) |  |   | (29,340 | )
|                                                          |  |                                        |         |   |                      
|Provision (benefit) for income taxes(2)                   |  |                                        | (19,375 | ) |                       |   | 8,373                     |  |   |             |   |  |              |        |   |  |   | (11,002 | )
|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)(2)                                      |  | $                                      | (18,338 | ) |                       | $ | 13,955                    |  | $ | (331         | ) |  | $            | (13,624 | ) |  | $ | (18,338 | )
|                                                          |  |                                        |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  



10



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##### Table of Contents

|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|--------------------------------------------------------- |  | --------------------------------------------- | ------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                          |  | Three Fiscal Quarters Ended September 7, 2003 |        
|                                                          |  | Dominos, Inc.                                |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Revenues                                                  |  | $                                             |        |   |                       | $ | 885,540                   |  | $ | 14,776       |   |  | $            |        |   |  | $ | 900,316 |  
|                                                          |  |                                               |         |   |                      
|Cost of sales                                             |  |                                               |        |   |                       |   | 660,234                   |  |   | 11,341       |   |  |              |        |   |  |   | 671,575 |  
|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Operating margin                                          |  |                                               |        |   |                       |   | 225,306                   |  |   | 3,435        |   |  |              |        |   |  |   | 228,741 |  
|                                                          |  |                                               |         |   |                      
|General and administrative(2)                             |  |                                               |        |   |                       |   | 120,647                   |  |   | 3,854        |   |  |              |        |   |  |   | 124,501 |  
|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                             |  |                                               |        |   |                       |   | 104,659                   |  |   | (419         | ) |  |              |        |   |  |   | 104,240 |  
|                                                          |  |                                               |         |   |                      
|Equity earnings in subsidiaries                           |  |                                               | 65,020  |   |                       |   |                          |  |   |             |   |  |              | (65,020 | ) |  |   |        |  
|Interest income (expense), net                            |  |                                               | (54,169 | ) |                       |   | 375                       |  |   | (207         | ) |  |              |        |   |  |   | (54,001 | )
|Other expense                                             |  |                                               | (22,164 | ) |                       |   |                          |  |   |             |   |  |              |        |   |  |   | (22,164 | )
|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes |  |                                               | (11,313 | ) |                       |   | 105,034                   |  |   | (626         | ) |  |              | (65,020 | ) |  |   | 28,075  |  
|                                                          |  |                                               |         |   |                      
|Provision (benefit) for income taxes(2)                   |  |                                               | (28,860 | ) |                       |   | 39,388                    |  |   |             |   |  |              |        |   |  |   | 10,528  |  
|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  
|Net income (loss)(2)                                      |  | $                                             | 17,547  |   |                       | $ | 65,646                    |  | $ | (626         | ) |  | $            | (65,020 | ) |  | $ | 17,547  |  
|                                                          |  |                                               |         |   |                       |   |                           |  |   |              |   |  |              |         |   |  |   |         |  

---

|(2) | Dominos Pizza, Inc. and subsidiaries incurred interest expense, net of $17,054 and
$44,761 or $24 and $25 less than Dominos, Inc. and subsidiaries, during the third quarter and first three quarters of 2004, respectively. Accordingly, Dominos Pizza, Inc. and subsidiaries net income was $24 and $25 more than
Dominos, Inc. and subsidiaries for the third quarter and first three quarters of 2004, respectively. Dominos Pizza, Inc. and subsidiaries incurred general and administrative expenses of $49,097 and $124,243 or $478 and $258 less than
Dominos, Inc. and subsidiaries, during the third quarter and first three quarters of 2003, respectively and incurred related provision (benefit) for income taxes of $(10,824) and $10,625, or $178 and $97 more than Dominos, Inc. and
subsidiaries, during the third quarter and first three quarters of 2003, respectively. Accordingly, Dominos Pizza, Inc. and subsidiaries net income (loss) was $300 and $162 more than Dominos, Inc. and subsidiaries for the third quarter
and first three quarters of 2003, 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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dominos, Inc. and Subsidiaries

Supplemental Condensed Consolidating Statements of Cash Flows



|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|------------------------------------------------------------ |  | --------------------------------------------- | -------- | - | --------------------- | - | -------- | ------------------------- |  | - | ------------ | - | ------------ | - | - |  | - | -------- | -
|                                                             |  | Three Fiscal Quarters Ended September 5, 2004 |         
|                                                             |  | Dominos, Inc.                                |          |   | GuarantorSubsidiaries |   |          | Non-GuarantorSubsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash provided by (used in) operating activities(3)       |  | $                                             | (57,392  | ) |                       | $ | 112,377  |                           |  | $ | 2,338        |   |              | $ |  |  | $ | 57,323   |  
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Capital expenditures                                         |  |                                               |         |   |                       |   | (26,404  | )                         |  |   | (2,236       | ) |              |   |  |  |   | (28,640  | )
|Other                                                        |  |                                               |         |   |                       |   | 1,945    |                           |  |   |             |   |              |   |  |  |   | 1,945    |  
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Net cash used in investing activities                        |  |                                               |         |   |                       |   | (24,459  | )                         |  |   | (2,236       | ) |              |   |  |  |   | (26,695  | )
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Repayments of debt                                           |  |                                               | (155,334 | ) |                       |   | (156     | )                         |  |   | (103         | ) |              |   |  |  |   | (155,593 | )
|Distributions to parent, net                                 |  |                                               | 216,489  |   |                       |   | (113,864 | )                         |  |   |             |   |              |   |  |  |   | 102,625  |  
|Other                                                        |  |                                               | (654     | ) |                       |   |         |                           |  |   |             |   |              |   |  |  |   | (654     | )
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Net cash provided by (used in) financing activities(3)       |  |                                               | 60,501   |   |                       |   | (114,020 | )                         |  |   | (103         | ) |              |   |  |  |   | (53,622  | )
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Effect of exchange rate changes on cash and cash equivalents |  |                                               |         |   |                       |   | 512      |                           |  |   | (21          | ) |              |   |  |  |   | 491      |  
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Increase (decrease) in cash and cash equivalents             |  |                                               | 3,109    |   |                       |   | (25,590  | )                         |  |   | (22          | ) |              |   |  |  |   | (22,503  | )
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Cash and cash equivalents, at beginning of period(3)         |  |                                               |         |   |                       |   | 41,123   |                           |  |   | 1,603        |   |              |   |  |  |   | 42,726   |  
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  
|Cash and cash equivalents, at end of period                  |  | $                                             | 3,109    |   |                       | $ | 15,533   |                           |  | $ | 1,581        |   |              | $ |  |  | $ | 20,223   |  
|                                                             |  |                                               |          |   |                       |   |          |                           |  |   |              |   |              |   |   |  |   |          |  



11



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##### Table of Contents

|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|------------------------------------------------------------ |  | --------------------------------------------- | --------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - | ------------ | - | - |  | - | --------- | -
|                                                             |  | Three Fiscal Quarters Ended September 7, 2003 |          
|                                                             |  | Dominos, Inc.                                |           |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash provided by (used in) operating activities          |  | $                                             | (57,872   | ) |                       | $ | 109,672 |                           |  | $ | 294          |   |              | $ |  |  | $ | 52,094    |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Capital expenditures                                         |  |                                               |          |   |                       |   | (17,065 | )                         |  |   | (502         | ) |              |   |  |  |   | (17,567   | )
|Other                                                        |  |                                               |          |   |                       |   | 7,653   |                           |  |   |             |   |              |   |  |  |   | 7,653     |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Net cash used in investing activities                        |  |                                               |          |   |                       |   | (9,412  | )                         |  |   | (502         | ) |              |   |  |  |   | (9,914    | )
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Proceeds from issuance of long-term debt                     |  |                                               | 1,010,090 |   |                       |   |        |                           |  |   |             |   |              |   |  |  |   | 1,010,090 |  
|Repayments of debt                                           |  |                                               | (640,381  | ) |                       |   |        |                           |  |   | (45          | ) |              |   |  |  |   | (640,426  | )
|Distributions to parent, net                                 |  |                                               | (291,789  | ) |                       |   | (97,474 | )                         |  |   |             |   |              |   |  |  |   | (389,262  | )
|Other                                                        |  |                                               | (20,048   | ) |                       |   |        |                           |  |   |             |   |              |   |  |  |   | (20,048   | )
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Net cash provided by (used in) financing activities          |  |                                               | 57,872    |   |                       |   | (97,474 | )                         |  |   | (45          | ) |              |   |  |  |   | (39,646   | )
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Effect of exchange rate changes on cash and cash equivalents |  |                                               |          |   |                       |   | (22     | )                         |  |   | 27           |   |              |   |  |  |   | 5         |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Increase (decrease) in cash and cash equivalents             |  |                                               |          |   |                       |   | 2,764   |                           |  |   | (226         | ) |              |   |  |  |   | 2,539     |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Cash and cash equivalents, at beginning of period(3)         |  |                                               |          |   |                       |   | 21,522  |                           |  |   | 950          |   |              |   |  |  |   | 22,472    |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  
|Cash and cash equivalents, at end of period(3)               |  | $                                             |          |   |                       | $ | 24,286  |                           |  | $ | 724          |   |              | $ |  |  | $ | 25,010    |  
|                                                             |  |                                               |           |   |                       |   |         |                           |  |   |              |   |              |   |   |  |   |           |  

---

|(3) | Dominos Pizza, Inc. and subsidiaries had net cash provided by operating activities of
$57,748, or $425 more than Dominos, Inc. and subsidiaries, during the first three quarters of 2004 and had net cash used in financing activities of $54,173, or $551 more than Dominos, Inc. and subsidiaries, during the first three
quarters of 2004. Cash and cash equivalents for Dominos Pizza, Inc. and subsidiaries was $42,852, $25,135 and $22,596 at December 28, 2003, September 7, 2003 and December 29, 2002, 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



---

##### 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 2004 and 2003 third quarters referenced herein represent the twelve-week periods ended September 5, 2004 and September 7, 2003, respectively. The 2004 and 2003 first three quarters referenced herein represent the thirty-six week periods
ended September 5, 2004 and September 7, 2003, respectively.



Overview



During the third quarter and first three quarters of
2004, global retail sales, comprised of retail sales at both our franchise and Company-owned stores worldwide, grew 12.0% and 8.6%, respectively. During these same periods, revenues grew 11.0% and 7.5%, respectively. Excluding costs incurred in
connection with our IPO in the third quarter of 2004 and costs incurred in connection with our recapitalization in the third quarter of 2003, we achieved an increase in income from operations, despite an intensely competitive landscape, an
environment of rising commodity prices negatively affecting our food costs and an increase in losses on sale/disposal of assets of $3.2 million (comprised of a $ 0.4 million net loss in 2004 and a $2.8 million net gain in 2003).



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 third quarter and first three quarters of 2004, domestic
same store sales increased 8.0% and 2.9%, respectively, led by our domestic franchise operations. These positive same store sales results were driven by positive consumer response to the Companys marketing and promotional activities. We also
had continued strong sales from our international operations, which increased 5.9% and 5.8% on a constant dollar basis during the third quarter and first three quarters of 2004. On a historical dollar basis, international same store sales increased
9.9% and 12.0% during the third quarter and first three quarters of 2004. The third quarter marked the 43rd consecutive quarter that we have grown our international same store sales. Additionally, our worldwide store counts increased 271 stores from
year-ago levels, led by our international operations.



Income
from operations increased $6.0 million to $28.4 million in the third quarter. This increase was driven largely by $15.7 million of costs incurred in connection with our 2003 recapitalization, offset by $10.0 million of costs incurred in connection
with our initial public offering. Additionally, income from operations improved despite the negative impact of a $3.2 million increase in losses on sale/disposal of assets and increases in food costs at Company-owned stores, primarily cheese. The
average published cheese block price per pound increased $0.22 to $1.60 in the third quarter of 2004 compared to the prior year. Net income increased $19.0 million to nearly $1.0 million in the third quarter.



Same Store Sales Growth



The following is a summary of our same store sales growth for the third
quarter and first three quarters of 2004.



|                              |  |                       |   |  |                              |  
|----------------------------- |  | --------------------- | - |  | ---------------------------- | -
|                              |  | Third Quarter of 2004 |   |  | First Three Quarters of 2004 |  
|Domestic Company-owned stores |  | + 6.8                 | % |  | + 1.1                        | %
|Domestic franchise stores     |  | + 8.2                 | % |  | + 3.1                        | %
|                              |  |                       |   |  |                              |  
|Domestic stores               |  | + 8.0                 | % |  | + 2.9                        | %
|                              |  |                      
|International:                |  |                       |   |  |                              |  
|Constant dollar               |  | + 5.9                 | % |  | + 5.8                        | %
|Historical dollar             |  | + 9.9                 | % |  | + 12.0                       | %



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##### Table of Contents

Store Growth Activity



The following is a summary of our store growth activity for the third quarter and first three quarters of 2004.



|                                 |  |                              |  |                         |   |  |                |   |  |                     |   |  |       |  
|-------------------------------- |  | ---------------------------- |  | ----------------------- | - |  | -------------- | - |  | ------------------- | - |  | ----- | -
|                                 |  | Third Quarter of 2004        | 
|                                 |  | Domestic Company-ownedStores |  | DomesticFranchiseStores |   |  | DomesticStores |   |  | InternationalStores |   |  | Total |  
|Store count at June 13, 2004     |  | 577                          |  | 4,348                   |   |  | 4,925          |   |  | 2,605               |   |  | 7,530 |  
|Openings                         |  | 1                            |  | 32                      |   |  | 33             |   |  | 59                  |   |  | 92    |  
|Closings                         |  |                             |  | (13                     | ) |  | (13            | ) |  | (6                  | ) |  | (19   | )
|Transfers                        |  |                             |  |                        |   |  |               |   |  |                    |   |  |      |  
|                                 |  |                              |  |                         |   |  |                |   |  |                     |   |  |       |  
|Store count at September 5, 2004 |  | 578                          |  | 4,367                   |   |  | 4,945          |   |  | 2,658               |   |  | 7,603 |  
|                                 |  |                              |  |                         |   |  |                |   |  |                     |   |  |       |  



|                                 |  |                              |   |  |                         |   |  |                |   |  |                     |   |  |       |  
|-------------------------------- |  | ---------------------------- | - |  | ----------------------- | - |  | -------------- | - |  | ------------------- | - |  | ----- | -
|                                 |  | First Three Quarters of 2004 |  
|                                 |  | Domestic Company-ownedStores |   |  | DomesticFranchiseStores |   |  | DomesticStores |   |  | InternationalStores |   |  | Total |  
|Store count at December 28, 2003 |  | 577                          |   |  | 4,327                   |   |  | 4,904          |   |  | 2,523               |   |  | 7,427 |  
|Openings                         |  | 2                            |   |  | 81                      |   |  | 83             |   |  | 154                 |   |  | 237   |  
|Closings                         |  | (1                           | ) |  | (41                     | ) |  | (42            | ) |  | (19                 | ) |  | (61   | )
|Transfers                        |  |                             |   |  |                        |   |  |               |   |  |                    |   |  |      |  
|                                 |  |                              |   |  |                         |   |  |                |   |  |                     |   |  |       |  
|Store count at September 5, 2004 |  | 578                          |   |  | 4,367                   |   |  | 4,945          |   |  | 2,658               |   |  | 7,603 |  
|                                 |  |                              |   |  |                         |   |  |                |   |  |                     |   |  |       |  



Income Statement Data



The following is a summary of income statement data
for the third quarter and first three quarters of 2004 and 2003.



|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|--------------------------------------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | --------------------------- | ----- | - | --------------------------- | ----- | -- |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|                                                          |  | Third Quarter of 2004 |       |  | Third Quarter of 2003 |   |  | First ThreeQuarters of 2004 |       |   | First ThreeQuarters of 2003 |      
|Revenues:                                                 |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Domestic Company-owned stores                             |  | $                     | 87.5  |  | 26.9                  | % |  | $                           | 82.4  |   |                             | 28.1  | %  |  | $ | 259.5 |  | 26.8  | % |  | $ | 258.2 |  | 28.7  | %
|Domestic franchise                                        |  |                       | 35.2  |  | 10.8                  |   |  |                             | 31.4  |   |                             | 10.7  |    |  |   | 103.6 |  | 10.7  |   |  |   | 98.2  |  | 10.9  |  
|Domestic distribution                                     |  |                       | 177.4 |  | 54.6                  |   |  |                             | 157.7 |   |                             | 53.9  |    |  |   | 529.2 |  | 54.7  |   |  |   | 479.8 |  | 53.3  |  
|International                                             |  |                       | 24.9  |  | 7.7                   |   |  |                             | 21.3  |   |                             | 7.3   |    |  |   | 75.7  |  | 7.8   |   |  |   | 64.2  |  | 7.1   |  
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Total revenues                                            |  |                       | 325.0 |  | 100.0                 |   |  |                             | 292.8 |   |                             | 100.0 |    |  |   | 968.0 |  | 100.0 |   |  |   | 900.3 |  | 100.0 |  
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Operating expenses:                                       |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Cost of sales                                             |  |                       | 245.7 |  | 75.6                  |   |  |                             | 221.3 |   |                             | 75.6  |    |  |   | 730.0 |  | 75.4  |   |  |   | 671.6 |  | 74.6  |  
|General and administrative                                |  |                       | 50.9  |  | 15.7                  |   |  |                             | 49.1  |   |                             | 16.8  |    |  |   | 126.8 |  | 13.1  |   |  |   | 124.2 |  | 13.8  |  
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Income from operations                                    |  |                       | 28.4  |  | 8.7                   |   |  |                             | 22.4  |   |                             | 7.7   |    |  |   | 111.2 |  | 11.5  |   |  |   | 104.5 |  | 11.6  |  
|                                                          |  |                       |       |  |                       |   |  |                            
|Interest expense, net                                     |  |                       | 17.1  |  | 5.2                   |   |  |                             | 30.8  |   |                             | 10.5  |    |  |   | 44.8  |  | 4.6   |   |  |   | 54.0  |  | 6.0   |  
|Other                                                     |  |                       | 9.8   |  | 3.0                   |   |  |                             | 20.4  |   |                             | 7.0   |    |  |   | 9.8   |  | 1.0   |   |  |   | 22.2  |  | 2.5   |  
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Income (loss) before provision (benefit) for income taxes |  |                       | 1.6   |  | 0.5                   |   |  |                             | (28.9 | ) |                             | (9.9  | )  |  |   | 56.7  |  | 5.9   |   |  |   | 28.3  |  | 3.1   |  
|Provision (benefit) for income taxes                      |  |                       | 0.6   |  | 0.2                   |   |  |                             | (10.8 | ) |                             | (3.7  | )  |  |   | 21.4  |  | 2.2   |   |  |   | 10.6  |  | 1.2   |  
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  
|Net income (loss)                                         |  | $                     | 1.0   |  | 0.3                   | % |  | $                           | (18.0 | ) |                             | (6.2  | )% |  | $ | 35.3  |  | 3.6   | % |  | $ | 17.7  |  | 2.0   | %
|                                                          |  |                       |       |  |                       |   |  |                             |       |   |                             |       |    |  |   |       |  |       |   |  |   |       |  |       |  



Revenues



Revenues include retail sales by
Company-owned stores, royalties and fees 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 food prices, primarily cheese prices.



Consolidated revenues increased $32.2 million or 11.0% to $325.0 million in
the third quarter of 2004, from $292.8 million in the comparable period in 2003, and increased $67.7 million or 7.5% to $968.0 million in the first three quarters of 2004, from $900.3 million in the comparable period in 2003. These increases were a
result of increases in revenues at each of our reportable segments and are more fully described below.



14



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##### Table of Contents

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                |  | Third Quarter of 2004 |       |  | Third Quarter of 2003 |   |  | First ThreeQuarters of 2004 |       |  | First ThreeQuarters of 2003 |  
|Domestic Company-owned stores  |  | $                     | 87.5  |  | 71.3                  | % |  | $                           | 82.4  |  | 72.4                        | % |  | $ | 259.5 |  | 71.5  | % |  | $ | 258.2 |  | 72.5  | %
|Domestic franchise             |  |                       | 35.2  |  | 28.7                  |   |  |                             | 31.4  |  | 27.6                        |   |  |   | 103.6 |  | 28.5  |   |  |   | 98.2  |  | 27.5  |  
|                               |  |                       |       |  |                       |   |  |                             |       |  |                             |   |  |   |       |  |       |   |  |   |       |  |       |  
|Total domestic stores revenues |  | $                     | 122.7 |  | 100.0                 | % |  | $                           | 113.8 |  | 100.0                       | % |  | $ | 363.1 |  | 100.0 | % |  | $ | 356.4 |  | 100.0 | %
|                               |  |                       |       |  |                       |   |  |                             |       |  |                             |   |  |   |       |  |       |   |  |   |       |  |       |  



Domestic stores
revenues increased $8.9 million or 7.8% to $122.7 million in the third quarter of 2004, from $113.8 million in the comparable period in 2003, and increased $6.7 million or 1.9% to $363.1 million in the first three quarters of 2004, from $356.4
million in the comparable period in 2003. These increases in revenues were due primarily to increases in both our domestic Company-owned and domestic franchise same store sales as well as increases in the average number of domestic franchise stores
in operation during 2004. Domestic same store sales increased 8.0% and 2.9% in the third quarter and first three quarters of 2004, respectively, compared to the same periods in 2003, 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 $5.1 million or 6.1% to $87.5 million in the third quarter of 2004, from $82.4 million in
the comparable period in 2003, and increased $1.3 million or 0.5% to $259.5 million in the first three quarters of 2004, from $258.2 million in the comparable period in 2003. These increases in revenues were due primarily to increases in same store
sales of 6.8% and 1.1% in the third quarter and first three quarters of 2004, respectively, compared to the same periods in 2003. There were 578 and 579 domestic Company-owned stores in operation as of September 5, 2004 and September 7, 2003,
respectively.



Domestic Franchise



Revenues from domestic franchise operations increased $3.8 million or 12.1%
to $35.2 million in the third quarter of 2004, from $31.4 million in the comparable period in 2003, and increased $5.4 million or 5.5% to $103.6 million in the first three quarters of 2004, from $98.2 million in the comparable period in 2003. These
increases in revenues were due primarily to increases in same store sales of 8.2% and 3.1% in the third quarter and first three quarters of 2004, respectively, compared to the same periods in 2003 and an increase in the average number of domestic
franchise stores open during 2004. There were 4,367 and 4,296 domestic franchise stores in operation as of September 5, 2004 and September 7, 2003, respectively.



Domestic Distribution



Revenues from domestic distribution operations increased $19.7 million or 12.5% to $177.4 million in the third quarter of 2004, from $157.7 million in the
comparable period in 2003, and increased $49.4 million or 10.3% to $529.2 million in the first three quarters of 2004, from $479.8 million in the comparable period in 2003. The increase in domestic distribution revenues in the third quarter of 2004
was due primarily to increases in volumes related to increases in domestic franchise retail sales and a market increase in overall food prices, primarily higher cheese prices. The increase in domestic distribution revenues in the first three
quarters of 2004 was due primarily to a market increase in overall food prices, primarily higher cheese prices. The published cheese block price-per-pound averaged $1.60 and $1.65 in the third quarter and first three quarters of 2004, respectively,
up from $1.38 and $1.21 in the comparable periods in 2003. Had the 2004 average cheese prices been in effect during the comparable periods of 2003, distribution revenues for the third quarter and first three quarters of 2003 would have been
approximately $6.8 million and $40.9 million higher than the reported 2003 amounts, respectively.



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##### Table of Contents

International



Revenues from international operations increased $3.6 million or 16.7% to $24.9 million in the third quarter of 2004, from
$21.3 million in the comparable period in 2003, and increased $11.5 million or 17.9% to $75.7 million in the first three quarters of 2004, from $64.2 million in the comparable period in 2003. These increases in revenues were due to increases in same
store sales, an increase in the average number of international stores open during 2004, and related increases in revenues from our international distribution operations. On a constant dollar basis, same store sales increased 5.9% and 5.8% in the
third quarter and first three quarters of 2004, compared to the same periods in 2003. On a historical dollar basis, same store sales increased 9.9% and 12.0% in the third quarter and first three quarters of 2004, respectively, compared to the same
periods in 2003, reflecting a generally weaker U.S. Dollar in those markets in which we compete. There were 2,658 and 2,457 international stores in operation as of September 5, 2004 and September 7, 2003, respectively.



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 $7.8 million or 10.9% to $79.3
million in the third quarter of 2004, from $71.5 million in the comparable period in 2003, and increased $9.3 million or 4.0% to $238.0 million in the first three quarters of 2004, from $228.7 million in the comparable period in 2003, as summarized
in the following table.



|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | --------------------------- | ----- |  | ---------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|                              |  | Third Quarter of 2004 |       |  | Third Quarter of 2003 |   |  | First ThreeQuarters of 2004 |       |  | First Three Quarters of 2003 |  
|Consolidated revenues         |  | $                     | 325.0 |  | 100.0                 | % |  | $                           | 292.8 |  | 100.0                        | % |  | $ | 968.0 |  | 100.0 | % |  | $ | 900.3 |  | 100.0 | %
|Consolidated cost of sales    |  |                       | 245.7 |  | 75.6                  |   |  |                             | 221.3 |  | 75.6                         |   |  |   | 730.0 |  | 75.4  |   |  |   | 671.6 |  | 74.6  |  
|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|Consolidated operating margin |  | $                     | 79.3  |  | 24.4                  | % |  | $                           | 71.5  |  | 24.4                         | % |  | $ | 238.0 |  | 24.6  | % |  | $ | 228.7 |  | 25.4  | %
|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  



The increases in
consolidated operating margin for the third quarter and first three quarters of 2004 were due primarily to increases in domestic franchise and international revenues resulting from strong retail sales growth. As a percentage of revenues, the
consolidated operating margin was flat in the third quarter of 2004 compared to the same period in 2003 and decreased 0.8 percentage points to 24.6% in the first three quarters of 2004, from 25.4% in the comparable period in 2003.



Cheese price changes are a pass-through in domestic distribution
revenues and cost of sales and, as such, have no impact on operating margin or income. However, cheese price changes do impact operating margin as a percentage of revenues. Had the 2004 average cheese prices been in effect during the comparable
periods of 2003, the total operating margin for the third quarter and first three quarters of 2003 would have been approximately 23.9% and 24.3% of total revenues, respectively, or an improvement of 0.5 and 0.3 percentage points in the third quarter
and first three quarters of 2004, respectively.



Domestic Company-Owned Stores



The domestic Company-owned store operating margin increased $0.8 million or 5.4% to $15.4 million in the third quarter of 2004, from $14.6 million in the comparable period in 2003, and decreased $1.9 million or 3.8% to $48.3 million in the
first three quarters of 2004, from $50.2 million in the comparable period in 2003, as summarized in the following table.



|                              |  |                      |      |  |                      |   |  |                            |      |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | -------------------- | ---- |  | -------------------- | - |  | -------------------------- | ---- |  | ---------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|Domestic Company-Owned Stores |  | Third Quarterof 2004 |      |  | Third Quarterof 2003 |   |  | First ThreeQuarter of 2004 |      |  | First Three Quarters of 2003 |  
|Revenues                      |  | $                    | 87.5 |  | 100.0                | % |  | $                          | 82.4 |  | 100.0                        | % |  | $ | 259.5 |  | 100.0 | % |  | $ | 258.2 |  | 100.0 | %
|Cost of sales                 |  |                      | 72.1 |  | 82.4                 |   |  |                            | 67.9 |  | 82.3                         |   |  |   | 211.2 |  | 81.4  |   |  |   | 208.0 |  | 80.6  |  
|                              |  |                      |      |  |                      |   |  |                            |      |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|Store operating margin        |  | $                    | 15.4 |  | 17.6                 | % |  | $                          | 14.6 |  | 17.7                         | % |  | $ | 48.3  |  | 18.6  | % |  | $ | 50.2  |  | 19.4  | %
|                              |  |                      |      |  |                      |   |  |                            |      |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  



The increase in the
domestic Company-owned store operating margin during the third quarter of 2004 was due primarily to an increase in same store sales, offset in part by an increase in overall food costs, primarily cheese. The decrease in the domestic Company-owned
store operating margin during first three quarters of 2004 was due primarily to an increase in overall food costs and an increase insurance costs, offset in part by an increase in same store sales.



16



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##### Table of Contents

As a percentage of store revenues, the store operating margin decreased 0.1 percentage points to 17.6% in
the third quarter of 2004, from 17.7% in the comparable period in 2003, and decreased 0.8 percentage points to 18.6% in the first three quarters of 2004, from 19.4% in the comparable period in 2003.



As a percentage of store revenues, food costs increased 1.3 percentage points
to 29.0% in the third quarter of 2004, from 27.7% in the comparable period in 2003 and increased 1.2 percentage points to 28.3% in the first three quarters of 2004, from 27.1% in the comparable period in 2003. These increases in food costs as a
percentage of store revenues were due primarily to an increase in overall food prices, primarily cheese.



As a percentage of store revenues, labor costs decreased 0.6 percentage points to 30.0% in the third quarter of 2004, from 30.6% in the comparable period
in 2003 and decreased 0.4 percentage points to 30.0% in the first three quarters of 2004, from 30.4% in the comparable period in 2003.



As a percentage of store revenues, occupancy costs, which include rent, telephone, utilities and depreciation, decreased 0.2 percentage points to 11.6% in
the third quarter of 2004, from 11.8% in the comparable period in 2003, and increased 0.1 percentage points to 11.3% in the first three quarters of 2004, from 11.2% in the comparable period in 2003.



Domestic Distribution



The domestic distribution operating margin increased $1.1 million or 7.1% to
$16.4 million in the third quarter of 2004, from $15.3 million in the comparable period in 2003, and decreased $1.4 million or 2.8% to $49.5 million in the first three quarters of 2004, from $50.9 million in the comparable period in 2003, as
summarized in the following table.



|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|----------------------------- |  | --------------------- | ----- |  | --------------------- | - |  | --------------------------- | ----- |  | ---------------------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|Domestic Distribution         |  | Third Quarter of 2004 |       |  | Third Quarter of 2003 |   |  | First ThreeQuarters of 2004 |       |  | First Three Quarters of 2003 |  
|Revenues                      |  | $                     | 177.4 |  | 100.0                 | % |  | $                           | 157.7 |  | 100.0                        | % |  | $ | 529.2 |  | 100.0 | % |  | $ | 479.8 |  | 100.0 | %
|Cost of sales                 |  |                       | 161.0 |  | 90.7                  |   |  |                             | 142.4 |  | 90.3                         |   |  |   | 479.7 |  | 90.6  |   |  |   | 428.8 |  | 89.4  |  
|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  
|Distribution operating margin |  | $                     | 16.4  |  | 9.3                   | % |  | $                           | 15.3  |  | 9.7                          | % |  | $ | 49.5  |  | 9.4   | % |  | $ | 50.9  |  | 10.6  | %
|                              |  |                       |       |  |                       |   |  |                             |       |  |                              |   |  |   |       |  |       |   |  |   |       |  |       |  



The increase in the
domestic distribution operating margin during the third quarter of 2004 was due primarily to increases in volumes as a result of increases in domestic retail sales, offset in part by increases in insurance, occupancy and delivery costs. The decrease
in domestic distribution operating margin during the first three quarters of 2004 was due primarily to increases in insurance, occupancy and delivery costs.



As a percentage of distribution revenues, the distribution operating margin decreased 0.4 percentage points to 9.3% in the third quarter of 2004, from
9.7% in the comparable period in 2003, and decreased 1.2 percentage points to 9.4% in the first three quarters of 2004, from 10.6% in the comparable period in 2003. The decreases in the domestic distribution operating margin as a percentage of
revenues were due primarily to the negative impact on operating margin due to increases in food prices.



Had the 2004 average cheese prices been in effect during the comparable periods of 2003, the distribution operating margin for the third quarter and first
three quarters of 2003 would have been approximately 9.3% and 9.8% of distribution revenues, respectively, or flat for the third quarter of 2004 and a decrease of 0.4 percentage points during the first three quarters of 2004.



General and Administrative Expenses



General and administrative expenses increased $1.8 million or 3.7% to $50.9
million in the third quarter of 2004, from $49.1 million in the comparable period in 2003, and increased $2.6 million or 2.1% to $126.8 million in the first three quarters of 2004, from $124.2 million in the comparable period in 2003. General and
administrative expenses during the third quarter were negatively impacted as compared to 2003 by a $10.0 million payment made in connection with our IPO to an affiliate of our former majority stockholder to terminate its management agreement, as
well as a $3.2 million year-over-year increase in losses on sale/disposal of assets, including a $2.8 million gain relating to the collection of a note receivable in 2003. Separately, the Company recognized $0.9 million in 2003 relating to the
collection of a previously fully reserved note receivable. The Company also experienced increases in administrative labor, rents, advertising and insurance during 2004. Offsetting these increases in general and administrative expenses was
approximately $15.7 million of expenses incurred in connection with the Companys 2003 recapitalization.



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Interest Expense



Interest expense decreased $13.7 million or 44.2% to $17.3 million in the third quarter of 2004, from $31.0 million in the comparable period in 2003
and decreased $9.1 million or 16.8% to $45.2 million in the first three quarters of 2004, from $54.3 million in the comparable period in 2003. These decreases in interest expense were due primarily to approximately $15.6 million of financing fees
that were written-off in connection with the Companys 2003 recapitalization, offset by approximately $3.7 million of financing fees that were written-off in connection with the retirement of $109.1 million of senior subordinated notes in the
third quarter of 2004.



Additionally, interest expense was
positively impacted by more favorable interest rates. Our effective borrowing rate decreased 0.8 and 1.3 percentage points to 5.6% and 5.7% during the third quarter and first three quarters of 2004, respectively. Our average outstanding debt
balance, excluding capital lease obligations, decreased $52.6 million to $898.3 million in the third quarter of 2004, from $950.9 million in the comparable period in 2003. Our average outstanding debt, excluding capital lease obligations, balance
increased $211.7 million to $921.9 million in the first three quarters of 2004, from $710.2 million in the comparable period in 2003.



Other



Other expense decreased $10.6 million or 52.3% to $9.8 million in the third quarter of 2004, from $20.4 million in the comparable period in 2003 and
decreased $12.4 million or 56.0% to $9.8 million in the first three quarters of 2004, from $22.2 million in the comparable period in 2003. The other amount of $9.8 million for the third quarter and first three quarters of 2004 is comprised of losses
incurred in connection with debt retirements, including $9.0 million incurred in connection with the redemption of $109.1 million of Dominos, Inc.s senior subordinated notes in August 2004. The other amounts of $20.4 million and $22.2
million for the third quarter and first three quarters of 2003, respectively, are comprised of losses incurred in connection with debt retirements, including $20.4 million of bond tender fees incurred in connection with the recapitalization in the
third quarter of 2003.



Provision for Income Taxes



Provision for income taxes increased $11.4 million to $0.6 million in the
third quarter of 2004, from a benefit of $10.8 million in the comparable period in 2003, and increased $10.8 million to $21.4 million in the first three quarters of 2004, from $10.6 million in the comparable period in 2003. The effective tax rate
for all periods presented has remained relatively flat.



Liquidity and
Capital Resources



We had working capital of $16.5 million
and cash and cash equivalents of $20.2 million at September 5, 2004. 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 and invest in long-term assets, reduce our working capital
amounts. More recently, due to the one percent annual amortization payments required by our senior secured credit facility, as well as voluntary prepayments we have made on the senior secured credit facility principal amount, we do not have a
significant current portion of long-term debt. Accordingly, our working capital has been positively impacted. 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 and debt repayments from these sources. We did not have any material commitments for capital expenditures as of September 5, 2004.



As of September 5, 2004, we had $804.3 million of debt, of which $0.3 million was classified as a current liability. There
were no borrowings under our $125.0 million revolving credit facility. Letters of credit issued under the revolving credit facility were $26.1 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.



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We enter into interest rate swaps, collars or similar instruments with the objective of reducing
volatility relating to our borrowing costs. As of September 5, 2004, we are party to interest rate derivatives in the total notional amount of $505.0 million.



Cash provided by operating activities was $57.7 million and $52.1 million in the first three quarters of 2004 and 2003, respectively. The $5.6 million
increase was due primarily to a $17.6 million increase in net income, offset by a $12.1 million decrease in amortization of deferred financing costs.



Cash used in investing activities was $26.7 million and $9.9 million in the first three quarters of 2004 and 2003, respectively. The $16.8 million
increase was due primarily to an $11.1 million increase in capital expenditures, due primarily to renovations of our corporate headquarters, and a $5.2 million decrease in net repayments of notes receivable.



Cash used in financing activities was $54.2 million and $39.6 million in the
first three quarters of 2004 and 2003, respectively. The $14.6 million increase was due primarily to net cash used in our initial public offering in 2004 exceeding the net cash used in our recapitalization in 2003. In connection with our initial
public offering in 2004, we received net proceeds from the issuance of common stock of approximately $119.6 million. We used these net proceeds and cash from operations to repurchase approximately $109.1 million of senior subordinated notes, and
repay approximately $16.9 million of notes payable to our founder and former majority stockholder and his wife. Additionally, during the first three quarters of 2004, we repaid approximately $46.5 million of additional debt obligations. In
connection with our recapitalization in 2003, we received proceeds from the issuance of long-term debt of approximately $1.0 billion. We used these proceeds to repay approximately $362.3 million outstanding under our then existing credit facility,
repurchase approximately $206.7 million of senior subordinated notes, retire our preferred stock for approximately $200.6 million, distribute $188.3 million to our shareholders and pay approximately $20.0 million of financing fees. Furthermore,
during the first three quarters of 2003, we repaid approximately $71.4 million of additional debt obligations.



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 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.



Forward-Looking Statements



Certain statements
contained in this filing relating to capital spending levels and the adequacy of our capital resources are forward-looking. Also, statements that contain words such as believes, expects, anticipates,
intends, estimates or similar expressions are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such
forward-looking statements. Among these risks and uncertainties are competitive factors, increases in our operating costs, ability to retain our key personnel, our substantial leverage, ability to implement our growth and cost-saving strategies,
industry trends and general economic conditions, adequacy of insurance coverage and other factors, all of which are described in our 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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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 three 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 fixed component of our debt under our senior subordinated notes to variable LIBOR rates over the term of the senior subordinated notes.



These agreements are summarized in the following table.



|                   |  |                       |               |      |                                 |               |                            |                   |      
|------------------ |  | --------------------- | ------------- | ---- | ------------------------------- | ------------- | -------------------------- | ----------------- | -----
|Derivative         |  | Total Notional Amount |               | Term |                                 | Dominos Pays |                            | Counterparty Pays
|Interest Rate Swap |  | $                     | 30.0 million  |      | September 2001  September 2004 |               | 3.69%                      |                   | LIBOR
|Interest Rate Swap |  | $                     | 75.0 million  |      | August 2002  June 2005         |               | 3.25%                      |                   | LIBOR
|Interest Rate Swap |  | $                     | 50.0 million  |      | August 2003  July 2011         |               | LIBOR plus319 basis points |                   | 8.25%
|Interest Rate Swap |  | $                     | 50.0 million  |      | August 2003  July 2011         |               | LIBOR plus324 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 on a portion of our senior secured credit facility term debt to various fixed rates over various terms. The agreement has a notional starting amount
of $350.0 million, begins in June 2005, ends in June 2007 and fixes our interest rate at 3.21%. We pay a fixed interest rate under these agreements while the counterparty pays a floating rate.



Interest Rate Risk



Our variable interest expense is sensitive to changes in the general level
of interest rates. At September 5, 2004, the weighted average interest rate on our $208.0 million of variable interest debt was 4.2%.



We had total interest expense of approximately $45.2 million in the first three quarters of 2004. 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 $5.6 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 September 5, 2004 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 actions alleging that our store managers are misclassified as exempt employees. 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 estimated 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) AveragePrice Paidper Share(or Unit) |       | (c) Total Number of Shares (or Units) Purchased as Part of Publicly AnnouncedPlans orPrograms |   | (d) Maximum Number (orApproximateDollar Value)of Shares (orUnits) thatMay Yet BePurchasedUnder thePlans orPrograms
|Period #1 (June 14, 2004 to July 11, 2004)      |  | 107,952                                       | (1) |  | $                                       | 14.00 |                                                                                               |  |                                                                                                                    | 
|Period #2 (July 12, 2004 to August 8, 2004)     |  |                                              |     |  |                                         |      |                                                                                               |  |                                                                                                                    | 
|Period #3 (August 9, 2004 to September 5, 2004) |  |                                              |     |  |                                         |      |                                                                                               |  |                                                                                                                    | 
|                                                |  |                                               |     |  |                                         |       |                                                                                               |   |                                                                                                                    |  
|Total                                           |  | 107,952                                       |     |  | $                                       | 14.00 |                                                                                               |  |                                                                                                                    | 
|                                                |  |                                               |     |  |                                         |       |                                                                                               |   |                                                                                                                    |  



|(1) | As previously disclosed, following our IPO, we repurchased from each of Messrs. Silverman and Soignet the outstanding options to purchase shares of our Class L
common stock that were held by them. Each of Messrs. Silverman and Soignet had the right to acquire 53,976 shares of our common stock pursuant to the exercise of these options. We repurchased these options at a price equal to the difference between
our initial public offering price per share ($14.00) and the exercise price per share applicable to such options ($8.34). Each of Messrs. Silverman and Soignet received approximately $305,000 in connection with the repurchase of these options.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 3. Defaults Upon Senior Securities



None.



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



None.



Item 5. Other Information



None.



Item 6. Exhibits and Reports on Form 8-K



|a. | Exhibits
|-- | --------



|              |  |                                                                                                                                                                                                                 
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                     
|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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b. Reports on Form 8-K.



The following Current Reports on Form 8-K were filed with or furnished to the SEC during the period covered by this report:



Current Report on Form 8-K of Dominos Pizza, Inc. dated July 27, 2004,
which included a press release announcing financial results for the second quarter of 2004 which ended June 13, 2004.



Current Report on Form 8-K of Dominos Pizza, Inc. and Dominos, Inc. dated August 24, 2004, which included a press release announcing the
Companys purchase of $109.1 million of Dominos, Inc.s 8.25% senior subordinated notes due 2011.



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: October 19, 2004 |  | /s/ Harry J. Silverman 
|                       |  | Harry J. Silverman     
|                       |  | Chief Financial Officer



22